Exhibit 10.29
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ADDENDUM TO EMPLOYMENT AGREEMENT
WHEREAS, Wyndham International, Inc. (the "Company") and Xxxxxx X. Xxxxx
(the "Executive") are parties to that certain Executive Employment Agreement
effective as of March 19, 2001 (the "Employment Agreement"); and
WHEREAS, the Company and the Executive wish to amend certain provisions of
the Employment Agreement as specified in this Addendum to Employment Agreement
(this "Addendum");
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Executive hereby agree that effective August
10, 2001, the Employment Agreement is amended as hereinafter set forth.
1. Certain Defined Terms. Capitalized terms not otherwise defined herein
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shall have the meanings ascribed to such terms in the Employment Agreement.
2. Amendment to Paragraph 4. Unauthorized Disclosure. Paragraph 4 of the
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Employment Agreement is hereby deleted in its entirety and replaced with the
following:
4. Unauthorized Disclosure.
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(a) Confidential Information. Executive acknowledges that in
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the course of his employment with the Company (and, if applicable,
its predecessors), he has been allowed to become, and will continue
to be allowed to become, acquainted with the business affairs,
information, trade secrets, and other matters of the Company and its
subsidiaries which are of a proprietary or confidential nature,
including but not limited to the operations, business opportunities,
price and cost information, finance, customer information, business
plans, various sales techniques, manuals, letters, notebooks,
procedures, reports, products, processes, services, and other
confidential information and knowledge (collectively the
"Confidential Information") concerning the business of the Company,
its predecessors and their respective subsidiaries. The Company
agrees to provide on an ongoing basis such Confidential Information
as the Company deems necessary or desirable to aid Executive in the
performance of his duties. Executive understands and acknowledges
that such Confidential Information is confidential, and he agrees
not to disclose such Confidential Information to anyone outside the
Company except to the extent that (i) Executive deems such
disclosure or use reasonably necessary or appropriate in connection
with performing his duties on behalf of the Company, (ii) Executive
is required by order of a court of competent jurisdiction (by
subpoena or similar process) to disclose or discuss any Confidential
Information, provided that in such case, Executive shall promptly
inform the Company of such event, shall cooperate with the Company
in attempting to obtain a protective order or
to otherwise restrict such disclosure, and shall only disclose
Confidential Information to the minimum extent necessary to comply
with any such court order; (iii) such Confidential Information
becomes generally known to and available for use by the hotel and
hospitality industry (the "Hotel Industry"), other than as a result
of any action or inaction by Executive; or (iv) such information has
been rightfully received by a member of the Hotel Industry or has
been published in a form generally available to the Hotel Industry
prior to the date Executive proposes to disclose or use such
information. Executive further agrees that he will not during
employment and/or at any time thereafter use such Confidential
Information in competing, directly or indirectly, with the Company
or any of its subsidiaries. At such time as Executive shall cease to
be employed by the Company, he will immediately turn over to the
Company all Confidential Information, including papers, documents,
writings, electronically stored information, other property, and all
copies of them provided to or created by him during the course of
his employment with the Company.
(b) Heirs, successors, and legal representatives. The
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foregoing provisions of this Paragraph 4 shall be binding upon
Executive's heirs, successors, and legal representatives. The
provisions of this Paragraph 4 shall survive the termination of this
Agreement for any reason.
(c) Definition of Subsidiary. For purposes of this Paragraph 4
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and for purposes of Paragraph 5 (Covenant Not to Compete) below,
"subsidiary" of the Company means any corporation, partnership,
joint venture, limited liability company or other entity of which
(i) at least a majority of the securities or other interests having
by their terms voting power to elect a majority of the board of
directors or others performing similar functions for such entity is
directly or indirectly beneficially owned by the Company (either
alone or through or together with one or more of its subsidiaries),
or (ii) the Company or any subsidiary of the Company is a general
partner or manager.
3. Amendment to Paragraph 5. Covenant Not to Compete. Paragraph 5 of
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the Employment Agreement is hereby deleted in its entirety and replaced with the
following:
5. Covenant Not to Compete. In consideration for the Option,
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the Stock Grant, the loans evidenced by the Recourse Note and the
Non-Recourse Note, the Restricted Unit Award granted to Executive on
April 12, 2001, the other consideration set forth in the Addendum,
the Company's promise to provide Confidential Information as set
forth in Paragraph 4 above (including the Confidential Information
provided by the Company to Executive concurrently with the execution
of the Addendum, which Executive acknowledges has not been
previously provided to Executive), and for Executive's employment by
the Company under the terms provided in this Agreement, and as a
means to aid in the performance and enforcement of the terms of and
preserve the rights of the
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Company pursuant to the Unauthorized Disclosure provisions of
Paragraph 4, Executive agrees as follows:
(a) during the term of Executive's employment with the
Company and for a period of twenty-four (24) months
thereafter, regardless of the reason for termination of
employment (except that the restrictions of this Paragraph
5(a) relating to the twenty-four (24) months after the term of
employment shall not apply if (x) Executive terminates his
employment for Good Reason as provided in Subparagraph 6(e) or
(y) Executive's employment is terminated by the Company
without Cause as provided in Subparagraph 6(d) within eighteen
(18) months after the occurrence of a Change in Control),
Executive will not, directly or indirectly, as an owner,
director, principal, agent, officer, employee, partner,
consultant, servant, or otherwise, carry on, operate, manage,
control, or become involved in any manner with any business,
operation, corporation, partnership, association, agency, or
other person or entity which is in the business of owning,
operating, managing or granting franchise rights with respect
to hotels, motels or other lodging facilities in any area or
territory in which the Company or any of its subsidiaries
conducts operations; provided, however, that the foregoing
shall not prohibit Executive from owning up to one percent
(1%) of the outstanding stock of a publicly held company
engaged in the hospitality business. Notwithstanding the
foregoing, after Executive's employment with the Company has
terminated, upon receiving written permission by the Board,
Executive shall be permitted to engage in such activities with
respect to any other hotel, motel or lodging facility that
would be immaterial to the operations of the Company and its
subsidiaries in the area or territory in question.
Immateriality, for purposes of the foregoing sentence, shall
be determined in the sole discretion of the Board in good
faith.
(b) during the term of Executive's employment with the
Company and for a period of twenty-four (24) months
thereafter, regardless of the reason for termination of
employment (except that the restrictions of this Paragraph
5(b) relating to the twenty-four (24) months after the term of
employment shall not apply if (x) Executive terminates his
employment for Good Reason as provided in Subparagraph 6(e) or
(y) Executive's employment is terminated by the Company
without Cause as provided in Subparagraph 6(d) within eighteen
(18) months after the occurrence of a Change in Control),
Executive will not, directly or indirectly, either for himself
or for any other business, operation, corporation,
partnership, association, agency, or other person or entity,
call upon, compete for, solicit, divert, or take away, or
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attempt to divert or take away any of the customers
(including, without limitation, any hotel owner, lessor or
lessee, asset manager, trustee or consumer with whom the
Company or any of its subsidiaries from time to time (i) has
an existing agreement or business relationship; (ii) has had
an agreement or business relationship within the two-year
period preceding the Executive's last day of employment with
the Company; or (iii) has included as a prospect in its
applicable pipeline) or vendors of the Company or any of its
subsidiaries in any of the areas or territories in which the
Company or any of its subsidiaries conducts operations if such
action has the intent or effect of interfering with the
Company's or any of its subsidiaries' relationship with the
vendor or customer.
(c) during the term of Executive's employment with the
Company and for a period of twenty-four (24) months
thereafter, regardless of the reason for termination of
employment (except that the restrictions of this Paragraph
5(c) relating to the twenty-four (24) months after the term of
employment shall not apply if (x) Executive terminates his
employment for Good Reason as provided in Subparagraph 6(e) or
(y) Executive's employment is terminated by the Company
without Cause as provided in Subparagraph 6(d) within eighteen
(18) months after the occurrence of a Change in Control),
Executive will not directly or indirectly solicit or induce
any current or prospective employee of the Company or any of
its subsidiaries (including, without limitation, any current
or prospective employee of the Company or any of its
subsidiaries within the six-month period preceding Executive's
last day of employment with the Company or within the 24-month
period of this covenant) to accept employment with Executive
or with any business, operation, corporation, partnership,
association, agency, or other person or entity with which
Executive may be associated, and Executive will not employ or
cause any business, operation, corporation, partnership,
association, agency, or other person or entity with which
Executive may be associated to employ any current or
prospective employee of the Company or any of its subsidiaries
without providing the Company with ten (10) days' prior
written notice of such proposed employment.
(d) Executive agrees and acknowledges that the
restrictions contained in this noncompetition covenant are
reasonable in scope of activity, duration and geographical
area and are necessary to protect the Company's business
interests and Confidential Information after the Effective
Date of this Agreement. If any provision of this
noncompetition covenant as applied to any party or to any
circumstance is adjudged by a court
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to be invalid or unenforceable, the same will in no way affect
any other circumstance or the validity or enforceability of
this Agreement. If any such provision, or any part thereof, is
held to be unenforceable because of the duration of such
provision or the scope of activity or area covered thereby,
the parties agree that the court making such determination
shall have the power to reduce the duration and/or area and/or
scope of activity of such provision, and/or to delete specific
words or phrases, and in its reduced form, such provision
shall then be enforceable and shall be enforced. The parties
agree and acknowledge that the breach of this noncompetition
covenant will cause irreparable damage to the Company, and
upon breach of any provision of this noncompetition covenant,
the Company shall be entitled to injunctive relief, specific
performance, or other equitable relief; provided, however,
that this shall in no way limit any other remedies which the
Company may have (including, without limitation, the right to
seek monetary damages).
(e) Should Executive violate the provisions of this
Paragraph, then in addition to all other rights and remedies
available to the Company at law or in equity, the duration of
this covenant shall automatically be extended for the period
of time from which Executive began such violation until he
permanently ceases such violation.
4. Amendment to Paragraph 8. Change in Control Payment. In the last
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sentence of the first paragraph of Paragraph 8 of the Employment Agreement, the
words "These provisions" are hereby deleted and replaced with "The provisions of
Subparagraph 8(a)".
5. Amendments to Subparagraph 8(a). Change in Control. The first sentence
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of Subparagraph 8(a)(i) of the Employment Agreement is hereby deleted in its
entirety and replaced with the following:
If within eighteen (18) months after the occurrence of the first
event constituting a Change in Control, Executive's employment is
terminated by the Company without Cause as provided in Subparagraph
6(d) or Executive terminates his employment for Good Reason as
provided in Subparagraph 6(e), then the Company shall pay Executive
the Severance Amount as provided in Subparagraph 7(d)(i) in
substantially equal bi-weekly installments, in arrears, over
twenty-four (24) months; provided, however, that in the event
Executive commences any employment with an employer other than the
Company during such twenty-four (24) month period, the Company shall
not be entitled to any right of set-off against the Severance Amount
for any cash compensation received by the Executive from the new
employer during such period.
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The following subparagraph is hereby inserted immediately following
Subparagraph 8(a)(iv):
(v) Notwithstanding Subparagraph 8(a)(iii), the Restricted Unit Award
granted to Executive on April 12, 2001 shall not vest as provided in
such Subparagraph 8(a)(iii) and shall instead vest in accordance
with the terms of such Restricted Unit Award.
6. Amendments to Subparagraph 8(b). Gross Up Payment. Subparagraph 8(b)(i)
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of the Employment Agreement is hereby deleted in its entirety and replaced with
the following:
(i) Excess Parachute Payment. If Executive incurs the tax (the
"Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986
(the "Code") on "excess parachute payments" within the meaning of Section
280G(b)(1) of the Code, the Company will pay to Executive an amount such
that the net amount retained by Executive, after deduction of any Excise
Tax on the excess parachute payment and any federal, state and local
income taxes and employment taxes (together with penalties and interest)
and Excise Tax upon the payment provided for by this sentence, will be
equal to the Severance Amount. In addition, if pursuant to the immediately
preceding sentence a full gross up payment is not made to Executive for
the entire amount of Excise Tax (and any federal, state and local income
taxes and employment taxes (together with penalties and interest) and
Excise Tax on the payment provided for in the immediately preceding
sentence) incurred by Executive in connection with the first event
constituting a Change in Control, then the Company will pay to Executive
an additional amount that, after taking into account the amount payable
pursuant to the immediately preceding sentence, will completely gross up
the Executive for the entire amount of Excise Tax (and for any federal,
state and local income taxes and employment taxes (together with penalties
and interest) and Excise Tax on the payments provided for by this
Subparagraph 8(b)(i)); provided, however, that any payment made pursuant
to this sentence will not exceed an amount equal to twice the Executive's
Base Salary or Adjusted Base Salary, as applicable, in effect immediately
prior to the date of the Change in Control. The payments made pursuant to
this Subparagraph 8(b)(i) are collectively referred to herein as the
"Gross Up Payments". It is the intent that the Gross Up Payments provided
for by this Subparagraph 8(b)(i) place Executive in the same position
Executive would have been in had no Excise Tax been imposed, subject to
the limitation on the Gross Up Payment provided for in the second sentence
of this Subparagraph 8(b)(i) by the proviso of such sentence.
Subparagraph 8(b)(ii) is hereby deleted in its entirety and replaced
with the following:
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(ii) Applicable Rates. For purposes of determining the amount of the
Gross Up Payments, Executive will 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 Payments are to be made and state and local income
taxes at the highest marginal rates of taxation in the state and locality
of Executive's primary residence for the calendar year in which the Gross
Up Payments are to be made, net of the maximum reduction in federal income
taxes that could be obtained from deduction of such state and local taxes.
Subparagraphs 8(b)(iii) and 8(b)(iv) are hereby deleted in their
entirety and are replaced with the following:
(iii) Time for Payment. The Company will pay the estimated amount of
the Gross Up Payments in cash to Executive at such time or times when the
Excise Tax is due. Executive and the Company and their respective tax
advisors agree to confer and reasonably cooperate in the determination of
the actual amount of the Gross Up Payments. Without limiting the
foregoing, Executive shall, if requested by the Company, cooperate in a
valuation of Executive's obligations under paragraph 5 of this Agreement
by a valuation firm selected and paid for by the Company. Further,
Executive and the Company agree to make such adjustments to the estimated
amount of the Gross Up Payments as may be necessary to equal the actual
amount of the Gross Up Payments, which in the case of Executive will refer
to refunds of prior overpayments and in the case of the Company will refer
to makeup of prior underpayments.
7. Amendment to Subparagraph 8(c). Definitions. The penultimate sentence
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of Subparagraph 8(c) is hereby deleted in its entirety and replaced with the
following:
All defined terms used in the definition of "Change in Control"
shall have the same meaning as set forth in the Certificate of
Designation of Series B Convertible Preferred Stock of Wyndham
International, Inc. as in effect on the Effective Date of this
Agreement.
8. Amendment to Paragraph 13. Arbitration; Other Disputes. Paragraph 13 of
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the Employment Agreement is hereby deleted in its entirety and replaced with the
following:
13. Mediation and/or Arbitration; Other Disputes.
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(a) General Procedures. In the event of any dispute or
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controversy arising under or in connection with the terms of this
Agreement, the parties shall first promptly try in good faith to
settle such dispute or controversy by mediation under the Commercial
Mediation Rules of the American Arbitration Association ("AAA")
before resorting to arbitration, provided, however, that if the
dispute or controversy concerns whether Executive is entitled to a
payment under subparagraph 8(a) or 8(b) or the amount of any payment
to which the Executive is
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entitled under subparagraph 8(a) or 8(b), the expedited procedures
in subparagraph 13(b) will apply. In the event such dispute or
controversy remains unresolved in whole or in part for a period of
thirty (30) days after it is submitted to mediation, the parties
will settle any remaining dispute or controversy exclusively by
arbitration in Dallas, Texas in accordance with the Commercial
Arbitration Rules of the AAA then in effect. The parties hereto
agree that any dispute relating to the terms of this Agreement or
the performance by the parties of their respective obligations under
the terms of this Agreement shall not in any event be subject to the
AAA's National Rules for the Resolution of Employment Disputes.
Judgment may be entered on the arbitrator's award in any court
having jurisdiction. With respect to a dispute or other controversy
arising under or in connection with the terms of this Agreement
after a Change in Control, all administration fees and arbitration
fees shall be paid solely by the Company. Each party agrees to pay
its own legal fees and expenses incurred in connection with
mediation and/or arbitration.
Notwithstanding the above, the Company shall be entitled
to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of
paragraph 4 or 5 hereof. Should a dispute occur concerning
Executive's mental or physical capacity as described in
subparagraphs 6(b), 6(c) or 7(b), a doctor selected by Executive and
a doctor selected by the Company shall be entitled to examine
Executive. If the opinion of the Company's doctor and Executive's
doctor conflict, the Company's doctor and Executive's doctor shall
together agree upon a third doctor, whose opinion shall be binding.
Any amount to which Executive is entitled under this
Agreement (including any disputed amount) which is not paid when due
shall bear interest from the date due until paid at a rate equal to
the lesser of eighteen percent (18%) per annum or the maximum lawful
rate.
(b) Expedited Procedures. The following expedited procedures
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apply in the event of any dispute or controversy concerning whether
Executive is entitled to a payment under subparagraph 8(a) or 8(b)
or the amount of any payment to which Executive is entitled under
subparagraph 8(a) or 8(b), and are intended to supplement the
general procedures detailed above. The parties shall first promptly
try in good faith to settle such dispute or controversy by expedited
mediation under the Commercial Mediation Rules of the AAA, as
modified by this Agreement, before resorting to arbitration. In the
event that such dispute or controversy remains unresolved in whole
or in part for a period of fifteen (15) days after either party
files a request for expedited mediation with the AAA, the parties
will settle any remaining dispute or controversy exclusively by
expedited arbitration in Dallas, Texas in accordance with the
Expedited
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Procedures of the Commercial Arbitration Rules of the AAA then in
effect, as modified by this Agreement. The parties agree that the
arbitration hearing will be held sixty (60) days after the filing of
a demand for expedited arbitration. The parties further agree that
the following deadlines shall apply: (1) a party has fifteen (15)
days following the conclusion of the mediation period to file an
arbitration demand; (2) the opposing party then has seven (7) days
to file an answering statement; (3) thereafter, the parties have
thirty-five (35) days to conduct discovery, and (4) the parties have
seven (7) days following the close of discovery to exchange copies
of all exhibits that they intend to submit at the hearing. During
the first five (5) days of the discovery period, and prior to either
party starting discovery, the parties must agree upon the type of
discovery that will be conducted and upon a discovery schedule. Any
dispute regarding the type of discovery or the discovery schedule
must be resolved by the arbitrator during a discovery conference
conducted in person or on the telephone within the first five (5)
days of the discovery period. The parties agree that the arbitrator
shall have fifteen (15) days after the arbitration hearing to issue
an award. The award shall be written and reasoned, if requested by
one of the parties.
9. Governing Law. The validity, interpretation, construction, and
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performance of this Addendum shall be governed by the laws of the State of Texas
(without regard to principles of conflicts of laws).
10. Counterparts. This Addendum may be executed in several counterparts,
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each of which shall be deemed an original but all of which together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum
effective as of August 10, 2001.
WYNDHAM INTERNATIONAL, INC.
By:/s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
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Title: Senior Vice President - Human Resources
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/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Executive
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