RELEASE AND WAIVER
Exhibit 99.1
RELEASE AND WAIVER
THIS RELEASE AND WAIVER (the “Termination Release”) is made as of the 15th day of April, 2022 by and between XXXXXX XXXXXX (the “Executive”) and ASHFORD HOSPITALITY SERVICES, LLC (the “Company”), a subsidiary of ASHFORD INC. (“AINC,” together with all subsidiaries and affiliates of AINC, including the Company, the “Ashford Companies”). All capitalized terms not defined in this Termination Release shall have the meanings assigned to such terms in that certain Amended and Restated Employment Agreement (the “Agreement”) dated as of December 20, 2019.
WHEREAS, the Executive, AINC and the Company are parties to the Agreement; and
WHEREAS, notwithstanding any contrary provision of the Agreement or the terms of any equity or other incentive plan of any of the Ashford Companies, Ashford Hospitality Trust, Inc. (“Ashford Trust”), or Braemar Hotels & Resorts Inc. (“Braemar,” together with Ashford Trust, the “Ashford Advised Entities”) (such plans the “Incentive Plans”) or grant or award made to Executive under any of the Incentive Plans (the “Incentive Plan Awards”), the parties desire this Termination Release to set forth the entire terms of their agreement regarding the termination of the Agreement and the Executive’s employment pursuant to it; and
TERMINATION RELEASE – Page 1
2. TERMINATION BENEFITS. In consideration of the release of claims by the Executive in Paragraph 3 and the other promises and undertakings of the Executive set forth in this Termination Release, and subject to the contingencies set forth below:
(a) the Company shall pay the Executive $750,000.00 (the “Termination Payment”);
(b) the Company shall pay the Executive $6,397,067.00 (the “Severance Payment”);
(c) the Company will allow the Executive and his eligible dependents to continue to participate in the Company’s medical, dental and vision plan in effect as of the Resignation Date at the same premium cost as similarly situated active employee of the Company (which premiums shall be deducted from the Severance Payment on a monthly basis) until the earlier of (i) the date the Executive (or any of his eligible dependents with respect to such dependents) becomes eligible to participate in another group health plan or otherwise is no longer eligible to participate in the Company’s plan and (ii) the twenty-fourth month following the Resignation Date, and the Company will reimburse the Executive on a monthly basis for the employee share of the premiums for such coverage (the “Limited Benefit Continuation”);
(d) if, at the time the Limited Benefit Continuation ends, the Executive or any of his eligible dependents are eligible to continue coverage under the Company’s group health plan pursuant to the Consolidated Budget Reconciliation Act of 1985 (“COBRA”) and the Executive timely elects such continued coverage and timely makes the premium payments, the Company will reimburse the Executive on a monthly basis for the cost of such premiums for himself and any of his eligible dependents until the earlier of (i) the date the Executive (or any of his eligible dependents with respect to such dependents) becomes eligible to participate in another group health plan or otherwise is no longer eligible for COBRA participation coverage and (ii) twelve (12) months of continued coverage (the “COBRA Benefit”);
(e) the Company will reimburse the Executive on a monthly basis for the premium cost of life insurance and long-term disability insurance, if any, for the same level of such benefits that were provided to the Executive under the Company’s life insurance and long-term disability plans in effect as of the Resignation Date for the earlier of (i) the date the Executive becomes eligible to participate or is covered under another employer’s life insurance and long-term disability plans and (ii) the twenty-fourth month following the Resignation Date (the “Limited Benefit Reimbursement”), provided, however, that the Executive provides proof to the Company on a monthly basis of the premium cost and payment thereof.
(f) as of the Resignation Date, and notwithstanding any contrary provision of any Incentive Plans or Incentive Plan Awards, all Incentive Plan Awards previously granted or awarded to Executive shall be treated in the same manner as if the Executive’s employment had been terminated by the Company without Cause (the “Accelerated Vesting”).
TERMINATION RELEASE – Page 2
The Termination Payment, the Severance Payment, the Limited Benefit Continuation, the COBRA Benefit, the Limited Benefit Reimbursement, and the Accelerated Vesting are the “Termination Benefits”. The Termination Payment, less legally required withholdings and deductions, will be paid in a single lump sum on the Company’s first payroll date that is at least five (5) business days after the Ratification Effective Date (defined below). The Severance Payment, less legally required withholdings and deductions and the employee share of the premiums for Limited Benefit Continuation, shall be paid in twenty-four (24) substantially equal monthly installments (each of which installments may be made in the Company’s discretion over one or more of the Company’s payroll dates in such month) beginning in August 2022 and continuing until August 2024, provided, however, that the first installment shall be paid, without interest, on the Company’s first regular payroll date that is at least five (5) business days after the Ratification Effective Date (defined below) and include any installments (or fraction thereof) that would have been paid had the first installment been payable on the Company’s first payroll date in August 2022. The monthly Severance Payments through January 2023 are intended to be a short-term deferral pursuant to Treasury Regulation Section 1.409A-1(b)(4). The Executive agrees to inform the Company promptly of any event that would make himself or any of his eligible dependents ineligible for the Limited Benefit Continuation, the COBRA Benefit, or the Limited Benefit Reimbursement. Each payment hereunder shall be deemed a separate payment for purposes of Section 409A of the Internal Revenue Code of 1986, as amended.
The Company’s obligation to pay or continue to pay or provide the Termination Benefits is contingent on the occurrence of both the Effective Date (defined below) and the Ratification Effective Date (defined below), and the Executive’s continued compliance with this Termination Release and the Continuing Obligations (defined below). In the event the Executive fails to comply with this Termination Release or the Continuing Obligations, then the Executive shall not be entitled to receive or continue to receive any of the Termination Benefits and shall immediately remit to the Company upon written demand the Termination Payment and any portion of the Severance Payment, the COBRA Benefit, or the Limited Benefit Reimbursement that has already been paid or reimbursed to him, but all other provisions of this Termination Release shall remain in full force and effect.
3. GENERAL RELEASE BY EXECUTIVE; RATIFICATION OF GENERAL RELEASE BY EXECUTIVE
(a) Subject to subparagraph (d) and Paragraph 13, the Executive knowingly and voluntarily releases, acquits, and forever discharges the Ashford Companies and Ashford Advised Entities, and its or their respective owners, parents, stockholders, predecessors, successors, assigns, agents, directors, officers, employees, representatives, divisions and subsidiaries (collectively, the “Releasees”) from any and all charges, complaints, claims, liabilities, obligations, promises, agreements, damages, causes of action, suits, rights, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured (collectively, the “Claims”), against them which the Executive or any of his heirs, executors, administrators, successors and assigns ever had, now has or at any time hereafter may have, own or hold by reason of any matter, fact, or cause whatsoever from the beginning of time up to and including the date of this Termination Release and, except as permitted by law that supersedes this Termination Release, covenants and agrees not to bring a legal action any of the Releasees for any of the Claims released by this Paragraph 3. The Claims released by this Paragraph 3 include without limitation all Claims under any federal, state, or local employment discrimination or fair employment practices laws (including under the Age Discrimination in Employment Act (the “ADEA”) as set forth more specifically described in Paragraph 4); based on or under the Agreement, any of the Incentive Plans, or any of the Incentive Plan Awards; or based on the common law or any other federal, state, or local statutory or constitutional provision now or hereafter recognized.
TERMINATION RELEASE – Page 3
(b) Subject to subparagraph (d) and Paragraph 13, the Executive represents that he has not filed or permitted to be filed against any of the Releasees, any complaints, charges or lawsuits and covenants and agrees that he will not seek or be entitled to any personal recovery in any court or before any governmental agency, arbitrator or self-regulatory body against any of the Releasees arising out of his employment or the ending of his employment.
(c) The Executive agrees that (i) his continued employment and benefit coverage, and his acceptance of his Base Salary, during the Interim Period constitutes the renewal and ratification by him of the terms of this Paragraph 3 from the date he signs this Termination Release through the Resignation Date and (ii) the Company’s obligation to pay or provide the Termination Benefits is contingent on his memorializing the renewal and ratification of this Paragraph 3 by his signing and returning, and not revoking his acceptance of, a copy of the Renewal and Ratification of General Release attached hereto as Exhibit A and incorporated by this reference (the “Ratification”) to Xxxx Xxxx personally or by email at xxxxx@xxxxxxxxxx.xxx no earlier than the Resignation Date and no later than the twenty-first day after the Resignation Date. The Executive may revoke the Ratification by giving notice to Xxxx Xxxx by email at xxxxx@xxxxxxxxxx.xxx no later than the seventh day after the Executive signs and returns the Ratification. If the Executive does timely sign and return, and does not timely revoke the Ratification, then the Ratification will become effective and enforceable on the seventh day after the Executive signs and returns it (the “Ratification Effective Date”). If the Executive does not timely sign and return, or does timely revoke the Ratification, then he will not be entitled to and will not receive the Termination Benefits but all other provisions of this Termination Release shall remain in full force and effect.
(d) This Paragraph 3 and the Ratification does not waive or release (i) any Claims under the ADEA that may arise after the date the Executive signs this Termination Release (until such time as the Executive subsequently signs the Ratification, at which time this Paragraph 3 does not waive or release any Claims under the ADEA that may arise after the date the Executive signs the Ratification); (ii) any right to enforce this Termination Release; (iii) any rights of Executive under Sections 5(e) or 14 of the Agreement; (iv) any rights that cannot by law be released, including any right to receive an award for information provided to any governmental agency; or (v) any right to benefits under the Company’s employee benefit plans to which he is or will be entitled pursuant to the terms of such plans in the ordinary course.
TERMINATION RELEASE – Page 4
TERMINATION RELEASE – Page 5
7. REAFFIRMATION OF CONTINUING OBLIGATIONS; MODIFICATION OF POST-EMPLOYMENT COVENANTS.
(a) Nothing in this Termination Release shall be deemed to affect or relieve the Executive from his continuing obligations contained in Sections 9, 10, 13, and 15 of Agreement (together with Paragraph 7(b) of this Termination Release, the “Continuing Obligations”). The Executive specifically acknowledges and reaffirms his continuing non-competition and non-solicitation obligations to the Company and AINC under Sections 10(a) and 10(b) of the Agreement, and further agrees that Section 10(b) of the Agreement is amended to read in full as follows:
The Executive further acknowledges that this reaffirmation is material to this Termination Release, and the Executive acknowledges and agrees that his continuing non-competition and non-solicitation obligations under Sections 10(a) and (b) of the Agreement, as modified in this Paragraph 7, are reasonable and enforceable and that he will not challenge or violate these covenants.
(b) The Executive agrees that until such time as the Company has paid all Severance Payments in full (such period, the “Standstill Period”), without the prior written consent of the Company, the Executive will not at any time, directly or indirectly, acquire, make any proposal or offer to acquire, or propose or facilitate the acquisition of, directly or indirectly, by purchase or otherwise, record or Beneficial Ownership of any additional equity securities of the Ashford-Related Entities, or securities of any of the Ashford-Related Entities (as defined in the Agreement) that are convertible, exchangeable, redeemable or exercisable into such equity securities. During the Standstill Period, without the prior written consent of the Company, the Executive agrees that he will not at any time, directly or indirectly:
(i) enter into, agree to enter into, commence or submit any merger, consolidation, tender offer, exchange offer, business combination, share exchange, recapitalization, restructuring or other extraordinary transaction involving any of the Ashford-Related Entities, or any subsidiary or division thereof, or any of their respective securities or assets or take any action that would reasonably be expected to require any of the Ashford-Related Entities to make a public announcement regarding the possibility of any such transaction;
TERMINATION RELEASE – Page 6
(ii) tender into a tender or exchange offer commenced by a third party other than a tender or exchange offer that the Board of Directors of one of the Ashford-Related Entities has affirmatively publicly recommended to such Ashford Related Entity’s stockholders that such stockholders tender into such offer and has not publicly withdrawn or changed such recommendation (and in the case of such a withdrawal or change of recommendation, it shall not be a breach of this clause (ii) if the tendered or exchanged securities are withdrawn prior to the expiration of such tender or exchange offer);
(iii) (x) make, or in any way participate in, any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission (the “SEC”) promulgated pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) to vote any securities of any of the Ashford-Related Entities under any circumstances, or deposit any securities of any of the Ashford-Related Entities in a voting trust or subject them to a voting agreement, pooling agreement or other agreement of similar effect, (y) seek to advise or influence any person with respect to the voting of any securities of any of the Ashford-Related Entities (other than to vote as recommended by Board of Directors of any of the Ashford-Related Entities), or (z) grant any proxy with respect to any equity interests of any of the Ashford-Related Entities (other than to the applicable Ashford-Related Entity or a person specified by such Ashford-Related Entity in a proxy card provided to stockholders of such Ashford-Related Entity);
(iv) form, join or in any way participate in a “group” (as that term is used for purposes of Rule 13d-5 or Section 13(d)(3) of the Exchange Act) with respect to any equity securities of any of the Ashford-Related Entity;
(v) form or publicly disclose any intention, plan or arrangement to change any of the members of the Board of Directors or executive officers of any of the Ashford-Related Entities, any of the executive officers of the Company, or any of the governing documents of any of the Ashford-Related Entities;
(vi) call, request the calling of, or otherwise seek or submit a written request for the calling of a special meeting of, or initiate any stockholder proposal for the election of any director or any other action by, the stockholders of any of the Ashford-Related Entities;
(vii) make a public announcement in connection with seeking to influence or control the management of the Board of Directors, or the policies, affairs or strategy of any of the Ashford-Related Entities;
(viii) form or disclose any intention, plan or arrangement inconsistent with the foregoing;
(ix) advise, assist or encourage, or enter into any arrangements with, any other persons in connection with any of the matters set forth in this Section 7(b); or
TERMINATION RELEASE – Page 7
(x) publicly request the Company to amend or waive any provision of this Termination Release.
For purposes of this Termination Release, “Beneficial Owner”, “Beneficially Own” and “Beneficial Ownership” have the meanings set forth in Rule 13d-3 promulgated under the Exchange Act; provided, that, for purposes of determining whether the Executive is a Beneficial Owner of a security, the Executive shall be deemed to be the Beneficial Owner of any securities which may be acquired by the Executive pursuant to any contract, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise (irrespective of whether the right to acquire such securities is exercisable immediately or only after the passage of time, including the passage of time in excess of sixty (60) days, the satisfaction of any conditions, the occurrence of any event or any combination of the foregoing); provided, further, that for purposes of calculating the percentage of fully diluted shares of any of the Ashford-Related Entities Beneficially Owned by the Executive, all equity interests which may be acquired by the Executive shall be deemed to be outstanding shares of such applicable Ashford-Related Entities.
TERMINATION RELEASE – Page 8
[SIGNATURE PAGE FOLLOWS]
TERMINATION RELEASE – Page 9
ASHFORD HOSPITALITY SERVICES, LLC |
By: | /s/ Xxxx Xxxxx |
Name: Xxxx Xxxxx | |
Title: Senior Vice President, Portfolio Management |
Date Signed: |
EXECUTIVE: | ||
/s/ XXXXXX XXXXXX | ||
XXXXXX XXXXXX | ||
Date Signed: |
SIGNATURE PAGE TO TERMINATION RELEASE
RENEWAL AND RATIFICATION OF GENERAL RELEASE
(Sign and return no earlier than Resignation
Date
and no later than 21 days after the Resignation Date)
1. I previously executed a Termination Release, which is incorporated by this reference. Paragraph 3 of the Termination Release contains a general release and covenant not to xxx by me. All capitalized terms in this Renewal and Ratification of General Release (the “Ratification”) have the same meaning as they do in the Termination Release.
2. In consideration of my continued employment and benefit coverage, and my acceptance of my Base Salary, during the Interim Period and the opportunity to receive (and as a condition of receiving) the Termination Benefits, I hereby renew and ratify the terms of the General Release and Covenant Not to Xxx by Executive in Paragraph 3 of the Termination Release. I acknowledge that Paragraph 13 of the Termination Release applies to this Ratification. I understand that by signing this Ratification, the Claims I am releasing include, but are not limited to, claims under the Age Discrimination in Employment Act other than those that may arise after the date I sign this Ratification.
3. As explained in set out Paragraph 3(d) of the Termination Release, I understand that (i) in order to receive the Termination Benefits, I must signing and return, and not revoke my acceptance of, a copy of this Ratification to Xxxx Xxxx personally or by email at xxxxx@xxxxxxxxxx.xxx no earlier than the Resignation Date and no later than the twenty-first day after the Resignation Date; (ii) I may revoke this Ratification giving notice to Xxxx Xxxx by email at xxxxx@xxxxxxxxxx.xxx no later than the seventh day after I sign and return it; (iii) if I do timely sign and return, and do not timely revoke this Ratification, then this Ratification will become effective and enforceable on the seventh day after it sign and return it; and (iv) if I do not timely sign and return, or do timely revoke this Ratification, then I will not be entitled to and will not receive the Termination Benefits but all other provisions of the Termination Release shall remain in full force and effect.
4. I acknowledge and agree that (i) I am hereby advised to consult with an attorney of my choosing before signing this; (ii) I have been given sufficient time, and up to 21 days at my option, to consider the meaning and effect of executing this Ratification and to consult an attorney if I desired; (iii) I have read and understand this Ratification; and (iv) my execution of this Ratification is knowing and voluntary.
AGREED:
Xxxxxx Xxxxxx | Date Signed |
RENEWAL AND RATIFICATION OF GENERAL RELEASE