EXHIBIT 10.5
ADDENDUM NO. 3 TO EMPLOYMENT AGREEMENT
WHEREAS, Wyndham International, Inc. (the "Company") and Xxxxxxxx Xxxx (the
"Executive") are parties to that certain Executive Employment Agreement
effective as of May 1, 2000, as amended by the Addenda thereto effective as of
August 30, 2001 and December 31, 2001 (as so amended the "Employment
Agreement"); and
WHEREAS, concurrently with the execution of this Addendum, Executive is
exchanging (the "Exchange") the Option (as defined in the Employment Agreement)
for a Restricted Unit Award for 1,000,000 Restricted Units (the "2002 Restricted
Units") to be evidenced by a Restricted Unit Award Agreement (the "2002
Restricted Unit Award Agreement") that the Company and Executive are entering
into concurrently with the execution of this Addendum; and
WHEREAS, the Company and the Executive wish to amend certain provisions of
the Employment Agreement as specified in this Addendum No. 3 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 at the
time of the Exchange on January 7, 2002, 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 Subparagraph 9(a)(iii). Subparagraph 9(a)(iii) of the
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Employment Agreement is hereby deleted in its entirety and replaced with the
following:
(iii) Notwithstanding anything to the contrary in any applicable
option agreement or stock-based award agreement, if Executive terminates
his employment for Good Reason as provided in Subparagraph 7(e) or if
Executive's employment is terminated by the Company without Cause as
provided in Subparagraph 7(d) within eighteen (18) months of a Change in
Control, all stock options and other stock-based awards granted to
Executive by the Company shall immediately accelerate and become
exercisable and non-forfeitable as of the Date of Termination, and at any
time during the 360 days commencing on the Date of Termination, Executive
or his estate may, irrespective of whether Executive is then employed by
the Company or then living, and solely at the election of Executive or his
estate, make a one-time election to require the Company to do all or any
combination of the following:
(x) with respect to any or all Restricted Unit Equivalents (as
defined below) received by Executive and/or his estate upon vesting of
a 2002 Restricted Unit that consisted entirely of cash, Executive or
his estate may require the Company to pay Executive or his estate an
amount equal to the amount, if any, by which $3.85 exceeds the amount
of cash received by Executive or his estate upon the vesting of such
2002 Restricted Unit;
(y) with respect to any or all Restricted Unit Equivalents
received by Executive and/or his estate upon vesting of a 2002
Restricted Unit that consisted entirely of consideration other than
cash (a "Non-Cash Restricted Unit Equivalent"), Executive or his
estate may require the Company:
(i) to purchase such Non-Cash Restricted Unit Equivalent if
it is then owned by Executive or his estate for the Base Price
(as defined below), or
(ii) if such Non-Cash Restricted Unit Equivalent has been
previously sold by Executive or his estate and Subparagraph
9(a)(iii)(y)(iii) below does not apply, pay to Executive or his
estate an amount, if any, by which the Base Price exceeds the
gross sales price at which Executive or his estate sold such
Non-Cash Restricted Unit Equivalent; or
(iii) if such Non-Cash Restricted Unit Equivalent consisted,
upon vesting of the 2002 Restricted Unit, of share(s) of Class A
Common Stock and such share(s), while owned by Executive or his
estate, were converted or exchanged into stock or other
securities of another corporation or entity or cash or other
property in a Transaction (as defined in the 2002 Restricted Unit
Award Agreement) occurring after such vesting (such stock,
securities, cash or other property into which such Non-Cash
Restricted Unit Equivalent was converted or exchanged, being
defined herein as a "Converted Restricted Unit Equivalent"), then
(A) if such Converted Restricted Unit Equivalent
consisted entirely of cash, pay Executive or his estate an
amount, if any, by which the Base Price exceeds the amount
of cash received by Executive and/or his estate upon such
conversion or exchange;
(B) if such Converted Restricted Unit Equivalent
consisted of consideration other than cash or consisted of a
combination of cash and other consideration;
(1) purchase the non-cash portion of such Converted
Restricted Unit Equivalent if it is then owned by Executive
or his estate for an amount equal to the Base Price less the
amount, if any, of the cash portion of the Converted
Restricted Unit Equivalent; or
(2) if the non-cash portion of such Converted
Restricted Unit Equivalent has been sold by Executive or his
estate, pay to Executive or his estate an amount, if any, by
which (A) exceeds (B), where (A) is the result obtained by
subtracting the cash component, if any, of such Converted
Restricted Unit Equivalent from the Base Price and (B) is
the gross sales price at which
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Executive or his estate sold the non-cash portion of such
Converted Restricted Unit Equivalent; and
(z) with respect to any or all Restricted Unit Equivalents
received by Executive and/or his estate upon vesting of a 2002
Restricted Unit that consisted of a combination of cash and
consideration other than cash (a "Combination Restricted Unit
Equivalent"), Executive or his estate may require the Company:
(i) to purchase the non-cash portion of such Combination
Restricted Unit Equivalent for an amount equal to the Base Price
less the amount of the cash portion of the Combination Restricted
Unit Equivalent; or
(ii) if the non-cash portion of such Combination Restricted
Unit Equivalent has been previously sold by Executive or his
estate, pay to Executive or his estate an amount, if any, by
which (A) exceeds (B), where (A) is the result obtained by
subtracting the cash portion of the Combination Restricted Unit
Equivalent from the Base Price, and (B) is the gross sales price
at which Executive or his estate sold the non-cash portion of
such Combination Restricted Unit Equivalent.
Executive or his estate may exercise the election by delivering
written notice of such election to the Company (which notice shall be
accompanied by evidence of the gross sales prices of any Restricted
Unit Equivalents and Converted Restricted Unit Equivalents with
respect to which the Company is required to make a payment pursuant to
Subparagraphs 9(a)(iii)(y)(ii), 9(a)(iii)(y)(iii)(B)(2), and/or
9(a)(iii)(z)(ii). On the fifth day after such notice is received, the
Company shall deliver to Executive or his estate the aggregate amount
the Company is required to pay pursuant to this Subparagraph
9(a)(iii), which amount shall be delivered to Executive or his estate
in cash in immediately available funds in Dallas County, Texas, upon
surrender to the Company by Executive or his estate of all Non-Cash
Restricted Unit Equivalents, non-cash portions of Combination
Restricted Unit Equivalents and non-cash portions of Converted
Restricted Unit Equivalents (in each case, duly endorsed for transfer
to the Company) that the Company is required to purchase pursuant to
Subparagraphs 9(a)(iii)(y)(i), 9(a)(iii)(y)(iii)(B)(1) and/or
9(a)(iii)(z)(i).
For purposes of this Subparagraph 9(a)(iii), "Restricted Unit
Equivalent" means (x) the shares of Class A Common Stock received by
Executive and/or his estate upon vesting of a 2002 Restricted Unit,
and (y) upon or following a Transaction occurring in connection with a
Change in Control, the stock or other securities of another
corporation or entity or cash or other property received by Executive
and/or his estate upon vesting of a 2002 Restricted Unit. The terms of
this Subparagraph 9(a)(iii) shall be equitably adjusted to reflect
stock dividends, stock splits, subdivisions or consolidations of
shares or other similar changes in capitalization affecting (x) the
Class A Common Stock, (y) shares or other securities of another
corporation into which the Class A Common Stock has been
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converted or exchanged in a Transaction occurring after vesting of a
2002 Restricted Unit, or (z) following a Transaction in connection
with a Change in Control, the stock or other securities of another
corporation or entity received by Executive upon vesting of a 2002
Restricted Unit.
For purposes of this Subparagraph 9(a)(iii), "Base Price" means
with respect to a Non-Cash Restricted Unit Equivalent or non-cash
portion of a Combination Restricted Unit Equivalent the result
obtained by subtracting (A) from (B) where (B) is $3.85 and (A) is the
aggregate amount of all dividends and distributions received by
Executive and/or his estate with respect to such Non-Cash Restricted
Unit Equivalent or non-cash portion of such Combination Restricted
Unit Equivalent, as the case may be, as well as any such dividends or
distributions that have been declared but not yet paid to Executive or
his estate as of the closing of the transactions contemplated by this
Subparagraph 9(a)(iii).
For purposes of this Subparagraph 9(a)(iii), "Base Price" means
with respect to a Converted Restricted Unit Equivalent the result
obtained by subtracting (A) from (B) where (B) is $3.85 and (A) is the
aggregate amount of (1) all dividends and distributions received by
Executive and/or his estate with respect to such Converted Restricted
Unit Equivalent, (2) all dividends and distributions received by
Executive and/or his estate with respect to the share(s) of Class A
Common Stock that were converted into such Converted Restricted Unit
Equivalent, and (3) any dividends or distributions that have been
declared but not yet paid to Executive or his estate with respect to
such Converted Restricted Unit Equivalent as of the closing of the
transactions contemplated by this Subparagraph 9(a)(iii).
Executive shall also be entitled to any other rights and benefits
with respect to stock-related awards, to the extent and upon the terms
provided in the employee stock option or incentive plan or any
agreement or other instrument attendant thereto pursuant to which such
options or awards were granted; and
3. 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).
4. 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Addendum No. 3
effective as of January 7, 2002.
WYNDHAM INTERNATIONAL, INC.
By: /s/ XXXXX XXXXXXX
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Name: Xxxxx Xxxxxxx
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Title: Vice President - Compensation and Benefits
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/s/ XXXXXXXX XXXX
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Xxxxxxxx Xxxx, Executive
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