EXHIBIT 10.13
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement"), executed March 27, 1998, and
to be effective April 27, 1998, is by and between XXXX X. XXXXXXX HOTELS, INC.,
a Delaware Corporation (the "Company"), and XXXXXXX X. XXXXX ("Employee").
RECITALS
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Employee will be employed as the Chief Financial Officer of the Company on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
AGREEMENT
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1. Employment. The Company hereby employs Employee as Executive Vice
President and Chief Financial Officer ("CFO") of the Company for the Term (as
defined below) of this Agreement, and Employee hereby accepts employment on the
terms and subject to the conditions set forth herein. Employee shall have and
exercise the authority and perform the duties normally incident to the office of
CFO, as well as such other duties as may be reasonably delegated to him by the
Company's Chief Executive Officer (the "CEO") and Board of Directors (the
"Board").
2. Term of Agreement. The term of this Agreement (the "Term") shall
begin on April 27, 1998, or such earlier date as mutually agreed upon by the
parties hereto (the "Commencement Date"), and shall continue until the date that
is three (3) years after the Commencement Date.
3. Compensation.
(a) Base Salary. The Company shall pay to Employee an annual salary of
Two Hundred Fifty Thousand Dollars ($250,000.00) (the annual salary, as it may
be increased from time to time by the Board on an annual basis, is referred to
herein as the "Base Salary") in equal bi-weekly installments.
(b) Discretionary Bonus. Each year during the Term, the Company shall
pay to Employee a bonus (the "Annual Bonus") of up to thirty-five percent (35%)
of his Base Salary for that year based on reasonable, performance-based
standards as established from time to time in the reasonable discretion of the
Board based on the following criteria: one-half (1/2) of the Annual Bonus shall
be based on the Compensation Committee's evaluation of Employee's overall job
performance; the other one-half (1/2) of the Annual Bonus shall be based on the
financial performance of the Company during that year, including the relative
financial performance of the Company as compared to the immediately preceding
year, and the extent to
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which the Company has met or exceeded the Company's annual budget projections as
adopted by the Board for that year.
All bonuses payable pursuant to this Section 3(b) shall be paid to
Employee in cash or other immediately available funds at the same time bonuses
are paid to the other officers of the Company.
(c) Stock Options. The Company shall grant to Employee options to
purchase one hundred thousand (100,000) shares ("Options") of the Company's
Class A Common Stock, par value One Dollar ($1.00) ("Common Stock"), for their
fair market value on the grant date of the option, pursuant to the Company's
1994 Stock Option Plan as in effect on the date hereof.
Except as otherwise provided herein, each of the Options granted
hereunder shall vest and become exercisable over a four (4) year period
following their Grant Date as follows: twenty-five percent (25%) of the granted
Options shall vest and become exercisable on each anniversary of the Grant Date
of the Options. Notwithstanding the foregoing, all Options granted to Employee
shall immediately vest and become exercisable upon the sale, merger,
reorganization or recapitalization of the Company pursuant to which the holders
of the Common Stock of the Company become entitled to receive stock, securities,
or other assets in exchange for their shares of Common Stock.
4. Benefits. Employee shall be entitled to receive the following
benefits from the Company:
(a) Insurance. The Company shall, at its sole expense, if Employee is
insurable at standard rates, purchase and maintain during the Term (i) a life
insurance policy on Employee's life, payable to one (1) or more beneficiaries
designated by Employee, in the aggregate amount of Five Hundred Thousand Dollars
($500,000.00); and (ii) such medical and disability insurance as is generally
available to other executive employees of the Company. If immediate coverage
under the Company's insurance plans is not available to Employee as of the
Commencement Date, the Company shall pay, or reimburse Employee for, the cost of
maintaining full coverage under Employee's existing life, health and disability
insurance policies until Employee is covered under the Company's plans.
(b) Retirement Plan. Employee shall be entitled to participate in any
retirement, savings or benefit plans that the Company makes available to any of
its executive employees.
(c) Club Memberships. The Company shall provide membership at (i)
Highland Springs Country Club, and (ii) the Tower Club (collectively, the
"Country Clubs"). Employee shall be responsible for all monthly dues and food
and other incidental charges incurred by Employee for personal use at the
Country Clubs.
(d) Vacation. Employee shall be entitled to two (2) weeks of paid
vacation during calendar 1998 and four (4) weeks of paid vacation per year
beginning in January, 1999.
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(e) Indemnity; D & O Insurance. To the extent permitted by law, the
Company shall indemnify Employee for any and all liability or damages incurred
by Employee in connection with his employment hereunder; and Employee shall be
covered by any Directors and Officers Liability Insurance which is maintained by
Company.
(f) Miscellaneous. The Company shall reimburse Employee for all
costs and expenses reasonably incurred by Employee in connection with the
performance of his duties hereunder.
5. Relocation.
(a) The Company shall reimburse Employee for two (2) trips to
Springfield for Employee and his spouse (including one (1) trip with his
children), to locate a residence in Springfield, and all costs and expenses
reasonably incurred in connection therewith, including meals, transportation,
and lodging at a hotel affiliated with the Company.
(b) If Employee begins work at the Company before his immediate family
moves to Springfield, the Company shall reimburse Employee for all reasonable
expenses incurred in connection with Employee's reasonable round-trip travel
between Springfield and New York, for up to three (3) months after the
Commencement Date.
(c) The Company shall pay the direct relocation costs for Employee and
his family to move from New York to Springfield, including without limitation
(i) packing and moving their personal effects, furniture and other property
(including the cost of shipping up to three (3) cars or, if one (1) or more of
the cars are driven to Springfield, the costs associated therewith including
mileage reimbursement), (ii) travel costs (including meals and lodging), (iii)
the costs of renting an apartment or other temporary living arrangements for up
to six (6) months, or until employee purchases a home in Springfield, whichever
is earlier, (iv) temporary storage costs for Employee's furniture and personal
effects for up to six (6) months, and (v) insurance costs related to the move.
To the extent that the amount of any reimbursement hereunder will be
included in Employee's taxable income (Federal or State), and is not deductible
for income tax purposes, the Company shall pay to Employee as reimbursement for
such moving expenses an aggregate amount that is sufficient to cover all of
Employee's out-of-pocket moving expenses on an after-tax basis. For example,
and without limiting the generality of the foregoing, if reimbursement of Seven
Hundred Fifty Dollars ($750.00) of Employee's actual moving expenses would be
included in Employee's taxable income (without an offsetting deduction), and if
Employee were taxed at a twenty-five percent (25%) effective rate (combined
Federal and State), then the Company would be obligated to pay Employee an
aggregate of One Thousand Dollars ($1,000.00) for such moving expenses (i.e.,
Seven Hundred Fifty Dollars ($750.00) on an after-tax basis).
6. Termination.
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(a) The Company may terminate this Agreement at any time with or
without "Cause." As used herein, the term "Cause" means gross negligence, fraud
or wilful misconduct.
(b) If Employee is terminated for Cause or if Employee voluntarily
terminates his employment with the Company prior to the end of the Term, (i)
Employee shall be entitled to receive his Base Salary through the date of such
termination; (ii) any Stock Options not vested at the time of such termination
shall be forfeited; and (iii) Employee will not be entitled to receive his
Annual Bonus, or any portion thereof, for the fiscal year in which such
termination occurs.
(c) This Agreement shall terminate upon the death of Employee or, at
the election of the Company, if Employee is unable to perform his duties
hereunder by reason of illness, injury or incapacity for one hundred eighty
(180) consecutive days ("Disability") (during which time Employee shall continue
to be compensated as provided herein).
(d) Either the Company or Employee may elect not to extend the Term by
giving written notice of such non-extension to the other party at least one
hundred and twenty (120) days prior to the end of the Term.
(e) If the Company materially changes the authority and duties of
Employee, such that he no longer serves as the CFO of the Company, and Employee
resigns as a result thereof, then the Company shall be deemed to have terminated
the Employee without Cause for purposes of this Agreement.
7. Severance. If this agreement is terminated (i) by the Company without
Cause, (ii) pursuant to an election by the Company not to extend the Term, (iii)
upon the death or Disability of Employee, or (iv) by either the Company or
Employee if there is a material change in Employee's authority and duties such
that he no longer serves as the CFO, then Employee shall be entitled to
severance pay equal to his Base Salary for the balance of the year in which the
termination occurs and an amount equal to one (1) year of his Base Salary and
prior years bonus, and all Options granted to Employee shall immediately vest
and be exercisable.
8. Covenant Not to Compete. Employee agrees that during the Term and for
one (1) year after the termination of this Agreement by Employee prior to the
end of the Term (except pursuant to Section 6(e) above), Employee will not,
without the prior written consent of the Chief Executive Officer of the Company,
which will not be unreasonably withheld, accept employment with, or serve as a
consultant to, or become an investor with, officer, director or shareholder of
any person, firm or corporation (including any new business started by Employee
alone or with others) that directly competes with the Company in any market
where Company has an existing hotel or has plans, as of the termination of
Employee's employment, for the construction of a hotel.
9. Miscellaneous.
(a) For purposes of this Agreement, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when personally delivered, two (2) days after deposit in the mail if
mailed by certified mail, return receipt
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requested, or when received if delivered by a nationally recognized overnight
courier service, or by facsimile. Notices to the Company shall be given to the
Company's secretary, addressed to the Company's corporate headquarters. Notices
to Employee shall be addressed to Employee's most recent address as set forth in
the personnel records of the Company. Either party shall be entitled to change
the address at which notice is to be given by providing notice to the other
party of such change in the manner provided herein.
(b) This Agreement sets forth the entire agreement of the parties with
respect to the subject matter hereof, and supersedes all prior agreements,
whether written or oral. This Agreement may be amended only by a writing signed
by the parties hereto. Each party represents and warrants that this Agreement
has been duly and validly authorized, executed and delivered by such party and
constitutes a valid and binding obligation of such party, enforceable against
such party in accordance with its terms.
(c) This Agreement shall be binding upon, and inure to the benefit of
the parties, their respective heirs, successors, personal representatives and
assigns.
(d) No waiver of any provision of this Agreement shall be valid unless
it is in writing and signed by the person or party against whom it is charged.
(e) This Agreement may be executed in one (1) or more counterparts,
any one (1) of which need not contain the signatures of more than one (1) party,
but all such counterparts taken together will constitute one (1) and the same
instrument. Signatures may be exchanged by telecopy, with original signatures to
follow. Each party to this Agreement agrees that it will be bound by its own
telecopied signature and that it accepts the telecopied signature of the other
party to this Agreement.
(f) This Agreement shall be governed by and construed in accordance
with the laws of the state of Missouri.
IN WITNESS WHEREOF, Company and Employee have caused this Employment
Agreement to be executed as of the date first set forth above.
COMPANY:
XXXX X. XXXXXXX HOTELS, INC.
By:_________________________________
Name (Print):_______________________
Title:______________________________
EMPLOYEE:
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____________________________________
Xxxxxxx X. Xxxxx
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