EXHIBIT 99.4
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of the 11th
day of December, 1998, between Wyndham International, Inc., a Delaware
corporation (the "Company"), and Xxxxx Xxxxxxxx ("Executive").
WHEREAS, Executive has previously had a valued association with Wyndham
Hotel Corporation, a Delaware corporation ("Previous Employer");
WHEREAS, the outstanding common stock of the Company is paired and
transferable only as a single unit with the outstanding common stock ("Paired
Shares") of Patriot American Hospitality, Inc. ("Affiliated Company");
WHEREAS, as an additional inducement to Executive to enter into this
Agreement, the Company has granted a one-time stock-based award (as set forth on
Schedule I attached hereto and made a part hereof by this reference) to
Executive, and the Company shall, on the Commencement Date (as hereinafter
defined), enter into a separate Indemnification Agreement with Executive of even
date in the form attached hereto as Exhibit A (the "Indemnification Agreement");
and
WHEREAS, Executive is desirous of committing to serve the Company on the
terms herein provided.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Employment. The term of this Agreement shall extend from January 5, 1998
(the "Commencement Date") until the third anniversary of the Commencement Date.
On or before the date that is six (6) months prior to the scheduled expiration
of this Agreement, the term of this Agreement shall (i) be formally extended
from the originally scheduled expiration date for an additional one (1) year by
the mutual agreement of the Company and Executive; or (ii) shall continue in
effect without extension for the balance of the term and expire in accordance
with its terms. The term of this Agreement shall be subject to termination as
provided in Paragraph 6 and may be referred to herein as the "Period of
Employment."
2. Position and Duties. During the Period of Employment, Executive shall
serve in the position described on Schedule I, shall report to the person
designated on Schedule I, shall have supervision and control over and
responsibility for the day-to-day business and affairs of those functions and
operations of the Company described on Schedule I and shall have such other
powers and duties as may from time to time be prescribed by the Chairman of the
Board of the Company (the "Chairman"), provided that such duties are consistent
with Executive's position or other positions that she may hold from time to
time. Executive shall devote her full working time and efforts to the business
and affairs of the Company. Notwithstanding the foregoing, Executive may serve
on other boards of directors or engage in religious, charitable
or other community activities as long as such services and activities are
disclosed to the Chairman and do not materially interfere with Executive's
performance of her duties to the Company as provided in this Agreement.
3. Compensation and Related Matters.
(a) Base Salary and Incentive Compensation. Executive's initial annual
base salary ("Base Salary") and incentive compensation range shall be set forth
on Schedule I. Executive's Base Salary shall be redetermined at least thirty
(30) days before each annual compensation determination date established by the
Company during the Period of Employment in an amount to be fixed by the
Chairman. The Base Salary, as redetermined, may be referred to herein as
"Adjusted Base Salary." The Base Salary or Adjusted Base Salary shall be
payable in substantially equal bi-weekly installments and shall in no way limit
or reduce the obligations of the Company hereunder. Executive's cash incentive
compensation shall be in an amount determined by the Chairman based on
individual performance, performance by the Company and total return to
shareholders. Executive will also participate in such incentive compensation
plans as the Board of Directors of the Company (the "Board") or its Compensation
Committee shall determine from time to time for employees of the same status
within the hierarchy of the Company.
(b) Expenses. Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by her (in accordance with the policies and
procedures then in effect and established by the Company for its executive
employees) in performing services hereunder during the Period of Employment,
provided that Executive properly accounts therefor in accordance with Company
policy.
(c) Other Benefits. During the Period of Employment, Executive shall be
entitled to continue to participate in or receive benefits under all of the
Company's Employee Benefit Plans in effect on the date hereof, or under plans or
arrangements that provide Executive with at least substantially equivalent
benefits to those provided under such Employee Benefit Plans. As used herein,
"Employee Benefit Plans" include, without limitation, each pension and
retirement plan; supplemental pension, retirement and deferred compensation
plan; savings and profit-sharing plan; stock ownership plan; stock purchase
plan; stock option plan; life insurance plan; medical insurance plan; disability
plan; and health and accident plan or arrangement established and maintained by
the Company on the date hereof for employees of the same status within the
hierarchy of the Company. To the extent that the scope or nature of benefits
described in this section are determined under the policies of the Company based
in whole or in part on the seniority or tenure of an employee's service,
Executive shall be deemed to have a tenure with the Company equal to the actual
time of Executive's service with Company plus the actual service by Executive to
the Previous Employer. During the Period of Employment, Executive shall be
entitled to participate in or receive benefits under any employee benefit plan
or arrangement which may, in the future, be made available by the Company to its
executives and key management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plan or
arrangement. Any
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payments or benefits payable to Executive under a plan or arrangement referred
to in this Subparagraph 3(c) in respect of any calendar year during which
Executive is employed by the Company for less than the whole of such year shall,
unless otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of days in such calendar year during which she is so
employed. Should any such payments or benefits accrue on a fiscal (rather than
calendar) year, then the proration in the preceding sentence shall be on the
basis of a fiscal year rather than calendar year.
(d) Vacations. Executive shall be entitled to the number of paid vacation
days in each calendar year determined by the Company from time to time for
executives at the same level as Executive. Executive shall also be entitled to
all paid holidays given by the Company to its executives. To the extent that
the scope or nature of benefits described in this section are determined under
the policies of the Company based in whole or in part on the seniority or tenure
of an employee's service, Executive shall be deemed to have a tenure with the
Company equal to the actual time of Executive's service with Company plus the
actual service by Executive to the Previous Employer.
4. Unauthorized Disclosure.
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(a) Confidential Information. Executive acknowledges that in the course of
her employment with the Company, she has been allowed to become, and will
continue to be allowed to become, acquainted with the Company's and Affiliated
Company's business affairs, strategies, methods of operation, information, trade
secrets, and other matters which are of a proprietary or confidential nature,
including but not limited to the Company's and Affiliated Company's and their
respective predecessors' 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 Company's,
Affiliated Company's and their respective predecessors' business. 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 her
duties. Executive understands and acknowledges that such Confidential
Information is confidential, and she agrees not to disclose such Confidential
Information to anyone outside the Company or the Affiliated Company except to
the extent that (i) Executive deems such disclosure or use reasonably necessary
or appropriate in connection with performing her 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. At such time as Executive shall cease to be employed by the
Company, she 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
her during the course of her employment with the Company.
(b) Heirs, successors, and legal representatives. The 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.
5. Confidentiality and Related Obligations.
(a) Executive is a licensed attorney and recognizes she is bound by the
ethical principles governing the legal profession including duties to preserve
confidential client information as defined and presently codified in Rule 1.05
of the Texas Disciplinary Rules of Professional Conduct and further to honor and
preserve the attorney client privilege. Executive recognizes and agrees that
these obligations are permanent and survive the period of Executive's employment
by the Company and survive the period of time she remains a licensed attorney.
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(b) Executive recognizes that if she were to attempt to perform as an
employee of or an attorney for a competitor of the Company, there would be a
genuine and inevitable threat that Executive would use or disclose privileged or
confidential client information, and Executive agrees that during Executive's
employment with the Company and for a period of six (6) months thereafter,
Executive will not perform as an employee of or an attorney for a competitor of
the Company. Executive agrees that the Company's remedy against Executive for
money damages for a breach of her duties of confidentiality to the Company would
be inadequate, and Executive agrees that an injunction against her for any such
threatened breach is an appropriate remedy. Notwithstanding anything to the
contrary contained herein, Executive's acceptance of a position with the
Xxxxxxxx Xxxx Family or its subsidiaries or affiliates ("Crow Family Interests")
after her termination of employment shall not be deemed to be a violation of the
foregoing non-compete provisions subject to the condition that Crow Family
Interests does not, during the period of Executive's employment and the period
of non-competition described in the first sentence of this section, directly or
indirectly form a hospitality operating company (as opposed to making individual
investments in hospitality properties).
(c) Executive also agrees that during the term of Executive's employment
with the Company and for a period of two (2) years thereafter, Executive will
not, directly or indirectly, either for herself 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 attempt to
divert or take away any of the customers (including, without limitation, any
hotel owner, lessor or lessee, asset manager, trustee, consumer with whom the
Company or Affiliated Company, from time to time (i) has an existing agreement
or business relationship; or (ii) has included as a prospect in its applicable
pipeline) or vendors of the Company or Affiliated Company in any of the areas or
territories in which the Company or Affiliated Company conducts operations if
such action has the intent or effect of interfering with the Company's or
Affiliated Company's relationship with the vendor or customer.
(d) Further, Executive agrees that during the term of Executive's
employment with the Company and for a period of two (2) years thereafter,
Executive will not directly or indirectly solicit or induce any present or
future employee of the Company or Affiliated Company 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 present or future employee of
the Company or Affiliated Company without providing the Company or Affiliated
Company with ten (10) days' prior written notice of such proposed employment.
6. Termination. Executive's employment hereunder may be terminated without
any breach of this Agreement under the following circumstances:
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(a) Death. Executive's employment hereunder shall terminate upon her
death.
(b) Disability. If, as a result of Executive's incapacity due to physical
or mental illness, Executive shall have been absent from her duties hereunder on
a full-time basis for one hundred eighty (180) calendar days in the aggregate in
any twelve (12) month period, the Company may terminate Executive's employment
hereunder.
(c) Termination by Company For Cause. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder for
Cause. For purposes of this Agreement "Cause" shall mean: (A) conduct by
Executive constituting a material act of willful misconduct in connection with
the performance of her duties, including, without limitation, misappropriation
of funds or property of the Company or any of its affiliates other than the
occasional, customary and de minimis use of Company property for personal
purposes; (B) criminal or civil conviction or conduct by Executive that would
reasonably be expected to result in material injury to the reputation of the
Company if she were retained in her position with the Company, including,
without limitation, conviction of a felony involving moral turpitude; (C)
continued, willful and deliberate non-performance by Executive of her duties
hereunder (other than by reason of Executive's physical or mental illness,
incapacity or disability) and such non-performance has continued for more than
thirty (30) days following written notice of such non-performance from the
Chairman; or (D) a breach by Executive of any of the provisions contained in
Paragraphs 4 and 5 of this Agreement.
(d) Termination by Company for Performance Reasons. At any time during the
Period of Employment, the Company may terminate Executive's employment if
Executive has materially failed to perform her duties hereunder or has violated,
in material respects, the policies and procedures of the Company and such
failure or violation has continued for more than ninety (90) days following
written notice of such violation from the Chairman.
(e) Termination Without Cause. At any time during the Period of
Employment, the Company may terminate Executive's employment hereunder without
Cause if such termination is approved by the Chairman. Any termination by the
Company of Executive's employment under this Agreement which does not constitute
a termination for Cause under Subparagraph 6(c), or termination for performance
under Subparagraph 6(d), or result from the death or disability of the Executive
under Subparagraph 6(a) or (b) or result from the expiration of the Period of
Employment without extension, shall be deemed a termination without Cause.
(f) Termination by Executive. At any time during the Period of Employment,
Executive may terminate her employment hereunder for any reason, including but
not limited to Good Reason. For purposes of this Agreement, "Good Reason" shall
mean that Executive has complied with the "Good Reason Process" (hereinafter
defined) following the occurrence of any of the following events: (A) a
substantial diminution or other substantive adverse change, not consented to by
Executive, in the nature or scope of Executive's responsibilities, authorities,
powers, functions or duties from the responsibilities, authorities, powers,
functions
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or duties described in Paragraph 2; (B) except in connection with a termination
of Executive's employment, any removal, during the Period of Employment, of
Executive from or, any failure by management to nominate, or, if nominated, any
failure by the Board to re-elect, Executive to Senior Vice President (or
comparable) officer level of the Company; (C) an involuntary reduction in
Executive's Base Salary or Adjusted Base Salary or involuntary reduction in cash
incentive compensation plan (but not reduction in incentive compensation
appropriate for level of performance) except for across-the-board salary
reductions similarly affecting all or substantially all management employees;
(D) a breach by the Company of any of its other material obligations under this
Agreement and the failure of the Company to cure such breach within thirty (30)
days after written notice thereof by Executive; (E) the relocation of the
Company's offices at which Executive is principally employed or the involuntary
relocation of the offices of Executive's primary workgroup to a location more
than thirty (30) miles from such offices, or the requirement by the Company for
Executive to be based anywhere other than the Company's offices at such location
on an extended basis, except for required travel on the Company's business to an
extent substantially consistent with Executive's business travel obligations; or
(F) the refusal of the Company to follow legal advice rendered on an issue of
material risk for the Company and/or its officers and directors. "Good Reason
Process" shall mean that (i) the Executive reasonably determines in good faith
that a "Good Reason" event has occurred; (ii) Executive notifies the Company in
writing of the occurrence of the Good Reason event; (iii) Executive cooperates
in good faith with the Company's efforts, for a period not less than ninety (90)
days following such notice, to modify Executive's employment situation in a
manner acceptable to Executive and Company; and (iv) notwithstanding such
efforts, one or more of the Good Reason events continues to exist and has not
been modified in a manner acceptable to Executive.
(g) Notice of Termination. Except for termination as specified in
Subparagraph 6(a), any termination of Executive's employment by the Company or
any such termination by Executive shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.
(h) Date of Termination. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by her death, the date of her death; (B) if
Executive's employment is terminated on account of disability under Subparagraph
6(b) or by the Company for Cause under Subparagraph 6(c), the date on which
Notice of Termination is given; (C) if Executive's employment is terminated by
the Company under Subparagraph 6(d), fourteen (14) days after the date on which
a Notice of Termination is given; (D) if Executive's employment is terminated by
the Company under Subparagraph 6(e), sixty (60) days after the date on which a
Notice of Termination is given; and (E) if Executive's employment is terminated
by Executive under Subparagraph 6(f), thirty (30) days after the date on which a
Notice of Termination is given.
7. Compensation Upon Termination or During Disability.
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(a) If Executive's employment terminates by reason of her death, the
Company shall, within ninety (90) days of death, pay in a lump sum amount to
such person as Executive shall designate in a notice filed with the Company or,
if no such person is designated, to Executive's estate, Executive's accrued and
unpaid Base Salary or, if applicable, her Adjusted Base Salary, to the date of
her death, plus her accrued and unpaid incentive compensation under Subparagraph
3(a). All unvested stock options and stock-based grants shall immediately vest
in Executive's estate or other legal representatives and become exercisable, and
Executive's estate or other legal representatives shall have one (1) year from
the Date of Termination, or remaining option term, if earlier, to exercise the
stock options. For a period of one (1) year following the Date of Termination,
the Company shall pay such health insurance premiums as may be necessary to
allow Executive's spouse and dependents to receive health insurance coverage
substantially similar to coverage they received prior to the Date of
Termination. In addition to the foregoing, any payments to which Executive's
spouse, beneficiaries, or estate may be entitled under any employee benefit plan
shall also be paid in accordance with the terms of such plan or arrangement.
Such payments, in the aggregate, shall fully discharge the Company's obligations
hereunder.
(b) During any period that Executive fails to perform her duties hereunder
as a result of incapacity due to physical or mental illness, Executive shall
continue to receive her accrued and unpaid Base Salary or, if applicable, her
Adjusted Base Salary and accrued and unpaid incentive compensation payments
under Subparagraph 3(a), until Executive's employment is terminated due to
disability in accordance with Subparagraph 6(b) or until Executive terminates
her employment in accordance with Subparagraph 6(f), whichever first occurs.
All unvested stock options and stock-based grants shall immediately vest and
become exercisable and Executive shall have one (1) year from the Date of
Termination, or remaining option term, if earlier, to exercise the stock
options. For a period of one (1) year following the Date of Termination, the
Company shall pay such health insurance premiums as may be necessary to allow
Executive, Executive's spouse and dependents to receive health insurance
coverage substantially similar to coverage they received prior to the Date of
Termination. Upon termination due to death prior to the termination first to
occur as specified in the preceding sentence, Subparagraph 7(a) shall apply.
(c) If Executive's employment is terminated by Executive other than for
Good Reason as provided in Subparagraph 6(f), then the Company shall, through
the Date of Termination, pay Executive her accrued and unpaid Base Salary or, if
applicable, her Adjusted Base Salary at the rate in effect at the time Notice of
Termination is given. Thereafter, the Company shall have no further obligations
to Executive except as otherwise expressly provided under this Agreement,
provided any such termination shall not adversely affect or alter Executive's
rights under any employee benefit plan of the Company in which Executive, at the
Date of Termination, has a vested interest, unless otherwise provided in such
employee benefit plan or any agreement or other instrument attendant thereto.
(d) If Executive terminates her employment for Good Reason as provided in
Subparagraph 6(f) or if Executive's employment is terminated by the Company
without Cause
8
as provided in Subparagraph 6(e), then the Company shall, through the Date of
Termination, pay Executive her accrued and unpaid Base Salary or, if applicable,
her Adjusted Base Salary at the rate in effect at the time Notice of Termination
is given and her accrued and unpaid incentive compensation under Subparagraph
3(a), pro-rated for any partial year employment. In addition, subject to signing
by Executive of a general release of claims in a form and manner satisfactory to
the Company,
(i) the Company shall provide payments to Executive in an amount
equal to the sum of (A) 50 percent of the sum of Executive's Base Salary
or, if applicable, her Adjusted Base Salary and her Average Incentive
Compensation and (B) the amount provided by the Company's then current
severance policy (the "Severance Amount"). The Severance Amount shall be
paid out in substantially equal quarterly installments, in advance, over a
period equal to the sum of six months plus the salary continuation period
provided by the Company's then current severance policy; provided, however,
that in the event Executive commences any employment during such period,
the Company shall be entitled to set-off against the remaining Severance
Amount the amount of any cash compensation received by Executive from the
new employer. The amount payable in each quarter will not be subject to any
set-off so long as Executive certifies in writing prior to each quarterly
payment that she has not accepted employment with a new employer
(including, without limitation, contract and consulting agreements). For
purposes of this Agreement, "Average Incentive Compensation" shall mean the
average of the annual incentive compensation under Subparagraph 3(a)
received by Executive for the three (3) immediately preceding fiscal years
or such fewer number of complete fiscal years as Executive may have been
employed by the Company and the Previous Employer. Notwithstanding the
foregoing, if the Executive breaches any of the provisions contained in
Paragraphs 4 and 5 of this Agreement, all payments of the Severance Amount
shall immediately cease. Notwithstanding the foregoing, in the event
Executive terminates her employment for Good Reason as provided in
Subparagraph 6(f), she shall be entitled to the Severance Amount only if
she provides the Notice of Termination provided for in Subparagraph 6(g)
within thirty (30) days after the occurrence of the event or events which
constitute such Good Reason as specified in clauses (A), (B), (C), (D), (E)
and (F) of Subparagraph 6(f);
(ii) in addition to any other benefits to which Executive may be
entitled in accordance with the Company's then existing severance policies,
the Company shall, for a period of six (6) months commencing on the Date of
Termination or through the date Executive secures new employment, if
earlier, pay for the cost of executive outplacement services selected by
Executive for use in connection with obtaining alternate employment; and
(iii) Executive shall receive all the rights and benefits granted or
in effect with respect to Executive under the Company's employee stock
option or incentive plans and agreements with Executive pursuant thereto.
In addition to the foregoing, all
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stock options and other stock-based awards in which Executive otherwise
would have vested if she would have remained employed for a period of
twelve (12) months commencing on the Date of Termination shall immediately
accelerate and become exercisable or nonforfeitable as of the Date of
Termination.
(e) If Executive's employment is terminated by the Company for Cause as
provided in Subparagraph 6(c) or for performance as provided in Subparagraph
6(d), then the Company shall, through the Date of Termination, pay Executive her
accrued and unpaid Base Salary or, if applicable, her Adjusted Base Salary at
the rate in effect at the time Notice of Termination is given and in the case of
termination for performance as provided by Subparagraph 6(d), her accrued and
unpaid incentive compensation under Subparagraph 3(a) and any severance pay
provided under the Company's then current severance policy. Thereafter, the
Company shall have no further obligations to Executive except as otherwise
expressly provided under this Agreement, provided any such termination shall not
adversely affect or alter Executive's rights under any employee benefit plan of
the Company in which Executive, at the Date of Termination, has a vested
interest, unless otherwise provided in such employee benefit plan or any
agreement or other instrument attendant thereto. Notwithstanding the foregoing
and in addition to whatever other rights or remedies the Company may have at law
or in equity, all stock options held by Executive shall immediately expire on
the Date of Termination if Executive's employment is terminated by the Company
for Cause as provided by Subparagraph 6(c).
(f) If Executive's employment is terminated by the Company solely by reason
of the expiration of the Period of Employment without extension, then the
Company shall, through the date of termination, pay Executive her accrued and
unpaid Base Salary or, if applicable, her Adjusted Base Salary at the rate in
effect at such time, her accrued and unpaid incentive compensation under
Subparagraph 3(b) and the amount provided under the Company's then current
severance policy. Executive shall receive all the rights and benefits granted
or in effect with respect to Executive under the Company's employee stock option
or incentive plans and agreements with Executive pursuant thereto. In addition
to the foregoing, all options and other stock-based awards in which Executive
would otherwise have vested if she would have remained employed for the period
of severance shall immediately accelerate and become exercisable or
nonforfeitable as of the date of termination. Thereafter, the Company shall
have no further obligations to Executive except as otherwise expressly provided
under this Agreement, provided any such termination shall not adversely affect
or alter Executive's rights under any employee benefit plan of the Company in
which Executive, at the date of termination, has a vested interest, unless
otherwise provided in such employee benefit plan or any agreement or other
instrument attendant thereto.
(g) Nothing contained in the foregoing Subparagraphs 7(a) through 7(f)
shall be construed so as to affect Executive's rights or the Company's
obligations relating to agreements or benefits which are unrelated to
termination of employment.
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8. Parachute Payment. The provisions of this Paragraph 8 set forth certain
terms of an agreement reached between Executive and the Company regarding
Executive's rights and obligations upon the occurrence of a Change in Control of
the Company. These provisions are intended to assure and encourage in advance
Executive's continued attention and dedication to her assigned duties and her
objectivity during the pendency and after the occurrence of any such event.
These provisions shall apply in lieu of, and expressly supersede, the provisions
of Subparagraph 7(d)(i) regarding severance pay upon a termination of
employment, if such termination of employment occurs within twelve (12) months
after the occurrence of the first event constituting a Change of Control;
provided that such first event occurs during the Period of Employment. These
provisions shall terminate and be of no further force or effect beginning twelve
(12) months after the occurrence of a Change of Control.
(a) Escrow. Within fifteen (15) days after the occurrence of the first
event constituting a Change of Control, the Company shall place funds in an
amount equal to the estimated Parachute Amount in escrow, pursuant to
arrangements that are mutually acceptable to the Company and Executive providing
for the payment of the Parachute Amount in the event Executive becomes entitled
thereto pursuant to Subparagraph 8(b)(i) (the "Escrow Arrangement"). The Escrow
Arrangement shall be maintained until the earlier of (A) twelve (12) months
after the occurrence of the first event constituting a Change of Control or (B)
the payment to Executive of the Parachute Amount pursuant to the provisions of
Subparagraph 8(b)(i).
(b) Change in Control.
(i) If within twelve (12) months after the occurrence of the first
event constituting a Change in Control, Executive's employment terminates
for any reason other than (A) death, (B) her inability, due to illness,
accident, or other physical or mental incapacity, to perform her duties for
more than one hundred eighty (180) days during any twelve-month period, (C)
for Cause or (D) her Voluntary Resignation ("Termination"), then the
Company shall pay Executive in a lump sum an amount equal to the applicable
Parachute Amount on the tenth (10th) day following Executive's Termination;
and
(ii) Notwithstanding anything to the contrary in any applicable option
agreement or stock-based award agreement, upon the effective date of the
Change in Control, all stock options and other stock-based awards granted
to Executive by the Company shall immediately accelerate and become
exercisable or non-forfeitable as of the date of Change in Control, and
Executive shall 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.
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(c) Gross Up Payment.
(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 (the
"Gross Up Payment") 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 taxes (together with penalties and interest) and
Excise Tax upon the payment provided for by this Subparagraph 8(c)(i), will
be equal to the Parachute Amount.
(ii) Applicable Rates. For purposes of determining the amount of the
Gross Up Payment, Executive will be deemed to pay federal income taxes at
the highest marginal rate of federal taxation in the calendar year in which
the Gross Up Payment is to be made and state and local income taxes at the
highest marginal rates of taxation in the state and locality of Executive's
residence on the date of Executive's Termination, net of the maximum
reduction in federal income taxes that could be obtained from deduction of
such state and local taxes.
(iii) Determination of Gross Up Payment Amount. The determination of
whether the Excise Tax is payable and the amount thereof will be based upon
the opinion of tax counsel selected by Executive and approved by the
Company, which approval will not be unreasonably withheld. The costs of
obtaining the opinion of tax counsel shall be borne by the Company. If such
opinion is not finally accepted by the Internal Revenue Service (or state
and local taxing authorities), then appropriate adjustments to the Excise
Tax will be computed and additional Gross Up Payments will be made in the
manner provided by this Subparagraph (c).
(iv) Time For Payment. The Company will pay the estimated amount of
the Gross Up Payment in cash to Executive concurrent with Employee's
Termination. Executive and the Company agree to reasonably cooperate in the
determination of the actual amount of the Gross Up Payment. Further,
Executive and the Company agree to make such adjustments to the estimated
amount of the Gross Up Payment as may be necessary to equal the actual
amount of the Gross Up Payment, 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.
(d) Definitions. For purposes of this Paragraph 8, the following terms
shall have the following meanings:
"Change in Control" shall mean an event which shall be deemed to have
occurred if (i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than a trustee or other fiduciary holding securities
under an employee benefit plan of
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the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Exchange Act), directly or indirectly, of securities
of the Company representing twenty-five percent (25%) or more of the
combined voting power of the Company's then outstanding securities; or (ii)
individuals who at the Commencement Date constitute the Board and any new
director (other than a director designated by a person who has entered into
an agreement with the Company to effect a transaction described in clauses
(i) or (iii) of this paragraph) whose election by the Board or nomination
for election by the Company's stockholders was approved by a vote of at
least eighty percent (80%) of the directors then still in office who either
were directors at the Commencement Date or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority of the Board; or (iii) the stockholders of the Company approve a
merger or consolidation of the Company with or into any other corporation,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) at least sixty percent (60%) of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets.
"Company" shall mean not only Wyndham International, Inc., but also
its successors by merger or otherwise.
"Parachute Amount" shall mean an amount equal to the Severance Amount
provided for in Subparagraph 7(d)(i). In the event an enhanced severance
plan is adopted by the Company, Executive shall be entitled to receive the
same level of severance benefits as the Executive Vice Presidents.
"Voluntary Resignation" shall mean any termination of Executive's
employment by her own act, unless such termination is for Good Reason.
9. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified mail, return receipt requested, postage prepaid, addressed as follows:
if to the Executive:
At her home address as shown
in the Company's personnel records;
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if to the Company:
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
10. Miscellaneous. No provisions of this Agreement may be modified, waived, or
discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, unless specifically
referred to herein, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement. The validity,
interpretation, construction, and performance of this Agreement shall be
governed by the laws of the State of Texas (without regard to principles of
conflicts of laws).
11. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect. The invalid portion of this Agreement, if any, shall be modified by any
court having jurisdiction to the extent necessary to render such portion
enforceable.
12. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
13. Arbitration; Other Disputes. In the event of any dispute or controversy
arising under or in connection with 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
before resorting to arbitration. In the event such dispute or controversy
remains unresolved in whole or in part for a period of thirty (30) days after it
arises, the parties will settle any remaining dispute or controversy exclusively
by arbitration in Dallas, Texas, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. 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. Furthermore, should a dispute occur concerning
Executive's mental or physical capacity as described in Subparagraph 6(b), 6(c)
or 7(b), a doctor selected by
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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 at a rate equal to the lesser of eighteen percent
(18%) per annum or the maximum lawful rate.
14. Third-Party Agreements and Rights. Executive represents to the Company
that Executive's execution of this Agreement, Executive's employment with the
Company and the performance of Executive's proposed duties for the Company will
not violate any obligations Executive may have to any employer or other party,
and Executive will not bring to the premises of the Company any copies or other
tangible embodiments of non-public information belonging to or obtained from any
such previous employment or other party.
15. Litigation and Regulatory Cooperation. During and after Executive's
employment, Executive shall reasonably cooperate with the Company in the defense
or prosecution of any claims or actions now in existence or which may be brought
in the future against or on behalf of the Company which relate to events or
occurrences that transpired while Executive was employed by the Company;
provided, however, that such cooperation shall not materially and adversely
affect Executive or expose Executive to an increased probability of civil or
criminal litigation. Executive's cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. During and after Executive's
employment, Executive also shall cooperate fully with the Company in connection
with any investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or occurrences
that transpired while Executive was employed by the Company. The Company shall
also provide Executive with compensation on an hourly basis calculated at her
final base compensation rate for requested litigation and regulatory cooperation
that occurs after her termination of employment, and reimburse Executive for all
costs and expenses incurred in connection with her performance under this
Paragraph 15, including, but not limited to, reasonable attorneys' fees and
costs.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective on
the date and year first above written.
WYNDHAM INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Its: Chairman and Chief Executive Officer
/s/ Xxxxx Xxxxxxxx
------------------------------------
Xxxxx Xxxxxxxx
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