EXHIBIT 10.13
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is made as of the 12th
day of August, 1999, between Wyndham International, Inc., a Delaware corporation
(the "Company"), and Xxxx X. Xxxxxxxx ("Executive"), but it shall become
effective only on the date set forth in Paragraph 19 below (the "Effective
Date").
WHEREAS, the Company desires to employ Executive as its President and
Chief Operating Officer; and
WHEREAS, as an additional inducement to Executive to enter into this
Agreement, the Company shall, on the Effective Date, (a) pay to Executive a
signing bonus of $550,000.00, (b) aid Executive in the purchase of a Dallas
residence, up to and including a bridge loan, (c) grant Executive an option to
purchase a certain number of shares of Class A Common Stock of the Company, as
set forth in the agreement attached hereto as Exhibit A (the "Option"), (d)
grant Executive a certain number of shares of Class A Common Stock of the
Company as set forth in the agreement attached hereto as Exhibit B (the "Stock
Grant"); and (e) enter into a promissory note in the form attached hereto as
Exhibit C (the "Note"); and
WHEREAS, Executive desires to be employed by 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 the Effective Date
until the third anniversary of the Effective Date; provided, however, that the
term of this Agreement shall automatically be extended for one additional year
on the third anniversary of the Effective Date and each anniversary thereafter
unless, not less than 90 days prior to each such date, either party shall have
given notice to the other that it does not wish to extend this Agreement;
provided, further, that if a Change in Control occurs during the original or
extended term of this Agreement, the term of this Agreement shall continue in
effect for a period of not less than eighteen (18) months beyond the month in
which the Change in Control occurred. The term of this Agreement shall be
subject to termination as provided in Paragraph 7 and may be referred to herein
as the "Period of Employment."
2. Position and Duties. During the Period of Employment, Executive shall serve
as President and Chief Operating Officer of the Company, shall have supervision
and control over and responsibility for the day-to-day business and affairs of
those functions and operations of the Company 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") or the Chief Executive Officer of the Company
(the "CEO"), provided that such duties are consistent with the normal and
customary duties of the Executive's position or other positions that he may hold
from time to time. Executive shall devote his full working time and efforts to
the business and affairs of the
1
Company. Notwithstanding the foregoing, Executive may serve on other boards of
directors, with the approval of the Chairman or CEO, or engage in religious,
charitable or other community activities as long as such services and activities
are disclosed to the Chairman or CEO and do not materially interfere with
Executive's performance of his duties to the Company as provided in this
Agreement.
3. Compensation and Related Matters.
(a) Base Salary. Executive's initial annual base salary ("Base Salary")
shall be $550,000.00. Thereafter, 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 but in any event not
later than the first quarter of the applicable fiscal year (the "Annual
Compensation Determination Date") in an amount to be fixed by the Board of
Directors (the "Board") based upon merit, but in no event shall such re-
determined Base Salary be less than $550,000.00. The Base Salary, as
redetermined, is referred to herein as the "Adjusted Base Salary." The Base
Salary or, if applicable, the Adjusted Base Salary, shall be payable in
substantially equal bi-weekly installments.
(b) Incentive Compensation. In addition to Base Salary or, if applicable,
Adjusted Base Salary, Executive shall be eligible to receive in each fiscal year
during the Period of Employment, on or about the Annual Compensation
Determination Date (or earlier as provided in Paragraph 8 and 9 of this
Agreement), cash incentive compensation (the "Incentive Compensation") in an
amount determined annually by the Compensation Committee of the Board based on
individual performance, "Employer EBITDA Achievement" (as hereinafter defined),
and total return to shareholders. Incentive Compensation shall equal from zero
to two times the then current Base Salary or, if applicable, Adjusted Base
Salary. "Employer EBITDA Achievement" is the degree to which the annual budget
established by Employer for earnings before interest, taxes, depreciation, and
amortization is achieved. Incentive Compensation shall equal at least
$750,000.00 for the remainder of 1999, which shall be payable to Executive not
later than March 31, 2000. Thereafter, Incentive Compensation shall be targeted
at a minimum of 100% of the Base Salary or, if applicable, Adjusted Base Salary
for any year in which Employer EBITDA Achievement is one hundred percent (100%)
or more ("Target Incentive Compensation"). The Company will advance $12,500.00
of Incentive Compensation on a monthly basis, as a draw against annual Incentive
Compensation.
"Pro Rata Incentive Compensation" shall be paid to Executive for any
termination. Pro Rata Incentive Compensation equals the Incentive Compensation
for the fiscal year of termination multiplied by a fraction, the numerator of
which is the number of days in the current fiscal year through Date of
Termination and the denominator is 365.
If, for the purpose of calculating Incentive Compensation or Pro Rata
Incentive Compensation, the Incentive Compensation cannot be determined by the
time required to be paid, Employer shall make a good faith estimate of the pro
rata amount based on an amount Executive would have earned had he continued
employment for the entire fiscal year.
Executive will also participate in such other incentive compensation plans,
policies or practices as the Board shall determine.
2
(c) Expenses. Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by him (in accordance with the policies and
procedures then in effect and established by the Company for its senior
executive officers) in performing services hereunder during the Period of
Employment, provided that Executive properly accounts therefor in accordance
with the Company policy.
(d) 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. 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 executive and key management employees, subject to and on
a basis consistent with the terms, conditions, and overall administration of
such plan or arrangement. Any payments or benefits payable to Executive under a
plan or arrangement referred to in this Subparagraph 3(d) 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 each
calendar year during which he 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.
(e) Life Insurance. The Company shall pay the premiums on, and maintain in
effect throughout the Period of Employment, a life insurance policy on the life
of Executive in an amount not less than $2.0 million. Executive shall have the
right to designate the beneficiary under such policy.
(f) 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.
(g) Disability Insurance. The Company shall pay the premiums on, and
maintain in effect through the Period of Employment, long-term disability
insurance providing for payment
3
of benefits at rates not less than sixty percent (60%) of Executive's current
Base Salary or Adjusted Base Salary.
4. Board Service. Executive agrees to serve as a Director of the Company if so
elected or appointed.
5. Unauthorized Disclosure.
(a) Confidential Information. Executive acknowledges that in the course of
his employment with the Company (and, if applicable, its predecessors), he has
been allowed to become, and will continue to be allowed to become, acquainted
with the Company's business affairs, information, trade secrets, and other
matters which are of a proprietary or confidential nature, including but not
limited to the Company's and its 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 and its 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 his duties.
Executive understands and acknowledges that such Confidential Information is
confidential, and he agrees not to disclose such Confidential Information to
anyone outside the company except to the extent that (i) Executive deems such
disclosure or use reasonably necessary or appropriate in connection with
performing his duties on behalf of the Company; (ii) Executive is required by
order of a court of competent jurisdiction (by subpoena or similar process) to
disclose or discuss any Confidential Information, provided that in such case,
Executive shall promptly inform the Company of such event, shall cooperate with
the Company in attempting to obtain a protective order or to otherwise restrict
such disclosure, and shall only disclose Confidential Information to the minimum
extent necessary to comply with any such court order; (iii) such Confidential
Information becomes generally known to and available for use by the hotel and
hospitality industry (the "Hotel Industry"), other than as a result of any
action or inaction by Executive; or (iv) such information has been rightfully
received by a member of the Hotel Industry or has been published in a form
generally available to the Hotel Industry prior to the date Executive proposes
to disclose or use such information. Executive further agrees that he will not
during employment and/or at any time thereafter use such Confidential
Information in competing, directly or indirectly, with the Company. At such time
as Executive shall cease to be employed by the Company, he will immediately turn
over to the Company all Confidential Information, including papers, documents,
writings, electronically stored information, other property, and all copies of
them, provided to or created by him during the course of his employment with the
Company.
(b) Heirs, successors, and legal representatives. The foregoing provisions
of this Paragraph 5 shall be binding upon Executive's heirs, successors, and
legal representatives. The provisions of this Paragraph 5 shall survive the
termination of this Agreement for any reason.
6. Covenant Not to Compete. In consideration for the Option, Stock Grant, loan
evidenced by the Note, the Company's promise to provide Confidential Information
as set forth in Paragraph 5 above, and for Executive's employment by the Company
under the terms provided
4
in this Agreement and as a means to aid in the performance and enforcement of
and preserve the rights of the Company pursuant to the terms of the Unauthorized
Disclosure provisions of Paragraph 5, Executive agrees as follows:
(a) during the term of Executive's employment with the Company and for a
period of twenty-four (24) months thereafter, regardless of the reason for
termination of employment, Executive will not, directly or indirectly, as an
owner, director, principal, agent, officer, employee, partner, consultant,
servant, or otherwise, carry on, operate, manage, control, or become involved in
any manner with any business, operation, corporation, partnership, association,
agency, or other person or entity which is in the business of owning, operating,
managing or granting franchise rights with respect to hotels, motels or other
lodging facilities in any location in which the Company, or any subsidiary or
affiliate of the Company, operates or has plans or has projected to operate any
facility during Executive's term of Employment including any area within a 50
mile radius of such facility (any "Business Area"); provided, however, that the
foregoing shall not prohibit Executive from owning up to one percent (1%) of the
outstanding stock of a publicly held company engaged in the hospitality
business. Notwithstanding the foregoing, after Executive's employment with the
Company has terminated, upon receiving written permission by the Board,
Executive shall be permitted to engage in such activities with respect to any
other hotel, motel or lodging facility that shall be determined in the sole
discretion of the Board in good faith to be immaterial to the operations of the
Company, or any subsidiary or affiliate of the Company, in the area or territory
in question.
(b) during the term of Executive's employment with the Company and for a
period of twenty-four (24) months thereafter, regardless of the reason for
termination of employment, Executive will not, directly or indirectly, either
for himself or for any other business, operation, corporation, partnership,
association, agency, or other person or entity, call upon, compete for, solicit,
divert, or take away, or attempt to divert or take away current or prospective
customers (including, without limitation, any hotel owner, lessor or lessee,
asset manager, trustee, consumer with whom the Company, or any subsidiary or
affiliate of the Company, (i) has an existing agreement or business
relationship; (ii) has had an agreement or business relationship within the two-
year period preceding the Executive's last day of employment with the Company;
or (iii) has included as a prospect in its applicable pipeline) or vendors of
the Company, or any subsidiary or affiliate of the Company, in any Business
Area.
(c) during the term of Executive's employment with the Company and for a
period of twenty-four (24) months thereafter, regardless of the reason for
termination of employment, Executive will not directly or indirectly solicit or
induce any current or prospective employee of the Company, or any subsidiary or
affiliate of the Company (including, without limitation, any current or
prospective employee of the Company within the six-month period preceding the
Executive's last day of employment with the Company or within the 24-month
period of this covenant) to accept employment with Executive or with any
business, operation, corporation, partnership, association, agency, or other
person or entity with which Executive may be associated, and Executive will not
employ or cause any business, operation, corporation, partnership, association,
agency, or other person or entity with which Executive may be associated to
employ any current or prospective employee of the Company, or any subsidiary or
5
affiliate of the Company, without providing the Company with ten (10) days'
prior written notice of such proposed employment.
(d) Executive agrees and acknowledges that the restrictions contained in
this noncompetition covenant are reasonable in scope and duration and are
necessary to protect the Company's business interests and Confidential
Information after the Effective Date of this Agreement. If any provision of this
noncompetition covenant as applied to any party or to any circumstance is
adjudged by a court to be invalid or unenforceable, the same will no in way
affect any other circumstance or the validity or enforceability of this
Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision, and/or to delete
specific words or phrases, and in its reduced form, such provision shall then be
enforceable and shall be enforced. The parties agree and acknowledge that the
breach of this noncompetition covenant will cause irreparable damage to the
Company, and upon breach of any provision of this noncompetition covenant, the
Company shall be entitled to injunctive relief, specific performance, or other
equitable relief; provided, however, that this shall in no way limit any other
remedies which the Company may have (including, without limitation, the right to
seek monetary damages).
(e) Should Executive violate the provisions of this Paragraph, then in
addition to all other rights and remedies available to the Company at law or in
equity, the duration of this covenant shall automatically be extended for the
period of time from which Executive began such violation until he permanently
ceases such violation.
7. Termination. Executive's employment hereunder may be terminated without any
breach of this Agreement under the following circumstances:
(a) Death. Executive's employment hereunder shall terminate upon his death.
(b) Disability. If, as a result of Executive's incapacity due to physical
or mental illness, Executive shall have been absent from his 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
if such termination is approved by not less than a majority of the Board of
Directors of the Company at a meeting of such Board of Directors called and held
for such purpose. 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 his 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 of Executive, a plea of nolo
contendere by Executive or conduct by Executive that, as determined in the sole
discretion of the Board of Directors of the Company, has resulted in, or would
result in if he were retained in his position with the Company, material
6
injury to the reputation of the Company, including, without limitation,
conviction of a felony involving moral turpitude; (C) continued, willful and
deliberate non-performance by Executive of his 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 Board; (D) a breach by Executive
of any of the provisions contained in Paragraphs 5 and 6 of this Agreement; or
(E) a violation by the Executive of the Company's employment policies and such
violation has continued following written notice of such violation from the
Board.
(d) 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 a majority of the Board at a meeting of the Board
called and held for such purpose. Any termination by the Company or Executive's
employment under this Agreement which does not constitute a termination for
Cause under Subparagraph 7(c) or result from the death or disability of the
Executive under Subparagraph 7(a) or (b) shall be deemed a termination without
Cause. If the Company provides notice to the Executive under Paragraph 1 that it
does not wish to extend the Period of Employment, such action shall be deemed a
termination without Cause.
(e) Termination by Executive. At any time during the Period of Employment,
Executive may terminate his employment hereunder for any reason, including but
not limited to Good Reason. If Executive provides notice to the Company under
Paragraph 1 that he does not wish to extend the Period of Employment, such
action shall be deemed a voluntary termination by Executive and one without 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,
(B) any removal, during the Period of Employment, from Executive of his titles
of President and Chief Operating Officer; (C) an involuntary reduction in
Executive's Base Salary, Adjusted Base Salary or Incentive Compensation (but not
reduction in Incentive Compensation appropriate for level of performance); (D) a
breach by the Company of any of its other material obligations under this
Agreement and the failure of Company to cure such breach within thirty (30) days
after written notice thereof by Executive; (B) the involuntary 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 (other than a relocation in either
event to Dallas, Texas), or the requirement by the Company for Executive to be
based anywhere other than the Company's offices at such location or in Dallas,
Texas on an extended basis, except for required travel on obligations; and (F)
Executive shall not have been nominated by the Nominating Committee of the Board
to fill a seat as a Class A Director when the next such vacancy occurs but in
any event prior to the first anniversary of the Effective Date. "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
7
not been modified in a manner acceptable to Executive. If the Company cures the
Good Reason event during the ninety (90) day period, Good Reason shall be deemed
not to have occurred.
(f) Notice of Term/nation. Except for termination as specified in
Subparagraph 7(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.
(g) Date of Termination. "Date of Termination" shall mean: (A) if
Executive's employment is terminated by his death, the date of his death; (B) if
Executive's employment is terminated on account of disability under Subparagraph
7(b) or by the Company for Cause under Subparagraph 7(c), the date on which
Notice of Termination is given; (C) if Executive's employment is terminated by
the Company under Subparagraph 7(d), sixty (60) days after the date on which a
Notice of Termination is given; and (D) if Executive's employment is terminated
by Executive under Subparagraph 7(e), thirty (30) days after the date on which a
Notice of Termination is given.
8. Compensation Upon Termination or During Disability.
(a) If Executive's employment terminates by reason of his 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, his Adjusted Base Salary, to the date of
his death, plus his Pro Rata Incentive Compensation, if any, under Subparagraph
3(b). 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 his duties hereunder
as a result of incapacity due to physical or mental illness, Executive shall
continue to receive his accrued arid unpaid Base Salary or, if applicable, his
Adjusted Base Salary and accrued and unpaid Incentive Compensation payments, if
any, under Subparagraph 3(b), until Executive's employment is terminated due to
disability in accordance with Subparagraph 7(b) or until Executive terminates
his employment in accordance with Subparagraph 7(e), whichever first occurs. 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 8(a) shall apply.
8
(c) If Executive's employment is terminated by Executive other than for
Good Reason as provided in Subparagraph 7(e), then the Company shall, through
the Date of Termination, pay Executive his accrued and unpaid Base Salary or, if
applicable, his 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 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), then the Company shall, through
the Date of Termination, pay Executive his accrued and unpaid Base Salary or, if
applicable, his Adjusted Base Salary at the rate in effect at the time Notice of
Termination is given and his accrued and unpaid Incentive Compensation, if any,
under Subparagraph 3(b). 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 continue Executive's compensation at a rate
equal to the sum of Executive's Average Base Salary and his Average
Incentive Compensation payable for the remaining length of the Period of
Employment after the Date of Termination (the "Severance Amount"), but in
no event for fewer than twenty-four (24) months. The Severance Amount shall
be paid out in substantially equal bi-weekly installments, in arrears;
provided, however, that in the event Executive commences any employment
with an employer other than the Company during the twelve month period
ending on the first anniversary of the Date of termination, the Company
shall be entitled to set-off against the remaining Severance Amount fifty
percent (50%) of the amount of any cash compensation received by Executive
from the new employer during such period, provided further that, in the
event Executive commences any employment with, or is employed by, any
employer other than the Company during the twelve month period ending on
the second anniversary of the Date of Termination, the Company shall be
entitled to set-off against the remaining Severance Amount twenty-five
percent (25%) of the amount of any cash received by Executive from such
employer during such period. From time to time, Executive may be asked to
certify to the Company that he has not accepted employment with a new
employer (including, without limitation, contract and consulting
agreements). For purposes of this Agreement, "Average Base Salary" shall
mean the average of the annual Base Salary or, if applicable, Adjusted Base
Salary received by Executive for each of the three (3) immediately
preceding fiscal years or such fewer number of complete fiscal years as
Executive may have been employed by the Company. For purposes of this
Agreement, "Average Incentive Compensation" shall mean the average of the
annual Incentive Compensation under Subparagraph 3(b) received by Executive
for the three (3) immediately preceding fiscal years or such fewer numbers
of complete fiscal years as Executive may have been employed by the
Company. In no event shall "Average Incentive Compensation" include any
sign-on bonus, retention bonus or any other special bonus. Notwithstanding
the foregoing, if the Executive breaches any of the provisions contained in
Paragraphs 5 and 6 of this
9
Agreement, all payments of the Severance Amount shall immediately cease.
Notwithstanding the foregoing, in the event Executive terminates his
employment for Good Reason as provided in Subparagraph 7(e), he shall be
entitled to the Severance Amount only if he provides the Notice of
Termination provided for in Subparagraph 7(f) 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 7(e).
(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 one (1) year commencing on the Date of
Termination, pay such health insurance premiums as may be necessary to
allow Executive, Executive's spouse and dependents to continue to receive
health insurance coverage substantially similar to the coverage they
received prior to his termination of employment.
(e) If Executive's employment is terminated by the Company for Cause as
provided in Subparagraph 7(c), then the Company shall, through the Date of
Termination, pay Executive his accrued and unpaid Base Salary or, if applicable,
his 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.
(f) Regardless of the reason for termination, for a period of five (5)
years beginning on the Date of Termination, the Company will provide such
reasonable assistance and support to Executive as he shall reasonably require in
connection with the preparation and filing of tax returns, statements and forms
insofar as such returns, statements or forms relate to Executive's association
with the Company or any of its predecessors or affiliates. At the Company's
election, such assistance and support shall be provided by either tax personnel
from the Company or certified public accountants selected and compensated by the
Company.
(g) Nothing contained in the foregoing Subparagraphs 8(a) through 8(f)
shall be construed so as to effect Executive's rights or the Company's
obligations relating to agreements or benefits which are unrelated to
termination of employment.
9. Change in Control Payment. The provisions of this Paragraph 9 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 his assigned duties
and his 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 8(d)(i) regarding severance pay upon a termination of
employment, if such termination of employment occurs within eighteen (18) months
after the occurrence of the first event constituting a Change in Control;
provided that such first event occurs during the Period of
10
Employment. These provisions shall terminate and be of no further force or
effect beginning eighteen (18) months after the occurrence of a Change in
Control.
(a) Change in Control
(i) If within eighteen (18) months after the occurrence of the first
event constituting a Change in Control, Executive's employment is
terminated by the Company without Cause as provided in Subparagraph 7(d) or
Executive terminates his employment for Good Reason as provided in
Subparagraph 7(e), then the Company shall pay Executive the Severance
Amount as provided in Subparagraph 8(d)(i) in substantially biweekly
installments, in arrears, over twenty-four (24) months. Notwithstanding the
foregoing, if the Executive breaches any of the provisions contained in
Paragraphs 5 and 6 of this Agreement, all payments of the Severance Amount
shall immediately cease;
(ii) Within fifteen (15) days after Executive becomes entitled to
receive the Severance Amount under (i) above, the Company shall place funds
in an amount equal to the estimated Severance Agreement in escrow, pursuant
to arrangements that are mutually acceptable to the Company and Executive
(the "Escrow Arrangement"). The Escrow Arrangement shall be maintained
until the final installment payment of the Severance Amount has been made;
(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 or non-forfeitable as of the Date of Termination, and Executive
shall have 360 days to exercise his stock options. 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
(iv) The Company shall, for a period of one (1) year commencing on
the Date of Termination, pay such health insurance premiums as may be
necessary to allow Executive, Executive's spouse and dependent to continue
to receive health insurance coverage substantially similar to the coverage
they received prior to his termination employment.
(b) 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
11
payment and any federal, state and local income taxes and employment taxes
(together with penalties and interest) and Excise Tax upon the payment
provided for by this Subparagraph 8(c)(i), will be equal to the Severance
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 income 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. 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 at such time of times when the
Excise Tax is due. 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, 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.
(c) Definitions. For purpose of this Paragraph 9, the following terms
shall have the following meanings:
"Change in Control" shall mean any of the following:
(a) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (the
"Acquiring Person"), other than the Company, or any of its Subsidiaries or
any Investor or Excluded Group, of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of the
combined voting power or economic interests of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors; provided, however, that any transfer from any Investor or
Excluded Group will not result in a Change in Control if such transfer was
part of a series of related transactions the effect of which, absent the
transfer to such Acquiring Person by the Investor or Excluded Group, would
not have resulted in the acquisition by such Acquiring Person of 35% or
more of the combined voting power or economic interests of the then
outstanding voting securities; or
12
(b) during any period of 12 consecutive months after the Issuance
Date, the individuals who are the beginning of any such 12-month period
constituted a majority of the Class A Directors and Class C Directors (the
"Incumbent Non-Investor Majority") cease for any reason to constitute at
least a majority of such Class A Directors and Class C Directors; provided
that (i) any individual becoming a director whose election, or nomination
for election by the Company's stockholders, was approved by a vote of the
stockholders having the right to designate such director and (ii) any
director whose election to the Board or whose nomination for election by
the stockholders of the Company was approved by the requisite vote of
directors entitled to vote on such election or nomination in accordance
with the Restated Certificate of Incorporation of the Company, shall, in
each such case, be considered as though such individual were a member of
the Incumbent Non-Investor Majority, but excluding, as a member of the
Incumbent Non-Investor Majority, any such individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the directors of the Company (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) and further excluding any person who is an affiliate or
associate of an Acquiring Person having or proposing to acquire beneficial
ownership of 25% or more of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in
the election of directors; or
(c) the approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case, with respect to
which all or substantially all of the individuals and entities who were the
respective beneficial owners of the voting securities of the Company
immediately prior to such reorganization, merger or consolidation do not,
following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 57.5% of the combined voting power of the
then outstanding voting securities entitled to vote generally in the
election of director of the Company resulting from such reorganization,
merger or consolidation; or
(d) the sale or other disposition of assets representing 50% or more
of the assets of the Company in one transaction or series of related
transactions.
All defined terms used in the definition of "Change in Control" shall have
the same meaning as set forth in the Form of Certificate of Designation of
Series B Convertible Preferred Stock of Wyndham International, Inc.
"Company" shall mean not only Wyndham International, Inc., but also
its successors by merger or otherwise.
10. 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:
13
At his home address as shown in the Company's personnel records;
if to the Company:
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Senior Vice President of Human Resources and General Counsel
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.
11. 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.)
12. 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.
13. 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.
14. 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 applicable 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 5 or 6 hereof. Furthermore, should a dispute occur concerning
Executive's mental or physical capacity as
14
described in Subparagraph 7(b), 7(c) or 8(b), a doctor selected by Executive and
a doctor selected by the Company shall be entitled to examine Executive. If the
opinion of the Company's doctor and Executive's doctor conflict, the Company's
doctor and Executive's doctor shall together agree upon a third doctor, whose
opinion shall be binding. Any amount to which Executive is entitled under this
Agreement (including any disputed amount), which is not paid when due, shall
bear interest at a rate equal to the lesser of eighteen percent (18%) per annum
or the maximum lawful rate.
15. 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.
16. 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 (to be derived from
the sum of his Base Compensation or, if applicable, Adjusted Base Salary and
Average Incentive Compensation) for requested litigation and regulatory
cooperation that occurs after his termination of employment, and reimburse
Executive for all costs and expenses incurred in connection with his performance
under this Paragraph 14, including, but not limited to, reasonable attorneys'
fees and costs.
17. Gender Neutral. Wherever used herein, a pronoun in the masculine gender
shall be considered as including the feminine gender unless the context clearly
indicates otherwise.
18. Governing Law and Consent. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Texas without
giving effect to any choice of law or conflict provisions or rule (whether of
the State of Texas or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of Texas, and Executive
hereby expressly consents to the personal jurisdiction of the state and federal
courts located in Dallas County, Texas for any lawsuit filed by the Company to
seek a restraining order or injunction to prevent any continuation of any
violation of Paragraph 5 or 6 of this Agreement.
19. Effective Date. This Agreement is effective ____________________, 1999.
15
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
WYNDHAM INTERNATIONAL, INC.
By: /s/ XXXXX X. CARREKAR
-------------------------------------
Its: Chairman and Chief Executive Officer
/s/ XXXX X. XXXXXXXX
----------------------------------------
Xxxx X. Xxxxxxxx
16
Exhibit A
---------
WYNDHAM INTERNATIONAL, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Dated as of August 12, 1999
Wyndham International, Inc., a corporation organized under the laws of
Delaware (the "Company"), hereby grants to Xxxx X. Xxxxxxxx, an Employee of the
Company (the "Optionee"), as of August 12, 1999 (the "Date of Grant"), a non-
qualified option (the "Option") to purchase from the Company 1,100,000 shares
of its Class A Common Stock (the "Shares"), at the price of $3.75 per Share,
subject to the terms and conditions set forth below. Such grant is pursuant to
the Wyndham International, Inc. 1997 Incentive Plan (the "Plan") and is made as
an inducement to Optionee to enter into the Employment Agreement between
Optionee and the Company of even date herewith (the "Employment Agreement").
1. Option Subject to Acceptance of Optionee Agreement and Employment
Agreement. The Option may not be exercised unless the Optionee accepts
this Option Agreement and the Employment Agreement by executing both the
Option Agreement and the Employment Agreement and returning such original
execution copies to the Company.
2. Time and Manner of Exercise of Option.
a. Maximum Term of Option. The Expiration Date of this Option is the date
that is ten years from the Date of Grant. This Optionee may not be
exercised on or after the Expiration Date.
b. Vesting Schedule. No portion of this Option may be exercised until
such portion shall have vested. Except as set forth in Section 3 of
this Agreement, this Option shall be vested and exercisable with
respect to the following number of Shares on the dates indicted below
provided that Optionee remains employed by the Company on such dates:
--------------------------------------------------------------------------------
Vesting Schedule
--------------------------------------------------------------------------------
Number of
Shares Exercisable Vesting Date
--------------------------------------------------------------------------------
220,000 (20%) 1 year after Date of Grant
--------------------------------------------------------------------------------
220,000 (20%) 2 years after Date of Grant
--------------------------------------------------------------------------------
220,000 (20%) 3 years after Date of Grant
--------------------------------------------------------------------------------
220,000 (20%) 4 years after Date of Grant
--------------------------------------------------------------------------------
220,000 (20%) 5 years after Date of Grant
--------------------------------------------------------------------------------
In the event of a Change in Control of the Company (as defined in the
Employment Agreement), the vesting date for any unvested portions
of the Option
1
shall be accelerated by two years. In the event of a Change in Control of
the Company (as defined in the Employment Agreement), if within 18 months
after such Change in Control the Optionee's employment with the Company is
terminated by the Company without Cause (as defined in the Employment
Agreement) or for Good Reason (as defined in the Employment Agreement), any
unvested portions of this Option shall fully vest and become exercisable.
A partial exercise of this Option shall not affect Optionee's right to
exercise this Option with respect to the remaining Shares.
c. Method of Exercise of Option. Subject to limitations set forth in this
Agreement, the Option may be exercised by the Optionee (1) by giving
written notice to the Company specifying the number of whole Shares to be
purchased and accompanied by payment of the Option price in full (or
arrangement made for such payment to the Company's satisfaction) either (i)
in cash or cash equivalents acceptable to the Committee, (ii) in previously
owned Shares (which the Optionee has held for at least six months prior to
the delivery of such Shares or which the Optionee purchased on the open
market and for which the Optionee has good title, free and clear of all
liens and encumbrances) having a Fair Market Value, determined as of the
date of exercise, equal to the aggregate purchase price payable pursuant to
the Option by reason of such exercise, (iii) in cash or a check payable and
acceptable to the Company by a broker-dealer acceptable to the Company to
whom the Optionee has submitted an irrevocable notice of exercise or (iv) a
combination of two or more of the foregoing, and (2) by executing such
documents as the Company may reasonable request. Any fraction of a Share
which would be required to pay such purchase price shall be disregarded and
the remaining amount due shall be paid in cash by the Optionee.
The delivery of certificates representing the Shares subject to the Option
will be contingent upon the Company's receipt from Optionee of (1) full
payment of the Option price, as set forth above, and (2) any agreement,
statement or other evidence that the Company may require to satisfy itself
that the issuance of Shares to be purchased pursuant to the exercise of the
Option and the subsequent resale of Shares will be in compliance with
applicable laws and regulations.
d. Piggyback Registration Rights. At any time after the date hereof, if the
Company determines that it will file a registration statement under the
Securities Act of 1933, as amended (the "1933 Act") (other than a
registration statement on a Form S-4 or S-8 or filed in connection with an
exchange offer, an offering of securities solely to the Company's existing
stockholders or a rights offering by the Company) on any form that would
also permit the registration of the Shares acquired pursuant to the
exercise of the Option, to the extent certificates are delivered therefor
pursuant to Section 5(b) hereof, which the number of such shares shall be
measured as of the date such registration statement is initially filed with
the Securities and Exchange Commission (the "Registrable Stock"), and such
filing is to be on the Company's behalf and/or on behalf of selling holders
of
2
its securities for the general registration of its Class A Common
Stock to be sold for cash, at such time the Company will within thirty
(30) days of such determination give the Participant written notice of
such determination setting forth the date on which the Company
proposes to file such registration statement, which date will be no
earlier than thirty (30) days from the date of such notice, and
advising the Participant of his right to have Registrable Stock
included in such registration. Upon the written request of the
Participant received by the Company no later than fifteen (15) days
after the date of the Company's notice, the Company will use its best
efforts to cause to be registered under the 1933 Act all of the
Registrable Stock that the Participant has so requested to be
registered. If, in the opinion of the managing underwriter or
underwriters (or, in the case of a non-underwritten offering, in the
opinion of the Company), the total amount of such securities to be so
registered, including such Registrable Stock, will exceed the maximum
amount of the Company's securities that can be marketed (i) at a price
reasonably related to the then current market value of such
securities, or (ii) without otherwise materially and adversely
affecting the entire offering, then the Registrable Stock shall not be
included in such registration.
3. Exercise After Termination of Employment. If the Optionee's employment by
the Company or an Affiliate is terminated, the period within which to
exercise the Option may be subject to earlier termination as set forth
below. The Board's determination of the reason for termination of the
Optionee's employment shall be conclusive and binding on the Optionee and
his or her legal representatives or legatees. Any transfer of employment
from the Company to any Affiliate of the Company shall not be deemed to be
a termination of employment for purposes of this Agreement.
a. Termination Due to Death. If the Optionee's employment terminates by
reason of death, the Option held by the Optionee shall vest and become
exercisable in accordance with the Vesting Schedule as set forth in
Section 2(b), plus an additional number of Shares that would have
vested on the next vesting anniversary date. The Optionee's legal
representative or legatee may exercise the Option, to the extent
exercisable in accordance with this Section 3(a), for a period of 360
days from the date of death or until the Expiration Date, if earlier.
Any portion of the Option that is not exercisable at the time of death
shall terminate immediately and be of no further force or effect.
b. Termination Due to Disability. If the Optionee's employment terminates
by reason of incapacity due to physical or mental illness which
resulted in his or her absence from his or her duties with the Company
on a full-time basis for 180 calendar days in the aggregate in any 12-
month period, the Option held by the Optionee shall vest and become
exercisable in accordance with the Vesting Schedule as set forth in
Section 2(b), plus an additional number of Shares that would have
vested on the next vesting anniversary date. The Optionee may exercise
the Option, to the extent exercisable in accordance with this Section
3(b), for a period of 360 days from the date of termination of
employment or until the Expiration Date, if earlier. Any portion of
the Option that is not exercisable upon
3
termination of employment shall terminate immediately and be of no
further force or effect.
c. Termination for Cause. If the Optionee's employment is terminated for
Cause (as defined in the Employment Agreement), the Option held by the
Optionee shall terminate immediately and be of no further force and
effect.
d. Termination without Cause or for Good Reason. If the Optionee's
employment is terminated by the Company without Cause (as defined in
the Employment Agreement) or the Optionee resigns from the Company for
Good Reason (as defined in the Employment Agreement), the Option held
by the Optionee shall continue to vest and become exercisable in
accordance with the Vesting Schedule as set forth in Section 2(b) for
an additional 36 months. The Optionee may exercise the Option, to the
extent exercisable in accordance with this Section 3(d), for a period
of 360 days after the end of the 36-month period or until the
Expiration Date, if earlier. Any portion of the Option that is not
exercisable at the end of 36 months following termination of
employment shall terminate immediately and be of no further force or
effect.
Notwithstanding the foregoing, if Optionee breaches any of the
provisions contained in Paragraph 5 or 6 of the Employment Agreement,
(i) any portion of the Option that vested or will vest by virtue of
this Section 3(d) shall immediately terminate and be of no force and
effect, and (ii) to the extent any portion of the Option that vested
by virtue of this Section 3(d) has been exercised, Optionee shall be
required to disgorge to the Company the difference between the fair
market value per Share on the date of exercise and the Option price
per Share, multiplied by the number of Shares acquired by Optionee.
e. Other Termination. If the Optionee's employment terminates for any
reason not covered in Subsections (a), (b), (c) or (d) of this Section
3, the Option held by the Optionee may be exercised, to the extent
exercisable on the date of termination pursuant to the applicable
vesting schedule in Section 2(b), for a period of three (3) months
from the date of termination or until the Expiration Date, if earlier.
Any portion of the Option that is not exercisable at such time shall
terminate immediately and be of no further force or effect.
4. Incorporation of the Plan. Notwithstanding anything herein to the contrary,
this Option shall be subject to and governed by all the terms and
conditions of the Plan. Capitalized terms in this Agreement shall have the
meaning specified in the Plan, unless a different meaning is specified
herein. All references herein to the Plan shall mean the Plan in effect as
of the date hereof. In the event of any conflict between the provisions in
the Plan and the provisions in this Agreement, the provisions of the Plan
shall govern.
5. Additional Terms and Conditions of Option.
4
a. Transferability of Option. To the extent permitted by the Plan, the Option
in this Agreement may be transferred by Executive to his children,
grandchildren, spouse, one or more trusts for the benefit of such family
members, or a partnership in which such family members are the only
partners, provided, however, that (1) Executive may not receive any
consideration for the transfer, and (2) the holder(s) of the transferred
Option shall be bound by the same terms and conditions that governed the
Option during the period that it was held by Executive. Otherwise, this
Agreement (1) is personal to the Optionee, is non-assignable and is not
transferable in any manner, by operation of law or otherwise, other than by
will or the laws of descent and distribution, and (2) is exercisable,
during the Optionee's lifetime, only by the Optionee, and thereafter only
by the Optionee's legal representative or legatee.
b. Delivery of Certificates. Upon the exercise of the Option, in whole or in
part, the Company shall deliver or cause to be delivered one or more
certificates representing the number of Shares purchased against full
payment therefor. The Company shall pay all original issue or transfer
taxes and all fees and expenses incident to such delivery.
c. Option Confers No Rights as Stockholder. The Optionee shall not be entitled
to any privileges of ownership with respect to Shares subject to the Option
unless and until purchased and delivered upon the exercise of the Option,
in whole or in part, and the Optionee becomes a stockholder of record with
respect to such delivered Shares; and the Optionee shall not be considered
a stockholder of the Company with respect to any such Shares not so
purchased and delivered.
d. Decisions of Committee. The Committee shall have the right to resolve all
questions which may arise in connection with the Option or its exercise.
Any interpretation, determination or other action made or taken by the
Committee regarding this Agreement shall be final, binding and conclusive.
e. Reservation of Shares. The Company shall at all times prior to the
expiration or termination of the Option reserve or cause to be reserved and
keep or cause to be kept available, either in its treasury or out of its
authorized but unissued shares of common stock, the full number of shares
of common stock of the Company subject to the Option from time to time.
f. Change in Capital Structure. The terms of this Option shall be adjusted as
the Committee determines is equitably required in the event the Company
effects one or more stock dividends, stock split-ups, subdivisions or
consolidations of shares or other similar changes in capitalization.
g. Fractional Shares. Fractional shares shall not be issuable hereunder, and
when any provision hereof may entitle Optionee to a fractional share such
fraction shall be disregarded.
5
6. Tax Withholding. The Optionee shall, not later than the date as of which
the exercise of this Option becomes a taxable event for Federal income tax
purposes, pay to the Company or make arrangements satisfactory to the
Committee for payment of any Federal, state, and local taxes required by
law to be withheld on account of such taxable event. Subject to the
approval of the Committee, the Optionee may elect to have such tax
withholding obligation satisfied, in whole or in part, by (i) authorizing
the Company to withhold from Shares to be issued, or (ii) transferring to
the Company a number of previously owned whole Shares (which the Optionee
has held for at least six months prior to the delivery of such Shares or
which the Optionee purchased on the open market and for which the Optionee
has good title, free and clear of all liens and encumbrances) having an
aggregate Fair Market Value, determined as of the date of exercise, that
would satisfy the withholding amount due.
7. Miscellaneous Provisions.
a. Designation as Non-qualified Stock Option. The Option is hereby
designated as not constituting an "incentive stock option" within the
meaning of section 422 of the Code. This Agreement shall be
interpreted and treated consistently with such designation.
b. Successors. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of the Company and any person
or persons who shall, upon the death of the Optionee, acquire any
rights hereunder in accordance with this Agreement or the Plan.
c. Notices. All notices, requests or other communications provided for in
this Agreement shall be made, if to the Company, to the Secretary of
the Company at the Company's principal executive office, and if to the
Optionee, to his or her address on the books of the Company (or to
such other address as the Company or the Optionee may give to the
other for purposes of notice hereunder).
All notices, requests or other communications provided for in this
Agreement shall be made in writing either (a) by personal delivery to
the party entitled thereto, (b) facsimile with confirmation of
receipt, (c) by mailing in the United States mail to the last known
address of the party entitled thereto or (d) by express courier
service. The notice, request or other communication shall be deemed to
be received upon personal delivery, upon confirmation of receipt of
facsimile transmission or upon receipt by the party entitled thereto
if by United States mail or express courier service; provided,
however, that if a notice, request or other communication is not
received during regular business hours, it shall be deemed to be
received on the next succeeding business day of the Company.
d. Governing Law. This Agreement and all determinations made and actions
taken pursuant hereto and thereto, to the extent not governed by the
laws of the United
6
States, shall be governed by the laws of the State of Delaware and
construed in accordance therewith without giving effect to principles
of conflicts of laws.
e. Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed an original and both of which together shall
constitute one and the same instrument.
f. Further Assurances. The Company and the Optionee shall execute and
deliver such further instruments and take such additional action as
each party may reasonably request to effect, consummate, confirm or
evidence the grant of the Option to the Optionee, and they shall each
execute such documents as may be reasonably necessary to assist each
other in preserving or perfecting their respective rights in the
Option.
g. No Right to Continued Employment. This Agreement does not confer upon
Optionee any right to continue in the employ of the Company or an
Affiliate, nor shall it interfere in any way with the right of the
Company or an Affiliate to terminate such employment at any time.
WYNDHAM INTERNATIONAL, INC.
By: /s/ XXXXX X. XXXXXXXX
-----------------------------
Title: Chairman & CEO
--------------------------
Accepted this 12 August, 1999.
/s/ XXXX X. XXXXXXXX
-------------------------------
Xxxx X. Xxxxxxxx
"Optionee"
7
Exhibit B
---------
WYNDHAM INTERNATIONAL, INC.
RESTRICTED UNIT AWARD AGREEMENT
Dated as of August 12, 1999
Wyndham International, Inc., a corporation organized under the laws of
Delaware (the "Company"), hereby awards to Xxxx X. Xxxxxxxx (the "Participant"),
as of the date hereof (the "Award Date"), a Restricted Unit Award (the "Award")
covering the right to receive 203,000 shares of Class A Common Stock (the
"Shares") of the Company, subject to the terms and conditions set forth below.
Such grant is pursuant to the Wyndham International, Inc. 1997 Incentive Plan
(the "Plan").
1. Award Subject to Acceptance of Agreement. The Award shall not be valid and
binding unless the Participant accepts this Agreement by executing it in
the space provided below and returning such original execution copy to the
Company.
2. Vesting of Award. No portion of this Award may be exercised until such
portion shall have vested (such unvested portion of the Award, the
"Restricted Units"). Except as set forth in Section 3 of this Agreement,
and subject to the discretion of the Committee or the Board of Directors to
accelerate the vesting schedule hereunder, this Award shall be vested and
nonforfeitable with respect to the following number of Restricted Units on
the dates indicated:
--------------------------------------------------------------------------------
Number of Restricted Units
Subject to Vesting Date Restrictions Lapse
--------------------------------------------------------------------------------
67,666 (33 1/3%) 1 year after Award Date
--------------------------------------------------------------------------------
67,667 (33 1/3%) 2 years after Award Date
--------------------------------------------------------------------------------
67,667 (33 1/3%) 3 years after Award Date
--------------------------------------------------------------------------------
3. Termination of Employment. If the Participant's employment by the Company
or an Affiliate is terminated prior to the dates the restrictions lapse as
set forth above, Participant shall forfeit all Restricted Units which have
not yet vested, except as provided below. The Committee's or the Board of
Directors' determination of the reason for termination of the Participant's
employment shall be conclusive and binding on the Participant and his or
her legal representatives or legatees. Any transfer of employment from the
Company to an Affiliate shall not be deemed to be a termination of
employment for purposes of this Agreement.
1
Exhibit C
---------
NO PERSONAL LIABILITY NONRECOURSE PROMISSORY NOTE
Dallas, Texas
$850,000.00 , 1999
--------
FOR VALUE RECEIVED, XXXX X. XXXXXXXX (referred to herein as the "Maker"),
promises to pay to WYNDHAM INTERNATIONAL, INC., a Delaware corporation (referred
to herein as the "Payee"), or its assigns, the sum of EIGHT HUNDRED FIFTY
THOUSAND DOLLARS AND NO CENTS ($850,000.00), together with interest on the
unpaid principal balance as set forth below.
1. Certain Definitions. The following items, when.used in this Note,
shall have the meanings assigned to them below:
(a) Stated Rate. The term "Stated Rate" means the interest rate, as
the same may be adjusted from time to time, paid by Payee during the term of
this Note pursuant to the revolving line of credit of the Payee as it may exist
from time to time.
(b) Maximum Rate. The term "Maximum Rate" shall mean, on any day, the
highest nonusurious rate of interest (if any) permitted by applicable law on
such day. For purposes of Tex. Rev. Civ. Stat. Xxx. Art. 5069-1.04(b), as it may
from time to time be amended, the "applicable rate ceiling" shall be the
"indicated rate" ceiling from time to time in effect as limited by Art. 5069.
1.04(b); provided, however, that to the extent permitted by applicable law,
Payee reserves the right to change the "applicable rate ceiling" from time to
time by further notice and disclosure to Maker; and, provided further, that the
"highest nonusurious rate of interest permitted by applicable law" for purposes
of this Note shall not be limited to the applicable rate ceiling under Art.
5069-1.04 if federal laws or other state laws now or hereafter in effect and
applicable to this Note (and the interest contracted for, charged and collected
hereunder) shall permit a higher rate of interest.
2. Interest Rate. The unpaid principal balance from the date hereof until
maturity shall bear interest at a rate per annum equal to the lesser of the
Stated Rate or the Maximum Rate. Interest on the unpaid principal balance
hereof shall be calculated at a daily rate equal to 1/365th of the rate per
annum herein provided, and shall be charged and collected on the actual number
of days elapsed. After maturity, unpaid principal and, to the extent permitted
by law, interest on this Note shall bear interest at a rate equal to the lesser
of (i) four (4) percentage points over the Stated Rate or (ii) the Maximum Rate.
3. Payment of Principal and Interest. The entire principal balance and
accrued interest on this Note shall become due and payable on the earlier of (i)
the third anniversary of the date hereof or (ii) ten (10) days after termination
of Maker's employment with Payee.
4. Events of Default.
(a) The occurrence of any one or more of the following events shall be
deemed an event of default hereunder ("Event of Default"):
(i) The failure of Maker to make any payment on this Note when
the same becomes due and payable and such failure continues for ten
(10) days after notice of such failure to pay is received by Maker
from Payee; or
(ii) Maker shall commence any case, proceeding or other action
seeking reorganization, arrangement or adjustment of his debts under
any bankruptcy, insolvency or reorganization law, or seek the
appointment of a receiver, trustee or custodian for Maker or for all
of his property; or
(iii) Any case, proceeding or other action shall be commenced
against Maker seeking reorganization, arrangement or adjustment of his
debts under any bankruptcy, insolvency or reorganization law or
seeking the appointment of a receiver, custodian or trustee for Maker
or for all or substantially all of his property, and such case,
proceeding or other action remains undismissed for a period of sixty
(60) days after commencement thereof.
(b) Upon the occurrence of an Event of Default hereunder, Payee, at its
option, may declare the entire unpaid principal balance and accrued interest on
this Note to be immediately due and payable without notice of any kind to Maker
and without any other presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived by Maker, and may, at its option, exercise any
other right or remedy existing at law or in equity. Failure to exercise any such
right or remedy shall not constitute a waiver of the right to exercise the same
in the event of any subsequent default.
5. Voluntary Prepayment. Maker shall have the right and privilege from
time to time to prepay in whole or in part the unpaid principal of this Note
without premium or penalty, provided that the accrued interest on the amount
prepaid is likewise paid, and the accrual of interest shall immediately cease on
any amount so prepaid.
6. Waiver. Maker waives demand, presentment for payment, notice of
nonpayment, protest and notice of protest and agrees to any substitution,
subordination or release of any parties primarily or secondarily liable hereon.
No waiver by Payee of any of its rights or remedies hereunder or under any other
document evidencing or securing this Note or otherwise shall be considered a
waiver of any other subsequent right to remedy of Payee; and no delay or
omission in the exercise or enforcement by Payee of any rights or remedies shall
be construed as a waiver of any right or remedy of Payee.
7. Attorneys' Fees. If this Note is not paid pursuant to the terms hereof
and is placed in the hands of an attorney for collection, or if it is collected
through bankruptcy or any other court proceeding after maturity, then Payee
shall be entitled to reasonable attorneys' fees for collection.
2
8. Limitation on Agreements. It is the intention of Maker and Payee to
comply with applicable usury laws. In furtherance thereof, Maker and Payee
stipulate and agree that, notwithstanding any provision contained in this Note,
or in any other agreement between Maker and Payee, Payee shall never be entitled
to receive, collect or apply as interest on this Note, any amount in excess of
the Maximum Rate, and, in the event Payee ever receives, collects or applies as
interest any such excess, such amount that would be excessive interest shall be
deemed to be a partial prepayment of principal and treated hereunder as such,
and if the principal amount of the Note is paid in full, any remaining excess
shall forthwith be paid to Maker. In determining whether the interest paid or
payable, under any specific contingency, exceeds the Maximum Rate, Maker and
Payee shall, to the maximum extent permitted under applicable law, (i)
characterize any non-principal payments (other than payments hereunder) as an
expense, fee or premium rather than as interest, (ii) exclude voluntary
prepayments and the effects thereof, and (iii) amortize, prorate, allocate and
spread in equal parts the total amount of interest throughout the entire
contemplated term of this Note so that the interest rate is uniform throughout
such term.
9. Limitation on Liability. THIS NOTE SHALL BE NONRECOURSE TO MAKER AND
MAKER SHALL HAVE NO PERSONAL LIABILITY FOR THE PAYMENT HEREOF.
10. Governing Law and Venue. This Note is being executed and delivered and
is intended to be performed in the State of Texas. This Note shall be construed
as to both validity and performance and enforced in accordance with and governed
by the laws of the State of Texas.
11. Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by certified or registered mail, postage prepaid,
with return receipt requested, addressed to Maker or Payee as follows:
If to Payee to:
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
If to Maker to:
Xxxx X. Xxxxxxxx at address on file with the
Payee
or such other address as shall be furnished in writing by Maker or Payee to the
other, in accordance with the above provisions, and such notice or communication
shall be deemed to
3
have been given as of the date so delivered in the case of personal delivery or
three (3) days after deposit in the mail in the case of certified or registered
mail
12. Arbitration. Maker and Payee agree that any claim, controversy or
dispute arising out of or relating to this Note that cannot be amicably settled
shall be referred to binding arbitration as hereinafter provided. If arbitration
is required to resolve a dispute between Maker and Payee, Payee will notify the
American Arbitration Association ("AAA") and request AAA to select one person to
act as the arbitrator for resolution of this dispute. The selected arbitrator
will establish the rule for arbitration of the dispute and such rules will be
binding upon all parties to the arbitration proceeding. The arbitrator may use
the rules of the AAA for commercial arbitration but is encouraged to adopt such
rules as the arbitrator deems appropriate to accomplish the arbitration in the
quickest and least expensive manner possible. Accordingly, the arbitrator may
(i) dispense with any formal rules of evidence and allow hearsay testimony so as
to limit the number of witnesses required, (ii) minimize discovery procedures as
the arbitrator deems appropriate, (iii) act upon his understanding or
interpretation of the law on any issue without the obligation to research such
issue or accept or act upon briefs of the issue prepared by any party, (iv)
limit the time for presentation of any party's case as well as the amount of
information or number of witnesses to be presented in connection with any
hearing, (v) prevent any party from allowing an attorney to present or argue the
party's case before the arbitrator in any hearing, and (vi) impose any. other
rules which the arbitrator believes appropriate to effect a resolution of the
dispute as quickly and inexpensively as possible. The arbitration shall take
place in Dallas, Texas. The arbitrator will have the exclusive authority to
determine and award costs of arbitration and the cost incurred by any party for
attorneys, advisors and consultants. Any award made by the arbitrator shall be
binding on Maker, Payee and all parties to the arbitration and shall be
enforceable to the fullest extent of the law.
13. Tax Matters. Maker acknowledges that Maker has not relied on any
advice from Payee with regard to the tax treatment of the Note.
MAKER
/s/ XXXX X. XXXXXXXX
----------------------------
Xxxx X. Xxxxxxxx
4
