Exhibit (d)(4)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this"Agreement") is made and entered into as
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of this 29/th/ day of November, 2001, by and between Xxxxxxx Inns, Inc., a real
estate investment trust incorporated under the laws of the State of Georgia (the
"Company"), and Xxxxxx X. Xxxxxxx, an individual resident of the State of
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Georgia (the "Executive").
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BACKGROUND
Executive and Company are parties to that certain Employment Agreement,
dated July 27, 2000 (the "Prior Agreement"), pursuant to which Executive agreed
to serve as Chairman of the Board of Directors (the"Board") and Chief Executive
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Officer of Company. Company recognizes Executive's past and potential
contributions to the growth and success of Company. Company desires to provide
for the continued employment of Executive and to make certain changes in the
Prior Agreement which Company has determined will reinforce and encourage the
continued dedication of Executive to Company and will promote the best interests
of Company and its stockholders. Executive is willing to continue to serve
Company on the terms and conditions herein provided, and to replace the Prior
Agreement with this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Effective Date. The effective date of this Agreement (the
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"Effective Date") shall be December 1, 2001.
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2. Employment. Company shall continue to employ Executive and
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Executive hereby accepts such continued employment subject to the terms and
conditions set forth herein for the Employment Period, and both parties agree
to rescind the Prior Agreement and replace it with this Agreement.
3. Employment Period. This Agreement will begin on the Effective
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Date and, unless earlier terminated in accordance with Section 6 hereof, will be
for a term of two years, which term shall be extended automatically (without
further action of Executive or Company) for an additional two year period from
and after the then scheduled expiration date unless at least 12 months prior to
the then applicable expiration date Company notifies Executive in writing of its
intent to terminate or change the Agreement. The period ending at the then
scheduled expiration date of this Agreement is referred to herein as the
"Employment Period."
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4. Duties and Responsibilities; Authority; Devotion of Time to
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Company.
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(a) Executive will continue to serve in his capacity as
Chairman of the Board and Chief Executive Officer of Company. Subject
to clause (c) below, Executive shall faithfully and diligently perform
the services and functions relating to such positions or otherwise
incident thereto, as may be reasonably designated by the Board from
time to time; provided, however, that all such services shall be within
Executive's area of competence and expertise.
(b) Executive shall enjoy the authority consistent with the
positions described above and shall report directly and solely to the
Board.
(c) During the Employment Period, excluding any period of
vacation or sick leave to which Executive is entitled, Executive agrees
to devote reasonable attention and time during normal business hours to
the business and affairs of Company and, to the extent necessary to
discharge the responsibilities assigned to Executive hereunder, to use
Executive's reasonable best efforts to perform faithfully and
diligently such responsibilities. During the Employment Period,
Executive shall be entitled to (i) serve on corporate, civic or
charitable boards or committees other than those of Company and (ii)
manage personal investments, provided that such activities do not
materially interfere with the performance of Executive's
responsibilities under this Agreement.
5. Compensation and Benefits.
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(a) Base Salary. During the Employment Period, Company will
pay to Executive a base salary ("Base Salary"), less normal
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withholdings, payable in equal monthly or more frequent installments as
are customary under Company's payroll practices from time to time.
Executive's Base Salary for the first 12 months of the Employment
Period shall be $338,632.00; provided, however, that the amount
actually paid to Executive each year as Base Salary shall be (i) the
Base Salary multiplied by (ii) the percentage (as reasonably determined
by Executive) that the time of Executive devoted to the business and
affairs of Company bears to the total of Executive's time devoted to
the business and affairs of (A) Company, (B) the various Xxxxxxx and
Signature Inns owned by Company (the "Inns"), (C) the operating company
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that manages the Inns and (D) the development company or companies that
develop new Inns.
(b) Incentive, Profit Sharing, Savings and Retirement Plans.
During the Employment Period, Executive will be entitled to participate
in all executive incentive compensation and bonus programs (including,
without limitation, stock option, performance share and restricted
stock grants as may from time to time be authorized by the Board),
profit sharing, savings and retirement plans, practices, policies and
programs applicable generally to actively employed senior executive
officers of Company ("Peer Executives"), on terms and conditions no
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less favorable than those applicable to Peer Executives.
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(c) Welfare Benefit Plans. During the Employment Period,
Executive and/or Executive's family, as the case may be, will be
eligible for participation in and will receive all benefits under
welfare benefit plans, practices, policies and programs provided by
Company (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel
accident insurance plans and programs) (collectively, the "Company
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Welfare Plans") to the extent applicable generally to Peer Executives.
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Without limiting the foregoing, Company shall:
(i) obtain and maintain a term life policy on
Executive with a face value of five times his Base Salary,
payable to Executive's spouse or designated beneficiary;
(ii) in the event that Executive is unable to
substantially perform his duties due to any physical or mental
infirmity, pay 100% of Executive's Base Salary until the
Disability Effective Date (as defined in Section 6(b));
(iii) obtain and maintain a long-term disability
insurance policy which shall pay to Executive, upon his
Disability, not less than $6,000 per month from the Disability
Effective Date until the date that Executive reaches age 65 or
is no longer subject to such Disability; and
(iv) obtain and maintain a "your own occupation"
disability insurance policy which shall pay not less than
$6,000 per month, payable to Executive's spouse or designated
beneficiary.
(d) Expenses. During the Employment Period, Company will
promptly reimburse Executive for all reasonable expenses incurred by
Executive and related to Executive's duties (including, without
limitation, travel, seminar and continuing education expenses), in
accordance with the policies, practices and procedures of Company to
the extent applicable generally to Peer Executives.
(e) Fringe Benefits. During the Employment Period,
Executive will be entitled to fringe benefits in accordance with the
plans, practices, programs and policies of Company in effect for Peer
Executives. Without limiting the foregoing, Company shall:
(i) provide to Executive an automobile owned or
leased by Company of a make and model appropriate to
Executive's status (in the reasonable opinion of Executive)
or, at Executive's request, shall provide Executive with a
monthly allowance of not less than $800.00 to cover the cost
of the business use of an automobile owned or leased by
Executive; and
(ii) reimburse Executive's reasonable expenses for
dues and capital assessments for the Ravinia Club, Dunwoody
Country Club, Sea Island Club and
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Atlanta Athletic Club memberships currently held by Executive.
With respect to such memberships not currently held by
Executive, Company shall in addition pay the initiation fees
for such memberships if approved in advance by the Board of
Directors.
(f) Vacation. During the Employment Period, Executive
will be entitled to not less than six weeks of paid annual vacation in
accordance with the plans, policies, programs and practices of Company
as in effect generally with respect to Peer Executives.
(g) Past Service Credit. Executive shall be given full
credit for Executive's prior years of service with Company for all
purposes under the plans, programs, policies, agreements and practices
covering Executive pursuant to this Section.
6. Termination of Employment.
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(a) Death. Executive's employment will terminate
automatically upon Executive's death during the Employment Period.
(b) Disability. If the Disability of Executive has
occurred during the Employment Period, Company may give to Executive
written notice in accordance with Section 15(d) of this Agreement of
its intention to terminate Executive's employment. In such event,
Executive's employment will terminate effective on the 30th day after
receipt by Executive of such written notice (the "Disability Effective
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Date"), provided that, within the 30 days after such receipt, Executive
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shall not have returned to full-time performance of Executive's duties.
For purposes of this Agreement, "Disability" means a physical or mental
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infirmity that impairs Executive's ability to substantially perform his
duties with Company for a period of 180 consecutive days, as determined
by Company in good faith subject to review by a three-physician panel.
(c) Termination for Cause. Company may terminate
Executive's employment during the Employment Period for Cause. For
purposes of this Agreement, "Cause" means:
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(i) the failure of Executive to substantially
perform Executive's duties with Company (other than any such
failure resulting from incapacity due to physical or mental
infirmity), which failure continues for a period of 30 days
after a written demand for substantial performance is
delivered to Executive by the Board that specifically
identifies the manner in which the Board believes that
Executive has not substantially performed Executive's duties;
(ii) the engaging by Executive in illegal conduct
that is materially and demonstrably injurious to Company;
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(iii) breach of fiduciary duty to Company that
results in material personal profit to Executive at the
expense of Company; or
(iv) the failure by Executive to honor all the
terms and provisions of this Agreement, excluding for this
purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by Executive promptly
after receipt of notice given by Company.
The cessation of employment of Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to
Executive, as part of the Notice of Termination, a copy of a resolution
duly adopted by the affirmative vote of not less than a two-thirds
majority of the independent, non-employee Directors then serving at a
meeting of the Board called and held for the purpose of considering
such termination (after reasonable notice is provided to Executive and
Executive is given an opportunity, together with counsel, to be heard
before the Board) reasonably finding that, in the good faith opinion of
such Directors, Executive is guilty of the conduct described in clause
(i), (ii), (iii) or (iv) above, and specifying the particulars thereof
in detail.
(d) Termination for Good Reason. Executive's
employment may be terminated by Executive for Good Reason. For
purposes of this Agreement, "Good Reason" means the occurrence during
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the Employment Period of any of the following events:
(i) the assignment to Executive, without his
written consent, of any duties inconsistent in any material
respect with Executive's position, authority, duties or
responsibilities on the Effective Date or any other action by
Company that results in a diminution in any material respect
in such position, authority, duties or responsibilities,
excluding for this purpose an isolated and inadvertent action
not taken in bad faith that is remedied by Company promptly
after receipt of notice thereof given by Executive;
(ii) a reduction by Company in Executive's
annual Base Salary at the rate in effect on the Effective
Date or as the same may be increased from time to time;
(iii) the failure by Company (A) to continue in
effect any compensation plan in which Executive participates
during the Employment Period that is material to Executive's
total compensation, unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been made
with respect to such plan or (B) to continue Executive's
participation therein (or in such substitute or alternative
plan) on a basis not materially less favorable, both in terms
of the amount of benefits provided and the level of
Executive's participation relative to Peer Executives;
(iv) the failure by Company to continue to
provide Executive with benefits substantially similar to those
enjoyed by Executive under any of Company's pension,
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life insurance, medical, health and accident, disability or
other welfare plans in which Executive was participating
during the Employment Period;
(v) the failure by Company to pay to Executive
any deferred compensation when due under any deferred
compensation plan or agreement applicable to Executive;
(vi) a permanent transfer or relocation of
Executive which results from a required move of the location
of the office of the Company to which Executive is to report
on a permanent basis to a location outside the greater
Atlanta, Georgia metropolitan area;
(vii) there is a change in the control of the
Company, which shall mean and include any one or more of the
following:
A. any individual, corporation, partnership,
group, association or other entity or "person", as
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such term is defined in Section 14(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"),
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other than Executive or any person or persons related
to or associated with him, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 of the
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General Rules and Regulations under the Exchange
Act), directly or indirectly, of 50% or more of the
outstanding securities of the Company having the
right to vote at elections of directors;
B. the Board of Directors of the Company is
changed as a result of a contested election so that
the nominees for Directors in such election
designated by the current management group of the
Company fail to be elected or constitute a majority
of persons constituting the Board of Directors of the
Company immediately following such election;
C. a merger, liquidation, dissolution,
consolidation or reorganization of the Company as a
result of which less than 50% of the total voting
power of the outstanding securities of the surviving
or resulting entity entitled to vote for members of
the Board of Directors is represented by the
securities held by the persons who held all of such
outstanding voting securities of the Company
immediately prior to the consummation of such
transaction or development; or
D. the lease, sale, exchange, transfer or
other disposition of all or substantially all of the
assets of the Company or the successor thereof;
(viii) the Company notifies Executive in writing
of its intent to terminate or change the Agreement in
any material respect; or
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(ix) the failure by Company to honor all the terms and provisions of
this Agreement, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by Company
promptly after receipt of notice thereof given by Executive.
(e) Notice of Termination. Any termination of Executive's employment by
Company other than by reason of death or Disability, or by Executive for Good
Reason, shall be communicated by Notice of Termination to the other party hereto
given in accordance with Section 15(d) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice that (i) indicates
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the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment under the
provision so indicated and (iii) specifies the termination date (which date
shall be not less than 60 days after the giving of such notice). If a dispute
exists concerning the provisions of this Agreement that apply to Executive's
termination of employment, the parties shall pursue the resolution of such
dispute with reasonable diligence. Within ten business days of such a
resolution, any party owing any payments pursuant to the provisions of this
Agreement shall make all such payments together with interest accrued thereon at
the rate provided in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986,
as amended (the "Code"). Termination of Executive's employment shall occur on
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the specified Date of Termination even if there is a dispute between the parties
relating to the provisions of this Agreement that apply to such termination. The
failure by Executive or Company to set forth in the Notice of Termination any
fact or circumstance that contributes to a showing of Good Reason or Cause will
not waive any right of Executive or Company, respectively, hereunder or preclude
Executive or Company, respectively, from asserting such fact or circumstance in
enforcing Executive's or Company's rights hereunder.
(f) Date of Termination. For purposes of this Agreement, "Date of
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Termination" means (i) if Executive's employment is terminated by Company other
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than by reason of death or Disability, or by Executive for Good Reason, the date
specified in the Notice of Termination, (ii) if Executive's employment is
terminated by reason of death or Disability, the Date of Termination will be the
date of death or the Disability Effective Date, as the case may be or (iii) if
Executive's employment is terminated by Executive other than for Good Reason
(i.e., if Executive voluntarily resigns from his employment with Company), the
date Executive announces his voluntary resignation.
7. Obligations of Company upon Termination.
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(a) Good Reason; Other than for Cause. If Executive's employment is
terminated by Company without Cause or by Executive for Good Reason (and in
either case, other than by reason of Executive's death or Disability), then in
consideration of Executive's services rendered prior to such termination:
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(i) Severance Payment. The Company shall continue to pay to
Executive on a monthly basis for the two year period commencing on the Date
of Termination an amount equal to one-twelfth of Executive's Base Salary at
the rate in effect immediately prior to the Date of Termination (not taking
into account any reduction in Base Salary that would constitute Good
Reason), plus an amount equal to one-twelfth of the Executive's Average
Bonus (the "Continuation Payment"), such amount to be paid on the first day
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of each month following the Date of Termination. If the Date of Termination
is not the last day of the month, the Company shall pay to Executive within
two business days after the Date of Termination a pro rata amount of the
Continuation Payment for the remaining portion of the month in which the
Date of Termination occurs. In lieu of making Continuation Payments to
Executive for periods subsequent to the Date of Termination, Company may
elect to pay to Executive a lump sum severance payment, in cash, without
discount, equal to two times the sum of (A) Executive's annual Base Salary
at the rate in effect immediately prior to the Date of Termination (not
taking into account any reduction in Base Salary that would constitute Good
Reason) and (B) Executive's Average Bonus. For purposes of this Agreement,
(a) Executive's "Average Bonus" means the average of Executive's annual
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bonuses paid prior to the Effective Date and/or hereunder for the two
fiscal years during which Executive has been employed by Company
immediately preceding the fiscal year in which the Date of Termination
occurs, and (b) the portion of the then applicable Base Salary to be used
to determine the payments due to Executive upon the termination of his
employment hereunder shall be that percentage of the stated Base Salary
paid by Company pursuant to the proviso in the second sentence of Section
5(a) hereof for the twelve full months preceding the date of the notice of
termination;
(ii) Vesting of Options. Any and all options to purchase Company
common stock then held by Executive will, to the extent not already vested,
become vested and exercisable in full as of the Date of Termination, and
any provision contained in the agreement(s) under which such options were
granted that is inconsistent with such acceleration is hereby modified to
the extent necessary to provide for such acceleration;
(iii) Vesting of Restricted Stock. Any and all restrictions applicable
to awards of restricted stock of Company then held by Executive shall lapse
upon the Date of Termination, and any provision contained in the
agreement(s) under which such restricted stock awards were granted that is
inconsistent with such acceleration is hereby modified to the extent
necessary to provide for such acceleration of vesting;
(iv) Continued Benefits. For a period of two years from the Date of
Termination (the "Benefits Period"), Company shall provide Executive with
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group
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term life insurance, health insurance, accident and long-term disability
insurance benefits (collectively, "Welfare Benefits") substantially similar
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in all respects to those that Executive was receiving immediately prior to
the Date of Termination (not taking into account any reduction in such
Welfare Benefits that would constitute Good Reason). During the Benefits
Period, Executive will be entitled to elect to change his level of coverage
and/or his choice of coverage options (such as Executive only or family
medical coverage) with respect to the Welfare Benefits to be provided by
Company to Executive to the same extent that actively employed senior
executives of Company are permitted to make such changes; provided,
however, that in the event of any such changes Executive shall pay the
amount of any cost increase that would actually be paid by an actively
employed senior executive of Company by reason of making the same changes
in his level of coverage or coverage options; and
(v) Other Benefits. To the extent not theretofore paid or provided,
Company shall timely pay or provide to Executive any other amounts or
benefits required to be paid or provided or that Executive is eligible to
receive under any plan, program, policy or practice or contract or
agreement of Company (including, without limitation, payment or provision
of amounts and benefits pursuant to the terms of the Incentive Plan and/or
Retirement Plan) (such other amounts and benefits, collectively, the "Other
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Benefits").
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(b) Voluntary Resignation other than for Good Reason. If Executive's
employment is terminated by Executive other than for Good Reason, then in
consideration of Executive's services rendered prior to such termination,
Company shall pay to Executive in cash, without discount, an amount equal to
Executive's Base Salary to the Date of Termination;
(c) Death. If Executive's employment is terminated by reason of Executive's
death during the Employment Period, this Agreement will terminate without
further obligations to Executive's legal representatives under this Agreement,
other than for payment of Accrued Compensation, the vesting of stock options and
restricted stock and the timely payment or provision of Other Benefits,
including without limitation any death benefits to which Executive is then
entitled. For purposes of this Agreement, "Accrued Compensation" means all
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amounts of compensation for services rendered by Executive to Company or any
affiliate that have been earned or accrued through the Date of Termination but
that have not been paid as of the Date of Termination, including (i) Base
Salary, (ii) reimbursement (in accordance with Company's expense reimbursement
policy) for reasonable and necessary business expenses incurred by Executive on
behalf of Company during the period ending on the Date of Termination, (iii)
vacation pay and (iv) bonuses and incentive compensation. Accrued Compensation
shall be paid to Executive in a lump sum in cash within 30 days of the Date of
Termination or in accordance with any deferral election theretofore elected by
Executive.
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(d) Disability. If Executive's employment is terminated by reason of
Executive's Disability during the Employment Period, this Agreement will
terminate without further obligations to Executive, other than for payment
of the sum of Accrued Compensation, the vesting of stock options and
restricted stock and the timely payment or provision of Welfare Benefits
(during the Benefits Period) and Other Benefits (including without
limitation any disability benefits to which Executive is then entitled).
Accrued Compensation shall be paid to Executive in a lump sum in cash
within 30 days of the Date of Termination or in accordance with any
deferral election theretofore elected by Executive.
(e) Cause. If Executive's employment is terminated for Cause during
the Employment Period, this Agreement will terminate without further
obligations to Executive, other than for payment of Accrued Compensation
and the timely payment or provision of Other Benefits. In such case, all
Accrued Compensation shall be paid to Executive in a lump sum in cash
within 30 days of the Date of Termination or in accordance with any
deferral election theretofore elected by Executive.
Company's obligations under this Section shall survive the termination of
this Agreement.
8. Certain Additional Payments by Company. The parties intend that the
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severance payments and other compensation provided for herein are reasonable
compensation for Executive's services to Company and shall not constitute
"excess parachute payments" within the meaning of Section 280G(b)(1) of the
Code. In the event that the severance benefits or any other benefits or payments
to which Executive is entitled pursuant to this Agreement or otherwise
(collectively, the "Total Benefits"), will be subject to the excise tax imposed
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pursuant to Section 4999 of the Code ("Excise Tax"), Company shall pay to
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Executive an additional amount (the "Gross-Up Payment") such that the net amount
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retained by Executive, after deduction of any Excise Tax on the Total Benefits
and any federal, state and local income taxes, Excise Tax, and FICA and Medicare
withholding taxes upon the payment provided for by this Section, will be equal
to the Total Benefits.
For purposes of this Section, 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 Excise Tax is (or would be) payable and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of Executive's residence on the Date of Termination, net of the
reduction in federal income taxes that could be obtained from deduction of such
state and local taxes (calculated by assuming that any reduction under Section
68 of the Internal Revenue Code in the amount of itemized deductions allowable
to Executive applies first to reduce the amount of such state and local income
taxes that would otherwise be deductible by Executive).
In the event that the Excise Tax is subsequently determined to be less than
the amount taken into account hereunder at the time of termination of
Executive's employment, Executive shall repay to Company, at the time the amount
of such reduction in Excise Tax is fully determined, the portion of the Gross-Up
Payment attributable to such reduction (plus that portion of the Gross-Up
Payment attributable to the Excise Tax, federal, state and local income taxes
and FICA and Medicare
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withholding taxes imposed on the Gross-Up Payment being repaid by Executive to
the extent that such repayment results in a reduction in Excise Tax, FICA and
Medicare withholding taxes and/or a federal, state or local income tax
deduction) plus interest on the amount of such repayment at the rate provided in
Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the time of the
termination of Executive's employment (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-Up
Payment), Company shall make an additional Gross-Up Payment to Executive in
respect of such excess (plus any interest, penalties or additions payable by
Executive with respect to such excess) at the time that the amount of such
excess is finally determined.
The parties' obligations under this Section shall survive termination of
this Agreement.
9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
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limit Executive's continuing or future participation in any plan, program,
policy or practice provided by Company and for which Executive may qualify, nor,
subject to Section 15(j), shall anything herein limit or otherwise affect such
rights as Executive may have under any contract or agreement with Company.
Amounts that are vested benefits or that Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with Company at or subsequent to the Date of Termination will be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
10. Full Settlement; Certain Legal Expenses.
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(a) In no event shall Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to
Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not Executive obtains other employment.
(b) Company shall pay to Executive all reasonable legal fees and
expenses incurred by Executive as a result of a termination that entitles
Executive to any payments under this Agreement, including all such fees and
expenses, if any, incurred in successfully contesting or disputing any
Notice of Termination given hereunder or in successfully seeking to obtain
or enforce any right or benefit provided by this Agreement or in connection
with any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Code to any payment or benefit provided
hereunder. Such payments shall be made within 10 business days after
delivery of Executive's respective written requests for payment accompanied
with such evidence of fees and expenses incurred as Company reasonably may
require.
11. Assignment and Successors.
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(a) Executive. This Agreement is personal to Executive and without the
prior written consent of Company shall not be assignable by Executive
otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's
legal representatives.
(b) Company. This Agreement shall inure to the benefit of and be
binding upon Company and its successors and assigns.
(c) Assumption by Successors. Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that Company would be required to perform it
if no such succession had taken place. As used in this Agreement, "Company"
means Company as herein before defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law or otherwise.
12. Indemnification of Executive. Company shall indemnify Executive in the
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event that Executive was or is a party or is threatened to be made a party to
any threatened, pending, or completed Proceeding:
(a) other than an action by or in the right of Company, arising out of
the performance of Executive's duties with Company or by reason of the fact
that he is or was an officer, director, employee or agent of Company, or is
or was serving at the request of Company as a manager, director, trustee,
officer, employee, or agent of any other company, nonprofit or for-profit
corporation, partnership, joint venture, trust, or other enterprise,
against expenses, including attorney's fees, judgments, fines, and amounts
paid in settlement, actually and reasonably incurred by Executive in
connection with such Proceeding if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of
Company and, with respect to any criminal Proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any
Proceeding by judgment, order, or settlement, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption
that Executive did not act in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of Company and,
with respect to any criminal Proceeding, he had reasonable cause to believe
that his conduct was unlawful.
(b) by or in the right of Company to procure a judgment in its favor,
arising out of the performance of Executive's duties with Company or by
reason of the fact that he is or was an officer, director, employee, or
agent of Company, or is or was serving at the request of Company as a
manager, director, trustee, officer, employee, or agent of any other
company, nonprofit or for-profit corporation, partnership, joint venture,
trust, or other enterprise, against expenses, including attorney's fees,
actually and reasonably incurred by Executive in connection with the
defense or settlement of such Proceeding if he acted in
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good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of Company, except that no indemnification shall be
made in respect of any claim, issue, or matter as to which Executive is
adjudged to have engaged in conduct which would otherwise allow Company to
terminate Executive for Cause, unless and only to the extent that the court
in which such Proceeding was brought determines upon application that,
despite the adjudication of such conduct, but in view of all the
circumstances of the case, Executive is fairly and reasonably entitled to
indemnity for such expenses as such court shall deem proper.
(c) Without limiting the generality of the foregoing, to the extent
that Executive has been successful on the merits or otherwise in defense of
any Proceeding referred to in clause (a) or clause (b) of this Section, or
in defense of any claim, issue or matter therein, Company shall indemnify
him against expenses, including, without limitation, attorneys' fees
actually and reasonably incurred by him in connection with the Proceeding.
(d) Indemnifiable expenses incurred by Executive shall be paid by
Company in advance of the final disposition of the Proceeding upon receipt
of an undertaking by or on behalf of Executive to repay such amount if it
shall ultimately be determined that he is not entitled to be indemnified by
Company as authorized in this Section 12.
For purposes of this Agreement, "Proceeding" means any judicial or
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administrative trial, hearing, or other activity, civil, criminal or
investigative, the result of which may be that a court, arbitrator, or
governmental agency may enter a judgment, order, decree, or other determination
which, if not appealed and reversed, would be binding upon Company, its officers
or directors or other person subject to the jurisdiction of such court,
arbitrator, or governmental agency.
13. Confidentiality. During the Employment Period and for a period of one
---------------
year after the Termination Date, Executive will not divulge or appropriate for
his own use or the use of others any Confidential Information. Executive
acknowledges that the provisions of the prior sentence are expressly for the
benefit of Company, that Company would be irrevocably injured by a violation
thereof and that Company would have no adequate remedy at law in the event of
such violation. Therefore, Executive acknowledges and agrees that injunctive
relief, specific performance or any other appropriate equitable remedy are
appropriate remedies to enforce compliance with such provisions. Executive's
obligations under this Section shall survive the termination of this Agreement
for a period of one year after the Termination Date.
For purposes of this Agreement, "Confidential Information" means any
------------------------
valuable, non-public, competitively sensitive information concerning Company's
financial position and results of operations, annual and long-range business
plans, product or service plans, marketing plans and methods, training,
educational and administrative manuals, supplier information and purchase
histories and employee lists obtained by Executive during his employment with
Company; provided, however, that Confidential Information shall not include
information to the extent that it (i) is or becomes publicly known or generally
utilized by others engaged in the same business or activities in
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which Company utilized, developed, or otherwise acquired such information; (ii)
is known to Executive prior to employment, having been lawfully received from
parties other than Company; or (iii) is furnished to others by Company with no
restriction on disclosure.
14. Arbitration. Any controversy or claim arising from, out of or relating
-----------
to this Agreement (other than controversies or claims arising from, out of or
relating to the provisions in Section 13, with respect to which either party may
upon 24 hours notice to the other seek injunctive and/or other equitable relief
in a court of competent jurisdiction) which would give rise to a claim under
federal, state or local law (including but not limited to claims based in tort
or contract, claims for discrimination under state or federal law, and/or claims
for violation of any federal, state or local law, statute or regulation) (each a
"Claim", which shall also include any dispute as to whether a matter constitutes
-----
a Claim), which cannot be resolved within 30 days by amicable negotiation
between the parties, shall be resolved by final and binding arbitration in
Atlanta, Georgia in accordance with the Model Employment Dispute Resolution
Rules (("Rules") of the American Arbitration Association (the "Association"), by
----- -----------
an experienced employment arbitrator licensed to practice law in the State of
Georgia.
A demand for arbitration shall be made within a reasonable time after the
Claim has arisen. In no event shall the demand for arbitration be made after the
date when institution of legal and/or equitable proceedings based on such Claim
would be barred by the applicable statute of limitations. Each party to the
arbitration will be entitled to be represented by counsel and will have the
opportunity to take one deposition of an opposing party or witness before the
arbitration hearing. By mutual agreement of the parties, additional depositions
may be taken. The arbitrator shall have the authority to hear and grant a motion
to dismiss and/or for summary judgment, applying the standards governing such
motions under the Federal Rules of Civil procedure. Each party shall have the
right to subpoena witnesses and documents for the arbitration hearing. A court
reporter shall record all arbitration proceedings.
With respect to any Claim brought to arbitration hereunder, either party
may be entitled to recover whatever damages would otherwise be available to that
party in any legal proceeding based upon the federal and/or state law applicable
to the matter. The decision of the arbitrator may be entered and enforced in any
court of competent jurisdiction by either party. Each party shall pay the fees
of their respective attorneys (except as otherwise awarded by the arbitrator),
the expenses of their witnesses and any other expenses connected with presenting
their Claim or defense. Other costs of the arbitration, including the fees of
the arbitrator, the cost of any record or transcript of the arbitration,
administrative fees, and other fees and costs, shall be borne equally by the
parties, one-half by Executive and one-half by the Company. Should Executive or
Company pursue any dispute or matter covered by this Section by any method other
than said arbitration, the responding party shall be entitled to recover from
the other party all damages, costs, expenses, and reasonable attorneys' fees
incurred as a result of such action. The provisions contained in this Section
shall survive the termination of this Agreement.
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The parties indicate their acceptance of the foregoing arbitration
requirement by initialing below:
______________________
For the Company Executive
15. Miscellaneous.
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(a) Governing Law. Except to the extent preempted by federal law and
without reference to principles of conflict of laws, the laws of the State
of Georgia will govern this Agreement in all respects, whether as to its
validity, construction, capacity, performance or otherwise.
(b) Captions. The captions in this Agreement are not part of the
provisions hereof and shall have no force or effect.
(c) Amendments and Modifications. This Agreement may not be amended
or modified otherwise than by a written agreement executed by the parties
hereto or their respective successors and legal representatives, which
writing makes specific reference to this Agreement.
(d) Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Company: Xxxxxxx Inns, Inc.
0 Xxxxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
If to Executive: Xxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications will be
effective when actually received by the addressee.
(e) Other Agents. Nothing in this Agreement is to be interpreted as
limiting Company from employing other personnel on such terms and
conditions as may be satisfactory to it.
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(f) Severability. If any provision or covenant, or any part thereof,
of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability
of the remaining provisions or covenants, or any part thereof, of this
Agreement, all of which will remain in full force and effect.
(g) Withholding. Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(h) Waiver. Failure of either party to insist, in one or more
instances, on performance by the other in strict accordance with the terms
and conditions of this Agreement shall not be deemed a waiver or
relinquishment of any right granted in this Agreement or of the future
performance of any such term or condition or of any other term or condition
of this Agreement, unless such waiver is contained in a writing signed by
the party making the waiver.
(i) Reduction of Benefits By Legally Required Benefits.
Notwithstanding any other provision of this Agreement to the contrary, if
Company is obligated by law to pay severance pay, a termination indemnity,
notice pay, or the like, or if Company is obligated by law to provide
advance notice of separation ("Notice Period"), then any severance benefits
-------------
hereunder shall be reduced by the amount of any such severance pay,
termination indemnity, notice pay or the like, as applicable, and by the
amount of any pay received with respect to any Notice Period.
(j) Timing of Payments.
(i) Except as otherwise provided for Continuation Payments, the
payments provided for in Sections 7 and 8 shall be made within 30 days
after the Date of Termination, provided, however, that if the amounts
of such payments cannot be finally determined on or before such date,
Company shall pay to Executive on such day an estimate, as determined
in good faith by Company, of the minimum amount of such payments and
shall pay the remainder of such payments (together with interest at
the rate provided in Section 1274(b)(2)(B) of the Code from the Date
of Termination to the payment of such remainder) as soon as the amount
thereof can be determined but in no event later than the 45th day
after the Date of Termination. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have
been due, such excess shall constitute a loan by Company to Executive,
payable on the tenth business day after demand by Company (together
with interest at the rate provided in Section 1274(b)(2)(B) of the
Code from the Date of Termination to the repayment of such excess).
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(ii) If any payment to Executive (other than those described in
the preceding subclause) is not made within 30 days of the date such
payment is required to be made, Executive shall be entitled to receive
interest on such payment from the due date until paid in full at an
annual rate which is the greater of (A) the"prime rate" (which for
purposes of this Agreement shall mean the interest rate published in
the Wall Street Journal, Eastern Edition for the day the payment is
due, identified therein as the "Prime Rate" and currently described as
"the base rate on corporate loans posted by at least 75% of the
nation's 30 largest banks") plus three percent or (B) the legal rate
of interest on judgments in the State of Georgia.
(k) Entire Agreement; Termination of Prior Agreement. Except as
provided herein, this Agreement contains the entire agreement between
Company and Executive with respect to the subject matter hereof and it
supersedes and invalidates any previous employment or severance agreements
or contracts between them, including, without limitation, the Prior
Agreement. No representations, inducements, promises or agreements, oral or
otherwise, that are not embodied herein shall be of any force or effect. In
the event that this Agreement does not take effect, the Prior Agreement
shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Employment Agreement as of the date first above written.
XXXXXXX INNS, INC.
By:
Xxxxxx X. Xxxxxx, Vice President-Legal
EXECUTIVE:
Xxxxxx X. Xxxxxxx
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