MARCEL VERBAAS EMPLOYMENT AGREEMENT
Exhibit
10.16
▇▇▇▇▇▇
▇▇▇▇▇▇▇
THIS
EMPLOYMENT AGREEMENT (the “Agreement”)
is
entered into by and between CNL HOTELS & RESORTS, INC., a Maryland
corporation formerly known as CNL Hospitality Properties, Inc. (hereinafter
referred to as the “Company”),
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (hereinafter referred to as the “Executive”)
and is
effective as of the Effective Date hereinbelow defined at Section 7.19.
WHEREAS,
the Company has entered into an Amended and Restated Agreement and Plan of
Merger among the Company, CNL Hotels & Resorts Acquisition, LLC, a Florida
limited liability company all of the membership interests of which are owned
by
the Company (“CHPAC”),
CNL
Hospitality Properties Acquisition Corp., a Florida corporation and wholly-owned
subsidiary of the Company, CNL Hospitality Corp., a Florida corporation (the
“Advisor”),
the
Stockholders identified therein (which includes Executive), and CNL Financial
Group, Inc., a Florida corporation (the "Merger
Agreement"),
pursuant to which the Advisor would be merged with and into CHPAC pursuant
to
the terms and conditions of the Merger Agreement (the “Merger”);
WHEREAS,
the execution and delivery of this Agreement by the Executive was an inducement
to the Company and CHPAC to enter into the Merger Agreement and to consummate
the Merger;
and
WHEREAS,
the Company wishes to offer employment to the Executive, and the Executive
wishes to accept such offer, on the terms set forth below.
Accordingly,
the parties hereto agree as follows:
1. Term.
The
Company hereby employs the Executive and the Executive hereby accepts such
employment for an initial term commencing as of the Effective Date and ending
on
December 31, 2009, unless sooner terminated in accordance with the provisions
of
Section 4 (the period during which the Executive is employed hereunder being
hereinafter referred to as the “Term”).
The
Term shall be subject to automatic one- (1-) year renewals unless either party
hereto notifies the other, in accordance with the notice provisions of Section
7.6, of non-renewal at least ninety (90) days prior to the end of any such
Term
(a “Non-Renewal”).
2. Duties.
The
Executive, in his capacity as Chief Investment Officer of the Company, shall
faithfully perform for the Company the duties of said office and shall perform
such other duties of an executive, managerial or administrative nature as shall
be specified and designated from time to time by the Chief Executive Officer
and
the Board of Directors of the Company (the “Board”). Such duties may include,
without limitation, the performance of services for, and serving on the board
of
directors of, any subsidiary of the Company without any additional compensation.
The Executive shall devote substantially all of the Executive’s business time
and effort to the performance of the Executive’s duties hereunder. Provided that
the following activities do not interfere with the Executive’s duties to the
Company and provided that the following activities do not violate the
Executive’s covenant against competition as described at Section 6 hereof,
during the Term, the Executive may perform personal, charitable and other
business activities, including, without limitation, serving as a member of
one
or more boards of directors of charitable or other professional organizations,
and, serve on the boards of directors of other business organizations that
are
not engaged in any aspect of the lodging industry, provided, however, that
service on the boards of directors of other business organizations would require
consent of the Board .
3. Compensation.
3.1 Salary.
The
Company shall pay the Executive during the Term a salary at the rate of Two
Hundred Eighty-One Thousand and No/00 Dollars ($281,000) per annum (the
“Annual
Salary”),
in
accordance with the customary payroll practices of the Company applicable to
senior executives generally. The Annual Salary may be increased from time to
time, by an amount as may be approved by the Board or the Compensation Committee
of the Board (the “Compensation
Committee”),
and,
upon such increase, the increased amount shall thereafter be deemed to be the
Annual Salary.
3.2 Bonus.
The
Executive will be eligible to participate in the Company’s annual bonus program
(the “Bonus
Plan”),
the
terms of which will be established by the Compensation Committee; provided,
however, at a minimum, Executive shall be eligible for such bonus compensation
as is set forth on Attachment
“A”
attached
hereto and made a part hereof by this reference.
3.3 Benefits
- In General.
The
Executive shall be permitted during the Term to participate in any group life,
hospitalization or disability insurance plans, health programs, pension and
profit sharing plans and similar benefits that may be available to other senior
executives of the Company generally, on the same terms as may be applicable
to
such other executives (except as otherwise provided in this Section 3), in
each
case to the extent that the Executive is eligible under the terms of such plans
or programs.
3.4 Paid
Time Off.
The
Executive shall be entitled to no fewer than twenty-five (25) days of paid
time
off per year.
3.5 Disability
Benefits and Life Insurance.
To the
extent the Company’s group life and disability insurance plans do not provide
this level of benefits, the Executive shall be entitled to additional benefits
so that his long-term disability coverage provides benefits (to continue for
such period as is provided in the applicable disability plan or program, as
amended from time to time, and with waiting periods and pre-existing condition
exceptions waived to the extent such coverage is available on commercially
reasonable terms) equal seventy-five percent (75%) of his Annual Salary in
the
case of a covered disability and life insurance coverage provides benefits
with
a face amount equal to one (1) times the Executive’s Annual Salary.
3.7 Expenses.
The
Company shall pay or reimburse the Executive for all ordinary and reasonable
out-of-pocket expenses actually incurred and, in the case of reimbursement,
actually paid by the Executive during the Term in the performance of the
Executive’s services under this Agreement; provided that the Executive shall
submit such expenses in accordance with the policies applicable to senior
executives of the Company generally.
4. Termination
of Employment.
The
Company may terminate the Executive’s employment for any reason or for no reason
and with or without Cause (as defined hereinbelow). The Executive may terminate
the Executive’s employment with the Company for Good Reason (as defined
hereinbelow) or without Good Reason. The Company or the Executive may terminate
the Executive’s employment by Non-Renewal. The
Executive shall be subject to the provisions of the Covenant Against Competition
set forth at Section 6.2. For
purposes of this Agreement, with respect to "earned and accrued" Bonus payments
to be made to the Executive in connection with the termination of his
employment, Bonus payments shall be deemed to be "earned and accrued" (a) if
the
Executive is employed with the Company as of the date of the last day of the
fiscal year for which a Bonus payment shall be made; (b) to the extent that
the
criteria for determining the amount of such Bonus payment is subject to
objective criteria; and (c) regardless of whether the Bonus payment award was
actually calculated or declared by the Company as of the date of the Executive's
employment.
4.1 Termination
upon the Executive’s Death or Disability.
a.
If
the
Executive dies during the Term, the obligations of the Company to or with
respect to the Executive shall terminate in their entirety except as otherwise
provided in this Section 4.1 and except for the surviving provisions of this
Agreement as described at Section 7.15.
b.
If
the
Executive becomes eligible for disability benefits under the Company’s long-term
disability plans and arrangements (or, if none apply, would have been so
eligible under the most recent plan or arrangement), the Company or the
Executive shall have the right, to the extent permitted by law, to terminate
the
employment of the Executive upon at least ninety (90) days’ prior written notice
to the other party, provided that neither party shall have the right to
terminate the Executive’s employment if, in the opinion of a qualified physician
reasonably acceptable to both parties, it is reasonably certain that the
Executive will be able to resume his duties on a regular full-time basis within
one hundred eighty (180) days of the date that the notice of such termination
is
delivered.
c.
Upon
the
Executive’s death or the termination of the Executive’s employment by virtue of
disability, all of the following shall apply:
(i)
the
Executive, or the Executive’s estate or beneficiaries in the case of the death
of the Executive, shall have no right to receive any compensation or benefit
hereunder on and after the effective date of the termination of employment,
except that the Executive, or the Executive’s estate or beneficiaries the case
of the death of the Executive, shall be entitled to receive the Executive’s
Annual Salary, and other benefits that are earned and accrued under this
Agreement prior to the date of termination, the Executive’s earned and accrued
bonuses as provided in the Bonus Plan, vesting providing in clause (ii) below,
and reimbursement under this Agreement for expenses incurred prior to the date
of such termination;
(ii)
all
of
the Executive’s outstanding and unvested Shares (as defined in Attachment “A”)
shall immediately be vested, any outstanding options to acquire shares of
Company stock shall immediately be vested and shall be exercisable by the
Executive or, in the case of the Executive’s death, by the beneficiaries of
Executive’s estate, for one (1) year following the termination (or, if shorter,
the balance of the regular term of the options); and
(iii)
this
Agreement shall otherwise terminate and there shall be no further rights with
respect to the Executive hereunder except for the surviving provisions of this
Agreement as provided in Section 7.15. The payments to be made in this Section
4.1(c) shall be in addition to, rather than in lieu of, the entitlement of
Executive or his estate to any other insurance or benefit proceeds as a result
of his death or disability.
4.2 Termination
by the Company for Cause.
The
Company may terminate the Executive’s employment at any time for “Cause”
if
any
of the following have occurred:
a. the
Executive’s conviction for (or pleading nolo contendere to) any felony, or a
misdemeanor involving moral turpitude;
b. the
Executive’s indictment for any felony or misdemeanor involving moral turpitude,
if such indictment is not discharged or otherwise resolved within eighteen
(18)
months;
c. the
Executive’s commission of an act of fraud, theft or dishonesty related to the
performance of the Executive’s duties hereunder;
d. the
continuing failure or habitual neglect by the Executive to perform the
Executive’s duties hereunder, except that, if such failure or neglect is
curable, the Executive shall first have thirty (30) days from his receipt of
notice of such failure or neglect to cure such condition and, if the Executive
does so, such failure or neglect shall not constitute Cause
hereunder;
e. any
material violation by the Executive of the covenants contained in Section 6
except that, if such violation is not willful and is curable, the executive
shall first have thirty (30) days from his receipt of notice of such violation
to cure such condition and, if the Executive does so, such violation shall
not
constitute Cause hereunder; or
f.
the
Executive’s continuing material breach of this Agreement, except that, if such
breach is curable, the Executive shall first have thirty (30) days from his
receipt of such notice of such breach to cure such breach and, if the Executive
does so, such breach shall not constitute Cause hereunder.
If
the
Company terminates the Executive’s employment for Cause, the Executive shall
have no right to receive any compensation or benefit hereunder on and after
the
effective date of the termination of employment, except that the Executive
shall
be entitled to receive the Executive’s Annual Salary, and other benefits that
are earned and accrued under this Agreement prior to the date of termination,
any earned and accrued bonuses as provided in the Bonus Plan, and reimbursement
under this Agreement for expenses incurred prior to the date of termination.
This Agreement shall otherwise terminate upon such termination of employment
and
the Executive shall have no further rights or obligations hereunder except
for
the surviving provisions of this Agreement as described at Section
7.15.
4.3 Termination
by the Company without Cause.
The
Company may terminate the Executive’s employment at any time without Cause upon
sixty (60) days prior written notice to the Executive. If the Company terminates
the Executive’s employment without the occurrence of any of the events
constituting “Cause” and the termination is not due to the Executive’s death or
disability or
is not
a Non-Renewal, then the termination by the Company is without Cause. If the
Company terminates the Executive’s employment without Cause, then the Severance
Package provisions of Section 5 shall apply, and this Agreement shall otherwise
terminate and the Executive shall have no further rights or obligations
hereunder except for the surviving provisions of this Agreement as described
at
Section 7.15.
4.4 Termination
of Employment by the Executive for Good Reason.
The
Executive may terminate the Executive’s employment with the Company at any time
for “Good
Reason”
and
receive the Severance Package provisions of Section 5 if any of the following
have occurred without the Executive’s written consent:
a. the
material reduction of the Executive’s authority, duties and responsibilities, or
the assignment to the Executive of duties materially inconsistent with the
Executive’s position or positions with the Company and its subsidiaries, except
that the Company shall have thirty (30) days from the date on which the
Executive gives the notice thereof to cure such event or condition and, if
the
Company does so, such event or condition shall not constitute Good Reason
hereunder;
b. a
reduction of the Annual Salary of the Executive, except that a reduction of
the
Executive’s Annual Salary shall not constitute Good Reason for termination if
(i) the Company fully cures (including retroactively) such reduction no later
than thirty (30) days from the date on which the Executive gives the Company
notice that the reduction constitutes Good Reason for termination hereunder;
or
(ii) such reduction is made in connection with a reduction in compensation
of
not more than ten percent (10%) of the Executive’s Annual Salary and such
reduction is made generally applicable to all senior management employees of
the
Company;
c. the
failure by the Company to obtain an agreement in form and substance reasonably
satisfactory to the Executive from any successor to the business of the Company
to assume and agree to perform this Agreement;
d. the
Company’s material breach of this Agreement, except that the Company shall have
thirty (30) days from the date on which the Executive gives the notice thereof
to cure such event or condition and, if the Company does so, such event or
condition shall not constitute Good Reason hereunder;
e.
a
requirement by the Company that Executive’s work location be moved more than
fifty (50) miles from the Company’s principal place of business in Orlando,
Florida; or
f.
the
occurrence of a change of control, which for purposes of this Agreement shall
mean the sale to an independent third party or group of independent third
parties of either (i) more than thirty percent (30%) of the issued and
outstanding equity securities of the Company and the voting power under normal
circumstances to elect a majority of the Company's Board (whether by merger,
consolidation, sale or transfer of the Company’s equity securities); or
(ii) all or substantially all of the Company's assets determined on a
consolidated basis. For the avoidance of doubt, a change of control shall not
include the Merger or any issuance by the Company of equity securities in an
initial public offering.
This
Agreement shall otherwise terminate upon such termination of employment and
the
Executive shall have no further rights or obligations hereunder except for
the
surviving provisions of this Agreement as described at Section
7.15.
4.5
Termination
of Employment by the Executive without Good Reason.
The
Executive may terminate the Executive’s employment with the Company at any time
without Good Reason. If the Executive terminates his employment without the
occurrence of any of the events constituting “Good
Reason”
and
the
termination is not due to the Executive’s death or disability, then the
termination by the Executive is without Good Reason. If the Executive terminates
the Executive’s employment with the Company without Good Reason, the Executive
shall have no right to receive any compensation or benefit hereunder on and
after the effective date of the termination of employment, except that the
Executive shall be entitled to receive the Executive’s Annual Salary, and other
benefits that are earned and accrued under this Agreement or under applicable
Company benefit plans prior to the date of termination, any earned and accrued
bonuses as provided in the Bonus Plan, and reimbursement under this Agreement
for expenses incurred prior to the date of termination. This Agreement shall
otherwise terminate upon such termination of employment and the Executive shall
have no further rights or obligations hereunder except for the surviving
provisions of this Agreement as described at Section 7.15.
4.6
Termination
upon Expiration and Non-Renewal of Agreement.
The
Company may terminate the Executive’s employment by Non-Renewal of the Term in
accordance with the provisions of Section 1 and Section 7.6 hereof, and the
Severance Package provisions of Section 5 shall apply. If the Executive
terminates employment by Non-Renewal, it will be treated as a termination of
employment without Good Reason. This Agreement shall otherwise terminate upon
such termination of employment and the Executive shall have no further rights
or
obligations hereunder except for the surviving provisions of this Agreement
as
described at Section 7.15.
5.
Severance
Package for Certain Terminations of Employment.
The
Executive shall be entitled to certain rights and shall be bound by certain
obligations as described in this Section 5 (the “Severance
Package”)
if the
Executive’s employment terminates because of the Non-Renewal by the Company of
this Agreement, or if the Company terminates the Executive’s employment without
Cause, or if the Executive terminates the Executive’s employment for Good
Reason. For purposes of this Agreement, the “Severance
Package”
shall
consist of all of the following rights and obligations:
a.
other
than as set forth in this Section 5 generally, the Executive shall have no
right
to receive any compensation or benefit hereunder on and after the effective
date
of the termination of employment, except that the Executive shall be entitled
to
receive the Executive’s Annual Salary, and other benefits that are earned and
accrued under this Agreement and under applicable Company benefit plans prior
to
the date of termination, any earned and accrued bonuses as provided in the
Bonus
Plan, and reimbursement under this Agreement for expenses incurred prior to
the
date of termination;
b.
subject
to the execution of a general release of claims in favor of the Company as
set
forth in Attachment
“B”,
the
Executive shall receive both:
(i)
a
cash payment equal to two (2) times the sum of (w) the Executive’s Annual Salary
(as in effect on the effective date of such termination excluding any reduction
not permitted by this Agreement) plus
(x) the average of the Executive’s Annual Bonus actually earned for the two
of the last three full fiscal years that would result in the highest average
(“Average
Annual Bonus”),
payable in equal installments over the period that corresponds to the period
during which the covenants provided in Section 6.2 hereof are to be applicable
in accordance with the Company’s usual and customary salary payroll practices,
commencing on the first payday following Executive’s termination. (If,
at
the time of a termination to which this sub-subparagraph b(i) applies, at least
three full fiscal years have not occurred, then to the extent necessary to
calculate the Average Annual Bonus for the last three years as set forth above,
the annual bonus or bonuses payable to Executive by Executive’s former employer
shall be used); provided,
however,
that in
the event the termination of employment is in connection with a Non-Renewal
by
the Company, such payments shall equal the sum of (y) the Executive’s Annual
Salary (as in effect on the effective date of such termination excluding any
reduction not permitted by this Agreement) plus
(z) the
Executive’s Average Annual Bonus, which together shall be payable in equal
installments over a twelve (12) month period in accordance with the Company’s
usual and customary salary payroll practices (and
made
payable to the Executive’s estate in the event that the Executive dies prior to
the expiration of such period),
commencing on the first payday following Executive’s termination; and
provided,
further,
that if
the covenants provided in Section 6.2 are not
applicable, in a single lump sum within five (5) days of termination of
employment; provided,
further,
that if
the Executive is a “key employee” within the meaning of Internal Revenue Code of
1986, as amended, Section 409A (“Section 409A”) payments shall not commence (or
be made in the case of a lump sum payment) until six months following the
Executive’s separation from service to the extent necessary to avoid the
imposition of the additional 20% tax under Section 409A (and in the case of
installment payments, the first payment shall include all installment payments
required by this subsection that otherwise would have been made during such
six
month period);
and
(ii)
for
a period of twelve (12) months after termination of employment such continuing
health benefits (including any medical, vision or dental benefits), under the
Company’s health plans and programs applicable to senior executives of the
Company generally as the Executive would have received under this Agreement
(and
at such costs to the Executive) as would have applied in the absence of such
termination or expiration (but not taking into account any post-termination
increases in Annual Salary that may otherwise have occurred without regard
to
such termination and that may have favorably affected such benefits) it being
expressly understood and agreed that nothing in this clause (b)(ii) shall
restrict the ability of the Company to generally amend or terminate such plans
and programs from time to time in its sole discretion; provided,
however,
that
the Company shall in no event be required to provide such coverage after such
time as the Executive becomes entitled to receive health benefits from another
employer or recipient of the Executive’s services (and provided, further, that
such entitlement shall be determined without regard to any individual waivers
or
other arrangements);
c.
subject
to the execution of a general release of claims in favor of the Company as
set
forth in Attachment
“B”,
the
Executive’s outstanding and unvested Shares (as defined in Attachment “A”) that
would have vested in the calendar year employment terminates (treating
the performance criteria for the year of termination as fully
satisfied)
shall
be vested, any outstanding options to acquire shares of Company stock shall
immediately be vested and shall be exercisable by the Executive or, in the
case
of the Executive’s death, by the beneficiaries of Executive’s estate, for one
(1) year following the termination (or, if shorter, the balance of the regular
term of the options); provided,
however,
that if
such termination of employment occurs in connection with or on or after a change
of control, all of the Executive’s outstanding awards of Shares shall
immediately be vested (treating the performance criteria for the applicable
year(s) as fully satisfied).
This
Agreement shall otherwise terminate upon such termination of employment and
the
Executive shall have no further rights hereunder except for surviving provisions
of this Agreement as provided in Section 7.15.
6. Covenants
of the Executive.
6.1 General
Covenants of the Executive.
The
Executive acknowledges that (a) the principal business of the Company is the
acquisition, development and ownership of interests in hotel and resort
properties including full service hotels and resorts, limited service hotels,
extended stay hotels and upper upscale and luxury resorts (such business, and
any and all other businesses that after the date hereof, and from time to time
during the Term, become material with respect to the Company’s then-overall
business, herein being collectively referred to as the “Business”);
(b)
the Company knows of a limited number of persons who have developed the
Company’s Business; (c) the Company’s Business is, in part, national in scope;
(d) the Executive’s work for the Company and its subsidiaries (and the
predecessors of either) has given and will continue to give the Executive access
to the confidential affairs and proprietary information of the Company and
to
“trade secrets,” as defined in Section 688.002(4) of the Florida Statutes, of
the Company and its subsidiaries; (e) the covenants and agreements of the
Executive contained in this Section 6 are essential to the business and goodwill
of the Company; and (f) the Company would not have entered into this Agreement
but for the covenants and agreements set forth in this Section 6.
6.2 Covenant
Against Competition.
The
covenant against competition herein described shall apply as follows:
a.
during
the Term;
b.
for
a
period of one (1) year following a termination of the Executive’s employment by
the Company for Cause, by the Company without Cause, by the Executive without
Good Reason or by either party after Non-Renewal;
c.
for
a
period of two (2) years following a termination of the Executive’s employment by
the Executive for Good Reason; or
d.
as
to
Section 6.2(bb) and (dd), at any time during and after the Executive’s
employment with the Company and its subsidiaries (and the predecessors of
either).
During
the time periods for described hereinabove, the Executive covenants as follows:
aa. The
Executive shall not, directly or indirectly, own, manage, control or participate
in the ownership, management, or control of, or be employed or engaged by or
otherwise affiliated or associated as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director or in any other
individual or representative capacity, engage or participate in any business
that owns and operates hotel and resort properties, or is a real estate
investment trust which owns hotel and resort properties, or in the business
of
providing hotel management or consulting services, and that has assets, or
provides services to entities that have assets, in excess of Seven Hundred
Fifty
Million and No/00 Dollars ($750,000,000), and such business is in competition
in
any manner whatsoever with the Business of the Company in any state or country
or other jurisdiction in which the Company conducts its Business; provided,
however,
that,
notwithstanding the foregoing, (i) the Executive may own or participate in
the
ownership of any entity which he owned or managed or participated in the
ownership or management of prior to the Effective Date which ownership,
management or participation has been disclosed to the Company; and (ii) the
Executive may invest in securities of any entity, solely for investment purposes
and without participating in the business thereof, if (A) such securities are
traded on any national securities exchange or the National Association of
Securities Dealers, Inc. Automated Quotation System or equivalent non-U.S.
securities exchange, (B) the Executive is not a controlling person of, or a
member of a group which controls, such entity and (C) the Executive does not,
directly or indirectly, own one percent (1%) or more of any class of securities
of such entity.
bb. Except
in
connection with the business and affairs of the Company and its affiliates:
the
Executive shall keep secret and retain in strictest confidence, and shall not
use for his benefit or the benefit of others, all confidential matters relating
to the Business and the business of any of its affiliates and to the Company
and
any of its affiliates, learned by the Executive heretofore or hereafter directly
or indirectly from the Company or any of its subsidiaries (or any predecessor
of
either) (the “Confidential
Company Information”),
including, without limitation, information with respect to the Business and
any
aspect thereof, profit or loss figures, and the Company’s or its affiliates’ (or
any of their predecessors) properties, and shall not disclose such Confidential
Company information to anyone outside of the Company except with the Company’s
express written consent and except for Confidential Company Information which
(i) at the time of receipt or thereafter becomes publicly known through no
wrongful act of the Executive; (ii) is clearly obtainable in the public domain;
(iii) was not acquired by the Executive in connection with the Executive’s
employment or affiliation with the Company; (iv) was not acquired by the
Executive from the Company or its representatives or from a third-party who
has
an agreement with the Company not to disclose such information; or (v) is
required to be disclosed by rule of law or by order of a court or governmental
body or agency. For purposes of this Agreement, “affiliate”
means,
with respect to the Company, any person, partnership, corporation or other
entity that controls, is controlled by or is under common control with the
Company within the meaning of Rule 405 of Regulation C under the Securities
Act of 1933, as now in effect or as hereafter amended.
cc. The
Executive shall not, without the Company’s prior written consent, directly or
indirectly, (i) knowingly solicit or knowingly encourage to leave the employment
or other service of the Company or any of its affiliates, any employee thereof
or knowingly hire (on behalf of the Executive or any other person or entity)
any
employee who has left the employment or other service of the Company or any
of
its affiliates (or any predecessor of either) within one (1) year of the
termination of such employee’s or independent contractor’s employment or other
service with the Company and its affiliates; or (ii) whether for the Executive’s
own account or for the account of any other person, firm, corporation or other
business organization, intentionally interfere with the Company’s or any of its
affiliates, relationship with, or endeavor to entice away from the Company
or
any of its affiliates, any person who during the Executive’s employment with the
Company and its affiliates (or the predecessors of either) is or was a customer
or client of the Company or any of its affiliates (or any predecessor of
either).
dd. All
memoranda, notes, lists, records, property and any other tangible product and
documents (and all copies thereof) made, produced or compiled by the Executive
or made available to the Executive concerning the Business of the Company and
its affiliates shall be the Company’s property and shall be delivered to the
Company at any time on request.
6.3 Rights
and Remedies upon Breach.
The
Executive acknowledges and agrees that any breach by him of any of the
provisions of Sections 6.1 or 6.2 (the “Restrictive
Covenants”)
would
result in irreparable injury and damage for which money damages would not
provide an adequate remedy. Therefore, if the Executive breaches, or threatens
to commit a breach of, any of the Restrictive Covenants, the Company and its
affiliates shall have the right and remedy to have the Restrictive Covenants
specifically enforced (without posting bond and without the need to prove
damages) by any court having equity jurisdiction, including, without limitation,
the right to an entry against the Executive of restraining orders and
injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
covenants. This right and remedy shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company and its affiliates under
law or in equity (including, without limitation, the recovery of damages).
The
existence of any claim or cause of action by the Executive, whether predicated
on this Agreement or otherwise, shall not constitute a defense to the
enforcement of the Restrictive Covenants. The Company has the right to cease
making the payments provided as part of the Severance Package in the event
of a
material breach of any of the Restrictive Covenants that, if capable of cure
and
not willful, is not cured within thirty (30) days after receipt of notice
thereof from the Company.
7. Other
Provisions.
7.1 Severability.
The
Executive acknowledges and agrees that the Executive has had an opportunity
to
seek advice of counsel in connection with this Agreement; and that the
Restrictive Covenants are reasonable in geographical and temporal scope and
in
all other respects. If it is determined that any of the provisions of this
Agreement, including, without limitation, any of the Restrictive Covenants,
or
any part thereof, is invalid or unenforceable, the remainder of the provisions
of this Agreement shall not thereby be affected and shall be given full affect,
without regard to the invalid portions.
7.2 Duration
and Scope of Covenants.
If any
court or other decision maker of competent jurisdiction determines that any
of
the Executive’s covenants contained in this Agreement, including, without
limitation, any of the Restrictive Covenants, or any part thereof, are
unenforceable because of the duration or geographical scope of such provision,
then, after such determination has become final and unappealable, the duration
or scope of such provision, as the case may be, shall be reduced so that such
provision becomes enforceable and, in its reduced form, such provision shall
then be enforceable and shall be enforced.
7.3 Enforceability
of Restrictive Covenants; Jurisdictions.
The
Company and the Executive intend to and hereby consent to jurisdiction to
enforce the Restrictive Covenants upon the courts of any jurisdiction within
the
geographical scope of the Restrictive Covenants. If the courts of any one or
more of such jurisdictions hold the Restrictive Covenants wholly unenforceable
by reason of breadth of scope or otherwise it is the intention of the Company
and the Executive that such determination not bar or in any way affect the
Company’s right, or the right of any of its affiliates, to the relief provided
above in the courts of any other jurisdiction within the geographical scope
of
such Restrictive Covenants, as to breaches of such Restrictive Covenants in
such
other respective jurisdictions, such Restrictive Covenants as they relate to
each jurisdiction’s being, for this purpose, severable, diverse and independent
covenants, subject, where appropriate, to the doctrine of res judicata.
7.4 Arbitration.
Except
with regard to Section 6, all disputes between the parties or any claims
concerning the performance, breach, construction or interpretation of this
Agreement, or in any manner arising out of this Agreement, shall be submitted
to
binding arbitration in accordance with the Commercial Arbitration Rules, as
amended from time to time, of the American Arbitration Association (the
“AAA”),
which
arbitration shall be carried out in the manner set forth below:
a.
Within
fifteen (15) days after written notice by one party to the other party of its
demand for arbitration, which demand shall set forth the name and address of
its
designated arbitrator, the other party shall appoint its designated arbitrator
and so notify the demanding party. Within fifteen (15) days thereafter, the
two
arbitrators so appointed shall appoint the third arbitrator. If the two
appointed arbitrators cannot agree on the third arbitrator, then the AAA shall
appoint an independent arbitrator as the third arbitrator. The dispute shall
be
heard by the arbitrators within ninety (90) days after appointment of the third
arbitrator. The decision of any two (2) or all three (3) of the arbitrators
shall be binding upon the parties without any right of appeal. The decision
of
the arbitrators shall be final and binding upon the Company, its successors
and
assigns, and upon Executive, his heirs, personal representatives, and legal
representatives
b.
The
arbitration proceedings shall take place in Orlando, Florida, and the judgment
and determination of such proceedings shall be binding on all parties. Judgment
upon any award rendered by the arbitrators may be entered into any court having
competent jurisdiction without any right of appeal.
c.
Each
party shall pay its or his own expenses of arbitration, and the expenses of
the
arbitrators and the arbitration proceeding shall be shared equally. However,
if
in the opinion of a majority of the arbitrators, any claim or defense was
unreasonable, the arbitrators may assess, as part of their award, all or any
part of the arbitration expenses of the other party (other than attorneys’ fees,
which are addressed in Section 7.5 below) and of the arbitrators and the
arbitration proceeding.
7.5 Attorneys’
Fees.
In the
event of any legal proceeding (including an arbitration proceeding) relating
to
this Agreement or any term or provision thereof, the losing party shall be
responsible to pay or reimburse the prevailing party for all reasonable
attorneys’ fees and expenses incurred by the prevailing party in connection with
such proceeding.
7.6 Notices.
Any
notice, consent or other communication required or permitted hereunder shall
be
in writing and shall be delivered personally, telegraphed, telexed, sent by
facsimile transmission or sent by certified, registered or express mail, postage
prepaid. Any such notice, consent or other communication shall be deemed given
when so delivered personally, delivered by overnight courier, telexed or sent
by
facsimile transmission or, if mailed, five days after the date of deposit in
the
United States mails as follows:
a. If
to the
Company, to:
CNL
Hotels & Resorts, Inc.
CNL
Center at City Commons
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Chairman (▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.)
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy in either case to:
▇▇▇▇▇▇▇▇▇
Traurig, LLP
The
MetLife Building
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
b. If
to the
Executive, to:
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Fascimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy in either case to:
▇▇▇▇▇
& ▇▇▇▇▇▇▇▇▇ LLP
SunTrust
Center
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
G. ▇▇▇▇▇▇ ▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Any
such
person may by notice given in accordance with this Section to the other parties
hereto designate another address or person for receipt by such person of notices
hereunder.
7.7 Entire
Agreement.
This
Agreement contains the entire agreement between the parties with respect to
the
subject matter hereof and supersedes all prior agreements, written or oral,
with
the Company or its subsidiaries (or any predecessor of either).
7.8 Waivers
and Amendments.
This
Agreement may be amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, only by a written instrument signed by the parties
or, in the case of a waiver, by the party waiving compliance. No delay on the
part of any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of any party
of
any such right, power or privilege nor any single or partial exercise of any
such right, power or privilege, preclude any other or further exercise thereof
or the exercise of any other such right, power or privilege. If the Executive
is
terminated without Cause or is terminated due to a Non-Renewal of this Agreement
by the Company, the Company hereby waives, as to the Executive only, the no-hire
provision in the Merger Agreement.
7.9 GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF FLORIDA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
7.10 Assignment.
This
Agreement, and the Executive’s rights and obligations hereunder, may not be
assigned by the Executive; any purported assignment by the Executive in
violation hereof shall be null and void. In the event of any sale, transfer
or
other disposition of all or substantially all of the Company’s assets or
business, whether by merger, consolidation or otherwise, the Company may assign
this Agreement and its rights hereunder.
7.11 Withholding.
The
Company shall be entitled to withhold from any payments or deemed payments
any
amount of withholding required by law. In
the
event that the Company determines that any federal, state, local or foreign
tax
or withholding payment is required relating to the vesting in or delivery of
Shares, the Company shall have the right to require such payments from the
Executive or withhold such amounts from other payments due to the Executive
from
the Company or any affiliate, or to withhold Shares that would otherwise have
been issued to the Executive. The
Executive shall have the right to elect, in his discretion, the manner in which
such payments shall be made or withheld. No
other
taxes, fees, impositions, duties or other charges or offsets of any kind shall
be deducted or withheld from amounts payable hereunder, unless otherwise
required by law.
7.12 No
Duty to Mitigate.
The
Executive shall not be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment or otherwise,
nor
will any payments hereunder be subject to offset in the event the Executive
does
mitigate.
7.13 Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors, permitted assigns, heirs, executors and legal
representatives.
7.14 Counterparts.
This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original but all such
counterparts together shall constitute one and the same instrument. Each
counterpart may consist of two copies hereof each signed by one of the parties
hereto.
7.15 Survival.
Anything contained in this Agreement to the contrary notwithstanding, the
provisions of Sections 3.7, 4, 5, 6, 7.3, 7.4, 7.5, 7.11, 7.12, 7.18, 7.19
and
7.21 and the other provisions of this Section 7 (to the extent necessary to
effectuate the survival of Sections 4, 5, 6, 7.3, 7.4, 7.11, and 7.12) shall
survive the termination of this Agreement and any termination of the Executive’s
employment hereunder.
7.16 Existing
Agreements.
Executive represents to the Company that the Executive is not subject or a
party
to any employment or consulting agreement, non-competition covenant or other
agreement, covenant or understanding which might prohibit the Executive from
executing this Agreement or limit the Executive’s ability to fulfill the
Executive’s responsibilities hereunder.
7.17 Headings.
The
headings in this Agreement are for reference only and shall not affect the
interpretation of this Agreement.
7.18 Parachute
Provisions.
If any
amount payable to or other benefit receivable by the Executive pursuant to
this
Agreement is deemed to constitute a Parachute Payment (as defined below), alone
or when added to any other amount payable or paid to or other benefit receivable
or received by the Executive which is deemed to constitute a Parachute Payment
(whether or not under an existing plan, arrangement or other agreement), and
would result in the imposition on the Executive of an excise tax under Section
4999 of the Internal Revenue Code of 1986, as amended, then, in addition to
any
other benefits to which the Executive is entitled under this Agreement, the
Executive shall be paid by the Company an amount in cash equal to the sum of
the
excise taxes payable by the Executive by reason of receiving Parachute Payments
plus the amount necessary to put the Executive in the same after-tax position
(taking into account any and all applicable federal, state and local excise,
income or other taxes at the highest applicable rates on such Parachute Payments
and on any payments under this Section 7.18) as if no excise taxes had been
imposed with respect to Parachute Payments. The amount of any payment under
this
Section 7.18 shall be computed by a certified public accounting firm mutually
and reasonably acceptable to the Executive and the Company, the computation
expenses of which shall be paid by the Company. “Parachute Payment” shall mean
any payment deemed to constitute a “parachute payment” as defined in Section
280G of the Internal Revenue Code of 1986, as amended.
7.19 Company’s
Repurchase of Certain Shares.
At the
Excutive’s option, exercisable
at any time within twelve (12) months after the date Shares
(as defined in Attachment “A”)
(including any additional shares of the Company’s Common Stock then owned by the
Executive and attributable to such Shares as a result of a stock dividend,
stock-split, or recapitalization of the Company) are includible in Executive’s
taxable income, the Company shall
purchase from the Executive an amount of shares of the Company’s Stock then
owned by the Executive sufficient to pay the difference between the income
tax
attributable to the inclusion of the value of such Shares in Executive’s taxable
income and the amount previously withheld
(“Put
Right”); provided, however, that such Put Right shall not be exercisable with
regard to any shares of the Company’s Stock the repurchase of which would result
in an accounting charge to the Company. The Executive’s Put Right shall be
exercisable at the fair market value of the shares as of the date such Put
Right
is exercised (the “Purchase Price”) as determined in good faith by the Company.
Unless the Company and the Executive shall mutually agree upon other terms,
the
Purchase Price shall be paid in cash or other readily available funds, to be
paid to the Executive thirty (30) days from the date that the Executive elects
to exercise his Put Right. If
the
shares Company Common Stock are listed on an established national or regional
stock exchange or are admitted to quotation on The Nasdaq Stock Market, Inc.,
or
are publicly traded in an established securities market, the foregoing Put
Right
shall terminate as of the first date that the shares of Common Stock are so
listed, quoted or publicly traded.
7.20 Effective
Date.
The
Effective Date shall be the Effective Time (as such term is defined in the
Merger Agreement).
7.21 Indemnification.
Subject
to the Company’s
Articles of Incorporation and Bylaws, the Company shall indemnify the Executive
with respect to his performance of services hereunder on the Company’s
and its
affiliates’
behalf,
to the fullest extent allowed under the laws of the State of Florida, and if
such is held not to be applicable, then to the fullest extent allowed under
the
laws of the state of the Company’s
incorporation.
IN
WITNESS WHEREOF, the parties hereto have signed their names to this Employment
Agreement as of the day and year set forth below.
| COMPANY: | ||
|
CNL HOTELS & RESORTS, INC., a Maryland
corporation:
|
||
| |
|
|
| Date: June 15, 2006 | By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III |
|
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III |
||
| Title: CEO | ||
| EXECUTIVE: | ||
| |
|
|
| Date: June 15, 2006 | By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ |
|
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ |
||
| Title: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||
▇▇▇▇▇▇
▇▇▇▇▇▇▇
ATTACHMENT
“A”
A. BONUS
COMPENSATION
1. Annual
Bonus Compensation.
Executive shall be eligible to participate in the Bonus Plan during the term
of
this Agreement. Executive’s
bonus
will be subject to Executive’s achievement of performance criteria established
annually by the Compensation Committee:
1.1.
For
Threshold level, Executive shall receive 50% of his Annual Salary as bonus
compensation;
1.2. For
Target level, Executive shall receive 75% of his Annual Salary as bonus
compensation;
and
1.3. For
Maximum level, Executive shall receive 100% of his Annual Salary as bonus
compensation.
For
purpose of the Annual Bonus, Annual Salary means the Annual Salary paid the
Executive during the calendar or portion of the calendar year covered by the
bonus. Any bonus compensation in excess of 100% of Executive’s Annual Salary may
be paid, in whole or in part, at the option of the Executive, in shares of
the
Company’s common stock. Executive’s performance criteria shall be established
annually by the Compensation Committee. For each fiscal year, Executive’s bonus,
if any, will be paid to Executive in a lump sum on or before seventy five (75)
days after the end of such fiscal year.
2. Withholding.
All
amounts payable to Executive hereunder shall be subject to all required federal,
state or local income tax or other withholding by the Company.
B. OTHER
BENEFITS AND PAYMENTS
3.
Shares.
Subject
to the Company’s 2004 Omnibus Long-Term Incentive Plan,
as an
incentive bonus, shares of the Company’s common stock (“Shares”) shall be
granted to the Executive in accordance with the following provisions:
3.1. A
total
of twenty-one thousand six hundred (21,600) Shares shall be granted in the
form
of stock units which shall vest in four equal installments on each of December
31, 2006, December 31, 2007, December 31, 2008 and December 31, 2009, if
Executive then remains in service to the Company. The shares related to the
vested stock units shall be delivered to the Executive when vested.
3.2 A
total
of ninety-eight thousand four hundred (98,400) Shares shall be granted in the
form of stock units which shall be subject to vesting based on the achievement
of performance criteria over partial year, annual and cumulative performance
periods starting December 31, 2006 and ending on the last day of each calendar
year through December 31, 2009, as determined by the Compensation
Committee
and the
shares related to the vested stock units shall be delivered to the Executive
when vested or, to the extent vested, on an earlier termination of employment.
3.3 Delivery
of shares of Company common stock subject to the stock units shall be delayed
six months if such delivery is made in connection with the Executive’s
separation from service and such delay is necessary to avoid the 20% additional
tax imposed by Section 409A. In the event share delivery is delayed, at the
same
time the Shares are delivered, the Executive shall receive an amount equal
to
the dividend(s) that would be payable on the number of Shares subject to the
delayed delivery if the record date of such dividend(s) is after the date of
the
Executive’s separation from service and prior to the delivery of the shares to
the Executive.
▇▇▇▇▇▇
▇▇▇▇▇▇▇
ATTACHMENT
“B”
General
Release of Claims If Executive Is 40 Years-Old or Older on the Date of
Execution
Consistent
with Section 5 of the Employment Agreement dated _______ __, 2006 between me
and
CNL Hotels & Resorts Inc. (the “Employment Agreement”) and in consideration
for and contingent upon my receipt of the Severance Package set forth in
Sections 5(b) and 5(c) of the Employment Agreement, I, for myself, my attorneys,
heirs, executors, administrators, successors, and assigns, do hereby fully
and
forever release and discharge CNL Hotels & Resorts Inc. and its affiliated
entities (as defined in the Employment Agreement), as well as their
predecessors, successors, assigns, and their current or former directors,
officers, partners, agents, employees, attorneys, and administrators from all
suits, causes of action, and/or claims, demands or entitlements of any nature
whatsoever, whether known, unknown, or unforeseen, which I have or may have
against any of them arising out of or in connection with my employment by CNL
Hotels & Resorts Inc., the Employment Agreement, the termination of my
employment with CNL Hotels & Resorts Inc., or any event, transaction, or
matter occurring or existing on or before the date of my signing of this General
Release, except that I am not releasing any (a) right to indemnification that
I
may otherwise have, (b)
right to
Annual Salary and benefits under applicable benefit plans that are earned and
accrued but unpaid as of the date of my signing this General Release, (c) right
to reimbursement for business expenses incurred and not reimbursed as of the
date of my signing this General Release, (d) right to any bonus payment(s)
under
the Bonus Plan that are earned and accrued for the most recent completed
calendar year for which a bonus payment has not then been paid as of the date
of
my signing this General Release, or
(e)
claims arising after the date of my signing this General Release. I agree not
to
file or otherwise institute any claim, demand or lawsuit seeking damages or
other relief and not to otherwise assert any claims, demands or entitlements
that are lawfully released herein. I further hereby irrevocably and
unconditionally waive any and all rights to recover any relief or damages
concerning the claims, demands or entitlements that are lawfully released
herein. I represent and warrant that I have not previously filed or joined
in
any such claims, demands or entitlements against CNL Hotels & Resorts Inc.
or the other persons released herein and that I will indemnify and hold them
harmless from all liabilities, claims, demands, costs, expenses and/or
attorneys’ fees incurred as a result of any such claims, demands or
lawsuits.
Except
as
otherwise expressly provided above, this General Release specifically includes,
but is not limited to, all claims of breach of contract, employment
discrimination (including any claims coming within the scope of Title VII of
the
Civil Rights Act, the Age Discrimination in Employment Act, the Older Workers
Benefit Protection Act, the Equal Pay Act, the Americans with Disabilities
Act,
the Family and Medical Leave Act, and any comparable Florida law, all as
amended, or any other applicable federal, state, or local law), claims under
the
Employee Retirement Income Security Act, as amended, claims under the Fair
Labor
Standards Act, as amended (or any other applicable federal, state or local
statute relating to payment of wages), claims concerning recruitment, hiring,
termination, salary rate, severance pay, stock options, wages or benefits due,
sick leave, holiday pay, vacation pay, life insurance, group medical insurance,
any other fringe benefits, worker’s compensation, termination, employment
status, libel, slander, defamation, intentional or negligent misrepresentation
and/or infliction of emotional distress, together with any and all tort,
contract, or other claims which might have been asserted by me or on my behalf
in any suit, charge of discrimination, or claim against CNL Hotels & Resorts
or the persons released herein.
I
acknowledge that I have been given an opportunity of twenty-one (21) days to
consider this General Release and that I have been encouraged by CNL Hotels
& Resorts Inc. to discuss fully the terms of this General Release with legal
counsel of my own choosing. Moreover, for a period of seven (7) days following
my execution of this General Release, I shall have the right to revoke the
waiver of claims arising under the Age Discrimination in Employment Act, a
federal statute that prohibits employers from discriminating against employees
who are age 40 or over. If I elect to revoke this General Release within this
seven-day period, I must inform CNL Hotels & Resorts Inc. by delivering a
written notice of revocation to CNL Hotels & Resorts Inc.’s Director of
Human Resources, ________________________, no
later
than 11:59 p.m. on the seventh calendar day after I sign this General Release.
I
understand that, if I elect to exercise this revocation right, this General
Release shall be voided in its entirety and CNL Hotels & Resorts Inc. shall
be relieved of all obligations to make the portion of the Severance Package
described in Section 5(b) and (c) of the Employment Agreement. I may, if I
wish,
elect to sign this General Release prior to the expiration of the 21-day
consideration period, and I agree that if I elect to do so, my election is
made
freely and voluntarily and after having an opportunity to consult
counsel.
AGREED:
[Form
of Agreement Only - Do No Execute]
_____________________________ ______________________________
▇▇▇▇▇▇
▇▇▇▇▇▇▇ Date