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EXECUTION COPY
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, effective as of April 1, 2000 by and
between MERISTAR HOSPITALITY CORPORATION, a Maryland corporation (the
"Company"), MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P., a Delaware limited
partnership (the "Partnership"), and PAUL W. WHETSELL (the "Executive"), an
individual residing at 10901 Tara Road, Potomac, Maryland 20854.
The Company and the Partnership desire to employ the Executive in the
capacities of Chairman of the Board and Chief Executive Officer, and the
Executive desires to be so employed, on the terms and subject to the conditions
set forth in this agreement (the "Agreement");
Now, Therefore, in consideration of the mutual covenants set forth
herein and other good and valuable consideration the parties hereto hereby agree
as follows:
1. Employment; Term. The Company and the Partnership each hereby
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employ the Executive, and the Executive agrees to be employed by the Company and
the Partnership, upon the terms and subject to the conditions set forth herein,
for an initial term of three and one-half (3-1/2) years, commencing on April 1,
2000 (the "Commencement Date"), unless terminated earlier in accordance with
Section 5 of this Agreement; provided, that, such term shall automatically be
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extended from time to time for additional periods of one calendar year from the
date on which it would otherwise expire unless the Executive, on one hand, or
the Company and the Partnership, on the other, gives notice to the other party
or parties not less than 120 days prior to such date that it elects to permit
the term of this Agreement to expire without extension on such date. (The
initial term of this Agreement as the same may be extended in accordance with
the terms of this Agreement is hereinafter referred to as the "Term").
2. Positions; Conduct.
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(a) During the Term, the Executive will hold the titles and
offices of, and serve in the positions of, Chairman of the Board and Chief
Executive Officer of the Company and the Partnership. The Executive shall report
to the Board of Directors of the Company (the "Board") and shall perform such
specific duties and services (including service as an officer, director or
equivalent position of any direct or indirect subsidiary without additional
compensation) as they shall reasonably request consistent with the Executive's
positions.
(b) During the Term, the Executive agrees to devote his full
business time and attention to the business and affairs of the Company and the
Partnership and to faithfully and diligently perform, to the best of his
ability, all of his duties and responsibilities hereunder; provided, that the
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Executive may devote his business time to providing services to MeriStar Hotels
& Resorts, Inc., and may provide
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services as described in Schedule A attached hereto, so long as such activity
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does not interfere with the performance of the Executive's duties hereunder.
Nothing in this Agreement shall preclude the Executive from devoting reasonable
time and attention to (i) serving, with the approval of the Board, as a
director, trustee or member of any committee of any organization, (ii) engaging
in charitable and community activities and (iii) managing his personal
investments and affairs; provided that such activities do not involve any
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material conflict of interest with the interests of the Company or, individually
or collectively, interfere materially with the performance by the Executive of
his duties and responsibilities under this Agreement. Notwithstanding the
foregoing and except as expressly provided herein, during the Term, the
Executive may not accept employment with any other individual or entity, or
engage in any other venture which is directly or indirectly in conflict or
competition with the business of the Company or the Partnership.
(c) The Executive's office and place of rendering his services
under this Agreement shall be in the principal executive offices of the Company
which shall be in the Washington, D.C. metropolitan area. Under no circumstances
shall the Executive be required to relocate from the Washington, D.C.
metropolitan area or provide services under this Agreement in any other location
other than in connection with reasonable and customary business travel. During
the Term, the Company shall provide the Executive with executive office space,
and administrative and secretarial assistance and other support services
consistent with his position as Chairman of the Board and Chief Executive
Officer and with his duties and responsibilities hereunder.
3. Board of Directors. While it is understood that the right to
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elect directors of the Company is by law vested in the stockholders and
directors of the Company, it is nevertheless mutually contemplated that, subject
to such rights, during the Term the Executive will serve as a member of the
Company's Board of Directors.
4. Salary; Additional Compensation; Perquisites and Benefits.
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(a) During the Term, the Company and the Partnership will pay
the Executive a base salary at an aggregate annual rate of not less than
$285,000 per annum, subject to annual review by the Compensation Committee of
the Board (the "Compensation Committee"), and in the discretion of such
Committee, increased from time to time. Once increased, such base salary may not
be decreased. Such salary shall be paid in periodic installments in accordance
with the Company's standard practice, but not less frequently than semi-monthly.
(b) For each fiscal year during the Term, the Executive will be
eligible to receive a bonus from the Company. The award and amount of such
bonus shall be based upon the achievement of predefined operating or performance
goals and other criteria established by the Compensation Committee, which goals
shall give the Executive the opportunity to earn a bonus in the following
amounts: threshold target -25% of base salary; target - 125 % of base salary;
and maximum bonus amount - 150% of base salary.
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(c) During the Term, the Executive will participate in all plans
now existing or hereafter adopted by the Company or the Partnership for their
management employees or the general benefit of their employees, such as any
pension, profit-sharing, bonuses, stock option or other incentive compensation
plans, life and health insurance plans, or other insurance plans and benefits on
the same basis and subject to the same qualifications as other senior executive
officers.
(d) (i) The Executive shall be eligible for stock option
grants from time to time pursuant to the Company's Incentive Plan in accordance
with the terms thereof. The Compensation Committee granted to the Executive,
effective on the date of the consummation of the merger (the "Merger")
contemplated by the Agreement and Plan of Merger among American General Hospital
Corporation and American General Hospitality Operating Partnership, L.P. and
CapStar Hotel Company, L.P. and CapStar Management Company II L.P. dated as of
March 15, 1998, as amended (the "Merger Date"), options to purchase 353,743
shares of the common stock of the Company at an exercise price equal to the fair
market value at the time of grant. Subject to the terms of this Agreement as to
the acceleration of vesting of stock options, such options shall vest as
follows:
First Anniversary of the Merger Date 33-1/3% vested
Second Anniversary of the Merger Date 66-2/3% vested
Third Anniversary of the Merger Date 100% vested
Such options shall be exercisable, subject to vesting and continued service, for
ten (10) years from the date of grant and in all other respects shall be subject
to the terms and conditions of the Incentive Plan.
(ii) The Executive waived the accelerated vesting of stock
options granted to the Executive under the CapStar Hotel Company Equity
Incentive Plan (the "CapStar Plan"), which would otherwise have occurred as a
result of the consummation of the Merger, and such options (the "Pre-Merger
Awards") shall continue to vest in accordance with their terms and the terms of
the CapStar Plan.
(iii) On the Merger Date, the Company issued to the
Executive 24,352 shares of common stock of the Company (the "Restricted Stock").
The Restricted Stock vests in three equal installments of 7,242 shares each on
each of the first, second and third anniversaries of the Merger Date,
conditioned upon the Executive's continuing to be employed by the Company on
such dates or as otherwise provided by this Agreement.
(e) The Company and the Partnership will reimburse the
Executive, in accordance with their standard policies from time to time in
effect, for all
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out-of-pocket business expenses as may be incurred by the Executive in the
performance of his duties under this Agreement.
(f) The Executive shall be entitled to vacation time to be
credited and taken in accordance with the Company's policy from time to time in
effect for senior executives, which in any event shall not be less than a total
of four weeks per calendar year.
(g) To the fullest extent permitted by applicable law, the
Executive shall be indemnified and held harmless by the Company and the
Partnership against any and all judgments, penalties, fines, amounts paid in
settlement, and other reasonable expenses (including, without limitation,
reasonable attorneys' fees and disbursements) actually incurred by the Executive
in connection with any threatened, pending or completed action, suit or
proceeding (whether civil, criminal, administrative, investigative or other) for
any action or omission in his capacity as a director, officer or employee of the
Company or the Partnership.
Indemnification under this Section 4(h) shall be in addition to,
and not in substitution of, any other indemnification by the Company or the
Partnership of its officers and directors. Expenses incurred by the Executive in
defending an action, suit or proceeding for which he claims the right to be
indemnified pursuant to this Section 4(h) shall be paid by the Company or the
Partnership, as the case may be, in advance of the final disposition of such
action, suit or proceeding upon the Company's or the Partnership's receipt of
(x) a written affirmation by the Executive of his good faith belief that the
standard of conduct necessary for his indemnification hereunder and under the
provisions of applicable law has been met and (y) a written undertaking by or on
behalf of the Executive to repay the amount advanced if it shall ultimately be
determined by a court that the Executive engaged in conduct which precludes
indemnification under the provisions of such applicable law. Such written
undertaking in clause (y) shall be accepted by the Company or the Partnership,
as the case may be, without security therefor and without reference to the
financial ability of the Executive to make repayment thereunder. The Company and
the Partnership shall use commercially reasonable efforts to maintain in effect
for the Term of this Agreement a directors' and officers' liability insurance
policy, with a policy limit of at least $5,000,000, subject to customary
exclusions, with respect to claims made against officers and directors of the
Company or the Partnership; provided, however, the Company or the Partnership,
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as the case may be, shall be relieved of this obligation to maintain directors'
and officers' liability insurance if, in the good faith judgment of the Company
or the Partnership, it cannot be obtained at a reasonable cost.
5. Termination.
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(a) The Term will terminate immediately upon the Executive's
death or, upon thirty (30) days' prior written notice by the Company, in the
case of a determination of the Executive's Disability. As used herein the term
"Disability" means
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the Executive's inability to perform his duties and responsibilities under this
Agreement for a period of more than 120 consecutive days, or for more than 180
days, whether or not continuous, during any 365-day period, due to physical or
mental incapacity or impairment. A determination of Disability will be made by a
physician reasonably satisfactory to both the Executive and the Company and paid
for by the Company or the Partnership whose decision shall be final and binding
on the Executive and the Company; provided that if they cannot agree as to a
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physician, then each shall select and pay for a physician and these two together
shall select a third physician whose fee shall be borne equally by the Executive
and either the Company or the Partnership and whose determination of Disability
shall be binding on the Executive and the Company. Should the Executive become
incapacitated, his employment shall continue and all base and other compensation
due the Executive hereunder shall continue to be paid through the date upon
which the Executive's employment is terminated for Disability in accordance with
this section.
(b) The Term may be terminated by the Company upon notice to the
Executive upon the occurrence of any event constituting "Cause" as defined
herein.
(c) The Term may be terminated by the Executive upon notice to
the Company of any event constituting "Good Reason" as defined herein.
6. Severance.
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(a) If the Term is terminated by the Company for Cause, the
Company and the Partnership will pay to the Executive an aggregate amount equal
to the Executive's accrued and unpaid base salary through the date of such
termination, and all unvested options will terminate immediately and any vested
options issued pursuant to the Company's Incentive Plan and held by the
Executive at termination, will expire ninety (90) days after the termination
date.
(b) If the Term is terminated by the Executive other than
because of death, Disability or for Good Reason, the Company and the Partnership
will pay to the Executive an aggregate amount equal to the Executive's accrued
and unpaid base salary through the date of such termination, and all unvested
options will terminate immediately and any vested options issued pursuant to the
Company's Incentive Plan and held by the Executive at termination, will expire
ninety (90) days after the termination date.
(c) If the Term is terminated upon the Executive's death or
Disability, the Company and the Partnership will pay to the Executive's estate
or the Executive, as the case may be, a lump sum payment equal to the
Executive's base salary through the termination date, plus a pro rata portion of
the Executive's bonus for the fiscal year in which the termination occurred. In
addition, the Company will make payments for one (1) year of all compensation
otherwise payable to the Executive pursuant to this Agreement, including, but
not limited to, base salary, bonus and welfare benefits. In
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addition, all of the Executive's unvested stock options and restricted stock
awards will immediately vest and become exercisable for a period of one (1) year
thereafter and shares of restricted stock of the Company previously granted to
the Executive shall become free from all contractual restrictions.
(d) Subject to Section 6(e) hereof, if the Term is terminated by
the Company without Cause or other than by reason of his death or Disability, in
addition to any other remedies available, or if the Executive terminates the
Term for Good Reason, the Company and the Partnership shall pay the Executive a
lump sum equal to the product of (x) the sum of (A) the Executive's then annual
base salary and (B) the amount of the Executive's bonus for the preceding year,
multiplied by (y) the greater of (A) two and one-half (2 1/2) and (B) a
fraction, the numerator of which is the number of days remaining in the Term
(without further extension) and the denominator of which is 365. In addition,
all of the Executive's unvested stock options and restricted stock awards will
immediately vest and become exercisable for a period of one (1) year thereafter
and shares of restricted stock of the Company previously granted to the
Executive shall become free from all contractual restrictions, and the Company
shall continue in effect the Executive's health benefits noted in Section 4(c)
hereof or their equivalent for a period equal to the greater of two and one-half
(2 1/2) years or the remaining Term, without further extension.
(e) If, within twenty-four (24) months following a Change in
Control, the Term is terminated by the Executive for Good Reason or by the
Company without Cause, in addition to any other rights which the Executive may
have under law or otherwise, the Executive shall receive the same payments and
benefits provided for under Section 6(d) hereof; provided, that the amount of
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the multiplier described in clause (d)(y)(A) of Section 6 hereof shall be
increased from two and one-half (2 1/2) times to three and one-half (3 1/2)
times.
(f) If at any time the Term is not extended pursuant to the
proviso to Section 1 hereof as a result of the Company giving notice thereunder
that it elects to permit the term of this Agreement to expire without extension,
the Company shall be deemed to have terminated the Executive's employment
without Cause.
(g) Notwithstanding anything in this Section 6 to the contrary:
if the Term is terminated for any reason at any time prior to the first
anniversary of the Commencement Date, the Pre-Merger Awards will immediately
vest and remain exercisable in accordance with their respective terms; provided,
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however, such Pre-Merger Awards will have an exercise period of at least one (1)
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year from the date of termination.
(h) As used herein, the term "Cause" means:
(i) the Executive's willful and intentional failure or
refusal to perform or observe any of his material duties, responsibilities
or obligations set forth in this Agreement; provided, however, that the
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Company
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shall not be deemed to have Cause pursuant to this clause (i) unless the
Company gives the Executive written notice that the specified conduct has
occurred and making specific reference to this Section 6(h)(i) and the
Executive fails to cure the conduct within thirty (30) days after receipt
of such notice;
(ii) any willful and intentional act of the Executive
involving malfeasance, fraud, theft, misappropriation of funds,
embezzlement or dishonesty affecting the Company or the Partnership; or
(iii) the Executive's conviction of, or a plea of guilty or
nolo contendere to, an offense which is a felony in the jurisdiction
involved.
Termination of the Executive for Cause shall be communicated by a Notice of
Termination. For purposes of this Agreement, a "Notice of Termination" shall
mean delivery to the Executive of a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of the
Company's Board at a meeting of the Board called and held for the purpose (after
reasonable notice to the Executive and reasonable opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board prior to
such vote) of finding that in the good faith opinion of the Board, the Executive
was guilty of conduct constituting Cause and specifying the particulars thereof
in detail, including, with respect to any termination based upon conduct
described in clause (i) above that the Executive failed to cure such conduct
during the thirty-day period following the date on which the Company gave
written notice of the conduct referred to in such clause (i). For purposes of
this Agreement, no such purported termination of the Executive's employment
shall be effective without such Notice of Termination;
(i) As used herein, the term "Good Reason" means the occurrence
of any of the following, without the prior written consent of the Executive:
(i) assignment of the Executive of duties materially
inconsistent with the Executive's positions as described in Section 2(a)
hereof, or any significant diminution in the Executive's duties or
responsibilities, other than in connection with the termination of the
Executive's employment for Cause, Disability or as a result of the
Executive's death or by the Executive other than for Good Reason;
(ii) the failure of the Company to nominate the Executive
to the Board or the failure of the Executive to be elected to the Board;
(iii) the change in the location of the Company's principal
executive offices or of the Executive's principal place of employment to a
location outside the Washington, D.C. metropolitan area;
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(iv) any material breach of this Agreement by the Company
or the Partnership which is continuing; or
(v) a Change in Control;
provided, however, that the Executive shall not be deemed to have Good Reason
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pursuant to clauses (i), (ii) or (iv) above unless the Executive gives the
Company or the Partnership, as the case may be, written notice that the
specified conduct or event has occurred and the Company or the Partnership fails
to cure such conduct or event within thirty (30) days of the receipt of such
notice.
(j) As used herein, the term "Change in Control" means the
occurrence of any one of the following events:
(i) the acquisition (other than from the Company) by any
"Person" (as the term is used for purposes of Sections 13(d) or 14(d) of
the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of thirty (30%) percent or more of the
combined voting power of the Company's then outstanding voting securities;
or
(ii) the individuals who were members of the Board (the
"Incumbent Board") during the previous twelve (12) month period, cease for
any reason to constitute at least a majority of the Board; provided,
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however, that if the election, or nomination for election by the Company's
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stockholders, of any new director was approved by a vote of at least two-
thirds of the Incumbent Board, such new director shall, for purposes of
this Agreement, be considered as a member of the Incumbent Board; or
(iii) approval by the stockholders of the Company of (a)
merger or consolidation involving the Company if the stockholders of the
Company, immediately before such merger or consolidation do not, as a
result of such merger or consolidation, own, directly or indirectly, more
than fifty (50%) percent of the combined voting power of the then
outstanding voting securities of the corporation resulting from such merger
or consolidation in substantially the same proportion as their ownership of
the combined voting power of the voting securities of the Company
outstanding immediately before such merger or consolidation or (b) a
complete liquidation or dissolution of the Company or an agreement for the
sale or other disposition of all or substantially all of the assets of the
Company; or
(iv) approval by the stockholders of the Company of any
transaction (including without limitation a "going private transaction")
involving the Company if the stockholders of the Company, immediately
before such transaction, do not as a result of such transaction, own
directly or indirectly, more than fifty (50%) percent of the combined
voting power of the then outstanding
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voting securities of the corporation resulting from such transaction in
substantially the same proportion as their ownership of the combined voting
power of the voting securities of the Company outstanding immediately
before such transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur pursuant to clause (i) above solely because thirty (30%) percent or
more of the combined voting power of the Company's then outstanding securities
is acquired by (a) a trustee or other fiduciary holding securities under one or
more employee benefit plans maintained by the Company or any of its subsidiaries
or (b) any corporation which, immediately prior to such acquisition, is owned
directly or indirectly by the stockholders of the Company in the same proportion
as their ownership of stock in the Company immediately prior to such
acquisition.
(k) The amounts required to be paid and the benefits required to
be made available to the Executive under this Section 6 are absolute. Under no
circumstances shall the Executive, upon the termination of his employment
hereunder, be required to seek alternative employment and, in the event that the
Executive does secure other employment, no compensation or other benefits
received in respect of such employment shall be set-off or in any other way
limit or reduce the obligations of the Company under this Section 6.
(l) Excise Tax Payments.
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(i) Gross-Up Payment. If it shall be determined that any
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payment or distribution of any type to or in respect of the Executive, by
the Company, the Partnership, or any other person, whether paid or payable
or distributed or distributable pursuant to the terms of the Agreement or
otherwise (the "Total Payments"), is or will be subject to the excise tax
imposed by Section 4999 of the Internal Code of 1986, as amended (the
"Code") or any interest or penalties with respect to such excise tax (such
excise tax, together with any such interest and penalties, are collectively
referred to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes) imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to
the Excise Tax imposed upon the Total Payments.
(ii) Determination by Accountant.
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(A) All computations and determinations relevant to
this Section 6(l) shall be made by a national accounting firm selected by
the Company from among the five (5) largest accounting firms in the United
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States (the "Accounting Firm") which firm may be the Company's accountants.
Such determinations shall include whether any of the Total Payments are
"parachute payments" (within the meaning of Section 280G of the Code). In
making the initial determination hereunder as to whether a Gross-Up Payment
is required the Accounting Firm shall determine that no Gross-Up Payment is
required, if the Accounting Firm is able to conclude that no "Change of
Control" has occurred (within the meaning of Section 280G of the Code) on
the basis of "substantial authority" (within the meaning of Section 6230 of
the Code) and shall provide opinions to that effect to both the Company and
the Executive. If the Accounting Firm determines that a Gross-Up Payment is
required, the Accounting Firm shall provide its determination (the
"Determination"), together with detailed supporting calculations regarding
the amount of any Gross-Up Payment and any other relevant matter both to
the Company and the Executive by no later than ten (10) days following the
Termination Date, if applicable, or such earlier time as is requested by
the Company or the Executive (if the Executive reasonably believes that any
of the Total Payments may be subject to the Excise Tax). If the Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall
furnish the Executive and the Company with a written statement that such
Accounting Firm has concluded that no Excise Tax is payable (including the
reasons therefor) and that the Executive has substantial authority not to
report any Excise Tax on his federal income tax return.
(B) If a Gross-Up Payment is determined to be
payable, it shall be paid to the Executive within twenty (20) days after
the Determination (and all accompanying calculations and other material
supporting the Determination) is delivered to the Company by the Accounting
Firm. Any determination by the Accounting Firm shall be binding upon the
Company and the Executive, absent manifest error.
(C) As a result of uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments not made
by the Company should have been made ("Underpayment"), or that Gross-Up
Payments will have been made by the Company which should not have been made
("Overpayments"). In either such event, the Accounting Firm shall determine
the amount of the Underpayment or Overpayment that has occurred. In the
case of an Underpayment, the amount of such Underpayment (together with any
interest and penalties payable by the Executive as a result of such
Underpayment) shall be promptly paid by the Company to or for the benefit
of the Executive.
(D) In the case of an Overpayment, the Executive
shall, at the direction and expense of the Company, take such steps as
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are reasonably necessary (including the filing of returns and claims for
refund), follow reasonable instructions from, and procedures established
by, the Company, and otherwise reasonably cooperate with the Company to
correct such Overpayment, provided, however, that (i) the Executive shall
not in any event be obligated to return to the Company an amount greater
than the net after-tax portion of the Overpayment that he has retained or
has recovered as a refund from the applicable taxing authorities and (ii)
this provision shall be interpreted in a manner consistent with the intent
of Section 6(l)(i), which is to make the Executive whole, on an after-tax
basis, from the application of the Excise Taxes, it being acknowledged and
understood that the correction of an Overpayment may result in the
Executive repaying to the Company an amount which is less than the
Overpayment.
(E) The Executive shall notify the Company in writing
of any claim by the Internal Revenue Service relating to the possible
application of the Excise Tax under Section 4999 of the Code to any of the
payments and amounts referred to herein and shall afford the Company, at
its expense, the opportunity to control the defense of such claim.
7. Confidential Information.
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(a) The Executive acknowledges that the Company and its
subsidiaries or affiliated ventures ("Company Affiliates") own and have
developed and compile, and will in the future own, develop and compile, certain
Confidential Information and that during the course of his rendering services
hereunder Confidential Information will be disclosed to the Executive by the
Company Affiliates. The Executive hereby agrees that, during the Term and for a
period of three years thereafter, he will not use or disclose, furnish or make
accessible to anyone, directly or indirectly, any Confidential Information of
the Company Affiliates.
(b) As used herein, the term "Confidential Information" means
any trade secrets, confidential or proprietary information, or other knowledge,
know-how, information, documents or materials, owned, developed or possessed by
a Company Affiliate pertaining to its businesses the confidentiality of which
such company takes reasonable measures to protect, including, but not limited
to, trade secrets, techniques, know-how (including designs, plans, procedures,
processes and research records), software, computer programs, innovations,
discoveries, improvements, research, developments, test results, reports,
specifications, data, formats, marketing data and business plans and strategies,
agreements and other forms of documents, expansion plans, budgets, projections,
and salary, staffing and employment information. Notwithstanding the foregoing,
Confidential Information shall not in any event include information which (i)
was generally known or generally available to the public prior to its disclosure
to the Executive, (ii) becomes generally known or generally available to the
public subsequent
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to its disclosure to the Executive through no wrongful act of the Executive,
(iii) is or becomes available to the Executive from sources other than the
Company Affiliates which sources are not known to the Executive to be under any
duty of confidentiality with respect thereto or (iv) the Executive is required
to disclose by applicable law or regulation or by order of any court or federal,
state or local regulatory or administrative body (provided that the Executive
provides the Company with prior notice of the contemplated disclosure and
reasonably cooperates with the Company, at the Company's sole expense, in
seeking a protective order or other appropriate protection of such information).
8. Specific Performance.
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(a) The Executive acknowledges that the services to be rendered
by him hereunder are of a special, unique, extraordinary and personal character
and that the Company Affiliates would sustain irreparable harm in the event of a
violation by the Executive of Section 7 hereof. Therefore, in addition to any
other remedies available, the Company shall be entitled to specific enforcement
and/or an injunction from any court of competent jurisdiction restraining the
Executive from committing or continuing any such violation of this Agreement
without proving actual damages or posting a bond or other security. Nothing
herein shall be construed as prohibiting the Company from pursuing any other
remedies available to it for such breach or threatened breach, including the
recovery of damages.
(b) If any of the restrictions on activities of the Executive
contained in Section 7 hereof shall for any reason be held by a court of
competent jurisdiction to be excessively broad, such restrictions shall be
construed so as thereafter to be limited or reduced to be enforceable to the
maximum extent compatible with the applicable law as it shall then appear; it
being understood that by the execution of this Agreement the parties hereto
regard such restrictions as reasonable and compatible with their respective
rights.
(c) Notwithstanding anything in this Agreement to the contrary,
in the event that the Company fails to make any payment of any amounts or
provide any of the benefits to the Executive when due as called for under
Section 6 of this Agreement and such failure shall continue for twenty (20) days
after notice thereof from the Executive, all restrictions on the activities of
the Executive under Section 7 hereof shall be immediately and permanently
terminated.
9. Withholding. The parties agree that all payments to be made to
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the Executive by the Company pursuant to the Agreement shall be subject to all
applicable withholding obligations of such company.
10. Notices. All notices required or permitted hereunder shall be in
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writing and shall be deemed given and received when delivered personally, four
(4) days after being mailed if sent by registered or certified mail, postage
pre-paid, or by one (1)
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day after delivery if sent by air courier (for next-day delivery) with evidence
of receipt thereof or by facsimile with receipt confirmed by the addressee. Such
notices shall be addressed respectively:
If to the Executive, to:
10901 Tara Road
Potomac, Maryland 20854
If to the Company or to the Partnership, to:
MeriStar Hospitality Corporation
1010 Wisconsin Avenue, N.W.
Washington, D.C. 20007
Attention: Legal Department
or to any other address of which such party may have given notice to the other
parties in the manner specified above.
11. Miscellaneous.
-------------
(a) This Agreement is a personal contract calling for the
provision of unique services by the Executive, and the Executive's rights and
obligations hereunder may not be sold, transferred, assigned, pledged or
hypothecated by the Executive. The rights and obligations of the Company and the
Partnership hereunder will be binding upon and run in favor of their respective
successors and assigns. The Company will not be deemed to have breached this
Agreement if any obligations of the Company to make payments to the Executive
are satisfied by the Partnership.
(b) This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware, without
regard to conflict of laws principles.
(c) Any controversy arising out of or relating to this Agreement
or any breach hereof shall be settled by arbitration in Washington, D.C. by a
single neutral arbitrator in accordance with the Commercial Arbitration Rules of
the American Arbitration Association. Judgment upon any award rendered may be
entered in any court having jurisdiction thereof, except in the event of a
controversy relating to any alleged violation by the Executive of Section 7
hereof, in which case the Company shall be entitled to seek injunctive relief
from a court of competent jurisdiction without the requirement to seek
arbitration.
(d) The headings of the various sections of this Agreement are
for convenience of reference only and shall not define or limit any of the terms
or provisions hereof.
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(e) The provisions of this Agreement which by their terms call
for performance subsequent to the expiration or termination of the Term shall
survive such expiration or termination.
(f) The Company and the Partnership shall reimburse the
Executive for all costs incurred by the Executive in any proceeding for the
successful enforcement of the terms of this Agreement, including without
limitation all costs of investigation and reasonable attorneys fees and
expenses.
(g) This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
other prior agreements and undertakings, both written and oral, among the
parties with respect to the subject matter hereof, all of which shall be
terminated on the Commencement Date. In addition, the parties hereto hereby
waive all rights such party may have under all other prior agreements, including
without limitation, the Executive Employment Agreement entered into as of August
3, 1998 between the Executive and the Company and undertakings, both written and
oral, among the parties hereto, or among the Executive, CapStar Hotel Company
and CapStar Management Co., L.P., with respect to the subject matter hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first above written.
EXECUTIVE:
__________________________________________
Paul W. Whetsell
COMPANY:
MERISTAR HOSPITALITY CORPORATION
By:_______________________________________
Name:
Title:
PARTNERSHIP:
MERISTAR HOSPITALITY OPERATING
PARTNERSHIP L.P.
By:_______________________________________
its general partner
By:_______________________________________
Name:
Title:
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Schedule A
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Executive may act as an officer of CapStar Hotels, Inc. and Latham
Hotels, Inc. and their respective subsidiaries in connection with their general
affairs and in connection with the ownership, management, financing and sale of
their interests (and the interests of entities in which they are general
partners or principals) in the following hotels.
1. Ramada Inn, Slidell, Louisiana
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