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Exhibit
10.2
FINAL EXECUTION
VERSION
CONSULTING
AGREEMENT
This Consulting Agreement
(hereinafter the “Agreement”) is by and between
Strategic Hotels and Resorts, Inc. and its affiliates,
subsidiaries, related entities (collectively the
“Company”), and Sir David M.C. Michels
(hereinafter “Consultant”). The Company and the
Consultant are hereinafter collectively referred to as the
“Parties”.
WHEREAS, the Company desires
to engage Consultant in the capacity and under terms mutually
agreed upon by and mutually beneficial for both the Company and the
Consultant, and the Consultant desires to be engaged by the Company
under terms mutually agreed upon by and mutually beneficial for
both the Company and the Consultant;
THEREFORE, in consideration
of the mutual covenants, representations and undertakings contained
herein, the Company and the Consultant agree as follows:
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1. |
Responsibilities and Position .
Consultant’s responsibilities and duties will be to identify
and/or pursue on behalf of the Company luxury hotel or resort
property, asset or equity acquisition opportunities on the European
continent, facilitate relationships with hotel management
companies, investment banks, lenders and advisors relating to the
Company’s European operations, transactions or business
strategy, provide advice and recommendations to the Company
regarding the Company’s European hotel portfolio, participate
in the annual budgeting process for the Company’s European
hotel portfolio, and such other duties as Consultant and Company
shall otherwise agree. Although Consultant is to use his best
efforts in performing these responsibilities and duties, this is a
part-time, non-exclusive consulting engagement. Consultant is not
an employee of the company, but instead will work independently
using Consultant’s discretion and judgment in performing
these duties and responsibilities for the Company. The title for
Consultant’s position with the Company shall be such title as
Consultant and the Company may agree. |
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2. |
Start Date/Term . Consultant’s start date
will be August 16, 2007 (“Start Date”). The term
of this consulting engagement is 12 months, but will continue
indefinitely thereafter unless terminated by either Consultant or
the Company in accordance with this Agreement. In addition to the
termination rights and obligations set forth in Section 4,
Consultant and the Company both have the right to terminate the
consulting engagement by providing 180 days advance written notice
at any time after the expiration of 6 months after the Start
Date. |
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3. |
Compensation and Benefits . |
(a) Annual
Compensation . Consultant will receive annual compensation
of $500,000, paid monthly, in arrears. Consultant will be
responsible for payment of all Consultant’s own
taxes.
(b) Administrative
Stipend . Consultant will receive an annual stipend of
$25,000, paid monthly, to defray any administrative expenses for
items such as office space, telephone, fax or computer use, and
administrative help that Consultant may incur in performing his
duties for the Company.
(c) Expense
Reimbursement . The Company will reimburse Consultant for
all reasonable travel and entertainment expenses incurred by
Consultant in connection with Consultant’s performance of his
responsibilities and duties for the Company, subject to submission
of adequate documentation.
(d) Restricted Stock
Units . On the date of approval of this Agreement,
Consultant shall receive under the Company’s 2004 Incentive
Plan a grant of restricted stock units (“Stock Units”)
in a number equal to $150,000 divided by the closing price for the
Company’s common stock on such grant date. Such Stock Units
shall vest in three equal annual installments commencing on the
first anniversary of such grant, provided Consultant is still
providing services to the Company, either as a consultant, director
or employee, on such vesting dates. If the consulting engagement is
terminated for Cause under Section 4(a), any unvested Stock
Units shall automatically revert back to the Company.
(e) Insurance and Other
Benefits . Consultant is not eligible to participate in the
Company’s medical, insurance and other plans, nor will
Consultant receive any other benefits from the Company except as
identified in this Agreement.
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4. |
Termination . The Company may terminate
Consultant’s engagement with or without Cause (as defined in
Section 4(a)) or without advance notice, as in its sole
discretion it may decide. |
(a) For Cause .
The Company may dismiss Consultant at any time without notice for
any of the following reasons: (i) serious misconduct including
but not limited to theft, dishonesty, unethical conduct, or
material violation of law; (ii) material breach of the terms
or representations of this agreement; or
(iii) Consultant’s death or disability, subject to the
“Termination Due to Death or Disability” section
below.
(b) Without Cause or
Proper Notice . Subject to Consultant’s execution of
a release and waiver form acceptable to the Company, (i) if
the Company terminates Consultant’s engagement without Cause
as described in Section 4(a) during the first 12 months after
the Start Date, Consultant will receive a lump sum payment equal to
Consultant’s annual compensation, less any compensation
received by Consultant through the date of termination and
(ii) if the Company terminates Consultant’s engagement
after 12 months of the Start Date without providing the necessary
notice under Section 2, Consultant will receive payment for 6
additional months equaling a total of $250,000.
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(c) Due to Death or
Disability . If Consultant becomes permanently disabled and
unable to perform Consultant’s duties, Consultant agrees the
Company may terminate Consultant’s engagement with the
Company without notice.
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5. |
Conditions of Consulting Engagement . By
accepting the consulting engagement contemplated by this Agreement,
Consultant will be deemed to have made the following
representations and warranties: Consultant is not taking, and in
connection with his consulting engagement with the Company he will
not take, any action that would result in a violation by him of any
“non-compete” or “non-solicitation”
covenant, notice, requirement or other contractual restriction or
obligation binding on Consultant or any continuing duty of
confidentiality or other continuing duty Consultant may have to any
current or former employer or other person or entity for which
Consultant has performed services; and |
Consultant’s failure to
satisfy any of these conditions will make this Agreement
void.
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6. |
Confidentiality . In the course of this
consulting engagement, Consultant will have access to and the
Company will disclose to Consultant confidential, important, and/or
proprietary information concerning the Company, and/or its
activities (hereinafter “Confidential Information” as
more fully defined in this Section). Given that the Consultant will
have access to Confidential Information within the scope of his
consulting engagement with the Company, the Consultant agrees to
use the Confidential Information in accordance with the terms and
conditions set forth in this Agreement and solely in connection
with the performance of his duties on behalf of the Company. The
Consultant shall hold and treat Confidential Information in the
strictest confidence and will not in any way directly or indirectly
use or disclose or allow others to directly or indirectly use or
disclose the Confidential Information to the detriment of the
Company or for the direct or indirect benefit of the Consultant or
anyone other than the Company. Nothing in this Agreement shall be
construed as granting any rights to the Consultant, by license or
otherwise, to any of the Company’s Confidential
Information. |
For purposes of this
Agreement, “Confidential Information” shall include any
information, data and know-how relating to the business of the
Company or its related entities and affiliates that is disclosed to
Consultant by the Company or known to Consultant as a result of
Consultant’s engagement with the Company and not generally
within the public domain, including without limitation, the
following: properties or businesses under consideration for
acquisition and/or development by the Company and the economics
thereof; all information related to the terms, negotiations,
and
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