AMENDED AND RESTATED SEPARATION
PAY AGREEMENT
This Amended and
Restated Separation Pay Agreement (the “Agreement”) by
and between Lodgian, Inc. (“Company”), and Joseph Kelly
(“You” or “Your”) (collectively, the
“Parties”), is entered into and effective as of the
28th of February, 2008 (the “Effective
Date”).1
WHEREAS, the
Parties entered into that certain Separation Pay Agreement dated
February 15, 2007 and that certain Amendment to Separation Pay
Agreement dated May 8, 2007, (the “Prior
Agreements”);
WHEREAS, You will
continue to be employed by the Company;
WHEREAS, the
Company and You have agreed to certain payment obligations
following Your termination of employment, the terms and conditions
of which are set forth below;
NOW, THEREFORE, in
consideration of Company’s agreement to continue to employ
You and in further consideration of the mutual agreements set forth
herein, it is agreed:
1.
Termination of Prior Agreements . The Parties hereby
terminate the Prior Agreements effective on the Effective Date. The
Parties acknowledge and agree that the termination of the Prior
Agreements does not and shall not result in the vesting,
acceleration, or triggering of any employment benefit in Your
favor, including, but not limited to, any post-termination payment
obligation or any separation payment.
2. At-will
Employment . This Agreement does not create a contract of
employment. Your employment with the Company is and remains at all
times an at-will relationship. This means that at either Your
option or the Company’s option, Your employment may be
terminated at any time, with or without Cause or with or without
notice. This Agreement does not alter the at-will employment
relationship.
3.
Post-Termination Payment Obligations.
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(a)
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If
Your employment terminates for any of the reasons set forth in
sub-section 4(c) below, then the Company shall pay You all accrued
but unpaid wages, based on Your then current Base Salary, through
the termination date. The Company shall have no other obligations
to You, including under any provision of this Agreement, Company
policy, or otherwise; provided, however, You shall continue to be
bound by (a) the restrictive covenants set forth in
Section 5 below, and (b) all other post-termination
obligations to which You are subject.
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(b)
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If
Your employment terminates for any of the reasons set forth in
sub-sections 4(a), 4(b), 4(d) or 4(e) below, or within sixty
(60) days before or three hundred sixty- five (365) days
after a Change in Control, then the Company will pay You all
accrued but unpaid Base Salary through the termination date. In
addition, upon Your “separation from service” (within
the meaning of Internal Revenue Code (“Code”) §
409A(a)(2)(A)(i)), the Company shall: (i) pay You (or Your
estate if applicable), within thirty (30) days of Your
termination date, a lump sum payment equal to two-thirds (2/3) of
Your then current annual Base Salary; (ii) reimburse Your and
Your eligible dependents’ COBRA premiums under the
Company’s major
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Unless
otherwise indicated, all capitalized terms used in this Agreement
are defined in the “Definitions” section of
Exhibit A. Exhibit A is incorporated by reference and is
included in the definition of “Agreement.”
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medical group health plan on a
monthly basis for a period of eight (8) months; and (iii)
notwithstanding anything to the contrary in any applicable
documents evidencing a grant of an award under the Lodgian, Inc.
2002 Stock Incentive Plan or any similar plan, accelerate the
vesting of any such awards granted to You by the Company (the
“Award(s)”) so that any such Award(s) comprised of
options to purchase Company stock shall be immediately exercisable
in full, or so that all vesting restrictions upon any such Award(s)
comprised of restricted stock shall lapse (collectively, the
payments and benefits set forth in the preceding sub-clauses (i)
– (iii) to be referred to as the “Separation
Benefits”). The Company shall have no other obligations to
You, including under this Agreement, any Company policy, or
otherwise. The Separation Benefits shall constitute full
satisfaction of the Company’s obligations under this
Agreement, any Company policy, or otherwise. The Company’s
obligation to provide the Separation Benefits shall be conditioned
upon Your satisfaction of the following conditions (the
“Separation Benefits Conditions”):
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(i)
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Execution and non-revocation of a
Separation & Release Agreement in a form prepared by the
Company, which includes, but is not limited to, Your releasing the
Company from any and all liability and claims of any kind;
and
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(ii)
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Your compliance with (a) the
restrictive covenants set forth in Section 5 below, and
(b) all other post-termination obligations to which You are
subject.
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If You
do not execute an effective Separation & Release Agreement as
set forth above, the Company shall have no obligation to provide
the Separation Benefits to You under this sub-section. The
Company’s obligation to provide the Separation Benefits set
forth above shall terminate immediately upon any breach by You of
any post-termination obligations to which You are
subject.
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4.
Termination of Employment . As an at-will employee, Your
employment may be terminated at any time for any or no reason,
including, but not limited to:
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(a)
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Your death;
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(b)
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Your disability which renders You
unable to perform the essential functions of Your job with or
without reasonable accommodation;
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(c)
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For
Cause. For Cause shall mean a termination by the Company because of
any one of the following events:
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(i)
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Your willful refusal to follow the
lawful direction of the CEO and/or the person to whom You report or
Your material failure to perform Your duties (other than by reason
of Disability, as defined in sub-paragraph 4(b) above), in either
case, only after You have been given written notice by the CEO
and/or the person to whom You report detailing the directives You
have refused to follow or the duties You have failed to perform and
at least 30 days to cure;
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(ii)
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Your material and willful failure to
comply with Company policies, only after You have been given
written notice by the CEO and/or the person to whom You report
detailing the policies with which You have failed to comply and at
least 30 days to cure;
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(iii)
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Your actively seeking a position
with another business, applying for such position, and being likely
to accept such a position without the Company’s written
consent;
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(iv)
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Your engaging in any of the
following conduct:
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(1)
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an
act of fraud or dishonesty that materially harms the Company or its
affiliates,
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(2)
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a
felony or any violation of any federal or state securities law or
Your being enjoined from violating any federal or state securities
law or being determined to have violated any such law;
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(3)
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gross negligence in connection with
any property or activity of the Company and/or its subsidiaries,
affiliates or successors;
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(4)
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repeated and intemperate use of
alcohol or illegal drugs after written notice from the CEO and/or
the person to whom You report;
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(5)
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material breach of any of Your
obligations under any agreement between You and the Company (other
than by reason of physical or mental illness or injury), but only
after You have been given written notice of the breach by the CEO
and/or the person to whom You report and at least thirty
(30) days to cure;
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(6)
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becoming barred or prohibited by the
SEC from holding Your position with the Company.
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(v)
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Your resignation from the Company
without Good Reason;
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(d)
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Your resignation from the Company
for Good Reason.
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(e)
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Without Cause.
Without Cause means any
termination of employment by Company which is not defined in
sub-paragraphs 4(a) – 4(d) above.
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5.
Restrictive Covenants . You acknowledge and agree that:
(a) Your position is a position of trust and responsibility
with access to Confidential Information, Trade Secrets, and
information concerning employees, customers, and prospective
customers of the Company; (b) the Trade Secrets and
Confidential Information, and the relationship between the Company
and each of its Employees, Customers, and Prospective Customers,
are valuable assets of the Company and may not be used for any
purpose other than the Company’s business; and (c) the
restrictions contained in this Section 5 are reasonable and
necessary to protect the legitimate business interests of the
Company, and will not impair or infringe upon Your right to work or
earn a living after Your employment with the Company
ends.
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(a)
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Trade Secrets and Confidential
Information . You represent and warrant that:
(i) You are not subject to any legal or contractual duty or
agreement that would prevent or prohibit You from performing the
duties contemplated by this Agreement or otherwise complying with
this Agreement, and (ii) You are not in breach of any legal or
contractual duty or agreement, including any agreement concerning
trade secrets or confidential information owned by any other
party.
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You
agree that You will not: (i) use, disclose, or reverse
engineer the Trade Secrets or the Confidential Information for any
purpose other than the Company’s Business, except as
authorized in writing by the Company; (ii) during Your
employment with the Company, use, disclose, or reverse engineer
(a) any confidential information or trade secrets of any
former employer or third party, or (b) any works of authorship
developed in whole or in part by You during any former employment
or for any other party, unless authorized in writing by the former
employer or third party; or (iii) upon Your resignation or
termination (a) retain Trade Secrets or Confidential
Information, including any copies existing in any form (including
electronic form),
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which are in Your possession or
control, or (b) destroy, delete, or alter the Trade Secrets or
Confidential Information without the Company’s written
consent.
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The
obligations under this sub-section shall: (i) with regard to
the Trade Secrets, remain in effect as long as the information
constitutes a trade secret under applicable law, and (ii) with
regard to the Confidential Information, remain in effect during the
Restricted Period. The confidentiality, property, and proprietary
rights protections available in this Agreement are in addition to,
and not exclusive of, any and all other rights to which the Company
is entitled under federal and state law, including, but not limited
to, rights provided under copyright laws, trade secret and
confidential information laws, and laws concerning fiduciary
duties.
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(b)
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Non-Disclosure of Customer or
Prospective Customer Information . During the Restricted Period, You
shall not, except as authorized by the Company, divulge or make
accessible to any person or entity (i) the names of Customers
or Prospective Customers, or (ii) any information contained in
a Customer’s or Prospective Customer’s
account.
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(c)
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Non-Solicitation of
Customers .
During the Restricted Period, You shall not, directly or
indirectly, solicit any Customer of the Company for the purpose of
selling or providing any products or services competitive with the
Business. The restrictions set forth in this sub-section apply only
to Customers with whom You had Contact during the term of Your
employment. Nothing in this sub-section shall be construed to
prohibit
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