EXHIBIT 10.2
**EXECUTIVE EMPLOYMENT AGREEMENT**
EXECUTIVE EMPLOYMENT AGREEMENT, effective as of February 23, 2004 by andbetween INTERSTATE HOTELS & RESORTS, INC., a Delaware corporation (the“Company”), MERISTAR MANAGEMENT COMPANY, L.L.C., a Delaware limited liabilitycompany (the “LLC”) and any successor employer, and WILLIAM RICHARDSON (the“Executive”), an individual residing at 3323 Ponoka Rd Pittsburgh, PA15241.
          The Company and the LLC desire to employ the Executive in the capacity ofChief Financial Officer, and the Executive desires to be so employed, on theterms and subject to the conditions set forth in this agreement (the“Agreement”);
          Now, therefore, in consideration of the mutual covenants set forth hereinand other good and valuable consideration the parties hereto hereby agree asfollows:
          1. Employment; Term. The Company and the LLC each hereby employ theExecutive, and the Executive agrees to be employed by the Company and the LLC,upon the terms and subject to the conditions set forth herein, for a term ofthree (3) years, commencing on February 23, 2004 (the “Commencement Date”), andending on February 23, 2007 unless terminated earlier in accordance withSection 4 of this Agreement; provided that such term shall automatically beextended from time to time for additional periods of one calendar year from thedate on which it would otherwise expire unless the Executive, on the one hand,or the Company and the LLC, on the other, gives notice to the other party andparties prior to such date that it elects to permit the term of this Agreementto expire without extension on such date. (The initial term of this Agreementas the same may be extended in accordance with the terms of this Agreement ishereinafter referred to as the “Term”).
          2. Positions; Conduct.
               (a) During the Term, the Executive will hold the title and office of, andserve in the position of Chief Financial Officer of the Company and the LLC.The Executive shall undertake the responsibilities and exercise the authoritycustomarily performed, undertaken and exercised by persons situated in asimilar executive capacity, and shall perform such other specific duties andservices (including service as an officer, director or equivalent position ofany direct or indirect subsidiary without additional compensation) as theyshall reasonably request consistent with the Executive’s position.
               (b) During the Term, the Executive agrees to devote his full business timeand attention to the business and affairs of the Company and the LLC and tofaithfully and diligently perform, to the best of his ability, all of hisduties and responsibilities hereunder. Nothing in this Agreement shallpreclude the Executive from devoting reasonable time and attention to (i)serving, with the approval of the Board, as a director, trustee or member ofany committee of any organization, (ii) engaging in charitable and communityactivities and (iii) managing his personal investments and affairs; providedthat such activities do not involve any material conflict of interest with theinterests of the Company or, individually or collectively, interfere materiallywith the

 

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performance by the Executive of his duties and responsibilities under thisAgreement. Notwithstanding the foregoing and except as expressly providedherein, during the Term, the Executive may not accept employment with any otherindividual or entity, or engage in any other venture which is directly orindirectly in conflict or competition with the business of the Company or theLLC.
               (c) The Executive’s office and place of rendering his services under thisAgreement shall be in the principal executive offices of the Company whichshall be in the Washington, D.C. metropolitan area. Under no circumstancesshall the Executive be required to relocate from the Washington, D.C.metropolitan area or provide services under this Agreement in any otherlocation other than in connection with reasonable and customary businesstravel. During the Term, the Company shall provide the Executive withexecutive office space, and administrative and secretarial assistance and othersupport services consistent with his position as Chief Financial Officer andwith his duties and responsibilities hereunder.
          3. Salary; Additional Compensation; Perquisites and Benefits.
               (a) During the Term, the Company and the LLC will pay the Executive a basesalary at an aggregate annual rate of not less than $350,000 per annum, subjectto annual review by the Compensation Committee of the Board (the “CompensationCommittee”), and in the discretion of such Committee, increased from time totime. Once increased, such base salary may not be decreased. Such salaryshall be paid in periodic installments in accordance with the Company’sstandard practice, but not less frequently than semi-monthly.
               (b) For each fiscal year during the Term, the Executive will be eligibleto receive a bonus from the Company. The award and amount of such bonus shallbe based upon the achievement of predefined operating or performance goals andother criteria established by the Compensation Committee, which goals shallgive the Executive the opportunity to earn a cash bonus equal to an amountbetween 0% and 125% of base salary.
               (c) During the Term, the Executive will participate in all plans nowexisting or hereafter adopted by the Company or the LLC for their managementemployees or the general benefit of their employees, such as any pension,profit-sharing, deferred compensation plans, the Interstate Executive RealEstate Fund, bonuses, stock option or other incentive compensation plans, lifeand health insurance plans, or other insurance plans and benefits on the samebasis and subject to the same qualifications as other senior executiveofficers. Notwithstanding the foregoing, the Company and the LLC may, in theirsole discretion, discontinue or eliminate any such plans.
               (d) The Executive shall be eligible for stock option and restricted stockaward grants from time to time pursuant to the Company’s Incentive Plan inaccordance with the terms thereof. All such grants shall be at the discretionof the Board. Executive shall receive a separate option agreement governingany such grants.
               (e) The Company and the LLC will reimburse the Executive, in accordancewith its standard policies from time to time in effect, for all out-of-pocketbusiness expenses as may be incurred by the Executive in the performance of hisduties

 

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under this Agreement. Executive will also be reimbursed for certainreasonable relocation expenses including house-hunting trips, real estatecosts, and moving fees in connection with Executive’s move to the Washington,DC area at the beginning of his employment. Finally, the Company shall pay forthe Executive’s apartment offered through BridgeStreet for one year from thehire date.
               (f) The Executive shall be entitled to vacation time to be credited andtaken in accordance with the Company’s policy from time to time in effect forsenior executives, which in any event shall not be less than a total of fourweeks per calendar year. Such vacation time shall not be carried over year toyear, and shall not be paid out upon termination of employment, or uponexpiration of this Agreement*.*
               (g) The Company, at its sole cost, shall pay (i) up to $7,500 annuallytoward the premium of a life insurance policy with a death benefit of at least$1,000,000 payable to a beneficiary designated by the Executive in accordancewith the terms and conditions of such life insurance policy and (ii) up to$7,500 annually toward the premium of a disability insurance policy with adisability benefit of at least $1,000,000 payable to the executive inaccordance with the terms and conditions of such disability insurance policy.The Company makes no representations or warranties that the insurance benefitscontained in the insurance policies supplied pursuant to this section will bepaid under any particular conditions, and the Company shall not be deemed aguarantor of such benefits. Such benefits shall be payable in accordance withthe terms of the respective insurance policy.
               (h) To the fullest extent permitted by applicable law, the Executive shallbe indemnified and held harmless by the Company and the LLC against any and alljudgments, penalties, fines, amounts paid in settlement, and other reasonableexpenses (including, without limitation, reasonable attorneys’ fees anddisbursements) actually incurred by the Executive in connection with anythreatened, pending or completed action, suit or proceeding (whether civil,criminal, administrative, investigative or other) for any action or omission inhis capacity as a director, officer or employee of the Company or the LLC.
               Indemnification under this Section 3(h) shall be in addition to, and notin substitution of, any other indemnification by the Company or the LLC of itsofficers and directors. Expenses incurred by the Executive in defending anaction, suit or proceeding for which he claims the right to be indemnifiedpursuant to this Section 3(h) shall be paid by the Company or the LLC, as thecase may be, in advance of the final disposition of such action, suit orproceeding upon the Company’s or the LLC’s receipt of (x) a written affirmationby the Executive of his good faith belief that the standard of conductnecessary for his indemnification hereunder and under the provisions ofapplicable law has been met and (y) a written undertaking by or on behalf ofthe Executive to repay the amount advanced if it shall ultimately be determinedby a court that the Executive engaged in conduct, including fraud, theft,misfeasance, or malfeasance against the Company or the LLC, which precludesindemnification under the provisions of such applicable law. Such writtenundertaking in clause (y) shall be accepted by the Company or the LLC, as thecase may be, without security therefor and without reference to the financialability of the Executive to make repayment thereunder.

 

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The Company and the LLC shall use commercially reasonable efforts tomaintain in effect for the Term of this Agreement a directors’ and officers’liability insurance policy, with a policy limit of at least $25,000,000,subject to customary exclusions, with respect to claims made against officersand directors of the Company or the LLC; provided, however, the Company or theLLC, as the case may be, shall be relieved of this obligation to maintaindirectors’ and officers’ liability insurance if, in the good faith judgment ofthe Company or the LLC, it cannot be obtained at a reasonable cost.
          4. Termination.
               (a) The Term will terminate immediately upon the Executive’s death,Disability, or, upon thirty (30) days’ prior written notice by the Company, inthe case of a Determination of Disability. As used herein the term“Disability” means the Executive’s inability to perform his duties andresponsibilities under this Agreement for a period of more than 120 consecutivedays, or for more than 180 days, whether or not continuous, during any 365-dayperiod, due to physical or mental incapacity or impairment. A “Determinationof Disability” shall occur when a physician, reasonably satisfactory to boththe Executive and the Company and paid for by the Company or the LLC, findsthat the Executive will likely be unable to perform his duties andresponsibilities under this Agreement for the above-specified period due to aphysical or mental incapacity or impairment. Such decision shall be final andbinding on the Executive and the Company; provided that if they cannot agree asto a physician, then each shall select and pay for a physician and these twotogether shall select a third physician whose fee shall be borne equally by theExecutive and either the Company or the LLC and whose Determination ofDisability shall be binding on the Executive and the Company. Should theExecutive become incapacitated, his employment shall continue and all base andother compensation due the Executive hereunder shall continue to be paidthrough the date upon which the Executive’s employment is terminated forDisability or Determination of Disability in accordance with this section.
               (b) The Term may be terminated by the Company upon notice to the Executiveand with or without “Cause” as defined herein.
               (c) The Term may be terminated by the Executive upon notice to the Companyand with or without “Good Reason” as defined herein.
          5. Severance.
               (a) If the Term is terminated by theCompany for Cause,
 (i) the Company and theLLC will pay to the Executive an aggregateamount equal to the Executive’s accrued andunpaid base salary through the date of suchtermination;  (ii) all unvested optionsand restricted shares will terminateimmediately; and

 

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 (iii) any vested optionsissued pursuant to the Company’s Incentive Planand held by the Executive at termination, willexpire ninety (90) days after the terminationdate.
               (b) If the Term is terminated by the Executive other than because ofdeath, Disability or for Good Reason,
 (i) the Company and theLLC will pay to the Executive an aggregateamount equal to the Executive’s accrued andunpaid base salary through the date of suchtermination;  (ii) all unvested optionsand restricted shares terminate immediately; and  (iii) any vested optionsissued pursuant to the Company’s Incentive Planand held by the Executive at termination, willexpire ninety (90) days after the terminationdate.
               (c) If the Term is terminated upon the Executive’s death or Disability,
 (i) the Company and theLLC will pay to the Executive’s estate or theExecutive, as the case may be, a lump sumpayment equal to the Executive’s base salarythrough the termination date, plus a pro rataportion of the Executive’s bonus for the fiscalyear in which the termination occurred;  (ii) the Company will makepayments for one (1) year of all compensationotherwise payable to the Executive pursuant tothis Agreement, including, but not limited to,base salary, bonus and welfare benefits;  (iii) all of theExecutive’s unvested stock options willimmediately vest and such options, along withthose previously vested and unexercised, willbecome exercisable for a period of one (1) yearthereafter; and  (iv) all of theExecutive’s unvested restricted stock willimmediately vest and all of the restricted stockof the Company held by the Executive shallbecome free from all contractual restrictions.
               (d) Subject to Section 5(e) hereof, if the Term is terminated by theCompany without Cause or other than by reason of Executive’s death orDisability, in

 

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addition to any other remedies available, or if the Executive terminatesthe Term for Good Reason,
 (i) the Company and theLLC shall pay the Executive a lump sum equal totwo (2) times 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 thepreceding calendar year; **provided that**, ifExecutive separates from employment pursuant tothis Section 5(d) prior to his first anniversarywith the Company, then Executive’s bonus amountfor purposes of this Section 5(d)(i) will be   % of Executive’s base salary;  (ii) all of theExecutive’s unvested stock options willimmediately vest and such options, along withthose previously vested and unexercised, willbecome exercisable for a period of one (1) yearthereafter;  (iii) all of theExecutive’s unvested restricted stock willimmediately vest and all of the restricted stockof the Company held by the Executive shallbecome free from all contractual restrictions;and  (iv) the Company shallalso continue in effect the Executive’s healthand dental benefits (or similar health anddental benefits paid to senior executives) notedin Section 3(c) as follows: Upon Executive’stermination of employment, Executive shall beeligible for continued health insurance benefitsunder the federal law known as COBRA. Executiveis required to timely elect COBRA in order toreceive continued health insurance coverageunder this Agreement. Upon Executive’s electionof COBRA coverage and timely payment ofapplicable monthly COBRA premiums, Executivewill receive health insurance coverage underCOBRA up to the maximum period provided by law.The Company will reimburse Executive of the costof such COBRA coverage until the earlier of (x)eighteen (18) months from the termination dateor (y) the date on which the Executive obtainshealth insurance coverage from a subsequentemployer. Executive acknowledges that if hedoes not timely elect COBRA coverage he will notreceive continued health insurance benefits fromthe Company. Executive also acknowledges thathe is responsible for any taxes due on paymentsfrom the

 

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   Company in reimbursement for COBRA premiumamounts.
               (e) Left intentionally blank.
               (f) If at any time the Term is not extended pursuant to the proviso toSection 1 hereof as a result of the Company giving notice thereunder that itelects to permit the term of this Agreement to expire without extension, theCompany shall be deemed to have terminated the Executive’s employment withoutCause.
               (g) As used herein, the term “Cause” means:
               (i) the Executive’s willful and intentional failure or refusal toperform or observe any of his material duties, responsibilities orobligations set forth in this Agreement; provided, however, that theCompany shall not be deemed to have Cause pursuant to this clause (i)unless the Company gives the Executive written notice that the specifiedconduct has occurred and making specific reference to this Section5(g)(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 involvingmalfeasance, fraud, theft, misappropriation of funds, or embezzlementaffecting the Company or the LLC;
               (iv) the Executive’s conviction of, or a plea of guilty or nolocontendere to, an offense which is a felony;
               (v) Executive’s material breach of this Agreement; or
               (vi) Gross misconduct by Executive that is of such a serious orsubstantial nature that a substantial likelihood exists that suchmisconduct would injure the reputation of the Company if the Executivewere to remain employed by the Company or LLC.
Termination of the Executive for Cause shall be communicated by a Notice ofTermination. For purposes of this Agreement, a “Notice of Termination” shallmean delivery to the Executive of a copy of a resolution duly adopted by theaffirmative vote of not less than a majority of the entire membership of theCompany’s Board at a meeting of the Board called and held for the purpose(after reasonable notice to the Executive and reasonable opportunity for theExecutive, together with the Executive’s counsel, to be heard before the Boardprior to such vote) of finding that in the good faith opinion of the Board, theExecutive was guilty of conduct constituting Cause and specifying theparticulars thereof in detail, including, with respect to any termination basedupon conduct described in clause (i) above that the Executive failed to curesuch conduct during the thirty-day period following the date on which theCompany gave written notice of the conduct referred to in such clause (i). Forpurposes of this Agreement, no such purported termination of the Executive’semployment shall be effective without such Notice of Termination;

 

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               (h) As used herein, the term “Good Reason” means the occurrence of any ofthe following, without the prior written consent of the Executive:
               (i) assignment to the Executive of duties materially inconsistentwith the Executive’s positions as described in Section 2(a) hereof, orany significant diminution in the Executive’s duties or responsibilities,other than in connection with the termination of the Executive’semployment for Cause, Disability or as a result of the Executive’s deathor by the Executive other than for Good Reason;
               (ii) the change in the location of the Company’s principal executiveoffices or of the Executive’s principal place of employment to a locationoutside the Washington, D.C. metropolitan area;
               (iii) any material breach of this Agreement by the Company or theLLC which is continuing;
               (iv) a Change in Control; provided that a Change of Control shallonly constitute Good Reason if (i) the Executive terminates thisAgreement within the six month period following a Change of Control; or
provided, however, that the Executive shall not be deemed to have GoodReason pursuant to clauses (h)(i) or (iii) above unless the Executivegives the Company or the LLC, as the case may be, written notice thatthe specified conduct or event has occurred and the Company or the LLCfails to cure such conduct or event within thirty (30) days of thereceipt of such notice.
          (i) As used herein, the term “Change in Control” shall have thefollowing meaning:
               (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 theExchange Act) of beneficial ownership (within the meaning of Rule 13d-3promulgated under the Exchange Act) of thirty (30%) percent or more ofthe combined voting power of the Company’s then outstanding votingsecurities;
               (ii) the individuals who were members of the Board (the “IncumbentBoard”) during the previous twelve (12) month period, cease for anyreason to constitute at least a majority of the Board; provided, however,that if the election, or nomination for election by the Company’sstockholders, of any new director was approved by a vote of at leasttwo-thirds of the Incumbent Board, such new director shall, for purposesof this Agreement, be considered as a member of the Incumbent Board;
               (iii) approval by the stockholders of the Company of (a) merger orconsolidation involving the Company if the stockholders of the Company,immediately before such merger or consolidation do not, as a result ofsuch merger or consolidation, own, directly or indirectly, more thanfifty (50%) percent of the combined voting power of the then outstandingvoting securities of the corporation resulting from such merger orconsolidation in substantially the

 

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same proportion as their ownership of the combined voting power ofthe voting securities of the Company outstanding immediately before suchmerger or consolidation or (b) a complete liquidation or dissolution ofthe Company or an agreement for the sale or other disposition of all orsubstantially 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”) involvingthe Company if the stockholders of the Company, immediately before suchtransaction, do not as a result of such transaction, own directly orindirectly, more than fifty (50%) percent of the combined voting power ofthe then outstanding voting securities of the corporation resulting fromsuch transaction in substantially the same proportion as their ownershipof the combined voting power of the voting securities of the Companyoutstanding immediately before such transaction.
          Notwithstanding the foregoing, a Change in Control shall not be deemed tooccur pursuant to clause (i)(i) above solely because thirty (30%) percent ormore of the combined voting power of the Company’s then outstanding securitiesis acquired by (a) a trustee or other fiduciary holding securities under one ormore employee benefit plans maintained by the Company or any of itssubsidiaries or (b) any corporation which, immediately prior to suchacquisition, is owned directly or indirectly by the stockholders of the Companyin the same proportion as their ownership of stock in the Company immediatelyprior to such acquisition.
               (j) The amounts required to be paid and the benefits required to be madeavailable to the Executive under this Section 5 are absolute. Under nocircumstances shall the Executive, upon the termination of his employmenthereunder, be required to seek alternative employment and, in the event thatthe Executive does secure other employment, no compensation or other benefitsreceived in respect of such employment shall be set-off or in any other waylimit or reduce the obligations of the Company under this Section 5.
               (k) Excise Tax Payments.
               (i) Gross-Up Payment. If it shall be determined that any payment ordistribution of any type to or in respect of the Executive, by theCompany, the LLC, or any other person, whether paid or payable ordistributed or distributable pursuant to the terms of the Agreement orotherwise (the “Total Payments”), is or will be subject to the excise taximposed 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, arecollectively referred to as the “Excise Tax”), then the Executive shallbe entitled to receive an additional payment (a “Gross-Up Payment”) in anamount such that after payment by the Executive of all taxes (includingany interest or penalties imposed with respect to such taxes) imposedupon the Gross-Up Payment, the Executive retains an amount of theGross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

 

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               (ii) Determination by Accountant.
                    (A) All computations and determinations relevant to this Section5(k) shall be made by a national accounting firm selected by the Companyfrom among the five (5) largest accounting firms in the United States(the “Accounting Firm”) which firm may be the Company’s accountants. Suchdeterminations 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-UpPayment is required the Accounting Firm shall determine that no Gross-UpPayment is required, if the Accounting Firm is able to conclude that no“Change of Control” has occurred (within the meaning of Section 280G ofthe Code) on the basis of “substantial authority” (within the meaning ofSection 6230 of the Code) and shall provide opinions to that effect toboth the Company and the Executive. If the Accounting Firm determinesthat a Gross-Up Payment is required, the Accounting Firm shall provideits determination (the “Determination”), together with detailedsupporting calculations regarding the amount of any Gross-Up Payment andany other relevant matter both to the Company and the Executive by nolater than ten (10) days following the Termination Date, if applicable,or such earlier time as is requested by the Company or the Executive (ifthe Executive reasonably believes that any of the Total Payments may besubject to the Excise Tax). If the Accounting Firm determines that noExcise Tax is payable by the Executive, it shall furnish the Executiveand the Company with a written statement that such Accounting Firm hasconcluded that no Excise Tax is payable (including the reasons therefor)and that the Executive has substantial authority not to report any ExciseTax on his federal income tax return.
                    (B) If a Gross-Up Payment is determined to be payable, it shall bepaid to the Executive within twenty (20) days after the later of (i) theDetermination (and all accompanying calculations and other materialsupporting the Determination) is delivered to the Company by theAccounting Firm or (ii) the date of the event which leads to the Gross-upPayment. Any determination by the Accounting Firm shall be binding uponthe Company and the Executive, absent manifest error.
                    (C) As a result of uncertainty in the application of Section 4999 ofthe Code at the time of the initial determination by the Accounting Firmhereunder, it is possible that Gross-Up Payments not made by the Companyshould have been made (“Underpayment”), or that Gross-Up Payments willhave been made by the Company which should not have been made(“Overpayments”). In either such event, the Accounting Firm shalldetermine the amount of the Underpayment or Overpayment that hasoccurred. In the case of an Underpayment, the amount of suchUnderpayment (together with any interest and penalties payable by theExecutive as a result of such Underpayment) shall be promptly paid by theCompany to or for the benefit of the Executive.

 

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                    (D) In the case of an Overpayment, the Executive shall, at thedirection and expense of the Company, take such steps as are reasonablynecessary (including the filing of returns and claims for refund), followreasonable instructions from, and procedures established by, the Company,and otherwise reasonably cooperate with the Company to correct suchOverpayment, provided, however, that (i) the Executive shall not in anyevent be obligated to return to the Company an amount greater than thenet after-tax portion of the Overpayment that he has retained or hasrecovered as a refund from the applicable taxing authorities and (ii)this provision shall be interpreted in a manner consistent with theintent of Section 5(k)(i), which is to make the Executive whole, on anafter-tax basis, from the application of the Excise Taxes, it beingacknowledged and understood that the correction of an Overpayment mayresult in the Executive repaying to the Company an amount which is lessthan the Overpayment.
                    (E) The Executive shall notify the Company in writing of any claimby the Internal Revenue Service relating to the possible application ofthe Excise Tax under Section 4999 of the Code to any of the payments andamounts referred to herein and shall afford the Company, at its expense,the opportunity to control the defense of such claim.
          6. Cooperation with Company. Following the termination of theExecutive’s employment for any reason, Executive shall fully cooperate with theCompany in all matters relating to the winding up of his pending work on behalfof the Company including, but not limited to, any litigation in which theCompany is involved and the orderly transfer of any such pending work to otheremployees of the Company as may be designated by the Company. The Companyagrees to reimburse the Executive for any out-of-pocket expense he incurs inperforming any work on behalf of the Company following the termination of hisemployment.
          7. Confidential Information.
               (a) The Executive acknowledges that the Company and its subsidiaries oraffiliated ventures (“Company Affiliates”) own and have developed and compiled,and will in the future own, develop and compile, certain ConfidentialInformation and that during the course of his rendering services hereunderConfidential Information will be disclosed to the Executive by the CompanyAffiliates. The Executive hereby agrees that, during the Term and for a periodof three years thereafter, he will not use or disclose, furnish or makeaccessible to anyone, directly or indirectly, any Confidential Information ofthe Company Affiliates. In particular, Executive covenants and agrees thatExecutive shall not, directly or indirectly, communicate or divulge, or use forthe benefit of Executive or for any other person, or to the disadvantage of theCompany, the Confidential Information or any information in any way relating tothe Confidential Information, without prior written consent from the Company.
               (b) As used herein, the term “Confidential Information” means any tradesecrets, confidential or proprietary information, or other knowledge, know-how,

 

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information, documents, materials, owned, developed or possessed by aCompany Affiliate pertaining to its businesses, including, but not limited to,records, memoranda, computer files and disks, audio and video tapes, CD’s, andproperty in any form containing information generally not known in thehospitality industry, including but not limited to trade secrets, techniques,know-how (including designs, plans, procedures, processes and researchrecords), operations, market structure, formulas, data, programs, licenses,prices, costs, software, computer programs, innovations, discoveries,improvements, research, developments, test results, reports, specifications,data, formats, marketing data and business plans and strategies, customerlists, client lists and client contact lists, agreements and other forms ofdocuments, expansion plans, budgets, projections, and salary, staffing andemployment information. Notwithstanding the foregoing, ConfidentialInformation shall not in any event include information which (i) was generallyknown or generally available to the public prior to its disclosure to theExecutive, (ii) becomes generally known or generally available to the publicsubsequent to its disclosure to the Executive through no wrongful act of theExecutive, (iii) is or becomes available to the Executive from sources otherthan the Company Affiliates which sources are not known to the Executive to beunder any duty of confidentiality with respect thereto or (iv) the Executive isrequired to disclose by applicable law or regulation or by order of any courtor federal, state or local regulatory or administrative body (provided that theExecutive provides the Company with prior notice of the contemplated disclosureand reasonably cooperates with the Company, at the Company’s sole expense, inseeking a protective order or other appropriate protection of suchinformation).
               (c) Upon demand by the Company and/or upon termination of employment withthe Company for any reason, Executive shall promptly deliver to the Company allproperty and materials, whether written, descriptive, or maintained in someother form belonging to or relating to the Company, its business affairs andthose of its Affiliates, including all Confidential Information. If Executivedesires to retain copies of any forms or other materials developed by Executiveduring his employment with the Company, he may request permission to do so fromthe Chief Executive Officer, which permission shall not be unreasonablywithheld.
               (d) The Executive agrees that duringhis employmenthereunder and for a period of twelve (12) months thereafter he will not solicitor accept the business of, or assist any other person to solicit or accept thebusiness of, any persons or entities who were customers of the Company, as of,or within one (1) year prior to, the Executive’s termination of employment, forthe purposes of providing products or services competitive with the products orservices of the Company or to cause such customers to reduce or end theirbusiness with the Company.
               (c) The Executive agrees that duringhis employmenthereunder and for a period of twelve (12) months thereafter he will notsolicit, raid, entice or induce any person that then is or at any time duringthe twelve (12) month period prior to the end of the Term was an employee inExecutive’s department (other than a person whose employment with the Companyhas been terminated by the Company), to become employed by any person, firm orcorporation.
          8. Specific Performance.

 

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               (a) The Executive acknowledges that the services to be rendered by himhereunder are of a special, unique, extraordinary and personal character andthat the Company Affiliates would sustain irreparable harm in the event of aviolation by the Executive of Section 7 hereof. Therefore, in addition to anyother remedies available, the Company shall be entitled to specific enforcementand/or an injunction from any court of competent jurisdiction restraining theExecutive from committing or continuing any such violation of this Agreementwithout proving actual damages or posting a bond or other security. Nothingherein shall be construed as prohibiting the Company from pursuing any otherremedies available to it for such breach or threatened breach, including therecovery of damages.
               (b) If any of the restrictions on activities of the Executive contained inSection 7 hereof shall for any reason be held by a court of competentjurisdiction to be excessively broad, such restrictions shall be construed soas thereafter to be limited or reduced to be enforceable to the maximum extentcompatible with the applicable law as it shall then appear; it being understoodthat by the execution of this Agreement the parties hereto regard suchrestrictions as reasonable and compatible with their respective rights.
               (c) Notwithstanding anything in this Agreement to the contrary, in theevent that the Company fails to make any payment of any amounts or provide anyof the benefits to the Executive when due as called for under Section 5 of thisAgreement and such failure shall continue for twenty (20) days after writtennotice thereof from the Executive, all restrictions on the activities of theExecutive under Section 7 hereof shall be immediately and permanentlyterminated.
          9. Withholding. The parties agree that all payments to be made to theExecutive by the Company pursuant to the Agreement shall be subject to allapplicable withholding obligations of such company.
          10. Notices. All notices required or permitted hereunder shall be inwriting and shall be deemed given and received when delivered personally, four(4) days after being mailed if sent by registered or certified mail, postagepre-paid, or by one (1) day after delivery if sent by air courier (for next-daydelivery) with evidence of receipt thereof or by facsimile with receiptconfirmed by the addressee. Such notices shall be addressed respectively:    If to the Executive, to:    William Richardson 3323 Ponoka Rd Pittsburgh, PA 15241    If to the Company or to the LLC, to:    Interstate Hotels & Resorts, Inc. 4501 North Fairfax Drive, Suite 800 Fairfax, VA 22203

 

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or to any other address of which such party may have given notice to the otherparties in the manner specified above.
          11. Miscellaneous.
               (a) This Agreement is a personal contract calling for the provision ofunique services by the Executive, and the Executive’s rights and obligationshereunder may not be sold, transferred, assigned, pledged or hypothecated bythe Executive. The rights and obligations of the Company and the LLC hereunderwill be binding upon and run in favor of their respective successors andassigns. The Company will not be deemed to have breached this Agreement if anyobligations of the Company to make payments to the Executive are satisfied bythe LLC.
               (b) This Agreement shall be governed by and construed and enforced inaccordance with the internal laws of the State of Delaware, without regard toconflict of laws principles.
               (c) The headings of the various sections of this Agreement are forconvenience of reference only and shall not define or limit any of the terms orprovisions hereof.
               (d) The provisions of this Agreement which by their terms call forperformance subsequent to the expiration or termination of the Term shallsurvive such expiration or termination.
               (e) The Company and the LLC shall reimburse the Executive for all costsincurred by the Executive in any proceeding for the successful enforcement ofthe terms of this Agreement, including without limitation all costs ofinvestigation and reasonable attorneys’ fees and expenses incurred in thepreparation of or in connection with such proceeding.
               (f) This Agreement constitutes the entire agreement of the parties heretowith respect to the subject matter hereof and supersedes all other prioragreements and undertakings, both written and oral, among the parties withrespect to the subject matter hereof, all of which shall be terminated on theCommencement Date. In addition, the parties hereto hereby waive all rightssuch party may have under all other prior agreements. In addition, the partieshereto hereby waive all rights such party may have under all other prioragreements and undertakings, both written and oral, among the parties hereto.
          IN WITNESS WHEREOF, the parties hereto have executed this Agreementeffective as of the date first above written.         EXECUTIVE:            William Richardson

 

15         COMPANY:         INTERSTATE HOTELS & RESORTS, INC.        By:          Name:     Title:             LLC:         INTERSTATE MANAGEMENT COMPANY, LLC          By: Interstate Operating Company, L.P., a member          By: Interstate Hotels & Resorts, Inc., its general partner        By:          Name:     Title: