Document:

Exhibit 10.3

 

ADVISORY AGREEMENT

 

THIS ADVISORY AGREEMENT (this “Agreement”), is dated and effective as of [                                    ], 2014 (the “Effective Date”), by and between ASHFORD HOSPITALITY TRUST, INC., a Maryland corporation (“Ashford Trust” or the “Company”), ASHFORD HOSPITALITY TRUST LIMITED PARTNERSHIP, a Delaware limited partnership (the “Operating Partnership”), and ASHFORD HOSPITALITY ADVISORS LLC, a Delaware limited liability company (the “Advisor”).

 

WHEREAS, Ashford Trust, through its interest in the Operating Partnership, is in the business of investing in the hospitality industry including, the acquiring, developing, owning, asset managing and disposing of hotels (for purposes hereof, unless the context otherwise requires, the term “Company” shall collectively include Ashford Trust and the Operating Partnership);

 

WHEREAS, Ashford Trust is a public company that has elected to be treated as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”) and has recently completed a spin-off of its asset management and external advisory subsidiary;

 

WHEREAS, the Company desires to avail itself of the experience, brand relationships, lender and capital provider sources and relationships, asset management expertise, sources of information, advice, assistance and certain facilities of the Advisor and to have the Advisor provide the services hereinafter set forth, on behalf of, and subject to the supervision of, the board of directors of Ashford Trust (the “Board of Directors”), all as provided herein; and

 

WHEREAS, the Advisor is willing to provide such services to the Company on the terms set forth herein;

 

NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

 

1.                                      APPOINTMENT OF ADVISOR.  The Company hereby appoints the Advisor to serve as its exclusive advisor and asset manager, to provide the management and real estate services specified herein on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.

 

2.                                      DUTIES OF ADVISOR.  Subject to the supervision of the Board of Directors, the Advisor will be responsible for the day-to-day operations of the Company (and all subsidiaries and joint ventures of the Company) and shall perform (or cause to be performed) all services relating to the acquisition and disposition of hotels, asset management, financing and operations of the Company as may be reasonably required, which shall include the following related to the Company’s hotel assets:

 

(a)                           source, investigate and evaluate acquisitions and dispositions consistent with the Company’s Investment Guidelines (as defined in Section 9.2(a) below) and make recommendations to the Board of Directors;

 

 

(b)                           engage and supervise, on the Company’s behalf and at the Company’s expense, third parties to provide development management, property management, project management, design and construction services, investment banking services, financial services, property disposition brokerage services, independent accounting and auditing services and tax reviews and advice, transfer agent and registrar services, feasibility studies, appraisals, engineering studies, environmental property inspections and due diligence services, underwriting review services, consulting services and all other services reasonably necessary for Advisor to perform its duties hereunder;

 

(c)                            negotiate, on the Company’s behalf, any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives;

 

(d)                           coordinate and manage joint ventures with the Company, including monitoring and enforcing compliance with applicable joint venture or partnership governing documents;

 

(e)                            negotiate, on behalf of the Company, terms of hotel management agreements, franchise agreements and other contracts or agreements of the Company, and modifications, extensions, waivers or terminations thereof including, without limitation, the negotiation and approval of annual operating and capital budgets thereunder;

 

(f)                             on behalf of the Company, enforce, monitor and manage compliance of hotel management agreements, franchise agreements and other contracts or agreements of the Company, and modifications, extensions, waivers or terminations thereof;

 

(g)                            negotiate, on behalf of the Company, terms of loan documents for the Company’s financings;

 

(h)                           enforce, monitor and manage compliance of loan documents to which the Company is a party, in each case, on behalf of the Company;

 

(i)                               administer bookkeeping and accounting functions as are required for the management and operation of the Company, contract for audits and prepare or cause to be prepared such periodic reports and filings as may be required by any governmental authority in connection with the ordinary conduct of the Company’s business, and otherwise advise and assist the Company with its compliance with applicable legal and regulatory requirements, including without limitation, periodic reports, returns or statements required under the Securities Exchange Act of 1934, as amended, the Code and any regulations or rulings thereunder, the securities and tax statutes of any jurisdiction in which the Company is obligated to file such reports, or the rules and regulations promulgated under any of the foregoing;

 

(j)                              advise and assist in the preparation and filing of all offering documents, registration statements, prospectuses, proxies, and other forms or documents filed with the Securities and Exchange Commission (the “SEC”) pursuant to the Securities Act of 1933, as amended, or any state securities regulators (it being understood that the Company shall be

 

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responsible for the content of any and all of its offering documents, SEC filings or state regulatory filings, including, without limitation, those filings referred to in subparagraph 2(i) above, and Advisor shall not be held liable for any costs or liabilities arising out of any misstatements or omissions in the Company’s offering documents, SEC filings, state regulatory filings or other filings referred to in subparagraphs 2(i) and (j), whether or not material, and the Company shall promptly indemnify Advisor for such costs and liabilities);

 

(k)                           retain counsel, consultants and other third party professionals on behalf of the Company, coordinate, supervise and manage all consultants, third party professionals and counsel, and investigate, evaluate, negotiate and oversee the processing of claims by or against the Company;

 

(l)                               advise and assist with the Company’s risk management and oversight function;

 

(m)                       provide office space, office equipment and personnel necessary for the performance of services;

 

(n)                           perform or supervise the performance of such administrative functions reasonably necessary for the establishment of bank accounts, related controls, collection of revenues and the payment of Company debts and obligations;

 

(o)                           communicate with the Company’s investors and analysts as required to satisfy reporting or other requirements of any governing body or exchange on which the Company’s securities are traded and to maintain effective relations with such investors;

 

(p)                           advise and assist the Company with respect to the Company’s public relations, preparation of marketing materials, website and investor relation services;

 

(q)                           counsel the Company regarding qualifying, and maintaining Ashford Trust’s qualification as a REIT;

 

(r)                              assist the Company in complying with all regulatory requirements applicable to the Company (subject to the Company providing appropriate, necessary and timely funding of capital);

 

(s)                             counsel the Company in connection with policy decisions to be made by the Board of Directors;

 

(t)                              furnish reports and statistical and economic research to the Company regarding the Company’s activities, investments, financing and capital market activities and services performed for the Company by the Advisor;

 

(u)                            asset manage and monitor the operating performance of the Company’s real estate investments, including the management and implementation of capital improvement programs, pursue property tax appeals (as appropriate), and provide periodic reports with

 

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respect to the Company’s investments to the Board of Directors, including comparative information with respect to such operating performance and budgeted or projected operating results;

 

(v)                           maintain cash in U.S. Treasuries or bank accounts (with the understanding that Advisor’s duties shall not include providing or assisting in proactive investment management strategies or investment in securities other than U.S. Treasuries), and make payment of fees, costs and expenses, or the payment of distributions to stockholders of the Company;

 

(w)                         advise the Company as to its capital structure and capital raising;

 

(x)                           take all actions reasonably necessary to enable the Company to comply with and abide by all applicable laws and regulations in all material respects subject to the Company providing appropriate, necessary and timely funding of capital;

 

(y)                           provide the Company with an internal audit staff with the ability to satisfy any applicable regulatory requirements, including, requirements of the New York Stock Exchange and the SEC, and any additional duties that are determined reasonably necessary or appropriate by the Company’s audit committee; and

 

(z)                            take such other actions and render such other services as may reasonably be requested by the Company consistent with the purpose of this Agreement and the aforementioned services.

 

The Advisor shall make available sufficient experienced and appropriate personnel to perform the services and functions specified including, without limitation, the positions of the chief executive officer, president, chief operating officer, chief financial officer, chief strategy officer, chief accounting officer and executive vice president-asset management (collectively, “Executives”) or such positions as Advisor deems reasonably necessary.  The Advisor shall not be obligated to dedicate any of its officers or other personnel exclusively to the Company nor is the Advisor, its Affiliates or any of its officers or other employees obligated to dedicate any specific portion of its or their time to the Company or its business, except as necessary to perform the services provided above. The Advisor shall be entitled to rely on qualified experts and professionals (including, without limitation, accountants, legal counsel and other professional service providers) hired by the Advisor at the Company’s sole cost and expense.  The Advisor may retain, for and on behalf, and at the sole cost and expense, of the Company, such services of any individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity (each, a “Person”) as the Advisor deems necessary or advisable in connection with the management and operations of the Company.

 

Any waiver, consent, approval, modification, enforcement matter or election required to be made by the Company under the Mutual Exclusivity Agreement between the Company, Remington Lodging and Hospitality LLC (“Remington”) and Monty J. Bennett, dated as of August 29, 2003, as the same has been amended through the date hereof and may be amended

 

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from time to time hereafter, or the Master Management Agreement between the Company and Remington, dated as of August 29, 2003, as the same has been amended through the date hereof or may be amended or supplemented from time to time hereafter, shall be within the exclusive discretion and control of a majority of the Independent Directors (or higher vote thresholds specifically set forth in such agreements) unless specifically delegated to the Advisor by a majority of the Independent Directors.  For purposes of this Agreement, “Independent Director” shall mean any director of Ashford Trust who, on the date at issue, is currently serving on the Board of Directors and is “independent” as determined by application of the current rules and regulations of the New York Stock Exchange in effect as of the Effective Date of this Agreement.  For purposes of this Agreement, “Affiliate” shall mean a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the Person in question and any officer, director, trustee, key decision-making employee, stockholder or partner of any Person referred to in the preceding clause, except that for purposes of this Agreement, the Company shall not be considered an Affiliate of the Advisor.

 

Any increase in the scope of duties or services to be provided by the Advisor must be jointly approved by the Company and the Advisor and will be subject to additional compensation determined in accordance with the provisions of Section 6.4 and the process set forth in Section 9.3 below.

 

3.                                      AUTHORITY OF ADVISOR.  Subject to the express limitations set forth in this Agreement and the continuing authority of the Board of Directors over the management of the Company, the power to direct the management, operation and policies of the Company shall be vested in the Advisor. Notwithstanding the foregoing, all material decisions with respect to annual capital plans, brand conversions, the commencement or settlement of litigation matters, investment decisions, capital market transactions, annual budgets and management and franchise options recommended by the Advisor, including the acquisition, sale, financing and refinancing of assets, shall be subject to the prior authorization of the Board of Directors, except to the extent such authority is expressly delegated by the Board of Directors to the Advisor. Additionally, if the charter or Maryland General Corporation Law requires the prior approval of the Board of Directors, the Advisor may not take any action on behalf of the Company without the prior approval of the Board of Directors or duly authorized committees thereof. In such cases where prior approval is required, the Advisor will deliver to the Board of Directors such documents and supporting information as may be reasonably requested by the Board of Directors to evaluate a proposed investment (and any related financing) or other matter requiring the Board of Directors’ authorization.

 

4.                                      BANK ACCOUNTS.  The Advisor may establish and maintain, subject to any applicable conditions or limitations of loan documents applicable to the Company, one or more bank accounts in its own name for the account of the Company or in the name of the Company and may collect and deposit into any account or accounts, and disburse from any such account or accounts, any money on behalf of the Company, under such terms and conditions as the Board of Directors may approve, provided that no funds shall be comingled with the funds of the Advisor. The Advisor shall from time to time render appropriate accountings of such collections and payments to the Board and the independent auditors of the Company.

 

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5.                                      PAYMENT OF EXPENSES.  In addition to the compensation paid to the Advisor pursuant to Section 6 hereof, the Company shall pay directly or reimburse the Advisor, on a monthly basis, for all of the expenses paid or incurred by the Advisor or its Affiliates on behalf of the Company or in connection with the services provided to the Company pursuant to this Agreement, including, but not limited to, tax, legal, accounting, advisory, investment banking and other third party professional fees, Board of Directors’ fees, debt service, taxes, insurance (including errors and omissions insurance and any additional insurance required by Section 8.2), underwriting, brokerage, reporting, registration, listing fees and charges, travel and entertainment expenses, conference sponsorships, transaction diligence and closing costs, dead deal costs, dividends, office space, the cost of all equity awards or compensation plans established by the Company, including the value of awards made by the Company to the employees, officers, Affiliates and representatives of the Advisor, and any other costs which are reasonably necessary for the performance by the Advisor of its duties and functions under this Agreement and also including any expenses incurred by Advisor to comply with new or revised laws or governmental rules or regulations that impose additional duties on the Company or the Advisor in its capacity as advisor to the Company, including any personnel costs incurred to satisfy such additional duties.  In addition, the Company shall pay its pro rata share of the office overhead and administrative expenses of the Advisor incurred in providing its duties pursuant to this Agreement.

 

The Advisor shall be responsible for all wages, salaries, cash bonus payments and benefits related to all employees of the Advisor providing services to the Company (including any officers of the Company who are also officers of the Advisor), excluding expenses related to (i) the provision of internal audit services as described in the next sentence and (ii) equity compensation awarded by the Company to employees, officers, Affiliates and representatives of the Advisor pursuant to Section 6.3 below.  The Company shall reimburse the Advisor, on a monthly basis, the Company’s pro-rata portion (as reasonably agreed to between the Advisor and a majority of the Company’s Independent Directors or Ashford Trust’s audit committee, chairman of the audit committee or lead director) of all expenses related to (i) employment of the Advisor’s internal audit managers and other employees of the Advisor who are actively engaged in providing internal audit services to the Company, (ii) the reasonable travel and other out-of-pocket costs of the Advisor relating to the activities of the Advisor’s internal audit employees and the reasonable third party expenses which the Advisor incurs, in each case, in connection with providing internal audit services, and (iii) all reasonable international office expenses, overhead, personnel costs, travel and other costs directly related to Advisor’s non-Executive personnel that are located internationally or that oversee the operations of international assets or related to Advisor’s personnel that source, investigate or provide diligence services in connection with possible acquisitions or investments internationally.  Such expenses shall include, but are not limited to, salary, wages, payroll taxes and the cost of employee benefit plans.

 

6.                                      COMPENSATION.

 

6.1                               Base Fee.  The Company shall pay to the Advisor a quarterly base fee (the “Base Fee”) payable in arrears in cash, for services provided by the Advisor in the preceding quarter.

 

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For purposes of this Agreement, the “Base Fee” will be equal to 0.70% per annum of the Total Market Capitalization of the Company, subject to the payment of a minimum quarterly base fee (“Minimum Base Fee”), if applicable. For purposes of this Agreement, “Total Market Capitalization” shall be calculated on a quarterly basis as:

 

(i)                                     the average of the volume-weighted average price per share of Ashford Trust’s common stock for each trading day of the preceding quarter multiplied by the average number of shares of Ashford Trust’s common stock outstanding during such quarter, on a fully-diluted basis (assuming all common units and long term incentive partnership units in the Operating Partnership which have achieved economic parity with common units in the Operating Partnership have been converted to common stock in the Company), plus

 

(ii)                                  the quarterly average of the aggregate principal amount of the Company’s consolidated indebtedness (including the Company’s proportionate share of debt of any entity that is not consolidated but excluding the Company’s joint venture partners’ proportionate share of consolidated debt), plus

 

(iii)                               the quarterly average of the liquidation value of the Company’s outstanding preferred equity.

 

The Minimum Base Fee for each quarter beginning one year from the Effective Date will be equal to the greater of:

 

(i) 90% of the Base Fee paid for the same quarter in the prior year and

 

(ii) the G&A Ratio multiplied by the Company’s Total Market Capitalization.

 

The minimum base fee (on an annual basis) for the first partial quarter following the Effective Date, and the next four full fiscal quarters thereafter. will be equal to the greater of:

 

(i) 0.70% of the Company’s Total Market Capitalization as of the first day of trading immediately following the Effective Date; and

 

(ii) the G&A Ratio multiplied by the Company’s Total Market Capitalization as of the first day of trading immediately following the Effective Date.

 

For purposes of this Agreement, the “G&A Ratio” will be calculated as the simple average of the ratios of total general and administrative expenses, less any non-cash expenses but including any dead deal costs, paid in the applicable quarter by each member of a select peer group set forth in Exhibit A (each, a “Peer Group Member” and collectively, the “Peer Group”), divided by the total enterprise value of such Peer Group Member (calculated in the same manner as the Company’s Total Market Capitalization). The G&A Ratio for each Peer Group Member will be calculated based on the financial information presented in such Peer Group Member’s Form 10-Q or 10-K periodic filings with the SEC following the end of each quarter.  The Peer Group may be modified from time to time by mutual written agreement of the Advisor and a majority of the Independent Directors, negotiating in good faith.

 

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The Base Fee, as calculated above, shall be payable in arrears no later than the 15th day following the end of each quarter (i.e., one-fourth of 0.70% of the Total Market Capitalization of the Company).  The Minimum Base Fee shall be calculated as soon as practicable following the end of the quarter, and to the extent the Minimum Base Fee exceeds the Base Fee paid to the Advisor with respect to any quarter, the Company will pay the Advisor the difference between Minimum Base Fee and the Base Fee within 5 business days of final calculation of the Minimum Base Fee.

 

For purposes of payment of the Base Fee for a partial quarter relating to the first quarter in which this Agreement is effective or for the last quarter in which this Agreement is terminated, the Base Fee shall be calculated as 0.70% of the Total Market Capitalization of the Company, calculated using each trading day of such partial quarter prior to termination, multiplied by the number of days in the applicable quarter in which this Agreement is in effect divided by 365 or 366 days, as applicable.  The Minimum Base Fee shall be similarly reduced proportionately based on the number of days in the applicable quarter in which this Agreement is in effect divided by 365 or 366 days, as applicable.

 

6.2                               Incentive Fee.  In each year that the Company’s total shareholder return exceeds the average total shareholder return for the Peer Group (the “Incentive Fee Threshold”), the Company shall pay to the Advisor an incentive fee (the “Incentive Fee”), calculated as set forth in the following paragraph.  For purposes of this Agreement, the Company’s total shareholder return will be calculated using the year-end stock price equal to the closing price of Ashford Trust’s common stock on the last trading day of the year, as compared to the closing stock price of Ashford Trust’s common stock on the last trading day of the prior year (or, with respect to the stub period ending December 31, 2014, the closing stock price of Ashford Trust’s common stock on the business day immediately following the Effective Date), in each case assuming all dividends on the common stock during such period are reinvested into additional shares of Ashford Trust common stock.  The average total shareholder return for each Peer Group Member will be calculated in the same manner and for the same time period, and the average for the Peer Group will be the simple average of the total shareholder return for each Peer Group Member.

 

If the Company’s total shareholder return exceeds the Incentive Fee Threshold with respect to any calendar year (or stub period), the annual Incentive Fee for such calendar year (or stub period) shall be calculated, for each year (or stub period) beginning with the stub period ending December 31, 2014, as (i) 5% of the amount (expressed as a percentage but in no event greater than 25%) by which the Company’s annual total shareholder return exceeds the Incentive Fee Threshold, multiplied by (ii) the Fully Diluted Equity Value (defined below) of the Company at December 31 of such calendar year; provided, for the stub period ending December 31, 2014, the product from the preceding calculation shall be reduced proportionately based on the number of days in which this Agreement is in effect for the calendar year 2014 divided by 365 days.  The Company’s “Fully Diluted Equity Value” shall be calculated by assuming that all units in the Operating Partnership, including long term incentive partnership units of the Operating Partnership that have achieved economic parity with the common units of the Operating Partnership, if any, are converted into common stock and that the per share value of each share

 

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of Company common stock is equal to the closing price of the Company’s common stock on the last trading day of the year.

 

If this Agreement is terminated on a day other than the last trading day of a calendar year, then the Company’s total shareholder return, the Incentive Fee Threshold and the total shareholder return for each Peer Group Member will be calculated using the stock price of Ashford Trust’s common stock and each Peer Group Member’s common stock closing price on the last trading day immediately preceding the date of termination of this Agreement.

 

The Incentive Fee, if any, subject to the FCCR Condition (defined below), shall be payable in arrears in three (3) equal annual installments with the first installment payable on January 15 following the applicable year for which the Incentive Fee relates and on January 15 of the next two successive years.  Notwithstanding the foregoing, upon any termination of this Agreement for any reason, any unpaid Incentive Fee (including any Incentive Fee installment for the stub period ending on the termination date) shall become fully earned and immediately due and payable without regard to the FCCR Condition defined below.  Except in the case when the Incentive Fee is payable on the date of termination of this Agreement, up to 50% of the Incentive Fee may be paid by the Company, at the option of the Company, in shares of common stock of Ashford Trust or common units of the Operating Partnership, with the balance payable in cash, unless at the time for payment of the Incentive Fee:

 

(i)                                     the Advisor (or its Affiliates) owns common stock or common units in an amount (determined with reference to the closing price of the Company’s common stock on the last trading day of the year or stub period) greater than or equal to three times the Base Fee for the preceding four quarters,

 

(ii)                                  payment in such securities would cause the Advisor to be subject to the provisions of the Investment Company Act, or

 

(iii)                               payment in such securities would not be legally permissible for any reason;

 

in which case, the entire Incentive Fee will be paid by the Company in cash.

 

Upon the determination of the Incentive Fee, except in the case of any termination of this Agreement in which case the Incentive Fee for the stub period and all unpaid installments of an Incentive shall be deemed earned and fully due and payable, each one-third installment of the Incentive Fee shall not be deemed earned by Advisor or otherwise payable by the Company unless the Company, as of the December 31 immediately preceding the due date for the payment of the Incentive Fee installment, has a FCCR of .20x or greater (the “FCCR Condition”).  For purposes hereof, “FCCR” shall mean the Company’s fixed charge coverage ratio being the ratio of adjusted EBITDA for the previous four consecutive fiscal quarters to fixed charges, which includes all (i) interest expense of the Company and its subsidiaries, (ii) regularly scheduled principal payments of the Company and its subsidiaries, other than balloon or similar principal payments which repay indebtedness in full and payments under cash flow mortgages applied to principal, and (iii) preferred dividends paid by the Company.

 

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6.3                               Equity Compensation.  To incentivize employees, officers, consultants, non-employee directors, Affiliates or representatives of the Advisor to achieve goals and business objectives of the Company, as established by the Board of Directors, in addition to the Base Fee and the Incentive Fee set forth above, the Board of Directors will have the authority to and shall make recommendations of annual equity awards to the Advisor or directly to employees, officers, consultants, non-employee directors, Affiliates or representatives of the Advisor, based on the achievement by the Company of certain financial or other objectives established by the Board of Directors.

 

The Company, at its option, may choose to issue such compensation in the form of equity awards in Ashford Trust or the Operating Partnership, unless and to the extent that receipt of such equity awards would adversely affect the Company’s status as a REIT, in which case, the equity awards shall be limited to equity awards in the Operating Partnership. For a period of one year from the date of issuance, any such equity awards in the Operating Partnership shall not be transferable, except by operation of law, without the written consent of the General Partner which consent may be withheld in the sole and absolute discretion of the General Partner; provided, however, the Advisor may assign, without the consent of the General Partner, such equity awards to employees, officers, consultants, non-employees, directors, Affiliates or representatives of Advisor provided the one-year restriction on transfer shall remain applicable to such assignee. In addition, except as expressly provided above, any transfer of such equity awards at any time must comply with the transfer restrictions of Ashford Trust OP’s partnership agreement or the Company’s charter and bylaws, as applicable.

 

6.4                               Additional Services.  If, and to the extent that, the Company requests the Advisor to render services on behalf of the Company other than those required to be rendered by the Advisor under this Agreement, such additional services shall be compensated separately at Market Rates as determined in accordance with the process set forth in Section 9.3 below.

 

7.                                      LIMITATION ON ACTIVITIES.  Notwithstanding anything in this Agreement to the contrary, the Advisor shall not take any action (unless directed by the Board of Directors, in which case the Company shall indemnify and hold harmless Advisor and each of its officers, directors, employees, members, managers, agents and representatives, from and against any and all claims, liabilities, costs and expenses threatened or incurred by Advisor or any other indemnified person, which, directly or indirectly, results from the Advisor following the directive of the Board of Directors), which would (a) adversely affect the status of the Company as a REIT, (b) subject the Company to regulation under the Investment Company Act of 1940, as amended, (c) knowingly and intentionally violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Company (provided that without adequate assurance of funding by the Company necessary for compliance, Advisor shall not be responsible for such violations and the Company shall indemnify and hold harmless Advisor and each of its officers, directors, employees, members, managers, agents and representatives, from and against all claims, liabilities, costs and expenses threatened or incurred by Advisor, directly or indirectly, as a result of the Company’s failure to timely fund adequate capital to comply with any applicable law, rule or regulation), (d)  violate any of the rules or regulations of any

 

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exchange on which the Company’s securities are listed or (e) violate the Company’s charter, bylaws or resolutions of the Board of Directors, all as in effect from time to time.

 

The Advisor acknowledges receipt of the Company’s Code of Business Conduct and Ethics, Code of Conduct for CEO, CFO and CAO, and Policy on Insider Training, and agrees to require its employees who provide services to the Company to comply with such codes and policies.

 

8.                                      LIMITATION OF LIABILITY AND INDEMNIFICATION.

 

8.1                               Limitation on Liability.  The Advisor shall have no responsibility other than to render the services and take the actions described herein in good faith and with the exercise of due care and shall not be responsible for any action of the Board of Directors in following or declining to follow any advice or recommendation of the Advisor. The Advisor (including its officers, directors, managers, employees and members) will not be liable for any act or omission by the Advisor (or its officers, directors, managers, employees and members) performed in accordance with and pursuant to this Agreement, except by reason of acts constituting gross negligence, bad faith, willful misconduct or reckless disregard of its duties under this Agreement.

 

8.2                               Insurance Coverage of the Advisor.  The Advisor shall maintain errors and omissions insurance coverage and other insurance coverage in amounts which are customarily carried by asset managers performing functions similar to those of the Advisor under this Agreement.  No fidelity bond shall be required.

 

8.3                               Indemnification.

 

(a)                                 The Company shall reimburse, indemnify and hold harmless the Advisor and its partners, directors, officers, stockholders, managers, members, agents, employees and each other Person, if any, controlling the Advisor (each, an “Advisor Indemnified Party”), to the full extent lawful, from and against any and all losses, claims, damages or liabilities of any nature whatsoever (“Losses”) with respect to or arising from any acts or omission of the Advisor (including ordinary negligence) in its capacity as such, except with respect to losses, claims, damages or liabilities with respect to or arising out of such Advisor Indemnified Party’s gross negligence, bad faith or willful misconduct, or reckless disregard of its duties under this Agreement.

 

(b)                                 The Advisor shall reimburse, indemnify and hold harmless the Company, and its partners, directors, officers, stockholders, managers, members, agents, employees and each other Person, if any, controlling the Company (each, a “Company Indemnified Party”; Advisor Indemnified Party and Company Indemnified Party are each sometimes hereinafter referred to as an “Indemnified Party”) of and from any and all Losses in respect of or arising from (i) any acts or omissions of the Advisor constituting bad faith, willful misconduct, gross negligence or reckless disregard of duties of the Advisor under this Agreement or (ii) any claims by the Advisor’s employees relating to the terms and conditions of their employment by the Advisor.

 

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(c)                                  Notwithstanding the indemnification provisions in Section 8.3(a) and Section 8.3(b) above, indemnification will not be allowed for any liability arising from or out of a violation of state or federal securities laws by an Indemnified Party. Indemnification will be allowed for settlements and related expenses of lawsuits alleging securities law violations, and for expenses incurred in successfully defending such lawsuits, provided that a court either (i) approves the settlement and finds that indemnification of the settlement and related costs should be made, or (ii) approves indemnification of litigation costs if a successful defense is made. If indemnification is unavailable as a result of this Section 8.3(c), the indemnifying party shall contribute to the aggregate losses, claims, damages or liabilities to which the Indemnified Party may be subject in such amount as is appropriate to reflect the relative benefits received by each of the indemnifying party and the party seeking contribution on the one hand and the relative faults of the indemnifying party and the party seeking contribution on the other, as well as any other relevant equitable considerations.

 

(d)                                 Promptly after receipt by an Indemnified Party of notice of the commencement of any action, such Indemnified Party shall, if a claim in respect thereof is to be made pursuant hereto, notify the indemnifying party in writing of the commencement thereof; but the omission to so notify the indemnifying party shall not relieve it from any liability that it may have to any Indemnified Party pursuant to this Section 8.3.  In case any such action shall be brought against an Indemnified Party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, to assume the defense thereof, with counsel satisfactory to such Indemnified Party and, after notice from the indemnifying party to such Indemnified Party of its election to assume the defense thereof, the indemnifying party shall not be liable to such Indemnified Party under Section 8.3(a) or (b) hereof, as applicable, for any legal expenses of other counsel or any of the expenses, in each case subsequently incurred by such Indemnified Party, unless (i) the indemnifying party and the Indemnified Party shall have mutually agreed to the retention of such counsel, or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and Indemnified Party and representation of both parties by the same counsel would be inappropriate in the reasonable opinion of the Indemnified Party, due to actual or potential differing interests between them. The obligations of the indemnifying party under this Section 8.3 shall be in addition to any liability which the indemnifying party otherwise may have.

 

(e)                                  The Company shall be required to advance funds to an Indemnified Party for legal expenses and other costs incurred as a result of any legal action or proceeding if a claim in respect thereof is to be made pursuant hereto and if requested by such Indemnified Party if (i) such suit, action or proceeding relates to or arises out of, or is alleged to relate to or arise out of or has been caused or alleged to have been caused in whole or in part by, any action or inaction on the part of the Indemnified Party in the performance of its duties or provision of its services on behalf of the Company; and (ii) the Indemnified Party undertakes to repay any funds advanced pursuant to this Section 8.3(3) in cases in which such Indemnified Party would not be entitled to indemnification under Section 8.3(a).  If advances are required under this Section 8.3(3), the Indemnified Party shall furnish the Company with an undertaking as set forth in clause (ii) of the preceding sentence and shall thereafter have the right to bill the Company

 

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for, or otherwise require the Company to pay, at any time and from time to time after such Indemnified Party shall become obligated to make payment therefor, any and all reasonable amounts for which such Indemnified Party is entitled to indemnification under Section 8.3, and the Company shall pay the same within thirty (30) days after request for payment.  In the event that a determination is made by a court of competent jurisdiction or an arbitrator that the Company is not so obligated in respect of any amount paid by it to a particular Indemnified Party, such Indemnified Party will refund such amount within sixty (60) days of such determination, and in the event that a determination by a court of competent jurisdiction or an arbitrator is made that the Company is so obligated in respect to any amount not paid by the Company to a particular Indemnified Party, the Company will pay such amount to such Indemnified Party within thirty (30) days of such final determination, in either case together with interest at the current prime rate plus two percent (2%) from the date paid until repaid or the date it was obligated to be paid until the date actually paid.

 

9.                                      RELATIONSHIP OF ADVISOR AND COMPANY.

 

9.1                               Relationship.

 

(a)                                 The Company and the Advisor are not partners or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners or joint venturers. Nothing herein contained shall prevent the Advisor from engaging in other activities, including, without limitation, the rendering of advice to other Persons (including other REITs) and to the management of Ashford Hospitality Prime, Inc. (“Ashford Prime”), the Advisor’s parent, or other programs advised, sponsored or organized by the Advisor or its Affiliates. The Company shall not revise its Investment Guidelines to be directly competitive with all or any portion of the Investment Guidelines of Ashford Prime as of November 19, 2013 or with all or any portion of the initial investment guidelines of any Spin-Off Company (as defined in Section 15).  The Company acknowledges that Ashford Prime’s investment guidelines as such date hereof include hotel real estate assets primarily consisting of equity or ownership interests, as well as debt investments when such debt is acquired with the intent of obtaining an equity or ownership interest, in:

 

(i)                                     full service and urban select service hotels with trailing twelve (12) month average RevPAR or anticipated twelve (12) month average RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined with reference to the most current Smith Travel Research reports, generally in the 20 most populous metropolitan statistical areas, as estimated by the United States Census Bureau and delineated by the U.S. Office of Management and Budget;

 

(ii)                                  upscale, upper-upscale and luxury hotels meeting the RevPAR criteria set forth in clause (i) above and situated in markets that may be generally recognized as resort markets; and

 

(iii)                               international hospitality assets predominantly focused in areas that are general destinations or in close proximity to major transportation hubs or

 

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business centers, such that the area serves as a significant entry or departure point to a foreign country or region of a foreign country for business or leisure travelers and meet the RevPAR criteria set forth in clause (i) above (after any applicable currency conversion to U.S. dollars).

 

The Company further acknowledges that any subsequent change to Ashford Prime’s Investment Guidelines, including in connection with any future spin-off, carve-out, split-off or other consummation of a transfer of a division or subset of assets for the purpose of forming a joint venture, a newly created private platform or a new publicly traded company will not have any impact on or change the “Investment Guidelines of Ashford Prime as of November 19, 2013” for purposes of enforcing this Section 9.  Except as described in this Section 9.1, this Agreement shall not limit or restrict the right of any manager, director, officer, employee or equityholder of the Advisor or its Affiliates to engage in any other business or to render services of any kind to any other Person. The Advisor may, with respect to any investment in which the Company is a participant, also render advice and service to each and every other participant therein. While the information and recommendations provided to the Company shall, in the Advisor’s reasonable and good faith judgment, be appropriate under the circumstances, they may be different from those supplied to other persons.

 

(b)                                 To the extent the Advisor deems an investment opportunity suitable for recommendation, the Advisor must present any such individual investment opportunity that satisfies the Company’s Initial Investment Guidelines (as set forth and subject to the limitations in Section 9.2 below) to the Company, and the Board of Directors will have 10 business days to accept such opportunity prior to it being available to Ashford Prime or any other Person advised by the Advisor. Except as set forth in the preceding sentence, the Company recognizes that it is not entitled to preferential treatment and is only entitled to equitable treatment in receiving information, recommendations and other services. The Company shall have the benefit of the Advisor’s best judgment and effort, and the Advisor shall not undertake any activities that, in its good faith judgment, will materially and adversely affect the performance of its obligations under this Agreement.

 

(c)                                  The parties hereto agree and acknowledge that each of the Company, the Advisor and Ashford Prime, as well as other companies that the Advisor may advise in the future, may benefit from the strategic relationships between such companies and accordingly intend to cooperate to achieve results that are in the best interests of each such entities’ respective shareholders.  From time to time, as may be determined by the independent directors of the Advisor, the Company, Ashford Prime and any other company subsequently advised by the Advisor, each such entity may provide financial accommodations, guaranties, back-stop guaranties, and other forms of financial assistance to the other entities on terms that the respective Independent Directors determine to be fair and reasonable.

 

9.2                               Conflicts of Interest.

 

(a)                                 To minimize conflicts with Ashford Prime and the Company, both of which are advised by the Advisor, Ashford Prime and the Company have identified the asset type that such party intends to select as its principal investment focus and to set parameters for

 

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its real estate investments, including parameters primarily relating to RevPAR, segments, markets and other factors or financial metrics.  The asset type, together with the relevant parameters for investments are referred to as such Person’s “Investment Guidelines,” and the “Initial Investment Guidelines” of the Company are the Investment Guidelines of the Company as set forth below.  The Board of Directors may modify or supplement, after consultation with Advisor, the Company’s Investment Guidelines upon written notice to the Advisor from time to time (subject, however, to the prohibition in Section 9.1(a) restricting the Company from changing its Initial Investment Guidelines to be directly competitive with all or any portion of Ashford Prime’s Investment Guidelines as of November 19, 2013 or the initial investment guidelines of any Spin-Off Company).  As of the Effective Date, the Advisor advises Ashford Prime and also advises the Company. The Advisor may enter into an advising relationship with additional companies in the future. The Company hereby declares its Initial Investment Guidelines to be all segments of the hospitality industry (including, without limitation, direct, joint venture and debt investments in hotels, condo-hotels, time-shares and other hospitality related assets), with RevPAR criteria less than two times the then-current U.S. average RevPAR.

 

When determining whether an asset satisfies the Company’s Investment Guidelines, the Advisor shall make a good faith determination of projected RevPAR, taking into account historical RevPAR as well as such additional considerations as conversions or reposition of assets, capital plans, brand changes and other factors that may reasonably be forecasted to raise RevPAR after stabilization of such initiative.

 

(b)                                 If the Company materially modifies its Initial Investment Guidelines set forth in Section 9.2(a) above without the written consent of the Advisor (except in connection with the establishment of a Spin-Off Company), the Advisor will not have an obligation to present investment opportunities to the Company as set forth in Section 9.1(b) above at any time thereafter, regardless of any subsequent modifications by the Company to its Investment Guidelines.  Instead, the Adviser shall use its best judgment in determining how to allocate investment opportunities to Persons (including Ashford Prime and the Company) which Advisor advises, taking into account such factors as the Advisor deems relevant, in its discretion, subject to any then existing or future obligations that the Advisor may have to other Persons.  The Company acknowledges that if it materially modifies its Initial Investment Guidelines, it will not be entitled to preferential treatment from the Advisor and only will be entitled to the Advisor’s best judgment in allocating investment opportunities.

 

(c)                                  In the event that the Advisor obtains a portfolio acquisition opportunity composed of asset types that satisfies the Initial Investment Guidelines of the Company and Ashford Prime or, as applicable, one or more other Persons managed by the Advisor, the Advisor will endeavor in its good faith judgment to present such opportunity to the Board of Directors, Ashford Prime and, if applicable, such other Person(s) to the extent the portfolio can be reasonably divided by asset type and acquired on the basis of such asset types in satisfaction of each Person’s Investment Guidelines. If the board of directors of Ashford Prime, the Board of Directors and, if applicable, such other Person(s) approve its portion of such acquisition, Ashford Prime, the Company and, if applicable, such other Person(s) will cooperate in good

 

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faith in completing the acquisition of the portfolio. If the portfolio cannot be reasonably separated by asset type, the Advisor shall allocate portfolio investment opportunities between the Company, Ashford Prime and, if applicable, other Persons advised by the Advisor, in a fair and equitable manner consistent with the investment objectives of the Company, Ashford Prime and, if applicable, other Persons advised by the Advisor. In making this determination, the Advisor will consider, in its sole discretion, the Investment Guidelines and investment strategy of each entity with respect to the acquisition of properties, portfolio concentrations, tax consequences, regulatory restrictions, liquidity requirements, leverage and other factors deemed appropriate by the Advisor. Notwithstanding the foregoing, if the Company materially modifies its Initial Investment Guidelines set forth in Section 9.2(a) above without the written consent of the Advisor, the Advisor will not have an obligation to present portfolio acquisition opportunities to the Company as set forth in this Section 9.2(c) at any time thereafter, regardless of any subsequent modifications by the Company to its Investment Guidelines.  Instead, the Adviser shall use its best judgment in determining how to allocate such portfolio investment opportunities to Persons (including Ashford Prime and the Company) which Advisor advises, taking into account such factors as the Advisor deems relevant, in its discretion, subject to any then existing or future obligations that the Advisor may have to other Persons.  In making the allocation determination with respect to any portfolio opportunity, the Advisor will have no obligation to make any such portfolio investment opportunity available to the Company.

 

9.3                               Exclusive Provider of Products or Services.  At any time the Company desires to engage a third party for the performance of services or delivery of products and provided that the Company has the right to control the decision on the award of the applicable contract, the Advisor shall have the exclusive right to provide such service or product at market rates for the provision of such services (“Market Rates”). For purposes of this Agreement, Market Rates shall be determined by reference to fees charged by third party providers who are not discounting such fees as a result of fees generated from other sources.

 

If the Company, after consultation with the Advisor, intends to solicit bids or enter the market for a particular service or product, the Company shall afford the Advisor the opportunity to provide such service or product.  In any event, the Advisor shall be provided at least 20 days to elect to provide such service or product at Market Rates.  If a majority of the Independent Directors of the Company affirmatively vote that the proposed pricing of the Advisor is not at Market Rates, then the Company and Advisor shall engage a consultant acceptable to the parties to determine the Market Rate for such services.  If the consultant’s opinion reflects fees lower than the pricing proposed by the Advisor, the Advisor will pay the expenses of the Consultant and shall have the option to provide the services or product at the Market Rate as determined by the consultant.  If the Consultant determines that the proposed pricing by the Advisor is at or below Market Rates, then the Company shall pay the expenses of the Consultant and shall engage Advisor at the Market Rate as determined by the consultant.

 

9.4                               The Ashford Name.  The Advisor and its Affiliates have a proprietary interest in the trademarked “Ashford” name and logo. The Advisor hereby grants to the Company a non-transferable, non-assignable, non-exclusive royalty-free right and license to use the “Ashford” name and logo during the term of this Agreement. Accordingly, and in recognition

 

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of this right, if at any time the Company ceases to retain the Advisor or one of its Affiliates to perform advisory services for the Company, the Company will, within 60 days after receipt of written request from the Advisor, cease to conduct business under or use the name “Ashford” or any derivative thereof and the Company shall change its name and the names of any of its subsidiaries to a name that does not contain the name “Ashford” or any other word or words that might, in the reasonable discretion of the Advisor, be susceptible of indication of some form of relationship between the Company and the Advisor or any its Affiliates. At such time, the Company will also make any changes to any trademarks, servicemarks, logos, or other marks necessary to remove any references to the word “Ashford.” Consistent with the foregoing, it is specifically recognized that the Advisor or one or more of its Affiliates has in the past and may in the future organize, sponsor or otherwise permit to exist other investment vehicles (including vehicles for investment in real estate) and financial and service organizations having “Ashford” as a part of their name and using the “Ashford” logo, all without the need for any consent (and without the right to object thereto) by the Company.

 

10.                               BOOKS AND RECORDS.  All books and records compiled by the Advisor in the course of discharging its responsibilities under this Agreement shall be the property of the Company and shall be delivered by the Advisor to the Company immediately upon any termination of this Agreement regardless of the grounds for such termination (including, but not limited to, a breach by the Company of this Agreement); provided, however, that the Advisor shall have reasonable access to such books and records to the extent reasonably necessary in connection with the conduct of its services hereunder. The Advisor shall not maintain or assert any lien against or upon any of the books and records.  During the term of this Agreement, the books and records of the Company maintained by the Advisor shall be accessible for inspection by any designated representative of the Company upon reasonable advance notice and during normal business hours.

 

11.                               CONFIDENTIALITY.  The Advisor shall keep confidential any and all non-public information (“Confidential Information”), written or oral, obtained by it in connection with the performance of services to the Company except that the Advisor may share such Confidential Information (i) with Affiliates, officers, directors, employees, agents and other parties who need such Confidential Information for the Advisor to be able to perform its duties hereunder, (ii) with appraisers, lenders, bankers and other parties as necessary in the ordinary course of the Company’s business, (iii) in connection with any governmental or regulatory filings of the Company, filings with the New York Stock Exchange or other applicable securities exchanges or markets, or disclosure or presentations to Company investors (subject to compliance with Regulation FD), (iv) with governmental officials having jurisdiction over the Company and (v) as required by law.

 

Nothing will prevent the Advisor from disclosing Confidential Information (i) upon the order of any court or administrative agency, (ii) upon the request or demand of, or pursuant to any law or regulation to, any regulatory agency or authority, (iii) to the extent reasonably required in connection with the exercise of any remedy under this Agreement, or (iv) to the Advisor’s legal counsel or independent auditors; provided, however that with respect to (i) and

 

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(ii), so long as legally permissible, the Advisor will give notice to the Company so that the Company may seek, at its sole expense, an appropriate protective order or waiver.

 

For purposes of this Agreement, Confidential Information shall not include (i) information that is available to the public from a source other than the Advisor, (ii) information that is released in writing by the Company to the public or to persons who are not under similar obligations of confidentiality to the Company, or (iii) information that is obtained by the Advisor from a third-party which, to the best of the Advisor’s knowledge, does not constitute a breach by such third-party of an obligation of confidence.

 

12.                               TERM AND TERMINATION.

 

(a)                                 This Agreement shall have an initial term of twenty 20 years from the Effective Date and shall be automatically extended for successive one year terms thereafter without further action by either the Company or the Advisor unless earlier terminated, as provided herein. This Agreement shall be automatically renewed for additional one (1) year terms commencing on the 20th anniversary of the Effective Date unless:

 

(i)                                     the Advisor gives written notice to the Company of termination at least 180 days prior to the expiration of the then current term; or

 

(ii)                                  the Company gives written notice to the Advisor of termination (a “Termination Notice”) at least 180 days prior to the expiration of the then current term; provided, however, that any such termination must receive the affirmative vote of at least two-thirds of the Independent Directors of the Company based on a good faith finding that either (A) there has been unsatisfactory performance by the Advisor that is materially detrimental to the Company and its subsidiaries taken as a whole, or (B) the Base Fee and/or Incentive Fee is not fair (and the Advisor does not offer to negotiate a lower fee that at least a majority of the Independent Directors of the Company determines is fair.)

 

If the reason for non-renewal specified by the Company in its Termination Notice is (ii)(B) above, then the Advisor may, at its option, provide a notice of proposal to renegotiate the Base Fee and Incentive Fees (a “Renegotiation Proposal”) not less than 150 days prior to the pending termination date. Thereupon, each party shall use its commercially reasonable efforts to negotiate in good faith to find a resolution on fees within 120 days following the Company’s receipt of the Renegotiation Proposal. If a resolution is achieved between the Advisor and at least a majority of the Independent Directors of the Company within the 120 day period, then the Advisory Agreement shall continue in full force and effect with modification only to the agreed upon Base Fee and/or Incentive Fee.

 

(b)                                 The Advisor may also, at any time, terminate this Agreement upon a default by the Company in the performance or observance of any material term, condition or

 

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covenant under this Agreement; provided, however, that the Advisor must, before terminating this Agreement, give written notice of the default to the Company and provide the Company with an opportunity to cure the default within 45 days, or if such cure is not reasonably susceptible to cure within 45 days, such additional cure period as is necessary to cure the default so long as the Company is diligently and in good faith pursuing such cure and the additional cure period does not exceed 90 days.

 

(c)                                  The Company may also, at any time, terminate this Agreement:

 

(i)                                     upon a default by the Advisor in the performance or observance of any material term, condition or covenant under this Agreement; provided, however, that the Company must, before terminating this Agreement, give written notice of the default to the Advisor and provide the Advisor with an opportunity to cure the default within 60 days, or if such cure is not reasonably susceptible to cure within 60 days, such additional cure period as is reasonably necessary to cure the default so long as the Advisor is diligently and in good faith pursuing such cure;

 

(ii)                                  immediately upon providing written notice to the Advisor following an event rendering the Advisor insolvent (an “Insolvency Event”); provided the Advisor shall notify the Company no later than 30 days following the Advisor’s knowledge of an Insolvency Event. For purposes of this Agreement, an “Insolvency Event” is any occurrence in which the Advisor shall (A) authorize or agree to the commencement of a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency, receivership or other similar law now or hereafter in effect or the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property if the Advisor has not filed a motion to assume this Agreement with the appropriate court within 120 days of the commencement of such case or proceeding, (B) make a general assignment for the benefit of its creditors, (C) have an involuntary or other proceeding commenced against it seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or thereafter in effect, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period exceeding one hundred twenty (120) days or (D) commence an action for dissolution;

 

(iii)                               immediately upon providing written notice to the Advisor, following the advisor’s conviction (including a plea or nolo contendere) of a felony;

 

(iv)                              immediately upon providing written notice to the Advisor, if the Advisor commits an act of fraud against the Company, misappropriates the funds of the Company or acts in a manner constituting willful misconduct, gross negligence or reckless disregard in the performance of its material duties

 

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under this Agreement (including a failure to act); provided, however, that if any such actions or omissions described in this Section 12(c)(iv) are caused by an employee and/or an officer of the Advisor (or an Affiliate of the Advisor) and the Advisor takes all reasonable necessary and appropriate action against such person and cures the damage caused by such actions or omissions within 45 days of the Advisor’s actual knowledge of its commission or omission, the Company will not have the right to terminate this Agreement pursuant to this Section 12(c)(iv); and

 

(v)                                 immediately upon providing written notice to the Advisor following an Advisor Change of Control unless such Advisor Change of Control constitutes a permissible assignment under Section 14 hereof.

 

“Advisor Change of Control” shall be deemed to have occurred upon any of the following events affecting Advisor:

 

A.                                    any “person” (as defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as modified in Section 13(d) and 14(d) of the Exchange Act) other than (A) the Advisor or any of their respective subsidiaries, (B) any employee benefit plan of the Advisor or any of its subsidiaries, (C) Remington or any Affiliate of Remington, (D) a company owned, directly or indirectly, by stockholders of the Advisor in substantially the same proportions as their ownership of the Advisor, as applicable, or (E) an underwriter temporarily holding securities pursuant to an offering of such securities, becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Advisor representing 50% or more of the shares of voting stock of the Advisor, as applicable, then outstanding; provided, however, if any of the Chief Executive Officer, President, Chief Operating Officer, or Chief Financial Officer of the Advisor immediately before the event (collectively, the “Advisor Key Officers”) remain in such capacity or similar capacity with the Advisor immediately after the event, or if a majority of the board of directors of Advisor immediately before the event remain on the board of directors of Advisor immediately after the event, then no Advisor Change of Control shall be deemed to have occurred;

 

B.                                    the consummation of any merger, organization, business combination or consolidation of the Advisor or one of its subsidiaries, as applicable, with or into any other company, other than a merger, reorganization, business combination or consolidation which would result in the holders of the voting securities of the Advisor outstanding immediately prior thereto holding securities which represent immediately after such merger,

 

20

 

reorganization, business combination or consolidation more than 50% of the combined voting power of the voting securities of the Advisor, as applicable, or the surviving company or the parent of such surviving company, provided, however, if any of the Advisor Key Officers remain in such capacity or similar capacity with the Advisor or surviving entity immediately after the event, or if a majority of the board of directors of Advisor immediately before the event remain on the board of directors of Advisor or surviving entity immediately after the event, then no Advisor Change of Control shall be deemed to have occurred; or

 

C.                                    the consummation of a sale or disposition by the Advisor of all or substantially all of its assets, other than a sale or disposition if the holders of the voting securities of such entity outstanding immediately prior thereto hold securities immediately thereafter which represent more than 50% of the combined voting power of the voting securities of the acquiror, or parent of the acquiror, of such assets provided, however, if any of the Advisor Key Officers remain in such capacity or similar capacity with the Advisor or acquiring entity immediately after the event, or if a majority of the board of directors of Advisor or acquiring entity immediately before the event remain on the board of directors of Advisor immediately after the event, then no Advisor Change of Control shall be deemed to have occurred.

 

(d)                           Upon any termination of this Agreement (including a termination pursuant to Section 16 hereof), the parties shall have the following obligations (“Termination Obligations”):

 

(i)                                   The Company shall pay all Base Fees, Incentive Fees and expense reimbursements due and owing through the date of termination, including, without limitation, any unpaid Incentive Fee installments which shall, upon any termination, become immediately earned by Advisor and due from the Company (collectively, “Accrued Fees”).

 

(ii)                                Upon any termination pursuant to Section 12(a)(ii), based on unsatisfactory performance by the Advisor or unfair fees with no resolution within the time period set forth in Section 12(a)(ii), the Company shall pay a termination fee  (the “Termination Fee” calculated as follows:

 

(A)                               So long as Advisor’s common units are not publicly traded or, if Advisor is a subsidiary of Ashford Inc., Ashford Inc.’s common stock is not publicly traded:

 

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(1)                                 14 multiplied by the earnings of the Advisor attributable to this Agreement, after costs and expenses (including taxes) of the Advisor attributable to the performance of its duties under this Agreement (“Net Earnings”) for the 12-month period preceding the termination date of this Agreement; plus

 

(2)                                 an additional amount such that the total net amount received by Advisor after the reduction by assumed state and federal income taxes at an assumed combined rate of 40% on the amounts described in (1) and (2) shall equal the amount described in (1).

 

(B)                               If at the time the Transaction Notice is given to Advisor, Advisor’s common units are publicly traded or Advisor is a subsidiary of Ashford Inc. and Ashford Inc.’s common stock is publicly traded:

 

(1)                                 1.1 times the greater of:

 

(I)                                   12 multiplied by the Net Earnings of the Advisor for the 12-month period preceding the termination date of this Agreement; or

 

(II)                              the earnings multiple (based on net earnings after taxes) for the Advisor’s common stock for the 12-month period preceding the termination date of this Agreement multiplied by the Net Earnings of the Advisor for the 12-month period preceding the termination date of this Agreement; or

 

(III)                         the simple average of the earnings multiples (based on net earnings after taxes) for the Advisor’s common stock for each of the three fiscal years preceding the termination date of this Agreement, multiplied by the Net Earnings of the Advisor for the 12-month period preceding the termination date of this Agreement, plus

 

(2)                                 an additional amount such that the total net amount received by Advisor after the reduction by assumed state and federal income taxes at an assumed combined rate of 40% on the amounts described in (1) and (2) shall equal the amount described in (1).

 

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The Termination Fee shall be payable to Advisor on or before the termination date of this Agreement.

 

(iii)                              In the event of any termination of this Agreement other than an Advisor Change of Control, the Company (and any of its Affiliates) shall not, without the consent of the Advisor, solicit for employment, employ or otherwise retain (directly or indirectly) any employee of the Advisor (or any of its Affiliates) for a period of two years.

 

(iv)                             Immediately upon termination, the Advisor shall promptly (a) pay over all money collected and held for the account of the Company, provided that the Advisor shall be permitted to deduct any Accrued Fees in lieu of receiving payment for such Accrued Fees pursuant to Section 12(d)(i); (b) deliver a full accounting of all accounts held by the Advisor in the name of or on behalf of the Company; (c) deliver all property, documents, files, contracts and assets of the Company to the Company; and (d) cooperate with and assist the Company in executing an orderly transition of the management of the company’s assets to a new advisor.

 

(e)                           The following Sections, including the rights and obligations contained therein, shall survive the termination of this Agreement:

 

(i)                                    The parties’ Termination Obligations pursuant to Section 12(d) and the obligations pursuant to Section 16;

 

(ii)                                 The Advisor’s confidentiality obligations pursuant to Section 11;

 

(iii)                              The limitation of the Advisor’s liability pursuant to Section 8.1;

 

(iv)                             The parties’ indemnification obligations pursuant to Section 8.3; and

 

(v)                                The Company’s obligations to cease using the trademarked name “Ashford” and other obligations pursuant to Section 9.4.

 

13.                               NOTICES.  Any notices, instructions or other communications required or contemplated by this Agreement shall be deemed to have been properly given and to be effective upon delivery if delivered in person, sent electronically or upon receipt if sent by courier service. All such communications to the Company shall be addressed as follows:

 

Ashford Hospitality Trust, Inc.

14185 Dallas Parkway, Suite 1100

Dallas, TX  75254

Attn: Chief Executive Officer

 

With a copy to:

 

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Ashford Hospitality Trust, Inc.

14185 Dallas Parkway, Suite 110

Dallas, TX  75254

Attn:  General Counsel

 

All such communications to the Advisor shall be addressed as follows:

 

Ashford Hospitality Advisors LLC

14185 Dallas Parkway, Suite 1100

Dallas, TX  75254

Attn: Chief Executive Officer

 

With a copy to:

 

Ashford Hospitality Advisors LLC

14185 Dallas Parkway, Suite 1100

Dallas, TX  75254

Attn:  General Counsel

 

Either party hereto may designate a different address by written notice to the other party delivered in accordance with this Section 13.

 

14.                               DELEGATION OF RESPONSIBILITY AND ASSIGNMENT.

 

(a)                           Notwithstanding anything in this Agreement, the Advisor shall have the power to delegate all or any part of its rights and powers to manage and control the business and affairs of the Company to such officers, employees, Affiliates, agents and representatives of the Advisor or the Company as it may deem appropriate. Any authority delegated by the Advisor to any other person shall be subject to the limitations on the rights and powers of the Advisor specifically set forth in this Agreement or the charter of the Company.

 

The Advisor may assign this Agreement to any Affiliate that remains under the control of the Advisor without the consent of the Company.

 

(b)                           The Company may not assign this Agreement without the prior written consent of the Advisor, except in the case of assignment by the Company to another REIT or other organization that is a successor, by merger, consolidation, purchase of assets, or other similar transaction, to the Company.

 

15.                               FUTURE SPIN-OFF BY THE COMPANY.  If the Company elects to spin-off, carve-out, split-off or otherwise consummate a transfer of a division or subset of assets for the purpose of forming a joint venture, a newly created private platform or a new publicly traded company to hold such division or subset of assets constituting a distinct asset type and/or Investment Guidelines (collectively, a “Spin-Off Company”), the Company and Advisor agree that such Spin-Off Company shall be externally advised by the Advisor pursuant to an advisory agreement containing substantially the same material terms set forth in this Agreement.

 

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16.                               TERMINATION FOR CONVENIENCE UPON CHANGE OF CONTROL OF COMPANY. Upon a Company Change of Control (defined below), the Company shall have the right, at its election, to terminate this Agreement upon the payment of the COC Termination Fee (defined below) and subject to the conditions and terms of this Section 16.

 

(a)                          “Company Change of Control” shall mean any of the following events:

 

(i)                                    any “person” (as defined in Section 3(a)(9) of the Exchange Act , and as modified in Section 13(d) and 14(d) of the Exchange Act) other than (A) the Company or any of its subsidiaries, (B) any employee benefit plan of the Company or any of its subsidiaries, (C) a company owned, directly or indirectly, by stockholders of Ashford Trust in substantially the same proportions as the ownership of Ashford Trust, or (D) an underwriter temporarily holding securities pursuant to an offering of such securities, becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of Ashford Trust representing 35% or more of the shares of voting stock of Ashford Trust then outstanding;

 

(ii)                                 the consummation of any merger, reorganization, business combination or consolidation of the Company, or one of its respective subsidiaries, as applicable, with or into any other company, other than a merger, reorganization, business combination or consolidation which would result in the holders of the voting securities of Ashford Trust outstanding immediately prior thereto holding securities which represent immediately after such merger, reorganization, business combination or consolidation more than 50% of the combined voting power of the voting securities of the Company or the surviving company or the parent of such surviving company;

 

(iii)                              the consummation of a sale or disposition by the Company of all or substantially all of its assets, other than a sale or disposition if the holders of the voting securities of Ashford Trust outstanding immediately prior thereto hold securities immediately thereafter which represent more than 50% of the combined voting power of the voting securities of the acquirer, or parent of the acquirer, of such assets.

 

(b)                          If the Company desires to enter into a transaction which constitutes a Company Change of Control and the Board of Directors approves (subject to diligence, shareholder approval, conditions or otherwise) such proposed transaction, the Company shall promptly notify the Advisor in writing (the “Transaction Notice”), or in any event within five (5) business days following the Board approval.  The Transaction Notice shall set forth in reasonable detail the material terms of the proposed Company Change of Control transaction, the proposed timing, pricing, identity of the acquirer(s), and all material conditions including, without limitation, whether or not the proposed transaction is conditioned upon the termination of this Agreement.  If the proposed Company Change in Control transaction is not conditioned

 

25

 

upon a termination of this Agreement, this Agreement shall continue in full force and effect following the closing of the Company Change of Control transaction with the Company, the acquirer or successor, as the case may be.  If the proposed Company Change in Control transaction is conditioned upon the termination of this Agreement, then subject to the payment of the COC Termination Fee, together will all other Base Fees, Incentive Fees, and other charges, costs and reimbursements accrued through the date of termination of this Agreement required to be paid to Advisor pursuant to the terms of this Agreement, the Company may elect to terminate this Agreement by setting forth its election in the Transaction Notice or by written notice to Advisor, which notice must be delivered at least sixty (60) days prior to the closing of the Company Change of Control transaction.  As a condition to the effectiveness of a termination of this Agreement, the Company shall pay to Advisor the COC Termination Fee (together with all other Base Fees, Incentive Fees, and other charges, costs and reimbursements accrued through the date of termination of this Agreement) on the closing of the Company Change of Control transaction.  If an election to terminate this Agreement is not timely made by the Company, this Agreement shall continue in full force and effect with the Company, acquirer or successor, as the case may be.

 

(c)                            If a Company Change in Control occurs by reason of an action not taken by the Board but through an involuntary action, then, within ten (10) days following the occurrence of such Company Change in Control, the Company may elect by delivering written notice thereof to Advisor, subject to the payment of the COC Termination Fee (together with all Base Fees, Incentive Fees, and other charges, costs and reimbursements accrued through the date of termination of this Agreement required to be paid to Advisor pursuant to the terms of this Agreement), to terminate this Agreement, which such termination may occur no earlier than thirty (30) days or greater than sixty (60) days following the date such written election is received by Advisor.  If such election is timely made by the Company, the Company shall pay to Advisor, on the termination date of this Agreement, the COC Termination Fee and all Base Fees, Incentive Fees, and other charges, costs and reimbursements accrued through the date of termination of this Agreement required to be paid pursuant to the terms of this Agreement.  If an election to terminate this Agreement is not timely made by the Company, this Agreement shall continue in full force and effect with the Company, acquirer or successor, as the case may be.

 

(d)                           The “COC Termination Fee” payable to the Advisor in cash, for purposes of a termination of this Agreement shall be calculated as follows:

 

(i)                                     So long as Advisor’s common units are not publicly traded and if Advisor is a subsidiary of Ashford Inc., Ashford Inc.’s common stock is not publicly traded:

 

(A)                               14 multiplied by the earnings of the Advisor attributable to this Agreement, after costs and expenses (including taxes) of the Advisor attributable to the performance of its duties under this Agreement (“Net Earnings”) for the 12-month period preceding the termination date of this Agreement; plus

 

26

 

(B)                               an additional amount such that the total net amount received by Advisor after the reduction by assumed state and federal income taxes at an assumed combined rate of 40% on the amounts described in (A) and (B) shall equal the amount described in (A).

 

(ii)                                  If at the time the Transaction Notice is given to Advisor, Advisor’s common units are publicly traded or Advisor is a subsidiary of Ashford Inc. and Ashford Inc.’s common stock is publicly traded:

 

(A)                               1.1 times the greater of:

 

(I)                                   12 multiplied by the Net Earnings of the Advisor for the 12-month period preceding the termination date of this Agreement; or

 

(II)                              the earnings multiple (based on net earnings after taxes) for the Advisor’s common stock for the 12-month period preceding the termination date of this Agreement multiplied by the Net Earnings of the Advisor for the 12-month period preceding the termination date of this Agreement; or

 

(III)                         the simple average of the earnings multiples (based on net earnings after taxes) for the Advisor’s common stock for each of the three fiscal years preceding the termination date of this Agreement, multiplied by the Net Earnings of the Advisor for the 12-month period preceding the termination date of this Agreement, plus

 

(B)                               an additional amount such that the total net amount received by Advisor after the reduction by assumed state and federal income taxes at an assumed combined rate of 40% on the amounts described in (A) and (B) shall equal the amount described in (A).

 

(e)                            Following the closing of a Company Change in Control Transaction and termination of this Agreement pursuant to this Section 16, the Advisor will reasonably cooperate in an orderly transition of management for a period of up to thirty (30) days for the payment of Base and Incentive Fees based on the average monthly amounts for the three (3) months prior to the Transaction Notice, or in the case of a termination pursuant to Section 16(c) above, based on the average monthly amounts for the three (3) months prior to the public announcement of the Company Change in Control.

 

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17.                               REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ADVISOR. The Advisor represents and warrants to, and covenants and agrees with, the Company as follows:

 

(a)                           The Advisor, taking into account its own personnel and the personnel available to it through its Affiliates, has access to personnel trained and experienced in the business of acquisitions, leasing of hotels, asset management, financing, the ownership and dispositions of hotels and such other areas as may be necessary and sufficient to enable the Advisor to perform its obligations under this Agreement.

 

(b)                           The Advisor shall comply with all laws, rules, regulations and ordinances applicable to the performance of its obligations under this Agreement.

 

Neither the Advisor nor any of its Affiliates is party to or otherwise bound by or, during the term of this Agreement (including any extension thereof), will become party to or otherwise bound by, any agreement that would restrict or prevent (i) the Advisor from performing any obligation contemplated by this Agreement or (ii) the Company from operating its business as proposed to be conducted, including, without limitation, acquiring any hotel in any geographic market in the United States or any foreign country.

 

18.                               GOVERNING LAW.  This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to the conflict of laws principals thereof.

 

19.                               ENTIRE AGREEMENT.  This Agreement reflects the entire understanding of the parties hereto with respect to the subject matter hereof and supersedes and replaces all agreements between the Company and the Advisor with respect to the subject matter hereof.

 

20.                               SUCCESSORS AND ASSIGNS.  This Agreement shall inure to the benefit of and be binding upon the parties to this Agreement and their respective successors and permitted assigns, and no other Person shall acquire or have any right under, or by virtue of, this Agreement. The Company shall be entitled to assign this Agreement to any successor to all or substantially all of its assets, rights and/or obligations; the Advisor shall have the right to assign this Agreement to any Affiliate (as such term is defined in Section 2).

 

21.                               AMENDMENT, MODIFICATIONS AND WAIVER.  This Agreement hereto shall not be altered or otherwise amended in any respect, except pursuant to an instrument in writing signed by the parties hereto; provided, that any additions to or deletions from the Peer Group Members identified in Exhibit A shall only be made with the approval of a majority of the Independent Directors of the Company. The waiver by a party of a breach of any provisions of this Agreement shall not operate or be construed as a waiver of any subsequent breach.

 

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22.                               COUNTERPARTS.  This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which shall constitute one and the same agreement.

 

(SIGNATURES BEGIN ON NEXT PAGE)

 

* * * * *

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

 

 

	
 
    	
ASHFORD   TRUST:
    
	
 
    	
 
    
	
 
    	
Ashford   Hospitality Trust, Inc.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:   David A. Brooks
    
	
 
    	
Title:   Chief Operating Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
OPERATING   PARTNERSHIP:
    
	
 
    	
 
    
	
 
    	
Ashford   Hospitality Limited Partnership
    
	
 
    	
 
    
	
 
    	
By:
    	
Ashford   OP General Partner LLC, its general partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:   David A. Brooks
    
	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ADVISOR:
    
	
 
    	
 
    
	
 
    	
Ashford   Hospitality Advisors LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:   David A. Brooks
    
	
 
    	
Title:   Vice President
    
					

 

[Signature page to the Advisory Agreement]

 

 

Exhibit A

 

Peer Group Members

 

Chatham Lodging Trust (CLDT)

 

Chesapeake Lodging Trust (CHSP)

 

Diamondrock Hospitality Co. (DRH)

 

FelCor Lodging Trust Incorporated (FCH)

 

Hersha Hospitality Trust (HT)

 

Host Hotels & Resorts, Inc. (HST)

 

LaSalle Hotel Properties (LHO)

 

RLJ Lodging Trust (RLJ)

 

Summit Hotel Properties, Inc. (INN)

 

Sunstone Hotel Investors Inc. (SHO)

 

A-1Exhibit 10.30 10-K 2014 Collective Agreement OWTU

     
COLLECTIVE AGREEMENT 
By and Between  
OILFIELDS WORKERS' TRADE UNION
and
PriceSmart Clubs (TT) Ltd.
ON BEHALF OF THE HOURLY RATED WEEKLY PAID AND HOURLY RATED BI-MONTHLY PAID EMPLOYEES WEEKLY AND MONTHLY RATED EMPLOYEES OF BARGAINING UNIT No.1

This Collective Agreement By and Between the Oilfields Workers' Trade Union (hereinafter called "Union") and PriceSmart Clubs (TT) Ltd., formerly PS Operations Ltd. (hereinafter called "PriceSmart"), on behalf of the hourly rated weekly paid Employees and hourly rated bi-monthly paid Employees of Bargaining Unit No. 1, as per Certificate No. 2/2008 of the Registration, Recognition and Certification Board, (wherein the corporate name is incorrectly stated as “PriceSmart Trinidad Limited”) is entered into effective as of December 1st, 2012 (hereinafter called "Agreement") under the following agreed terms and conditions:
  
ARTICLE 1 - RECOGNITION 
PriceSmart recognizes the Oilfields Workers' Trade Union as the exclusive representative for the Employees employed in Bargaining Unit No.1, in respect to wages/salaries, hours of work and all other terms and conditions of employment. 
ARTICLE 2 - SCOPE OF AGREEMENT 
This Agreement is intended to promote economic and efficient operation of the working of PriceSmart, avoid industrial disturbances and achieve the highest level of Employee performance consistent with safety, good health and sustained effort. To this end it provides the rates of pay, hours of work and all other terms and conditions of employment for all Employees within the Bargaining Unit. 
ARTICLE 3 - MANAGEMENT RIGHTS  
In acknowledging that the regular and customary functions of management are vested in PriceSmart it is agreed that:
		
	(i)
	The right to manage its operations and to direct its work force, including the right to decide its labour requirements and to employ those Employees it considers most suitable for its operations, is vested in PriceSmart subject to the provisions of this Agreement. 

(ii)     In the exercise of its right to employ, PriceSmart will give the Union an opportunity to put forward Employees for consideration by PriceSmart and where, in the opinion of PriceSmart, the Union's nominees are equal to other applicants, they will be given preference. 
		
	(i)
	PriceSmart will provide such job security to its Employees as is consistent with good Industrial Relations Practices, as defined in the Industrial Relations Act. 

ARTICLE 4 - REGULATION OF CONTRACT WORK 
		
	(i) 
	     PriceSmart will not contract out work normally performed by Employees covered by this Collective Agreement, if such contracting out would result in the laying off or demotion of its regular Employees during the period of such contract work. Nothing herein will preclude PriceSmart from contracting out for specialized work not normally undertaken by PriceSmart Employees or for work needed on an expedited basis for repairs, improvements, installation of specialized equipment or software, or other similar services, needed by PriceSmart. 

		
	(ii)
	In the event that there is need for the services of a contract worker for a temporary period, the rate 

payable will be not less than the minimum wage paid per the Employee Classification chart (attached hereto), to an Employee normally expected to complete such work. 
		
	(iii)  
	The Company will ensure that when contractors are hired, all Health and Safety requirements as per the Occupational Safety and Health Act of 2004 and any other government prescribed legislation will be adhered to. 

		
	(ii)
	In the event that it is proved to the satisfaction of PriceSmart that a Contractor has violated the above mentioned provisions, the Company will notify the contractor of its intent to suspend the said contract. The contractor will be allowed the opportunity to rectify the violation within not more than seven (7) days from the date of the notice, after which, failing rectification, the suspension of the contract will become automatically effective. 

 ARTICLE 5 - DEFINITIONS 
In this Agreement the following quoted words shall have the meanings assigned to them: 
1.     Day: 
A.     A "Work Day" shall be defined as the scheduled period from the time the Employee begins working, on any given day, until he/she finishes. The regular Work Day for an Employee shall be as described in Section 2. “Employee” immediately below. However, Regular Part Time Employees though normally scheduled for six hours a day, may be scheduled for eight (8) hours a day. In the event that there is a change in the schedule, then forty eight (48) hours notice shall be given, where forty eight (48) hours notice cannot be given then overtime rate shall apply. It is understood that work in excess of scheduled time would be paid at overtime rates.
		
	B. 
	An "Off Day" shall be defined as any day where an Employee is not scheduled to work.           

2.         Employee shall mean any person employed by PriceSmart Clubs (TT) Ltd. 
A. "Regular Full-time Employees" are those PriceSmart Employees who are regularly scheduled to work (8) eight hours per day at least forty (40) hours or 5 days per week in any seven (7) calendar days. 
B. "Regular Part-time Employees" are those PriceSmart Employees who are regularly scheduled to work at least twenty-five (25) hours, but less than forty (40), hours, in any five (5) days within a seven (7) calendar day period. These employees though normally scheduled for six (6) hours a day, may be scheduled for eight (8) hours a day. Unscheduled requests to work in excess of the scheduled times or beyond eight (8) hours per day or forty (40) hours per week, will attract overtime payments.  
C. "Hourly Employees" are those PriceSmart Employees whose pay is determined by an Hourly Rate times the number of hours they have worked.

D. "Central Office Employees" are Employees who work in positions designated as such on Schedule A and B and who provide country-wide (Trinidad and Tobago), regional support functions for the warehouse club operations. It is understood that the Central Office Employees will continue to provide necessary support for the region. 

E. "Warehouse Employees" are Employees who work in positions designated as such on Schedule A and B.  

F. “Temporary/ Seasonal Employees” are Employees who are hired, by written contract, for a specified period of time. After which they are expected to demit office.

3. "Overtime" shall mean any authorized hours worked by an Employee in excess of eight (8) hours per day or over forty (40) hours for that work week.  In the case of Regular Part Time Employees, authorized hours worked in excess of scheduled six (6) hours for that day or over scheduled thirty-six (36) hours for that work week. In the event the Regular Part Time Employee is scheduled for eight (8) hours for that day or forty (40) hours for that week, overtime will become due after these hours. If an Employee is asked to report for work earlier than his scheduled work day the time worked before shall be paid as overtime provided 

that the schedule work day is completed. 

4. "Parties" shall mean PriceSmart Clubs (TT) Ltd and the Oilfields Workers' Trade Union collectively. Each may individually be referred to as a "Party."

5. "PriceSmart", shall mean PriceSmart Clubs (TT) Ltd a corporation existing and incorporated under the laws of Trinidad & Tobago (formerly PS Operations Limited).

6. “Public Holiday” shall mean all days proclaimed as such by the Government of Trinidad and Tobago as further explained in Article 23 below. 
7. Rate of pay: 
A. "Hourly Rate" shall mean the rate of pay per hour for the appropriate jobs as set out in the schedule of rates and classifications on Schedule A, paid fortnightly attached to and forming part of this Agreement. 
B. "Monthly Rate" shall mean that rate of pay per month for the appropriate jobs as set out in the schedule of rates and classifications on Schedule B attached to and forming part of this Agreement. 
8. "Service" shall mean the continuous time spent in active employment of PriceSmart. Any period of unbroken Part-time and/or Temporary/Seasonal employment which continues into permanent employment will be considered as Service by PriceSmart for the purpose of this Agreement.
9. "Union" shall mean the Oilfields Workers' Trade Union or OWTU. 
10.    Work Week- 
		
	(i)
	Warehouse Employees 

The normal work week for Warehouse Employees shall be forty (40) hours, eight (8) hours per day, five (5) days per week within any seven (7) calendar days. 
		
	(ii) 
	Central Office Employee 

The normal work week for Regular Full-time Central Office Employees, shall be forty (40) hours, (8) eight hours per day, five (5) days per week, Monday through Friday. 
		
	(i)
	Regular Part-time Employees:

The normal work week for Regular Part-time employees shall be between twenty five (25) to thirty six (36) hours, five days within any seven (7) day period or as per Article 5 (2) B. 
11."Call Out" - shall mean a request from PriceSmart to an Employee to report to work prior to his/her regularly scheduled Work Day or on a scheduled Off Day as per Article 13 Call Back/ Call Out allowance.  
12."Call Back" - is a request from PriceSmart for the Employee to return to work after the Employee has completed his/her scheduled Work Day as per Article 13 Call Back/Call Out allowance.
13. "TT$" or "$" - shall mean the legal currency of Trinidad & Tobago in dollars. 
ARTICLE 6 - HOURS OF WORK 
1.      Warehouse Employees 
Established hours of work will be:

	
		
	Regular Full-time Employees:
5:45a.m.  to 1:45 p.m.
6.00 a.m.  to 2:00 p.m.
7.00 a.m.   to 3.00 p.m.
8.00 a.m.   to 4.00 p.m.
9.00 a.m.   to 5.00 p.m.
10.00 a.m.  to 6.00 p.m.
11:00 a.m.   to 7:00 p.m.
12:00 noon   to 8:00 p.m.
12:45 p.m.  to 8:45 p.m.
1.15 p.m.   to 9.15 p.m.
2:00 p.m.  to 10:00 p.m.
2:15 p.m. to 10:15 p.m.
2:30 p.m.   to 10:30 p.m.
2:45 p.m. to 10:45 p.m.
9.00 p.m. to 5.00 a.m.
10.00 p.m.to 6.00 a.m.
	Regular Part-time Employees:
6:00 a.m.  -12noon
7:00 a.m.  -1:00 p.m.
8:00 a.m.  -2:00 p.m.
9:00 a.m.  -3:00 p.m.
10:00 a.m.  -4:00 p.m.
11:00 a.m.  -5:00 p.m.
12 noon-6:00 p.m.
1:00 p.m.-7:00 p.m.
2:00 p.m.-8:00 p.m.
3:00 p.m.-9:00 p.m.
4:00 p.m.-10:00 p.m.

N.B. It is understood that a regular Part-time Employee may be scheduled to work the same hours as a Regular Full-time Employee.
Breaks
The Employee's Supervisor/Manager shall assign the breaks as follows: 
		
	(1)
	Regular Full-time or Part-time Employees scheduled to work eight (8) hours, shall be entitled to a rest and meal period of forty (40) minutes to be taken as one ten (10) minutes break not less than one (1) hour nor more than three (3) hours into their scheduled work day and a thirty (30) minutes break not less than four (4) hours or more than six (6) hours into their scheduled work day.  

		
	(2)
	Regular Part-time Employees scheduled to work six (6) hours, shall be entitled to a rest and meal period of twenty five (25) minutes, to be taken as one ten (10) minutes break not less than one (1) hour nor more than three (3) hours into their scheduled work day. The second break of fifteen (15) minutes shall be taken not less than four (4) hours into their work day.

Breaks may not be used to extend the lunch period. 

2.     Central Office Employees: 
Monday to Friday                    8:00am to 4:00pm
Breaks: Employees will have a thirty (30) minutes lunch break. A ten (10) minutes break is also allowed no less than two (2) hours into the work day. Breaks may not be used to extend the lunch period. 
3.     Clocking: In and Clocking: Out 
Each Employee will be required to time-in at the beginning and time-out at the end of their Work Day and at the beginning and end of their lunch break. 
ARTICLE 7 - JOB SECURITY 
PriceSmart shall use its good faith and best endeavours to ensure a maximum degree of job security for all its Employees. To this end it shall first consider reassigning an Employee to a different department and/or transferring an Employee to a different Warehouse before termination. 
In the event a reduction in the establishment is contemplated, PriceSmart shall advise the OWTU and enter 

into consultation with a view to exploring the possibility of averting, reducing or mitigating the effects of the proposed retrenchment for a period not exceeding twenty (20) working days. This consultation shall be prior to the formal notice period as prescribed by the Retrenchment and Severance Benefit Act No. 32 of 1985. 
Should an Employee reject the offer of transfer or redeployment, he/she would be treated for all purposes as though he / she accepted redundancy. The Union shall have the right to make representation on any grievance arising out of such action by PriceSmart.  
ARTICLE 8 - UNION SECURITY 
PriceSmart believes that the interest of the Employees covered by this Agreement would be best served if employees who are members are active in the affairs of the Union, which is the recognized majority union, as the exclusive representative for the Collective Bargaining in respect of wages/ salaries, hours of work and other conditions of employment. 
PriceSmart in recognition of the OWTU’s status as Recognised Majority Union, agrees to supply new and current Employees who are and will be members of the Bargaining Unit with a copy of this Agreement
ARTICLE 9 - ASSIGNMENT AND CLASSIFICATION 
PriceSmart shall give each Employee a Letter of Appointment indicating Regular Work classification in accordance with the classifications and departments of the Schedules attached to this Agreement. Any promotions, temporary/permanent assignments to another work classification or departments shall also be confirmed in writing.
Every existing job shall have a job title which shall be listed in Schedule A and/or B and shall be supported by a job description, i.e. list of key duties and responsibilities for that specific job. Such job descriptions shall be prepared by PriceSmart and agreed upon by the Union.  PriceSmart agrees to notify the Union of the creation of any new Job Titles. The Union shall have the right to initiate negotiations with PriceSmart concerning Job Titles which may be discontinued. 
ARTICLE 10 - ADDITION OF NEW CLASSIFICATION TO SCHEDULE 
PriceSmart agrees to notify the Union of the creation of any new job titles within the Bargaining Unit and to provide job descriptions in support thereof. These new job descriptions and basic wage rates will be discussed between PriceSmart and the Union before they become official. PriceSmart and the Union shall strive to conclude discussions before implementation. Should it be necessary to introduce these classifications before agreement is reached, then the rate finally agreed to would be applied retroactively. 
The Union shall have the right to initiate negotiations with PriceSmart concerning jobs which have been materially changed. 
ARTICLE 11 - COLLECTION OF UNION DUES 
PriceSmart agrees that where the necessary authority is provided in writing by an Employee to PriceSmart, then PriceSmart shall make deductions from wages for Union dues, as well as entrance and reinstatement fees of the Union. Such deductions shall be remitted to the Union on or before the 10th day of the following month, subject to such, as may be agreed between the Parties from time to time. Where PriceSmart has received notification from Employees revoking their authorization to deduct dues from their salary/wages, PriceSmart shall inform the Union Executive accordingly.    
 ARTICLE 12 - OVERTIME 
PriceSmart shall carry on its operation in such a way as to reduce to the extent reasonably possible, the incidence of Overtime work. However, the Employees, if requested by PriceSmart, may work in excess of their normal working hours, providing that no Employee may be required to work in excess of sixteen (16) continuous hours except in cases of emergencies.
1. An Employee who works Overtime on his/her normal working day or on Off Days, Sundays or Public Holidays, for each additional hour or part thereof beyond eight hours in any given day or forty (40) hours in 

any one Work Week, exclusive of meal and rest breaks, shall be paid at the rates set out below: 
(a)     For work in excess of his/her normal hours of work, an Employee shall receive payment at one and a half (1 1/2 ) times his/her normal rate for the first four (4) hours and two (2) times his/her normal rate for the next four (4) and three (3) times normal hourly rate thereafter. 
(b)     For work performed on an Off Day, an Employee shall receive two (2) times his/her normal rate for the first eight (8) hours and three (3) times thereafter. A minimum payment of eight (8) hours at two (2) times his/her normal rate will be guaranteed to any employee who reports for work, even though no work is offered. However, an Employee who chooses to leave after working less than eight (8) hours, shall be paid only for the hours worked, at the two (2) times rate.  
		
	(c) 
	For work performed on a Public Holiday, an Employee shall receive two (2) times his/her normal rate for the first eight (8) hours and three (3) times his/her normal rate thereafter in addition to his/her Public holiday pay. A minimum payment of eight (8) hours at two (2) times his/her normal rate will be guaranteed to any employee who reports for work even though no work is offered. However, an Employee who chooses to leave after working less than eight (8) hours, shall be paid only for the hours worked, at the two (2) times rate. 

		
	(d)   
	Where the need could be foreseen twenty-four hours prior, PriceSmart shall give the Employee advance notice so as to enable him/her to make adequate adjustments to his/her personal arrangements, PriceSmart shall not penalize an Employee who has declined a request to work Overtime.

(e)    A paid ten (10) minute break shall be given at the commencement of any Overtime where it is known that the Overtime period will be in excess of two (2) hours and another paid break of (10) minutes every four (4) hours thereafter. 
ARTICLE 13 - CALL BACK / CALL OUT ALLOWANCE 
Any Employee who is called back to work after he/she has completed his/her normal scheduled hours of work, shall receive a Call Back Allowance of Forty Five ($45.00) dollars for reporting or working after such Call Back. It is understood that this does not apply to requests for overtime during the course of the Work Day. 
Any Employee who is called out to work before his/her normal starting time, whether or not prior notice has been given shall receive the appropriate premium rate for the time worked before his/her normal starting time in addition to a Call Out Allowance of Forty Five ($45.00) dollars providing that he/she works the scheduled work day. 
ARTICLE 14- NOTICES 
Any written notices to Oilfields Workers' Trade Union to be given hereunder, shall be addressed to the General Secretary of the Union at 99a Circular Road, San Fernando. Any written notices to PriceSmart to be given hereunder shall be addressed to the Country Manager - PriceSmart at Endeavour and Nasaloo Ramaya Road, Chaguanas. All written notices shall be delivered by hand or registered mail. 
ARTICLE 15- NOTICE BOARDS 
PriceSmart shall provide one (1) secure Notice Board in each location for the exhibition of Official Union Notices. The Union agrees not to exhibit any notices which are not in the best interest of PriceSmart.  
ARTICLE 16 - DISCIPLINARY ACTION 
Adverse reports on the work of an Employee will be discussed with such Employee and he/she will be given an opportunity to defend him/herself. 
For unsatisfactory work or any other offence by an Employee, PriceSmart may take disciplinary action in keeping with the seriousness of the offence. The Employee and the Union must be given a written notice of any such disciplinary action taken and such notice shall state the offence committed and the action taken by PriceSmart.
For an offence that is not considered by PriceSmart to be serious enough to warrant suspension or dismissal, the Employee may be issued with a Warning Notice as a written corrective measure. Once the Employee has satisfied management that he/she has taken the required corrective action, any such notice issued shall be removed from the record of the Employee after six (6) months have elapsed. The Union shall be notified. 

The Union shall have the right to appeal against any disciplinary action taken against an Employee under the Grievance Procedure. 
Before disciplinary action is taken, PriceSmart shall investigate immediately, any alleged offence or complaint against an Employee. 
ARTICLE 17 - GRIEVANCE PROCEDURE 
Any Employee or group of Employees may individually or through their Union Representatives present grievances to the Management of PriceSmart. Should any Employee have a grievance or compliant, he/she may within five (5) working days seek redress in the following manner; 
Stage 1: The complaint or grievance may be taken up with the immediate Supervisor who shall give his/her answer within (2) working days. 
Stage 2: Failing a settlement at Step 1, the matter may be raised with the Department or Section Head within six (6) working days of the reply of Step 1. A reply shall be given within three (3) days after the conclusion of these discussions. 
Stage 3: The local Branch of the Union may within six (6) working days. Following a reply at Step2, lodge the complaint in writing to PriceSmart HR supervisor, who shall arrange a meeting with the appropriate Official. The Official shall give his/her decision in writing within six (6) days of the meeting. 
Stage 4: The Executive or their Representative may, within fourteen (14) days of receipt of the decision at step 3, request a meeting in writing with the Country HR Manager or other Management who shall, within fourteen (14) days of such request, discuss the matters involved. Workers who are required to give evidence in addition to branch representatives shall be present at this meeting. The Management shall give its decision in writing within fourteen (14) days of such hearing.  
Note : 
(a)     Appeals against disciplinary action shall normally commence at Stage 3 above in the manner described herein.  
(b)     PriceSmart may lodge complaints with the Union, such complaints shall be sent to the General Secretary of the Union.
Additional Dispute Procedure 
If a difference exists between the Union and PriceSmart arising out of the interpretation, application or alleged violation of this Agreement the following procedure will be followed. 
The Union, may request a meeting with PriceSmart and vice-versa and such meeting shall be held within seven (7) days of such request. Failing a settlement, the Union or the Company may then refer the matter to the Ministry of Labour for conciliation. If no settlement is reached, either party may refer the matter to the Industrial Court for settlement. 
ARTICLE 18 - PROMOTIONS 
It is the policy of PriceSmart, whenever possible, to fill all positions within the Bargaining Unit by promotion of existing Employees.  
(i)     In the first instance, the Company may promote an Employee without first advertising the position internally if management considers that a suitable Employee is available. The Company will inform the Union in writing before implementation.  
(ii)     If management does not identify a suitable Employee, the Company will advertise internally for the vacant position. A copy of the advertisement will be sent to the Union. The Union reserves its right to request a meeting with Management.  
(iii)     If no suitable candidate is obtained from among the internal applicants, PriceSmart will then advertise the position externally. The Union will be notified before the position is advertised externally.  
		
	(iv) 
	For the purpose of applying this clause "suitability" of an Employee shall consist of proven ability, previous job performance and experience and/or qualifications necessary to adequately perform the work in accordance with the requirement of the job provided, however, where there are two (2) people of equal qualifications for the same job, length of Service shall be the determining factor.  

		
	(i)
	PriceSmart agrees to furnish the Union with a copy of all general notices relating to movement of a 

permanent nature of Employees within the Bargaining Unit.  
		
	(vi) 
	Whenever a vacancy arises, consideration shall be given to Employees who have received appropriate training. "Where the Employee has been specifically trained to fill a position, upon satisfactory completion of the required training, all things being equal, the employee shall be appointed.   

ARTICLE 19 - TRAINING AND DEVELOPMENT 
PriceSmart recognizes the need for the furtherance of the Employee's professional and/or technical development in so far as they relate to the Employee's present job and/or further advancement in PriceSmart. To this end, PriceSmart agrees to provide the necessary training to all its Employees. All training provided by PriceSmart shall be paid at regular time.  
Any Employee who wish to better equip themselves for the responsibilities of their existing job classification or to enhance their promotional opportunities by attending part -time external courses, and who may need work schedule accommodations to do so, should advise their supervisor not less than one month prior to the commencement date of such classes. The Company will, to the extent possible and as is consistent with the scheduling needs of the business, accommodate the classes and examination schedules of such Employees.  
Workers undergoing training shall be properly supervised and shall receive all necessary information relevant to the tasks. 
ARTICLE 20 - WAGE RATES AND STANDARD OF EMPLOYMENT 
(i)     Each Employee shall receive, as the minimum, pay appropriate to his work classification as shown in Schedules "A" and "B."
(ii)     Each Hourly/Monthly Rated Employee shall be entitled to a wage payable weekly/fortnightly calculated by multiplying the number of hours worked by his appropriate rate per hour, except in circumstances described in the Article 12 of this Agreement where certain hours will be paid at a higher rate per hour (e.g. Overtime). 
(iii)     It is agreed that the wage rates and conditions of employment settled by this Agreement are to be regarded as normal, but at the discretion of PriceSmart more favourable rates and conditions of employment may be granted in special cases, but under no circumstances can PriceSmart fix rates and conditions less favourable than those provided in this Agreement.  
(iv)  It is hereby agreed that hourly paid Employees wages’ shall be paid fortnightly no later than Thursday. However, if a Public Holiday falls on a Thursday, and for this or any other reason it is impracticable to make such payment on a Thursday, wages shall be paid on the working day preceding the Thursday. While monthly paid employees would be paid on or before the 26th of each month. The Union and Employees shall be given notice ninety (90) days in advance of any changes necessary to this pay schedule. The Union shall have the right to initiate discussions regarding changes to the pay schedule.  
ARTICLE 21 - COST OF LIVING ALLOWANCE 
PriceSmart shall grant to all members of the Bargaining Unit a Cost of Living Allowance of TT$62.00 per month, effective December 1, 2012, TT$64.00 per month effective December 1, 2013 and TT$66.00 per month effective December 1, 2014. The Cost of Living Allowances shall not be cumulative. At the end of the Collective Agreement, the Cost of Living Allowance of $66.00 per month will continue until a new Collective Agreement is agreed upon. In the event of changes in Cost of Living Allowances and salaries, the quantum paid would be offset if necessary. 
Effective December 1, 2012 the Consolidation of Cola Amount of $60.00 onto Existing Wage/Salary Monthly Rate as at November 30, 2012, before the implementation of the first year wage/salary increase of 4%.
ARTICLE 22 - ANNUAL WAGE ADJUSTMENTS 
An annual increase in wages/salaries effective 1st December of each year of not less than: 
4% for the year 1st December 2012 - 30th November 2013
5% for the year 1st December 2013 - 30th November 2014
5% for the year 1st December 2014 - 30th November 2015 

These increases shall be granted regardless of the inflation rate or cost of living indices indicated for the country. Nothing herein shall be interpreted to require or preclude PriceSmart from granting merit raises to members of the Union.  
ARTICLE 23 - REGULAR PART-TIME BENEFITS 
		
	I.
	 Qualification for Benefits for Regular Part Time Employees.

Paid Sick Leave ........... All Regular Part Time employees must work for more
than 6 months to be eligible for paid sick leave.

Maternity Leave ........... All Regular Part Time employees must have 12 months of continuous service to be eligible for paid maternity leave.

Paternity  Leave ...........  All Regular Part Time employees must have 12 months of continuous service to be eligible for paid paternity leave, however, if their service is less than 12 months the leave will be pro-rated.

Vacation ........... All Regular Part Time employees must have 12 months of continuous service to be eligible for paid vacation leave.

Casual Leave ........... All Regular Part Time employees must have 12 months of continuous service to be eligible for paid casual leave.

 Severance ........... Qualification period is as detailed in the Collective Agreement  as per Article 27

Retirement ...........Qualification period is as detailed in the Collective Agreement as per Article 27

Jury Service ........... As Summoned by the Court
Bereavement Leave ........... On Occurrence of a Bereavement
Work Accident ........... On Occurrence
Death in Service ...........  On Occurrence
Public Holidays ...........  As scheduled on gazetted Public Holidays 

		
	II.
	Computation of pay for the above

Computation of all averages is based on scheduled hours worked at straight time rate

Paid Sick Leave    .....      Past 6 month average of hours worked
Maternity Leave    .....    Past 12 month average of hours worked
		
	Paternity Leave 
	.....       Past 12 month average of hours worked, however, if

their service is less than 12 months the leave will be pro-rated.
Vacation         .....    Past 12 month average of hours worked
Casual Leave    .....         Past 12 month average of hours worked
Severance            .....    Past 12 month average of hours worked
Retirement       .....     Past 12 month average of hours worked 
Jury service         .....      Last scheduled hours of work

Bereavement Leave ....       Last scheduled hours of work
Work Accident      .....      Scheduled hours of work
Death in Service     .....      Last scheduled hours of work
Public holidays          .....     Last scheduled hours of work

EXAMPLE OF THE CALCULATION FOR PAID SICK LEAVE

Mary Doe - Regular Part Time Front End Operator
Date of Hire:  April 1st 2010.
Assumptions: The employee submitted a sick leave form in December 2010 for one day.
Calculation: Past 6 months average of hours worked 
Working:  Use the Total hours worked over the 6 months and divide it by 26 weeks divided by 5 days in work week
Eg: Total hours over the six months/26 weeks (6) months/5 days = average hours per day
 780/26/5= 6 average hours per day 

EXAMPLE OF THE CALCULATION FOR PATERNITY LEAVE
Jason Doe - Regular Part Time Merchandising Stocker
Date of Hire: February 1st 2010
Assumption: The employee is expecting a child in March 2011.  The employee has over one year service. 
Calculation: Past 12 month average of hours worked
Working: Use Total hours worked over the 12 months divided by 52 weeks divided by 5 days 
Eg: Total hours worked over 12 months/52 weeks (12) months/5 days = average hours per day
1719/52/5= 6.6 = 7 average hours per day
ARTICLE 24 - PUBLIC HOLIDAYS 
With respect to the following proclaimed holidays, it is agreed that Employees who would have been scheduled to work on any such day shall be guaranteed such day as a paid holiday with payment computed according to his/her normal scheduled hours and rate of pay. 
NEW YEAR'S DAY                 CORPUS CHRISTI
EASTER MONDAY                  EMANCIPATION DAY 
SPIRITUAL SHOUTER BAPTIST DAY     BOXING DAY
INDIAN ARRIVAL DAY            LABOUR DAY
EID - UL- FITR                 INDEPENDENCE DAY
GOOD FRIDAY                 CHRISTMAS DAY 
REPUBLIC DAY                 DIVALI DAY
and any other days which may be proclaimed as a Public Holiday by the Government of Trinidad and Tobago. Any Public Holiday which is observed when an Employee is on certified illness shall be paid as a Public 

Holiday and not as a sick benefit. 
Carnival Davs 
The two (2) days of Carnival which are declared as Public Festival in Trinidad and Tobago. Regular Full Time Employees shall be given both days off with full pay and any other days which may be proclaimed as a Public Festival day by the Government of Trinidad and Tobago.
Employees who are required to work on any of these days shall be paid in accordance with Article 12.
ARTICLE 25 - SUBSISTENCE ALLOWANCE 
(a) When an employee is called to work in excess of his normal work day, or report to work before his/her commencing hours of the established working day, he/she shall be paid a subsistence allowance as follows:
2 hours and beyond      - $45.00
Every 4 hours thereafter -   $45.00
(b) A subsistence Allowance shall be paid to workers who are required to work after eight (8) hours on Saturdays, Sundays, or Public Holidays.
(c) A worker required to work during his/her lunch break
(d) A worker having to perform duties outside their work base and over stay his/her lunch period before returning to their base. 
ARTICLE 26- ACTING ALLOWANCE 
		
	1.
	A member of the Bargaining Unit who is scheduled to work in a classification with a pay rate higher than his/her own, for a period of one complete day or more, shall be paid, during such acting period, at the rate of the higher classification. However during this period the employee will not be required to perform work in his/her substantive position along with this other position.

It is understood that Employees may be required to help out during a Work Day temporarily.
		
	2.
	No assignment to a vacant /higher classification shall exceed a period of three (3) consecutive months. However, in the event that such an assignment exceeds a period of two (2) consecutive months, based on the performance in the vacant/higher classification, the Employee will be considered for confirmation. On the completion of the third month the employee shall be confirmed in the position. 

The Union shall be informed in writing of assignments in any vacant higher classification.
		
	3.
	In the event of a confirmation in the higher Employee Classification, the confirmation will be effective from the date the acting assignment commenced.

This condition does not apply where the Employee was acting for another Employee who is on leave of absence or on extended leave as defined in this Agreement, and the Employee on leave is expected to return to work.  
In the event that the employee who is on leave of absence of any type, does not return to work the employee who acted in this position will be offered the position. Appointment to this position will be effective on the date of termination of the previous employee.
		
	4. 
	Any employee who worked in a classification higher than his/her own for a period of two (2) months who proceeds on any paid leave of absence including Public Holidays, shall receive the rate applicable to the higher classification.

		
	5. 
	Reasonable and advance notice shall be given in all instance of appointment and shall be confirmed in writing and a copy forwarded to the Union. 

ARTICLE 27 - SEVERANCE PAY & RETIREMENT PAY 
(a) Severance 
An Employee whose services are terminated due to redundancy, shall receive a Severance Payment calculated at his/her basic rate at the time of termination, inclusive of Cost of Living Allowance and any other bonuses he/she may be entitled to at the time of termination in accordance with the following table: 
For hourly rated weekly paid employees 

1 to less than 5 years Service - 3 weeks pay for each year of Service
5 and over to less than 10 years Service -- 5 weeks pay for each year of Service  
Over 10 years of Service - 6 weeks pay for each year of Service 
For hourly rated bi-monthly paid employees
1 to 5 years service: 0.75 months pay for each year of service
5 and over to less than 10 years service: 1.25 months for each year of service
10 and over years of service: 1.75 months for each year of service. 
Monthly Paid Employees
1 to 5 years service: 0.75 months’ pay for each year of service
5 and over to less than 10 years service: 1.25 months for each year of service
10 and over years of service: 1.75 months for each year of service. 

If the Employee's services are terminated as stated above due to redundancy, between one anniversary date and the other, he/she shall receive severance pay on a pro-rata basis for those completed months of service.
Regular Part-Time Employees
All Part Time Workers shall receive the above benefits based on their average weekly hours of work for their tenure as stated in Article 23.
EXAMPLES OF SEVERANCE PAYMENTS 
(ASSUMED PAY RATES $300.00 WEEKLY OR $1,300.00 MONTHLY) 
Employee has 4 years service

Hourly Rated, Weekly Paid:
   4years x 3 weeks (12weeks) x $300.00 = $3,600.00

Hourly Rated, Bi-Monthly Paid
   4years x .75months (3mths) x $1300.00= $3,900.00

Monthly Paid
   4years x .75months (3mths) x $1300.00= $3,900.00

Employee has 8 years service

Hourly Rated, Weekly Paid
 8years x 5weeks (40weeks) x $300.00 = $12,000.00
Hourly Rated, Bi-Monthly Paid 
8years x 1.25months (10mths) x $1,300.00= $13,000.00
Monthly Paid 
8years x 1.25months (10mths) x $1,300.00= $13,000.00

Employee has 12 years service

Hourly Rated Weekly Paid
12 years x 6weeks (72weeks) x $300.00 =$21,600.00

Hourly Rated Bi-Monthly Paid
12years x 1.75months (21mths) x $1,300.00 =$27,300.00

Monthly Paid
12years x 1.75months (21mths) x $1,300.00 =$27,300.00
(b)     Retirement 

An Employee who resigns due to reaching retirement age of at least 60 years old, or, who has a certified permanent disability or who is declared medically unfit to work, as validated by a PriceSmart approved doctor, after three (3) or more years of Service, shall receive a Retirement Gratuity calculated at his/her basic rate, at that time, in accordance with the following scale:
For hourly rated weekly paid employees 
1 to less than 5 years of Service - 3 weeks pay for each year of Service
5 to less than 10 years of Service -5 weeks pay for each year of Service 
10 years and over - 7 weeks pay for each year of Service 

For hourly rated bi- monthly paid employees
1 to less than 5 years service: .75 months pay for each year of service
5 to less than 10 years service: 1.25 months pay for each year of service
10 years and over: 1.75 months pay for each year of service

Regular Part-Time Employees
All Regular Part Time Workers shall receive the above benefits based on their average weekly hours of work for their tenure as stated in Article 23.

EXAMPLES OF RETIREMENT PAYMENTS
(ASSUMED PAY RATE$300.00 WEEKLY OR $1,300.00 MONTHLY)

Employee has 4 years service:
Hourly Rated, Weekly Paid
   4years x 3 weeks (12weeks) x $300.00 = $3,600.00
Hourly Rated, Bi-Monthly Paid
   4years x .75months (3mths) x $1300.00= $3,900.00
Monthly Paid
   4years x .75months (3mths) x $1300.00= $3,900.00

Employee has 8 years service
Hourly Rated, Weekly Paid
 8years x 5weeks (40weeks) x $300.00 = $12,000.00
Hourly Rated, Bi-Monthly Paid 
8years x 1.25months (10mths) x $1,300.00= $13,000.00
Monthly Paid 
8years x 1.25months (10mths) x $1,300.00= $13,000.00

Employee has 12years service
Hourly Rated Weekly Paid
12 years x 7weeks (84weeks) x $300.00 =$25,200.00
Hourly Rated Bi-Monthly Paid
12years x 1.75months (21mths) x $1,300.00 =$27,300.00
Monthly Paid
12years x 1.75months (21mths) x $1,300.00 =$27,300.00

Retrenchment Notice 

In keeping with the Act, retrenchment shall be in accordance with the procedure laid down in Act 32 of 1985. 
ARTICLE 28 - BEREAVEMENT LEAVE 
The Following provisions will be applicable to both Regular Full-time Employees and Regular Part Time Employees. All provisions for Regular Part Time Employees will be calculated as per Article 23.
(a)     Where death occurs in Trinidad in the immediate family: parent, grandparent, brother-in-law, sister-in-law, mother-in law, father-in-law, spouse, child, step-child, brother, sister, grandchild of an Employee, such Employee shall be granted leave of absence with full pay for up to three (3) working days at basic rate. 
(b)     If death as above occurs in Tobago, then such leave shall be five (5) days at basic rate. 
If death as above occurs outside of Trinidad and Tobago, then such leave shall be six (6) days at basic rate. The Company will consider extending leave above depending on the circumstances.
(c)     PriceSmart will consider extending leave, paid or unpaid, depending on the circumstances.
(d)     In other cases of deaths to relatives or friends not mentioned in (a) above, leave shall be considered depending on the circumstances. 
(e)     Employees must furnish PriceSmart with satisfactory evidence to justify claims of such leave of absence. 
ARTICLE 29 - CASUAL LEAVE 
		
	1.
	After completing one (1) year of service, all Regular Full-time Employees will be eligible for five (5) working Days Casual Leave, (Regular Part-time Employees will be eligible for three (3) working Days Casual Leave), not more than two (2) days to be taken consecutively.

		
	2.
	This leave will be granted during the period of January 1st to November 30th. Such leave may be applied for in writing, at least one (1) week in advance where applicable. A response to this application shall be given within three (3) working days. In cases of emergency, the employee will inform the Company as soon as possible with a good and sufficient reason for same. 

		
	3.
	Casual Leave applications will not be approved: 

(a) For days immediately preceding or immediately succeeding a Public Holiday or day prior to the commencement of Vacation Leave. 
(b) During December. 
(c) If the employee becomes aggrieved the terms and conditions of Article 17 Grievance Procedure shall apply.
		
	4.
	Employees who do not utilize any or only part of his/her entitlement by November 30th shall receive payment equivalent to leave not taken.  This payment will be made on or before December 15th.

ARTICLE 30 - MATERNITY AND PATERNITY LEAVE 
Maternity Leave 
Female Employees who have been on PriceSmart's regular payroll for at least twelve (12) months shall be granted Maternity Leave on the following conditions; 
(a)     At least ninety (90) days prior to confinement the Employee shall produce a Medical Certificate stating the expected date of delivery (EDD). 
(b)     An Employee shall be granted fourteen (14) weeks Maternity Leave as prescribed by a doctor. 
(c)     The Employee shall receive from PriceSmart the difference, if any, between her basic rate and the benefits received from National Insurance for that period. 
(d)     At least two (2) weeks prior to her return to work, the Employee shall submit a Medical Certificate certifying her fitness to return to work and shall notify PriceSmart of the date of her returning. She shall there upon be entitled to reinstatement. 
(e)     The Maternity Protection Act No.4 of 1998 shall be instructive in benefits not contained in this Article. 
Paternity Leave 
A Regular Full-time Employee whose spouse or Common-Law Wife (as evidenced by the beneficiary 

uniformly designated on PriceSmart forms) gives birth, shall be granted five (5) working days leave with full pay commencing with the date of delivery. Application for such leave must be made at least one (1) month in advance (where applicable) of the expected date of delivery and shall be granted within fourteen (14) calendar days of the birth of the child.  All provisions for Regular Part Time Employees will be calculated as per Article 23.
ARTICLE 31 - ANNUAL LEAVE 
Each Regular Full-time and Regular Part-Time Employee, after twelve (12) months of Service with PriceSmart, inclusive of all approved leave of absence, shall be entitled to Annual Leave in accordance with the following scale: 
Regular Full-time Employees      
1-4 years of Service:         10 Working Days per year
5-8 years of Service:         15 Working Days per year 
9-12 years of Service:     20 Working Days per year 
Regular Part-time Employees

1-4 years of continuous service   10 Average Working Days per year
5-8 years of continuous service   15 Average Working Days per year 
9-12 years of continuous service 20 Average Working Days per year

Average Work Days shall be calculated for Regular Part-time employees by taking the total number of hours worked over the previous twelve months and dividing it by the number of days worked to determine average hours worked per Working Day.  

(i)     The due date for an Employee's Annual Leave shall be his/her anniversary date of employment. 

(ii)     The date on which each Employee commences his/her Annual Leave entitlement shall be mutually agreed between the Employee and PriceSmart. 

		
	(iii)
	Any Employee who becomes ill during his/her period of Annual Leave shall have the ill days during that period treated as Sick Leave days as per Article 35 Sick Days and not as Annual Leave days, providing that the Employee furnishes a medical certificate. The Company and the Employee will agree as to whether the Vacation Leave outstanding as a result of the Sick Leave will be in the form of an immediate extension of vacation or a deferral to another mutually agreed time. 

(iv)     Any Employee who suffers bereavement during Annual Leave, shall have the affected days treated as Bereavement Leave as per Article 28 Bereavement Leave, not as Annual Leave days. The Company and the Employee will agree as to whether the vacation leave outstanding as a result of the bereavement will be in the form of an immediate extension of vacation or a deferral to another mutually agreed time. 

		
	(v)
	If a Public Holiday falls during any Employee's Annual vacation that day will not be treated as an Annual Leave day.

(vi)     Any Employee whose services are terminated between one (1) anniversary date and another shall receive pro-rated Annual Leave payment for any period he/she worked during that year. 

		
	(vii) 
	Should any Employee's Annual Leave become due and is scheduled and approved, but subsequently deferred, at the request of PriceSmart, such Employee shall be reimbursed on production of documentary evidence that he /she has incurred costs due to non-refundable tickets or non-refundable reservations, 

change fees or penalties. 

		
	(i)
	An Employee who is on Annual Vacation Leave and is summoned for Jury Service, shall be granted   the necessary leave to attend court as a Juror. The affected days will be considered as Leave for Jury Service and not annual leave. The Company and the Employee will agree to how the outstanding vacation leave will be utilized either as an immediate extension of vacation or a deferral to another mutually agreed time. 

		
	(ii)
	All workers shall receive payment for their entire period of Annual Vacation at basic rate of pay inclusive of COLA. 

No worker shall be called from Annual Leave to work except by mutual agreement.
ARTICLE 32 - JURY SERVICE AND WITNESS TESTIMONY 
(a)     An Employee who is summoned for jury service, after presenting the Company with a copy of the relevant summons, shall be granted leave of absence with full pay for the time needed for the Employee to attend court and to serve as a Juror. The Employee shall provide PriceSmart with evidence of the dates attended through documentation from the Registrar of the Supreme Court indicating the days served. 
(b)     An Employee who is required to testify as a witness on behalf of or concerning PriceSmart, shall be granted time off with pay for the days required for such testimony. If the matter does not concern PriceSmart, the Employee will be granted such time off as per leave arrangements contained in the Terms and Conditions outlined in this Collective Agreement.  
ARTICLE 33 - LEAVE FOR UNION BUSINESS 
		
	1.
	A Union Representative Employee, who is requested by the Union to take part in discussions between the Union and the Company, shall be paid for such time spent at the meeting as though he/she had worked at regular time. 

		
	a.
	Upon reasonable advance notice the Company shall grant leave of absence with pay to workers who are Union Officials engaged in Union matters connected with the Company. 

		
	b.
	(i) A worker who is required by the Union to take part in discussions between the Union and the Company shall be paid their normal eight hour work day/s.       

(ii)  When there are negotiations for a new Collective Agreement Union Representatives will not be required to work on that scheduled day/s. 
(iii) Members of the negotiating teams will be placed on daylight hours during      the period of negotiations where required. 
2. When discussions are to be held at the Ministry of Labour or any other location in Port of Spain, time-off with pay will be as follows:
 (a) Meetings scheduled in the morning: Employees will not be required to report to work on that day.
 (b) Meetings scheduled in the afternoon: Employees will be required to work up to 11am.
3. In cases where discussions are to be held in Accordance with Article 17 Grievance Procedure, the appropriate arrangements must be made through the Industrial Relations Manager, or in his/her absence the Country Human Resource Manager.  
4. For discussions between the Union and the Company at the work site, time off with pay in the amount of twenty-five (25) minutes will be granted to Union Officials and aggrieved Employees before the scheduled start of the meeting. 
5. A worker who desires time off to engage in the affairs of the OWTU, will, after submission of a written application from the Union Executive, be granted, depending on the needs of the Company's Operations, leave of absence without pay up to a maximum of two (2) years. Not more than one Employee per year may be eligible for this accommodation. 
6. An extension of this leave of absence, for no more than one (1) additional year, must be submitted by the Union Executive, in writing at least three (3) months before this period of absence has expired. Consideration 

of this request will be dependent on the needs of the Company's Operations.
7. PriceSmart will be responsible for providing the Employer's contribution to approved Pension Schemes and Medical Plans as long as the Employee's contribution is maintained during this period. If the employee fails to make such contributions, PriceSmart shall not be required to make any. Leave of absence outlined above, shall not constitute a break in service, but shall be considered for seniority purposes.
8. The Company shall grant up to a maximum of forty (40) days of paid study leave, of not more than ten (10) days consecutively per employee, to not more than two (2) employees from any one club at anyone time, to attend recognized Trade Union courses and seminars up to a maximum of eight (8) employees per year, The Union shall provide notice no later than the Monday of the week prior to the requested period. In the event that three (3) front line officers are from the same Club, time-off would not exceed more than twice a year.        
ARTICLE 34 - UNIFORMS AND PROTECTIVE GEAR 
The Company agrees to provide uniforms and protective gear to Employees, free of cost, as indicated in Schedule "C" attached hereto.
Health and Safety Committee 
(a)     PriceSmart shall maintain a Joint Occupational Safety Health and Environment Committee in each Warehouse consisting of equal Company and Union representatives of a total of ten (10) persons. 
(b)     The Joint Committee as listed above shall meet not less than once a month, unless otherwise agreed, at a regular scheduled time and place, for the purpose of jointly considering, inspecting, investigating and reviewing health, safety and environment conditions and practices and for reviewing accident investigations for the purpose of effectively making constructive recommendations with respect thereof.  
Protective Gear
PriceSmart shall provide personal protective equipment (PPE) including safety boots and clothing free of cost to all employees in those job classifications deemed so by the Health and Safety Committee who requires such protection. The replacement of boots will be on a needs basis.
Emergency Lights
Emergency lights shall be installed in areas throughout all warehouses.
First Aider and Stretchers 
Each Department will have a First Aid Kit. There will be at least one trained first aider on each shift. There will be three (3) stretchers available in each Warehouse.
Hot Water Facilities 
Hot water facilities shall be provided in all warehouses.
Change Rooms and Lockers 
There will be adequate changing rooms and lockers facilities to accommodate the workers.
Safety Rules 
PriceSmart will issue a booklet of Safety Rules a copy shall be given to each employee. The Union shall be issued with eight (8) copies.
Chemicals/Substances
Workers will be given adequate information of potentially dangerous chemicals and/or substances as necessary.
Material Safety Data Sheets (MSDS) obtained from suppliers will be made available in each area where chemicals are used.
These data sheets will also be provided to the Health and Safety Committee and a copy forwarded to the Shop Steward of each Warehouse.
ARTICLE 35 - PERSONNEL FILE 

PriceSmart shall maintain a personnel file on each Employee. An Employee shall have the right to request and be granted access to his/her file. This request should be made at least 24 hours in advance.  
ARTICLE 36 - SICK LEAVE 
		
	(a)
	Sick leave is intended for Regular Full Time or Regular Part Time Employees who are genuinely ill and as a consequence are unable to perform their duties. An Employee who is prevented by sickness from reporting for duty shall immediately call the Sick Call Line or notify his/her Supervisor or Department Head.  

(b) Sick leave shall be granted to all Regular Full Time and Regular Part-Time Employees who are on the regular payroll for a period of not less than six (6) months. 

(c) A maximum of sixteen (16) working days sick leave with full pay shall be granted in any calendar year. 
(d) A maximum of ten (10) working days of sick leave may be taken on the basis of one (1) or two (2) day period without a medical certificate. 
(e) PriceSmart shall accept the Medical Certificate from any duly registered Medical Practitioner for purposes of documenting sick leave. In cases of excessive absenteeism due to illness, the Company shall have the right to send the Employee to an approved PriceSmart doctor, such expenses shall be paid for by the Company.  

(f) An employee who undergoes a surgical operation shall be granted additional sick leave as per Schedule D attached with full pay less N.I.S. Benefit.

(g) In the event an Employee becomes ill whilst on the job, he/she should immediately report this condition to the Supervisor or Department Head, if able to do so, or have someone make such report on his/her behalf. PriceSmart will provide medical attention at the Company arranged Emergency Medical Facility, in an attempt to have the employee stabilized. If the doctor’s diagnosis is that the medical condition is not work related, then the cost of any required treatment will be for the account of the Employee, who can seek reimbursement from his/her medical plan.
ARTICLE 37 - WORK ACCIDENT 
1. All injuries suffered on the job shall be dealt with in accordance with the Workmen’s Compensation Ordinances and or any other applicable legislation. All injuries suffered arising out of and, or, in the course of performing the job, must be reported immediately to the Supervisor or other PriceSmart Official who will ensure that the injured Employee receives medical attention forthwith. 
2. PriceSmart shall explore all possibilities for re-employment of any Employee who has been incapacitated at his/her regular work through injury or compensable occupational disease while employed by PriceSmart and who has not reached normal retirement age. 
3. The Company shall reimburse transportation cost at normal taxi fare in instances where exceptional or unusual arrangements are required.
ARTICLE 38 - DEATH IN SERVICE 
PriceSmart shall maintain an insurance policy covering the life of the employee. In the event an employee dies whilst in the employment of the Company, the Legal Beneficiary of such employee will be paid the sum assured under this policy. 
ARTICLE 39 - DURATION OF AGREEMENT 
This Agreement shall commence as from December 1, 2012 and shall remain in force for a period of three (3) years thereby ending on November 30th 2015. Either party may, within ninety (90) days of the expiration date, submit proposals for amendments of this Agreement.

Signed this _15th_ day of ___July__, 2014. 
	
			
	For and on behalf of PriceSmart Clubs (TT) Ltd :
	 
	For and on behalf of Oilfields Workers' Trade Union :

	/s/ Ernesto Grijalva
	 
	_______________

	Ernesto Grijalva
Director/Secretary
	 
	Ancel Roget - President General 

	/s/ Dhanraj Mahabir
	 
	/s/ Carlton Gibson

	Dhanraj Mahabir  
 Country Manager
	 
	Carlton Gibson - 1st Vice President

	/s/ Derek Ali ESQ.
	 
	/s/ Louise St. Rose

	Derek R. Ali ESQ.
Attorney at Law
	 
	Louise St. Rose - Labour Relations Officer

	/s/ Vanessa Bailey
	 
	Branch Shop Stewards:

	Vanessa Bailey
Senior Human Resources Manager
	 
	/s/ Joseph De Souza

	/s/ Roshan Samraj
	 
	Joseph De Souza

	Roshan Samraj 
Industrial  Relations Manager
	 
	/s/ Sandra Mahabir-Khan

	 
	 
	Sandra Mahabir-Khan

	 
	 
	/s/ Roger Ross

	 
	 
	Roger Ross

	 
	 
	/s/ Vidia Sanahie

	 
	 
	Vidia Sanahie

	 
	 
	_______________

	 
	 
	Candice Simmons

	 
	 
	/s/ James Nelson

	 
	 
	James Nelson

	 
	 
	/s/ Keith Kennedy

	 
	 
	Keith Kennedy

	 
	 
	/s/ Agnes Bravo

	 
	 
	Agnes Bravo

	 
	 
	/s/ Gary Bradshaw

	 
	 
	Gary Bradshaw

	 
	 
	/s/ Ann Gibson

	 
	 
	Ann Gibson

	 
	 
	/s/ Allison Leston

	  
	 
	Allison Leston

                            

	
											
	SCHEDULE A 
	 
	 
	 

	Year 1 - December 1, 2012 to November 30, 2013 

	EMPLOYEE CLASSIFICATIONS - HOURLY RATED 
	 
	 

	POSITION
	LOCATION 
	LEVEL 
	RATE 

	ADMINISTRATION
	 
	 
	 

	Vault Clerk 
	Warehouse 
	4
	$29.32 

	Admin Assistant
	Warehouse
	4
	$29.32 

	MERCHANDISING 
	 
	 
	 

	Forklift Operator 
	Warehouse 
	3
	$24.98 

	Electronic Sales 
	Warehouse 
	2
	$21.05 

	Merchandising Stocker 
	Warehouse 
	1
	$19.66 

	SLICING DELI 
	 
	 
	 

	Slicing Deli Clerk 
	Warehouse 
	2
	$21.05 

	RECEIVING 
	 
	 
	 

	Receiving Secretary 
	Warehouse 
	4
	$29.32 

	Fork Lift Operator 
	Warehouse 
	3
	$24.98 

	Receiver 
	Warehouse 
	2
	$21.05 

	RTV Clerk 
	Warehouse 
	2
	$21.05 

	DEMO 
	 
	 
	 

	Product Demo Staff 
	Warehouse 
	1
	$19.66 

	BAKERY 
	 
	 
	 

	Cake Decorator 
	Warehouse 
	3
	$24.98 

	Bakery Clerk 
	Warehouse 
	2
	$21.05 

	FOOD SERVICE 
	 
	 
	 

	Food Service 
	Warehouse 
	2
	$21.05 

	FACILITY/MAINTENANCE 
	 
	 
	 

	Facility Technician 
	Warehouse 
	3
	$24.98 

	Facility/ Maintenance 
	Warehouse 
	1
	$19.66 

	MEAT 
	 
	 
	 

	Meat Cutter 
	Warehouse 
	3
	$24.98 

	Meat Clerk 
	Warehouse 
	2
	$21.05 

	Rotisserie Clerk 
	Warehouse 
	2
	$21.05 

	POULTRY 
	 
	 
	 

	Meat Cutter 
	Warehouse 
	3
	$24.98 

	Poultry Truck Operator 
	Warehouse 
	3
	$24.98 

	Meat Clerk 
	Warehouse 
	2
	$21.05 

	PRODUCE 
	 
	 
	 

	Produce Staff 
	Warehouse 
	1
	$19.66 

	MEMBERSHIP 
	 
	 
	 

	Membership Sales Representative 
	Warehouse 
	4
	$29.32 

	Telemarketer 
	Warehouse 
	2
	$21.05 

	Membership Clerk 
	Warehouse 
	2
	$21.05 

	BUSINESS SERVICE 
	 
	 
	 

	Business Services Clerk 
	Warehouse 
	3
	$24.98 

	PHOTO 
	 
	 
	 

	Photo Lab Technician 
	Warehouse 
	3
	$24.98 

	FRONT END 
	 
	 
	 

	Front End Cashier 
	Warehouse 
	2
	$21.05 

	Member Service Staff 
	Warehouse 
	1
	$19.66 

	
											
	Cart Crew Operator 
	Warehouse 
	1
	$19.66 

	CENTRAL 
	 
	 
	 

	Facility/Maintenance 
	Central 
	1
	$19.66 

	SCHEDULE A
	 
	 
	 
	 

	Year 2 - December 1, 2013 to November 30, 2014
	 

	EMPLOYEE CLASSIFICATION - HOURLY RATED 
	 

	POSITION
	LOCATION 
	LEVEL 
	RATE 
	 

	ADMINISTRATION
	 
	 
	 
	 

	Vault Clerk 
	Warehouse
	4
	$30.79 
	 

	Admin Assistant
	Warehouse
	4
	$30.79 
	 

	MERCHANDISING 
	 
	 
	 
	 

	Forklift Operator 
	Warehouse
	3
	$26.23 
	 

	Electronic Sales 
	Warehouse
	2
	$22.10 
	 

	Merchandising Stocker 
	Warehouse
	I
	$20.65 
	 

	SLICING DELI 
	 
	 
	 
	 

	Slicing Deli Clerk 
	Warehouse
	2
	$22.10 
	 

	RECEIVING 
	 
	 
	 
	 

	Receiving Secretary 
	Warehouse
	4
	$30.79 
	 

	Fork Lift Operator 
	Warehouse
	3
	$26.23 
	 

	Receiver 
	Warehouse
	2
	$22.10 
	 

	RTV Clerk 
	Warehouse
	2
	$22.10 
	 

	DEMO 
	 
	 
	 
	 

	Product Demo Staff 
	Warehouse
	I
	$20.65 
	 

	BAKERY 
	 
	 
	 
	 

	Cake Decorator 
	Warehouse
	3
	$26.23 
	 

	Bakery Clerk 
	Warehouse
	2
	$22.10 
	 

	FOOD SERVICE 
	 
	 
	 
	 

	Food Service 
	Warehouse
	2
	$22.10 
	 

	FACILITY /MAINTENANCE 
	 
	 
	 
	 

	Facility Technician 
	Warehouse
	3
	$26.23 
	 

	Facility/ Maintenance 
	Warehouse
	I
	$20.65 
	 

	MEAT 
	 
	 
	 
	 

	Meat Cutter 
	Warehouse
	3
	$26.23 
	 

	Meat Clerk 
	Warehouse
	2
	$22.10 
	 

	Rotisserie Clerk 
	Warehouse
	2
	$22.10 
	 

	POULTRY 
	 
	 
	 
	 

	Meat Cutter 
	Warehouse
	3
	$26.23 
	 

	Poultry Truck Operator 
	Warehouse
	3
	$26.23 
	 

	Meat Clerk 
	Warehouse
	2
	$22.10 
	 

	PRODUCE 
	 
	 
	 
	 

	Produce Staff 
	Warehouse
	1
	$20.65 
	 

	MEMBERSHIP 
	 
	 
	 
	 

	Membership Sales Representative 
	Warehouse
	4
	$30.79 
	 

	Telemarketer 
	Warehouse
	2
	$22.10 
	 

	Membership Clerk 
	Warehouse
	2
	$22.10 
	 

	BUSINESS SERVICE 
	 
	 
	 
	 

	Business Services Clerk 
	Warehouse
	3
	$26.23 
	 

	PHOTO 
	 
	 
	 
	 

	Photo Lab Technician 
	Warehouse
	3
	$26.23 
	 

	FRONT END 
	 
	 
	 
	 

	
											
	Front End Cashier 
	Warehouse
	2
	$22.10 
	 

	Member Service Staff 
	Warehouse
	1
	$20.65 
	 

	Cart Crew Operator 
	Warehouse
	1
	$20.65 
	 

	CENTRAL 
	 
	 
	 
	 

	Facility/Maintenance 
	Central
	1
	$20.65 
	 

	
				
	SCHEDULE A
	 
	 
	 

	Year 3 - December 1, 2014 to November 30, 2015

	EMPLOYEE CLASSIFICATION - HOURLY RATED 
	 

	POSITION
	LOCATION 
	LEVEL 
	RATE 

	ADMINISTRATION
	 
	 
	 

	Vault Clerk 
	Warehouse
	4
	$32.33 

	Admin Assistant
	Warehouse
	4
	$32.33 

	MERCHANDISING 
	 
	 
	 

	Forklift Operator 
	Warehouse
	3
	$27.54 

	Electronic Sales 
	Warehouse
	2
	$23.20 

	Merchandising Stocker 
	Warehouse
	1
	$21.68 

	SLICING DELI 
	 
	 
	 

	Slicing Deli Clerk 
	Warehouse
	2
	$23.20 

	RECEIVING 
	 
	 
	 

	Receiving Secretary 
	Warehouse
	4
	$32.33 

	Fork Lift Operator 
	Warehouse
	3
	$27.54 

	Receiver 
	Warehouse
	2
	$23.20 

	RTV Clerk 
	Warehouse
	2
	$23.20 

	DEMO 
	 
	 
	 

	Product Demo Staff 
	Warehouse
	1
	$21.68 

	BAKERY 
	 
	 
	 

	Cake Decorator 
	Warehouse
	3
	$27.54 

	Bakery Clerk 
	Warehouse
	2
	$23.20 

	FOOD SERVICE 
	 
	 
	 

	Food Service 
	Warehouse
	2
	$23.20 

	FACILITY /MAINTENANCE 
	 
	 
	 

	Facility Technician 
	Warehouse
	3
	$27.54 

	Facility/ Maintenance 
	Warehouse
	1
	$21.68 

	MEAT 
	 
	 
	 

	Meat Cutter 
	Warehouse
	3
	$27.54 

	Meat Clerk 
	Warehouse
	2
	$23.20 

	Rotisserie Clerk 
	Warehouse
	2
	$23.20 

	POULTRY 
	 
	 
	 

	Meat Cutter 
	Warehouse
	3
	$27.54 

	Poultry Truck Operator 
	Warehouse
	3
	$27.54 

	Meat Clerk 
	Warehouse
	2
	$23.20 

	PRODUCE 
	 
	 
	 

	Produce Staff 
	Warehouse
	I
	$21.68 

	MEMBERSHIP 
	 
	 
	 

	Membership Sales Representative 
	Warehouse
	4
	$32.33 

	Telemarketer 
	Warehouse
	2
	$23.20 

	Membership Clerk 
	Warehouse
	2
	$23.20 

	BUSINESS SERVICE 
	 
	 
	 

	
				
	Business Services Clerk 
	Warehouse
	3
	$27.54 

	PHOTO 
	 
	 
	 

	Photo Lab Technician 
	Warehouse
	3
	$27.54 

	FRONT END 
	 
	 
	 

	Front End Cashier 
	Warehouse
	2
	$23.20 

	Member Service Staff 
	Warehouse
	I
	$21.68 

	Cart Crew Operator 
	Warehouse
	I
	$21.68 

	CENTRAL 
	 
	 
	 

	Facility/Maintenance 
	Central
	I
	$21.68 

	
				
	SCHEDULE B 
	 
	 
	 

	Year 1 - December 1, 2012 to November 30, 2013 

	EMPLOYEE CLASSIFICATION - MONTHL Y RATED
	 
	 

	POSITION
	LOCATION 
	LEVEL
	STARTING 
RATE

	ADMINISTRATION
	 
	 
	 

	HR Assistant 
	Warehouse 
	4
	$29.32 

	IT Clerk 
	Warehouse 
	4
	$29.32 

	Sales Auditor 
	Warehouse 
	4
	$29.32 

	Payroll Clerk 
	Warehouse 
	4
	$29.32 

	Inventory Auditor 
	Warehouse 
	4
	$29.32 

	CENTRAL 
	 
	 
	 

	Executive Assistant 
	Central 
	4
	$29.32 

	Accounts Payable Clerk 
	Central 
	4
	$29.32 

	Accounts Receivable Clerk 
	Central 
	4
	$29.32 

	Accounting Assistant 
	Central 
	4
	$29.32 

	AP Lead 
	Central 
	4
	$29.32 

	Administrative Assistant SVP 
	Central 
	4
	$29.32 

	Buying; 
	 
	 
	 

	Competitive Shopper 
	Central 
	4
	$29.32 

	Quality Control Assistant 
	Central 
	4
	$29.32 

	Receptionist 
	Central 
	2
	$21.05 

	Driver / Courier 
	Central 
	I 
	$19.66 

	Compliance Coordinator 
	Central 
	4
	$29.32 

	RECEIVING 
	 
	 
	 

	RTV Repair Technician 
	Warehouse 
	3
	$24.98 

	POULTRY 
	 
	 
	 

	Poultry Receiving Secretary 
	Warehouse 
	4
	$29.32 

	
				
	SCHEDULE B 
	 
	 
	 

	Year 2 - December 1, 2013 to November 30, 2014 

	EMPLOYEE CLASSIFICATION - MONTHL Y RATED
	 
	 

	POSITION
	LOCATION 
	LEVEL 
	STARTING RATE 

	ADMINISTRATIONS 
	 
	 
	 

	HR Assistant 
	Warehouse 
	4
	$30.79 

	IT Clerk 
	Warehouse 
	4
	$30.79 

	Sales Auditor 
	Warehouse 
	4
	$30.79 

	Payroll Clerk 
	Warehouse 
	4
	$30.79 

	Inventory Auditor 
	Warehouse 
	4
	$30.79 

	CENTRAL 
	 
	 
	 

	Executive Assistant 
	Central 
	4
	$30.79 

	Accounts Payable Clerk 
	Central 
	4
	$30.79 

	Accounts Receivable Clerk 
	Central 
	4
	$30.79 

	Accounting Assistant 
	Central 
	4
	$30.79 

	AP Lead 
	Central 
	4
	$30.79 

	Administrative Assistant SVP 
	Central 
	4
	$30.79 

	Buying 
	 
	 
	 

	Competitive Shopper 
	Central 
	4
	$30.79 

	Quality Control Assistant 
	Central 
	4
	$30.79 

	Receptionist 
	Central 
	2
	$22.10 

	Driver / Courier 
	Central 
	I 
	$20.65 

	Compliance Coordinator 
	Central 
	4
	$30.79 

	RECEIVING 
	 
	 
	 

	RTV Repair Technician 
	Warehouse 
	3
	$26.23 

	POULTRY 
	 
	 
	 

	Poultry Receiving Secretary 
	Warehouse 
	4
	$30.79 

SCHEDULE B
Year 3 - December 1, 2014 to November 30, 2015
EMPLOYEE CLASSIFICATION - MONTHLY RATED

	
				
	 
	 
	 
	 

	POSITION
	LOCATION 
	LEVEL 
	STARTING RATE 

	ADMINISTRATION 
	 
	 
	 

	HR Assistant 
	Warehouse 
	4
	$32.33 

	IT Clerk 
	Warehouse 
	4
	$32.33 

	Sales Auditor 
	Warehouse 
	4
	$32.33 

	Payroll Clerk 
	Warehouse 
	4
	$32.33 

	Inventory Auditor 
	Warehouse 
	4
	$32.33 

	CENTRAL 
	 
	 
	 

	Executive Assistant 
	Central 
	4
	$32.33 

	Accounts Payable Clerk 
	Central 
	4
	$32.33 

	Accounts Receivable Clerk 
	Central 
	4
	$32.33 

	Accounting Assistant 
	Central 
	4
	$32.33 

	AP Lead 
	Central 
	4
	$32.33 

	Administrative Assistant SVP
	Central 
	4
	$32.33 

	Buying 
	 
	 
	 

	Competitive Shopper 
	Central 
	4
	$32.33 

	Quality Control Assistant 
	Central 
	4
	$32.33 

	Receptionist 
	Central 
	2
	$23.20 

	Driver / Courier 
	Central 
	1
	$21.68 

	Compliance Coordinator 
	Central 
	4
	$32.33 

	RECEIVING 
	 
	 
	 

	RTV Repair Technician 
	Warehouse 
	3
	$27.54 

	POULTRY 
	 
	 
	 

	Poultry Receiving Secretary 
	Warehouse 
	4
	$32.33 

SCHEDULE C 
Protective Clothing 
The Company shall provide all necessary safety and protective equipment including gloves; coats rubber boots safety boots, earmuffs, mittens, foot warmers and aprons as needed. Once the Employee has been supplied with the protective gear, the Employee will not be allowed to work without it, and may be granted leave without pay until they return with the proper equipment. 
Required Clothing 
UNIFORMS BY DEPARTMENT 
During work hours, Employees are required to wear the clothing indicated in the chart below. 

SCHEDULE D
	
		
	SCHEDULE OF ADDITIONAL SICK LEAVE BENEFITS FOR SURGICAL OPERATIONS

	 
	 

	Appendectomy
(Removal of Appendix)
	Up to 4 weeks

	Herniorhaphy
(Repair of Hernia)
	Up to 4 weeks

	Tonsillectomy
(Repair of Tonsils)
	 Up to 10 days

	D & C
(Dilation and Scraping of Uterus)
	 Up to 10 days

	Conization of Cervix
(Tissue Removal Mouth of Uterus)
	 Up to 10 days

	Hysterectomy
(Removal of Uterus)
	Up to 5 weeks

	Cholecystectomy
(Removal of Gall Bladder)
	Up to 6 weeks

	Choledocholithotomy
(Removal of Stone from Bile Ducts)
	Up to 6 weeks

	Radical Mastectomy
(Removal of Breast)
	Up to 8 weeks

	Partial Gastric Resection
(Removal of part of Stomach)
	Up to 12 weeks

	Partial Colectomy
(Removal of part of Large Intestine)
	Up to 12 weeks

	Vein Legation and Stripping
(Tying and Removal of Vein for Varicose Veins)
	Up to 2 weeks

	Haemorrhoidectomy
(Removal of Hemorrhoids)
	Up to 4 weeks

	Herniated Lumber Disc Removal
(Removal of parts of Disc in Spine)
	Up to 12 weeks

	Cardio Vascular Surgery
	Up to 12 weeks

	Kidney Transplant
	Up to 12 weeks

	Bone Marrow Surgery
	Up to 12 weeks

	Myomectomy
(Removal of Fibroids)
	Up to 6 weeks

	Prostatectomy
(Removal of Prostate Gland)
	Up to 12 weeks

	Ureteroplasty (operation of the Ureter)
	Up to 4 weeks

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