Exhibit 28
CONSULTING AGREEMENT
This Consulting Agreement entered into this 13th day of August, 1993, by
and between UNITED INNS, INC., a Delaware corporation (the "Company") and GELLER
& CO., an Illinois corporation ("Geller").
1. ENGAGEMENT. The Company hereby employs Geller to develop and assist in
the implementation of a strategic plan ("Plan") for the future operation of the
Company. The consulting services to be performed will include but shall not be
limited to the review of the following business areas of the Company:
a. OPERATIONS. Geller shall analyze each property of the Company as
to market position, operational efficiency and performance, needed
capital expenditures, future financial performance and its recommended
utilization in the future.
b. CORPORATE STRUCTURE. Geller shall prepare a corporate office
review (including the regional offices) that will include an analysis
of the cost and organization of the corporate staff, the cost
effectiveness of the office personnel, the corporate structure and
organization and specific suggestions for improved efficiencies.
c. FINANCE. Geller shall analyze the capital structure of the
Company including the individual debt associated with each Company
property as well as the general Company debt and Geller shall make
recommendations related to possible opportunities for restructuring or
refinancing such debt.
d. FINANCIAL PROJECTIONS. Geller shall assist in the preparation of
"base line" financial projections (income, balance sheet and cash flow
statements) to analyze the fiscal implications of the various options
that might be undertaken by the Company.
e. GROWTH OPPORTUNITIES. Geller shall identify and make
recommendations in regard to possible growth and expansion
opportunities for the Company including the type of products desired
within various market segments, cost projections for such products,
the availability of loans or equity participations for such projects
and the proposed timing of the potential areas of development.
f. Advisory. Geller shall advise, assist and counsel the Company in
regard to the execution and monitoring of the Plan and as to other
general corporate opportunities and problems.
2. TERM. The term of this Agreement shall be for one (1) year beginning
with the date of the execution of this Agreement.
3. CASH COMPENSATION. The Company shall pay Geller the sum of TWELVE
THOUSAND FIVE HUNDRED DOLLARS ($12,500.00) per month of the term of this
Agreement and shall reimburse Geller on a monthly basis for all of the out-of-
pocket expenses incurred by Geller in the performance of its service for the
Company. All such expenses in excess of FIVE THOUSAND DOLLARS ($5,000.00) per
month must be approved by the Company in advance. No other fee, transactional or
otherwise, shall be paid to Geller & Co. unless mutually agreeable to both
parties. A budget for projected expenditures shall be prepared by Geller and
delivered to the Company within ten (10) days after the execution of this
Agreement.
4. RESTRICTED STOCK AWARD. On the date of the execution of this
Agreement, the Company shall award to Geller TWENTY FIVE THOUSAND (25,000)
shares of common stock of United Inns, Inc. which stock shall be fully vested,
earned and delivered on the completion of the full term of this Agreement. At
the time of the delivery of the stock, such stock shall be registered for sale
under the Securities Act of 1933.
5. STOCK OPTIONS. On the date of execution of this Agreement, the Company
shall grant to Geller options to purchase THIRTY FIVE THOUSAND (35,000) shares
of the common stock of United Inns, Inc. (which options shall vest and shall be
delivered one year from the date of this Agreement) at an exercise price which
shall equal the average of the per-share stock price of United Inns stock at the
close of the New York Stock Exchange for the five (5) previous days in which the
stock traded immediately preceding the date of the execution of this Agreement.
The options may be exercised at any date after one (1) year from the date of
grant and until their expiration on the fifth (5th) anniversary date of this
Agreement. The options may only be assigned to Geller's employees, to a
subsidiary corporation controlled by Geller or to the members of Laurence
Geller's immediate family. The shares of stock issuable upon the exercise of the
options shall be registered for sale under the Securities Act of 1933.
6. SUPERVISION. Although the entire staff of Geller may be involved in
the performance of the services for the benefit of the Company under the terms
of this Agreement, Laurence Geller shall personally supervise and on behalf of
Geller be responsible for the preparation of the Plan and related services as
required under this Agreement.
7. TERMINATION. The Company may only terminate this Agreement for cause.
For this purpose, cause shall be defined as lying, cheating, stealing,
dishonesty or for the failure of Geller to substantially perform its services as
required under the terms of this Agreement. If the Company determines that
Geller is not performing the services as required under this Agreement, it shall
give Geller notice of any such default in writing forty-five (45)
days in advance of the date of termination. Within such period, Geller shall be
given the full opportunity to correct any such deficiencies and to perform the
required services under this Agreement.
If the Agreement is terminated by the Company, all cash compensation as
provided in paragraph 3 hereof, shall be terminated as of the effective date of
termination and all expenses that had been incurred by Geller in accordance with
the provisions of this Agreement shall be paid by the Company. Also, on such
termination, all Geller's rights to the restricted stock as provided in
paragraph 4 hereof, and the stock options as provided in paragraph 5 hereof
shall terminate.
If the parties disagree as to the validity of the termination of this
Agreement, then the issues shall be decided by arbitration as provided in
paragraph 9 hereof.
B. CONFIDENTIAL INFORMATION. All information and materials made available
by the Company to Geller for the performances of the services provided in this
Agreement shall be considered to be confidential and proprietary information and
Geller shall use such material and information solely for the purposes of
performing the services required under this Agreement. Geller shall take all
appropriate measures to safeguard the confidentiality of such material and
information. Geller and its employees shall not indulge or make available this
information or materials to any other party without the prior written approval
of the Company. Geller will not trade in the Company stock based on inside
information in violation of Federal or State Securities Laws. No press release
shall be made by either party related to this Agreement without the prior
written approval of the other party. This agreement of confidentiality shall
survive the termination of this Agreement and may be enforceable by the Company.
9. CHOICE OF LAW. This Agreement shall be construed under the laws of the
State of Tennessee. Any disputes arising out of or concerning this Agreement
shall be settled by arbitration in Memphis, Tennessee in accordance with the
rules of the American Arbitration Association unless some other place is
mutually agreed upon by the parties in writing. However, nothing herein
contained shall be deemed to deprive either party of its right to injunctive or
other equitable relief to enforce its rights hereunder. The decision upon
arbitration shall be binding on both parties.
10. ENTIRE AGREEMENT. This Agreement contains all of the agreements,
representations and conditions made by or between the parties hereto.
Modifications and amendments must be in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement this date and
year first above written.
UNITED INNS, INC.
BY: /s/ Don W. Cockroft
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GELLER & CO.
BY: /s/ Laurence Geller
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