Exhibit 99.15
AGREEMENT
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This Agreement ("Agreement") dated this 15th day of October, 1997 between
Choice Hotels Franchising, Inc. (to be renamed Choice Hotels International,
Inc.) ("Employer"), a Delaware corporation with principal offices at 10750
Columbia Pike, Silver Spring, Maryland 20901, and Stewart Bainum, Jr.
("Employee"), sets forth the terms and conditions governing the employment
relationship between Employee and Employer.
1. Employment. During the term of this Agreement, as hereinafter
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defined, Employer hereby employs Employee as Executive Chairman. Employee hereby
accepts such employment upon the terms and conditions hereinafter set forth and
agrees to faithfully and to the best of his ability perform such duties as may
be from time to time assigned by Employer, its Board of Directors or its
designees, such duties to be rendered at the principal office of Employer or at
such other place or places as Employer shall require. Employee also agrees to
perform his duties in accordance with policies established by Employer's Board
of Directors, which may be changed from time to time.
2. Term. Subject to the provisions for termination hereinafter provided,
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the term of this Agreement shall begin on October 15, 1997 (the "Effective
Date") and shall terminate three (3) years thereafter. Upon expiration of said
period, the parties may extend the term if they mutually agree to do so.
Notwithstanding the aforesaid term, either party may terminate this Agreement
upon thirty days' written notice to the other on the first and second
anniversaries of the Effective Date.
3. Compensation. For all services rendered by Employee under this
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Agreement during the term thereof, Employer shall pay Employee the following
compensation:
(a) Salary. A base salary of Eighty-Two Thousand Seven Hundred Two
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Dollars ($82,702) per annum payable in accordance with Employer's
standard payroll practices from time to time in effect. Such salary
shall be reviewed from time to time by the Employer's Compensation
Committee and may be increased at the discretion of Employer.
(b) Incentive Bonus. Employee shall have the opportunity to earn up
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to a maximum of Sixty Percent (60%) per annum of the base salary set
forth in subparagraph 3(a) above in Employer's bonus plans as adopted
from time to time by Employer's Board of Directors.
(c) Automobile. Employer shall provide Employee with allowance for
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automobile expenses of $ 1,462.50 per year.
(d) Club Membership. Employer shall provide Employee with an
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appropriate corporate membership at a dining and/or recreational club
for the purpose of business entertainment.
(e) Stock Options. Employee shall be eligible to receive options
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under the Choice Hotels Franchising, Inc. Long Term Incentive Plan,
or similar plan, to purchase common shares of the Employer in
accordance with the policy of the Board of Directors as in effect
from time to time.
(f) Other Benefits. Employee shall, when eligible, be entitled to
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participate in all other fringe benefits accorded headquarters
employees by Employer as are in effect from time to time.
4. Extent of Services. Employee shall devote twelve and one-half
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percent (12-1/2%) of his professional time, attention, and energies to the
business of Employer, and shall not during the term of this Agreement be engaged
in any other business activity whether or not such business activity is pursued
for gain, profit, or other pecuniary advantage except for Employee's services as
the Chairman and Chief Executive Officer of Manor Care, Inc. ("Manor Care"), for
which he shall devote seventy-five percent (75%) of his professional time and
his services as Chairman of Choice Hotels International, Inc. (to be renamed
Sunburst Hospitality Corporation)("Sunburst"), for which he shall devote twelve
and one-half percent (12-1/2%); but the foregoing shall not be construed as
preventing Employee from investing his assets in the securities of public
companies, or the securities of private companies or limited partnerships
outside the healthcare and lodging industries. Employee warrants and represents
that he has no contracts or obligations to others which would materially inhibit
the performance of his services under this Agreement.
5. Disclosure and Use of Information. Employee recognizes and
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acknowledges that Employer's and affiliates' present and prospective clients,
franchises, management contracts, acquisitions and personnel, as they may exist
from time to time, are valuable, special and unique assets of Employer's
business. Throughout the term of this Agreement and for a period of two (2)
years after its termination or expiration for whatever cause or reason except as
required by applicable law, Employee shall not directly or indirectly, or cause
others to, make use of or disclose to others any information relating to the
business of Employer that has not otherwise been made public, including but not
limited to Employer's present or prospective clients, franchises, management
contracts or acquisitions. In the event of an actual or threatened breach by
Employee of the provisions of this paragraph, Employer shall be entitled to
injunctive relief restraining Employee from committing such breach or threatened
breach. Nothing herein stated shall be construed as preventing Employer from
pursuing any other remedies available to Employer for such breach or threatened
breach, including the recovery of damages from Employee.
6. Notices. Any notice, request or demand required or permitted to be
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given under this Agreement shall be in writing, and shall be delivered
personally to the recipient or sent by
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certified or registered mail to his residence in the case of Employee, or to its
principal office in the case of the Employer.
7. Elective Positions. Nothing contained in this Agreement is intended
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to nor shall be construed to abrogate, limit or affect the powers, rights and
privileges of the Board of Directors or stockholders to remove Employee from the
positions set forth in paragraph 1, with or without just cause, during the term
of this Agreement or to elect someone other than Employee to those positions, as
provided by law and the By-Laws of Employer; provided, however, that if Employee
is so removed without cause, it is expressly understood and agreed, in the event
any one or combination of the foregoing occurs, Employee's rights under this
Agreement shall in no way be prejudiced, and Employee shall be entitled to
receive compensation referred to in paragraph above, except ungranted stock
options, provided that he is ready, willing and able to perform the duties and
responsibilities set forth above. Notwithstanding the foregoing, the election or
appointment of Employee to a different executive position shall not be
considered removal hereunder. Employee upon removal shall be entitled to pursue
other employment, and Employer shall be entitled to receive as offset and
thereby reduce its payment, the amount received by Employee from any other
active employment (other than the moneys received by Employee from Manor Care
and Sunburst as contemplated in paragraph 4 above). As a condition to Employee
receiving his compensation from Employer, Employee agrees to furnish Employer
annually with full information regarding such other employment and to permit
verification of his employment records and Federal income tax returns by an
independent attorney or accountant. Employer shall receive credit for
unemployment insurance benefits, social security insurance or like amounts
actually received by Employee.
8. Waiver of Breach. The waiver of either party of a breach of any
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provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
9. Assignment. The rights and obligations of Employer under this
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Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Employer. The obligations of Employee hereunder may not be
assigned or delegated.
10. Termination of Agreement. This Agreement shall terminate upon the
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following events and conditions:
(a) Upon expiration of its term;
(b) For just cause, including but not limited to refusal to carry
out duties and instructions relative to the position, dishonesty,
violation of this Agreement, and any willful acts or omissions
inimical to or contrary to policies of Employer not arbitrarily
applied in the case of Employee. In the event of termination by
Employer for just cause, vested but unexercised options granted
during the term of this Agreement shall be forfeited as a result
thereof, as of the date of notice. In the event of a willful breach
of this Agreement by Employee, Employer shall have the right to
purchase from Employee, at the price paid by Employee, such of its
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Common Stock as has been acquired by Employee by exercise of a stock
option granted during the term of this Agreement if such exercise is
within six (6) months prior to termination of this Agreement as a
result of such breach. Employee shall be entitled to fourteen (14)
days advance written notice of termination, except where the basis
for termination constitutes conduct on the part of Employee involving
dishonesty or bad faith, in which case the termination shall be
effective upon the sending of notice.
(c) Subject to state and federal laws, if Employee is unable to
perform the essential functions of the services described herein,
Employer shall have the right to terminate this Agreement by written
notice to Employee. In the event of such termination, all non-vested
obligations of Employer to Employee pursuant to this Agreement shall
terminate.
(d) In the event of Employee's death during the term of this
Agreement, the Agreement shall terminate as of the date thereof.
11. Entire Agreement. This instrument contains the entire agreement of
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the parties. It may be changed only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification, extension,
or discharge is sought. This Agreement shall be governed by the laws of the
State of Maryland, and any litigation shall be conducted in the State of
Maryland.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first set forth above.
Employer:
CHOICE HOTELS FRANCHISING, INC.
(to be renamed Choice Hotels International, Inc.)
By: /s/ Michael J. DeSantis
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Michael J. DeSantis
Senior Vice President and Secretary
Employee:
/s/ Stewart Bainum, Jr.
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Stewart Bainum, Jr.
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