Exhibit 10(9)
ESCROW AGREEMENT
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ESCROW AGREEMENT, effective on the later of June 30, 1995 or the
date of the distribution of the dividend shares in Promus Hotel Corporation
to the shareholders of The Promus Companies Incorporated (the Spin-Off
Date), by and between Promus Hotel Corporation, a Delaware corporation (the
"Company"), the subsidiaries of the Company listed on the execution page of
this Agreement ("Subsidiaries"), and NationsBank, formerly Sovran Bank,
(the "Escrow Agent").
WHEREAS, the Company and certain Subsidiaries are, or may become,
obligated under various employee plans and agreements to pay certain
compensation which has been or may be deferred by their employees, certain
other compensation which would be payable upon a change in control of the
Company and certain supplemental retirement benefits to employees at such
times as such compensation and benefits become payable; and
WHEREAS, the aforesaid obligations of the Company and
Subsidiaries are not funded or otherwise secured and the Company and
Subsidiaries desire to assure the future payment of said deferred
compensation and certain other compensation and retirement benefits for
certain of its employees ("Participants") notwithstanding, except as herein
specifically provided, any event that may occur in the future, including a
dispute between the Company and an employee, a change in the Company's
management or policies or a change in control of the Company; and
WHEREAS, for purposes of assuring payments of said deferred
compensation and certain other compensation and retirement benefits, the
Company and the Subsidiaries which are obligated for such payments desire
to deposit in an escrow account, subject only to the claims of the
Company's creditors and, to the extent of funds contributed to the Escrow
Fund by a
Subsidiary, creditors of such Subsidiary obligated for such payments, as
the case may be, amounts sufficient to fund such payments as they become
payable; and
WHEREAS, this Escrow Agreement shall be treated as if it were a
grantor trust under the Internal Revenue Code and, accordingly, it is
intended and expressly recognized that the income, deduction, and credits
associated with the assets transferred to the Escrow Agent shall be passed
through to the Company and shall be included in computing the Company's
taxable income.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and for other good and valuable consideration, the parties
hereto agree as follows:
ARTICLE I
THE PLANS
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SECTION 1.1 Plans and Agreements. The following Company
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employee plans and agreements ("Plans") shall be subject to this Agreement:
(a) Executive Deferred Compensation Plan effective as of the
later of June 30, 1995 or the Spin-Off Date, as the same may be
amended from time to time, including, without limitation, agreements
of Participants relating to deferrals under such plan ("EDCP").
(b) Deferred Compensation Plan effective as of the later of June
30, 1995 or the Spin-Off Date, as the same may be amended from time to
time, including, without limitation, individual Deferred Compensation
Agreements of Participants relating to the deferral of salary or bonus
("DCP").
(c) Individual agreements as the same may be amended from time
to time, relating to the retirement of any Participant.
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(d) Severance Agreements, as the same may be amended from time
to time, effective as of the later of June 30, 1995 or the Spin-Off
Date between the Company and the Participants.
SECTION 1.2 Participants. The Participants are:
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Employees
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Champion, Carol G. Ralph B. Lake
Dempsey, Donald H. Rose, Michael
Halpern, M. Ronald Schultz, Raymond E.
Jarvis, Jeffery M. Sullivan, David C.
Keltner, Thomas L. Wells, Mark C.
Outside Directors
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Ellis, U. Bertram Jr. Peternell, Ben C.
Fields, Debra J. Roth, Michael I.
Hart, Christopher W. Stein, Jay
Neel, C. Warren Terry, Ronald
The Company may add Participants upon written notice to the Escrow
Agent. For purposes of this Agreement, the beneficiary of any Participant
who dies shall be deemed a Participant under this Agreement to the extent
such beneficiary is entitled to then accrued benefits under the Plans.
ARTICLE II
ESCROW AND ESCROW FUND
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SECTION 2.1 Escrow.
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(a) The Escrow Agent holds (i) the sum of $10.00 in cash, and
(ii) life insurance policies described on Exhibit A attached hereto
("Life Insurance Policies"). In addition, the Company is delivering
to the Escrow Agent concurrently herewith a summary, attached hereto
as Exhibit B, of all of the benefits available under the Plans
described in Section 1.01 hereof and a schedule, attached hereto as
Exhibit C, of the
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current Participants and the amounts credited or payable to each
Participant under each Plan as of the date hereof. The Company shall
also deliver to the Escrow Agent concurrently herewith, as Exhibit D,
copies of the Plans as in effect on the date hereof and the election
forms and agreements that identify the date(s) when the benefits are
to commence and the method in which they are to be paid. Each year
thereafter the Company will update these reports so that the Escrow
Agent has an account and record at all times of the benefits to be
paid and when they are to be paid.
(b) In addition to the foregoing, the Company shall make
payments or contributions to the Escrow Agent equal in value to any
additional amount which is determined at the end of each calendar
year, or at more frequent times as may be determined by the Company,
by an actuary or certified public accountant selected by the Company
to be necessary or sufficient to provide for or otherwise assure the
payment of benefits then accrued, payable, or to be payable under the
Plans based on deferrals up to that point in time (and also including
severance payments then payable into escrow under any Severance
Agreement of a Participant), which payment or contribution may be cash
and/or property including life insurance policies (which shall then be
included under the defined term "Life Insurance Policies" hereunder)
and shall be made as promptly as practicable after the end of each
calendar year or such other more frequent times as determined by the
Company.
Each such payment or contribution by the Company pursuant hereto
shall be accompanied by a schedule of the individual Participants,
including any new Participants, for whose accounts such payment is
being made, which sets forth both the estimated liability with respect
to each such Participant in respect of each Plan.
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(c) The Company may, at any time or from time to time, deposit
into escrow additional monies to pay premiums on specific Life
Insurance Policies designated by the Company and to pay interest on
any policy loans which interest is incurred and payable during the
first seven years of any such policy. Upon the occurrence of such
deposit, the Escrow Fund shall be deemed enlarged so that the Escrow
Fund will thereafter be maintained at a level to pay accrued benefits
to the Participants under the Plans based on deferrals to that point
in time and also to pay premiums on the designated policies and to pay
interest on such policy loans.
(d) If at any time or from time to time a certified public
accountant or actuary selected by the Company (which actuary may be a
representative of Management Compensation Group) determines that the
then present value of the Escrow Fund (including, but not limited to,
the cash surrender value of any Life Insurance Policies and any
proceeds from Life Insurance Policies), using an annual discount rate
equal to the Company's then current long-term annual borrowing rate,
is larger than necessary to pay benefits then accrued, payable, or to
be payable under the Plans based on deferrals up to that point in
time, and to pay policy premiums and make interest payments on policy
loans if the Company shall have made a deposit under Section 2.01(c),
then the Escrow Agent shall forthwith transfer, deliver, and assign to
the Company such funds or property (including, but not limited to, any
proceeds from Life Insurance Policies or Life Insurance Policies
themselves) as may be specified in a written instruction to the Escrow
Agent from the Company so that the Escrow Fund is not overfunded.
Said written instruction shall be in the form of a letter signed by
the Controller or Assistant Controller of the Company and shall be
accompanied by an affidavit of the Controller or Assistant
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Controller which shall state to the effect that, based on the opinion
of the aforesaid actuary or certified public accountant selected by
the Company, after the delivery of such funds or property to the
Company, the Escrow Fund will not be underfunded or overfunded (i) for
purposes of paying accrued benefits under the Plans (assuming that
payment of such benefits were to commence as of the date of the letter
or within 10 days thereof) to Participants when such benefits become
due and payable based on deferrals up to the end of the month prior to
the date of said written instruction and (ii) for purposes of Section
2.01(c) if the Company shall have made a deposit under Section
2.01(c). Upon receipt of the foregoing written instruction, the
Escrow Agent shall forthwith deliver, transfer, and assign to the
Company the funds and/or property (including but not limited to any
Life Insurance Policies together with all incidents of ownership
relating thereto) specified in the written instruction.
(e) Any actuary or certified public accountant that provides an
opinion or advice in connection with this Agreement shall have
discretion to use such assumptions as he or she deems reasonably
appropriate in providing any opinions or advice. In addition, any
such opinion or advice may be based upon reasonable estimates or may
use estimated numbers or projections which are deemed reasonable.
Notwithstanding the foregoing, such actuary or accountant shall
assume, for EDCP liabilities, that all EDCP Participants (other than
those who have already terminated and are receiving the Termination
Rate) will be entitled to an interest rate of not less than the
minimum Retirement Interest Rate specified in the EDCP with respect to
their account balances until paid. Any such accountant or actuary
shall have no liability to the Company, the Escrow Agent, or any
Participant or beneficiary if such assumptions, projections, or
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estimates are subsequently held erroneous (other than by reason of
fraud or intentional miscalculation).
SECTION 2.2 Escrow Fund.
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(a) As used herein, the term "Escrow Fund" shall mean (i) the
cash and Life Insurance Policies held by the Escrow Agent as described
in Section 2.01(a) hereof plus all amounts delivered hereafter
pursuant to Sections 2.01(b) and 2.01(c) hereof, in whatever form held
or invested as provided herein, (ii) subject to Section 2.02(b) below,
any income or earnings derived from amounts delivered to the Escrow
Agent pursuant to Sections 2.01(a), 2.01(b), and 2.01(c), and (iii)
the Life Insurance Policies delivered to the Escrow Agent including,
but not limited to, the cash surrender value thereof and any and all
proceeds derived from such policies. Subject to the provisions of
Section 2.01, the Escrow Fund shall be held, invested and reinvested
by the Escrow Agent only in accordance with this Section 2.02. The
Escrow Agent shall use the Escrow Fund to pay benefits and amounts
payable to the Participants under the Plans when due if and to the
extent that such benefits are not paid by the Company. For this
purpose, the Escrow Agent shall, to the extent necessary to pay unpaid
benefits, cancel any or all of the Life Insurance Policies and obtain
and use the cash surrender value thereof to pay such benefits,
provided, however, the Escrow Agent shall first give the Company 10
business days prior written notice specifying which policy or policies
will be cancelled. Such policies shall then not be cancelled if the
Controller or Assistant Controller of the Company or any Vice
President of the Company informs the Escrow Agent during the 10-day
notice period that such benefits have been paid. The Escrow Agent
shall use its good faith efforts to invest or reinvest from time to
time all, or such part, of any cash
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in the Escrow Fund as it believes prudent under the circumstances
(taking into account, among other things, anticipated cash
requirements for the potential payment of amounts due under the Plans
as provided in Section 3.01 hereof and any other amounts payable under
this Agreement) in either one or a combination of the following
investments:
(i) investments in direct obligations of the United States
of America or agencies of the United States of America or
obligations unconditionally and fully guaranteed as to principal
and interest by the United States of America, in each case
maturing within one year or less from the date of acquisition; or
(ii) investments in negotiable certificates of deposit
issued by a commercial bank organized and existing under the laws
of the United States of America or any state thereof having a
combined capital and surplus of at least $500 million;
(iii) investments in guaranteed funding agreements of
insurance companies having total assets in excess of $2 billion,
provided such investments shall have withdrawal provisions
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appropriate for paying benefits to Participants when due and
other payments required under this Agreement; or
(iv) investments in money market funds, including, but not
necessarily limited to, the money market fund maintained by the
Escrow Agent, provided, however, that the Escrow Agent shall not
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be liable for any failure to maximize the income earned on that
portion of the Escrow Fund as is from time to time invested or
reinvested as set forth above, nor for any loss of income due to
liquidation of any investment which the Escrow Agent, in its sole
discretion,
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believes necessary to make any payments or to reimburse expenses
under the terms of this Agreement.
The Escrow Agent shall be named as the owner and beneficiary
of the Life Insurance Policies and, subject to Section 2.02(a),
shall have the right to cancel such policies and receive the cash
surrender value, and shall further have the right to borrow
against cash policies. If any policy is reassigned back to the
Company, the Company shall then be the owner and beneficiary
thereof. If the Company makes a deposit under Section 2.01(c)
for the purpose of paying premiums and interest on policy loans
with respect to any specified Life Insurance Policies in escrow,
then the Escrow Agent shall pay the premiums due on such policies
as may be necessary or appropriate to keep the policies in force.
If the Escrow Agent borrows against such policies, it will engage
in such borrowing and will pay interest on loans in a manner that
assures that interest payable on policy loans will be deductible
by the Company for Federal income tax purposes to the extent that
such interest would otherwise be deductible to the Company under
the law in effect at such time if the Company was the owner and
beneficiary of such policies. If the Company makes a deposit
under Section 2.01(c), the Escrow Agent may borrow from the Life
Insurance Policies to pay premiums so long as the interest on
such loans is deductible by the Company for Federal income tax
purposes. The Escrow Agent shall inform the Company of the need
to borrow on such policies (without limiting the Company's right
to direct such borrowings) and the Company shall advise the
Escrow Agent as to whether the interest to be paid on such loans
will be deductible.
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(b) Except as hereinafter provided, all net interest and other
net income credited on the investments of the Escrow Fund, to the
extent not necessary to provide for any payments or expenses required
or contemplated by this Agreement, shall be the property of the
Company and shall not constitute a part of the Escrow Fund. Such net
interest and other net income credited as of the end of any calendar
quarter shall be paid over to the Company by the Escrow Agent as
promptly as practicable, or, at the option of the Company exercisable
by delivering written notice to the Escrow Agent, shall be contributed
to the Escrow Fund and applied towards the Company's obligation,
pursuant to Section 2.01(b) hereof, to deliver further amounts to the
Escrow Fund. Notwithstanding anything herein to the contrary, the
Company's Chief Executive Officer and Chief Financial Officer,
jointly, shall have authority to direct the Escrow Agent in writing,
from time to time, to borrow from any Life Insurance Policies in the
Escrow Fund and use the funds received from such borrowing to purchase
other life insurance policies, including variable insurance or annuity
contracts, as may be directed in writing by the Company's Chief
Executive Officer and Chief Financial Officer, jointly, which other
insurance policies shall be assets of the Escrow Fund subject to the
terms and provisions of the Escrow Agreement, as amended. The Escrow
Agent shall act only as an administrative agent in carrying out
directed investment transactions in accordance with this paragraph and
shall not be responsible for the investment decision. If a directed
investment transaction violates any duty to diversify, to maintain
liquidity or to meet any other investment standard or other
requirement under this Escrow Agreement or applicable law, the entire
responsibility shall rest upon the Company. The Escrow Agent
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shall be fully protected in acting upon or complying with any
restrictions or directions provided in accordance with this paragraph.
(c) All losses of income or principal in respect of, and
expenses (including, as provided in Section 4.01(g) hereof, any
expenses of the Escrow Agent) charged against, the Escrow Fund shall
be for the account of the Company and the Company shall be obligated
to promptly reimburse the Escrow Fund for any loss in principal amount
of, or expense charged against, the Escrow Fund.
ARTICLE III
RELEASE OF ESCROW FUND
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SECTION 3.1 Deliveries to Participants. The Escrow Agent
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shall hold the Escrow Fund in its possession under the provisions of this
Agreement until authorized to deliver the Escrow Fund or any specified
portion thereof as follows:
(a) If the Company does not make any payments under the Plans
when due, the Escrow Agent shall deliver to individual Participants
from the Escrow Fund the amounts that are payable to the Participants,
at such times as such amounts become payable in accordance with the
terms of the Plans. The Escrow Agent is authorized to comply with
such terms as may be reasonably explained by the Company in writing.
The Company will inform the Escrow Agent in writing from time to time
as to the timing and amounts of payments due under the Plans. If the
Company does not instruct the Escrow Agent as to amounts of payments
due under the Plans or if the Escrow Agent reasonably deems such
instructions to be erroneous or improper, then the Escrow Agent is
authorized to take such steps as it deems necessary to determine the
correct amounts
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and payments including, but not limited to, obtaining such information
from Management Compensation Group of Portland, Oregon.
(b) In the event a Participant reasonably believes that he or
she has not received timely payment of any amount or benefit payable
to such participant from the Escrow Fund in respect of a Plan, the
Participant shall be entitled to deliver to the Escrow Agent written
notice (the "Participant's Notice") setting forth payment instructions
for the amount or benefit the Participant believes is due under a
Plan. The Escrow Agent shall deliver a copy of the Participant's
Notice to the Company within ten business days of receipt thereof. If
the Company does not deliver written notice to the Escrow Agent
objecting to the payment instructions contained in the Participant's
Notice within ten business days of receipt thereof from the Escrow
Agent, the Escrow Agent shall make the payment set forth in the
Participant's Notice. If it is necessary to cancel any Life Insurance
Policies for this purpose, the Escrow Agent shall follow the 10-day
notice procedure set forth in Section 2.02(a) hereof regarding the
cancellation of Life Insurance Policies. If the Company delivers
timely written notice to the Escrow Agent objecting to the payment to
the Participant requested in the Participant's Notice, which notice
shall be delivered by the Escrow Agent to the Participant within five
business days of receipt thereof, the Escrow Agent shall be obligated
to make the payment or provide the benefit set forth in the
Participant's Notice (unless the Company objects on the grounds that
the payment has already been made in which event the procedures at the
end of this Section 3.01(b) shall apply) upon receipt from the
Participant of a written undertaking, in the form attached hereto as
Exhibit E, to indemnify and hold harmless the Escrow Agent and the
Company from and against all losses or claims which may
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result from any incorrect payment or benefit which is made to the
Participant pursuant to the Participant's Notice. If the Company
objects on the grounds that the requested payment has already been
made, the Escrow Agent shall not make the payment upon confirming that
the payment has already been made. If the Escrow Agent does not,
after due inquiry and investigation, confirm that such payment or
payments have been made, then the Escrow Agent shall make the
requested payment or payments.
(c) To the extent that the Company or a Subsidiary from time to
time makes payments under the Plans which payments the Escrow Fund is
intended to protect, the Escrow Agent shall upon request of the
Company, using the Escrow Fund, promptly reimburse the Company for any
such payment, together with interest as provided below. The Company
may specify that such reimbursement and interest payment shall be in
the form of the cash surrender value of Life Insurance Policies and in
that instance the Escrow Agent shall assign, transfer, and deliver to
the Company Life Insurance Policies designated by the Company as
representing not less than such value. Such reimbursement and
interest payment shall be made within 60 business days after a written
notice is delivered by an officer of the Company to the Escrow Agent
setting forth the specific amounts paid by the Company or the
Subsidiary and specifying who received such payments and the date
thereof. Said reimbursement amount shall bear interest, at the rate
specified in Section 2.01(d) hereof, from the date the Company or the
Subsidiary made such payment.
SECTION 3.2 Claims of Company Creditors in Event of Bankruptcy
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or Insolvency. It is the intent of the parties hereto that the Escrow Fund
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is and shall remain at all times subject to the claims of the general
creditors of the Company (and of any applicable
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Subsidiary to the extent of funds contributed to the Escrow Fund by such
Subsidiary) in the event of bankruptcy or insolvency of the Company or any
applicable Subsidiary. Accordingly, the Company or the Subsidiaries shall
not create a security interest in the Escrow Fund in favor of the
Participants or any creditor. The Company's Board of Directors or Chief
Executive Officer shall provide the Escrow Agent with written notice of the
Company's or any applicable Subsidiary's bankruptcy or insolvency. In the
case of bankruptcy, such notice is to be accompanied by a certified copy of
the petition commencing the bankruptcy proceeding under the Bankruptcy
Code, 11 U.S.C. 11 et seq. When so notified, the Escrow Agent will suspend
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any further payment from the Escrow Fund to any Participants to whom the
bankrupt entity is obligated under the Plans, and will hold the Escrow Fund
for the benefit of the Company's general creditors (or the general
creditors of any applicable Subsidiary to the extent of funds contributed
to the Escrow Fund by such Subsidiary) only as directed by a court of
competent jurisdiction. The Company or a Subsidiary will be considered
insolvent if the sum of its debt is greater than all its property at a fair
market valuation.
ARTICLE IV
ESCROW AGENT
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SECTION 4.1 Escrow Agent.
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(a) The duties and responsibilities of the Escrow Agent shall be
limited to those expressly set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the
Escrow Agent.
(b) If, pursuant to Section 3.02 hereof or otherwise, all or any
part of the Escrow Fund is at any time attached, garnished, or levied
upon by any court order, or in case the payment, assignment, transfer,
conveyance or delivery of any such property
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shall be stayed or enjoined by any court order, or in case any order,
writ, judgment or decree shall be made or entered by a court affecting
such property or any part thereof, then and in any of such events the
Escrow Agent is authorized, in its sole discretion, to rely upon and
comply with any such order, writ, judgment or decree, and it shall not
be liable to the Company or any Participant by reason of such
compliance even though such order, writ, judgment or decree
subsequently may be reversed, modified, annulled, set aside or
vacated.
(c) The Escrow Agent shall maintain such books, records and
accounts as may be necessary for the proper administration of the
Escrow Fund, including, without limitation, as provided in Section
2.01 hereof, and shall render to the Company, on or prior to each
January 31 following the date of this Agreement until the termination
of this Agreement (and on the date of such termination), an accounting
with respect to the Escrow Fund as of the end of the then most recent
calendar year (and as of the date of such termination).
(d) The Escrow Agent shall not be liable for any act taken or
omitted to be taken hereunder if taken or omitted to be taken by it in
good faith. The Escrow Agent shall also be fully protected in relying
upon any notice given hereunder which it in good faith believes to be
genuine and executed and delivered in accordance with this Agreement.
(e) The Escrow Agent may consult with legal counsel to be
selected by it, and the Escrow Agent shall not be liable for any
action taken or suffered by it in accordance with the advice of such
counsel.
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(f) The Escrow Agent shall be reimbursed by the Company for its
reasonable expenses incurred in connection with the performance of its
duties hereunder and shall be paid reasonable fees for the performance
of such duties in the manner provided by paragraph (g) of this Section
4.01.
(g) The Company agrees to indemnify and hold harmless the Escrow
Agent from and against any and all damages, losses, claims or expenses
as incurred (including expenses of investigation and fees and
disbursements of counsel to the Escrow Agent) arising out of or in
connection with the performance by the Escrow Agent of its duties
hereunder. Any amount payable to the Escrow Agent under paragraph (f)
of this Section 4.01 or this paragraph (g) shall be paid by the
Company promptly upon notice by the Escrow Agent to the Company. If
such payment is not made within 60 days of the Company's receipt of
such notice, then the Escrow Agent may pay such fees from the Escrow
Fund. If it is necessary to use the cash surrender value of any Life
Insurance Policies for this purpose, the Escrow Agent shall use the
10-day notice procedure set forth in Section 2.02(a) hereof prior to
cancellation of any policy. In the event payment is made hereunder to
the Escrow Agent from the Escrow Fund, the Escrow Agent shall promptly
notify the Company in writing of the amount of such payment. The
Company agrees that, upon receipt of such notice, it will deliver to
the Escrow Fund an amount of money or property equal to any payments
made from the Escrow Fund to the Escrow Agent pursuant to paragraph
(f) of this Section 4.01 or this paragraph (g). The failure of the
Company to transfer any such amount shall not in any way impair the
Escrow Agent's right to indemnification, reimbursement and payment
pursuant to paragraph (f) of this Section 4.01 or this paragraph (g).
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(h) Notwithstanding any other provisions of the Agreement, the
Escrow Agent shall not be required to pay any benefits, premiums on
insurance policies or expenses from funds other than the Escrow Fund.
If there are not sufficient funds in the Escrow Fund to meet any one
or more of the foregoing obligations that are due, then the Escrow
Agent shall notify the Company of the amount needed to meet such
obligations. Upon receipt of the funds from the Company, and not
before then, the Escrow Agent shall pay for such obligations.
SECTION 4.2 Successor Escrow Agent. The Escrow Agent may
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resign and be discharged from its duties hereunder at any time by giving
notice in writing of such resignation to the Company and each Participant
specifying a date (not less than 30 days after the giving of such notice)
when such resignation shall take effect. Promptly after such notice, the
Company and Participants having at least 50 percent of all amounts then
accounted for in the Escrow Fund with respect to their accounts shall
appoint a successor Escrow Agent, such successor Escrow Agent to become
Escrow Agent hereunder upon the resignation date specified in such notice.
If the Company and the Participants are unable to so agree upon a successor
Escrow Agent within 30 days after such notice, the Escrow Agent shall be
entitled, at the expense of the Company, to petition the United States
District Court for the Western District of Tennessee or any of the courts
of the State of Tennessee having jurisdiction to appoint its successor.
The Escrow Agent shall continue to serve until its successor accepts the
escrow and receives the Escrow Fund. The Company and Participants having
at least 50 percent of all amounts then accounted for in the Escrow Fund
with respect to their accounts may agree at any time to substitute a new
Escrow Agent by giving fifteen days' notice thereof to the Escrow Agent
then acting. The Escrow Agent and any successor thereto appointed
hereunder shall be
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a bank or trust company located in the United States having a combined
capital and surplus of at least $500 million. Upon the appointment of a
successor, the Escrow Agent shall transfer the Escrow funds to the
successor and be relieved of any further liability to the Company,
Participants or any other parties that may otherwise have a claim against
any of the plans described in Section 1.01 hereof.
ARTICLE V
TERMINATION, AMENDMENT AND WAIVER
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SECTION 5.1 Termination. This Agreement shall be terminated
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upon the earliest of the four following events: (i) the exhaustion of the
Escrow Fund; (ii) the final payment of all amounts payable to the
Participants pursuant to the Plans; (iii) upon the vote of a majority of
the directors of the Company then in office, but only with the written
consent of Participants having at least 50 percent of all amounts then
accounted for in the Escrow Fund with respect to their accounts, or (iv) 50
years from the date hereof. Promptly upon termination of this Agreement,
any remaining portion of the Escrow Fund shall be assigned, transferred,
and delivered to the Company.
SECTION 5.2 Amendment and Waiver. This Agreement may not be
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amended except by an instrument in writing signed on behalf of the parties
hereto together with the written consent of Participants having at least 50
percent of all amounts then accounted for in the Escrow Fund with respect
to their accounts. The parties hereto, together with the consent of
Participants having at least 50 percent of all amounts then accounted for
in the Escrow Fund with respect to their accounts, may at any time waive
compliance with any of the agreements or conditions herein. Any agreement
on the part of a party hereto or a Participant to any such waiver shall be
valid if set forth in an instrument in writing signed on behalf of such
party or
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Participant. Notwithstanding the foregoing, any such amendment or waiver
may be made by written agreement of the parties hereto without obtaining
the consent of the Participants if such amendment or waiver does not
adversely affect the rights of the Participants hereunder. No such
amendment or waiver relating to this Agreement may be made with respect to
a particular Participant unless said Participant has agreed in writing to
such amendment or waiver.
ARTICLE VI
GENERAL PROVISIONS
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SECTION 6.1 Further Assurances. The Company shall, at any
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time and from time to time, upon the reasonable request of the Escrow
Agent, execute and deliver such further instruments and do such further
acts as may be necessary or proper to effectuate the purposes of this
Agreement.
SECTION 6.2 Certain Provisions Relating to this Agreement.
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(a) This Agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof and supersedes any
and all prior agreements, arrangements and understandings relating
thereto. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and legal
representatives.
(b) This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee, other than and
without reference to any provisions of such laws regarding choice of
laws or conflict of laws.
(c) In the event any provision of this Agreement or the
application thereof to any person or circumstances shall be determined
by a court of proper jurisdiction to be invalid or unenforceable to
any extent, the remainder of this Agreement, or the
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application of such provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each provision of this Agreement shall be valid
and enforced to the fullest extent permitted by law.
(d) Notwithstanding any of the provisions of this Agreement,
this Agreement shall not create on behalf of a Participant or any
beneficiary of a Participant any preferred right or secured interest
in any asset held under this Agreement; and a Participant and any
beneficiary of a Participant shall at all times be a general,
unsecured creditor of the Company and of any applicable Subsidiary,
subject to such rights and preferences as may otherwise exist under
applicable law.
SECTION 6.3 Notices. Any notice, demand or waiver required or
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permitted hereunder shall be in writing and shall be given personally or by
prepaid registered or certified mail, return receipt requested, or by
Federal Express, addressed as follows:
If to the Company: Promus Hotel Corporation
6800 Poplar Avenue, Suite 200
Memphis, TN 38138
ATTN: Secretary
If to the Escrow Agent: NationsBank Trust Department
1 NationsBank Plaza
Nashville, Tennessee 37239-1697
If to a Participant, to the last given address of such Participant.
A notice shall be deemed received upon the date of delivery if
given personally or, if given by mail, upon the receipt thereof.
SECTION 6.4 Third Party Beneficiaries. Each present
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Participant or future Participant, and each beneficiary of a Participant in
case of the death of a Participant, is an intended third party beneficiary
under this Agreement, and shall be entitled to enforce all terms and
provisions hereof with the same force and effect as if such person had been
a party hereto.
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SECTION 6.5 Non-Assignment. Participants and their
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beneficiaries may not assign, pledge, encumber, or otherwise transfer any
of their rights hereunder and no creditor of any Participant or of any
beneficiary of a Participant shall have any claim or right to the funds
under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
PROMUS HOTELS, INC. PROMUS HOTEL CORPORATION
BY: BY:
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TITLE: TITLE:
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NATIONSBANK (formerly Sovran Bank)
BY:
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TITLE:
----------------------
______________________
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EXHIBIT E
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Indemnity Agreement
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The undersigned, ____________________________, in consideration
of receiving certain disputed benefit payments pursuant to an Escrow
Agreement dated ________________, 1995, between Promus Hotel Corporation
(the "Company") and __________________ _________________ ("Escrow Agent")
hereby agrees to indemnify and hold harmless the Company and the Escrow
Agent from and against any and all losses, damages, expenses, or claims
which may result from any incorrect payment or incorrect benefit which is
made to the undersigned pursuant to a notice delivered by the undersigned
to the Escrow Agent.
Dated: _______________________ _________________________________
Participant