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EXHIBIT 10.13
STOCKHOLDERS' AGREEMENT
dated as of May 24, 1996
among
WYNDHAM HOTEL CORPORATION
and
The Stockholders Listed on the Signature Pages Hereto
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STOCKHOLDERS' AGREEMENT
THIS STOCKHOLDERS' AGREEMENT (this "Agreement") is made and entered
into as of May 24, 1996, by and among Wyndham Hotel Corporation, a Delaware
corporation ("Wyndham"), and each of the Stockholders (as hereinafter defined)
listed on the signature pages hereto.
RECITALS:
A. Pursuant to a Buy-Sell Agreement (the "Buy-Sell Agreement") dated
as of May 2, 1994 among Wynopt Investment Partnership Level II, L.P. (formerly
known as Ross Investment Partners 2, L.P.), a Delaware limited partnership
("Hampstead"), Wyndham Hotel Company Ltd., a Texas limited partnership
("Wyndham Partnership"), and certain other persons, the parties thereto agreed
to impose certain restrictions and obligations with respect to the ownership,
retention and disposition of equity interests in Wyndham Partnership, as well
as certain corporate governance matters.
B. As contemplated by the Buy-Sell Agreement, Wyndham, directly or
through one or more subsidiaries, has succeeded to substantially all of the
assets of Wyndham Partnership, parties to the Buy-Sell Agreement have acquired
Shares (as hereinafter defined) in Wyndham and Wyndham has consummated an
initial public offering ("IPO") of its Shares.
C. The Buy-Sell Agreement contained restrictions and obligations that
were to apply both before and after the IPO and, for the sake of clarity, the
parties desire to set forth fully in this Agreement the restrictions and
obligations that are to apply after the IPO and to terminate the Buy-Sell
Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
I. DEFINITIONS
1.1. Defined Terms. In addition to the terms defined
elsewhere herein, terms used herein which are defined below have
the meanings set forth below when used in this Agreement with
initial capital letters:
Affiliate. With respect to any Person, any other Person
controlling, controlled by or under common control with, the first
Person. For purposes of this definition and this Agreement, the term
"control" (and correlative terms) means the power, whether by
contract, equity ownership or otherwise, to direct the policies or
management of a Person.
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Business Day. Any day, excluding Saturday, Sunday and any day
which is a legal holiday or a day on which banking institutions in New
York City or Dallas, Texas are authorized by law or other governmental
actions to close.
Covered Shares. Shares held by Stockholders that are subject
to the provisions of Article II as provided in Section 4.5. If any
Stockholder holds Shares that are not Covered Shares ("Uncovered
Shares"), Article II will apply on a "last- in-first-out" basis, with
the result that such Stockholder may freely Transfer (as hereafter
defined) a number of Shares equal to up to the total number of
Uncovered Shares held by such Stockholder before the provisions of
Article II apply to any Transfer of Covered Shares.
Crow/Wyndham Stockholder. The stockholders, other than the
Hampstead Stockholders, listed on the signature page of this Agreement
and the Transferees of such stockholders (except a Hampstead
Stockholder) authorized under this Agreement, excluding, however, a
Transferee in an Exempt Transfer or Third-Party Sale.
Exempt Transfer. Any (i) open-market sales of Shares by a
Stockholder not exceeding the volume limitations imposed by Rule 144
under the Securities Act, (ii) sales by a Stockholder in the IPO,
including any sales pursuant to the exercise by the underwriters of
the over-allotment option and (iii) Transfer of Shares by WEL to the
direct or indirect owners of equity interests in WEL, whether in
connection with the dissolution of WEL or otherwise.
Hampstead's Allocable Percentage. A fraction, expressed as a
percentage, (i) the numerator of which is the sum of (a) the number of
Covered Shares owned by the Hampstead Stockholders (excluding from
such Shares those that were acquired from the Crow/Wyndham
Stockholders) multiplied by the Net Option Factor, and (b) the number
of Covered Shares that were acquired by the Hampstead Stockholders
from the Crow/Wyndham Stockholders and (ii) the denominator of which
is the total number of Shares outstanding.
Hampstead Principals. Donald J. McNamara, Robert A.
Whitman and Daniel A. Decker.
Hampstead Stock Percentage. The percentage of the outstanding
Shares held by the Hampstead Stockholders immediately following the
IPO (but giving effect to any exercise by the IPO underwriters of the
over-allotment option).
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Hampstead Stockholders. Wynopt Investment Partnership,
L.P. and Wynopt Investment Partnership Level II, L.P.
(formerly known as Ross Investment Partners 2, L.P.) and the
Transferees of such stockholders (except a Crow/Wyndham
Stockholder) authorized under this Agreement, excluding,
however, a Transferee in an Exempt Transfer or Third-Party
Sale.
Immediate Family. The spouse of an individual and the
parents, children and grandchildren of the individual or his or her
spouse. An adopted child will be treated as the child of his or her
adoptive parent or parents if (but only if) he or she was adopted
before he or she reached 21 years of age.
Inside Director. A director serving on the Wyndham Board who
is employed by Wyndham or who is employed by, or an equity investor
in, a Crow/Wyndham Stockholder or a Hampstead Stockholder or any
Affiliate (other than Wyndham) of any such Stockholder.
Investment Agreement. The Investment Agreement dated as
of May 2, 1994 among The Hampstead Group, Inc., Wyndham Hotel
Company Ltd. and certain other persons.
Investment Program Cutback. Terms used in this definition
shall have the meanings assigned to them in the Investment Agreement.
An "Investment Program Cutback" shall be deemed to have occurred if
(i) as of December 31 of any year, Property Management Agreements have
been terminated such that the total Management Revenue represented by
Subject Hotels that are subject to Property Management Agreements
under the Investment Program as of such date is less than $8,520,000
and (ii) as of December 31 of the immediately following year, the
total Management Revenue with respect to the Subject Hotels then
subject to Property Management Agreements under the Investment Program
does not equal or exceed $8,520,000. Termination of Property
Management Agreements under the following circumstances shall not
reduce Management Revenue for purposes of the foregoing calculation:
(i) any termination of the Property Management Agreement by the owner
of the Subject Hotel by reason of a default on the part of the manager
or by reason of a right to terminate based on the performance of the
Subject Hotel, (ii) any termination of the Property Management
Agreement for The Checkers Hotel in Los Angeles, California, or (iii)
any termination by consent of the owner of the Subject Hotel and the
manager under the Property Management Agreement. For purpose of the
foregoing calculation, Hampstead shall be deemed to have a 100% equity
interest in the Hotel Investments covering the Subject Hotels in
question.
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Market Price. The closing sale price of the Shares on
the date in question on the principal securities exchange on
which the Shares are traded.
Net Option Factor. The quotient yielded by dividing
37.5% by the Hampstead Stock Percentage.
Outside Director. A director serving on the Wyndham Board who
is not an Inside Director and who qualifies as an "independent
director" within the meaning of the New York Stock Exchange Listed
Company Manual.
Permitted Transferee. (a) With respect to a Stockholder who
is an individual, a member of the Immediate Family of the Stockholder
or a trust whose sole beneficiaries are members of the Immediate
Family of the Stockholder, (b) with respect to a Stockholder that is a
corporation, partnership or other entity (other than a trust), an
equity owner of the corporation, partnership or other legal entity,
(c) with respect to a Stockholder that is a trust, any member of the
Immediate Family of the grantor of the trust, and (d) with respect to
Trammell Crow, Margaret Crow and their direct descendants, a
charitable trust or foundation that meets the requirements of Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
Person. Any individual or a legal entity.
Securities Act. The Securities Act of 1933, as amended.
Shares. The common stock, $.01 par value per share, of
Wyndham.
Stockholder Group. The Crow/Wyndham Stockholders, as a
group, or the Hampstead Stockholders, as a group.
Stockholders. The Crow/Wyndham Stockholders and the
Hampstead Stockholders.
WEL. Wyndham Employees Ltd., a Texas limited
partnership.
Wyndham Board. The board of directors of Wyndham.
II. TRANSFERS OF SHARES
2.1. (a) Restriction on Transfers. (i) General Rule. No
Stockholder may effect any direct or indirect sale, transfer,
pledge or other disposition, whether directly or in connection with
or as a result of any merger, consolidation or other transaction
that results in any Person not included within the categories of
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authorized Transferees specified in Section 2.1(a)(ii) obtaining beneficial
ownership of Covered Shares (any such direct or indirect sale, transfer, pledge
or other disposition being a "Transfer"), except in connection with an Exempt
Sale or otherwise in accordance with this Agreement. Notwithstanding the
foregoing, any transfer that might otherwise be deemed to result from the
merger or consolidation of Wyndham with or into another entity or any
recapitalization of the Shares shall not be deemed to constitute a "Transfer"
for purpose of this Agreement.
(ii) Permitted Transfers. Any Stockholder may Transfer any
Shares (A) to any wholly-owned Affiliate of the Stockholder, (B) to any Person
who is a Permitted Transferee, (C) to Trammell or Margaret Crow or any lineal
descendant of Trammell and Margaret Crow or any trust of which not less than
75% of the beneficial interests are held by Trammell or Margaret Crow or such
lineal descendants or any partnership, corporation or other entity of which not
less than 75% of the outstanding equity interests are owned directly or
indirectly by Trammell or Margaret Crow or such descendants (collectively, the
"Crow Interests"), (D) to Wyndham or to any then-existing Crow/Wyndham
Stockholder or to any individual employed substantially full time in Wyndham's
business as a senior executive officer, (E) as a pledge to secure indebtedness,
provided that the pledgee agrees that, upon any foreclosure of the pledge, the
pledgee shall immediately comply with the provisions of Section 2.1(e) below
with respect to the pledged Shares and (F) to the owners of equity interests in
a Stockholder upon a partial or complete liquidation or dissolution of such
Stockholder. For purposes of this Agreement, as to any Stockholder which is a
legal entity and does not have assets valued, on a cost basis, in excess of
$1,000,000, other than Shares, any Transfer of any equity interest in such
Stockholder which, in one or a series of Transfers, involves in the aggregate
more than a 50% equity interest in such Stockholder will be a "Transfer" unless
such Transfer is solely to other existing equity holders of such entity. Each
Transfer permitted by this Section 2.1(a)(ii) will also require the execution
and delivery of an instrument in form and substance satisfactory to the Wyndham
Board pursuant to which the Transferee agrees to be bound by this Agreement.
(b) Procedures for Effecting Third-Party Sales. (i)
Right of First Offer. Prior to consummating any Transfer of Covered Shares to
any Person, other than in connection with an Exempt Transfer or as permitted
pursuant to Section 2.1 (a)(ii) (a "Third-Party Sale"), the Stockholder
proposing to effect the Third- Party Sale (the "Offering Stockholder") will
deliver to each of the other Stockholders and to Wyndham a written Notice (an
"Offer Notice") specifying (A) the aggregate amount of cash consideration (the
"Offer Price") for which the Offering Stockholder proposes in good faith to sell
the Shares to be offered in such Third-Party Sale (the "Offered Shares"), (B)
the identity of the purchaser in
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such Third-Party Sale (if then known), and (C) all other material terms of the
proposed Third-Party Sale. The procedures set forth in this Section 2.1(b)
shall be subject to the special provisions set forth below in Sections 2.1(c),
(d) and (e) with respect to proposed Third Party Sales in connection with an
underwritten public offering, registered public sales pursuant to a shelf
registration under the Securities Act and pledge foreclosures.
(ii) Rights To Purchase Offered Shares. For purposes of this
Agreement, (A) the Hampstead Stockholders (collectively and as they may
allocate among themselves as set forth below) will be the "Non-Offering
Stockholder" with respect to a proposed Third-Party Sale by any Crow/Wyndham
Stockholder (including the Crow Interests), and (B) the Crow/Wyndham
Stockholders (collectively and as they may allocate among themselves as set
forth below) will be the "Non-Offering Stockholder" with respect to a proposed
Third- Party Sale by any Hampstead Stockholder. If a Non-Offering Stockholder
delivers to the Offering Stockholder a written Notice (an "Acceptance Notice")
within 10 Business Days following delivery of the Offer Notice (such 10
Business Day period being referred to herein as the "ROFO Acceptance Period")
stating that such Non- Offering Stockholder is willing to purchase all of the
Offered Shares for the Offer Price and on the other terms set forth in the
Offer Notice, the Offering Stockholder will sell all (but not less than all) of
the Offered Shares to such Non-Offering Stockholder, and such Non-Offering
Stockholder will purchase such Offered Shares from the Offering Stockholder, on
the proposed terms and subject to the conditions set forth below. In such case,
the Hampstead Stockholders, with the Offered Shares allocated based on the
number of Offered Shares requested to be purchased by each of the Hampstead
Stockholders, will be the "Purchasing Stockholder" with respect to a proposed
Third-Party Sale by any Crow/Wyndham Stockholder, and the Crow/Wyndham
Stockholders, with the Offered Shares allocated (unless otherwise agreed by the
Crow/Wyndham Stockholders requesting to purchase Offered Shares) based on the
number of Shares owned by each of the Crow/Wyndham Stockholders who request to
purchase Offered Shares (but in no event so as to require any Stockholder to
purchase in excess of the number of Offered Shares requested by such
Stockholder), will be the "Purchasing Stockholder" with respect to a proposed
Third-Party Sale by any Hampstead Stockholder. Notwithstanding the foregoing,
Wyndham will have the prior right to elect to purchase Offered Shares proposed
to be sold by the Crow Interests by delivery of an Acceptance Notice to the
Offering Stockholder and the Non-Offering Stockholder during the ROFO
Acceptance Period, but only if the Offered Shares constitute all of the Shares
owned by the Crow Interests and only to the extent the Offered Shares, if
purchased by the Hampstead Stockholders, would cause the Hampstead Stockholders
to own in excess of 40% of the outstanding Shares. Any such purchase of Offered
Shares by Wyndham will be on the same terms and conditions as a purchase by a
Purchasing Stockholder as
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provided for herein. No Third-Party Sale may be effected for consideration
other than cash.
(iii) The ROFO Closing. The consummation of any purchase of
the Offered Shares by the Purchasing Stockholder pursuant to this Section
2.1(b) (the "ROFO Closing") will occur no more than 10 Business Days following
the delivery of the Acceptance Notice (such 10 Business Day period being
referred to herein as the "ROFO Closing Period") at such time and place as may
be agreed upon by the Offering Stockholder and the Purchasing Stockholder or,
if such parties fail to agree to such time and place, at the principal
executive offices of Wyndham at 10:00 a.m. (Central Time) on the tenth Business
Day following the expiration of the ROFO Acceptance Period. At the ROFO
Closing, (A) the Purchasing Stockholder will deliver to the Offering
Stockholder by certified or official bank check or wire transfer to an account
designated by the Offering Stockholder an amount in immediately available funds
equal to the Offer Price, (B) the Offering Stockholder will deliver one or more
certificates evidencing the Offered Shares, together with such other duly
executed instruments or documents (executed by the Offering Stockholder) as may
be reasonably requested by the Purchasing Stockholder to acquire the Offered
Shares free and clear of any and all claims, liens, pledges, charges,
encumbrances, security interests, options, trusts, commitments and other
restrictions of any kind whatsoever (collectively, "Encumbrances"), except for
Encumbrances created by this Agreement, federal or state securities laws or the
Purchasing Stockholder or as specified in the Offer Notice, and (C) the
Offering Stockholder will be deemed to represent and warrant to the Purchasing
Stockholder that, upon the ROFO Closing, the Offering Stockholder will convey
and the Purchasing Stockholder will acquire the entire record and beneficial
ownership of, and good and valid title to, the Offered Shares, free and clear
of any and all Encumbrances, except for Encumbrances created by this Agreement,
federal and state securities laws or the Purchasing Stockholder or as described
in the Offer Notice.
(iv) Right To Consummate Third-Party Sale. If no Acceptance
Notice relating to the proposed Third-Party Sale is delivered to the Offering
Stockholder prior to the expiration of the ROFO Acceptance Period, or an
Acceptance Notice is so delivered to the Offering Stockholder but the ROFO
Closing fails to occur prior to the expiration of the ROFO Closing Period
(unless the Purchasing Stockholder was ready, willing and able prior to the
expiration of the ROFO Closing Period to consummate the transactions to be
consummated by the Purchasing Stockholder at the ROFO Closing), the Offering
Stockholder may (without affecting its rights, if any, arising out of such
failure) consummate the Third- Party Sale, but only (A) during the 60 calendar
day period immediately following the expiration of the ROFO Acceptance Period
(in the event that no Acceptance Notice was timely delivered to the
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Offering Stockholder) or the 60 calendar day period immediately following the
expiration of the ROFO Closing Period (in the event that an Acceptance Notice
was timely delivered to the Offering Stockholder but the ROFO Closing failed
timely to occur), (B) at a price at least equal to 95% of the Offer Price, and
(C) upon other terms not materially less favorable to the Offering Stockholder
than those set forth in the Offer Notice.
(v) Right to Consummate Third-Party Sale if No Proposed
Transferee Identified. The Offering Stockholder may consummate a Third-Party
Sale for which no purchaser has been identified at the time of delivery of the
Offer Notice that it is otherwise entitled to consummate pursuant to Section
2.1(b)(iv) only (A) during the 90 calendar day period immediately following the
expiration of the ROFO Acceptance Period (in the event that no Acceptance
Notice was timely delivered to the Offering Stockholder) or the 90 calendar day
period immediately following the expiration of the ROFO Closing Period (in the
event that an Acceptance Notice was timely delivered to the Offering
Stockholder but the ROFO Closing failed timely to occur), (B) at a price at
least equal to 95% of the Offer Price, and (C) upon other terms not materially
less favorable to the Offering Stockholder than those set forth in the Offer
Notice.
(c) Special Procedures Applicable to Proposed Underwritten
Offerings. The procedures set forth above in Section 2.1(b) will be applicable
to proposed Third Party Sales in connection with an underwritten public
offering (a "Public Offering") except that (i) the Offer Price shall be a good
faith estimate by the Offering Stockholder of the price to the public at which
the Offering Stockholder would be willing to sell in the proposed Public
Offering (the "Public Offering Estimate") and (ii) if as described in Section
2.1(b)(iv) an Acceptance Notice is not delivered or a sale to the Non-Offering
Stockholder does not occur, the Offering Stockholder may consummate the
Third-Party Sale in the proposed Public Offering without regard to the price at
which such Third-Party Sale is completed, but only if the Public Offering is
consummated during the 150 calendar day period immediately following the
expiration of the ROFO Acceptance Period. In the event the Non-Offering
Stockholder does not deliver an Acceptance Notice during the ROFO Acceptance
Period, the Non-Offering Stockholder may nevertheless elect by a Notice (the
"Special Allocation Notice") delivered during the ROFO Acceptance Period to the
Offering Stockholder and to Wyndham to purchase in the Public Offering a
percentage (equal to the greater of the Hampstead Stock Percentage and the
percentage permitted by the Public Offering underwriters) (the "Special
Allocation Percentage") of the Shares sold in the Public Offering at the price
to the public (the "Public Offering Price"). In the event the Non-Offering
Stockholder delivers a Special Allocation Notice, (x) the Public Offering may
be consummated only if arrangements are made with the underwriters in the
Public Offering to make available for purchase by the Non-
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Offering Stockholder the Special Allocation Percentage of the Shares to be sold
in the Public Offering at the Public Offering Price and (y) subject to the
terms of such arrangements, the Non- Offering Stockholder shall be obligated to
purchase such Shares at the Public Offering Price even though the Public
Offering Price is above the Public Offering Estimate.
(d) Special Procedures Applicable to Sales under Shelf
Registrations. The procedures set forth above in Section 2.1(b) shall be
applicable to proposed open-market Third-Party Sales pursuant to a shelf
registration statement under the Securities Act (a "Shelf Registration"),
except that (i) the Offer Notice shall set forth a minimum price at which the
Offering Stockholder intends to sell the Offered Shares during the 90 calendar
day period following the ROFO Acceptance Period (the "Shelf Minimum Price"),
(ii) the number of Offered Shares will represent a good faith estimate by the
Offering Stockholder of the Shares the Offering Stockholder intends to sell at
prices equal to or greater than the Shelf Minimum Price during the Shelf
Period, (iii) the Acceptance Notice will constitute a commitment on the part of
the Non-Offering Stockholder to purchase, upon notice by the Offering
Stockholder (a "Sale Notice"), all of the Offered Shares that the Offering
Stockholder elects to sell during the Shelf Period at the Market Price of the
Shares on the date of the Sale Notice, provided such Market Price is within a
range specified in the Acceptance Notice by the Non-Offering Stockholder
between the Shelf Minimum Price and a price in excess thereof, in which case
such Market Price will constitute the Offer Price for purposes of the ROFO
Closing and the ROFO Closing Period will commence on the date of the Sale
Notice, and (iv) if as described in Section 2.1(b)(iv) an Acceptance Notice is
not delivered or a sale to the Non-Offering Stockholder does not occur, the
Offering Stockholder may (without affecting its rights, if any, arising out of
any failure to close on the part of the Non- Offering Stockholder) consummate
one or more public Third-Party Sales pursuant to the Shelf Registration at any
price at or above the Shelf Minimum Price at any time during the Shelf Period.
(e) Special Procedures Applicable to Pledge Foreclosures.
Within 10 Business Days following the foreclosure of a pledge of Shares
permitted under Section 2.1(a)(ii)(E), the pledgee shall send an Offer Notice
pursuant to Section 2.1 (b)(i) and the procedures set forth in Section 2.1(b)
shall apply to such Offer Notice, except that (i) the Non-Offering Stockholder
shall be the Crow/Wyndham Stockholders in the case of a pledge by a Hampstead
Stockholder and the Hampstead Stockholders shall be the Non-Offering
Stockholder in the case of a pledge by a Crow/Wyndham Stockholder and (ii) the
Offer Price shall be the Market Price on the Business Day immediately preceding
the date of the Offer Notice.
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(f) Unauthorized Transfers. Any purported Transfer of Shares
in violation of this Agreement (an "Unauthorized Transfer") will be null and
void. Wyndham will not register, recognize or give effect to any Unauthorized
Transfer and the purported Transferee of any Shares pursuant to an Unauthorized
Transfer will not thereby acquire any rights in such Shares.
III. CERTAIN CORPORATE GOVERNANCE MATTERS
3.1. Board of Directors. The Stockholders agree that the Wyndham Board
will consist of such number of directors as may be fixed from time to time by a
majority of the entire Wyndham Board then in office and the number of such
directors that shall be Inside Directors and the number that shall be Outside
Directors shall be determined in like manner.
3.2. Right to Nominate Directors. (a) The Hampstead Stockholders will
be entitled to nominate a portion of the Wyndham Board. The portion of the
Wyndham Board that Hampstead shall be entitled to nominate shall be equal to
the nearest whole number obtained by multiplying the Hampstead Allocable
Percentage times the number of directors that are to serve on the Wyndham
Board, and such number shall be allocated as proportionally as practicable
between Inside Directors and Outside Directors based on the total number of
Inside Directors and Outside Directors. Each Inside Director nominated by the
Hampstead Stockholders shall be a Hampstead Principal or such other Inside
Director as is reasonably acceptable to the Crow/Wyndham Stockholders. The
Crow/Wyndham Stockholders (acting with the approval of the holders of a
majority of the Shares held by the Crow/Wyndham Stockholders) shall be entitled
to nominate all Inside Directors and all Outside Directors other than those
that the Hampstead Stockholders have the right to nominate. The Inside
Directors and the Outside Directors that the Stockholder Groups are entitled to
nominate are sometimes referred to in this Agreement as "Stockholder Nominees."
(b) If at any time during the term of this Agreement the
relationship between Hampstead's Allocable Percentage and the number of
directors constituting the Wyndham Board is such that a Stockholder Group has a
number of Stockholder Nominees on the Wyndham Board that exceeds the number to
which such Stockholder Group is entitled (whether one or more, an "Excess
Nominee"), such Stockholder Group, if requested to do so by the other
Stockholder Group, will select the Stockholder Nominee who is to be designated
the Excess Nominee and will cause the Excess Nominee to resign from his or her
position on the Wyndham Board, and in the event the Excess Nominee fails to
resign, the Excess Nominee will be removed as provided in this Agreement.
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3.3. Election of Stockholder Nominees. (a) Each Stockholder will use
its best efforts to cause the Stockholder Nominees to be elected in any and all
elections of directors of Wyndham held during the term of this Agreement.
Notwithstanding any other provision of this Agreement, however, no Stockholder
will be required to cause the election of any Stockholder Nominee, or to
support the continued service of any Stockholder Nominee, if the Wyndham Board
determines in good faith, based as to legal matters on the advice of outside
counsel, that the election or continued service of such Stockholder Nominee
would be inconsistent with the fiduciary duty owed by the Wyndham Board to all
the stockholders of Wyndham, provided, however, that the foregoing shall not
detract from the right of the Stockholder Group who nominated such Stockholder
Nominee to nominate another Stockholder Nominee for such position. In addition,
continued service on the Wyndham Board by Persons who are also officers of
Wyndham (an "Officer Nominee") will be conditioned upon such Persons continuing
to hold their positions as officers of Wyndham. Any officer who does not
continue to hold such office will, in the absence of a resignation by the
Officer Nominee, be removed from the Wyndham Board as provided in this
Agreement.
(b) Without limiting the generality or effect of
Section 3.3(a), each Stockholder will vote or cause to be voted for the
election of the Stockholder Nominees in any and all elections of directors of
Wyndham held during the term of this Agreement all Shares that such Stockholder
has the power to vote or in respect of which such Stockholder has the power to
direct the vote.
(c) Without limiting the generality or effect of
Section 3.3(a), at each meeting of the stockholders of Wyndham held during the
term of this Agreement at which the term of office of any Stockholder Nominee
(an "Expiring Nominee") expires, each such Expiring Nominee will be nominated
for election to another term as a director of Wyndham and will be included in
the slate of nominees recommended to stockholders for election as directors of
Wyndham in any proxy statement prepared by or on behalf of Wyndham with respect
to such meeting unless the election of the nominee would result in such nominee
becoming an Excess Nominee, in which case a nominee of the other Stockholder
Group shall be nominated and included in such slate; provided that, if the
Stockholder Group that nominated any Expiring Nominee so specifies, or any
Expiring Nominee declines or is unable to accept the nomination, another
individual designated by the Stockholder Group that nominated such Expiring
Nominee, in lieu of such Expiring Nominee, will be nominated for election as a
director of Wyndham and will be included in the slate of nominees recommended
to stockholders for election as directors of Wyndham in any such proxy
statement.
3.4. Vacancies Among Stockholder Nominees. (a) Each Stockholder
Nominee will hold his or her office as a director of
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Wyndham for such term as is provided in Wyndham's constituent documents or
until his or her death, resignation or removal from the Wyndham Board or until
his or her successor has been duly elected and qualified in accordance with the
provisions of this Agreement, Wyndham's constituent documents and applicable
law. If any Stockholder Nominee ceases to serve as a director of Wyndham for
any reason during his or her term (a "Terminating Nominee"), a nominee for the
vacancy resulting therefrom will be designated by the Stockholder Group that
nominated the Terminating Nominee unless the election of the nominee would
result in such nominee becoming an Excess Nominee, in which case the vacancy
shall be filled by a nominee of the other Stockholder Group.
(b) If a Stockholder Group fails at any time to nominate the
maximum number of persons for election to the Board that such Stockholder Group
is entitled to nominate pursuant to Section 3.2, each directorship in respect
of which such Stockholder Group so failed to make a nomination will remain
vacant unless such vacancy results in there being fewer than the minimum number
of directors required by law, in which case such vacancy or vacancies will be
filled by a person or persons selected by a majority of the directors of
Wyndham then in office.
3.5. Removal of Stockholder Nominees. If (i) an Excess Nominee or an
Officer Nominee is to be removed from the Wyndham Board as provided in Section
3.2(b) or 3.3(a) above or (ii) at any time a Stockholder Group shall notify
Wyndham in writing of its desire to have removed from the Wyndham Board, with
or without cause, any Stockholder Nominee, each of the Stockholders will, if
necessary, subject to all applicable requirements of law, use its best efforts
to take or cause to be taken all such action as may be required to remove such
Stockholder Nominee from the Wyndham Board. Subject to the immediately
preceding sentence, no Stockholder will vote or cause to be voted any Shares
that such Stockholder has the power to vote or in respect of which such
Stockholder has the power to direct the vote for the removal, other than for
cause, of any Stockholder Nominee nominated solely by the other Stockholder
Group without the prior written consent of such other Stockholder Group (which
in the case of the Crow/Wyndham Stockholders shall be by action of the holders
of a majority of the Shares held by the Crow/Wyndham Stockholders). The
foregoing provisions shall be without prejudice to the right of the
stockholders of Wyndham to remove directors for cause as provided by the
Delaware General Corporation Law.
3.6. Committees. Throughout the term of this Agreement, each
Stockholder will use its best efforts to cause each committee of the Wyndham
Board to consist as nearly as practicable of Stockholder Nominees of each
Stockholder Group in the same proportions as the Stockholder Nominees of each
Stockholder Group
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are to be represented on the Wyndham Board as provided in Section
3.2.
3.7. Chairman of the Board. As long as the Crow Interests own Covered
Shares that represent at least 30% of the outstanding Shares, the Chairman of
the Board of Wyndham shall be a Person designated by the Crow Interests. In the
event the Hampstead Stockholders own Covered Shares that represent at least 30%
of the outstanding Shares and the Crow Interests no longer own Covered Shares
that represent at least such percentage, the Chairman of the Board shall be a
Person designated by Hampstead.
IV. MISCELLANEOUS
4.1. Notices. All notices, demands, consents, approvals, requests or
other communications which any of the parties to this Agreement may desire or
be required to give hereunder (collectively, "Notices") will be in writing and
will be given by (a) personal delivery, (b) facsimile transmission, or (c)
Federal Express or another nationally recognized overnight courier service,
fees prepaid, addressed as follows:
If to any Hampstead Stockholder, to:
4200 Texas Commerce Tower West
2200 Ross Avenue
Dallas, Texas 75201-6799
Attn: Richard M. Fitzpatrick
Facsimile (214) 220-4949
If to Wyndham or any Crow/Wyndham Stockholder, to:
Suite 2300
2001 Bryan Street
Dallas, Texas 75201
Attn: Carla S. Moreland
Facsimile (214) 978-4567
and
Suite 3200
2001 Ross Avenue
Dallas, Texas 75201
Attn: Susan T. Groenteman
Facsimile (214) 979-6249
Any party hereto may designate another addressee (and/or change its address)
for Notices hereunder by a Notice given pursuant to this Section. A Notice sent
in compliance with the provisions of this Section will be deemed given on the
date of receipt.
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4.2. Successors and Assigns. This Agreement will be binding upon the
parties hereto and their respective successors and assigns, and will inure to
the benefit of the parties hereto and, except as otherwise provided herein,
their respective successors and assigns, provided, however, that this Agreement
shall not be binding upon or inure to the benefit of any Transferee in an
Exempt Transfer or a Third-Party Sale. Except in connection with any Transfers
permitted by Article II, neither this Agreement nor any right or obligation
hereunder may be assigned or delegated by any party hereto without the prior
written consent of the other parties hereto.
4.3. Extension Not a Waiver. No delay or omission in the exercise of
any power, remedy or right herein provided or otherwise available to any party
hereto will impair or affect the right of such party thereafter to exercise the
same. Any extension of time or other indulgence granted to any party hereunder
will not otherwise alter or affect any power, remedy or right of any other
party hereto, or the obligations of the party to whom such extension or
indulgence is granted.
4.4. Entire Agreement; Amendments. This Agreement sets forth the
entire agreement between the parties relating to the subject matter hereof and
all prior agreements relative thereto which are not contained herein, including
the Buy-Sell Agreement, are terminated. Amendments, variations, modifications
or changes herein may be made effective and binding upon the parties hereto by,
and only by, a written agreement duly executed by each of (i) Wyndham, (ii) the
holders of at least 80% of the Shares held by the Crow/Wyndham Stockholders and
(iii) the holders of at least 80% of the Shares held by the Hampstead
Stockholders, and any alleged amendment, variation, modification, or change
herein which is not so documented will not be effective as to any party hereto.
4.5. After-Acquired Shares. The provisions of Article II of this
Agreement restricting the Transfer of Shares will apply to and include (i) all
Shares owned by the Stockholders on the date hereof until they are Transferred
in an Exempt Sale or Third-Party Sale and (ii) all voting securities received
in respect of Shares that remain subject to clause (i) in connection with any
merger or consolidation of Wyndham with or into another entity or any
recapitalization or stock split of, or stock dividend on, such Shares, but such
provisions will not otherwise apply to Shares or other voting securities
acquired by a Stockholder after the date hereof.
4.6. Counterparts. This Agreement may be executed in counterparts,
each of which will be an original, but all of which together will constitute
but one and the same agreement.
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4.7. Expenses. Each party hereto will bear its own legal and
other expenses incurred in connection with the preparation,
execution and performance of this Agreement.
4.8. Arbitration. (a) Any dispute relating to this Agreement or the
performance by the parties of their respective obligations under this
Agreement, which is not resolved after the parties' attempt at amicable
negotiations, will be finally settled by arbitration. If such a dispute arises,
any party hereto may initiate arbitration proceedings by filing a demand for
arbitration with the other parties and the Dallas, Texas office of the American
Arbitration Association ("AAA").
(b) All the arbitration proceedings will be conducted in
accordance with the rules of the AAA and will be held in Dallas, Texas. Within
a reasonable period of time following the conclusion of such proceedings, the
arbitration panel will render a written decision. Decisions of the arbitration
panel will be made by a majority of the panel members. The decision rendered by
the arbitration panel will be final and binding and be enforceable by
appropriate action brought in any state or federal court of competent
jurisdiction.
4.9. Further Assurances. Each of the parties will, at any time, upon
the request of another party hereto, take or cause to be taken, all actions and
do, or cause to be done, all things (including, without limitation, executing,
acknowledging and delivering any additional agreements, instruments and
documents) as may be reasonably necessary, proper or advisable in order to
consummate or make effective the intentions, purposes and transactions
contemplated by this Agreement.
4.10. Legend. A legend referring to the restrictions imposed by this
Agreement may be placed upon any certificate issued to evidence Shares.
4.11. Termination. This Agreement (a) may be terminated at any time by
an instrument duly executed by (i) Wyndham, (ii) the holders of at least 80% of
the Shares held by Crow/Wyndham Stockholders and (iii) the holders of at least
80% of the Shares held by Hampstead Stockholders and (b) will terminate without
further action upon the earliest of (i) the first date on which the Hampstead
Stockholders and the Crow/Wyndham Stockholders (including the Crow Interests)
have beneficial ownership (as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of less than 37.5%, in the
aggregate, of the outstanding Shares of Wyndham, (ii) the Hampstead
Stockholders own less than 50% of the number of Shares held by them immediately
following the IPO, (iii) the sixth anniversary of the date of this Agreement,
(iv) the occurrence of an Investment Program Cutback, (v) the first date on
which the Hampstead Principals, or any of them, do not
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control the business and affairs of the Hampstead Stockholders, including the
voting and disposition of Shares, unless the foregoing occurs by reason of the
death of the last of such individuals to control such business and affairs, in
which case this Agreement shall not terminate if within 90 days thereafter a
replacement satisfactory to the Crow/Wyndham Stockholders is placed in control
and such replacement (or a subsequent replacement who is likewise so
satisfactory) remains in control at all times thereafter or (vi) any
distribution or other Transfer of Shares by the Hampstead Stockholders to
direct or indirect owners of equity interests in the Hampstead Stockholders
which results in the Shares being held by any Person other than a Hampstead
Principal or a Person controlled by a Hampstead Principal.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
WYNDHAM HOTEL CORPORATION
By: /s/ JAMES D. CARREKER
-------------------------------
Name: James D. Carreker
Title: President
STOCKHOLDERS:
/s/ JAMES D. CARREKER
-----------------------------------
James D. Carreker
THE CARREKER DESCENDANTS TRUST
By: /s/ JAMES D. CARREKER
-------------------------------
Name: James D. Carreker
Title: Special Trustee
/s/ LESLIE V. BENTLEY
-----------------------------------
Leslie V. Bentley
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THE BROOKE ANDREA BENTLEY TRUST
By: /s/ LESLIE V. BENTLEY
-------------------------------
Name: Leslie V. Bentley
Title: Special Trustee
THE KRISTIN MICHELLE SCHAFFNER TRUST
By: /s/ LESLIE V. BENTLEY
-------------------------------
Name: Leslie V. Bentley
Title: Special Trustee
THE LISA SUSANNE BENTLEY TRUST
By: /s/ LESLIE V. BENTLEY
-------------------------------
Name: Leslie V. Bentley
Title: Special Trustee
THE WENDI ELIZABETH SCHAFFNER TRUST
By: /s/ LESLIE V. BENTLEY
-------------------------------
Name: Leslie V. Bentley
Title: Special Trustee
/s/ ANNE L. RAYMOND
-----------------------------------
Anne L. Raymond
/s/ STANLEY M. KOONCE, JR.
-----------------------------------
Stanley M. Koonce, Jr.
/s/ ERIC A. DANZIGER
-----------------------------------
Eric A. Danziger
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WYNDHAM EMPLOYEES LTD.
By: Wyndham Hotel Management
Corporation, General Partner
By: /s/ JAMES D. CARREKER
--------------------------
Name: James D. Carreker
Title: President
WYNDHAM HOTEL MANAGEMENT CORPORATION
By: /s/ JAMES D. CARREKER
--------------------------
Name: James D. Carreker
Title: President
/s/ TRAMMELL S. CROW
-----------------------------------
Trammell S. Crow
CF SECURITIES, L.P.
By: Mill Spring Holdings, Inc.,
General Partner
By: /s/ SUSAN T. GROENTEMAN
---------------------------
Name: Susan T. Groenteman
-------------------------
Title: Vice President
------------------------
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WYNOPT INVESTMENT PARTNERSHIP
LEVEL II, L.P.
By: Hampstead GenPar, L.P., General
Partner
By: HH GenPar Partners, General
Partner
By: Hampstead Associates, Inc.,
General Partner
By: /s/ DANIEL A. DECKER
-------------------------------
Name: Daniel A. Decker
-----------------------------
Title: Authorized Officer
----------------------------
WYNOPT INVESTMENT PARTNERSHIP, L.P.
By: Wynopt Investment GenPar, Inc.,
General Partner
By: /s/ DANIEL A. DECKER
-------------------------------
Name: Daniel A. Decker
-----------------------------
Title: Authorized Officer
----------------------------
/s/ SUSAN T. GROENTEMAN
----------------------------------------
Susan T. Groenteman
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