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EXHIBIT 10.11
SEPARATION AGREEMENT
This Separation Agreement (the "Agreement") is made and
entered into as of February 9, 2001, by and between Lodgian, Inc., a Delaware
corporation with its principal offices located in Atlanta, Georgia (the
"Company"), and Robert S. Cole, an individual resident of Georgia (the
"Executive").
STATEMENT OF BACKGROUND INFORMATION
A. Executive is employed as President and Chief Executive
Officer and serves as a member of Company's Board of Directors, and Executive
and Company are parties to an Employment Agreement dated as of December, 1998
(the "Employment Agreement").
B. Executive has, with Company's consent, resigned his position
as President and Chief Executive Officer of Company, effective as of February
9, 2001 (the "Effective Date").
C. Company intends to retain Executive to perform certain
services following the Effective Date under different terms of employment as
set forth in this Agreement.
D. Executive and Company desire to enter into this Agreement to
settle fully and finally any differences that might arise under the Employment
Agreement, Executive's employment and termination of employment with Company,
and Executive's rendering of services to Company after the Effective Date.
STATEMENT OF AGREEMENT
In consideration of the mutual covenants and obligations set
forth herein, the receipt and adequacy of which are expressly acknowledged, the
parties to this Agreement, intending to be legally bound, hereby agree as
follows:
1. Termination of Employment Agreement. (a) Termination Date.
The Employment Agreement, and Executive's employment thereunder, shall
terminate on the Effective Date. Executive shall continue to serve as a
non-officer employee through March 2, 2001 (the "Employment Termination Date")
and thereafter as a member of Company's Board of Directors and as a consultant
providing transition assistance and strategic and financial advisory services
to Company's Chief Executive Officer (the "Consulting Services").
(b) Severance Payment. Within ten (10) days following
the Employment Termination Date, Company shall pay to Executive in immediately
available funds the sum of $750,000, subject to applicable tax withholding
requirements, in full settlement of all amounts due Executive by reason of the
termination of the Employment Agreement (but excluding any amounts or benefits
due under Company's benefit plans, including COBRA benefits and 401(k) plan
benefits).
2. Consulting Arrangement. (a) Term of Engagement. Executive's
Consulting Services to Company shall commence March 3, 2001, and shall continue
until the first to occur of (i) Company's notification of Executive that
Executive's Consulting Services are no longer
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required by Company; (ii) Executive's death or incapacity; or (iii) March 31,
2002 (the "Consulting Period"). Throughout the Consulting Period, Executive
shall be available in Atlanta, Georgia to perform the Consulting Services as
Company may reasonably request, subject to reasonable advance notice.
(b) Compensation for Consulting Services. As
compensation in full for Executive's Consu lting Services, Company shall pay
Executive in immediately available funds the sum of $750,000 on or before March
8, 2001 (the "Consulting Fee"). Employee shall be treated as an independent
contractor for all purposes associated with the consulting arrangement
contemplated by this Section 2, including employment and income tax purposes.
Executive shall be reimbursed for any expenses, including travel costs,
incurred at Company's request.
(c) Office Facility. Company shall continue to provide
through April 27, 2001, office space and administrative assistance to Executive
at Company's principal office in Atlanta, Georgia at a level substantially
equivalent to that provided immediately prior to the Effective Date, regardless
of the duration of the Consulting Period. Thereafter, Executive shall be
responsible for his own office and office expenses associated with the
provision of the Consulting Services.
(d) Director Compensation. Notwithstanding any provision
of this Agreement, Executive will receive from Company the compensation and
benefits accorded outside directors of Company for so long as Executive
continues to serve as a director of Company.
3. Confidentiality and Non-Solicitation Covenants. Executive
will comply with the provisions of Section 13 of the Employment Agreement
(dealing with confidentiality and nondisclosure) in all respects as though the
Employment Agreement terminated at the end of the Consulting Period, and
Company shall continue to have all legal and equitable remedies available to it
under the Employment Agreement to enforce Executive's compliance with such
provisions.
4. Mutual Release. (a) Release of Company. Except for the
obligations of Company under this Agreement and any benefits to which Executive
is entitled under any employee benefit plan sponsored or maintained by Company,
Executive, for himself, his successors, assigns, attorneys, and all those
entitled to assert his rights, now and forever hereby releases and discharges
Company and its respective officers, directors, stockholders, trustees,
employees, agents, parent corporations, subsidiaries, affiliates, estates,
successors, assigns and attorneys, (the "Released Parties") from any and all
claims, actions, causes of action, sums of money due, suits, debts, liens,
covenants, contracts, obligations, costs, expenses, damages, judgments,
agreements, promises, demands, claims for attorney's fees and costs, or
liabilities whatsoever, in law or in equity ("Claims"), which Executive ever
had or now has against the Released Parties, including any Claims arising by
reason of or in any way connected with any employment relationship or
Employment Agreement which existed between Company, or any of its parents,
subsidiaries, affiliates, or predecessors, and Executive. It is understood and
agreed that this Agreement is intended to cover all Claims which may be traced
either directly or indirectly to the aforesaid employment relationship, any
change in Executive's position, title, or responsibility during that
relationship, and the termination of that relationship, that Executive has,
had, or purports to have,
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from the beginning of time to the present, whether known or unknown, that now
exists, no matter how remotely they may be related to the aforesaid employment
relationship, including, but not limited to, Claims for employment
discrimination under federal or state law; Claims arising under Title VII of
the Civil Rights Act, 42 U.S.C. ss. 2000(e), et seq., the Americans With
Disabilities Act, 42 U.S.C. ss. 12101 et seq. or the Age Discrimination in
Employment Act, 29 U.S.C. ss. 621, et seq.; Claims for statutory or common law
wrongful discharge; Claims for attorney's fees, expenses and costs; Claims for
defamation; Claims for intentional infliction of emotional distress; Claims for
wages; and Claims for any contingent development fee obligations incurred by
Company in connection with the Servico/Impac merger.
(b) Release of Executive. Company, for itself, its
successors, assigns, attorneys, and all those entitled to assert its rights,
now and forever hereby releases and discharges Executive from any and all
Claims which Company ever had or now has against Executive, including any
Claims arising by reason of or in any way connected with Executive's employment
relationship with Company, whether known or unknown.
5. Confidentiality and Non-Disparagement. Executive and Company
covenant and warrant that they have not and will not disclose or publish,
verbally, in writing or otherwise, to any person or entity the amount of
consideration passing pursuant to this Agreement, or any other term or
consideration passing pursuant to this Agreement. The parties specifically
except from this limitation the following: as to Executive, his tax advisor(s),
his immediate family, and the Internal Revenue Service; as to Company, its
attorneys, accountants, directors, and only those employees determined to have
a bona fide need to know the information, in Company's good faith
determination, as well as any disclosures required by state or Federal law or
stock exchange regulation, including but not limited to the Securities and
Exchange Act of 1934 and New York Stock Exchange. Executive and Company further
covenant and warrant that neither will make any statements or comments of a
defamatory or disparaging nature to third parties, including Company's
customers or potential employers of Executive, regarding Executive, Company or
its directors, officers, personnel, or products.
6. Indemnification of Executive. Company shall not limit,
restrict, rescind or otherwise modify its policies governing indemnification of
Company's directors and officers in any manner that adversely affects
Executive, and all indemnification obligations of Company to Executive,
including those arising under the Employment Agreement and under the Amended
and Restated Plan of Merger dated July 22, 1998 by and between Company,
Servico, Inc., Impac Hotel Group, L.L.C. and the other parties thereto, shall
survive in accordance with the terms in effect immediately prior to the
Effective Date.
7. Legal Expenses. (a) Negotiation and Preparation. All
reasonable costs and expenses, including fees and disbursements of counsel,
incurred by Executive in the negotiation and preparation of this Agreement up
to $10,000 shall be promptly paid on behalf of, or reimbursed to, Executive by
Company.
(b) Enforcement. If Executive incurs legal or other fees
and expenses in an effort to secure, preserve or establish entitlement to
compensation or benefits under this Agreement, Company shall reimburse
Executive for such fees and expenses within ten (10) days after his request for
reimbursement accompanied by evidence that the fees and expenses have
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been incurred. If Executive does not prevail (after exhaustion of all available
judicial remedies) in respect of the claim asserted by Executive, and if
Company establishes before a court of competent jurisdiction, by clear and
convincing evidence, that Executive had no reasonable basis for such claim and
acted in bad faith, no reimbursement of such fees and expenses incurred
directly in respect of such claim shall be due Executive and Executive shall
refund to Company any such amounts previously reimbursed with respect to such
claim.
8. Entire Agreement. This Agreement embodies the entire
agreement of the parties and supercedes any prior written or oral agreement
between the parties, including, without limitation, the Employment Agreement.
This Agreement may not be changed or terminated orally but only by an agreement
in writing signed by the parties hereto.
9. Waiver. The waiver by Company of a breach of any provision of
this Agreement by Executive shall not operate or be constituted as a waiver of
any subsequent breach by him. The waiver by Executive of a breach of any
provision of this Agreement by Company shall not operate or be construed as a
waiver of any subsequent breach by Company.
10. Governing Law. This Agreement shall be subject to, and
governed by, the internal laws of the State of Georgia, without regard to
choice of law principles.
11. Assignability; Successors. The obligations of Executive may
not be delegated and, Executive may not, without Company's written consent
thereto, assign, transfer, convey, pledge, encumber, hypothecate or otherwise
dispose of this Agreement or any interest herein. Any such attempted delegation
or disposition shall be null and void and without effect. Company and Executive
agree that this Agreement and each of Company's rights and obligations
hereunder shall be assumed by and binding upon any corporation or other
business entity which succeeds to the assets or conducts the business of
Company, whether directly or indirectly, by purchase, merger, consolidation or
otherwise (a "Successor"). In the event that another corporation or other
business entity becomes a Successor of Company, then the Successor shall, by an
agreement in form and substance reasonably satisfactory to Executive, expressly
assume and agree to perform this Agreement in the same manner and to the same
extent as Company would be required to perform if there had been no Successor.
12. Construction and Enforcement. In construing and enforcing
this Agreement, the following rules shall be followed:
(a) Control of Drafting. Each provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against either party. No consideration shall be given to the
fact or presumption that any party had a greater or lesser hand in drafting
this Agreement.
(b) Captions. In construing and enforcing this
Agreement, no consideration shall be given to the captions of the articles,
sections or subsections of this Agreement, which are inserted for convenience
in locating the provisions of this Agreement and not as an aid in its
construction.
(c) Including. The word "include" and its syntactical
forms mean "include, but are not limited to," and corresponding syntactical
forms. The principle of ejusdem generis
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shall not be used to limit the scope of the category of things illustrated by
the items mentioned in a clause introduced by the word "including."
(d) Definitions. A defined term has its defined meaning
throughout this Agreement, regardless of where in this Agreement it is defined.
(e) Internal Cross-References. Unless otherwise noted,
reference to a Section means a section of this Agreement and may be understood
to mean, for example, "Section 2 of this Agreement." The term Section is used
variously to identify entire Sections (as in "Section 2," subsections (as in
"Section 2(a)" and clauses (as in "Section 2(a)(i).")
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
14. Time. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first above written.
LODGIAN, INC.
By:
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Chairman
Joseph C. Calabro
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Robert S. Cole
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