EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of May 4, 2005, by and between GAYLORD
ENTERTAINMENT COMPANY, a Delaware corporation having its corporate headquarters
at One Gaylord Drive, Nashville, Tennessee 37214 ("the Company") and DAVID C.
KLOEPPEL, a resident of Nashville, Tennessee ("Executive").
WITNESSETH:
WHEREAS, the Company desires to employ Executive as its Executive Vice
President and Chief Financial Officer, and Executive desires to serve in such
capacity pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
AGREEMENT
1. EMPLOYMENT; TERM; PLACE OF EMPLOYMENT. The Company hereby employs
Executive, and Executive hereby accepts employment with the Company upon the
terms and conditions contained in this Agreement. The term of Executive's
employment hereunder shall commence on May 4, 2005 (the "Effective Date") and
shall continue for a period of four (4) years from and after the Effective Date
(the "Employment Period"). For purposes of this Agreement, a "Contract Year"
shall mean a one year period commencing on the Effective Date or any anniversary
thereof. Executive shall render services at the offices established by the
Company in the greater Nashville metropolitan area; provided that Executive
agrees to travel on temporary trips to such other places as may be required to
perform Executive's duties hereunder.
2. DUTIES; TITLE.
(a) Description of Duties.
(i) During the Employment Period, Executive shall serve the
Company as its Executive Vice President and Chief Financial Officer
and report directly to the President and Chief Executive Officer
("CEO"). Executive shall supervise the financial conduct of the
business and affairs of the Company, its subsidiaries and respective
divisions, supervise the development function for the Company, and
perform such other duties as the CEO shall determine.
(ii) Executive shall faithfully perform the duties required of
his office. Subject to Section 2(b), Executive shall devote all of
his business time and effort to the performance of his duties to the
Company.
(b) Other Activities. Notwithstanding anything to the contrary
contained in Section 2(a), Executive shall be permitted to engage in the
following activities, provided that such activities do not materially
interfere or conflict with Executive's duties and responsibilities to the
Company:
(i) Executive may serve on the governing boards of, or
otherwise participate in, a reasonable number of trade associations
and charitable organizations,
whose purposes are not inconsistent with the activities and the
image of the Company;
(ii) Executive may engage in a reasonable amount of charitable
activities and community affairs; and
(iii) Subject to the prior approval of the Board of Directors,
Executive may serve on the board of directors of one or more
business corporations, provided also that they do not compete,
directly or indirectly, with the Company.
(c) Other Policies. Executive shall be subject to and shall comply
with all codes of conduct, personnel policies and procedures applicable to
senior executives of the Company, including, without limitation, policies
regarding sexual harassment, conflicts of interest and insider trading.
3. CASH COMPENSATION.
(a) Base Salary. During the initial Contract Year, the Company shall
pay to Executive an annual salary of $475,000. Executive's annual salary
shall be increased in each subsequent Contract Year by a percentage equal
to the annual percentage increase, if any, generally granted to other
senior executives, such percentage to be determined from time to time by
the Human Resources Committee of the Board of Directors (such annual
salary, together with any increases under this subsection (b), being
herein referred to as the "Base Salary").
(b) Annual Cash Bonus. Executive shall be eligible for an annual
cash bonus equal to a target of 75% of Executive's Base Salary (the
"Year-End Bonus") to be paid to him in each calendar year and shall be
determined based on the achievement of certain goals and Company
performance criteria as established by the CEO and approved by the Board's
Human Resources Committee. The Year-End Bonus for each calendar year shall
be paid to Executive on or before the end of February 28th of the
immediately succeeding year.
(c) Withholding. The Base Salary and each Year-End Bonus shall be
subject to applicable withholding and shall be payable in accordance with
the Company's payroll practices.
4. RESTRICTED STOCK GRANT. The Company hereby grants to Executive 16,000
restricted shares of Company Common Stock (the "Restricted Stock Grant"). The
restrictions on the Restricted Stock Grant shares shall terminate in 4,000 share
increments on the first through the fourth anniversaries of August 1, 2005;
provided, however, Executive must be employed by the Company on each such
anniversary date for the restrictions on the particular share increment to be
terminated. The Restricted Stock Grant is hereby granted pursuant to the
Company's Omnibus Plan as may hereafter be further amended, and shall otherwise
be subject to the terms of a restricted stock grant agreement between the
Company and Executive in the form prescribed for Company executives generally.
If a restriction terminates as to a 4,000 share increment, the Company shall
deliver such shares to Executive.
5. BENEFITS; EXPENSES; ETC.
(a) Expenses. During the Employment Period, the Company shall
reimburse Executive, in accordance with the Company's policies and
procedures, for all reasonable
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expenses incurred by Executive, including reimbursement for his reasonable
first class travel expenses in connection with the performance of his
duties for the Company.
(b) Vehicle Allowance. During the Employment Period, Executive shall
be entitled to receive from the Company a vehicle allowance of $800 per
month, subject to future increases as may be granted to senior executives.
(c) Vacation. During the Employment Period, Executive shall be
entitled to four (4) weeks vacation during each Contract Year.
(d) Company Plans. During the Employment Period, Executive shall be
entitled to participate in and enjoy the benefits of (i) the Company
Health Insurance Plan, (ii) the Company 401(k) Savings Plan, (iii) the
Company Supplemental Deferred Compensation ("SUDCOMP") Plan, and (iv) any
health, life, disability, retirement, pension, group insurance, or other
similar plan or plans which may be in effect or instituted by the Company
for the benefit of senior executives generally, upon such terms as may be
therein provided. A summary of such benefits as in effect on the date
hereof has been provided to Executive, the receipt of which is hereby
acknowledged.
(e) Attorney's Fees. Executive shall be entitled to reimbursement
for reasonable attorney's fees and expenses incurred by Executive in the
review and negotiation of this Agreement, upon submission of documentation
evidencing such fees and expenses.
6. TERMINATION. Executive's employment hereunder may be terminated prior
to the expiration of the Employment Period as follows:
(a) Termination by Death. Upon the death of Executive ("Death"),
Executive's employment shall automatically terminate as of the date of
Death.
(b) Termination by Company for Permanent Disability. At the option
of the Company, Executive's employment may be terminated by written notice
to Executive or his personal representative in the event of the Permanent
Disability of Executive. As used herein, the term "Permanent Disability"
shall mean a physical or mental incapacity or disability which renders
Executive unable substantially to render the services required hereunder
for a period of ninety (90) consecutive days or one hundred eighty (180)
days during any twelve (12) month period as determined in good faith by
the Company.
(c) Termination by Company for Cause. At the option of the Company,
Executive's employment may be terminated by written notice to Executive
upon the occurrence of any one or more of the following events (each, a
"Cause"):
(i) any action by Executive constituting fraud, self-dealing,
embezzlement, or dishonesty in the course of his employment
hereunder;
(ii) any conviction of Executive of a crime involving moral
turpitude;
(iii) failure of Executive after reasonable notice promptly to
comply with any valid and legal directive of the CEO;
(iv) a material breach by Executive of any of his obligations
under this Agreement and failure to cure such breach within ten (10)
days of his receipt of written notice thereof from the Company; or
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(v) a failure by Executive to perform adequately his
responsibilities under this Agreement as demonstrated by objective
and verifiable evidence showing that the business operations under
Executive's control have been materially harmed as a result of
Executive's gross negligence or willful misconduct.
(d) Termination by Executive for Good Reason. At the option of
Executive, Executive may terminate his employment by written notice to
Company given within a reasonable time after the occurrence of the
following circumstances ("Good Reason"), unless the Company cures the same
within thirty (30) days of such notice:
(i) Any adverse change by Company in the Executive's position
or title described in Section 2 hereof, whether or not any such
change has been approved by a majority of the members of the Board;
(ii) The assignment to Executive, over his reasonable
objection, of any duties materially inconsistent with his status as
Executive Vice President and Chief Financial Officer or a
substantial adverse alteration in the nature of his
responsibilities;
(iii) A reduction by Company in his annual base salary of
$475,000 as the same may be increased from time to time pursuant to
Section 3(b) hereof;
(iv) Company's requiring Executive to be based anywhere other
than the Company's headquarters in Nashville, Tennessee except for
required travel on the Company's business;
(v) The failure by Company, without Executive's consent, to
pay to him any portion of his current compensation, except pursuant
to this Agreement or pursuant to a compensation deferral elected by
Executive;
(vi) Except as permitted by this Agreement, the failure by
Company to continue in effect any compensation plan (or substitute
or alternative plan) in which Executive is entitled to participate
which is material to Executive's total compensation, or the failure
by the Company to continue Executive's participation therein on a
basis that is materially as favorable both in terms of the amount of
benefits provided and the level of Executive's participation
relative to other participants at Executive's grade level; or
(vii) The failure by Company to continue to provide Executive
with benefits substantially similar to those enjoyed by senior
executives under the Company's pension and deferred compensation
plans, and the life insurance, medical, health and accident, and
disability plans in which Executive is entitled to participate,
except as required by law, or the taking of any action by the
Company which would directly or indirectly materially reduce any of
such benefits or deprive Executive of any material fringe benefit
enjoyed by Executive, or the failure by the Company to provide
Executive with the number of paid vacation days to which Executive
is entitled; or
(viii) A material breach by the Company of any of its
obligations under this Agreement.
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(e) Termination by Company Without Cause. At the option of the
Company Executive's employment may be terminated by written notice to
Executive at any time ("Without Cause").
7. EFFECT OF TERMINATION.
(a) Effect Generally. If Executive's employment is terminated prior
to the fourth anniversary of the Effective Date, the Company shall not
have any liability or obligation to Executive other than as specifically
set forth in Section 6, Section 7 and Section 8 hereof. Upon the
termination of Executive's employment for any reason, he shall, upon the
request of the Company, resign from all corporate offices held by
Executive.
(b) Effect of Termination by Death. Upon the termination of
Executive's employment as a result of Death, Executive's estate shall be
entitled to receive an amount equal to: (i) accrued but unpaid Base Salary
through the date of termination; (ii) a pro rata portion of Executive's
Annual Bonus, if any, for the year in which termination occurs, (iii) any
unpaid portion of the Annual Bonuses for prior calendar years, accrued and
unpaid vacation pay, unreimbursed expenses incurred pursuant to Section
5(a), (b) or (e), and any other benefits owed to Executive pursuant to any
written employee benefit plan or policy of the Company, excluding benefits
payable pursuant to any plan beneficiary pursuant to a contractual
beneficiary designation by Executive, (iv) the portion of the Restricted
Stock Grant that is free from restrictions as of the date of death and the
acceleration and immediate release of all restrictions from all Restricted
Stock Grants that are subject to restrictions as of the date of death, (v)
Executive's vested Stock Options as of the date of death, the vesting and
exercise of which is governed by the Omnibus Plan; and (vi) all of
Executive's Stock Options, which pursuant to the Omnibus Plan are
accelerated as of the termination date (date of death) and are exercisable
until the expiration of the Stock Option Term.
(c) Effect of Termination for Permanent Disability. Upon the
termination of Executive's employment hereunder as a result of Permanent
Disability, Executive shall be entitled to receive an amount equal to: (i)
accrued but unpaid Base Salary through the date of termination; (ii) a pro
rata portion of Executive's Annual Bonus, if any, for the year in which
termination occurs, (iii) any unpaid portion of an Annual Bonus for prior
calendar years, long-term disability benefits available to executives of
the Company, accrued and unpaid vacation pay, unreimbursed expenses
incurred pursuant to Section 5(a), (b) or (e) and any other benefits owed
to Executive pursuant to any written employee benefit plan or policy of
the Company; (iv) the portion of the Restricted Stock Grant that is free
from restrictions as of the termination date; (v) Executive's vested Stock
Options as of the date of termination, the vesting of which is governed by
the Omnibus Plan; and (vi) all of Executive's Stock Options, which
pursuant to the Omnibus Plan are accelerated as of the termination date
and are exercisable until the expiration of the Stock Option Term.
Payments to Executive hereunder shall be reduced by any payments received
by Executive under any worker's compensation or similar law.
(d) Effect of Termination by the Company for Cause or by Executive
Without Good Reason. Upon the termination of Executive's employment by the
Company for Cause or by Executive for any reason other than Good Reason,
Executive shall be entitled to receive an amount equal to: (i) accrued but
unpaid Base Salary through the date of termination, (ii) any unpaid Annual
Bonus for prior calendar years, accrued but unpaid vacation pay,
unreimbursed expenses incurred pursuant to Section 5(a), (b) or (e) and
any other benefits owed to Executive pursuant to any written employee
benefit plan or policy of the Company; and (iii) the portion of the
Restricted Stock Grant that is free from restrictions as of the
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termination date. All Stock Options, to the extent not theretofore
exercised, shall terminate on the date of termination of employment under
this Section 7(d). Executive shall also forfeit any right to an Annual
Bonus for the calendar year in which Executive's termination occurs.
(e) Effect of Termination by the Company Without Cause or by
Executive for Good Reason. Upon the termination of Executive's employment
hereunder by the Company Without Cause or by Executive for Good Reason,
Executive shall be entitled to: (i) the payment of two (2) times
Executive's Base Salary for the year in which such termination shall
occur; (ii) payment of two (2) times Executive's Annual Bonus for the
preceding year, (iii) any unpaid portion of any Annual Bonus for prior
calendar years, accrued and unpaid vacation pay, unreimbursed expenses
incurred pursuant to Section 5(a), (b),or (e) and any other benefits owed
to Executive pursuant to any written employee benefit plan or policy of
the Company; (iv) the portion of the Restricted Stock Grant that is free
from restrictions as of the date of termination and the acceleration and
immediate release of all restrictions from up to 8,000 shares of the
Restricted Stock Grant that are subject to restrictions as of the date of
termination and immediate release of all restrictions from a pro-rata
portion of the units of restricted stock grants under the Company's
Performance Accelerated Restricted Stock Unit Program ("PARSUP") that are
subject to restrictions as of the date of termination (for purposes of
this clause, the number of PARSUP units that shall vest early shall be an
amount equal to the number of unvested PARSUP units on the date of
termination multiplied by a fraction, the numerator of which is total
number of months (including any fractional month) during which Executive
was employed hereunder commencing with February 2003 (up to 60), and the
denominator of which is 60); and (v) the vested portion of Executive's
Stock Options, and the acceleration and immediate vesting of Executive's
unvested Stock Options that were scheduled to vest during the two-year
period following the date of Executive's termination. Executive shall have
two (2) years from the date of such termination Without Cause or by
Executive for Good Reason to exercise all vested Stock Options.
8. CHANGE OF CONTROL.
(a) Definition. A "Change of Control" shall be deemed to have taken
place if:
(i) any person or entity, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, other than the
Company, a wholly-owned subsidiary thereof, or any employee benefit plan
of the Company or any of its subsidiaries becomes the beneficial owner of
Company securities having 35% or more of the combined voting power of the
then outstanding securities of the Company that may be cast for the
election of directors of the Company (other than as a result of the
issuance of securities initiated by the Company in the ordinary course of
business);
(ii) individuals who, as of the date of this Amendment, were
members of the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the members of the Board; provided that
any individual who becomes a director after such date whose election or
nomination for election by the Company's shareholders was approved by
two-thirds of the members of the Incumbent Board (other than an election
or nomination of an individual whose initial assumption of office is in
connection with an actual or threatened "election contest" relating to the
election of the directors of the Company (as such terms are used in Rule
14a-11 under the Securities Exchange Act of 1934), "tender offer" (as such
term is used in Section 14(d) of the Securities Exchange Act of 1934) or a
proposed transaction described in clause (iii) below) shall be deemed to
be members of the Incumbent Board.".
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(iii) as the result of, or in connection with, any cash tender
or exchange offer, merger or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions, the
holders of all the Company's securities entitled to vote generally in the
election of directors of the Company immediately prior to such transaction
constitute, following such transaction, less than a majority of the
combined voting power of the then-outstanding securities of the Company or
any successor corporation or entity entitled to vote generally in the
election of the directors of the Company or such other corporation or
entity after such transactions; or
(iv) the Company sells all or substantially all of the assets
of the Company.
(b) Effect of Change of Control. In the event that within one (1)
year following a Change of Control, the Company terminates Executive
Without Cause or Executive terminates employment for Good Reason,
Executive shall be entitled to: (i) the payment of three (3) times
Executive's Base Salary for the year in which such termination shall
occur; (ii) the payment of three (3) times Executive's Annual Bonus for
the preceding year; (iii) any unpaid portion of any Annual Bonus for prior
calendar years, accrued and unpaid vacation pay, unreimbursed expenses
incurred pursuant to Section 5(a), (b),or (e) and any other benefits owed
to Executive pursuant to any written employee benefit plan or policy of
the Company; (iv) the portion of the Restricted Stock Grant that is free
from restrictions as of the date of termination and the acceleration and
immediate release of all restrictions from all Restricted Stock Grants
that are subject to restrictions as of the date of termination; and (v)
the vested portion of Executive's Stock Options and the acceleration and
immediate vesting of any unvested portion of Executive's Stock Options.
Executive shall have two (2) years from the date of such termination to
exercise all vested Stock Options.
9. EXCISE TAX REIMBURSEMENT. In connection with or arising out of a Change
in Control of the Company, in the event Executive shall be subject to the tax
imposed by Section 4999 of the Code (the "Excise Tax") in respect of any payment
or distribution by the Company or any other person or entity to or for
Executive's benefit, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, or whether prior to or
following any termination of Executive other than Termination for Cause or By
Executive without Good Reason (a "Payment"), the Company shall pay to Executive
an additional amount. The additional amount (the "Gross-Up Payment") shall be
equal to the Excise Tax, together with any federal, state and local income tax,
employment tax and any other taxes associated with this payment such that
Executive incurs no out-of-pocket expenses associated with the Excise Tax.
Provided, however, nothing in this Section shall obligate the Company to pay
Executive for any federal, state or local income taxes imposed upon Executive by
virtue of a Payment. For purposes of determining whether any of the Payments
will be subject to the Excise Tax and the amount of such Excise Tax the
following will apply:
(a) Determination of Parachute Payments. Any payments or benefits
received or to be received by Executive in connection with a Change in
Control of the Company or his termination of employment other than by the
Company for Cause or by Executive Without Good Reason shall be treated as
"parachute payments" within the meaning of Section 280G(b)(2) of the Code,
and all "excess parachute payments" within the meaning of Section
280G(b)(1) shall be treated as subject to the Excise Tax, unless in the
opinion of tax counsel selected by the Company's independent auditors and
acceptable to Executive such other payments or benefits (in whole or in
part) do not constitute parachute payments, or such excess parachute
payments (in whole or in part) represent reasonable compensation for
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services actually rendered within the meaning of Section 280G(b)(3) of the
Code, or are otherwise not subject to the Excise Tax; and
(b) Valuation of Benefits and Determination of Tax Rates. The value
of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company's independent auditors in accordance with
proposed, temporary or final regulations under Section 280G(d)(3) and (4)
of the Code or, in the absence of such regulations, in accordance with the
principles of Section 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, Executive shall be deemed
to pay federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate of taxation
in the state and locality of Executive's residence on the date of
termination of his employment, net of the applicable reduction in federal
income taxes which could be obtained from deduction of such state and
local taxes.
(c) Repayment of Gross-Up by Executive and Possible Additional
Gross-Up by Company. In the event that the amount of Excise Tax
attributable to Payments is subsequently determined to be less than the
amount taken into account hereunder at the time of termination of
Executive's employment, he shall repay to the Company at the time that the
amount of such reduction in Excise Tax is finally determined the portion
of the Gross-Up Payment attributable to such reduction (including the
portion of the Gross-Up Payment attributable to the Excise Tax, employment
tax and federal (and state and local) income tax imposed on the Gross-Up
Payment being repaid by Executive if such repayment results in a reduction
in Excise Tax and/or a federal (and state and local) income tax deduction)
plus interest on the amount of such repayment at the rate provided in
section 1274(b)(2)(B) of the Code. In the event that the Excise Tax
attributable to Payments is determined to exceed the amount taken into
account hereunder at the time of the termination of Executive's employment
(including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company
shall make an additional gross-up payment in respect of such excess (plus
any interest and/or penalties payable by Executive with respect to such
excess) at the time that the amount of such excess is finally determined.
10. EXECUTIVE COVENANTS.
(a) General. Executive and the Company understand and agree that the
purpose of the provisions of this Section 10 is to protect legitimate
business interests of the Company, as more fully described below, and is
not intended to impair or infringe upon Executive's right to work, earn a
living, or acquire and possess property from the fruits of his labor.
Executive hereby acknowledges that the post-employment restrictions set
forth in this Section 10 are reasonable and that they do not, and will
not, unduly impair his ability to earn a living after the termination of
his employment with the Company. Therefore, subject to the limitations of
reasonableness imposed by law upon restrictions set forth herein,
Executive shall be subject to the restrictions set forth in this Section
10.
(b) Definitions. The following capitalized terms used in this
Section 10 shall have the meanings assigned to them below, which
definitions shall apply to both the singular and the plural forms of such
terms: "Confidential Information" means any confidential or proprietary
information possessed by the Company without limitation, any confidential
"know-how," customer lists, details of client and consultant contracts,
current and anticipated customer requirements, pricing policies, price
lists, market studies, business plans, operational methods, marketing
plans or strategies, product development techniques or plans,
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computer software programs (including object code and source code), data
and documentation, data base technologies, systems, structures and
architectures, inventions and ideas, past, current and planned research
and development, compilations, devices, methods, techniques, processes,
financial information and data, business acquisition plans, new personnel
acquisition plans and any other information that would constitute a trade
secret under the common law or statutory law of the State of Tennessee.
"Person" means any individual or any corporation, partnership,
joint venture, association or other entity or enterprise.
"Protected Employees" means employees of the Company or its
affiliated companies who are employed by the Company or its
affiliated companies at any time within six (6) months prior to the
date of termination of Executive for any reason whatsoever or any
earlier date (during the Restricted Period) of an alleged breach of
the Restrictive Covenants by Executive.
"Restricted Period" means the period of Executive's employment
by the Company plus a period extending two (2) years from the date
of termination of employment; provided, however, the Restricted
Period shall be extended for a period equal to the time during which
Executive is in breach of his obligations to the Company under this
Section 10.
"Restrictive Covenants" means the restrictive covenants
contained in Section 10(c) hereof:
(c) Restrictive Covenants.
(i) Restriction on Disclosure and Use of Confidential
Information. Executive understands and agrees that the Confidential
Information constitutes a valuable asset of the Company and its
affiliated entities, and may not be converted to Executive's own use
or converted by Executive for the use of any other Person.
Accordingly, Executive hereby agrees that Executive shall not,
directly or indirectly, at any time during the Restricted Period or
thereafter, reveal, divulge or disclose to any Person not expressly
authorized by the Company any Confidential Information, and
Executive shall not, at any time during the Restricted Period or
thereafter, directly or indirectly, use or make use of any
Confidential Information in connection with any business activity
other than that of the Company. The parties acknowledge and agree
that this Agreement is not intended to, and does not, alter either
the Company's rights or Executive's obligations under any state or
federal statutory or common law regarding trade secrets and unfair
trade practices,
(ii) Non-solicitation of Protected Employees. Executive
understands and agrees that the relationship between the Company and
each of its Protected Employees constitutes a valuable asset of the
Company and may not be converted to Executive's own use or converted
by Executive for the use of any other Person. Accordingly, Executive
hereby agrees that during the Restricted Period Executive shall not
directly or indirectly on Executive's own behalf or on behalf of any
Person solicit any Protected Employee to terminate his or her
employment with the Company.
(iii) Non-interference with Company Opportunities. Executive
understands and agrees that all business opportunities with which he
is involved
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during his employment with the Company constitute valuable assets of
the Company and its affiliated entities, and may not be converted to
Executive's own use or converted by Executive for the use of any
other Person. Accordingly, Executive hereby agrees that during the
Restricted Period or thereafter, Executive shall not directly or
indirectly on Executive's own behalf or on behalf of any Person,
interfere with, solicit, pursue, or in any way make use of any such
business opportunities.
(d) Exceptions from Disclosure Restrictions. Anything herein to the
contrary notwithstanding, Executive shall not be restricted from
disclosing or using Confidential Information that: (i) is or becomes
generally available to the public other than as a result of an
unauthorized disclosure by Executive or his agent; (ii) becomes available
to Executive in a manner that is not in contravention of applicable law
from a source (other than the Company or its affiliated entities or one of
its or their officers, employees, agents or representatives) that is not
known by Executive, after reasonable investigation, to be bound by a
confidential relationship with the Company or its affiliated entities or
by a confidentiality or other similar agreement; or (iii) is required to
be disclosed by law, court order or other legal process; provided,
however, that in the event disclosure is required by law, court order or
legal process, Executive shall provide the Company with prompt notice of
such requirement so that the Company may seek an appropriate protective
order prior to any such required disclosure by Executive.
(e) Enforcement of the Restrictive Covenants.
(i) Rights and Remedies upon Breach. In the event Executive
breaches, or threatens to commit a breach of, any of the provisions of the
Restrictive Covenants, the Company shall have the right and remedy to
enjoin, preliminarily and permanently, Executive from violating or
threatening to violate the Restrictive Covenants and to have the
Restrictive Covenants specifically enforced by any court of competent
jurisdiction, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the Company and
that money damages would not provide an adequate remedy to the Company.
The rights referred to herein shall be independent of any others and
severally enforceable, and shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company at law or in
equity.
(ii) Severability of Covenant. Executive acknowledges and
agrees that the Restrictive Covenants are reasonable and valid in all
respects. If any court determines that any Restrictive Covenants, or any
part thereof, is invalid or unenforceable, the remainder of the
Restrictive Covenants shall not thereby be affected and shall be given
full effect, without regard to the invalid portions.
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11. COOPERATION IN FUTURE MATTERS. Executive hereby agrees that, for a
period of three (3) years following the date of his termination, he shall
cooperate with the Company's reasonable requests relating to matters that
pertain to Executive's employment by the Company, including, without limitation,
providing information of limited consultation as to such matters, participating
in legal proceedings, investigations or audits on behalf of the Company, or
otherwise making himself reasonably available to the Company for other related
purposes. Any such cooperation shall be performed at times scheduled taking into
consideration Executive's other commitments, and Executive shall be compensated
(except for cooperation in connection with legal proceedings) at a reasonable
hourly or per diem rate to be agreed by the parties to the extent such
cooperation is required on more than an occasional and limited basis. Executive
shall also be reimbursed for all reasonable out of pocket expenses. Executive
shall not be required to perform such cooperation to the extent it conflicts
with any requirements of exclusivity of service for another employer or
otherwise, nor in any manner that in the good faith belief of Executive would
conflict with his rights under or ability to enforce this Agreement.
12. INDEMNIFICATION. The Company shall indemnify Executive and hold him
harmless from and against any and all costs, expenses, losses, claims, damages,
obligations or liabilities (including actual attorneys fees and expenses)
arising out of any acts or failures to act by the Company, its directors,
employees or agents that occurred prior to the Effective Date, or arising out of
or relating to any acts, or omissions to act, made by Executive on behalf of or
in the course of performing services for the Company to the fullest extent
permitted by the Bylaws of the Company, or, if greater, as permitted by
applicable law, as the same shall be in effect from time to time. If any claim,
action, suit or proceeding is brought, or any claim relating thereto is made,
against Executive with respect to which indemnity may be sought against the
Company pursuant to this Section, Executive shall notify the Company in writing
thereof, and the Company shall have the right to participate in, and to the
extent that it shall wish, in its discretion, assume and control the defense
thereof, with counsel satisfactory to Executive.
13. EXECUTIVE'S REPRESENTATIONS AND WARRANTIES. Executive represents and
warrants that he is free to enter into this Agreement and, as of the Effective
Date, that he is not subject to any conflicting obligation or any disability
which shall prevent or hinder Executive's execution of this Agreement or the
performance of his obligations hereunder; that no lawsuits or claims are pending
or, to Executive's knowledge, threatened against Executive; and that he has
never been subject to bankruptcy, insolvency, or similar proceedings, has never
been convicted of a felony or a crime involving moral turpitude, and has never
been subject to an investigation or proceeding by or before the Securities and
Exchange Commission or any state securities commission. The Company shall have
the authority to conduct an independent investigation into the background of
Executive and Executive agrees to fully cooperate in any such investigation. The
Company shall notify Executive if it intends to conduct such an investigation.
14. NOTICES. Any and all notices or other communications required or
permitted to be given under any of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered or
mailed by first class registered mail, return receipt requested, or by
commercial courier or delivery service, or by facsimile or electronic mail,
addressed to the parties at the addresses set forth below (or at such other
address as any party may specify by notice to all other parties given as
aforesaid):
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(a) if to the Company, to:
Gaylord Entertainment Company
One Gaylord Drive
Nashville, Tennessee 37214
Attention: President
Facsimile Number: (615) 316-6010
(b) if to Executive, to:
David C. Kloeppel
c/o Gaylord Entertainment Company
One Gaylord Drive
Nashville, TN 37214
and/or to such other persons and addresses as any party shall have specified in
writing to the other by notice as aforesaid.
15. MISCELLANEOUS.
(a) Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supercedes and replaces in its entirety Executive's September 4, 2001
employment agreement with the Company. This Agreement may not be modified,
amended, or terminated except by a written agreement signed by all of the
parties hereto. Nothing contained in this Agreement shall be construed to
impose any obligation on the Company to renew this Agreement and neither
the continuation of employment nor any other conduct shall be deemed to
imply a continuing obligation upon the expiration of this Agreement.
(b) Assignment; Binding Effect. This Agreement shall not be
assignable by Executive, but it shall be binding upon, and shall inure to
the benefit of, his heirs, executors, administrators, and legal
representatives. This Agreement shall be binding upon the Company and
inure to the benefit of the Company and its respective successors and
permitted assigns. This Agreement may only be assigned by the Company to
an entity controlling, controlled by, or under common control with the
Company; provided, however, that no such assignment shall relieve the
Company of any of its obligations hereunder.
(c) Waiver. No waiver of any breach or default hereunder shall be
considered valid unless in writing, and no such waiver shall be deemed a
waiver of any subsequent breach or default of the same or similar nature.
(d) Enforceability. Subject to the terms of Section 12(e) hereof, if
any provision of this Agreement shall be held invalid or unenforceable,
such invalidity or unenforceability shall attach only to such provision
and shall not in any manner affect or render invalid or unenforceable any
other severable provision of this Agreement, and this Agreement shall be
carried out as if any such invalid or unenforceable provision were not
contained herein, unless the invalidity or unenforceability of such
provision substantially impairs the benefits of the remaining portions of
this Agreement.
(e) Headings. The section headings contained herein are for the
purposes of convenience only and are not intended to define or limit the
contents of the sections.
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(f) Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall be deemed one original.
(g) Confidentiality of Agreement. The parties agree that the terms
of this Agreement as they relate to compensation, benefits, and
termination shall, unless otherwise required by law (including, in the
Company's reasonable judgment, as required by federal and state securities
laws), be kept confidential; provided, however, that any party hereto
shall be permitted to disclose this Agreement or the terms hereof with any
of its legal, accounting, or financial advisors provided that such party
ensures that the recipient shall comply with the provisions of this
Section 17(g).
(h) Governing Law. This Agreement shall be deemed to be a contract
under the laws of the State of Tennessee and for all purposes shall be
construed and enforced in accordance with the internal laws of said state.
(i) No Third Party Beneficiary. This Agreement shall not confer any
rights or remedies upon any person or entity other than the parties hereto
and their respective successors and permitted assigns.
(j) Arbitration. Any controversy or claim between or among the
parties hereto, including but not limited to those arising out of or
relating to this Agreement or any related agreements or instruments,
including any claim based on or arising from an alleged tort, shall be
determined by binding arbitration in accordance with the Federal
Arbitration Act (or if not applicable, the law of the state of Tennessee),
the Commercial Arbitration Rules of the American Arbitration Association
in effect as of the date hereof, and the provisions set forth below. In
the event of any inconsistency, the provisions herein shall control.
Judgment upon any arbitration award may be entered in any court having
jurisdiction. Any party to the Agreement may bring an action, including a
summary or expedited proceeding, to compel arbitration of any controversy
or claim to which this Agreement applies in any court having jurisdiction
over such action; provided, however, that all arbitration proceedings
shall take place in Nashville, Tennessee. The arbitration body shall set
forth its findings of fact and conclusions of law with citations to the
evidence presented and the applicable law, and shall render an award based
thereon. In making its determinations and award(s), the arbitration body
shall base its award on applicable law and precedent, and shall not
entertain arguments regarding punitive damages, nor shall the arbitration
body award punitive damages to any person. Each party shall bear its own
costs and expenses.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
GAYLORD ENTERTAINMENT COMPANY
By: /s/ Colin V. Reed
-------------------------------------
Colin V. Reed
President and Chief Executive Officer
EXECUTIVE:
/s/ David C. Kloeppel
-------------------------------------
David C. Kloeppel
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