Exhibit 99.1
SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
This Second Amendment to Employment Agreement, dated as of June 2, 2005 (this
"Amendment"), is between Boykin Lodging Company, an Ohio corporation (the
"Company"), and Robert W. Boykin (the "Executive").
WHEREAS, the Company and the Executive are parties to that certain Employment
Agreement, dated as of November 4, 1996, as amended by that certain First
Amendment to Employment Agreement, dated as of November 29, 2004 (the
"Agreement"; terms used but not otherwise defined herein have the meanings
ascribed to those terms in the Agreement); and
WHEREAS, the Company and the Executive desire to amend the Agreement as set
forth in this Amendment.
NOW THEREFORE, the Company and the Executive agree as follows:
1. Each reference to the termination of the Executive's employment
(whether by the Company or the Executive) in the Agreement shall mean a
separation from service as defined in Section 409A of the Code and the
regulations thereunder (a "Separation from Service").
2. As used in this Amendment, "Person" shall mean an individual,
corporation, limited liability company, joint venture, partnership, trust,
unincorporated organization or any other legal entity.
3. Subparagraph 2(e) of the Agreement is hereby amended in full to read as
follows:
"(e) The term "change in control" means the first to occur of the following
events:
(i) The Board or shareholders of the Company approve a consolidation
or merger that results in the shareholders immediately prior to the
transaction giving rise to the consolidation or merger owning less than
50% of the total combined voting power or total fair market value of all
classes of stock entitled to vote of the surviving entity immediately
after the consummation of the transaction giving rise to the merger; or
(ii) The Board or shareholders of the Company approve the sale of
substantially all of the assets of the Company to one Person or a group of
Persons acting together that is unrelated (within the meaning of Section
409A of the Code and the regulations thereunder) to the Company or the
liquidation or dissolution of the Company; or
(iii) Any Person (other than the Company or a Subsidiary or any
Company employee benefit plan (including any trustee of any such plan
acting in its capacity as trustee)) purchases any common shares of the
Company (or securities convertible into common shares of the Company)
pursuant to a tender or exchange offer without the prior consent of the
Board, or becomes the beneficial owner of securities of the Company
representing more than 50% of the voting power or fair market value of the
Company's outstanding securities; or
(iv) During any two-year period, individuals who at the beginning of
such period constitute the entire Board cease to constitute two-thirds of
the Board, unless the election or nomination for election of each new
director is approved by at least two-thirds of the directors then still in
office who were directors at the beginning of that period."
4. Subparagraph 3(b) of the Agreement is hereby amended in full to read as
follows:
"(b) The Company shall pay to the Executive bonus compensation for each calendar
year of the Company, not later than sixty (60) days following the end of that
year, prorated on a per diem basis for partial calendar years, and determined
and calculated by the Compensation Committee of the Board of Directors (the
"Compensation Committee") based on performance standards established by the
Compensation Committee for that year."
5. The last sentence of subparagraph 5(c) of the Agreement is hereby
amended in full to read as follows:
"If the Company causes a Separation from Service of the Executive other than
pursuant to subparagraph 5(a)(i) or 5(a)(ii) or the Executive causes a
Separation from Service pursuant to subparagraph 2(c), the Executive shall be
paid:
(i) an amount equal to (A) three multiplied by (B) the sum of (I)
the Executive's base salary at the rate in effect at the time of
Separation from Service and (II) an amount equal to the Executive's base
salary at the rate in effect at the time of Separation from Service
multiplied by the Executive's target bonus percentage established by the
Compensation Committee for the fiscal year during which the Separation
from Service occurs, which amount will be paid over a period of three
years beginning on the date of the Executive's Separation from Service
(the "Separation Date") in accordance with the Company's usual pay
practices; provided, however, that if the Executive is a key employee of
the Company (as defined in Section 409A of the Code), no installment of
that amount shall be paid prior to the earliest date that payment of an
installment can be made without incurring an excise tax pursuant to
Section 409A of the Code (the "Deferred Payment Date"), and on the
Deferred Payment Date the Company shall pay the Executive an amount equal
to the amount that would have been paid under this subparagraph 5(c)(i)
during the period beginning on the Separation Date and ending on the
Deferred Payment Date absent this provison
(ii) all of the benefits payable to the Executive pursuant to
subparagraphs 3(c) and (d) for a period of three years beginning on the
Separation Date; and
(iii) all of the benefits payable to the Executive pursuant to
subparagraphs 3(e), (g), (h) and (i) for the longer of the remainder of
the term of this Employment Agreement (as that term is defined in
subparagraph 2(a)) or the period set forth in the subparagraph."
6. The following is inserted as the last sentence of subparagraph 9(c):
"The Company shall cause this Employment Agreement to be assumed by any
successor of the Company, whether such succession occurs by merger, asset
acquisition, or otherwise."
7. The following is inserted as subparagraph 9(j):
"(j) (i) Not later than one (1) day prior to the day on which a transaction that
will result in a change in control is to be consummated (or if the Company does
not know about the transaction that will result in a change in control until
after it occurs, not later than five (5) days after the Company should
reasonably be expected to know about the transaction), the Company shall cause
to be issued an Irrevocable Standby Letter of Credit (the "Letter of Credit") in
favor of the Executive in order to provide the Executive with the amount that
will be paid under subparagraph 5(c) (including any adjustment to that amount
required by subparagraph 7) if the Company causes a Separation from Service
other than pursuant to subparagraph 5(a)(i) or 5(a)(ii) or the Executive causes
a Separation from Service pursuant to subparagraph 2(c). The bank or other
financial institution (the "Bank") that will issue the Letter of Credit shall be
chosen by the Committee or any individual to whom the Committee delegates that
responsibility, but must be organized under the laws of the United States of
America or any agency or instrumentality thereof or under the laws of any state
thereof and have a combined capital and surplus of at least $100,000,000. The
Company shall maintain the Letter of Credit until the earlier of the date the
Executive is no longer entitled to payments under subparagraph 5(c) or deposit
of the entire amount of the Letter of Credit into escrow as contemplated by
subparagraph 9(j)(iii) The expenses of establishing and maintaining the Letter
of Credit shall be paid solely by the Company.
(ii) The Letter of Credit shall be in an amount equal to the Company's
total potential liability to the Executive under subparagraph 5(c) (including
any adjustment to that amount required by subparagraph 7) in the event the
Company causes a Separation from Service other than pursuant to subparagraph
5(a)(i) or 5(a)(ii) or the Executive causes a Separation from Service pursuant
to subparagraph 2(c). The amount of the Letter of Credit shall be determined by
the Company acting in good faith. If the Executive becomes entitled to receive
payments as a result of such a Separation from Service and the Company fails to
make those payments, those payments will be paid out of the Letter of Credit in
accordance with the procedure set forth in subparagraph 9(j)(iii) below. If the
amount of the Letter of Credit is not sufficient to satisfy the total amount
payable to the Executive under subparagraph 5(c) (including any adjustment to
that amount required by subparagraph 7), the Company shall pay the additional
amount necessary to satisfy such total amount payable from its general assets.
(iii) If the Executive becomes entitled to receive payments under
subparagraph 5(c) and the Company fails to make those payments within three (3)
business days of the Company's receipt of a demand for payment from the
Executive, the Executive may draw on the Letter of Credit by providing written
notice (a "Draw Notice") requesting a draw on the Letter of Credit to both the
Bank and the Company (return receipt required) specifying the amount to be drawn
(the "Draw Amount"). The Letter of Credit shall require the Executive to certify
in the Draw Notice as a condition to receipt of the Draw Amount that (A) he is
entitled to receive payments under subparagraph 5(c) of this Employment
Agreement, (B) the Company has failed to make such payments and (C) the
Executive is entitled to draw on the Letter of Credit pursuant to the terms of
this Employment Agreement. Immediately upon receipt of a Draw
Notice containing those certifications, the Bank shall pay to the Executive the
amount set forth in the Draw Notice by wire transfer of immediately available
funds in accordance with wire transfer instructions provided by the Executive in
the Draw Notice.
(iv) Notwithstanding the foregoing provisions, the Company may establish
an alternative funding arrangement mutually acceptable to the Company and the
Executive to fund the amounts payable under this Employment Agreement."
8. Exhibit A to the Agreement is deleted in its entirety.
9. Except as amended by this Amendment, the Agreement shall continue in
full force and effect.
10. This Amendment may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
[signature page follows]
IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first
above written.
BOYKIN LODGING COMPANY
By: /s/ Richard C. Conti
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Its: President and Chief Operating Officer
/s/ Robert W. Boykin
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Robert W. Boykin