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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of
December 16, 1998, between Sunterra Corporation, a Maryland corporation (the
"Company"), and Xxxxxxx Xxxxxxx (the "Executive").
1. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to be employed by the Company, on the terms and
conditions set forth herein, subject to the approval of and ratification
by the Company's Board of Directors as soon as practicable.
2. Term. The employment of the Executive by the Company as provided in
Section 1 will commence on the first day of Executive's employment with
the Company, which shall occur on or before December 31, 1998 (the
"Effective Date") and will terminate at 12:01 a.m. on the second
anniversary of the Effective Date (the "Expiration Date") unless
automatically extended or sooner terminated as hereinafter provided
(such period, the "Employment Period"). Unless terminated by the
Executive or the Company prior to October 1, 2000, this Agreement shall
automatically renew on the terms set forth herein for a second two-year
period. If so renewed, no later than June 1, 2002, the Company shall
notify the Executive with written notice as to whether the Company
intends to further renew or extend the Agreement (including proposals
for such further renewal which the Executive may accept, reject or
negotiate, at his discretion). Between the date of this Agreement and
the Effective Date, Executive shall act as a consultant to the Company
on various matters as needed by the Company, in an amount of time not to
exceed ten (10) hours per week.
3. Position, Duties and Responsibilities.
a. Position. The Executive hereby agrees to serve as Executive Vice
President and Chief Financial Officer of the Company and shall
report directly to the Chief Executive Officer. The Executive
shall devote his best efforts and substantially full business
time and attention to the performance of services to the Company
in his capacity as an officer thereof and as may reasonably be
requested by the Chief Executive Officer or the Board. The
Company shall retain full direction and control of the means and
methods by which the Executive performs the above services. In
no order of priority, the following are the responsibilities and
duties that the Executive shall have:
1. To work closely with the Company's executive level
senior-most officers to structure strategic initiatives,
including acquisitions, and to analyze the financial impact of
such initiatives; and to participate actively in the
negotiations thereof and oversee the completion of such
initiatives.
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2. To maintain a current understanding of the Company's progress
in achieving stated financial goals and objectives (i.e.,
internal and Wall Street estimates) relative to applicable
Company projections and budgets prepared by others.
3. To serve as the primary point of contact for investor
relations and investment banking, research and analyst
communications; to participate in investor and analyst meetings
and conferences; to coordinate press releases, quarterly and
annual filings; and to coordinate the design and preparation of
the Company's annual shareholders' report; and to be involved in
such other similar matters with the assistance of Company
counsel.
4. To analyze and structure the Company's capital base,
including, without limitation, coordinating and implementing
equity and debt initiatives such as follow-on offerings, lines
of credit and securitization programs; and, generally, to manage
the Company's commercial banking relationships and lines of
credit.
5. To develop and oversee cash management policies.
6. To oversee the Company's policies and procedures respecting
employee purchases and sales of the Company's stock and the
exercise of its stock options.
7. To oversee the Company's treasury function, with the
assistance of appropriate personnel.
8. To oversee the Company's insurance and risk management
program, with the assistance of appropriate personnel.
9. To oversee the Company's internal accounting, administration,
and financial reporting and control functions, including
systems, SEC financial reporting, internal audits, corporate
budgeting, tax planning, and risk management functions.
10. To oversee the information technology and human resource
functions of the company.
11. To carry out such other customary duties and
responsibilities of an executive vice president and chief
financial officer of a public company.
b. Place of Employment. During the term of this Agreement, the
Executive shall perform the services required by this Agreement
at the Company's place of business in Orlando, Florida,
provided, however, that the Company will require the Executive
to travel extensively to other locations on the Company's
business.
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c. Other Activities. Except with the prior written approval of the
Board (which the Board may grant or withhold in its sole and
absolute discretion), the Executive, during the Employment
Period, will not (i) accept any other employment, (ii) serve on
the board of directors or similar body of any other business
entity (except as otherwise set forth below), or (iii) engage,
directly or indirectly, in any other business activity (whether
or not pursued for pecuniary advantage) that is or may be
competitive with, or that might place him in a competing
position to, that of the Company or any of its affiliates.
Notwithstanding the foregoing, the Company agrees that the
Executive (or affiliates of the Executive) shall be permitted
(i) to undertake the activities set forth in Section 8 and (ii)
to make any other passive personal investment that is not in a
business activity that is directly or indirectly competitive
with the Company.
4. Compensation and Related Matters.
a. Salary. During the Employment Period, the Company shall pay the
Executive a salary of not less than $300,000 during the first
full year and at such salary as determined by the Compensation
Committee of the Board during the second and subsequent years of
the Executive's employment with the Company (the "Base Salary").
All salary is to be paid consistent with the standard payroll
practices of the Company (e.g., timing of payments and standard
employee deductions, such as income tax withholdings, social
security, etc.). The Executive's performance and salary shall be
subject to review at the end of each fiscal year and increase
consistent with the standard practices of the Company.
b. Business Expenses. The Company shall reimburse the Executive in
connection with the conduct of the Company's business upon
presentation of sufficient evidence of such expenditures
consistent with the Company's policies as in place from time to
time, including the reimbursement of reasonable and necessary
expenses incurred by the Executive in connection with the
conduct of the Company's business in traveling to and from his
residence(s) and the venues where the Company conducts business.
c. Other Benefits. The Executive shall be entitled to participate
in or receive health, welfare, life insurance, long-term
disability insurance, bonus plan and similar benefits as the
Company provides generally from time to time to its executives.
The Company acknowledges that within a reasonable time following
the execution of this Agreement, it will execute an option
agreement substantially in the form attached as Exhibit "A"
hereto (the "Option Agreement") and will grant the Executive the
benefits under the equity participation plan in the form
attached as Exhibit "B" hereto (the "Option Plan"). Except as
otherwise set forth in this Section 4 and except with respect to
the Company's obligations under this Agreement with respect to
the Option Agreement and the Option Plan, nothing herein is
intended, or shall be construed to require the Company to
institute or continue any, or any particular, plan or benefits.
The Executive shall have the
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right to participate at Company expense in industry related
trade groups, conventions, etc. in furtherance of enhancing the
Executive's visibility on Wall Street and leadership of the time
share and resort industry.
d. Merit Bonus. The Compensation Committee of the Board shall
establish, monitor, and oversee an incentive bonus program for
the Executive which will provide for a target cash bonus to the
Executive of sixty percent (60%) of the Executive's then fiscal
year Base Salary if certain performance objectives established
by the CEO and Compensation Committee for the Executive are
achieved during the applicable fiscal year (the "Merit Bonus").
The Executive shall have the opportunity to be considered for
additional performance-based bonus compensation at the sole and
absolute discretion of the Board; however, the Company makes no
commitment to the Executive that any other performance-based
bonus compensation will be paid to the Executive.
e. Fringe Benefits. The Executive will be entitled to fringe
benefits as may be determined or granted from time-to-time by
the Board.
f. Vacation. The Executive shall be entitled to four vacation weeks
(20 days) in each calendar year on a pro-rated basis in
accordance with the Company's vacation policy. The Executive
will be entitled to all Company holidays.
g. Performance Reviews. At the end of each fiscal year commencing
in the 1999 fiscal year of the Company, the CEO will review the
Executive's job performance and will provide the Executive a
written review of the Executive's job performance during such
fiscal year and implement any Board determined revisions to the
Executive's Base Salary, the Executive's Merit Bonus, the
Executive's prospective incentive compensation package
(including the Executive's participation in the Option Plan),
the Executive's title and/or the Executive's responsibility at
the Company; provided, however, that the provisions set forth in
this Agreement with respect to the Executive's compensation, the
Option Agreement and the general terms and conditions of the
Executive's employment at the Company cannot be modified by the
Board in a manner which would result in less favorable or
beneficial terms or conditions being imposed on the Executive
than those provided for in the applicable provisions of this
Agreement without the Executive's full concurrence and consent.
h. Moving Expenses. The Company agrees to reimburse the Executive
for his reasonable and necessary moving expenses incurred in
moving his personal, family and household belongings from
Irvine, California to the Orlando, Florida area. Such
reimbursements will include reasonable and necessary expenses
incurred by the Executive and his spouse to identify a new
residence and the travel and lodging expenses incurred in
connection therewith through July 31, 1999. Moreover, the
Company will reimburse the Executive and his spouse for all
travel and living expenses incurred by them in Orlando, Florida
for the seven
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month period following the Effective Date. Such reimbursement
will include the normal and customary closing costs incurred by
the Executive in purchasing a new residence. The Company will
provide to the Executive a gross up for non deductible moving
expenses. The Company will reimburse the Executive up to 6% for
brokerage costs incurred in selling his current residence. Also,
the Company will pay to the Executive $25,000 as a relocation
allowance.
5. Termination. The Executive's employment hereunder shall be, or may be,
as the case may be, terminated under the following circumstances:
a. Death. The Executive's employment hereunder shall terminate upon
his death.
b. Disability. The Executive's employment hereunder shall terminate
on the Executive's physical or mental disability or infirmity
which, in the opinion of a competent physician selected by the
Board, renders the Executive unable to perform his duties under
this Agreement for more than 120 days during any 180-day period.
c. Cause. The Company may terminate the Executive's employment
hereunder for "Cause." Cause shall mean (i) Employee's material
breach of any of the terms of this Agreement, (ii) his
conviction of a crime involving moral turpitude or constituting
a felony under the laws of any state, the District of Columbia
or of the United States, or (iii) his gross negligence, willful
misconduct or fraud in the performance of his duties hereunder.
d. Employment-At-Will/Termination for Any Reason. Notwithstanding
the term of this Agreement having a duration of two years and
Sections 2 and 4 hereof referring to extensions of this
Agreement and the annual salary to be paid to the Executive
during each year of his employment with the Company, nothing in
this Agreement should be construed as to confer any right of the
Executive to be employed by the Company for a fixed or definite
term. Subject to Section 6 hereof, the Executive hereby agrees
that the Company may dismiss him under this Section 5(d) without
regard (i) to any general or specific policies (whether written
or oral) of the Company relating to the employment or
termination of its employees, or (ii) to any statements made to
the Executive, whether made orally or contained in any document,
pertaining to the Executive's relationship with the Company.
Notwithstanding anything to the contrary contained herein,
including Sections 2 and 4, the Executive's employment with the
Company is not for any specified term, is at will and may be
terminated by the Company at any time by delivery of a notice of
termination to the Executive, for any reason, with or without
cause, without liability except with respect to the payments
provided for by Section 6.
e. Voluntary Resignation. The Executive may voluntarily resign his
position and terminate his employment with the Company at any
time by delivery of a written
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notice of resignation to the Company (the "Notice of
Resignation"). The Notice of Resignation shall set forth the
date such resignation shall become effective (the "Date of
Resignation"), which date shall, in any event, be at least ten
(10) days and no more than thirty (30) days from the date the
Notice of Resignation is delivered to the Company. At its
option, the Company may reduce such notice period to any length,
upon thirty (30) days written notice to the Executive.
f. Notice. Any termination of the Executive's employment by the
Company shall be communicated by written Notice of Termination
to the Executive. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice that shall indicate the
specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
g. "Date of Termination" shall mean (i) if the Executive's
employment is terminated by his death, the date of his death,
(ii) if the Executive's employment is terminated by reason of
his disability, the date of the opinion of the physician
referred to in Section 5(b), above, (iii) if the Executive's
employment is terminated by the Company for Cause pursuant to
subsection 5(c) above, or without Cause by the Company pursuant
to subsection 5(d) above, the date specified in the Notice of
Termination and (iv) if the Executive voluntarily resigns
pursuant to subsection 5(e) above, the date of the Notice of
Resignation.
h. Termination Obligations.
i. The Executive hereby acknowledges and agrees that all
personal property and equipment furnished to or prepared
by the Executive in the course of or incident to his
employment, belongs to the Company and shall be promptly
returned to the Company upon termination of the
Employment Period. "Personal property" includes, without
limitation, all books, manuals, records, reports, notes,
contracts, lists, blueprints, and other documents, or
materials, or copies thereof (including computer files),
and all other proprietary information relating to the
business of the Company. Following termination, the
Executive will not retain any written or other tangible
material containing any proprietary information of the
Company.
ii. Upon termination of the Employment Period, the Executive
shall be deemed to have resigned from all offices and
directorships then held with the Company or any
affiliate.
iii. The representations and warranties contained herein and
the Executive's obligations under Sections 5(h), 7, 8, 9
and 15 through 18 shall survive termination of the
Employment Period and the expiration of this Agreement.
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i. Release. In exchange for the Company entering into the
Agreement, the Executive agrees that, at the time of his
resignation or termination from the Company, he will execute a
release acceptable to the Company of all liability of the
Company and its officers, shareholders, employees and directors
to the Executive in connection with or arising out of his
employment with the Company, except with respect to any
then-vested rights under the Company's Option Plan and except
with respect to any Severance Payments which may be payable to
him under the terms of the Agreement. Nothing herein shall
modify Executive's mediation and other rights under this
Agreement.
j. Notwithstanding anything to the contrary in this Agreement, if
the Date of Termination occurs within two years after the date
of this Agreement and the Date of Termination does not involve
an event described in either the first clause of clause (iii) of
the definition of the Date of Termination or in clause (iv) of
the definition of the Date of Termination, then the Executive
shall become a consultant to the Company effective upon the Date
of Termination. The Executive shall serve as a consultant to the
Company until the second anniversary of the date hereof. During
such consulting term, the Executive shall be available to
provide financial consulting services to the Company and
Executive shall not be entitled to any compensation for
rendering such consulting services other than that which he
would otherwise be entitled to receive under this Agreement
during such period.
6. Compensation Upon Termination.
a. Death. If the Executive's employment shall be terminated
pursuant to Section 5(a), the Company shall pay the Executive's
estate the Executive's monthly base salary payable pursuant to
Section 4(a) and one-twelfth of any bonus payable pursuant to
Section 4(d) at the most recent annual amount received, or
entitled to be received, by the Executive (the "Severance
Payment") for a period of two years following the Date of
Termination. For a period of two years following the Date of
Termination, the Executive and his dependents shall be entitled
to health insurance coverage rights as if the Executive was
currently employed.
b. Disability. If the Executive's employment shall be terminated by
reason of disability pursuant to Section 5(c), the Executive
shall receive the Severance Payment for the lesser of two years
or the duration of such disability; provided that payments so
made to the Executive during the disability shall be reduced by
the sum of the amounts, if any, payable to the Executive at or
prior to the time of any such payment under any disability
benefit plan of the Company. For a period of two years following
the Date of Termination, the Executive and his dependents shall
be entitled to health insurance coverage rights as if the
Executive was currently employed.
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c. Cause. If the Executive's employment shall be terminated for
Cause pursuant to Section 5(c) hereof, the Company shall pay the
Executive his salary and any bonus then payable pursuant to
Section 4(d) through the Date of Termination. At the Executive's
own expense, the Executive and his dependents shall also be
entitled to any continuation of health insurance coverage rights
under any applicable law.
d. Other Terminations by the Company. If the Company shall
terminate the Executive's employment without cause pursuant to
Section 5(d) hereof, the Company shall pay the Executive the
Severance Payment for a period of two (2) years from the Date of
Termination. For a period of two years following the Date of
Termination, the Executive and his dependents shall be entitled
to health insurance coverage rights as if the Executive was
currently employed.
e. Voluntary Resignation. If the Executive terminates his
employment with the Company pursuant to Section 5(g) hereof for
"Good Cause", the Company shall pay the Executive the Severance
Payment for a period of two years from the Date of Resignation.
If the Executive terminates his employment with the Company
pursuant to Section 5(g) hereof without "Good Cause," the
Company shall have no obligation to compensate the Executive
following the Date of Resignation. In any event, at the
Executive's own expense, the Executive and his dependents shall
be entitled to any continuation of health insurance coverage
rights under any applicable law.
For purposes of this Agreement, "Good Cause" shall mean, without
the express written consent of Executive, the occurrence of any
of the following events unless such events are substantially
corrected within 30 days following written notification by
Executive to the Company that he intends to terminate his
employment hereunder for one of the reasons set forth below:
i. A material breach by the Company of any provision of
this Agreement; and
ii. the occurrence of a "Change in Control."
As used in this Agreement, "Change of Control" means the
occurrence of any of the following: (i) the adoption of a plan
relating to the liquidation or dissolution of the Company, (ii)
the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is
that any person or group, other than any of Xxxxx Xxxxxx, Xxxxxx
X. Xxxxxx and Xxxxxx X. Xxxxxxxxx or their affiliates (the
"Principals"), becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Securities
Exchange Act of 1934), directly or indirectly, of more than 50%
of the total voting power of the total outstanding voting stock
of the Company on a fully diluted basis or (iii) the
consummation of the first transaction (including, without
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limitation, any merger or consolidation) the result of which is
that any person or group, other than the Principals, becomes the
beneficial owner (as defined above), directly or indirectly, of
more than 50% of the total voting power of the total outstanding
voting stock of the Company.
The Executive understands that any voluntary resignation
by him as a result of any personal or family reasons not
otherwise set forth in this Section 6(e) shall not constitute
"Good Cause."
f. Beginning with the thirteenth (13th) monthly payment and each
monthly payment thereafter the Company will be entitled to
offset and reduce each month, the amount of the monthly
Severance Payment otherwise payable to the Executive hereunder
by the amount of the Executive's prior month's earnings (if any)
from post-Company full time employment (including both salary,
bonus and other cash or cash equivalent compensation) at a
subsequent full time employer or in connection with a full time
consulting practice or other self-employment or any full time
venture founded by the Executive; provided, however, that the
Company shall not be entitled to any Severance Payment offset or
reduction as a result of any earnings or income generated by the
Executive from part-time consulting work, unless and until such
consulting work becomes a full time endeavor.
g. In the event of any Termination pursuant to Section 5, the
Executive shall be entitled to retain (i) any and all options to
purchase capital stock of the Company granted to the Executive
pursuant to the terms and conditions of the Option Agreement
attached as Exhibit "A" hereto that have vested as of the date
of such Termination.
h. Any Severance Payment made pursuant to this Section 6 shall be
payable in equal monthly installments over the required duration
set forth in Sections 6(a) through 6(e).
i. The continuing obligation of the Company to make the
Severance Payment to the Executive is expressly
conditioned upon the Executive complying and continuing
to comply with his obligations and covenants under
Sections 7 and 8 of this Agreement following termination
of employment with the Company.
7. Confidentiality and Non-Solicitation Covenants.
a. Confidentiality. In addition to the agreements set forth in
Section 5(h)(i), the Executive hereby agrees that the Executive
will not, during the Employment Period or at any time thereafter
directly or indirectly disclose or make available to any person,
firm, corporation, association or other entity for any reason or
purpose whatsoever, any Confidential Information (as defined
below). The Executive agrees that, upon termination of his
employment with the Company, all
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Confidential Information in his possession that is in written or
other tangible form (together with all copies or duplicates
thereof, including computer files) shall be returned to the
Company and shall not be retained by the Executive or furnished
to any third party, in any form except as provided herein;
provided, however, that the Executive shall not be obligated to
treat as confidential, or return to the Company copies of any
Confidential Information that (i) was publicly known at the time
of disclosure to the Executive, (ii) becomes publicly known or
available thereafter other than by any means in violation of
this Agreement or any other duty owed to the Company by any
person or entity or (iii) is lawfully disclosed to the Executive
by a third party. As used in this Agreement the term
"Confidential Information" means: information disclosed to the
Executive or known by the Executive as a consequence of or
through his relationship with the Company, about the owners,
customers, employees, business methods, public relations
methods, organization, procedures or finances, including,
without limitation, information of or relating to owner or
customer lists of the Company and its affiliates.
b. Non-Solicitation. In addition, the Executive hereby agrees that
during the Employment Period and for a one year period following
Termination thereafter, regardless of the reason or
circumstances of termination of employment with the Company, the
Executive will not, either on his own account or jointly with or
as a manager, agent, officer, employee, consultant, partner,
joint venturer, owner or shareholder or otherwise on behalf of
any other person, firm or corporation, (i) carry on or be
engaged or interested directly or indirectly in, or solicit, the
manufacture or sale of goods or provision of services to any
person, firm or corporation which, at any time during the
Employment Period has been or is a customer of or in the habit
of dealing with the Company in its business, (ii) endeavor
directly or indirectly to canvas or solicit in competition with
Company or to interfere with the supply of orders for goods or
services from or by any person, firm or corporation which during
the Employment Period has been or is a supplier of goods or
services to Company or (iii) directly or indirectly solicit or
attempt to solicit away from Company any of its officers or
employees or offer employment to any person who, on or during
the 6 months immediately preceding the date of such solicitation
or offer, is or was an officer or employee of Company.
8. Covenant Not to Compete.
a. The Executive agrees that the provisions of this Section 8 shall
apply during the Employment Period and during the period
beginning after the Executive's Date of Termination and ending
on the second anniversary thereof, regardless of whether the
Executive is terminated for Cause or without Cause or otherwise
(the "Noncompete Period"). During the Noncompete Period, the
Executive will not engage in any competitive businesses, and the
Executive agrees that he shall not (i) invest in, manage,
consult or participate in any way in any other timeshare or
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vacation ownership business (in either an active or passive
manner), (ii) participate in or advise any business wherein
timeshare or vacation ownership is a material business segment
or (iii) act for or on behalf of any business that intends to
enter or participate in the timeshare or vacation ownership
business, in each case unless the independent members of the
Company's Board of Directors determine that such action is in
the best interest of the Company. Subject to the restrictions
set forth in Section 3(a), Section 3(c) and in this Section 8,
the Executive shall be permitted to continue his existing
business investments and activities and may pursue additional
business investments; provided that the Executive shall not
serve as an officer or director of any public company resulting
from such business investments or activities.
b. Notwithstanding the foregoing, during the Noncompete Period:
i. the Executive may purchase stock as a stockholder in any
publicly traded company, including any company which is
involved in the timeshare and vacation ownership
business; provided that the Executive does not
beneficially own (together or separately or through his
affiliates) more than 5% of any company (other than the
Company) in the timeshare or vacation ownership
business;
ii. the Executive shall not invest (directly or indirectly)
in any timeshare or vacation ownership property in the
hospitality business (including any condominium project)
or any property where the business plan includes an
intention to convert the property to timeshare or
vacation ownership, unless the independent members of
the Company's Board of Directors determine that such an
investment is in the best interest of the Company;
iii. in the event that a Change of Control occurs which
causes an acceleration in the vesting of the Executive's
options and, the Executive is terminated for Cause or
without Cause by the Company within six (6) months
before or after the effective date of the Change of
Control, then the noncompete provisions contained in
Section 8(a) shall not be applicable and the following
shall apply instead: the Executive agrees that during
the two year period following the Executive's Date of
Termination, he will not (i) manage, consult or
participate in any way in any other public timeshare or
vacation ownership business (in either an active or
passive manner), (ii) participate in or advise any
public company wherein timeshare or vacation ownership
is a material business segment or (iii) act for or on
behalf of any business that intends to enter or
participate in the timeshare or vacation ownership
business as a public company.
9. Injunctive Relief and Enforcement. In the event of breach by the
Executive of the terms of Sections 5(h)(i), 7 or 8, and only following
mediation or attempted mediation as set forth in Section 16 below
(unless the Company is suffering irreparable injury, in which
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case Section 16 will not prevent the Company from seeking injunctive
relief against the Executive in any court or forum), the Company shall
be entitled to institute legal proceedings to enforce the specific
performance of this Agreement by the Executive and to enjoin the
Executive from any further violation of Sections 5(h)(i), 7 or 8 and to
exercise such remedies cumulatively or in conjunction with all other
rights and remedies provided by law and not otherwise limited by this
Agreement. The Executive acknowledges, however, that the remedies at law
for any breach by him of the provisions of Sections 5(h)(i), 7 or 8 may
be inadequate. In addition, in the event the agreements set forth in
Sections 5(h)(i), 7 or 8 shall be determined by any court of competent
jurisdiction to be unenforceable by reason of extending for too great a
period of time or over too great a geographical area or by reason of
being too extensive in any other respect, each such agreement shall be
interpreted to extend over the maximum period of time for which it may
be enforceable and to the maximum extent in all other respects as to
which it may be enforceable, and enforced as so interpreted, all as
determined by such court in such action.
10. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when personally delivered
when transmitted by telecopy with receipt confirmed, or one day after
delivery to an overnight air courier guaranteeing next day delivery,
addressed as follows:
If to the Executive: Xxxxxxx Xxxxxxx
0 Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000
If to the Company: Sunterra Corporation
0000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxx
With a copy to: Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxxx, Esq.
or to such other address as any party may have furnished to the others
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
11. Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect; provided, however, that if any one or
more of the terms contained in Sections 5(h), 7 or 8 hereto shall for
any reason be held
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to be excessively broad with regard to time, duration, geographic scope
or activity, that term shall not be deleted but shall be reformed and
constructed in a manner to enable it to be enforced to the extent
compatible with applicable law.
12. Assignment. This Agreement may not be assigned by the Executive, but may
be assigned by the Company to any successor to its business and will
inure to the benefit and be binding upon any such successor.
13. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
14. Headings. The headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this
Agreement.
15. Choice of Law. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the
State of Maryland (without reference to the choice of law provisions of
Maryland), except with respect to matters of law concerning the internal
corporate affairs of any corporate entity which is a party to or the
subject of this Agreement, and as to those matters the law of the
jurisdiction under which the respective entity derives its powers shall
govern.
16. Mediation. Subject to any irreparable injury being suffered by the
Company giving rise to the right of the Company to seek injunctive
relief against the Executive pursuant to Section 9 hereof, in the event
that there shall be a dispute among the parties arising out of or
relating to this Agreement or the Letter, or the breach thereof, the
parties agree that such dispute shall be resolved by final and binding
mediation in Orlando, Florida, before a mediator and on terms and
conditions mutually acceptable to the parties; provided, however, that
if the parties cannot agree on the terms and conditions of such
mediation, such terms and conditions shall be established by the
mediator. Any award issued as a result of such mediation shall be final
and binding between the parties thereto, and shall be enforceable by any
court having jurisdiction over the party against whom enforcement is
sought. The fees and expenses relating to such mediation (with the
exception of the Executive's attorneys' fees, if any) or any action to
enforce a mediation award shall be paid by the Company.
17. LIMITATION ON LIABILITIES. IF EITHER THE EXECUTIVE OR THE COMPANY IS
AWARDED ANY DAMAGES AS COMPENSATION FOR ANY BREACH OR ACTION RELATED TO
THIS AGREEMENT, A BREACH OF ANY COVENANT CONTAINED IN THIS AGREEMENT
(WHETHER EXPRESS OR IMPLIED BY EITHER LAW OR FACT), OR ANY OTHER CAUSE
OF ACTION BASED IN WHOLE OR IN PART ON ANY BREACH OF ANY PROVISION OF
THIS AGREEMENT, SUCH DAMAGES SHALL BE LIMITED TO CONTRACTUAL DAMAGES AND
SHALL EXCLUDE (I) PUNITIVE DAMAGES, AND (II) CONSEQUENTIAL AND/OR
INCIDENTAL DAMAGES
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(E.G., LOST PROFITS AND OTHER INDIRECT OR SPECULATIVE DAMAGES). THE
MAXIMUM AMOUNT OF DAMAGES THAT THE EXECUTIVE MAY RECOVER FOR ANY REASON
SHALL BE THE AMOUNT EQUAL TO ALL AMOUNTS OWED (BUT NOT YET PAID) TO THE
EXECUTIVE PURSUANT TO THIS AGREEMENT THROUGH ITS NATURAL TERM OR THROUGH
ANY SEVERANCE PERIOD, PLUS INTEREST ON ANY DELAYED PAYMENT AT THE
MAXIMUM RATE PER ANNUM ALLOWABLE BY APPLICABLE LAW FROM AND AFTER THE
DATE(S) THAT SUCH PAYMENTS WERE DUE.
18. WAIVER OF JURY TRIAL. TO THE EXTENT APPLICABLE, EACH OF THE PARTIES TO
THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR THE LETTER OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT.
19. Entire Agreement. This Agreement and the Letter contain the entire
agreement and understanding between the Company and the Executive with
respect to the employment of the Executive by the Company as
contemplated hereby and thereby, and no representations, promises,
agreements or understandings, written or oral, not herein or therein
contained shall be of any force or effect. Neither this Agreement nor
the Letter shall be changed unless in writing and signed by both the
Executive and an authorized representative of the Company.
20. The Executive's Acknowledgment. The Executive acknowledges (a) that he
has had the opportunity to consult with independent counsel of his own
choice concerning this Agreement and the Letter, and (b) that he has
read and understands the Agreement and the Letter, is fully aware of
their legal effect, and has entered into each of them freely based on
his own judgment.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement
as of the date and year first above written.
SUNTERRA CORPORATION
/s/ L. XXXXXX XXXXXX
------------------------------------
By: L. Xxxxxx Xxxxxx
Its: President and CEO
EXECUTIVE
/s/ XXXXXXX XXXXXXX
------------------------------------
By: Xxxxxxx Xxxxxxx
S-1
16
Exhibit "A"
Form of Option Agreement
A-1
17
Exhibit "B"
Form of Option Plan
B-1
