EXHIBIT 10.21
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of this 1st day of
May, 2001, between Sunterra Corporation, a Maryland corporation (the "Company"),
and Xxxx Xxxxxx (the "Executive"). As described further in Section 11 herein,
this Agreement shall only become effective (the "Commencement Date") upon
approval by the U.S. Bankruptcy Court for the District of Maryland (Baltimore
Division) (the "Bankruptcy Court") and shall be null and void in the event the
Bankruptcy Court does not approve the Agreement.
R E C I T A L S:
WHEREAS, the Company recognizes that the future growth, profitability
and success of the Company's business will be substantially and materially
enhanced by the employment of the Executive by the Company; and
WHEREAS, the Company desires to employ the Executive and the Executive
has indicated his willingness to provide his services, on the terms and
conditions set forth herein.
NOW, THEREFORE, on the basis of the foregoing premises and in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
Section 1. Employment. The Company hereby agrees to employ the
Executive and the Executive hereby accepts employment with the Company, on the
terms and subject to the conditions hereinafter set forth. Subject to the terms
and conditions contained herein, the Executive shall serve as Vice President,
General Counsel and Secretary of the Company and, in such capacity, shall report
directly to the President and Chief Executive Officer of the Company and shall
have such duties as are typically performed by an executive officer of a
corporation in such capacity, together with such additional duties, commensurate
with the Executive's position as may be assigned to the Executive from time to
time by the Chief Financial Officer of the Company. The principal location of
the Executive's employment shall be at the Company's principal executive office
located in Orlando, Florida. The Executive understands and agrees that he may be
required to travel from time to time for business reasons.
Section 2. Commencement Date; Term. Unless terminated pursuant to
Section 6 hereof, the Executive's employment hereunder shall commence on the
Commencement Date and shall continue during the period ending on December 31,
2003 (the "Initial Term"). Thereafter, the Employment Term shall extend
automatically for consecutive periods of one year unless either party shall
provide notice of termination not less than 90 days prior to an anniversary date
of this Agreement (which, for purposes of this Agreement, shall be December 31).
The Initial Term, together with any extension pursuant to this Section 2, is
referred to herein as the "Employment Term." The Employment Term shall terminate
upon any termination of the Executive's employment pursuant to Section 6.
Section 3. Compensation and Benefits. During the Employment Term, the
Executive shall be entitled to the following compensation and benefits:
(a) Salary. As compensation for the performance of the Executive's
services hereunder, the Company shall pay to the Executive a salary (the
"Salary") of $300,000 per
annum with increases, if any, as may be approved in writing by the President and
Chief Executive Officer. The Salary shall be payable in accordance with the
payroll practices of the Company as the same shall exist from time to time.
(b) Annual Bonus. As compensation for the performance of the
Executive's services hereunder during the Employment Term, the Executive shall
be eligible to receive an annual cash bonus (the "Annual Bonus") in an amount up
to $120,000, based upon the satisfaction of performance goals to be established
by the President and Chief Executive Officer and the Chief Financial Officer, in
consultation with the Executive. The Annual Bonus shall be subject to increases,
if any, as may be approved in writing by the President and Chief Executive
Officer. The Annual Bonus shall be paid to the Executive in quarterly
installments, consistent with the timing of bonus distributions to other
executive officers of the Company.
(c) Performance Bonus. The Executive shall be eligible to receive a
one-time performance bonus based on the aggregate recovery and distribution
(whether in cash or any other form of distributable value) to the Company's
general unsecured creditors, as set forth in the disclosure statement approved
by the Bankruptcy Court in accordance with Section 1125 of the Bankruptcy Code
(the "Recovery Bonus"). The amount of the Recovery Bonus shall be determined
based upon the following recovery schedule:
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Recovery to Unsecured Creditors
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Bonus Amount Recovery Amount
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$90,000 $0 to $100,000,000
112,500 100,000,001 to 200,000,000
135,000 200,000,001 to 300,000,000
157,500 300,000,001 to 400,000,000
180,000 400,000,001 to 500,000,000
225,000 500,000,001 to 600,000,000
270,000 600,000,001 and greater
The Executive shall also be eligible to receive a one-time performance bonus
based on the date the Company's plan of reorganization or liquidation under
Chapter 11 of Title 11 of the United States Code (the "Chapter 11 Plan") is
filed with the Bankruptcy Court (the "Timing Bonus"). The amount of the Timing
Bonus shall be determined based upon the following schedule:
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Timing Bonus
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Bonus Amount Date the Chapter 11 Plan is Filed
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$30,000 4/1/02 to 4/30/02
45,000 3/1/02 to 3/31/02
60,000 2/1/02 to 2/28/02
75,000 1/1/02 to 1/31/02
90,000 12/1/01 to 12/31/01
120,000 11/1/01 to 11/30/01
150,000 prior to 10/31/01
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The Timing Bonus shall be payable as soon as practicable following the date on
which the Company's Chapter 11 Plan is filed with the Bankruptcy Court; provided
that the Executive must be employed on the date the Company's Chapter 11 Plan is
filed with the Bankruptcy Court to be eligible to receive the Timing Bonus. The
Recovery Bonus shall be payable as soon as practicable following the date on
which the Company's Chapter 11 Plan becomes effective (the "Effective Date");
provided the Executive must be employed on the Effective Date to be eligible to
receive the Recovery Bonus.
(d) Benefits. In addition to the Salary, Annual Bonus, Recovery Bonus
and Timing Bonus, if any, the Executive shall be entitled to participate in
health, insurance, pension, and other benefits provided to other senior
executives of the Company on terms no less favorable than those available to
such other senior executives of the Company. The Executive shall also be
entitled to three weeks (15 days) of vacation for each calendar year during the
Employment Term, and all Company holidays. The Executive shall be entitled to
all other benefits as are generally allowed to other senior executives of the
Company, in accordance with the Company's policies in effect from time to time.
(e) Temporary Living Expenses; Permanent Relocation Expenses. In
connection with the performance of his services hereunder, the Executive shall
be required to relocate from Evanston, Illinois to a location near the Company's
main headquarters in the greater Orlando, Florida metropolitan area, within a
reasonable period of time following the Effective Date. For the period beginning
on the Commencement Date, and ending on the date the Executive permanently
relocates himself and his family to the greater Orlando, Florida metropolitan
area, subject to the limitations described below, the Company shall reimburse
the Executive for the reasonable costs incurred by the Executive for temporary
housing in Florida for the Executive and his family and reasonable travel, if
applicable, between Evanston, Illinois and such Florida location for the purpose
of visiting his family. The Executive shall be entitled to reimbursement of
reasonable temporary housing expenses, and reimbursement of reasonable travel
expenses, subject to submission of properly documented housing and travel
receipts. Upon submission of properly documented receipts, the Company shall
also reimburse the Executive for (x) reasonable moving costs in connection with
the permanent relocation by the Executive and his family from Evanston, Illinois
to the greater Orlando, Florida metropolitan area, (y) reasonable real estate
commissions and other closing costs and related expenses with respect to the
sale of the Executive's current residence in Evanston, Illinois in connection
with or following the Executive's permanent relocation, and (z) reasonable
closing costs on a new residence in the greater Orlando, Florida metropolitan
area. If all or any portion of the amounts payable to or on behalf of the
Executive under this Section 3(e) (the "Reimbursed Amounts") is subject to
income tax payable by the Executive (after taking into account whether any such
amounts are legally permissible income tax deductions to the Executive), the
Company shall pay to the Executive an additional amount to the extent necessary
to place the Executive in the same after-tax position as he would have been in
had the Reimbursed Amounts not been subject to income tax (the "Gross-up
Amount"). The determination of the Gross-up Amount shall be made by the
Company's independent auditors, and such determination shall be final.
(f) Automobile. During the Employment Term, the Company will provide
the Executive with a suitable car, as reasonably determined by the President and
Chief Executive Officer, or reimburse the Executive for the rental or lease cost
thereof, which car shall be used in
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the performance of the Executive's duties for the Company and its subsidiaries
and affiliates. The Executive will also be entitled to the use of the car for
his private purposes, subject to such restrictions and upon such conditions as
the Company may from time to time reasonably impose. Upon submission of properly
documented receipts, the Company shall reimburse the Executive for all
reasonable expenses (including gasoline, maintenance, repairs, insurance, and
registration) incurred in connection with the use of such car.
Section 4. Exclusivity. During the Employment Term, the Executive
shall devote his full time to the business of the Company, shall faithfully
serve the Company, shall in all respects conform to and comply with the lawful
and reasonable directions and instructions given to him by the President and
Chief Executive Officer and/or the Chief Financial Officer in accordance with
the terms of this Agreement, shall use his best efforts to promote and serve the
interests of the Company and shall not engage in any other business activity,
whether or not such activity shall be engaged in for pecuniary profit, except
that the Executive may (i) participate in the activities of professional trade
organizations, including arbitration activities, (ii) engage in personal
investing activities, (iii) teach one course per calendar year at the University
of Miami Law School as an adjunct professor, and (iv) assist Harnischfeger
Industries, Inc. and/or the Beloit Corporation liquidating trust from time to
time with respect to ongoing litigation and/or post-confirmation issues,
provided that activities set forth in these clauses (i), (ii), (iii) and (iv),
either singly or in the aggregate, do not interfere in any material respect with
the services to be provided by the Executive hereunder.
Section 5. Reimbursement for Expenses. The Executive is authorized to
incur reasonable expenses in the discharge of the services to be performed
hereunder, including expenses for travel, entertainment, maintaining
professional licenses and certifications, bar association fees, attendance at
bar and other association meetings and conferences, professional development,
lodging and similar items in accordance with the Company's expense reimbursement
policy, as the same may be modified by the Company from time to time. The
Company shall reimburse the Executive for all such proper expenses upon
presentation by the Executive of itemized accounts of such expenditures in
accordance with the financial policy of the Company, as in effect from time to
time.
Section 6. Termination and Default.
(a) Death. The Executive's employment shall automatically terminate
upon his death and upon such event, the Executive's estate shall be entitled to
receive the amounts specified in Section 6(g) below.
(b) Disability. If the Executive is unable to perform the duties
required of him under this Agreement because of illness, incapacity, or physical
or mental disability, the Employment Term shall continue and the Company shall
pay all compensation required to be paid to the Executive hereunder, unless the
Executive is unable to perform the duties required of him under this Agreement
for an aggregate of 120 days (whether or not consecutive) during any 12-month
period during the term of this Agreement, in which event the Executive's
employment shall terminate.
(c) Cause. The Company may terminate the Executive's employment at any
time, with or without Cause. In the event of termination pursuant to this
Section 6(c) for Cause,
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the Company shall deliver to the Executive written notice setting forth the
basis for such termination, which notice shall specifically set forth the nature
of the Cause which is the reason for such termination. Termination of the
Executive's employment hereunder shall be effective upon delivery of such notice
of termination. For purposes of this Agreement, "Cause" shall mean: (i) the
Executive's failure (except where due to a disability contemplated by subsection
(b) hereof), neglect or refusal to perform his duties hereunder which failure,
neglect or refusal shall not have been corrected by the Executive within 30 days
of receipt by the Executive of written notice from the Company of such failure,
neglect or refusal, which notice shall specifically set forth the nature of said
failure, neglect or refusal; (ii) any intentional breach of this Agreement by
the Executive or any willful or intentional act of the Executive taken for the
purpose of injuring the reputation or business of the Company or its affiliates
in any material respect; (iii) any continued or repeated absence from the
Company other than in connection with activities performed by the Executive that
are consistent with the terms and conditions of the Agreement, unless such
absence is (A) approved or excused by the President and Chief Executive Officer
or (B) is the result of the Executive's illness, disability or incapacity (in
which event the provisions of Section 6(b) hereof shall control); (iv) use of
illegal drugs by the Executive or repeated drunkenness; (v) the Executive's
conviction of a felony or pleading of no contest to a felony; or (vi) the
commission by the Executive of an act of fraud or embezzlement against the
Company.
(d) Without Cause. The Company may terminate the Executive's
employment during the Employment Term without Cause at any time by giving
written notice to the Executive. A termination of the Executive's employment
without Cause shall mean a termination initiated by the Company for any reason
other than Cause or on account of death or Disability. A termination without
Cause shall be effective immediately upon notice given by the Company to the
Executive.
(e) Resignation. Unless otherwise provided in Section 6(f) below in
the case of termination of employment for Good Reason, the Executive shall have
the right to terminate his employment at any time by giving written notice of
his resignation to the Company.
(f) Good Reason. The Executive shall have the right to terminate his
employment for Good Reason under the following circumstances: (i) the failure by
the Company to pay to the Executive the Salary, Annual Bonus, Recovery Bonus and
Timing Bonus, if any, in accordance with Sections 3(a), 3(b) and 3(c),
respectively; (ii) the failure of the Company to provide the benefits,
relocation, temporary living, automobile benefits, or expense reimbursement, in
accordance with Sections 3(d), 3(e), 3(f) and 5, respectively; (iii) a material
diminution in the Executive's responsibilities or authority; (iv) a requirement
that the Executive relocate outside of the greater Orlando, Florida metropolitan
area; (v) any intentional breach of this Agreement by the Company; or (vi) the
failure of any successor to all or substantially all of the business and/or
assets of the Company to assume the Agreement; provided, however, that Good
Reason shall not exist upon a termination of employment described in Section
6(b), (c) or (d); provided, further, that the Executive must provide written
notice of termination of employment for Good Reason within 45 days following the
Executive's knowledge of an event constituting Good Reason or such event shall
not constitute Good Reason hereunder. Notwithstanding the foregoing, Good Reason
shall not be deemed to exist unless the Company fails to cure the event giving
rise to Good Reason within 30 days after receipt of written notice thereof given
by the Executive.
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(g) Termination Payments.
(i) Termination without Cause or for Good Reason. In the event
that during the Employment Term the Executive's employment is terminated by the
Company without Cause or by the Executive for Good Reason, the Company shall pay
to the Executive the sum of the following amounts: (A) for a period of six
months following the date of termination, the reasonable costs associated with
executive outplacement services for the Executive, such reimbursement to be made
promptly upon presentation by the Executive of receipts for such services, (B)
all amounts fully earned and accrued pursuant to the terms of this Agreement,
but unpaid hereunder through the date of termination, if any, in respect of
Salary, Annual Bonus, Recovery Bonus (for purposes of clarity, the Recovery
Bonus shall only be paid to the Executive pursuant to this Section 6(g)(i)(B) if
the Executive's employment is terminated by the Company without Cause or by the
Executive for Good Reason on or after the Effective Date, but prior to the date
the Recovery Bonus is paid to the Executive), Timing Bonus (for purposes of
clarity, the Timing Bonus shall only be paid to the Executive pursuant to this
Section 6(g)(i)(B) if the Executive's employment is terminated by the Company
without Cause or by the Executive for Good Reason on or after the date on which
the Company's Chapter 11 Plan is filed with the Bankruptcy Court, but prior to
the date the Timing Bonus is paid to the Executive), and unreimbursed expenses,
and (C) continuation of Executive's Salary (less any applicable withholding or
similar taxes) at the rate in effect hereunder on the date of termination, in
accordance with the Company's prevailing payroll practices, for a period of
twelve (12) months following the date of termination (the "Severance Term") and
continuation for the Severance Term of any health or other insurance benefits
provided to the Executive (and/or his covered dependents) as of the date of
termination, in accordance with Section 3(c) hereof. Notwithstanding any other
provision in this Agreement or the terms of any severance plan or policy
maintained by the Company or its affiliates to the contrary, if the Company pays
the Executive the severance benefit as provided in this Section 6(g)(i)(C), the
Executive shall not be entitled to receive any other payments or benefits under
any other severance or similar plan maintained by the Company or its affiliates.
Any payment made with respect to the Timing Bonus and/or Recovery Bonus pursuant
to this Agreement shall be made without duplication.
(ii) Termination due to Death or Disability. In the event that
during the Employment Term the Executive's employment is terminated by the
Company due to the Executive's death or disability, the Company shall pay to the
Executive, or the Executive's estate, the sum of the following amounts: (A) for
a period of six months following the date of termination due to the Executive's
disability, the reasonable costs associated with executive outplacement services
for the Executive, such reimbursement to be made promptly upon presentation by
the Executive of receipts for such services, and (B) all amounts fully earned
and accrued pursuant to the terms of this Agreement, but unpaid hereunder
through the date of termination, if any, in respect of Salary, Annual Bonus,
Recovery Bonus (for purposes of clarity, the Recovery Bonus shall only be paid
to the Executive pursuant to this Section 6(g)(ii)(B) if the Executive's
employment is terminated due to death or disability on or after the Effective
Date, but prior to the date the Recovery Bonus is paid to the Executive), Timing
Bonus (for purposes of clarity, the Timing Bonus shall only be paid to the
Executive pursuant to this Section 6(g)(ii)(B) if the Executive's employment is
terminated due to death or disability on or after the date on which the
Company's Chapter 11 Plan is filed with the Bankruptcy Court, but prior to the
date the Timing Bonus is paid to the Executive), and unreimbursed expenses.
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(iii) Termination for Cause or without Good Reason. In the event
that during the Employment Term the Executive's employment is terminated by the
Company for Cause or by the Executive by resignation without Good Reason, the
Company shall pay to the Executive the sum of the following amounts: (A) for a
period of six months following the date of termination, the reasonable costs
associated with executive outplacement services for the Executive, such
reimbursement to be made promptly upon presentation by the Executive of receipts
for such services, and (B) all amounts fully earned and accrued pursuant to the
terms of this Agreement, but unpaid hereunder through the date of termination,
if any, in respect of Salary, Annual Bonus, Recovery Bonus (for purposes of
clarity, the Recovery Bonus shall only be paid to the Executive pursuant to this
Section 6(g)(iii)(B) if the Executive's employment is terminated for Cause or by
the Executive by resignation without Good Reason on or after the Effective Date,
but prior to the date the Recovery Bonus is paid to the Executive), Timing Bonus
(for purposes of clarity, the Timing Bonus shall only be paid to the Executive
pursuant to this Section 6(g)(iii)(B) if the Executive's employment is
terminated by the Company for Cause or by the Executive by resignation without
Good Reason on or after the date on which the Company's Chapter 11 Plan is filed
with the Bankruptcy Court, but prior to the date the Timing Bonus is paid to the
Executive), and unreimbursed expenses.
(h) Survival of Operative Sections. Upon any termination of the
Executive's employment, the provisions of Sections 6(g) and 7 through 19 of this
Agreement shall survive to the extent necessary to give effect to the provisions
thereof.
Section 7. Secrecy and Non-Competition.
(a) No Competing Employment. The Executive acknowledges that the
agreements and covenants contained in this Section 7 are essential to protect
the value of the Company's business and assets and by his current employment
with the Company, the Executive has obtained and will obtain such knowledge,
contacts, know-how, training and experience and there is a substantial
probability that such knowledge, know-how, contacts, training and experience
could be used to the substantial advantage of a competitor of the Company and to
the Company's substantial detriment. Therefore, the Executive agrees that for
the period commencing on the date of this Agreement and ending on the first
anniversary of the termination of the Executive's employment hereunder (such
period is hereinafter referred to as the "Restricted Period") with respect to
any State in which the Company is engaged in business during the Employment
Term, the Executive shall not participate or engage, directly or indirectly, for
himself or on behalf of or in conjunction with any person, partnership,
corporation or other entity, whether as an employee, agent, officer, director,
shareholder, partner, joint venturer, investor or otherwise, in any business
activities if such activity consists of any activity undertaken or expressly
contemplated to be undertaken by the Company at any time during the Employment
Term; provided that this Section 7(a) is not intended to restrict or otherwise
limit the Executive from engaging in the private practice of law following his
termination of employment from the Company. The Executive understands and
acknowledges, however, that to the extent the Executive engages in the private
practice of law following the termination of his employment with the Company, he
shall be subject to all applicable laws, rules and regulations governing the
representation of clients in the practice of law, including, but not limited to,
laws, rules and regulations governing conflicts of interest.
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(b) Nondisclosure of Confidential Information. The Executive, except
in connection with his employment hereunder, shall not disclose to any person or
entity or use, either during the Employment Term or at any time thereafter, any
information not in the public domain or generally known in the industry, in any
form, acquired by the Executive while employed by the Company or any predecessor
to the Company's business or, if acquired following the Employment Term, such
information which, to the Executive's knowledge, has been acquired, directly or
indirectly, from any person or entity owing a duty of confidentiality to the
Company, relating to the Company, including but not limited to information
regarding customers, vendors, suppliers, trade secrets, training programs,
manuals or materials, technical information, contracts, systems, procedures,
mailing lists, know-how, trade names, improvements, price lists, financial or
other data (including the revenues, costs or profits associated with any of the
Company's products or services), business plans, code books, invoices and other
financial statements, computer programs, software systems, databases, discs and
printouts, plans (business, technical or otherwise), customer and industry
lists, correspondence, internal reports, personnel files, sales and advertising
material, telephone numbers, names, addresses or any other compilation of
information, written or unwritten, which is or was used in the business of the
Company. The Executive agrees and acknowledges that all of such information, in
any form, and copies and extracts thereof, are and shall remain the sole and
exclusive property of the Company, and upon termination of his employment with
the Company, the Executive shall return to the Company the originals and all
copies of any such information provided to or acquired by the Executive in
connection with the performance of his duties for the Company, and shall return
to the Company all files, correspondence and/or other communications received,
maintained and/or originated by the Executive during the course of his
employment.
(c) No Interference. In consideration of the compensation (and other
benefits) provided and to be provided to the Executive as set forth hereunder,
the Executive covenants and agrees that during the Restricted Period, the
Executive will not, directly or indirectly: (i) solicit, induce, or otherwise
have business contact with, any person or entity who has, within the most recent
one-year period, been a service provider of or to the Company, and with whom the
Executive had any business relationship or about whom the Executive acquired any
significant knowledge during the Employment Term, if such contact could directly
adversely affect the business of the Company, or (ii) solicit, hire, induce,
endeavor to entice away from the Company or its subsidiaries, or otherwise
directly interfere with the relationship of the Company with any person who, to
the knowledge of the Executive, is or was within the then most recent twelve
(12) month period, employed by or otherwise engaged to perform services for the
Company. Notwithstanding the foregoing, this Section 7(c) shall not apply in the
event the Company is liquidated.
(d) Inventions, etc. The Executive hereby sells, transfers and
assigns to the Company or to any person or entity designated by the Company all
of the entire right, title and interest of the Executive in and to all
inventions, ideas, disclosures and improvements, whether patented or unpatented,
and copyrightable material, made or conceived by the Executive, solely or
jointly, during his employment by the Company which relate to methods,
apparatus, designs, products, processes or devices, sold, leased, used or under
consideration or development by the Company, or which otherwise relate to or
pertain to the business, functions or operations of the Company or which arise
from the efforts of the Executive during the course of his employment
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for the Company. The Executive shall communicate promptly and disclose to the
Company, in such form as the Company requests, all information, details and data
pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and the Executive shall execute and deliver to the Company such
formal transfers and assignments and such other papers and documents as may be
necessary or required of the Executive to permit the Company or any person or
entity designated by the Company to file and prosecute the patent applications
and, as to copyrightable material, to obtain copyright thereof. Any invention
relating to the business of the Company and disclosed by the Executive within
one year following the termination of his employment with the Company shall be
deemed to fall within the provisions of this paragraph unless proved to have
been first conceived and made following such termination.
(e) Definition of Company for Purposes of Covenants. For purposes of
the covenants provided in this Section 7, and not withstanding any other
provision of this Agreement to the contrary, "Company" shall be defined to mean
Sunterra Corporation, and each of its subsidiaries and affiliates, including
Poipu Resort Partners, L.P., a Hawaii limited partnership, and West Maui Resort
Partners, L.P., a Delaware limited partnership.
Section 8. Injunctive Relief. Without intending to limit the remedies
available to the Company, the Executive acknowledges that a breach of any of the
covenants contained in Section 7 hereof may result in material irreparable
injury to the Company or its subsidiaries or affiliates for which there is no
adequate remedy at law, that it will not be possible to measure damages for such
injuries precisely and that, in the event of such a breach or threat thereof,
the Company shall be entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction, without the necessity of proving
irreparable harm or injury as a result of such breach or threatened breach of
Section 7 hereof, restraining the Executive from engaging in activities
prohibited by Section 7 hereof or such other relief as may be required
specifically to enforce any of the covenants in Section 7 hereof.
Section 9. Extension of Restricted Period. In addition to the remedies
the Company may seek and obtain pursuant to Section 8 of this Agreement, the
Restricted Period shall be extended by any and all periods during which the
Executive shall be found by a court to have been in violation of the covenants
contained in Section 7 hereof.
Section 10. Representations and Warranties of the Executive. The
Executive represents and warrants to the Company as follows:
(a) This Agreement, upon execution and delivery by the Executive, will
be duly executed and delivered by the Executive and (assuming due execution and
delivery hereof by the Company) will be the valid and binding obligation of the
Executive enforceable against the Executive in accordance with its terms.
(b) Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby nor the performance of this
Agreement in accordance with its terms and conditions by the Executive (i)
requires the approval or consent of any governmental body or of any other person
or (ii) conflicts with or results in any breach or violation of, or constitutes
(or with notice or lapse of time or both would constitute) a default under, any
agreement, instrument, judgment, decree, order, statute, rule, permit or
governmental regulation applicable to the Executive. Notwithstanding the
foregoing, the Executive agrees to
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provide to the Company, prior to the Commencement Date, an acknowledgment and
consent from Harnischfeger Industries, Inc. and Beloit Corporation that the
Executive's employment with the Company does not violate the noncompetition and
nonsolicitation provisions of the Executive's change in control agreement with
Harnischfeger Industries, Inc. and Beloit Corporation.
(c) The representations and warranties of the Executive contained in
this Section 10 shall survive the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby.
Section 11. Approval by the Bankruptcy Court. Approval by the
Bankruptcy Court, after notice and hearing, is a condition precedent to either
party's obligations under this Agreement, and to the effectiveness of this
Agreement. The Company agrees to promptly file and serve a motion authorizing
the Company to enter into this Agreement with the Executive following the
execution of this Agreement by the parties hereto. The Executive shall have the
right to reasonably approve the form of the Bankruptcy Court order approving
this Agreement.
Section 12. Assignment; No Third-Party Beneficiaries. This Agreement
shall inure to the benefit of, and be binding on, the successors and assigns of
each of the parties, including, but not limited to, the Executive's heirs, the
Executive's guardian in the event of the Executive's disability, and the
personal representatives of the Executive's estate. This Agreement, and the
Executive's rights and obligations hereunder, may not be assigned by the
Executive; any purported assignment by the Executive in violation hereof shall
be null and void. In the event of any sale, transfer or other disposition of all
or substantially all of the Company's assets or business, whether by merger,
consolidation or otherwise, the Company may assign this Agreement and its rights
hereunder. In the event of assignment, the assignee shall expressly assume all
obligations of the Company hereunder. Except as otherwise provided herein,
nothing in this Agreement shall confer upon any person or entity not a party to
this Agreement, or the legal representatives of such person or entity, any
rights or remedies of any nature or kind whatsoever under or by reason of this
Agreement.
Section 13. Waiver and Amendments. Any waiver, alteration, amendment
or modification of any of the terms of this Agreement shall be valid only if
made in writing and signed by the parties hereto; provided, however, that any
such waiver, alteration, amendment or modification is consented to on the
Company's behalf by the President and Chief Executive Officer. No waiver by
either of the parties hereto of their rights hereunder shall be deemed to
constitute a waiver with respect to any subsequent occurrences or transactions
hereunder unless such waiver specifically states that it is to be construed as a
continuing waiver.
Section 14. Severability and Governing Law. The Executive acknowledges
and agrees that the covenants set forth in Section 7 hereof are reasonable and
valid in geographical and temporal scope and in all other respects. If any of
such covenants or such other provisions of this Agreement are found to be
invalid or unenforceable by a final determination of a court of competent
jurisdiction (a) the remaining terms and provisions hereof shall be unimpaired
and (b) the invalid or unenforceable term or provision shall be deemed replaced
by a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision. THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
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STATE OF FLORIDA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE, WITHOUT REGARD TO ITS CONFLICT OF LAWS RULES.
Section 15. Notices.
(a) All communications under this Agreement shall be in writing and
shall be delivered by hand or mailed by overnight courier or by registered or
certified mail, postage prepaid
If to the Executive, at 0000 Xxxxxx Xxx., Xxxx 0-Xxxxx, Xxxxxxxx,
Xxxxxxxx 00000, or at such other address as the Executive may have
furnished the Company in writing.
If to the Company, at 0000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxx, 00000,
marked for the attention of the President and Chief Executive Officer,
or at such other address as it may have furnished in writing to the
Executive.
(b) Any notice so addressed shall be deemed to be given: if delivered
by hand, on the date of such delivery; if mailed by overnight courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
Section 16. Section Headings. The headings of the sections and
subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof, affect the meaning or interpretation of
this Agreement or of any term or provision hereof.
Section 17. Entire Agreement. This Agreement constitutes the entire
understanding and agreement of the parties hereto regarding the employment of
the Executive. This Agreement supersedes all prior negotiations, discussions,
correspondence, communications, understandings and agreements between the
parties relating to the subject matter of this Agreement.
Section 18. Severability. In the event that any part or parts of this
Agreement shall be held illegal or unenforceable by any court or administrative
body of competent jurisdiction, such determination shall not effect the
remaining provisions of this Agreement which shall remain in full force and
effect.
Section 19. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SUNTERRA CORPORATION
By: /s/ Xxxxxxxx Xxxxx
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Name: Xxxxxxxx Xxxxx
Title: Chief Financial Officer
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
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