Exhibit 10.6-B
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EXECUTION COPY
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EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT, dated as of November 18, 1997 (this "Agreement")
between VISTANA, INC., a Florida corporation (the "Company"), and XXXXXXX X.
XXXXXX ("Employee") (capitalized terms used herein and not otherwise defined
shall have the meanings ascribed thereto in Section 13),
W I T N E S S E T H:
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WHEREAS, the Company, through its Affiliates, is engaged in the business of
timeshare or vacation ownership, development, sales and resort management, as
well as the installation and management of voice, data and cable television
systems, and related operations; and
WHEREAS, the parties hereto desire to enter this Agreement upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged, the
parties, intending legally to be bound, hereby agree as follows:
1. Employment. The Company hereby employs Employee, and Employee hereby
accepts such employment, upon the terms and conditions hereinafter set forth .
2. Position, Duties and Responsibilities.
(a) Position. Employee's title and primary responsibilities are set
forth on Schedule A attached hereto and incorporated herein by this reference.
(b) Place of Employment. During the term of this Agreement, Employee
shall perform the services required by this Agreement at the Company's place of
business set forth on Schedule A attached hereto; provided, however, that the
Company may at its discretion require Employee to travel extensively to other
locations on the Company's business.
(c) Other Activities. During the term of this Agreement, Employee
shall be an employee of the Company and, except as provided in Schedule C
attached hereto and incorporated herein by this reference, shall not be engaged
in any other employment or business activities, shall devote Employee's full
business time and effort to the Company and shall not serve as an officer or
director of any public company, other than the Company. Notwithstanding the
foregoing, Employee shall not be prohibited from investing or trading in stocks,
bonds, commodities or other forms of passive investment, including real property
(provided that such investments do not violate Section 10 hereof).
3. Term.
(a) Effective Date. This Agreement shall become effective on November
18, 1997 (the "Effective Date").
(b) Termination Date. The term of employment under this Agreement
shall terminate upon the earliest to occur of the following events (the date
specified in each such event is referred to as the "Termination Date"):
(i) the fourth anniversary of the Effective Date; provided,
however, that such period of employment may be extended by written
agreement of the parties (it being understood that if Employee remains
employed by the Company after the Termination Date described in this clause
(i), such employment shall be "at-will" unless different terms are
established in writing);
(ii) the date upon which the Company terminates Employee's
employment by the Company for Cause or without Cause (it being understood
that the date of termination shall be the date upon which the Company
provides Employee written notice of either such event);
(iii) the date of Employee's death;
(iv) the date upon which the Company terminates Employee's
employment by the Company as a result of Employee's Permanent Disability
(it being understood that the date of termination shall be the date upon
which the Company provides Employee written notice of such event); or
(v) the date upon which Employee effects a Voluntary Termination
(it being understood that the date of termination shall be the date upon
which the Employee provides the Company written notice of such event).
(c) Performance of Duties During Notice Period. In the event that
either (i) the Company terminates Employee's employment by the Company pursuant
to Section 3(b)(ii) hereof or (ii) Employee effects a Voluntary Termination
pursuant to Section 3(b)(v), Employee, if requested by the Company, shall
continue to render services hereunder to the Company for the 30-day notice
period (or, if shorter, until the Termination Date), and shall, in such event,
be paid the compensation and benefits hereunder for the remainder of such
period.
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(d) Employment-At-Will/Employee Acknowledgement. Notwithstanding the
term of this Agreement having a duration of four years and Sections 4(a) and (b)
hereof relating to the annual salary and annual bonus to be paid to Employee
during Employee's employment by the Company, nothing in this Agreement should be
construed as to confer any right of Employee to be employed by the Company for a
fixed or definite term. Subject to Section 8 hereof, Employee agrees that the
Company may dismiss Employee under Section 3(b)(ii) without regard to (i) any
general or specific policies (whether written or oral) of the Company relating
to the employment or termination of employment of the Company employees; or (ii)
any statements made to Employee, whether made orally or contained in any
document or instrument, pertaining to Employee's relationship with the Company.
Notwithstanding anything to the contrary contained herein, Employee's employment
by the Company is not for any specified term, is at-will and may be terminated
by the Company pursuant to Section 3(b)(ii) at any time by delivery of the
notice referred to therein, for any reason, for Cause or without cause, without
any liability whatsoever, except with respect to the payments provided for in
Section 8.
(e) Termination Obligations.
(i) Employee hereby acknowledges and agrees that all personal
property and equipment, including, 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, furnished
to or prepared by Employee in the course of or incident to Employee's
employment, belongs to the Company and shall be promptly returned to the
Company within 10 days after the Termination Date. Following the
Termination Date, Employee will not retain any written or other tangible
material containing any proprietary information of the Company.
(ii) Effective as of the Termination Date, Employee shall be
deemed to have resigned from all offices then held with the Company and
from all offices and directorships then held with any Affiliate of the
Company.
(iii) The covenants and agreements of Employee contained in
Sections 3(e), 9, 10, 11, 12 and 14(b) and (c) shall survive termination of
Employee's employment by the Company and the termination of this Agreement.
(f) Release. In exchange for the Company entering into the
Agreement, Employee agrees that, at the time of Employee's resignation or
termination from the Company, Employee will execute a release acceptable to the
Company of all liability of the Company and its officers, shareholders,
employees, directors and Affiliates
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to Employee in connection with or arising out of Employee's employment by the
Company, except with respect to (i) any then-vested rights under the Company's
Stock Plan, (ii) any amounts which may be payable to Employee pursuant to
Section 8 and (iii) any claims Employee may have pursuant to the Company's
disability and workmen's compensation insurance policies (it being understood
that the foregoing is not intended to provide Employee duplicative rights to
those provided for in Section 8(c)(ii)).
4. Compensation.
(a) Annual Salary. The Company shall pay to Employee an annual salary
equal to the base salary set forth on Schedule B attached hereto and
incorporated herein by this reference (the "Base Salary"). The Base Salary shall
be in effect, on a pro-rated basis, from and after the Effective Date through
December 31, 1997. For each calendar year during the term of this Agreement
commencing with the 1998 calendar year, the Company shall pay Employee an annual
salary (the "Adjusted Base Salary") determined by the Company's Board of
Directors (or the Compensation Committee thereof); provided, however, that the
Adjusted Base Salary shall be no less than the greater of (i) the Formula Salary
specified in Schedule B attached hereto; and (ii) the product of (x) the Base
Salary, multiplied by (y) a fraction, the numerator of which shall be the last
Consumer Price Index figure published prior to the December 31st immediately
preceding the beginning of such calendar year (the "Base Salary Adjustment
Date") and the denominator of which shall be the most recent Consumer Price
Index figure published prior to December 31, 1996; provided, further, however,
in no event shall the Adjusted Base Salary, as so adjusted on such Base Salary
Adjustment Date, be less than the Annual Salary for the preceding calendar year.
The Base Salary and the Adjusted Base Salary shall be paid in equal
installments, subject to all applicable withholding and deductions, in
accordance with the usual payroll practices of the Company, but not less
frequently than monthly.
(b) Annual Bonus Amount. Employee shall be entitled to be paid an
annual bonus amount (the "Annual Bonus Amount") in respect of each calendar year
beginning with the 1998 calendar year as further specified and described on
Schedule B attached hereto. The Annual Bonus Amount shall be deemed earned as
of December 31 of the applicable calendar year and shall be due and payable,
subject to all applicable withholding and deductions, within 31 days following
the end of the calendar year to which such Annual Bonus Amount relates based
upon the Company's good faith preliminary estimate thereof for such calendar
year; provided, that upon certification by the Company's auditors of the
Company's consolidated financial statements for such calendar year, the
definitive Annual Bonus Amount for such calendar year shall be determined by the
Company and the Company shall promptly pay to Employee (in the case the
preliminary estimate resulted in an
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underpayment), or the Employee shall promptly repay to the Company (in the case
the preliminary estimate resulted in an overpayment), the amount necessary to
provide Employee with full payment of the definitive Annual Bonus Amount as
finally determined in accordance with such audited consolidated financial
statements for such calendar year.
5. Fringe Benefits. During the term of this Agreement, Employee shall be
entitled to all such employment benefits as may, from time to time, be made
generally available to similar level management employees of the Company
including, without limitation, stock-based incentive plans, pension or other
retirement benefits, health, hospitalization and similar insurance and group or
individual life insurance, and Employee's family shall be entitled to
participate in the Company's medical and health insurance plans; provided,
however, that such benefits and arrangements are made available at the
discretion of the Company and nothing in this Agreement establishes any right of
Employee to the availability or continuance of any such plan or arrangement. If
additional rounds of stock options, restricted stock, stock appreciation rights
or similar stock-based incentives are granted by the Company to its senior
management employees, Employee shall participate in such grants with other
senior management employees of the Company on a pro rata basis (determined in
accordance with the options then held by the senior management employees as a
group).
6. Business Expenses. Except as otherwise provided herein, the Company
shall pay, either directly or by reimbursement to Employee, such reasonable and
necessary business expenses incurred by Employee, including travel and
entertainment expenses (with accommodations and class of travel comparable to
those made available to the Company's Chief Executive Officers), in the course
of employment by the Company as are consistent with the Company's policies in
existence from time to time. Such expenses shall include, but shall not be
limited to, occupational license fees, membership dues in professional
organizations, educational expenses, and subscriptions to professional journals.
7. Vacation and Sick Leave. Employee shall be entitled to four weeks'
paid vacation time, in the aggregate, per calendar year, and such paid sick
leave as shall be authorized by the Company pursuant to the Company's written
policies, as determined from time to time. Additionally, Employee may be
entitled to additional paid vacation time to the extent that the operations and
needs of the business permit as determined by the Company. All vacations shall
be taken by Employee at such time or times as may be reasonably approved by the
Company.
8. Compensation Upon Termination of Employment.
(a) Expiration of Term. If Employee's employment by the Company is
terminated as a result of the occurrence of the fourth
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anniversary of the Effective Date, the Company shall pay Employee (i) the
compensation and other benefits expressly provided under this Agreement through
the Termination Date; and (ii) the Transition Payment set forth on Schedule B
attached hereto (the "Transition Payment"), payable in 12-equal consecutive
monthly installments, commencing with the first calendar month after the
Termination Date.
(b) Death. If Employee's employment by the Company is terminated as a
result of the occurrence of Employee's death pursuant to Section 3(a)(iii), the
Company shall pay Employee's estate (i) the compensation and other benefits
expressly provided under this Agreement through the Termination Date; and (ii)
an aggregate of the Severance Amount set forth on Schedule B attached hereto
(the "Severance Amount"), payable in 24 equal monthly installments of the amount
set forth on Schedule B attached hereto (the "Monthly Severance Payment")
commencing with the first calendar month after the Termination Date.
(c) Permanent Disability. If Employee's employment by the Company is
terminated by the Company as a result of the occurrence of Employee's Permanent
Disability pursuant to Section 3(a)(iv), the Company shall pay Employee (i) the
compensation and other benefits expressly provided under this Agreement through
the Termination Date; and (ii) the Monthly Severance Payment for the lesser of
24 months or the duration of such Permanent Disability; provided, however, that
the amount of all payments of the Monthly Severance Amount shall be reduced by
the sum of the amount, if any, payable to Employee at or prior to the time of
any such payment under any disability benefit plan of the Company.
(d) Termination by the Company for Cause. If Employee's employment by
the Company is terminated by the Company for Cause pursuant to Section 3(b)(ii),
Employee shall receive the compensation and other benefits expressly provided
under this Agreement through the Termination Date.
(e) Termination by the Company without Cause. If Employee's
employment by the Company is terminated by the Company without Cause pursuant to
Section 3(b)(ii), the Company shall pay Employee (i) the compensation and other
benefits expressly provided under this Agreement through the Termination Date;
and (ii) the Severance Amount, payable in 24 equal monthly installments of the
Monthly Severance Payment commencing with the first calendar month after the
Termination Date.
(f) Termination by Employee for Good Reason. If Employee's employment
by the Company is terminated by Employee for Good Reason pursuant to Section
3(b)(v), the Company shall pay Employee (i) the compensation and other benefits
expressly provided under this Agreement through the Termination Date; and (ii)
the
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Severance Amount, payable in 24 equal monthly installments of the Monthly
Severance Payment commencing with the first calendar month after the Termination
Date; provided, however, that if such termination of the Employee's employment
for Good Reason results from a Voluntary Termination within 90 days after the
consummation of a Change in Control, the Company shall pay Employee, in lieu of
such amounts, the Change in Control Amount set forth in Schedule B attached
hereto.
(g) Termination by Employee without Good Reason. If Employee's
employment by the Company is terminated by Employee without Good Reason pursuant
to Section 3(b)(v), the Company shall pay Employee (i) the compensation and
other benefits expressly provided under this Agreement through the Termination
Date; and (ii) the Transition Payment, payable in 12-equal consecutive monthly
installments, commencing with the first calendar month after the Termination
Date.
(h) Continuation of Health Insurance Coverage. At Employee's own
expense, Employee and Employee's dependents shall also be entitled to any
continuation of health insurance coverage rights under any applicable law.
(i) Right of Offset; Compliance with Covenants.
(i) If the Employee's employment by the Company is terminated for
any reason, Employee shall be entitled to the compensation and other
benefits expressly provided under this Agreement, subject to the Company's
right of offset for any amounts owed by Employee to the Company (or to any
of its Affiliates).
(ii) The continuing obligation of the Company to make the Monthly
Severance Payment to Employee is expressly conditioned upon the Employee
complying in all respects and continuing to comply in all respects with
Employee's obligations under Sections 9, 10 and 11 hereof following the
Termination Date.
9. Confidential Information and Ownership of Property.
(a) Confidential Information. Employee agrees to use all Confidential
Information solely in connection with the performance of services for or on
behalf of the Company. Employee shall not, during the term of this Agreement,
or at any time after the termination of this Agreement, in any manner, either
directly or indirectly, (i) disseminate, disclose, use or communicate any
Confidential Information to any person or entity, regardless of whether such
Confidential Information is considered to be confidential by third parties, or
(ii) otherwise directly or indirectly misuse any Confidential Information;
provided, however, that (y) none of the provisions of this Section 9 shall apply
to
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disclosures made for valid business purposes of the Company or (z) that Employee
shall not be obligated to treat as confidential any Confidential Information
that (I) was publicly known at the time of disclosure to Employee; (II) becomes
publicly known or available thereafter other than by means in violation of this
Agreement or any other duty owned to the Company or any of its Affiliates by any
person or entity; or (III) is lawfully disclosed to Employee by a third party.
Notwithstanding the foregoing, Employee shall be permitted to disclose
Confidential Information to the extent required to enforce Employee's rights
hereunder in any litigation arising under, or pertaining to, this Agreement
provided that Employee shall give prior written notice to the Company of any
such disclosure so that the Company may have an opportunity to protect the
confidentiality of such Confidential Information in such litigation.
(b) Ownership of Property. Employee agrees that all works of
authorship developed, authored, written, created or contributed to during the
term of this Agreement for the benefit of the Company, whether solely or jointly
with others, shall be considered works-made-for-hire. Employee agrees that such
works shall be the sole and exclusive property of the Company (or its
appropriate Affiliate) and that all right, title and interest therein or
thereto, including all intellectual property rights existing or obtained in
connection therewith, shall likewise be the sole and exclusive property of the
Company (or its appropriate Affiliate). Employee agrees further that, in the
event that any work is not considered to be work-made-for-hire by operation of
law, Employee will immediately, and without further compensation, assign all of
Employee's right, title and interest therein to the Company (or its designated
Affiliate), its successors and assigns. At the request and expense of the
Company, Employee agrees to perform in a timely manner such further acts as may
be necessary or desirable to transfer, defend or perfect the Company's ownership
of such work and all rights incident thereto.
10. Covenant Not to Compete. Unless the Company's Board of Directors
determines that any of the following conduct is in the Company's best interests,
during the term of Employee's employment by the Company and for the Non-Compete
Period, Employee shall not:
(a) directly or indirectly for himself/herself or for any other person
or entity engage, whether as owner, investor, creditor, consultant,
partner, shareholder, director, financial backer, agent, employee or
otherwise, in the business, enterprise or employment of owning, operating,
marketing or selling a time-share, vacation plan, vacation ownership or
interval ownership project within the Territory; or
(b) directly or indirectly for himself/herself or for any other person
or entity sell, or otherwise procure
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purchasers for, any time-share, vacation plan, vacation ownership or
interval ownership project within the Territory; or
(c) have any business (as owner, investor, creditor, consultant,
partner, debtor or otherwise) or be employed in any capacity by a person or
entity that is engaged, directly or indirectly, in (i) operating, or
providing sales, marketing or development services to, a time-share,
vacation plan, vacation ownership or interval ownership project within the
Territory, or (ii) in an activity formed or entered into for the primary
purpose of engaging in a time-share, vacation plan, vacation ownership or
interval ownership business within the Territory; or
(d) [Intentionally Omitted]
(e) directly or indirectly for himself/herself or for any other person
or entity become employed in any capacity by or otherwise render services
in any capacity to any national enterprise having time-share, vacation
plan, vacation ownership or interval ownership activities, including,
without limitation, Xxxx Disney Company, Hilton Hotels Corporation, Hyatt
Corporation, Four Seasons Hotels and Resorts, Inc., Marriott International,
Inc., Inter-Continental Hotels and Resorts, Inc., Promus Hotels, Inc.,
Fairfield Communities, Inc., Signature Resorts, Inc. or Vacation Break
U.S.A., Inc. or any of their respective Affiliates; or
(f) directly or indirectly for himself, herself or for any other
person or entity pursue or consummate or otherwise interfere with any
Existing Project; or
(g) (i) directly or indirectly, for himself, herself, or any other
person or entity, pursue, consummate or otherwise interfere with any
Prospective Project or (ii) directly or indirectly for himself/herself or
for any other person or entity become employed in any capacity by or
otherwise render services in any capacity to any other person or entity
(other than the Company and its Affiliates) described in clause (ii) of the
definition of Prospective Project.
Notwithstanding the foregoing, Employee may purchase stock as a stockholder
in any publicly traded company, including any company engaged in the timeshare
or vacation ownership business; provided, however, that Employee may not own
(individually or collectively with Employee's family members, trusts for the
benefit of Employee's family members and affiliates of Employee) more than 5% of
any company (other than the Company).
In light of the substantial remuneration provided to Employee
hereunder and Employee's management position with the
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Company, Employee hereby specifically acknowledges and agrees that the
provisions of this Section 10 (including, without limitation, its time and
geographic limits), as well as the provisions of Sections 9 and 11, are
reasonable and appropriate, and that Employee will not claim to the contrary in
any action brought by the Company to enforce such any of such provisions.
11. Covenant Against Solicitation of Employees. During the term of
Employee's employment by the Company and for the Non-Compete Period, the
Employee shall not employ employees or agents or former employees or agents of
the Company or its Affiliates or, directly or indirectly, solicit or otherwise
encourage the employment of employees or agents or former employees or agents of
the Company or its Affiliates; provided, however, that this restriction shall
not apply to (i) former employees or agents who, as of the date of termination
of Employee's employment by the Company, have not worked for any of the Company
or its Affiliates during the twelve preceding months; or (ii) employees or
agents or former employees or agents who, prior to Employee's employment by the
Company, served as officers, directors, or employees of Synagen Capital
Partners, Inc. or Xxxxx X. Xxxxx & Co.
12. Remedies For Breach. It is understood and agreed by the parties that
no amount of money would adequately compensate the Company for damages which the
parties acknowledge would be suffered as a result of a violation by the Employee
of the covenants contained in Sections 9, 10 and 11 above, and that, therefore,
the Company shall be entitled, upon application to a court of competent
jurisdiction, to obtain injunctive relief (without the need to post bond) to
enforce the provisions of Sections 9, 10 or 11, which injunctive relief shall be
in addition to any other rights or remedies available to the Company. The
provisions of this Section 12 shall survive the termination of this Agreement.
13. Certain Defined Terms. For purposes of this Agreement the following
terms and phrases shall have the following meanings:
"Affiliate" means any person or entity who or which, directly or
indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, a specified person or entity (the term "control"
for these purposes meaning the ability, whether by ownership of shares or other
equity interests, by contract or otherwise, to elect a majority of the directors
of a corporation, to act as or select the managing or general partner of a
partnership, or otherwise to select, or have the power to remove and then
select, a majority of those persons exercising governing authority over an
entity).
"Cause", with respect to the termination of Employee's employment by the
Company, shall mean (a) the commission by Employee of an act of fraud,
embezzlement or willful breach of a fiduciary duty to the Company (including the
unauthorized
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disclosure of confidential or proprietary material information of the Company);
(b) the commission by Employee of a breach of any material covenant, provision,
term, condition, understanding or undertaking set forth in this Agreement; (c)
the commission by Employee (other than in Employee's capacity as an agent of the
Company) of a crime constituting a felony under applicable law (or a plea of
nolo contendere in lieu thereof); (d) the exposure of the Company to any
criminal liability substantially caused by the conduct of Employee which results
in a material adverse effect upon the Company's business, operations, financial
condition or results of operations or the exposure of the Company to any civil
liability caused by Employee's unlawful harassment in employment; (e) any
habitual absenteeism, gross negligence, bad faith, or willful misconduct by
Employee in the performance of Employee's duties to the Company which such
conduct results in a material detriment to the Company; or (f) Employee's
habitual abuse of alcohol or any controlled substance or Employee's reporting to
work under the influence of alcohol or a controlled substance (other than those
for which Employee is taking under a current prescription).
"Change in Control" means the occurrence of any one of the following
events:
(i) any (A) consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or which
contemplates that all or substantially all of the business and/ or assets
of the Company shall be controlled by another corporation or (B) a
recapitalization (including an exchange of Company equity securities by the
holders thereof), in either case, in which any "Person" (as such term is
used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than the
Controlling Shareholders, becomes the beneficial owner (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of securities of the
Company representing more than 50% of the combined voting power of the
Company's then outstanding securities ordinarily having the right to vote
in the election of directors;
(ii) any sale, lease, exchange or transfer (in one transaction or
series of related transactions) of all or substantially all of the assets
of the Company and its Affiliates;
(iii) approval by the shareholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company, unless such
plan or proposal is abandoned within 60 days following such approval; or
(iv) any "Person" (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Controlling Shareholders,
shall become the beneficial
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owner of securities of the Company representing more than 50% of the
combined voting power of the Company's then outstanding securities
ordinarily having the right to vote in the election of directors.
"Confidential Information" means all software, trade secrets, work products
created by Employee for the Company or any of its Affiliates, know-how, ideas,
techniques, theories, discoveries, formulas, plans, charts, designs, drawings,
lists of current or prospective clients, business plans and proposals, current
or prospective business opportunities, financial records, research and
development, marketing strategies and programs (including present and
prospective OPC locations and the terms of leases of similar arrangements) and
reports and other proprietary information created or obtained by Employee for
the benefit of the Company or any of its Affiliates during the course of
employment by the Company.
"Consumer Price Index" means the United States Department of Labor's Bureau
of Labor Statistics' Consumer Price Index, All Urban Consumers, All Items,
Xxxxxxx, Xxxxxxx Xxxx (0000-00 = 100), or the successor of such index (or if the
index is not published for the Orlando, Florida area, a comparable index
applicable to the Tampa, Florida or Jacksonville, Florida area or in the event
they are not available, any other areas as may be reasonably determined by the
Company).
"Controlling Shareholders" means Xxxxxxx X. Xxxxxxx, Xx., Xxxxxxx X. Xxxxx
and JGG Holdings Trust, in each case together with their respective Affiliates,
family members, former spouses (if applicable) and trusts for the benefit of any
of the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Project" means a time-share, vacation plan, vacation ownership or
interval ownership resort or project which the Company or any of its Affiliates
owns, operates or has commenced to develop, acquire or otherwise undertake as of
the Termination Date.
"Good Reason" shall mean the occurrence, without the express written
consent of Employee, of any of the following events unless such events are
substantially corrected within 30 days following written notification by
Employee to the Company that Employee intends to effect a Voluntary Termination
as a result of (i) a material alteration, reduction or diminution in Employee's
duties or responsibilities or relocation from the Company's office described on
Schedule A (Item No. 4) attached hereto; (ii) a material breach by the Company
of any covenant, provision, term, condition, understanding or undertaking set
forth in this Agreement; or (iii) a Voluntary Termination within 90 days after
the consummation of a Change in Control (it being understood that a Voluntary
Termination shall not be for Good Reason as a result of
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any personal or family reasons not otherwise set forth in this definition).
"Non-Compete Period" shall mean the period commencing on the Termination
Date and ending on (i) the first anniversary of the Termination Date in case of
the termination of Employee's employment by the Company pursuant to Section
3(b)(i); or (ii) the second anniversary of the Termination Date in case of (w)
the termination of Employee's employment by the Company for Cause pursuant to
Section 3(b)(ii), (x) the termination of Employee's employment by the Company
without Cause pursuant to Section 3(b)(ii), (y) the termination of Employee's
employment by Employee for Good Reason pursuant to Section 3(b)(v) and (z) the
termination of Employee's employment by Employee without Good Reason pursuant to
Section 3(b)(v) (it being understood that if such termination of employment is
due to a Voluntary Termination for Good Reason in respect of a Change in Control
of which both Messrs. Xxxxxxx X. Xxxxxxx, Xx. and Xxxxxxx X. Xxxxx have not
approved, by vote in their capacities as directors of the Company or otherwise,
then the Non-Compete Period shall not be applicable).
"Permanent Disability" shall mean the inability of the Employee to perform
substantially all Employee's duties and responsibilities to the Company by
reason of a physical or mental disability or infirmity for either (i) a
continuous period of six months or (ii) 180 days during any consecutive twelve-
month period. The date of such Permanent Disability shall be (y), in the case
of clause (i) above, the last day of such six-month period or, if later, the day
on which satisfactory medical evidence of such Permanent Disability is obtained
by the Company, or (z) in the case of clause (ii) above, such date as is
determined in good faith by the Company. In the event that any disagreement or
dispute arises between the Company and Employee as to whether the Employee has
incurred a Permanent Disability, then, in any such event, Employee shall submit
to a physical and/or mental examination by a competent and qualified physician
licensed under the laws of the State of Florida who shall be mutually selected
by the Company and Employee, and such physician shall make the determination of
whether Employee suffers from any disability. In the absence of fraud or bad
faith, the determination of such physician as to Employee's condition at such
time shall be final and binding upon both the Company and the Employee. The
entire cost of any such examination shall be borne solely by the Company.
"Prospective Project" means (i) a prospective time-share, vacation plan,
vacation ownership or interval ownership resort or project with respect to which
Employee has been made aware or has been advised prior to the Termination Date
that the Company or any of its Affiliates is considering developing or
undertaking and (ii) any person or entity, including its respective Affiliates,
with respect to which Employee has been made aware or has been advised prior to
the Termination Date that the Company or any of its
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Affiliates has commenced to evaluate or negotiate with in respect of any
transaction involving (y) the acquisition by the Company or any of its
Affiliates of all or a portion of such person or entity or its consolidated
assets or (z) the acquisition by such person or entity (or its Affiliates) of
all or a portion of the Company or its consolidated assets.
"Territory" means the total geographic area located within a 150-mile
radius of each Existing Project and each Prospective Project.
"Voluntary Termination" shall mean the voluntary termination by Employee of
Employee's employment by the Company by voluntary resignation or any other means
(other than (i) death or Permanent Disability or (ii) simultaneous with or
following termination for Cause or an event which if known to the Company at the
time of such voluntary termination by Employee would constitute Cause).
14. Miscellaneous.
(a) Severability. If any provision of this Agreement shall be
declared invalid or unenforceable by a court of competent jurisdiction, the
invalidity or unenforceability of such provision shall not affect the other
provisions hereof, and this Agreement shall be construed and enforced in all
respects as if such invalid or unenforceable provision was omitted.
(b) Attorneys' Fees and Costs. In the event a dispute arises between
the parties hereto and suit is instituted, the prevailing party or parties in
such litigation shall be entitled to recover reasonable attorneys' fees and
other costs and expenses from the non-prevailing party or parties, whether
incurred at the trial level or in any appellate proceeding. For purposes
hereof, the Company shall be deemed to have prevailed in any suit involving a
breach or alleged breach by Employee of any of the covenants contained in
Sections 9, 10 and 11 above if the Company prevails to any degree in such suit
(even if such covenant or covenants are not enforced to the fullest extent
otherwise sought by the Company).
(c) Governing Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida. In the event of
any legal or equitable action arising under this Agreement, the venue of such
action shall be exclusively within either the state courts of Florida located in
Orange County, Florida, or the United States District Court for the Middle
District of Florida, Orlando Division, and the parties waive any other
jurisdiction and venue.
(d) Completeness of Agreement. All understandings and agreements
heretofore made between the parties hereto with respect to the subject matter of
this Agreement are merged into this document which alone fully and completely
expresses their
-14-
agreement, other than certain understandings with respect to certain provisions
of the Old Agreement set forth in that certain letter dated the date hereof from
the Employers (as defined in the Old Agreement) to Employee. No change or
modification may be made to this Agreement except by instrument in writing duly
executed by the parties hereto with the same formalities as this document.
(e) Notices. Any and all notices or other communications provided for
herein shall be given in writing and shall be hand delivered or sent by United
States mail, postage prepaid, registered or certified, return receipt requested,
addressed as follows:
If to the Company:
Vistana, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: President
If to Employee: at the address specified
in Schedule A attached hereto.
provided, however, that any of the parties may, from time to time, give notice
to the other parties of some other address to which notices or other
communications to such party shall be sent, in which event, notices or other
communications to such party shall be sent to such address. Any notice or other
communication shall be deemed to have been given and received hereunder as of
the date the same is actually hand delivered or, if mailed, when deposited in
the United States mail, postage prepaid, registered or certified, return receipt
requested.
(f) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the respective parties hereto, their heirs, legal
representatives, successors and permitted assigns.
(g) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all of which shall
constitute but one and the same instrument.
(h) Captions. The captions appearing in this Agreement are inserted
only as a matter of convenience and in no way define, limit, construe or
describe the scope or intent of any provisions of this Agreement or in any way
affect this Agreement.
(i) Additional Understandings. Certain additional understandings
between the Company and Employee are set forth on Schedule C attached hereto and
incorporated herein by this reference.
-15-
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
date and year set forth above.
THE COMPANY:
-----------
VISTANA, INC., a Florida corporation
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chairman of the Board and
Co-Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President and Co-Chief
Executive Officer
EMPLOYEE:
--------
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
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SCHEDULE A
----------
Employee Title and Primary Employment Responsibilities
------------------------------------------------------
1. Employee Name and Address: Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
2. Employee Title: Vice Chairman
3. Primary Employment Responsibilities: Employee shall serve as Vice Chairman
of the Company. In such position, Employee shall assist at a senior
executive level in formulating and implementing the Company's global
business strategy, capital markets transactions, mergers and acquisitions,
and investor relations policies and, to the extent mutually agreed upon by
the Company and Employee, in managing or overseeing the Company's finance,
legal and investor relations functions. Except as provided in Schedule C
attached hereto, Employee 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 Board. The Company shall retain full direction and
control of the means and methods by which Employee performs his services
thereto. Both Employee and the Company agree that the nature and scope of
Employee's responsibility and authority will be consistent with being Vice
Chairman and a senior executive officer of a public company, as described
in more detail herein. Employee shall report directly to Messrs. Xxxxxxx
X. Xxxxxxx, Xx. and Xxxxxxx X. Xxxxx (the "Executive Officers"), and the
Executive Officers shall be generally available to Employee on a day-to-day
basis.
4. Place of Employment: The Company's office located in Orlando, Florida.
A-1
SCHEDULE B
----------
Employee Compensation
---------------------
1. Employee Name: Xxxxxxx X. Xxxxxx
2. Base Salary: $350,000
3. Formula Salary: Ninety-five percent (95%) of the annual salary payable for
the applicable calendar year to the Chief Executive Officer of the Company
or, if the Company then has more than one Chief Executive Officer, the
Chief Executive Officer having the highest annual salary.
4. Annual Bonus Amount: Up to 60% of Adjusted Base Salary; Formula to
approximate that of other senior executive officers; provided, however,
that for each of the calendar years 1998 and 1999, the aggregate of
Employee's Adjusted Base Salary and Annual Bonus Amount shall not be less
than $500,000.
5. Severance Amount: The product of (i) the greater of (x) 120% of Employee's
Adjusted Base Salary as of the Termination Date and (y) $500,000,
multiplied by (ii) two.
6. Monthly Severance Payment: The quotient of (i) the Severance Amount
determined in accordance with Item No. 5 above, divided by (ii) 12.
7. Transition Payment: The greater of (i) Employee's Adjusted Base Salary as
of the Termination Date and (ii) $500,000.
8. Change in Control Amount: The product of (i) three, multiplied by (ii) the
sum of (x) Employee's Adjusted Base Salary as of the effective date of the
Change in Control and (y) the Annual Bonus Amount paid or payable to
Employee for the calendar year immediately preceding the year in which the
Change in Control occurs (or, if such amount is higher, the Annual Bonus
Amount paid or payable to Employee for the calendar year in which the
Change in Control occurs); plus, with respect to any portion of the Change
in Control Amount, and any other amount which constitutes an "excess
parachute payment" within the meaning of Section 280G(b) of the Internal
Revenue Code of 1986 (or any other amended or successor
B-1
provision thereto) (including, without limitation, any amounts attributable
to the value of stock options granted to Employee by the Company or by the
Controlling Shareholders that became accelerated or vested as a result of
such Change in Control), that is subject to the tax imposed pursuant to
Section 4999 of the Internal Revenue Code of 1986 (or any other amended or
successor provision thereto) (the "Excise Tax"), an amount (the "Gross-Up
Amount") that, after reduction of the amount of such Gross-Up Amount for
all federal, state and local tax to which the Gross-Up Amount is subject
(including the Excise Tax to which the Gross-Up Amount is subject), is
equal to the amount of the Excise Tax to which such Change in Control
Amount, or other amount constituting an "excess parachute payment," is
subject. For purposes of determining the amount of any Gross-Up Amount,
Employee 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 Amount is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of residence of
Employee on the Termination Date, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.
B-2
SCHEDULE C
----------
Additional Understandings
-------------------------
During the term of Employee's employment under this Agreement, provided
that such activities do not violate the provisions of Sections 9, 10 or 11 of
this Agreement or interfere materially with Employee's performance of his
obligations to the Company:
1. Employee may, as his option and expense, maintain and perform the
responsibilities of any or all of the following business relationships:
(a) Member of the Board of Directors of Intellon Corporation;
(b) General Partner of Xxxxx/Synagen Partners, Ltd., the sole General
Partner of Xxxxx/Florida Bank Stock Fund, Limited Partnership;
(c) Non-executive Chairman or member of the Board of Directors of
Xxxxx X. Xxxxx & Co., a registered broker-dealer;
(d) Non-executive Chairman or member of the Board of Directors of
Xxxxx X. Xxxxx Financial Services, Inc., a holding company that owns the
outstanding stock of Xxxxx X. Xxxxx & Co. and Xxxxx X. Xxxxx Mortgage and
Realty, Inc.;
(e) Chairman of the Board of Directors, President, and Chief Executive
Officer of Synagen Capital Partners, Inc.;
(f) Principal, controlling, or sole shareholder of Xxxxx X. Xxxxx
Financial Services, Inc. and Synagen Capital Partners, Inc. and any successor
firms;
(g) Active status licensee as a Series 7 - Registered Representative,
Series 24 - General Securities Principal, and Series 63 - Uniform Securities
Agent with Xxxxx X. Xxxxx & Co. or another broker-dealer reasonably acceptable
to the Company (and in such capacities, Employee shall have the right to receive
commissions or other compensation from such firm for referrals or other business
directed by him to such firm, provided that all such referrals and business are
unrelated to the Company and its Affiliates); and
(h) Active status licensee as an attorney with The Florida Bar and the
District of Columbia Bar.
2. To allow Employee to facilitate an orderly transition and withdrawal
from his responsibilities as an executive officer and employee of such firms,
Employee may, at his option and expense:
C-1
(a) for a period of up to three months following the effective date of this
Agreement, serve as President and Chief Executive Officer of Xxxxx X. Xxxxx
Financial Services, Inc. and Xxxxx X. Xxxxx & Co.; (b) for a period of up to
nine months following the effective date of this Agreement, assist from time to
time in advising clients of Xxxxx X. Xxxxx & Co.; and (c) assist from time to
time in resolving and responding to any follow-up questions or issues that may
arise.
In connection with the foregoing activities, Employee may, at his option
and expense: (a) maintain at the Company's offices, separate telephone, fax, and
computer lines and equipment and send and receive mail and express deliveries to
facilitate communications relating to such activities; and (b) from time to time
use the services of his executive assistant in performing such activities.
Employee shall indemnify and hold harmless the Company, its Affiliates, and
their respective directors, officers, and employees from and against any and all
claims, losses, damages, and liabilities, and actions in respect thereof,
arising directly or indirectly out of any of the foregoing business
relationships and activities by Employee.
On the Effective Date, the Company will grant Employee an option to
purchase 180,000 shares of the Company's common stock pursuant to the Vistana
Stock Plan at an exercise price per share equal to the closing price per share
of the Company's common stock on the Effective Date on the NASDAQ National
Market System. Employee understands that in the event that, at the Company's
1998 Annual Meeting of Shareholders, the Company's shareholders do not approve
of an increase in the number of options available for grant under the Vistana
Stock Plan, such grant of options shall be null and void for all purposes and in
all respects; provided, however, that if the Company's shareholders do not so
approve of the increase in the number of options available for grant under the
Vistana Stock Plan, the Company will grant Employee an option to purchase
180,000 shares of the Company's common stock pursuant to the Vistana Stock Plan
on such later date as such options are available for grant at an exercise price
per share equal to the closing price per share of the Company's common stock on
the NASDAQ National Market System on the date of grant. Subject to the
foregoing, all grants of options will be made pursuant to an Option Agreement
between Vistana and Employee (which shall be substantially similar in form to
those Option Agreements currently in effect for other senior executives).
C-2
