Exhibit 10.135
AGREEMENT
This Agreement (the "Agreement") is made as of December 31, 2006 (the
"Effective Date"), by and between Bluegreen Corporation, a Massachusetts
corporation with its headquarters located in Boca Raton, Florida (the
"Company"), and Xxxxxx X. Xxxxxxx ("Xxxxxxx").
W I T N E S S E T H
WHEREAS, Xxxxxxx has received numerous awards recognizing his leadership
in and contribution to the real estate/timeshare industry;
WHEREAS, Xxxxxxx is recognized as a preeminent leader in the real
estate/timeshare industry;
WHEREAS, Xxxxxxx has through his previous employment with the Company
developed and acquired knowledge and information pertaining to the Company's
business and the business of its Related Entities (defined below), primarily
including, but not limited to, the Company's real estate development, finances,
management, operations, and sales and marketing, and Xxxxxxx acknowledges that
such information is valuable, confidential and proprietary;
WHEREAS, Xxxxxxx has resigned from his employment with the Company
effective December 31, 2006; and
WHEREAS, the Company desires to retain Xxxxxxx to provide the services
described herein and Xxxxxxx desires to provide such services and both parties
desire that Xxxxxxx provide such services as an independent contractor, rather
than an employee, effective January 1, 2007.
NOW, THEREFORE, in consideration of the promises set forth herein and
other good and valuable consideration, receipt of which is hereby acknowledged,
Xxxxxxx and the Company agree as follows:
1. Termination of Previous Agreement. The Company and Xxxxxxx agree that all
contractual agreements entered into between the Company and Xxxxxxx before the
Effective Date, including, without limitation, the Employment Agreement entered
into by and between the Company and Xxxxxxx on June 28, 2006, are terminated.
Xxxxxxx agrees and acknowledges that the only obligations, whether contractual
or otherwise, that the Company has with Xxxxxxx and that Xxxxxxx has with the
Company are those described in this Agreement.
2. Employment of Xxxxxxx and Service on the Board. Xxxxxxx agrees and
acknowledges that employment with the Company as its Chief Executive Officer
("CEO") terminated on December 31, 2006 (the "Employment Term"). By execution
hereof, unless his resignation is earlier submitted, Xxxxxxx acknowledges his
resignation from the Company's Board of Directors (the "Board") and as an
officer and director of any subsidiary or affiliate of the Company effective as
of December 31, 2006.
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3. Independent Contractor.
3.1 Independent Contractor Term. Subject to the terms and conditions set
forth herein, from January 1, 2007 through December 31, 2013 (the "Term"), the
Company shall engage Xxxxxxx as an independent contractor to personally provide
services to the Company as set forth herein. During the Term: (a) Xxxxxxx shall
serve as a strategic advisor to the Company; (b) Xxxxxxx shall cooperate and
assist in the transition of the responsibilities of the CEO to the new CEO
selected by the Board and shall mentor such new CEO and other executives of the
Company as requested by the Board or the new CEO; and (c) Xxxxxxx shall assist
the Board with strategic planning and product planning, serve as a general
advisor to senior management and the Board, assist in opening new markets,
assist in identifying and consummating acquisitions, and engage in such other
services as may be requested from time to time by the Company's executive
officers or the Board.
3.2 Independent Contractor Status. The Company and Xxxxxxx specifically
agree that after December 31, 2006, Xxxxxxx shall be an independent contractor
and not an employee of the Company. As such, the Company will not withhold or
pay on behalf of Xxxxxxx, income tax, employment tax, workers' compensation,
unemployment compensation or other similar taxes or benefits. In the event that
a court of competent jurisdiction shall decide, notwithstanding this Section 3,
that such sums are due, or should Xxxxxxx be deemed to be an employee, Xxxxxxx
shall be personally liable for all such taxes, sums, interest or penalties that
may be due thereby. This provision shall be binding upon the successors, heirs,
executors and administrators of the parties. During the Term, Xxxxxxx shall not
have any authority, and shall not hold himself out as having the authority, to
bind the Company or otherwise use the Company's name in any way not specifically
authorized by the Company. During the Term, Xxxxxxx shall not represent that he
is an employee of the Company.
4. Best Efforts. During the Term of this Agreement, Xxxxxxx shall devote
his best efforts to the performance of his duties under this Agreement and shall
perform them faithfully, diligently, and competently and in a manner consistent
with all policies of the Company. Xxxxxxx recognizes that the Company places
significant importance on its policies and practices regarding the way it
operates its business and how it treats its employees, customers and vendors,
including its business ethics, anti-discrimination, anti-harassment, and other
related policies. Xxxxxxx agrees that in doing business with the Company, he
will comport himself consistent with the Company's policies and will not engage
in any conduct that would conflict with the Company's policies or practices in
those areas. Xxxxxxx agrees to make himself available to the Company at any time
to provide the services reasonably requested hereunder. Xxxxxxx shall not engage
in any activities outside the scope of this Agreement for any other individuals
or entities if such activities could reasonably be expected to detract from or
interfere with the fulfillment of his responsibilities or duties under this
Agreement. Notwithstanding anything to the contrary contained herein, if Xxxxxxx
breaches his obligations hereunder, Xxxxxxx shall forfeit his entitlement to any
further compensation due under this Agreement and shall only be entitled to
accrued and unpaid compensation.
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5. Compensation. As full compensation for his services hereunder and in
consideration for Xxxxxxx'x covenants contained in this Agreement, the Company
shall pay Xxxxxxx the following compensation:
5.1 Term. During the period commencing on January 1, 2007 and ending on
December 31, 2011, Xxxxxxx will be paid at an annual rate of Five Hundred
Thousand Dollars ($500,000), and during the period commencing on January 1, 2012
and ending on December 31, 2013, Xxxxxxx will be paid at an annual rate of Two
Hundred Fifty Thousand Dollars ($250,000). This compensation shall be payable in
periodic installments in accordance with the Company's usual practice for its
senior executives.
5.2 Benefits. Subsequent to December 31, 2006, Xxxxxxx will not be
eligible to participate in any employee benefit plans, medical (health)
insurance plans, life insurance plans, disability income plans, retirement
plans, expense reimbursement plans, stock option plans or any other employee
benefit; provided, however that following the cessation of Xxxxxxx'x employment
as an employee of the Company, Xxxxxxx will have the right to continue health
insurance coverage under the Company's medical insurance plan for himself and,
to the extent available under the Consolidated Omnibus Budget Reconciliation Act
("COBRA"), his dependents, if any, at his own expense in accordance with COBRA,
if Xxxxxxx takes all actions necessary to elect to continue such coverage.
5.3 Golf Club. The Company shall pay (or reimburse) Xxxxxxx'x annual
membership dues in a golf club of Xxxxxxx'x choice through December 31, 2006,
provided however that the payment of dues shall not be made by the Company to
cover any period of membership subsequent to December 31, 2006. Subsequent to
December 31, 2006, the Company shall not pay for Xxxxxxx'x membership in a golf
club.
5.4 Expenses. The Company will pay or reimburse Xxxxxxx for all reasonable
vouchered business expenses incurred by him in the performance of his duties as
an employee of the Company through December 31, 2006, which have been submitted
in accordance with any expense reimbursement policy of the Company. During the
Term, the Company agrees to pay or reimburse Xxxxxxx only for reasonable
vouchered business expenses incurred by him in the performance of his duties as
a strategic advisor which have been pre-approved by the Company and thereafter
are submitted in accordance with any expense reimbursement policy or practice of
the Company.
6. Indemnification.
6.1 Company's Indemnification of Xxxxxxx. Except as otherwise provided
herein, the Company shall indemnify Xxxxxxx for acts taken in good faith in the
performance of his duties as Chief Executive Officer and pursuant to this
Agreement. Such indemnification shall be in accordance with the Company's
Articles of Organization, By-Laws and the laws of Massachusetts.
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6.2 Xxxxxxx shall indemnify the Company and each of its officers,
directors and employees and hold each of them harmless against and in respect of
any and all damage, loss, liability, obligation, assessment, judgment,
proceeding, claim, cost or expense, including without limitation amounts payable
in connection with the investigation or settlement of claims and including
attorneys' fees, relating to or arising out of the following: (i) any criminal
conduct by Xxxxxxx; (ii) Xxxxxxx'x violation of any of the policies and
procedures of the Company, including without limitation the Company's policies
on sexual harassment and transactions in the Company's securities; or (iii)
Xxxxxxx'x gross negligence, willful misconduct, fraud or misappropriation of
assets; provided, however, that in no event shall Xxxxxxx have any obligation
hereunder to indemnify the Company or any of the above indemnified persons for
amounts in excess of $3 million. The Company shall have the right to set-off any
such amounts against amounts due and payable by the Company to Xxxxxxx.
7. Termination. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement may be terminated at any time as follows:
7.1 Termination by the Company for Cause. The Company may terminate this
Agreement for Cause (as defined below), as provided below. In the event of a
termination for Cause, the Company shall be responsible under this Agreement
only for accrued and unpaid compensation and benefits through the date of
termination. For purposes of this Agreement the following shall constitute
"Cause" for such termination: (i) conviction of or plea of nolo contendere by
Xxxxxxx for (A) felony or (B) any misdemeanor involving moral turpitude, deceit,
dishonesty or fraud; (ii) Xxxxxxx'x violation of the policies and procedures of
the Company, including, without limitation, the Company's policies on sexual
harassment, discrimination and transactions in the Company's securities, as in
effect from time to time; (iii) Xxxxxxx'x xxxxx negligence, willful misconduct,
fraud or misappropriation of assets; (iv) material breach by Xxxxxxx of any of
Xxxxxxx'x obligations under this Agreement; or (v) any negative or disparaging
statements by Xxxxxxx about the Company, its management or principal
shareholders. Prior to termination of this Agreement for Cause pursuant to
subsections (ii), (iii), (iv) or (v), the Company shall provide Xxxxxxx written
notice of any violation breach or failure and, if possible of cure, Xxxxxxx will
have 10 business days after receipt of written notice to cure any such violation
or breach. If terminated pursuant to subsection (i) or if no cure is possible,
the termination shall be effective upon the date of written notice to Xxxxxxx.
7.2 Termination by the Company Without Cause. The Company may terminate
this Agreement without Cause by a vote of the Board. Such termination without
Cause shall be effective immediately upon written notice to Xxxxxxx of such a
vote by the Board. If this Agreement is terminated by the Company without Cause,
then Xxxxxxx shall be entitled to receive payments due under this Agreement for
the remainder of the Term in accordance with Section 9.2.
7.3 Death. If Xxxxxxx dies at any time during the Term, then this
Agreement shall terminate and Xxxxxxx'x estate shall be entitled to receive
payments due under this Agreement for the remainder of the Term in accordance
with Section 9.2.
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7.4 Disability. If Xxxxxxx shall become disabled at any time during the
Term and is substantially unable to perform under this Agreement, the Board may,
upon 30 days written notice to Xxxxxxx and in the sole discretion of the Company
terminate this Agreement. In the event of such termination, Xxxxxxx shall be
entitled to receive payments due under this Agreement for the remainder of the
Term in accordance with Section 9.2. For purposes of this Agreement, Xxxxxxx
shall be deemed to be "disabled" if, due to Xxxxxxx'x physical or mental
disability, he has been substantially unable to perform his duties for ninety
(90) continuous and consecutive days at any time during the Term of this
Agreement. Xxxxxxx shall be considered to have been substantially unable to
perform his duties hereunder if he is either (i) unable to reasonably and
effectively carry out his duties with reasonable accommodations by the Company
or (ii) unable to reasonably and effectively carry out his duties because any
reasonable accommodation that may be required would cause the Company undue
hardship.
8. Termination Benefits.
8.1 Termination of Benefits. Upon termination of Xxxxxxx'x services as an
employee, benefits under any employee benefit plans of the Company shall
terminate as provided in the terms of the applicable plans. Subject to the
approval of the Board's Compensation Committee and to the extent permissible
under the Company's relevant Option Plan, 84,538 of the 140,896 Xxxxxxx'x
unvested options, which would otherwise have vested February 19, 2008, shall
vest as of December 31, 2006. All other unvested options shall remain unvested
and shall, based on termination of his employment, be cancelled. Xxxxxxx may
exercise any vested options within the periods following termination of
employment set forth in the relevant plans and agreements under which the
options were granted.
8.2 Payment of Termination Benefits. With respect to payments due under
Section 7.2, 7.3 or 7.4 that are unpaid as of the date of termination, death or
disability, such payments shall be paid in periodic installments in accordance
with the Company's usual practices for its senior executives; provided, however,
that if Section 409A(a)(2)(B) would apply to Xxxxxxx at the date of termination
of employment, no such payments of Salary shall be made during the six month
period following the effective date of Xxxxxxx'x termination; provided, further,
that such payment which would have otherwise been made during such six month
period shall be paid in one lump sum payment upon the expiration of such six
month period. Notwithstanding the foregoing sentence, in the event of the death
of Xxxxxxx, any unpaid payments under Section 7.2, 7.3 or 7.4 shall continue and
be paid to the estate of Xxxxxxx for the same duration and in the same manner as
would have been paid to Xxxxxxx if he were alive. The payments under Section
7.2, 7.3 or 7.4 shall be offset by any amounts owed to the Company by Xxxxxxx
ratably over the anticipated period during which such payments will be paid.
8.3 Insurance. The Company currently maintains an insurance policy
insuring Xxxxxxx'x life. If requested by Xxxxxxx prior to March 15, 2007, the
Company shall take such steps necessary to transfer such policy to Xxxxxxx upon
payment by Xxxxxxx in immediately available funds of the cash value of such
policy on the date of transfer together with any amounts payable in connection
with such transfer.
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9. Non-Competition; Protection of Confidential Information; Etc.
9.1 Rationale for Restrictions. Xxxxxxx agrees that his services hereunder
are of a special, unique, extraordinary and intellectual character, and his
position with the Company places him in a position of confidence and trust with
the clients, customers, suppliers, vendors, contractors and employees of the
Company and/or of any joint venture, partnership, trust or other entity in which
the Company has a direct or indirect interest (collectively, "Related
Entities"). Xxxxxxx further acknowledges that the rendering of services under
this Agreement necessarily requires the disclosure to Xxxxxxx of Confidential
Information (defined below) of the Company and/or Related Entities. Xxxxxxx and
the Company agree that in the course of his duties hereunder, Xxxxxxx has and
will continue to develop a personal relationship with the Company's clients, and
a knowledge of these clients, affairs and requirements which may constitute the
Company's primary and only contact with such clients. Xxxxxxx acknowledges that
the Company's relationships with its established clientele may therefore be
placed in Xxxxxxx'x hands in confidence and trust. Xxxxxxx consequently agrees
that it is reasonable and necessary for the protection of the goodwill and
business of the Company and/or Related Entities that Xxxxxxx make the covenants
contained herein, that the covenants are a material inducement for the Company
to engage Xxxxxxx'x services and to enter into this Agreement, and that the
covenants are given as an integral part of and incident to this Agreement.
9.2 Non-Competition In Related Business. Provided that the Company
performs in all material respects its obligations under the terms of this
Agreement, Xxxxxxx shall not, directly or indirectly, during the Term of this
Agreement and for a period of two years thereafter, directly or indirectly,
enter into the employment of, render any services to, engage, manage, operate,
join, or own, lend money or otherwise offer other assistance to or participate
in or be connected with, as an officer, director, employee, principal, agent,
creditor, proprietor, representative, stockholder, partner, associate,
consultant or otherwise, any person or entity that directly or indirectly
competes with or is in any similar business to that of the Company and/or
Related Entities. The geographic scope of this covenant is limited to those
geographic markets in which the Company and/or Related Entities had conducted
business or had taken steps to commence conducting business during the Term of
this Agreement.
9.3 Solicitation of Employees and Customers. Provided that the Company
performs in all material respects its obligations under the terms of this
Agreement, Xxxxxxx shall not, at any time during the Term of this Agreement and
for a period of two years thereafter, whether for his own account or for the
account of any person or entity, attempt to solicit, endeavor to entice away
from the Company or Related Entities, or otherwise interfere with any
relationship of the Company or Related Entities with (i) any person (including,
but not limited to, any independent contractor or representative) who is or was
employed by or otherwise engaged to perform services for the Company and/or
Related Entities, during the Term of this Agreement, or (ii) any person who is
or was a customer or client of the Company and/or Related Entities during the
Term of this Agreement.
9.4 Confidential Information. Xxxxxxx agrees that he will not use any
Confidential Information for Xxxxxxx'x own purposes or for the benefit of any
other person or entity or
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disclose any Confidential Information to any other person or entity except as
may be required by law. As used in this Agreement, "Confidential Information"
shall mean financial information, reports and forecasts, studies, plans,
reports, designs, surveys, and analyses, sketches, drawings, notes, records,
memoranda, computer-generated data, or documents, and all other nonpublic
information relating to the business activities of the Company and/or Related
Entities, including, without limitation, all methods, processes, formulas,
techniques, equipment, research data, experiments, technical, commercial,
marketing and sales information, personnel data, computer software, contracting
systems, sources of supply, patentable or unpatentable inventions, methods of
operation, customer lists, employee lists, supplier lists, financial data, trade
secrets, and the like which presently or, in the future, are in the possession
of the Company and/or Related Entities. Said Confidential Information may be in
either human or computer readable form, including, but not limited to, software,
source code, hex code, or any other form.
9.5 Scope of Covenant. If any covenant contained in this Section 9 is
unenforceable because of the scope of business, duration or geographic scope of
such provision, the parties agree that the court, making such determination,
shall have the power to reduce the scope of business, duration and/or geographic
scope to the maximum enforceable by law and, in its reduced form, such provision
shall be enforceable.
10. Miscellaneous Provisions.
10.1 Xxxxxxx Representations. Xxxxxxx represents and warrants to the
Company (i) that this Agreement constitutes his valid and binding obligation,
enforceable against him in accordance with its terms; (ii) that neither the
execution nor delivery of this Agreement or the performance by him of any of his
covenants hereunder will constitute a default under any contract, agreement or
obligation to which he is a party or by which he or any of his properties is
bound; (iii) that there are no lawsuits, arbitration actions or other
proceedings (equitable, legal, administrative or otherwise) pending or (to the
best of his knowledge) threatened which could adversely affect the validity or
enforceability of this Agreement or his obligation or ability to perform his
obligations hereunder; and (iv) that no consent, approval or authorization of,
or notification to any other person or entity is required in connection with the
execution, delivery or performance of this Agreement by him.
10.2 Litigation and Regulatory Cooperation. Xxxxxxx agrees to cooperate
fully with the Company in the defense or prosecution of any claims or actions
now in existence or which may be brought in the future against or on behalf of
the Company which relate to events or occurrences that transpired while, or
relate to periods during which, Xxxxxxx was employed or serving as an
independent contractor. Xxxxxxx'x full cooperation in connection with such
claims or actions shall include, but not be limited to, being available to meet
with counsel to prepare for discovery or trial and to act as a witness on behalf
of the Company at mutually convenient times. During the Term, Xxxxxxx also shall
cooperate fully with the Company in connection with any investigation or review
by any federal, state or local regulatory authority as any such investigation or
review relates to events or occurrences that transpired while Xxxxxxx was
employed or serving as an independent contractor. The Company shall reimburse
Xxxxxxx for any reasonable out of pocket expenses incurred in connection with
Xxxxxxx'x performance of
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obligations pursuant to this Section 10.2. However, in the event that Xxxxxxx is
terminated for Cause pursuant to Section 7.1 and Xxxxxxx is no longer receiving
payments hereunder, this Section 10.2 shall no longer apply and continued
cooperation with the Company shall no longer be required.
10.3 Integration, Waiver and Severability. This Agreement sets forth the
entire agreement between the parties with respect to the matters covered herein
and supersedes all prior agreements, whether oral or written, including without
limitation the Employment Agreements between the Company and Xxxxxxx dated
December 19, 2001 and June 28, 2006. No waiver or modification of this Agreement
or of any part contained herein shall be valid unless in writing and duly
executed by Xxxxxxx and approved by the Board. No evidence of any waiver or
modification shall be offered or received in evidence of any proceeding,
arbitration, or litigation between the parties hereto arising out of or
affecting this Agreement, or the rights or obligations of the parties hereunder,
unless such waiver or modification is in writing, duly executed as aforesaid.
The failure of either party at any time to require performance by the other
party of any provision hereunder shall in no way affect the right of that party
thereafter to enforce the same, or to enforce any of the other provisions in
this Agreement; nor shall the waiver by either party of the breach of any
provision hereof be taken or held to be a waiver of any subsequent breach of
such provision or as a waiver of the provision itself. All agreements and
covenants contained herein are severable and in the event any of them shall be
held to be invalid by a court of competent jurisdiction, this Agreement shall be
interpreted as if such invalid terms or covenants were not contained herein.
10.4 Benefit and Assignability. This Agreement shall bind Xxxxxxx and the
Company and their respective successors and permitted assigns. This Agreement
requires the personal services of Xxxxxxx and cannot be assigned by Xxxxxxx.
Xxxxxxx agrees to provide his written consent to the assignment of this
Agreement, including, without limitation, the restrictive covenants herein, to
any successor or assign of the Company provided that the transfer or assignment
of this Agreement shall not materially expand or alter the restrictive covenants
contained herein. Xxxxxxx agrees not to delegate his obligations or duties
hereunder or any portion thereof.
10.5 Remedies for Breach of the Agreement. Xxxxxxx consents and agrees
that if he violates any covenant contained in this Agreement, the Company and/or
Related Entities would sustain irreparable harm and, therefore, in addition to
any other remedies which may be available to it, the Company and/or Related
Entities shall be entitled to an injunction restraining Xxxxxxx from committing
or continuing any such violation of this Agreement. Xxxxxxx also agrees and
acknowledges that his use of trade secrets, client lists or Confidential
Information, or the direct solicitation of existing clients of the Company
and/or Related Entities in a manner contrary to this Agreement will give rise to
irreparable injury that may specifically be enjoined. Nothing in this Agreement
shall be construed as prohibiting the Company and/or Related Entities from
pursuing any other remedy or remedies including, without limitation, recovery of
damages. Xxxxxxx acknowledges that Related Entities have rights under this
Agreement and that they may enforce these rights as third party beneficiaries.
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10.6 Survival. The provisions of Section 9 shall survive the termination
or expiration of this Agreement or Xxxxxxx'x employment or engagement
irrespective of the reason for such termination or expiration.
10.7 Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by nationally
recognized overnight courier service or certified mail, return receipt
requested, to his residence in the case of Xxxxxxx, or to its principal office
in the case of the Company.
10.8 Section Headings; Counterparts. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one of the same instrument.
10.9 Applicable Law. This Agreement shall be construed in accordance with,
the laws of the State of Florida, whether substantive or procedural. The sole
and exclusive venue for any legal action arising out of this Agreement shall be
in the Circuit Court in and for Palm Beach County, Florida. Xxxxxxx agrees and
stipulates that he waives his right to trial by jury in any action arising under
this Agreement where trial by jury would otherwise be available.
10.10 Prevailing Party. The prevailing party to an action to enforce or
defend this Agreement is entitled to attorney's fees and reasonable costs
incurred in connection therewith, including, but not limited to, those incurred
at the pre-litigation, pre-trial, trial, and appellate levels.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
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XXXXXX X. XXXXXXX
The Company:
BLUEGREEN CORPORATION
By:
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Name: Xxxx X. Xxxxx
Title: Chairman
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