Exhibit 10.3
Execution Copy
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of July 18, 1999 (this "Agreement")
between Vistana, Inc., a Florida corporation (the "Company"), and XXXXXXX X.
XXXXXXX, XX. ("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:
WHEREAS, the Company, through its Affiliates, is engaged in the
business of time-share 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;
WHEREAS, this Agreement is being entered into in connection with the
sale of a controlling interest in the Company by Employee; 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. The parties agree that this Agreement shall supersede the Employment
Agreement dated December 27, 1996 between Employee and the Company in its
entirety as of the Effective Date (as that term is defined in Section 3(a)) and
that such prior agreement shall have no further force and effect whatsoever on
or after the Effective Date. Employee and the Company further agree that this
Agreement shall supersede any other prior agreements or understandings between
Employee and the Company, if any, including without limitation any written, oral
or implied agreements or understandings, and that any such agreements or
understandings shall have no further force or effect whatsoever on or after the
Effective Date.
2. POSITION, DUTIES AND RESPONSIBILITIES.
(a) POSITION. Employee's title, reporting relationship 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 Employee shall spend such time as
reasonably necessary in connection with the business of the Company at the
principal executive offices of Sky ("Parent").
(c) OTHER ACTIVITIES. During the term of this Agreement,
Employee shall be an employee of the Company, shall not be engaged in any other
employment or business activities, shall devote such time and effort to the
Company as may be necessary and appropriate from time to time in the
circumstances for the proper discharge of his duties and obligations hereunder
and shall not, without the prior approval of Parent, serve as an officer or
director of any company, other than the Company, Parent or another Affiliate of
Parent. Notwithstanding the foregoing, Employee shall not be prohibited from
serving on civic boards or 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), provided that
such activities do not interfere with the proper discharge of Employee's duties
and obligations hereunder.
3. TERM.
(a) EFFECTIVE DATE. This Agreement shall become effective (the
"Effective Date") concurrently with the completion of the merger of the Company
with and into Fire Acquisition Corp., pursuant to the Agreement and Plan of
Merger dated as of July 18, 1999 among Parent, Fire Acquisition Corp., a Florida
corporation and a wholly-owned subsidiary of Parent, and the Company (the
"Merger").
(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 on such fourth anniversary of the
Effective Date and on each subsequent anniversary of
the Effective Date, Employee's term of employment
hereunder shall be extended for an additional period of
one year, unless either party shall have given written
notice to the other party not less than 90 days prior
to such date that Employee's term of employment shall
not be so extended;
(ii) the date upon which the Company terminates Employee's
employment by the Company for Cause, or without Cause
or 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 termination);
(iii) the date of Employee's death; or
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(iv) the date upon which Employee effects a Voluntary
Termination or terminates employment for Good Reason
(it being understood that the date of termination shall
be the date upon which Employee provides the Company
written notice of such termination).
(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 or terminates for Good Reason pursuant to Section 3(b)(iv),
Employee, if requested by the Company, shall continue to render services
hereunder to the Company for as long as requested by the Company up to 30 days
and shall, in such event, continue to be paid as provided in the Agreement
during such period.
(d) EMPLOYMENT-AT-WILL/EMPLOYEE ACKNOWLEDGMENT. Notwithstanding
the term of this Agreement having an initial duration of four years with
possible one-year extensions 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 or any other provision relating to Employee's
compensation or benefits, 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's 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
all computer files and disks), 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
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other tangible material containing any proprietary
information of the Company.
(ii) The covenants and agreements of Employee contained in
Sections 3(e), 9, 10, 11, 12 and 14 shall survive
termination of Employee's employment by the Company and
the termination of this Agreement.
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, 1999. For each calendar year during the term of this Agreement
commencing with the 2000 calendar year, the Company shall pay Employee an annual
salary (the "Adjusted Base Salary") determined by the Company's Board of
Directors; PROVIDED, HOWEVER that in no event shall the Adjusted Base Salary be
less than the Base Salary or the Adjusted Base Salary (as applicable) 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 Parent, 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") each calendar year beginning
with the 1999 calendar year as further specified and described on SCHEDULE B
attached hereto.
(c) LONG TERM INCENTIVE COMPENSATION.
(i) CASH. Employee shall be provided cash long-term
incentive compensation opportunities in accordance with
Parent's executive compensation policies.
(ii) STOCK OPTIONS. Employee shall be granted non-qualified
options for not less than 100,000 Units under Parent's
1999 Long-Term Incentive Compensation Plan in equal
installments of not less than 25,000 Units annually
over the term of the Agreement beginning on the
Effective Date and on subsequent anniversaries
thereof. Such options will have a 10 year term, will
become exercisable at the rate of 25% per year
beginning on the first anniversary of the date of grant
and will be governed by the terms of Parent's 1999
Long-Term Incentive Compensation Plan.
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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 senior level management employees of Parent or
its Affiliates including, without limitation, 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 any
such medical and health insurance plans; PROVIDED, HOWEVER, that such benefits
and arrangements are made available at the discretion of Parent and nothing in
this Agreement establishes any right of Employee to the availability or
continuance of any such plan or arrangement. Employee shall receive credit for
service with the Company prior to the Effective Date for purposes of such
benefits and arrangements.
6. BUSINESS EXPENSES. 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 first
class travel and accommodation), in the course of employment by the Company as
are consistent with Parent's policies in existence from time to time, and
provided that Employee furnishes all receipts or other documentation as required
under the Company's policies relating to reimbursement of expenses. Such
expenses shall include, but shall not be limited to, occupational license fees,
car allowance, membership dues in business and professional organizations,
continuing education expenses, subscriptions to business and professional
publications, cellular telephone, home fax, PC and data line expenses. Employee
shall be reimbursed by the Company for reasonable attorneys' fees incurred by
Employee in the negotiation of this Agreement.
7. VACATION AND SICK LEAVE. Employee shall be entitled to four weeks
paid vacation annually in accordance with Parent's policies. Employee shall be
entitled to sick leave in accordance with Parent's policies with credit for
service with the Company prior to the Effective Date.
8. COMPENSATION UPON TERMINATION OF EMPLOYMENT.
(a) TERMINATION BY THE COMPANY OR PARENT FOR CAUSE. If Employee's
employment is terminated by the Company for Cause, Employee shall receive only
his Base Salary or Adjusted Base Salary (as applicable) pro-rated through the
date of termination. Employee shall not be entitled to any additional
compensation and shall terminate participation in the Company's and Parent's
employee benefit plans and arrangements upon termination of employment (except
to the extent required by COBRA or other applicable law).
(b) TERMINATION BY THE COMPANY OR PARENT WITHOUT CAUSE. If
Employee's employment is terminated by the Company without Cause, Employee shall
receive (i) his Base Salary or Adjusted Base Salary (as applicable) pro-rated
through the date of termination, (ii) his annual bonus earned for the year in
which his employment terminates (if any) pro-rated through the date of
termination, (iii) accelerated vesting of all stock options and other employee
benefits subject to vesting, (iv) payment by the Company of Employee's premiums
for COBRA health insurance continuation coverage for 12 months, and (v)
continuation of his Base Salary or Adjusted Base Salary (as applicable) for 12
months after his termination date.
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(c) TERMINATION BY EMPLOYEE FOR GOOD REASON. If Employee's
employment is terminated by Employee for Good Reason, Employee shall receive (i)
his Base Salary or Adjusted Base Salary (as applicable) pro-rated through the
date of termination, (ii) his annual bonus earned for the year in which his
employment terminates (if any) pro-rated through the date of termination, (iii)
accelerated vesting of all stock options and other employee benefits subject to
vesting, (iv) payment by the Company of Employee's premiums for COBRA health
insurance continuation coverage for 12 months, and (v) continuation of his Base
Salary or Adjusted Base Salary (as applicable) for 12 months after his
termination date.
(d) VOLUNTARY TERMINATION BY EMPLOYEE. If Employee's employment
is terminated by Voluntary Termination, Employee shall receive only his Base
Salary or Adjusted Base Salary (as applicable) pro-rated through the date of
termination. Employee shall not be entitled to any additional compensation and
shall terminate participation in the Company's and Parent's employee benefit
plans and arrangements upon termination of employment (except to the extent
required by COBRA or other applicable law).
(e) OTHER TERMINATION. If Employee's employment is terminated
other than as set forth in (a) through (d) above, such as by reason of
Employee's death or Permanent Disability, Employee or a beneficiary designated
by Employee shall receive (i) his Base Salary or Adjusted Base Salary (as
applicable) pro-rated through the date of termination and (ii) his annual bonus
earned for the year in which his employment terminates (if any) pro-rated
through the date of termination.
(f) 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 any
payments to Employee hereunder following the
Termination Date is expressly conditioned upon 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. During the term of this Agreement,
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)
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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 disclosures made for valid
business purposes of the Company and (z) 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
owed to the Company, Parent or any Affiliate of the Company or Parent by any
person or entity. 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 Parent or the
appropriate Affiliate of the Company or Parent) 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 Parent or the appropriate Affiliate of the Company
or Parent). 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 Parent or the 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 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 or for any other person or
entity sell, or otherwise procure purchasers for, any time-share, vacation plan,
vacation ownership or interval ownership project within the Territory; or
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(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)
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) directly or indirectly for himself 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., Sunterra
Corporation or Bass PLC or any of their respective Affiliates; or
(e) directly or indirectly for himself or for any other person or
entity pursue or consummate or otherwise interfere with any Existing Project; or
(f) (i) directly or indirectly, for himself or any other person
or entity, pursue, consummate or otherwise interfere with any Prospective
Project or (ii) directly or indirectly for himself 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, Parent and any
Affiliate of the Company or Parent) 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
time-share 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.
In light of the substantial remuneration provided to Employee
hereunder and Employee's management position with the 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. The provisions of this Section 10 shall
survive the termination of this Agreement.
11. COVENANT AGAINST SOLICITATION OF EMPLOYEES. During the term of
Employee's employment by the Company and for the Non-Compete Period, Employee
shall not employ employees or agents or former employees or agents of the
Company, Parent or any Affiliate of the Company or Parent or, directly or
indirectly, solicit or otherwise encourage the employment of employees or agents
or former employees or agents of the Company, Parent or any Affiliate of the
Company or Parent; PROVIDED, HOWEVER, that this restriction shall not apply to
Employee's secretaries
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or personal assistants or to 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, Parent or any Affiliate of the Company or Parent during the twelve
preceding months. The provisions of this Section 11 shall survive the
termination of this Agreement.
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
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 or Parent
(including, but not limited to, the unauthorized disclosure of confidential or
proprietary material information of the Company or Parent); (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, Parent or any Affiliate of
the Company or Parent to any civil liability caused by Employee's conduct which
is determined by an arbitrator or court in a final and nonappealable decision to
constitute unlawful discrimination or harassment in employment; (e) any gross
negligence or willful misconduct by Employee in the performance of Employee's
duties to the Company where such conduct results in a material detriment to the
Company; or (f) Employee's habitual abuse of alcohol or any use by Employee of
an unlawful controlled substance (other than use by Employee in compliance with
a current prescription for Employee); PROVIDED, HOWEVER, that in the event of a
termination falling solely within clause (b) of this definition (and excluding
any termination of Employee for breach of Sections 9, 10 or 11), the Company,
prior to terminating Employee's employment, will give Employee written notice of
the conduct or event that the Company asserts constitutes a breach of a material
covenant, provision,
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term, condition, understanding or undertaking and afford Employee 15 days after
receipt of such notice to cure such breach; PROVIDED FURTHER, that Employee will
be deemed terminated for Cause unless any such breach is cured within such
15-day period.
"COBRA" means Part 6 of Title I of the Employee Retirement Income
Security Act of 1974, as amended.
"CONFIDENTIAL INFORMATION" means all software, trade secrets, work
products created by Employee for the Company, Parent or any Affiliate of the
Company or Parent, 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 or
similar arrangements) and reports and other proprietary information created or
obtained by Employee for the benefit of the Company, Parent or any Affiliate of
the Company or Parent during the course of employment by the Company.
"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, Parent or
any Affiliate of the Company or Parent owns, operates or has commenced to
develop, acquire or otherwise undertake as of the Termination Date.
"GOOD REASON" means the occurrence, without the written consent of
Employee, of any of the following events unless such events are substantially
corrected within 30 days following written notification that the Employee
intends to terminate employment as a result of (i) any reduction in Employee's
authority, title or rank with Xxxxxxx X. Xxxxx as one of the two highest ranking
time-share executives within Parent and its Affiliates, (ii) any change in
Employee's reporting relationship, (iii) relocation of Employee's Place of
Employment (as defined in SCHEDULE A) more than 35 miles from its current
location, provided that Employee shall spend such time as reasonably necessary
in connection with the Company's business at Parent's principal executive
offices without being deemed to have relocated for purposes of this provision or
(iv) any material breach by the Company or Parent of this Agreement.
"NON-COMPETE PERIOD" shall mean the period commencing on the
Termination Date and ending on the later of (i) the sixth anniversary of the
Effective Date and (ii) the second anniversary of the Termination Date.
"PERMANENT DISABILITY" shall mean the inability of Employee to perform
substantially all Employee's duties and responsibilities to the Company (with or
without reasonable accommodation) 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
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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
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
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, Parent or any Affiliate of the Company or Parent 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, Parent or any
Affiliate of the Company or Parent has commenced to evaluate or negotiate with
in respect of any transaction involving (y) the acquisition by the Company,
Parent or any Affiliate of the Company or Parent 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, and the corporate
offices of the Company and Parent and their respective Affiliates.
"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 death, Permanent Disability or Good Reason).
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 litigation 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 arbitration or 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
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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. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
(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 agreement. 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: General Counsel
With a copy to Parent at the address set forth below.
If to Parent:
Starwood Hotels & Resorts Worldwide, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attn: General Counsel
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.
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(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) BINDING ARBITRATION.
(i) Except for claims or disputes under Sections 9, 10 and
11, Employee and the Company agree that, to the extent
permitted by law, all claims or disputes arising out of
or relating to this Agreement, the parties' employment
relationship, or the termination of this Agreement or
such relationship, that Employee may have against or
with the Company, Parent or any Affiliate of the
Company or Parent and any of its or their affiliates,
subsidiaries, parents, successors, permitted assigns,
directors, officers, employees, owners, shareholders,
agents, or representatives, and that the Company or
such other persons or entities may have against or with
Employee, shall be submitted for binding arbitration in
Orlando, Florida, or such other location to which the
parties may agree, and shall be resolved in accordance
with the Commercial Rules of the American Arbitration
Association. Notwithstanding such rules, the parties
shall have the same rights to discovery and counsel as
they would have if the claim or dispute was being
resolved in a court of competent jurisdiction. If
either party pursues a claim and such claim results in
an arbitrator's decision, both parties agree to accept
such decision as final and binding, and judgment
thereupon may be entered in any Florida or other court
having jurisdiction thereof. The Company and Employee
hereby waive any right they may have to a jury trial
for all claims and disputes subject to arbitration
hereunder. Claims subject to arbitration hereunder
include without limitation claims under the Florida
Human Rights Act, the Florida Wage Discrimination Law,
the New York Human Rights Law, the
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New York Rights of Person With Disabilities Law, the
New York Equal Rights Law, Title VII of the Civil
Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act,
any and all federal, state and local laws governing
leaves of absence and family care, or under any other
federal, state, or local law, regulation, ordinance, or
executive order, or under common law. The costs of any
arbitration hereunder shall be borne equally by the
parties.
(ii) The arbitrator shall have no power to make an award or
impose a remedy that is not available to a court of
competent jurisdiction. The arbitrator shall apply the
substantive law of the State of Florida.
(iii) Notwithstanding the foregoing, the Company may in its
discretion immediately pursue any and all available
legal and equitable remedies for Employee's violation
of any provision of Sections 9, 10 or 11 in any court
of competent jurisdiction.
(iv) Except as necessary in court proceedings to enforce
this arbitration provision or an award rendered
hereunder, neither a party nor an arbitrator may
disclose the existence, content or results of any
arbitration hereunder without the prior written consent
of the Company and the Employee.
(j) INTERPRETATION. The parties hereto acknowledge and agree
that each party and its or his counsel reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its drafting. Accordingly,
(i) the rules of construction to the effect that any ambiguities are resolved
against the drafting party shall not be employed in the interpretation of this
Agreement, and (ii) the terms and provisions of this Agreement shall be
construed fairly as to all parties hereto and not in favor of or against any
party regardless of which party was generally responsible for the preparation of
this Agreement. Except where the context requires otherwise, all references
herein to Sections, paragraphs and clauses shall be deemed to be reference to
Sections, paragraphs and clauses of this Agreement. The words "include",
"including" and "includes" shall be deemed in each case to be followed by the
phrase "without limitation". The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
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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. Xxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxx
-------------------------------------------
Title: President and Co-Chief Executive Officer
------------------------------------------
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxx, Xx.
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
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SCHEDULE A
EMPLOYEE TITLE AND PRIMARY EMPLOYMENT RESPONSIBILITIES
1. EMPLOYEE NAME AND ADDRESS: Xxxxxxx X. Xxxxxxx, Xx.
[address omitted]
2. EMPLOYEE TITLE: Chairman and Co-Chief Executive Officer
3. EMPLOYEE REPORTING RELATIONSHIP:
Employee shall report to the Chief Executive Officer or Chief Operating
Officer of Parent or to the Chief Executive Officer or Chief Operating
Officer of Parent's Hotel Group.
3. PRIMARY EMPLOYMENT RESPONSIBILITIES:
Employee shall serve as President and Co-Chief Executive Officer of the
Company and shall with Xxxxxxx X. Xxxxx be one of the two highest ranking
time-share executives within Parent and its Affiliates. Employee shall
devote his best efforts and 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 Parent. The Company shall
retain full direction and control of the means and methods by which
Employee performs his services thereto.
4. PLACE OF EMPLOYMENT: The Company's office located in Orlando, Florida.
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SCHEDULE B
EMPLOYEE COMPENSATION
1. EMPLOYEE NAME: Xxxxxxx X. Xxxxxxx, Xx.
2. BASE SALARY: $430,000
3. ANNUAL BONUS AMOUNT:
For 1999, as determined under the terms of the Company's Annual
Performance Incentive Plan as in effect on the date of this Agreement
and using the payout percentages in effect on the date of this
Agreement, but with EPS goals converted to EBITDA goals and exclusion
of the transaction costs of the Merger and other extraordinary items,
including the cumulative effect of SOP 98-5 accounting change. For 2000
and future years, as determined under Parent's annual incentive plan
with a target bonus equal to 100% of Base Salary or Adjusted Base
Salary (as applicable). Performance targets and measures shall be
agreed upon by Parent and Employee based upon achievement of the
Company's budget and Parent's objectives.
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