EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into
effective July 1, 1997, by and between ATLANTIC GULF COMMUNITIES CORPORATION, a
Delaware corporation with its principal office located at 0000 Xxxxx Xxxxxxxx
Xxxxx, Xxxxx, Xxxxxxx 00000 (the "Company"), and XXXXXX X. XXXXXXX (the
"Employee").
RECITALS
--------
A. The Company is engaged in, among other things, the
acquisition, development and sale of real estate, and the management of various
assets including a portfolio of receivables resulting from the sale of real
estate.
B. The Company desires to continue the employment of the
Employee as its Executive Vice President - Chief Financial Officer under terms
which are competitive in the industry and which will provide the proper
incentives to yield the maximum benefit to
the Company and its stockholders.
C. The Employee desires to continue his employment with the
Company under the terms of this Agreement.
AGREEMENT
---------
The Company and the Employee (individually, a "Party";
collectively, the "Parties"), in consideration of the promises and mutual
covenants herein set forth, agree as follows:
1. EMPLOYMENT. The Company hereby continues the employment of
the Employee, and the Employee hereby accepts such continued employment, to
serve as the Executive Vice President Chief Financial Officer of the Company
under the terms of this Agreement.
2. DUTIES AND PERFORMANCE. The Employee shall serve as the
Executive Vice President - Chief Financial Officer of the Company, and shall
perform such executive and administrative services as are generally expected of
a corporate executive vice president and chief financial officer, or as may
reasonably be assigned to him from time to time by the Company's president (the
"President"), or the board of directors (the "Board"). The Employee shall report
directly to the President. The Employee agrees to devote his full business time,
attention, energy, and skill to the Company's business and goodwill and to
perform diligently and to the best of his ability to serve the Company's
interests.
3. TERM OF AGREEMENT. The term of the Employee's employment
hereunder shall commence on July 1, 1997 and continue until 5:00 p.m. June 30,
1999, unless earlier terminated pursuant to Section 8 below.
4. COMPENSATION.
a. The Company shall pay to the Employee, as
compensation for his services hereunder: (i) from the date hereof until December
31, 1997, a salary at the rate of $200,000 per annum, and (ii) from and after
January 1, 1998, a salary at the rate of $225,000 per annum ("Base
Compensation"); payable biweekly in accordance with the Company's general
policies and procedures for payment of salaries to its executive officers.
b. In addition to the Base Compensation, the
Employee shall be eligible for an annual bonus based upon Employee and Company
performance (the "Performance Bonus") of up to 50% of his Base Compensation. The
Employee's ability to earn a Performance Bonus shall be determined based upon
objectives and other criteria set by the President and approved by the Board, in
consultation with the Employee.
c. In addition to the Base Compensation, the
Company shall pay to Employee $90,000 upon the execution of this Agreement to
terminate the employment arrangement previously authorized by the Board on
December 9, 1996. Employee and Company hereby acknowledge and agree that the
employment arrangement previously authorized by the Board on December 9,1996, is
hereby terminated and of no further force or effect. The $90,000 paid to
Employee under this Section 4.c. shall be applied against the Performance Bonus
for the year ending December 31, 1997.
d. Pursuant to the Atlantic Gulf Communities
Employee Stock Option Plan (the "Existing Plan") and the authorization and
action by the Compensation/Stock Option Committee (the "Compensation Committee")
on November 17, 1997, the Employee has been granted options to purchase up to
Fifty Thousand(50,000) shares of the Company's common stock (the "Existing Plan
Stock Options"), subject to the terms and conditions set forth in the Existing
Plan and the Existing Plan Stock Option Agreement dated November 17, 1997,
attached hereto as Exhibit "A" (the "Existing Plan Stock Option Agreement").
Pursuant to the authorization and action by the Compensation Committee on
November 17, 1997, the Employee has been granted options to purchase up to Two
Hundred Thousand (200,000) shares of the Company's common stock (the "New Plan
Stock Options"), subject to the terms and conditions set forth in the New Plan
Stock Option Agreement dated November 17, 1997 attached hereto as Exhibit "B"
(the "New Stock Option Plan and Agreement"). The Existing Plan Stock Options and
New Plan Stock Options are sometimes collectively referred to herein as the
"Stock Options". Notwithstanding anything to the contrary contained
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herein, the Employee may not exercise the New Plan Stock Options at any time
prior to the date (the "Shareholder Approval Date") on which the New Stock
Option Plan and Agreement is approved by a majority vote of the shareholders of
the Company, in satisfaction of Section 162(m) of the Internal Revenue Code.
Subject to the foregoing, the Employee's Stock Options shall vest and become
exercisable according to the following schedules (provided the Employee's
employment hereunder has not been terminated prior to each "Exercisability Date"
and subject to such other terms as may be contained in the Existing Plan, the
Existing Plan Stock Option Agreement and the New Stock Option Plan and
Agreement):
EXISTING PLAN STOCK OPTIONS
Number of Shares that Become
Exercisability Date Available for Purchase
------------------- ----------------------
November 17, 1997 16,667
June 30, 1998 16,667
June 30, 1999 16,666
The exercise price of the Existing Plan Stock Options shall be $4.3125 per
share, which price is equal to the fair market value per share of the common
stock of the Company on the date of grant. The Existing Plan Stock Options shall
expire on the seventh (7th) anniversary of the date of grant, unless the
Existing Plan Stock Options shall be forfeited on an earlier date, as set forth
herein and under the Existing Plan Stock Option Agreement and the Existing Plan.
All other terms and conditions of the Existing Plan Stock Options shall be as
set forth in the Existing Plan Stock Option Agreement and the Existing Plan.
NEW PLAN STOCK OPTIONS
Number of Shares That Become
Exercisability Date Available for Purchase
------------------- ----------------------
Shareholder Approval Date 66,667
June 30, 1998 66,667
June 30, 1999 66,666
In the event the shareholders of the Company do not approve
the New Stock Option Plan and Agreement, in accordance with Section 162(m) of
the Internal Revenue Code, prior to September 30, 1998, any New Plan Stock
Options granted to the Employee pursuant to this Section 4.d. shall be deemed
null and void AB INITIO, and the Employee may terminate this Agreement for "Good
Reason", as more fully set forth in Section 8.e. hereof.
The exercise price of the New Plan Stock Options shall be
equal to the fair market value per share of the common stock of the
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Company at the close of business on the Shareholder Approval Date. The New Plan
Stock Options shall expire on the seventh (7th) anniversary of the date of the
grant, unless the New Plan Stock Options shall be forfeited on an earlier date,
as set forth herein and under the New Stock Option Plan and Agreement. All other
terms and conditions of the New Plan Stock Options shall be as set forth in the
New Stock Option Plan and Agreement.
Notwithstanding the above, any and all unexercisable and/or
unexercised Stock Options shall be forfeited, terminated and deemed null and
void on the dates set forth in Sections 8.a. through 8.e. hereof, as applicable
in the event the Employee's employment hereunder is terminated pursuant to the
applicable section hereof.
e. In respect of all payments under this
Agreement, the Company shall withhold and pay over to the appropriate
governmental agency all payroll taxes (including income, social security, and
unemployment compensation taxes) required by the federal, state and local
governments with jurisdiction over the Company.
5. EXPENSES. The Company will reimburse the Employee for all
reasonable and necessary travel and entertainment and professional expenses
incurred by the Employee in the performance of business-related duties for the
Company and its subsidiaries.
6. FRINGE BENEFITS. During the Term of the Employee's
employment hereunder, the Employee shall be entitled to such comparable fringe
benefits and perquisites as may be provided to any or all of the Company's
senior executives, including the President, pursuant to policies established
from time to time by the Board or Compensation Committee, as applicable. These
fringe benefits and perquisites shall include: (a) life insurance and health
insurance; (b) up to four weeks of paid vacation per year (but not cumulative
from year to year); (c) eligibility to participate in the Company's 401(k) Plan;
(d) a Company-leased car or car allowance, in either event not to exceed $800
per month (based on a "closed end" lease); (e) reimbursement of all reasonable
expenses for or related to car insurance, repairs and maintenance; and (f)
reimbursement of up to $1,000 annually for tax planning and tax return
preparation services.
7. COVENANTS NOT TO COMPETE. During the Term of the Employee's
employment with the Company, the Employee will not: (a) other than as an
employee of the Company or any of its subsidiaries or affiliates, engage in an
active way in real estate development or sales within the geographical
boundaries of Florida; or (b) engage as a passive investor in real estate
development or sales "in competition" with the Company or any of its
subsidiaries or affiliates. Whether a particular passive investment is in
competition with the Company or any of its subsidiaries or
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affiliates shall be determined by the Company's Conflicts Committee upon full
disclosure of the prospective investment by the Employee. The Employee
acknowledges and agrees that (a) the territory set forth above in which the
foregoing restrictions apply are the areas in which the Company derives or will
derive a significant portion of its revenues, (b) the foregoing restrictions as
to time and area are reasonable for the protection of the goodwill and business
of the Company against irreparable injury, (c) the foregoing restrictions do not
place an undue hardship on the Employee, and (d) the restrictions do not affect
adversely the public's health, safety or welfare.
8. Termination of Employment.
--------------------------
a. The Company may terminate the Employee's
employment hereunder at any time for "Cause," as defined below, upon giving
written notice of such involuntary termination to the Employee. In such event,
Employee shall not be entitled to any further compensation, bonus and/or
benefits, and any and all unexercisable and/or unexercised Stock Options as of
the date of the Employee's termination under this Section 8.a. shall be
forfeited, terminated and deemed null and void five (5) business days from the
date of termination. "Cause" justifying termination by the Company immediately
upon written notice shall mean any one of the following acts of or omissions by
the Employee:
(1) Conviction of a felony;
(2) Violation of federal or state
securities laws;
(3) Misappropriation of the Company's
funds;
(4) The violation of any law or regulation
governing the Employee's conduct under this Agreement;
(5) Habitual use of alcohol or drugs to a
degree that such use substantially interferes with the Employee's performance of
his duties or obligations hereunder;
(6) Deliberate and premeditated acts
against the Company's best interests; or
(7) Material breach of the terms of this
Agreement.
b. If the Company wishes to terminate the
Employee's employment hereunder other than for Cause, as defined above in
Section 8.a., the Company shall be entitled to do so upon a 60-day written
notice to the Employee of the Company's intention to terminate, provided,
however, that: (i) any and all unexercised Stock Options shall be forfeited,
terminated and deemed null and
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void ninety (90) days from the date on which the Employee's employment with the
Company terminates, and (ii) Employee shall be entitled to receive the following
compensation and benefits:
(1) any bonus earned but unpaid;
(2) severance compensation at the rate of
$225,000 per annum, payable in equal biweekly installments after the effective
date of such termination until expiration of the first 12 months after such
effective date, regardless of whether the Employee becomes gainfully employed in
the ensuing 12-month period;
(3) during the first three (3) months
following the effective date of such termination, (i) all fringe benefits to
which the Employee would otherwise be entitled under clauses (d), (e) and (f) of
the second sentence of Section 6 above or, at the Company's option, the payment
of an amount necessary, computed on an after tax basis, for the Employee to
purchase benefits substantially comparable to those to which he would otherwise
be entitled to under clauses (d), (e) and (f) of the second sentence of Section
6 above, and (ii) use of an "out placement" service provider, as designated by
the Company, to the extent the Company's cost therefor does not exceed $10,000;
and
(4) during the 12-month severance
compensation period provided in Section 8.b.(2) above, all fringe benefits to
which the Employee would otherwise be entitled under clause (a) of the second
sentence of Section 6 above or, at the Company's option, the payment of an
amount necessary, computed on an after tax basis, for the Employee to purchase
benefits substantially comparable to those to which he would otherwise be
entitled to under clause (a) of the second sentence of Section 6 above.
c. Employee may terminate his employment with the
Company at any time upon 90 days prior written notice to the Company; however in
such event, Employee shall not be entitled to any further compensation, bonus
and/or severance benefits; and any and all unexercisable and/or unexercised
Stock Options as of the Employee's termination under this Section 8.c. shall be
forfeited, terminated and deemed null and void thirty (30) days from the date of
Employee's termination of employment with the Company.
d. Notwithstanding anything herein to the
contrary, this Agreement shall terminate immediately upon the Employee's death
or total and permanent disability. For purposes of this Agreement, the Employee
shall be considered totally and permanently disabled if, as a result of illness
or injury, the Employee becomes unable to perform adequately his regular duties
on the Company's behalf and such inability continues for 180 or more consecutive
days. In such event, Company shall (i) pay to the Employee or the estate of the
deceased Employee any accrued but
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unpaid Base Compensation through Employee's date of disability or death, (ii)
pay to the Employee or the estate of the deceased Employee his accrued and
earned but unpaid Performance Bonus, if any, and (iii) pay to the Employee or
the estate of the deceased Employee a severance payment equal to six (6) months
of the Employee's Base Compensation as of the Employee's date of death or
disability. Any and all unexercisable and/or unexercised Stock Options as of the
date of the Employee's death or disability shall be forfeited, terminated and
deemed null and void ninety (90) days from the date of the Employee's death
and/or disability.
e. In the event the shareholders of the Company do
not approve the New Stock Option Plan and Agreement, pursuant to the terms of
Section 4.d. hereof, the Employee may terminate his employment hereunder for
"Good Reason" at any time prior to the earlier of fifteen (15) days following
disapproval by the shareholders or October 15, 1998. Upon the Employee's
termination of his employment with the Company for Good Reason under this
Section 8.e., the Company shall (i) pay to the Employee any accrued but unpaid
Base Compensation through the date of termination, and (ii) pay to the Employee
his accrued and earned but unpaid Performance Bonus, if any. In addition, if and
only to the extent that, the Performance Bonus would have been payable to
Employee for the bonus period in which the Employee terminates his employment
with the Company pursuant to this Section 8.e., based upon satisfaction of the
predetermined objectives set by the President and approved by the Board for such
bonus period, the Company shall pay the Employee a pro-rata share (based upon
the ratio of the period during the bonus period in which the Employee was
employed with the Company, as compared to the total bonus period) of the
Performance Bonus that is earned for the bonus period in which his employment
terminates, payable within two and one-half (2 1/2) months after the end of such
bonus period. Further, (i) any and all New Stock Options shall be deemed null
and void AB INITIO in the event the shareholders of the Company do not approve
the New Stock Option Plan and Agreement prior to September 30, 1998, whether or
not Employee terminates his employment pursuant to this Section 8.e., and (ii)
in the event Employee terminates this Agreement pursuant to this Section 8.e.,
any and all unexercisable and/or unexercised Existing Plan Stock Options as of
the Employee's termination under this Section 8.e. shall be forfeited,
terminated and deemed null and void thirty (30) days from the date of Employee's
termination of employment with the Company.
9. Confidentiality/No Solicitation.
--------------------------------
a. CONFIDENTIAL INFORMATION. The Employee shall
not at any time during or after his employment with the Company disclose or use,
directly or indirectly, any confidential information or trade secrets of the
Company, except as required by the performance of his duties hereunder and
solely for the
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Company's benefit. For the purposes of this Agreement, "confidential
information" shall mean all information disclosed to the Employee, or known by
him as a consequence of or through his employment with the Company, where such
information is not generally known in the trade or industry, and where such
information refers or relates in any manner whatsoever to the business
activities, processes, services or products of the Company. Such information
includes business and development plans (whether contemplated, initiates or
completed), development sites, business contacts, methods of operation, results
of analysis, customer lists, business forecasts, financial data, costs,
revenues, and similar information. Upon termination of this Agreement, the
Employee shall immediately return to the Company all of its property, and all
copies thereof, including all confidential information which has been reduced to
tangible form, in his possession, custody or control.
b. EMPLOYEE SOLICITATION. The Employee shall not,
either during the Term, or the first 180 days after the termination of this
Agreement, solicit, encourage or induce any employee of the Company to leave his
or her employment with the Company.
c. OTHER AGREEMENTS. The Employee represents and
warrants that his performance hereunder shall not conflict with any other
agreements to which he was or is a party. The Employee agrees not to enter into
any agreement, either written or oral, which may conflict with this Agreement.
d. RELIEF. The Employee agrees that the Company
will be irreparably damaged by a breach of this Section 9 and that damages at
law will be an insufficient remedy to the Company. The Employee also agrees that
the Company shall be entitled, upon application to a court of competent
jurisdiction, to obtain injunctive relief to enforce the provisions of this
Section 9, which injunctive relief shall be in addition to any other rights or
remedies available to the Company.
This Section 9 shall survive the expiration or earlier
termination of this Agreement.
10. INDEMNIFICATION. The Company shall indemnify Employee in
all suits or proceedings relating to or arising out of conduct or actions in his
official capacity as an officer or employee of the Company to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, including the right to have expenses (including attorney's fees)
incurred by the Employee paid by the Company in advance, as it may be amended
from time to time, and the Company's certificate of incorporation and by-laws.
This Agreement shall not in any manner diminish or change the Employee's
indemnification rights under law, including Delaware law, or under the Company's
certificate of incorporation and by-laws.
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11. MODIFICATION. No change or modification of this Agreement
shall be valid unless made in writing and signed by both the Parties.
12. APPLICABLE LAW. Except for Section 10 above, which shall
be governed by and construed in accordance with the laws of the State of
Delaware, this Agreement shall be governed by and construed in accordance with
the laws of the State of Florida, without reference to provisions that refer a
matter to the laws of any other jurisdiction. The Parties hereby agree that
venue shall be exclusively within Dade County, Florida.
13. NO JURY TRIAL. THE COMPANY AND EMPLOYEE HEREBY
VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING UNDER OR IN CONNECTION WITH THIS
AGREEMENT.
14. ASSIGNMENT PROHIBITED. This Agreement is personal to the
Parties and neither Party may assign or alienate any of its rights or
obligations under this Agreement without the written consent of the other Party.
15. SEVERABILITY. If any part of this Agreement is contrary
to, prohibited by, or deemed invalid under applicable law or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but that remainder of this Agreement shall not be invalid
and shall be given full force and effect so far as possible.
16. WAIVERS. The failure or delay of either Party at any time
to require performance by the other of any provision of this Agreement, even if
known, shall not affect the right of such Party to require performance of that
provision or to exercise any right, power or remedy hereunder, and any waiver by
either Party of any breach of any provision of this Agreement shall not be
construed as a waiver of any continuing or succeeding breach of such provision,
a waiver of the provision itself, or a waiver of any right, power or remedy
under this Agreement. No notice to or demand on either Party in any case shall,
of itself, entitle such Party to any other or further notice or demand in
similar or other circumstances.
17. ENFORCEMENT COSTS. If any legal action or other proceeding
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any provisions
of this Agreement, the successful or prevailing Party shall be entitled to
recover reasonable attorneys' and paralegals' fees, court costs and all expenses
even if not taxable as court costs (including all such fees, costs and expenses
incident to appeals), incurred in that action or proceeding, in addition to any
other relief to which such Party may
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be entitled. The terms of this Section 17 shall survive any termination of this
Agreement.
18. REMEDIES CUMULATIVE. No remedy conferred upon any Party
pursuant to this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law, in equity, by
statute or otherwise, including the right to recoup damages arising out of a
breach hereof. No single or partial exercise by any Party of any right, power or
remedy hereunder shall preclude any other or further exercise thereof.
19. NOTICES. All notices and other communications required or
permitted under this Agreement shall be in writing, and shall be deemed properly
given if delivered personally, mailed by registered or certified mail in the
United States mail, postage prepaid, return receipt requested, sent by
facsimile, or sent by Express Mail, Federal Express or other nationally
recognized express delivery service, as follows:
If to the Company or the Board:
Atlantic Gulf Communities Corporation
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: President
Fax Number: 000-000-0000
With a copy to:
Atlantic Gulf Communities Corporation
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: General Counsel
Fax Number: 000-000-0000
If to the Employee:
Xxxxxx X. Xxxxxxx
Atlantic Gulf Communities Corporation
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Fax Number: 000-000-0000
With a copy to:
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Notice given by hand, certified or registered mail, or by Express Mail, Federal
Express or other such express delivery service, shall
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be effective upon actual receipt. Notice given by facsimile transmission shall
be effective upon actual receipt if received during the recipient's normal
business hours, or at the beginning of the recipient's next business day after
receipt if not received during the recipient's normal business hours. All
notices by facsimile transmission shall be confirmed promptly after transmission
in writing by certified mail or personal delivery.
Any party may change any address to which notice is to be
given to it by giving notice as provided above of such change of address.
20. ENTIRE AGREEMENT. This Agreement incorporates the entire
agreement between the Parties with respect to the subject matter here, and
supersedes all other prior or contemporaneous agreements, negotiations or
discussions between the Parties with respect thereto.
21. MISCELLANEOUS. Captions and section headings used herein
are for convenience and are not a part of this Agreement and shall not be used
in construing it. Where necessary or appropriate to the meaning hereof, the
singular and plural shall be deemed to include each other, and the masculine,
feminine and neuter shall be deemed to include each other.
IN WITNESS WHEREOF, the Parties have executed this Agreement
as of the date first set forth above.
WITNESSES: COMPANY:
ATLANTIC GULF COMMUNITIES
CORPORATION
------------------------- By:___________________________
Print: J. Xxxxx Xxxxxxxxxx,
------------------- Chairman of the Board, President and
Chief Executive Officer
-------------------------
Print:
-------------------
EMPLOYEE:
------------------------- ------------------------------
Print: XXXXXX X. XXXXXXX
-------------------------
Print:
-------------------
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ATLANTIC GULF COMMUNITIES CORPORATION
EXISTING PLAN STOCK OPTION AGREEMENT
FOR
XXXXXX X. XXXXXXX
AGREEMENT
---------
1. GRANT OF OPTION. Atlantic Gulf Communities Corporation, a Delaware
corporation (the "Company") hereby grants, as of November 17, 1997, to Xxxxxx X.
Xxxxxxx (the "Optionee") an option (the "Option") to purchase up to Fifty
Thousand (50,000) shares of the Company's Common Stock, $.10 par value per share
(the "Shares"), at an exercise price per share equal to $4.3125. The Option
shall be subject to the terms and conditions set forth herein, and in the
Atlantic Gulf Communities Corporation Employee Stock Option Plan (the "Plan"),
the provisions of which are hereby incorporated by reference. The Option is a
nonqualified stock option, and not an incentive stock option.
2. DEFINITIONS. As used herein, the following terms shall have the meaning
indicated:
a. Any capitalized term used herein which is not defined herein shall
have the meaning given in the Plan.
b. "Cause" shall have the meaning set forth for such term in Section
8.a. of the Employment Agreement.
c. "Employment Agreement" shall mean that certain Employment Agreement
entered into by and between the Company and the Optionee, effective as of July
1, 1997.
3. Exercise Schedule.
------------------
a. Except as otherwise provided in Sections 6 or 8 of this Agreement,
the Option shall be exercisable in whole or in part, and cumulatively, according
to the following schedule:
Number of Shares That Become Available
Exercisability Date for Purchase
------------------- ------------
November 17, 1997 16,667
June 30, 1998 16,667
June 30, 1999 16,666
b. The Option shall terminate on, and in no event shall the Option be
exercisable after, November 16, 2004.
4. METHOD OF EXERCISE. This Option shall be exercisable in whole or in
part in accordance with
1
the exercise schedule set forth in Section 3 hereof by written notice which
shall state the election to exercise the Option, the number of Shares in respect
of which the Option is being exercised, and such other representations and
agreements as to the holder's investment intent with respect to such Shares as
may be required by the Company. Such written notice shall be signed by the
Optionee and shall be delivered in person or by certified mail to the Secretary
of the Company. The written notice shall be accompanied by payment of the
exercise price. This Option shall be deemed to be deemed to be exercised after
both (a) receipt by the Company of such written notice accompanied by the
exercise price and (b) arrangements that are satisfactory to the Committee in
its sole discretion have been made for Optionee's payment to the Company of the
amount that is necessary to be withheld in accordance with applicable Federal or
state withholding requirements. No Shares will be issued pursuant to the Option
unless and until such issuance and such exercise shall comply with all relevant
provisions of applicable law, including the requirements of any stock exchange
upon which the Shares then may be traded.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Optionee: (a) cash;
(b) check; or (c) such other consideration or in such other manner as may be
determined by the Committee or the Board, which other method, in the discretion
of the Committee or the Board may include, without limitation, payment of the
exercise price in whole or in part (i) with Shares held by the Optionee for at
least six months, (ii) by a promissory note payable to the order of the Company
in a form acceptable to the Committee, or (iii) by the Company retaining from
the Shares to be delivered upon exercise of the Option that number of Shares
having a Fair Market Value on the date of exercise equal to the option price for
the number of Shares with respect to which the Optionee exercises the Option or
by any other form of cashless exercise procedure approved by the Committee or
the Board.
6. TERMINATION OF OPTION. Any and all unvested or unexercised portion of
the Option shall terminate and become null and void at the time of the earliest
to occur of the following:
a. five (5) business days after the date the Optionee's
employment with the Company is terminated for Cause, pursuant to Section 8.a. of
the Employment Agreement;
b. ninety (90) days after the date the Optionee's employment with
the Company is terminated (i) by the Company without Cause, pursuant to Section
8.b. of the Employment Agreement, or (ii) as a result of the death or the total
and permanent disability of the Optionee, pursuant to Section 8.d. of the
Employment Agreement; or
c. thirty (30) days after the date the Optionee terminates his
employment with the Company, pursuant to Section 8.c. of the Employment
Agreement.
Also, the Committee or the Board, in its sole discretion may by giving
written notice (the "cancellation notice" cancel, effective upon the date of the
consummation of any corporation transaction described in Section 8(a) of this
Agreement or the consummation of any reorganization, merger, consolidation or
other transaction in which the Company does not survive, any Option that
2
remains unexercised on such date. Such cancellation notice shall be given thirty
(30) days prior to the proposed date of such cancellation and may be given
either before or after approval of such corporate transaction.
7. TRANSFERABILITY. The Option is not transferable other than by will or
by the laws of descent and distribution, and during the lifetime of the Optionee
the Option shall be exercisable only by the Optionee or the Optionee's legal
representative. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
8. CHANGE IN CONTROL. This Option shall become immediately fully
exercisable in the event of a "Change in Control" or the event that the
Committee or the Board exercised its discretion to provide a cancellation notice
with respect to the Option pursuant to Section 6 hereof. For this purpose, the
term "Change in Control" shall mean:
a. Approval by the shareholders of the Company of (i) a reorganization,
merger, consolidation or other form of corporate transaction or series of
transactions, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization, merger or
consolidation or other transaction do not, immediately thereafter, own more than
50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then outstanding
voting securities, or (ii) a liquidation or dissolution of the Company or (iii)
the sale of all or substantially all of the assets of the Company (unless such
reorganization, merger, consolidation or other corporate transaction,
liquidation, dissolution or sale is subsequently abandoned); or
b. Individuals who, as of the date hereof, constitute the board (as of
the date hereof the "Incumbent Board") cease for any reason to constitute a
majority of the Board, provided that (i) any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Company, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board, and (ii) any person becoming a director subsequent to the date hereof who
is nominated by AP-AGC, LLC, a shareholder of the Company, and who replaces a
member of the Incumbent Board nominated by AP-AGC, LLC, shall be for purposes of
this Agreement considered as though such persons were a member of the Incumbent
Board; or
c. The acquisition (other than from the Company) by any person, entity
or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act, (excluding, for this purpose, AP-AGC, LLC or the Company or its
subsidiaries, or any employee benefit plan of the Company or its subsidiaries
which acquires beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act) of 30% or more of either the then
outstanding
3
Common Stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of directors.
9. No Right to Continued Employment. Neither the Option nor this Agreement shall
confer upon the Optionee any right to continued employment or service with the
Company.
10. Law Governing. This Agreement shall be governed in accordance with and
governed by the internal laws of the State of Delaware.
11. Notices Any notice under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or when deposited in
the United States mail, registered, postage prepaid, and addressed, in the case
of the Company, to the Company's Secretary at 0000 X. Xxxxxxxx Xxxxx, Xxxxx,
Xxxxxxx 00000, or if the Company should move its principal office, to such
principal office, and, in the case of the Optionee, to the Optionee's last
permanent address as shown on the Company's records, subject to the right of
either party to designate some other address at any time hereafter in a notice
satisfying the requirements of this Section.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
WITNESSES: COMPANY:
ATLANTIC GULF COMMUNITIES CORPORATION
----------------------------- By:
Print: ------------------------------------
----------------------- J. Xxxxx Xxxxxxxxxx,
Chairman of the Board, President
----------------------------- and Chief Executive Officer
Print:
-----------------------
EMPLOYEE:
----------------------------- ------------------------------
Print: XXXXXX X. XXXXXXX
-----------------------
-----------------------------
Print:
-----------------------
4
ATLANTIC GULF COMMUNITIES CORPORATION
NEW STOCK OPTION PLAN AND AGREEMENT
FOR
XXXXXX X. XXXXXXX
AGREEMENT
---------
1. GRANT OF OPTION. Atlantic Gulf Communities Corporation, a Delaware
corporation (the "Company") hereby grants, as of November 17, 1997, to Xxxxxx X.
Xxxxxxx (the "Optionee") an option (the "Option") to purchase up to Two Hundred
Thousand (200,000) shares of the Company's Common Stock, $.10 par value per
share (the "Shares"), at an exercise price per share equal to the Option Price.
The Option shall be subject to the terms and conditions set forth herein. The
Option is a nonqualified stock option, and not an Incentive Stock Option.
2. STOCK OPTION PLAN. This Agreement shall also serve as the plan under which
the Option is granted, pursuant to the regulations promulgated under Section 162
of the Internal Revenue Code. The maximum number of shares that may be subject
to acquisition under the Option may not exceed Two Hundred Thousand (200,000)
shares.
3. DEFINITIONS. As used herein, the following terms shall have the meaning
indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Cause" shall have the meaning set forth for such term in Section
8.a. of the Employment Agreement.
(c) "Committee" shall mean a committee appointed by the Board (the
"Committee") which shall be composed of two or more Directors all of whom shall
be Outside Directors. The membership of the Committee shall be constituted so as
to comply at all times with the applicable requirements of Rule 16b-3
promulgated under the Securities Exchange Act and Section 162(m) of the Internal
Revenue Code. The Committee shall serve at the pleasure of the Board and shall
have the powers designated herein and such other powers as the Board may from
time to time confer upon it.
(d) "Common Stock" shall mean the Company's Common Stock, par value
$.10 per share.
(e) "Director" shall mean a member of the Board.
(f) "Employment Agreement" shall mean that certain Employment Agreement
entered into by and between the Company and the Optionee, of even date herewith.
(g) "Fair Market Value" of a Share on any date of reference shall mean
the "Closing Price" (as defined below) of the Common Stock on the business day
immediately preceding such
date, unless the Committee in its sole discretion shall determine otherwise in a
fair and uniform manner. For the purpose of determining Fair Market Value, the
"Closing Price" of the Common Stock on any business day shall be the last
reported sale price of the Common Stock on the National Association of
Securities Dealers' National Market System, on an national securities exchange,
or, if no such sales price is reported, the mean between the closing high bid
and low asked quotations for such day of Common Stock on such system, as
reported in any newspaper of general circulation. If no quotation is made for
the applicable day, the Fair Market Value shall be determined in the manner set
forth in the preceding sentence using quotations for the next preceding day for
which there were quotations, provided that such quotations shall have been made
within the ten (10) "Trading" days preceding the applicable day. Notwithstanding
the foregoing, if no such information is available, or if otherwise determined
necessary by the Committee, the Fair Market Value shall be determined in good
faith by the Committee or the Board in a fair and uniform manner.
(h) "Incentive Stock Option" shall mean an incentive stock option as
defined in Section 422 of the Internal Revenue Code.
(i) "Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(j) "Non-Qualified Stock Option" shall mean an Option which is not an
Incentive Stock Option.
(k) "Option" (when capitalized) shall mean any option granted under
this Agreement.
(l) "Option Price" shall mean the Fair Market Value of a Share on the
Shareholder Approval Date.
(m) "Outside Director" shall mean a member of the Board who qualifies
as an "outside director" under Section 162(m) of the Internal Revenue Code and
the regulations thereunder and as a "Non-Employee Director" under Rule 16b-3
promulgated under the Securities Exchange Act.
(n) "Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(o) "Share" shall mean a share of Common Stock.
(p) "Shareholder Approval Date" shall mean the date on which this Stock
Option Plan and Agreement is approved by a majority vote of the shareholders of
the Company, in satisfaction of Section 162(m) of the internal Revenue Code.
4. Exercise Schedule.
------------------
(a) Except as otherwise provided in Sections 7 or 10 of this Agreement,
the Option shall be exercisable in whole or in part, and cumulatively, according
to the following schedule:
2
Number of Shares That
Exercisability Date Become Available for Purchase
------------------- -----------------------------
Shareholder Approval Date 66,667
June 30, 1998 66,667
June 30, 1999 66,666
(b) Notwithstanding anything to the contrary contained herein, the
Optionee may not exercise any portion of the Option at any time prior to the
date on which this Stock Option Plan and Agreement is approved by a majority
vote of the shareholders of the Company, in satisfaction of Section 162(m) of
the Internal Revenue Code. In the event the shareholders of the Company do not
approve this Stock Option Plan and Agreement, in satisfaction of Section 162(m)
of the Internal Revenue Code, prior to September 30, 1998, any portion of the
Option granted to the Optionee hereunder shall be deemed null and void ab
initio, whether or not the Optionee terminates his employment with the Company.
(c) The Option shall terminate on, and in no event shall the Option be
exercisable after, November 16, 2004.
5. METHOD OF EXERCISE. This Option shall be exercisable in whole or in part in
accordance with the exercise schedule set forth in Section 4 hereof by written
notice which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such Shares as may be required by the Company. Such written notice shall be
signed by the Optionee and shall be delivered in person or by certified mail to
the Secretary of the Company. The written notice shall be accompanied by payment
of the exercise price. This Option shall be deemed to be exercised after both
(a) receipt by the Company of such written notice accompanied by the exercise
price and (b) arrangements that are satisfactory to the Committee in its sole
discretion have been made for Optionee's payment to the Company of the amount
that is necessary to be withheld in accordance with applicable Federal or state
withholding requirements. No Shares will be issued pursuant to the Option unless
and until such issuance and such exercise shall comply with all relevant
provisions of applicable law, including the requirements of any stock exchange
upon which the Shares then may be traded.
6. METHOD OF PAYMENT. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Optionee: (a) cash;
(b) check; or (c) such other consideration or in such other manner as may be
determined by the Committee or the Board, which other method, in the discretion
of the Committee or the Board may include, without limitation, payment of the
exercise price in whole or in part (i) with Shares held by the Optionee for at
least six (6) months, (ii) by a promissory note payable to the order of the
Company in a form acceptable to the Committee, or (iii) by the Company retaining
from the Shares to be delivered upon exercise of the Option that number of
Shares having a Fair Market Value on the date of exercise equal to the option
price for the number of Shares with respect to which the Optionee exercises the
Option or by any other form of cashless exercise procedure approved by the
Committee or the Board.
3
7. TERMINATION OF OPTION. Any and all unvested or unexercised portion of the
Option shall terminate and become null and void at the time of the earliest to
occur of the following:
(a) five (5) business days after the date the Optionee's employment
with the Company is terminated for Cause, pursuant to Section 8.a. of the
Employment Agreement;
(b) ninety (90) days after the date the Optionee's employment with the
Company is terminated (i) by the Company without Cause, pursuant to Section 8.b.
of the Employment Agreement, or (ii) as a result of the death or the total and
permanent disability of the Optionee, pursuant to Section 8.d. of the Employment
Agreement; or
(c) thirty (30) days after the date the Optionee terminates his
employment with the Company, pursuant to Section 8.c. of the Employment
Agreement.
Also, the Committee or the Board, in its sole discretion may by giving
written notice (the "cancellation notice") cancel, effective upon the date of
the consummation of any corporate transaction described in Section 10(a) of this
Agreement or the consummation of any reorganization, merger, consolidation or
other transaction in which the Company does not survive, any Option that remains
unexercised on such date. Such cancellation notice shall be given thirty (30)
days prior to the proposed date of such cancellation and may be given either
before or after approval of such corporate transaction.
8. TRANSFERABILITY.
----------------
(a) The Option is not transferable other than by will or by the laws of
descent and distribution, and during the lifetime of the Optionee the Option
shall be exercisable only by the Optionee or the Optionee's legal
representative. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
(b) Unless the prior written consent of the Committee or the Board is
obtained and the transaction does not violate the requirements of Rule 16b-3
promulgated under the Securities Exchange Act, no Shares acquired pursuant to
the exercise of an Option may be sold, assigned, pledged or otherwise
transferred prior to the expiration of the six-month period following the date
on which the Option was granted.
9. NO RIGHTS OF STOCKHOLDERS. Neither the Optionee nor any personal
representative (or beneficiary) shall be, or shall have any of the rights and
privileges of, a stockholder of the Company with respect to any shares of Stock
purchasable or issuable upon the exercise of any portion of the Option prior to
the date of exercise of the Option.
10. CHANGE IN CONTROL. This Option shall become immediately fully exercisable in
the event of a "Change in Control" or in the event that the Committee or the
Board exercises its discretion to provide a cancellation notice with respect to
the Option pursuant to Section 7 hereof. For this purpose, the term "Change in
Control" shall mean:
4
(a) Approval by the shareholders of the Company of (i) a
reorganization, merger, consolidation or other form of corporate transaction or
series of transactions, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization, merger or
consolidation or other transaction do not, immediately thereafter, own more than
50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then outstanding
voting securities, or (ii) a liquidation or dissolution of the Company or (iii)
the sale of all or substantially all of the assets of the Company (unless such
reorganization, merger, consolidation or other corporate transaction,
liquidation, dissolution or sale is subsequently abandoned); or
(b) Individuals who, as of the date hereof, constitute the Board (as of
the date hereof the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board, provided that (i) any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Company, as such terms are used in Rule 14a- 11 of Regulation
14A promulgated under the Securities Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board, and (ii) any person becoming a director subsequent to the date hereof who
is nominated by AP-AGC, LLC, a shareholder of the Company, and who replaces a
member of the Incumbent Board nominated by AP-AGC, LLC, shall be for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board; or
(c) The acquisition (other than from the Company) by any person, entity
or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act, (excluding, for this purpose, AP-AGC, LLC or the Company or its
subsidiaries, or any employee benefit plan of the Company or its subsidiaries
which acquires beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act) of 30% or more of either the then
outstanding Common Stock or the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the election of
directors.
11. ADJUSTMENT OF SHARES.
---------------------
(a) If at any time while unexercised Options are outstanding, there
shall be any increase or decrease in the number of issued and outstanding Shares
through the declaration of a stock dividend or through any recapitalization
resulting in a stock split-up, combination or exchange of Shares, then and in
such event, appropriate adjustment shall be made in the number of Shares and the
exercise price per Share thereof subject to any outstanding Option, so that the
same percentage of the Company's issued and outstanding Shares shall remain
subject to purchase at the same aggregate exercise price.
(b) The Committee or the Board may change the terms of Options
outstanding under this Agreement, with respect to the option price or the number
of Shares subject to the Options, or both,
5
when, in the Committee's or Board's sole discretion, such adjustments become
appropriate so as to preserve but not increase benefits under this Agreement.
(c) Except as otherwise expressly provided herein, the issuance by the
Company of shares of its capital stock of any class, or securities convertible
into shares of capital stock of any class, either in connection with a direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made to, the number of or exercise price for Shares then subject to
outstanding Options granted under this Agreement.
(d) Without limiting the generality of the foregoing, the existence of
outstanding Options granted under this Agreement shall not affect in any manner
the right or power of the Company to make, authorize or consummate (i) any or
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business; (ii) any merger or consolidation of
the Company; (iii) any issue by the Company of debt securities, or preferred or
preference stock that would rank above the Shares subject to outstanding
Options; (iv) the dissolution or liquidation of the Company; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company; or (vi) any other corporate act or proceeding, whether of a similar
character or otherwise.
12. ISSUANCE OF SHARES.
-------------------
(a) The Company shall not be obligated to issue any Shares unless it is
advised by counsel of its selection that it may do so without violation of the
applicable Federal and State laws pertaining to the issuance of securities, and
may require any stock so issued to bear a legend, may give its transfer agent
instructions, and may take such other steps, as in its judgment are reasonably
required to prevent any such violation.
(b) As a condition to any sale or issuance of Shares upon exercise of
any Option, the Committee or the Board may require such agreements or
undertakings as the Committee or the Board may deem necessary or advisable to
facilitate compliance with any applicable law or regulation including, but not
limited to, the following:
(i) a representation and warranty by the Optionee to the
Company, at the time any Option is exercised, that he is acquiring
the Shares to be issued to him for investment and not with a view
to, or for sale in connection with, the distribution of any such
Shares; and
(ii a representation, warranty and/or agreement to be
bound by any legends endorsed upon the certificate(s) for such
Shares that are, in the opinion of the Committee or the Board,
necessary or appropriate to facilitate compliance with the
provisions of any securities laws deemed by the Committee or the
Board to be applicable to the issuance and transfer of such Shares.
6
13. ADMINISTRATION.
--------------
(a) This Agreement shall be administered by the Committee or the Board.
(b) The Committee or the Board, from time to time, may adopt rules and
regulations for carrying out the purposes of this Agreement. The determinations
by the Committee or the Board, and the interpretation and construction of any
provision of this Agreement by the Committee or the Board, shall be final and
conclusive.
14. NO RIGHT TO CONTINUED EMPLOYMENT. Neither the Option nor this Agreement
shall confer upon the Optionee any right to continued employment or service with
the Company.
15. LAW GOVERNING. This Agreement shall be governed in accordance with and
governed by the internal laws of the State of Delaware.
16. INTERPRETATION. The Optionee accepts the Option subject to all the terms and
provisions of this Agreement. The undersigned Optionee hereby accepts as
binding, conclusive and final all decisions or interpretations of the Committee
upon any questions arising under the this Agreement.
17. NOTICES. Any notice under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or when deposited in
the United States mail, registered, postage prepaid, and addressed, in the case
of the Company, to the Company's Secretary at 0000 X. Xxxxxxxx Xxxxx, Xxxxx,
Xxxxxxx 00000, or if the Company should move its principal office, to such
principal office, and, in the case of the Optionee, to the Optionee's last
permanent address as shown on the Company's records, subject to the right of
either party to designate some other address at any time hereafter in a notice
satisfying the requirements of this Section.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the 17th day of November, 1997.
COMPANY:
ATLANTIC GULF COMMUNITIES
CORPORATION
By:
---------------------------------------
Name: J. Xxxxx Xxxxxxxxxx
Title: President, Chairman of the Board
and Chief Executive Officer
Dated: OPTIONEE:
By:
---------------------------------------
