Exhibit 4
THE OPTION GRANTED UNDER THIS SHAREHOLDER OPTION AGREEMENT AND ANY SHARES
OF COMMON STOCK WHICH MAY BE ISSUED UPON THE EXERCISE OF SUCH OPTION HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED,
SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS
OR AN EXEMPTION THEREFROM.
SHAREHOLDER OPTION AGREEMENT
SHAREHOLDER OPTION AGREEMENT, dated as of July 17, 1997 (this "Agreement")
among XXXXXXX X. XXXXXXX, XX., as trustee of the Xxxxxxx X. Xxxxxxx, Xx.
Revocable Trust (the "Gellein Trust"), XXXXXXX X. XXXXX, as trustee of the
Xxxxxxx X. Xxxxx Trust (the "Xxxxx Trust"), XXXXXXX X. XXXXXXX, XX., as the
trustee of the JGG Holdings Trust (the "X. Xxxxxxx Trust;" each of the foregoing
trusts is also sometimes referred to herein individually as a "Shareholder" and
collectively as the "Shareholders"), and ALAIN X.X. XXXXXX ("Grantee").
(Capitalized terms used herein but not otherwise defined shall have the meanings
set forth in Section 5 hereof.)
W I T N E S S E T H:
WHEREAS, the Shareholders have agreed collectively to grant to Grantee
options to purchase an aggregate of 40,000 shares of Common Stock owned by the
Shareholders upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of $10 and the mutual agreements contained
herein and certain other agreements being concurrently executed by Vistana,
Inc., a Florida corporation (the "Company"), and Grantee, the receipt, adequacy
and sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. The Option.
1.1 Grant of Option. Upon the terms and subject to the conditions
contained herein, each Shareholder hereby grants to Grantee the right and option
(the "Option") to purchase from such Shareholder the number of shares of Common
Stock set forth on attached Schedule A (the "Option Shares"). The Option may be
exercised at any time during the Term (as hereinafter defined) in whole or from
time to time in part, provided that if the Option is exercised in part, Grantee
shall be obligated to purchase a
pro rata portion of the Option Shares held by each Shareholder, and each
Shareholder shall be obligated to sell to Grantee its pro rata share of the
Option Shares subject to such exercise. The Option shall be exercisable with
respect to full shares of Common Stock only.
1.2 Vesting of Option. Grantee may not exercise the Option until it has
become vested. The Option shall vest, if at all, in its entirety upon the
earliest to occur of the following events (the "Vesting Date"):
(a) the date of the death or Permanent Disability of Grantee;
(b) the date upon which the Company terminates Grantee's employment by
the Company for any reason;
(c) the date upon which Grantee terminates Grantee's employment by the
Company as a result of a Voluntary Termination for Good Reason;
(d) the date upon which a Change in Control is consummated; and
(e) February 10, 2001;
provided, however, that if prior to February 10, 2001, Grantee terminates
Grantee's employment by the Company for any reason, the Option shall be
forfeited by Grantee, and this Agreement shall immediately thereafter cease to
have any force or effect.
1.3 Term of Option. Grantee may exercise the Option from and after the
Vesting Date until the earliest to occur of the following events (the "Term"):
(a) two years after the date of the death or Permanent Disability of
Grantee;
(b) two years after the date upon which the Company terminates
Grantee's employment by the Company other than for Cause;
(c) 30 days after the date upon which the Company terminates Grantee's
employment by the Company for Cause;
(d) two years after the date upon which Grantee effects a Voluntary
Termination of Grantee's employment by the Company; and
(e) the tenth anniversary of the date hereof.
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1.4 Exercise Price. The exercise price (the "Exercise Price") for each
Option Share shall be $12 per share, subject to adjustment as provided in
Section 1.7.
1.5 Procedure for Exercise. In the event Grantee desires to exercise the
Option, whether in whole or in part, Grantee shall deliver concurrent written
notices to each Shareholder (a) setting forth Grantee's desire to exercise the
Option, (b) specifying the number of shares of Common Stock to be purchased from
each Shareholder and (c) designating a date upon which Grantee desires to
consummate the exercise of the Option, which date shall not be less than 3 nor
more than 10 days after the delivery of such notice (the later of such date and
the date upon which all Federal and State securities laws relating to the
issuance and sale of the Option Shares and any applicable listing requirements
of any national securities exchange or other market system have been complied
with is referred to as an "Option Closing Date"). The Shareholders may require
the Grantee, or other person exercising the Option in accordance with the
provisions of Section 1.8, to furnish or execute such other documents as the
Shareholders or their counsel shall deem reasonably necessary to evidence such
exercise or to comply with or satisfy the requirements of the Securities Act or
any other applicable law.
1.6 Consummation of Exercise.
(a) On each Option Closing Date,
(i) Grantee shall deliver to each Shareholder the Exercise Price
for the Option Shares to be purchased from such Shareholder by wire
transfer of immediately available funds or by delivery of a certified or
cashier's check payable to the order of such Shareholder; and
(ii) Each Shareholder shall deliver to Grantee one or more
certificates evidencing the Option Shares to be purchased hereunder at such
closing, together with a duly executed stock power transferring such Option
Shares to Grantee on the books and records of the Company.
(b) Notwithstanding the foregoing, if: (i) the Common Stock is readily
tradeable on a national securities exchange or other market system at the time
the Option is exercised in whole or in part and (ii) the relevant Option Shares
have been or will, pursuant to the Registration Rights Agreement or otherwise,
be duly registered under the Securities Act and any applicable State securities
laws, or exempt from registration thereunder, and any applicable listing
requirements of any national securities exchange or other market system have
been or will, pursuant to the Registration Rights Agreement or otherwise, be
complied with, in each case, as reasonably determined by counsel for the
Shareholders, payment may also be made by delivery of the written
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notice described in Section 1.5, together with a copy of irrevocable
instructions to a broker to sell the number of shares of Common Stock specified
in the exercise notice and to: (x) deliver to each Shareholder the Option Price
with respect to the Option Shares being purchased by Grantee from such
Shareholder, (y) remit the remaining proceeds from the sale of such Option
Shares, less the amount of any applicable foreign, Federal, State or local
withholding taxes attributable to the transactions described herein, to Grantee,
and (z) remit any amounts withheld pursuant to clause (y) to the Company. The
written notice and irrevocable instructions shall be of no force or effect if
counsel for the Shareholders determines that the transactions described in this
paragraph will not comply with all applicable Federal and State securities laws
and the applicable listing requirements of any national securities exchange or
other market system.
(c) Grantee agrees that the Company may take such actions as are
necessary to comply with the wage withholding provisions of any applicable
foreign, Federal, State or local income tax laws in connection with each Option
exercise.
1.7 Adjustments to Option. In the event of any merger or consolidation of
the Company, any recapitalization, reorganization or sale of all or
substantially all of the assets or properties of the Company or any other
transaction or series of transactions (including, without limitation, stock
dividends), which would have a dilutive effect upon the Option or the Option
Shares, the Option, and the terms and provisions thereof, shall be adjusted in a
fair and equitable manner by the Shareholders, whose determination shall be
conclusive and binding on Grantee. The Shareholders shall promptly notify
Grantee in writing of any such adjustments, the reason therefor and the
calculation thereof.
1.8 Option Not Transferable; No Rights As a Shareholder.
---------------------------------------------------
(a) (i) Except as set forth in Section 1.8(a)(ii), the Option, or
any portion thereof, may not be sold, pledged, assigned, transferred or
otherwise disposed of in any manner other than by will or the laws of
descent and distribution and shall not be subject to execution, attachment
or similar process.
(ii) Notwithstanding anything to the contrary contained in this
Section 1.8, Grantee may transfer all or a portion of the Option to an
Affiliate of Grantee; provided, however, that (A) the Option shall remain
subject to all of the terms and conditions of this Agreement in the hands
of such Affiliate, and (B) such Affiliate shall first deliver to the
Shareholders a written agreement assuming and agreeing to be bound by all
the terms and conditions of this Agreement and to be a "Grantee" hereunder
to the extent of the portion of the Option so transferred.
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(iii) During Grantee's lifetime, the Option may only be
exercised by Grantee, an Affiliate of Grantee who or which is the holder of
all or a portion of the Option or by a legally authorized representative.
In the event that the Option shall be exercised by a person other than
Grantee, such person shall furnish to the Shareholders evidence
satisfactory to them of such person's right to exercise the Option.
(b) Neither Grantee nor any Affiliate of Grantee who or which is the
holder of all or a portion of the Option shall have any rights as a shareholder
of the Company until Grantee or such Affiliate shall have properly exercised the
Option, in whole or in part, and certificates evidencing the appropriate number
of Option Shares are properly delivered to Grantee or such Affiliate. Except as
provided in Section 1.7, no adjustment shall be made hereunder for dividends or
other rights for which the record date is prior to the issuance of such
certificates.
2. Representations and Warranties of Shareholders. Each of the
Shareholders severally and not jointly represents and warrants to Grantee as
follows:
2.1 Authority. Each Shareholder has all necessary power and authority to
execute and deliver this Agreement and to sell, assign, transfer and deliver to
Grantee, pursuant to the terms and conditions of this Agreement, the Option
Shares to be received by such Shareholder in connection herewith. Each
Shareholder has sole voting power and sole power of disposition of such
Shareholder's Option Shares, with no restrictions on such Shareholder's voting
rights or rights of disposition pertaining thereto, except for restrictions
imposed by applicable Federal and State securities laws and except as provided
in the Shareholders' Agreement, dated February 10, 1997, among the Shareholders
and the Company and the Underwriting Agreement executed by such Shareholder,
among others, in connection with the Initial Public Offering. At each closing
referred to in Section 1.6, each Shareholder will convey good and valid title to
the relevant Option Shares owned by such Shareholder, free and clear of any and
all liens, claims, pledges, security interests and other encumbrances of any
kind whatsoever.
2.2 Authorization/Enforceability. This Agreement has been duly
authorized, executed and delivered by each Shareholder and constitutes a valid
and legally binding obligation of such Shareholder, enforceable against such
Shareholder in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to or
affecting the rights or remedies of creditors, general principles of equity
(whether considered in an action at law or in equity) and the discretion of the
court before which any proceeding therefor may be brought.
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2.3 Non-Contravention. Neither the execution and delivery of this
Agreement nor the performance by each Shareholder of its respective obligations
hereunder will conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, its trust agreement, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Shareholder is a party or by which such Shareholder or
its assets (including, without limitation, Option Shares) is bound, or any
statute, order, rule or regulation of any governmental authority applicable to
such Shareholder or its assets.
2.4 Consents/Approvals. No consent, approval, authorization, order,
registration or qualification of or with any governmental authority or other
person or entity is required in connection with the execution or delivery or,
except for filings which may be required under applicable Federal and State
securities laws, performance of this Agreement by each Shareholder.
3. Representations and Warranties of Grantee. Grantee hereby represents
and warrants to the Shareholders as follows:
3.1 Capacity/Enforceability. Grantee has the legal capacity to enter into
and perform Grantee's obligations under this Agreement. This Agreement has been
duly executed and delivered by Grantee and constitutes a valid and legally
binding obligation of Grantee, enforceable against Grantee in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights or remedies
of creditors, general principles of equity (whether considered in an action at
law or in equity) and the discretion of the court before which any proceeding
therefor may be brought.
3.2 Non-Contravention. Neither the execution and delivery of this
Agreement nor the performance by Grantee of Grantee's obligations hereunder will
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which Grantee is a
party or by which Grantee or Grantee's assets is bound, or any statute, order,
rule or regulation of any governmental authority applicable to Grantee or
Grantee's assets.
3.3 Consents/Approvals. No consent, approval, authorization, order,
registration or qualification of or with any governmental authority or other
person or entity is required in connection with the execution or delivery or,
except for filings which may be required under applicable Federal and State
securities laws, performance of this Agreement by Grantee.
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3.4 Investment Intent.
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(a) Grantee is an "accredited investor" (as defined in Rule 501(a) of
Regulation D under the Securities Act) and is acquiring the Option, and
will acquire any Option Shares hereunder, for Grantee's own account and
with no intention of distributing or selling such securities, except in
accordance with applicable Federal and State securities laws. Grantee
understands that neither the Option nor the Option Shares has been
registered under the Securities Act by reason of their contemplated
issuance in transaction(s) exempt from the registration and prospectus
delivery requirements of the Securities Act pursuant to Section 4(2)
thereof. The reliance of the Shareholders on such exemption from
registration is predicated in part on the representations and warranties of
Grantee hereunder.
(b) Grantee agrees that Grantee will not sell or otherwise dispose of
the Option or any of the Option Shares unless such sale or other
disposition is permitted hereunder and under the Registration Rights
Agreement, has been registered or is exempt from registration under the
Securities Act and has been registered or qualified or is exempt from
registration or qualification under applicable State securities laws.
(c) Grantee understands that a restrictive legend consistent with the
foregoing has been or will be placed on the certificates evidencing the
Option Shares, and related stop transfer instructions will be noted in the
transfer records of the Company and/or its transfer agent for the Common
Stock.
(d) Grantee hereby acknowledges that disposition of the Option and the
Option Shares is restricted by applicable law and by the terms of this
Agreement and the Registration Rights Agreement, and Grantee may, unless
permitted hereunder and thereunder, be required to bear the economic risk
of Grantee's investment in the Option Shares (assuming exercise of the
Option) indefinitely.
4. Covenants.
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4.1 Right to Compel Disposition.
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(a) Notwithstanding anything in this Agreement to the contrary, upon a
proposed disposition by the Shareholders, acting as a group, of all or
substantially all the shares of Common Stock beneficially owned by them (as
determined in accordance with Rule 13d-3 of the Exchange Act, as amended) to one
or more third party purchasers who or which are not Affiliates of any of the
Shareholders (collectively, "Transferee"), by way of merger or
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sale, in a single transaction or a series of related transactions (other than
one or more underwritten public offerings), the Shareholders shall have the
right and option to deem the Option exercised (except that the Exercise Price
shall not be payable other than pursuant to this paragraph) and dispose of the
Option Shares on behalf of Grantee, and Grantee's Affiliates, if any, who or
which hold all or a portion of the Option, to such Transferee for the same
consideration per share of Common Stock and otherwise on the same terms and
conditions upon which the Shareholders effect the disposition of their shares of
Common Stock. Grantee, and Grantee's Affiliates, if any, who or which hold all
or a portion of the Option, shall, in connection with such a disposition, be
entitled to receive an amount equal to the total sales price of the Option
Shares, less the sum of the Exercise Price thereof and any applicable foreign,
Federal, State or local withholding taxes attributable to the transactions
described in this Section 4.1(a) (it being understood that cash consideration
and any other type of consideration (valued in accordance with the methodology
used for the disposition as a whole) in the foregoing amounts shall be retained
on a pro rata basis). Grantee agrees that the Company may take such actions as
are necessary to comply with the wage withholding provisions of any applicable
foreign, Federal, State or local income tax laws in connection with the above-
described transactions.
(b) In the event that the Shareholders desire to exercise their rights
pursuant to Section 4.1(a), they shall deliver to Grantee, and Grantee's
Affiliates, if any, who or which hold all or a portion of the Option, written
notice setting forth the consideration per share of Common Stock to be paid by
such Transferee and the other terms and conditions of such proposed disposition.
(c) Promptly after the consummation of the disposition of Option
Shares pursuant to this Section 4.1 (but in no event later than three business
days following receipt by the Shareholders of consideration from the
Transferee), the Shareholders shall (i) deliver notice thereof to Grantee, and
Grantee's Affiliates, if any, who or which hold all or a portion of the Option,
(ii) remit to Grantee, and Grantee's Affiliates, if any, who or which hold all
or a portion of the Option, the total sales price of the Option Shares disposed
of pursuant hereto less the sum of the Exercise Price thereof and any applicable
foreign, Federal, State or local withholding taxes, and (iii) furnish such other
evidence of the completion and time of completion of such disposition and the
terms thereof as may be reasonably requested in writing by Grantee.
(d) If, within 120 days after the Shareholders' delivery of the notice
required pursuant to Section 4.1(b), the Shareholders have not completed the
disposition of all or substantially all of their shares of Common Stock and the
Option Shares in accordance
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herewith (which period shall be extended in order to secure all approvals of
regulatory bodies and similar authorities that are required to effectuate such
disposition, in which case the closing shall be conducted no later than 10
business days after the receipt of all such approvals (it being understood that
the parties shall use their reasonable best efforts to obtain any such approvals
within the time periods contemplated hereby)), the deemed exercise described in
Section 4.1(a) shall be of no force or effect and the provisions of Sections
4.1(a) and 4.2(a) shall again apply.
(e) Grantee agrees to execute and deliver to the Shareholders and/or
the Transferee any and all documents and other instruments reasonably necessary
to effect the disposition of the Option or the Option Shares pursuant to this
Section.
(f) From and after Grantee's receipt of the notice contemplated by
Section 4.1(b), Grantee may not exercise the Option unless the provisions of
Section 4.1(d) shall have become applicable.
4.2 Right of Inclusion.
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(a) If (i) a Shareholder (considering the Gellein Trust and the X.
Xxxxxxx Trust as a single Shareholder for purposes of this Section 4.2), which,
at the time, owns an aggregate of at least 20% of the outstanding shares of
Common Stock, proposes to sell more than 50% of its shares of Common Stock in a
single transaction or a series of related transactions (other than one or more
underwritten public offerings) to a Transferee, and (ii) the Shareholders do not
elect to exercise their rights, if any, under Section 4.1, then such Shareholder
shall deliver to Grantee, and Grantee's Affiliates who or which hold all or a
portion of the Option, a written notice setting forth the consideration per
share of Common Stock to be paid by such Transferee and the other terms and
conditions of such proposed disposition. Grantee, and Grantee's Affiliates, if
any, who or which hold all or a portion of the Option, shall be entitled to
participate in such proposed disposition by requiring Shareholder to cause
Transferee to purchase that number of Option Shares equal to the Included Shares
and to receive, in connection with such proposed disposition, an amount equal to
the total sales price of the Included Shares, less the sum of the Exercise Price
thereof and any applicable foreign, Federal, State or local withholding taxes
attributable to the transactions described in Section 4.2(a).
(b) If Grantee, or any of Grantee's Affiliates described above, elects
so to participate, Grantee and any such Affiliate shall so notify the relevant
Shareholder within five business days after receipt of such Shareholder's
notice. Grantee's election shall constitute a deemed exercise of the Option
with respect to the Included Shares and authorization for the Shareholder to
dispose of the Included Shares on behalf of Grantee and any such
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Affiliate to Transferee for the same consideration per Share and otherwise on
the same terms and conditions upon which the Shareholder effects the disposition
of its shares of Common Stock. Grantee agrees that the Company may take such
actions as are necessary to comply with the wage withholding provisions of any
applicable foreign, Federal, State or local income tax laws in connection with
the transactions described in this Section 4.2(a).
(c) Promptly after the consummation of the disposition of the Included
Shares pursuant to this Section 4.2 (but in no event later than three business
days following receipt by the Shareholder of consideration from the Transferee),
such Shareholder shall (i) deliver notice thereof to Grantee and any of such
Grantee's Affiliates participating in such disposition, (ii) remit to Grantee
and any of such Grantee's Affiliates participation in such disposition the total
sales price of the Included Shares disposed of pursuant hereto, less the sum of
the Exercise Price thereof and any applicable foreign, Federal, State or local
withholding taxes (it being understood that cash consideration and any other
type of consideration (valued in accordance with the methodology used for the
disposition as a whole) in the foregoing amounts shall be retained on a pro rata
basis), and (iii) furnish such other evidence of the completion and time of
completion of such disposition and the terms thereof as may be reasonably
requested in writing by Grantee.
(d) If, within 120 days after the Shareholder's delivery of the notice
required pursuant to Section 4.2(a), such Shareholder has not completed the
disposition of more than 50% of its shares of Common Stock in accordance
herewith (which period shall be extended in order to secure all approvals of
regulatory bodies and similar authorities that are required to effectuate such
disposition, in which case the closing shall be conducted no later than 10
business days after the receipt of all such approvals (it being understood that
the parties shall use their reasonable best efforts to obtain any such approvals
within the time periods contemplated hereby)), the deemed exercise, if any,
referred to in Section 4.2(b) shall be of no force or effect and the provisions
of Sections 4.1(a) and 4.2(a) shall again apply.
(e) Grantee agrees to execute and deliver to the Shareholders and/or
the Transferee any and all documents and other instruments reasonably necessary
to effect the disposition of the Option or the Option Shares pursuant to this
Section.
(f) From and after Grantee's delivery of notice pursuant to Section
4.2(b), Grantee may not exercise the Option in respect of the Included Shares
(other than as set forth in Section 4.2(b)) unless the provisions of Section
4.2(d) shall have become applicable.
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4.3 Legend. Until the Option Shares no longer constitute Registrable
Shares (as defined in the Registration Rights Agreement), each certificate
representing Option Shares shall be imprinted with substantially the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY
OTHER APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE.
Each certificate representing Option Shares shall also be imprinted with
any other legend required pursuant to applicable State corporation or securities
laws or any other agreements among the parties, including, without limitation,
the Registration Rights Agreement.
5. Definitions.
5.1 Certain Definitions. For purposes of this Agreement, the terms and
phrases set forth below shall have the following meanings:
"Affiliate" means, as to any person (i) any corporation, partnership,
limited liability company, joint venture, trust or individual directly or
indirectly through one or more intermediaries controlled by or under common
control with such person, or which controls directly or indirectly through one
or more intermediaries, such person (it being understood that in the case of
Grantee, such an entity must be wholly-owned by Grantee and the persons in
respect of Grantee, if any, described in clauses (ii) and (iii) of this
definition); (ii) a trust which has as its principal income beneficiaries or
remaindermen such person or any direct or indirect holder of such person, or
members of the immediate family of such person or direct or indirect holder of
such person; and (iii) any members of the immediate family of such person or a
member of the immediate family of any direct or indirect holder of such person.
For purposes of this definition, (i) no person, by virtue of his, her or its
direct or indirect ownership of shares of Common Stock, shall be deemed to be an
Affiliate of another person; (ii) the terms "control", "controlled" and "common
control with" mean the ability, whether by the direct or indirect ownership of
voting securities or other equity interest, by contract or otherwise, to elect a
majority of the directors of a corporation, to select the managing 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; and (iii) the term "immediate family" means spouses, siblings and lineal
descendants of a person.
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"Cause", with respect to Grantee, has the meaning ascribed thereto in
the then effective employment agreement, if any, between the Company and
Grantee, as the same may be amended, restated, modified or supplemented.
"Change in Control" means the occurrence of any one of the following
events:
(i) any (A) consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or which
contemplates that all or substantially all of the business and/or assets of
the Company shall be controlled by another corporation or (B) a
recapitalization (including an exchange of Company equity securities by the
holders thereof), in either case, in which any "Person" (as such term is
used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than the
Controlling Shareholders, becomes the beneficial owner (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of securities of the
Company representing more than 50% of the combined voting power of the
Company's then outstanding securities ordinarily having the right to vote
in the election of directors;
(ii) any sale, lease, exchange or transfer (in one transaction or
series of related transactions) of all or substantially all of the assets
of the Company and its Affiliates;
(iii) approval by the shareholders of the Company of any plan
or proposal for the liquidation or dissolution of the Company, unless such
plan or proposal is abandoned within 60 days following such approval; or
(iv) any "Person" (as such term is used in Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Controlling Shareholders,
shall become the beneficial owner of securities of the Company representing
more than 50% of the combined voting power of the Company's then
outstanding securities ordinarily having the right to vote in the election
of directors.
"Controlling Shareholders" means the Shareholders, together with their
respective Affiliates, family members, former spouses (if applicable) and trusts
for the benefit of any of the foregoing.
"Employment Agreement" means the Employment Agreement, dated as of
February 10, 1997, between the Company and Grantee, as such agreement shall be
amended, modified, supplemented or restated from time to time.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Good Reason" has the meaning ascribed thereto in the Employment
Agreement. If Grantee does not have an effective Employment Agreement, then the
term shall mean the material alteration, reduction or diminution in Grantee's
duties or responsibilities or relocation from the Company's office located in
Orlando, Florida, without the express written consent of Grantee, unless any of
such events are substantially corrected within 30 days following written
notification by Grantee to the Company that Grantee intends to effect a
Voluntary Termination as a result of such event.
"Included Shares" means a number of Option Shares held by a
Shareholder equal to the product of (i) the number of Option Shares which
Grantee is entitled to purchase from such Shareholder pursuant to the terms of
this Agreement, multiplied by (ii) a fraction, the numerator of which is the
number of shares of Common Stock which the Shareholder and its Affiliates
propose to dispose of in such transaction or transactions, and the denominator
of which is all shares of Common Stock owned beneficially or of record by such
Shareholder and its Affiliates at such time determined on a fully-diluted basis
in accordance with generally accepted accounting principles.
"Initial Public Offering" means the sale by the Company of 4,625,000
shares of Common Stock to the public pursuant to an underwritten offering which
was effective February 27, 1997.
"Permanent Disability", with respect to Grantee has the meaning
ascribed thereto in the Employment Agreement. If Grantee does not have an
effective Employment Agreement, then the term "Permanent Disability" means the
inability of the Grantee to perform substantially all Grantee's duties and
responsibilities to the Company by reason of a physical or mental disability or
infirmity for either (i) a continuous period of six months or (ii) 180 days
during any consecutive twelve-month period. The date of such Permanent
Disability shall be (y), in the case of clause (i) above, the last day of such
six-month period or, if later, the day on which satisfactory medical evidence of
such Permanent Disability is obtained by the Company, or (z) in the case of
clause (ii) above, such date as is determined in good faith by the Company. In
the event that any disagreement or dispute arises between the Company and
Grantee as to whether the Grantee has incurred a Permanent Disability, then, in
any such event, Grantee 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 Grantee, and such
physician shall make the determination of whether Grantee suffers from any
disability. In the absence of fraud or bad faith, the determination of such
physician as to Grantee's condition at such
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time shall be final and binding upon both the Company and the Grantee.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of the date hereof, among the Company, Grantee and the other
parties listed on the signature pages thereof.
"Voluntary Termination" shall mean the voluntary termination by
Grantee of Grantee's employment by the Company by voluntary resignation or any
other means (other than (i) death or Permanent Disability or (ii) simultaneous
with or following termination for Cause or an event which if known to the
Company at the time of such voluntary termination by Grantee would constitute
Cause).
5.2 Other Defined Terms. Each of the following terms is defined in the
Section of this Agreement set forth opposite such term:
Term Section
---- -------
Company preamble
Exercise Price 1.4
Grantee preamble
Option 1.1
Option Closing Date 1.5
Option Shares 1.1
Securities Act legend
Shareholder preamble
Term 1.3
Territory 4.4(a)
Transferee 4.1(a)
Vesting Date 1.2
6. Miscellaneous Provisions.
6.1 Binding Effect. This Agreement and all the terms and provisions
hereof shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, heirs, personal or legal representatives
and permitted assigns and no other person or entity shall have any rights
hereunder, other than the Company, which shall be a beneficiary of Grantee's
agreements concerning withholding taxes set forth in Sections 1.6(c), 4.1(a) and
4.2(b).
6.2 Entire Agreement. This Agreement contains the entire understanding
among the parties with respect to the subject matter hereof and supersedes any
prior agreements or understandings among them with respect thereto.
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6.3 Amendments; Waivers. This Agreement may not be modified except by a
written agreement signed by the parties hereto, and no provision hereof or
breach thereof may be waived except in a writing executed by the party waiving
such party's rights. The waiver of any term hereof or the breach thereof in any
instance shall not be deemed to be a waiver of such term or breach in any other
instance or of any other term or breach.
6.4 Survival. The representations and warranties contained herein or
made pursuant hereto shall survive the execution and delivery of this Agreement
and the issuance of the Option Shares.
6.5 Governing Law. The construction and interpretation of this Agreement
shall be governed in all respects by the laws of the State of Florida (without
regard to its conflict of laws principles).
6.6 No Implied Employment Contract. Nothing contained in this Agreement
shall be construed to be a contract of employment between the Company and
Grantee.
6.7 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the application
thereof shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the minimal extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining provisions
of this Agreement or the application of such provision to other parties or
circumstances.
6.8 Notices. All communications among the parties shall be in writing
and shall be deemed to have been duly given as of the date of hand delivery or
three days after mailing via certified or registered mail, return receipt
requested, proper postage prepaid, to the addresses specified for each party on
attached Schedule A or such other address as a party shall from time to time
specify in a notice delivered in accordance with this Section 6.8.
6.9 Headings. The descriptive headings of the respective Sections and
Subsections of this Agreement are inserted for convenience of reference only and
shall not be deemed to modify or affect the construction of the provisions which
follow them.
6.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.
6.11 Trustee Exculpation. The execution of this Agreement by the trustees
of the Gellein Trust, Xxxxx Trust and X. Xxxxxxx Trust is by such trustees, not
individually, but solely in their capacities as trustees, and nothing contained
herein shall be
-15-
deemed to impose any personal liability on such trustees individually.
6.12 Consent of Spouse; Insertion in Will. Grantee agrees to obtain the
consent and approval of Grantee's spouse, by the execution hereof by such
spouse, to all of the terms and provisions of this Agreement. Grantee agrees to
insert in Grantee's last will and testament or other similar instrument, or
execute a codicil thereto, directing and authorizing Grantee's personal
representatives to fulfill and comply with the provisions of this Agreement.
6.13 Several Obligations. The obligations of the Shareholders hereunder
are several and not joint.
6.14 Equitable Relief. Each party hereto specifically acknowledges and
agrees that the remedy at law for any breach of its obligations hereunder will
be inadequate and that, in addition to any other relief available to the non-
breaching parties, the non-breaching parties shall be entitled to temporary and
permanent injunctive relief without the necessity of proving actual damages.
6.15 Attorneys' Fees and Costs. In the event a dispute arises between the
parties hereto and suit is instituted, the prevailing party or parties in such
litigation shall be entitled to recover reasonable attorneys' fees and other
costs and expenses from the non-prevailing party or parties, whether incurred at
the trial level or in any appellate proceeding.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement, as of the
date first above written.
SHAREHOLDERS:
------------
XXXXXXX X. XXXXXXX, XX. REVOCABLE
TRUST
By:
------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Trustee
XXXXXXX X. XXXXX TRUST
By:
------------------------------
Xxxxxxx X. Xxxxx
Trustee
JGG HOLDINGS TRUST
By:
------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
Trustee
GRANTEE:
-------
---------------------------------
Alain X.X. Xxxxxx
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CONSENT OF SPOUSE
-----------------
The undersigned, the spouse of Grantee referred to in the attached
Shareholders Option Agreement, hereby consents to the execution of the
Shareholders Option Agreement and the consummation of the transactions
contemplated thereby by Grantee, and hereby waives any and all rights the
undersigned may have in and to the property and subject matter of the
Shareholders Option Agreement by virtue of such spouse's marital relationship
with Grantee.
________________________________
Xxxxxx Xxxxxx
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SCHEDULE A
----------
Shareholder, Option and Grantee Information
-------------------------------------------
No. of Shares Subject
Name and Address to Grant of Option
---------------- ------------------
Xxxxxxx X. Xxxxxxx, Xx. 10,000
Revocable Trust
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
JGG Holdings Trust 10,000
c/o Xxxxxxx X. Xxxxxxx, Xx.,
Trustee
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Xxxxxxx X. Xxxxx Revocable Trust 20,000
c/o Xxxxxxx X. Xxxxx,
Trustee
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000 ______
40,000
======
Grantee Name and Address
------------------------
Alain X.X. Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
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