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EXHIBIT 10.21
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SHAREHOLDER'S AGREEMENT
BETWEEN
SILVERLEAF VACATION CLUB, INC.
AND
XXXXXX X. XXXXXXXXX
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TABLE OF CONTENTS
Page
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ARTICLE I
GENERAL PROVISIONS............................................................. 1
Section 1.1. Statement of Intent...................................... 1
Section 1.2. Interests Subject to Agreement........................... 1
Section 1.3. General Definitions for Agreement........................ 1
(a) Agreement............................................... 1
(b) Disability.............................................. 1
(c) Offer................................................... 2
(d) Offered Shares.......................................... 2
(e) Shares.................................................. 2
(f) Shareholder............................................. 2
(g) Purchase Price.......................................... 2
(h) Transfer................................................ 2
ARTICLE II
DETERMINATION OF PURCHASE PRICE................................................ 2
Section 2.1. Agreement as to Purchase Price.......................... 2
Section 2.2. Determination of Purchase Price......................... 3
(a) Computation of Corporation's Net Book Value............. 3
(b) Purchase Price for Shares............................... 3
ARTICLE III
RESTRICTIONS ON LIFETIME TRANSFER OF SHARES.................................... 3
Section 3.1. Restrictions on Lifetime Transfers...................... 3
Section 3.2. Lifetime Offer of First Refusal......................... 4
Section 3.3. Corporation's Option to Purchase Shares................. 4
(a) Offeror Shareholder's Required Notice................... 4
(b) Option Period........................................... 4
(c) Exercise of Option...................................... 4
Section 3.4. Payment of Right of First Refusal Price by Corporation.. 5
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(a) Closing Date of Purchase/Sale........................... 5
(b) Terms of Right of First Refusal Price................... 5
(c) Prepayment Privilege.................................... 5
Section 3.5. Expiration of Lifetime Transfer Restrictions............ 5
(a) Legal Opinion........................................... 5
(b) Reimbursement for Expenses.............................. 6
(c) Assumption of Agreement................................. 6
(d) Failure to Transfer..................................... 6
ARTICLE IV
OPTION TO PURCHASE UPON TERMINATION OF EMPLOYMENT.............................. 6
Section 4.1. Purchase Option of Corporation.......................... 6
(a) Purchase Price.......................................... 6
(b) Option.................................................. 6
(c) Exercise of Option...................................... 6
Section 4.2. Payment of Purchase Price by Corporation................ 7
(a) Closing Date of Purchase/Sale........................... 7
(b) Payment for Interest.................................... 7
Section 5.5. Notice Provision........................................ 8
(a) To the Corporation...................................... 9
(b) To the Shareholder...................................... 9
Section 5.6. Entire Agreement........................................ 9
Section 5.7. Amendment of Agreement.................................. 9
Section 5.8. Termination of Agreement................................ 9
Section 5.9. Interpretation of Agreement............................. 9
Section 5.10. Specific Performance of Agreement....................... 10
Section 5.11. Execution of Agreement in Counterparts.................. 10
Section 5.12. Binding Effect of Agreement............................. 10
Section 5.13. Gender and Number....................................... 11
Section 5.14. Execution of Additional Instruments..................... 11
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Page
Section 5.15. Strict Construction..................................... 11
Section 5.16. Effective Date.......................................... 11
EXHIBIT "A"
STOCK OWNERSHIP
EXHIBIT "B"
PROMISSORY NOTE
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SHAREHOLDER'S AGREEMENT
BETWEEN
SILVERLEAF VACATION CLUB, INC.
AND
XXXXXX X. XXXXXXXXX
THIS SHAREHOLDER'S AGREEMENT (the "Agreement") is executed between
SILVERLEAF VACATION CLUB, INC., a Texas corporation (the "Corporation"), and
XXXXXX X. XXXXXXXXX ("Shareholder") to provide for the orderly disposition of
shares of stock in the Corporation.
ARTICLE I
GENERAL PROVISIONS
Section 1. 1. Statement of Intent. The Shareholder owns the
shares of stock of the Corporation reflected on the attached Exhibit "A" and is
an employee of the Corporation. The Corporation and the Shareholder have
agreed in this Agreement to various restrictions, options and purchase
obligations concerning the Shares of stock of the Corporation.
Section 1.2. Interests Subject to Agreement. All interests in
the Shares now owned by the Shareholder are subject to the terms and provisions
of this Agreement. In the event the Corporation issues additional Shares in
the future to the Shareholder, the Shares shall be issued subject to the
restrictions, conditions and options contained in this Agreement.
Section 1.3. General Definitions for Agreement. The
following terms shall have the indicated meanings for purposes of this
Agreement:
(a) Agreement: References to "Agreement" shall mean this
Shareholder's Agreement, including any amendments made hereto.
(b) Disability: References in this Agreement to
"Disability" shall mean the physical or mental incapacity of the
Shareholder which prevents the
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Shareholder from performing the usual duties of her employment with
the Corporation for a consecutive period of THREE (3) months.
(c) Offer: References in this Agreement to "Offer" shall
mean the offer which an Offeror Shareholder is required to make as
provided by this Agreement. All Offers must be in writing, disclose
the full name and address of the proposed transferee, disclose the
transferee's qualifications to be a Shareholder of the Corporation,
and the full terms, conditions and purchase price of the proposed
Transfer.
(d) Offered Shares: References in this Agreement to
"Offered Shares" shall mean the Shares of the Shareholder subject to
the Offer that the Shareholder is required to make as provided in this
Agreement.
(e) Shares: References in this Agreement to "Shares"
shall mean the issued and outstanding shares of stock of the
Corporation owned by the Shareholder from time to time.
(f) Shareholder: References in this Agreement to the
"Shareholder" shall mean the Shareholder, her heirs, successors,
representatives, executors, transferees and assigns.
(g) Purchase Price: References in this Agreement to the
"Purchase Price" shall mean the amount of consideration which the
Shareholder shall receive under this Agreement on the sale of her
Shares under this Agreement.
(h) Transfer: References in this Agreement to "Transfer"
shall mean the sale, transfer, assignment, pledge, encumbrance,
alienation or any other disposition or hypothecation of any Share(s),
whether voluntary or involuntary.
ARTICLE II
DETERMINATION OF PURCHASE PRICE
Section 2.1. Agreement as to Purchase Price. The Shareholder
agrees that the determination of the Purchase Price of the Shareholder's Shares
shall be made under the provisions of Section 2.2 as to all sales and purchases
of Shares that are made under the terms of this Agreement, except as otherwise
specifically provided for in this Agreement.
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Section 2.2. Determination of Purchase Price. The Purchase
Price of each Share shall be determined in accordance with the following
provisions:
(a) Computation of Corporation's Net Book Value: The
representatives of the Corporation shall first determine the net book
value of the Corporation, computed in accordance with the accounting
procedures and practices historically employed for these purposes.
The Corporation and the Shareholder hereby agree that the computation
of the net book value of the Corporation shall be made by utilizing
the net book value of corporate assets reduced by all accrued expenses
and liabilities of the Corporation as reflected by the Corporation's
balance sheet prepared as of the last day of the month immediately
preceding the applicable Offer Date. The Corporation and the
Shareholder, however, hereby further agree that deferred taxes shall
be accrued as a liability based on the maximum corporate tax rates and
that such computations shall not include any value for good will,
control premiums, nor valuation discounts based upon minority
interests or marketability factors. The Corporation shall not be
required to retain the services of independent certified public
accountants for these purposes, nor shall the applicable financial
statement(s) be required to be certified.
(b) Purchase Price for Shares: The Purchase Price for the
Shareholder's Shares shall be determined by dividing the number of her
Shares by the total number of all Shares of the Corporation that are
issued and outstanding as of the applicable Offer Date, multiplied by
the net book value of the Corporation as determined above.
ARTICLE III
RESTRICTIONS ON LIFETIME TRANSFER OF SHARES
Section 3.1. Restrictions on Lifetime Transfers. No Shares
shall be Transferred without the prior written consent of the Board of
Directors of the Corporation, without first complying with the conditions
and provisions of this Agreement. The Shareholder shall not
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execute any agreement Transferring the Shares or any part thereof or otherwise
act to create new rights as to the Shares or any part thereof, except in
compliance with this Agreement, and any attempt to do so shall be void and of
no force nor effect.
Section 3.2. Lifetime Offer of First Refusal. If the
Shareholder (the "Offeror Shareholder") desires to Transfer all or any portion
of her Shares, the Offeror Shareholder must first make a written offer (the
"Offer") to sell all of such Shares to the Corporation. The Offer shall give
the Corporation the right to purchase the Shares at a price (the "Right of
First Refusal Price") equal to the lesser of (i) the Purchase Price as
determined under Article II, above, or (ii) the amount of consideration which
the Offeror Shareholder is entitled to receive under the terms of the proposed
Transfer.
Section 3.3. Corporation's Option to Purchase Shares. The
Corporation shall have the option to purchase all or any portion of the
Shares which the Offeror Shareholder desires to sell pursuant to the
following provisions:
(a) Offeror Shareholder's Required Notice: The Offeror
Shareholder shall deliver a written notice to the Board of Directors
specifying therein the name of the proposed Transferee, the number of
Shares, the total consideration to be received for such Shares, and
all other terms, provisions and conditions of the proposed Transfer.
(b) Option Period: The Corporation may exercise its
option to purchase any part of the Offered Shares at any time within
THIRTY (30) days after the latter of: [1] receipt of the Offer to
sell, and [2] the date of the determination of the Right of First
Refusal Price of the Shares.
(c) Exercise of Option: The Corporation shall give
written notice within such option period to the Offeror Shareholder of
the number of Shares which it agrees to purchase. The failure of the
Corporation to notify the Offeror Shareholder within this option
period shall constitute a rejection of the Offer.
Section 3.4. Payment of Right of First Refusal Price by
Corporation. In the event the Corporation exercises its option to purchase all
or any portion of the Offered Shares, the Right of First Refusal Price shall be
paid pursuant to the following provisions:
(a) Closing Date of Purchase/Sale: The Corporation shall
give the Offeror Shareholder written notice of the time and place of
the closing. The closing shall be within THIRTY (30) days after the
date of the Corporation's notice of its election to exercise its
option.
(b) Terms of Right of First Refusal Price: The
Corporation shall pay no
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less than TEN PERCENT (10%) of the total Right of First Refusal Price
at closing, payable in cash or by check. The Corporation shall have
the right and option to pay all or any greater amount in cash. The
balance of the Right of First Refusal Price shall be payable by the
execution and delivery of a promissory note at closing, the terms and
provisions of which are the same as the form which is attached as
Exhibit "B" to this Agreement.
(c) Prepayment Privilege: The Corporation shall have the
sole and absolute right to prepay all or any part of the Right of
First Refusal Price at any time, without penalty.
Section 3.5. Expiration of Lifetime Transfer Restrictions. The
Offeror Shareholder shall have the right to Transfer all or any part of such
Offered Shares that the Corporation elects not to purchase, provided that the
Transfer is made under the same terms, conditions and price as originally
proposed and set forth in the Offer. The Offeror Shareholder's right to
Transfer under this Section shall exist for a period of THIRTY (30) days after
the expiration of the option period specified by Section 3.3, above. The
Offeror Shareholder's right shall, however, be subject to the following
conditions:
(a) Legal Opinion: At the discretion of the Corporation,
the Corporation may require the Offeror Shareholder, at her expense,
to provide the Corporation with a legal opinion satisfactory to
counsel for the Corporation that the Transfer does not violate the
registration requirements of the federal or applicable state
securities laws.
(b) Reimbursement for Expenses: The Offeror Shareholder
shall reimburse the Corporation for expenses incurred with respect to
the Transfer, including but not limited to, all legal fees incurred by
the Corporation.
(c) Assumption of Agreement: The transferee of such
Shares ["the Third Party Transferee"] shall be subject to all of the
terms, provisions and conditions of this Agreement, including, but not
limited to, all of the restrictions, conditions and options contained
herein. The Third Party Transferee shall execute and deliver to the
Corporation an original counterpart of this Agreement.
(d) Failure to Transfer: If any of the Offered Shares are
not
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Transferred within the THIRTY (30) day period described in this
Section, or if the Offeror Shareholder desires to change the
transferee, terms or price as set forth in the Offer, the Offeror
Shareholder, if she desires to transfer the Shares, must re-offer the
Shares to the Corporation in accordance with the provisions of this
Article.
ARTICLE IV
OPTION TO PURCHASE UPON TERMINATION OF EMPLOYMENT
Section 4. 1. Purchase Option of Corporation. The Corporation
shall have the option to purchase all or any portion of the Shares of the
Shareholder when her employment with the Corporation is terminated by reason of
her Disability, retirement, resignation, termination (whether voluntarily or
involuntarily), or death pursuant to the following provisions:
(a) Purchase Price: The Purchase Price for the Shares
shall be determined under Article II, above, as of the last day of the
month preceding the Shareholder's termination.
(b) Option: The Corporation may exercise its option to
purchase any part of the Shares at any time within FIVE (5) years
after the date of employment termination.
(c) Exercise of Option: The Corporation shall be given
written notice within such option period to the Shareholder [or her
legal representatives] of the number of Shares which it agrees to
purchase.
Section 4.2. Payment of Purchase Price by Corporation. In the
event the Corporation exercises its option to purchase all or any portion of
the Shares pursuant to this Article, the Purchase Price of the Shares shall be
paid pursuant to the following provisions:
(a) Closing Date of Purchase/Sale: The Corporation shall
give the Shareholder or persons in possession of the Shares written
notice of the time and place of the closing.
(b) Payment for Interest: The Corporation shall make a
down payment
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in cash at Closing equal to at least TEN PERCENT (10%) of the
Purchase Price. The Corporation shall have the right and
option to pay all or any greater amount in cash. The balance
of the Purchase Price shall be payable by the execution and
delivery of a promissory note in an initial principal amount
equal to the balance of the Purchase Price, and being in the
form attached as Exhibit "B" to this Agreement.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.1. Deemed Offer on Involuntary Transfer of Shares.
The Shareholder, her representatives, and any person seeking to foreclose upon
or otherwise acquire any of the Shares through involuntary procedures shall be
required to send written notice by certified mail, return receipt requested, to
the Corporation prior to any involuntary Transfer and/or foreclosure upon any
Shares, including, but not limited to, any Shares which have been pledged or
otherwise encumbered with the consent of the Corporation. The required notice
shall disclose in full the nature and details of the involuntary transfer or
foreclosure. Upon receipt of the written notice, the Shareholder shall be
deemed to have made a written offer to sell such Shares under Article III of
this Agreement, and the Corporation shall have the option to purchase such
Shares under the terms of Article III of this Agreement, free and clear of any
claim of the person seeking to foreclose upon or otherwise acquire such Shares,
except as to any interest such person may have in the amount to be paid for the
Shares.
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Section 5.2. Filing of Agreement. An executed copy of this
Agreement shall be filed with the Corporation. The Corporation shall
furnish free of charge to the Shareholder a copy of this Agreement
upon written request.
Section 5.3. Endorsement of Stock Certificates. Each Share
certificate for the Shares shall be endorsed with the following statement:
"No transfer of this stock of the Corporation shall be effective without
compliance with, or written waiver by the Corporation of, the terms, provisions
and conditions of the Shareholder's Agreement between the Corporation and the
Shareholder on file at the Company's principal place of business."
The Shareholder shall return to the Secretary of the
Corporation any certificate for Shares which she now holds for the addition of
this required statement.
Section 5.4. Compliance with Law. In the event the Corporation
would otherwise be prohibited pursuant to the provisions of the Texas Business
Corporation Act from purchasing any Shares, the Corporation and the Shareholder
hereby agree to take such actions deemed reasonable to permit the Corporation
to purchase such Shares, including, without limitation, revaluation of assets
or reallocation of the stated capital of the Corporation.
Section 5.5. Notice Provision. Any notice, payment, demand or
communication required or permitted to be given by any provision of this
Agreement shall be deemed to have been effectively given and received on the
date personally delivered to the respective party to whom it is directed, or
when deposited by registered or certified mail, with postage and charges
prepaid and addressed as follows:
(a) To the Corporation: If to the Corporation, they shall
be addressed to the Corporation at the address of its principal place
of business in Dallas, Texas.
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(b) To the Shareholder: If to the Shareholder,
they shall be addressed to the Shareholder at the address on
file with the Corporation.
Any party may change its notice address by delivering a written change of
address to the other party.
Section 5.6. Entire Agreement. This Agreement constitutes the
entire understanding of the parties and supersedes all prior agreements,
whether written or oral, between the parties with respect to the subject matter
of this Agreement.
Section 5.7. Amendment of Agreement. No amendment,
modification or alteration of the terms of this Agreement shall be binding
unless in writing, dated subsequent to the date of this Agreement, and executed
by the Corporation and the Shareholder.
Section 5.8. Termination of Agreement. This Agreement shall
terminate upon the written consent of the Corporation and the Shareholder.
Section 5.9. Interpretation of Agreement. This Agreement
shall be construed under and in accordance with the laws of the State of Texas,
and all obligations that the parties created hereunder are performable in
Dallas County, Texas. In the event that judicial proceedings are instituted to
enforce any of the provisions of this Agreement, it shall be brought in a court
of competent jurisdiction in Dallas County, Texas. If any term or provision of
this Agreement is illegal or invalid for any reason, such illegality or
invalidity shall not affect the validity or enforceability of the remainder of
this Agreement. No headings or caption contained in this Agreement shall be
considered in interpreting any of its terms or provisions.
Section 5.10. Specific Performance of Agreement. The parties
hereby agree that it is impossible to measure in money the damages which will
accrue to a party by reason of a
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failure to perform any of the obligations under this Agreement. Therefore, if
any party or the personal representatives of the Shareholder shall institute
any action or proceeding to enforce the provisions of this Agreement, any
person, including the Corporation, against whom such action or proceeding is
brought hereby waives the claim or defense that such party or such personal
representative has or have an adequate remedy at law, and such person shall not
urge in any such action or proceeding the claim or defense that such remedy at
law exists.
If any action at law or in equity, including an action for
declaratory relief, is brought to enforce or interpret the provisions of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorney's fees and all other costs and expenses of litigation from the other
party, which amounts may be set by the court in the trial of such action or may
be enforced in a separate action brought for that purpose, and which amounts
shall be in addition to any other relief which may be awarded.
Section 5.11. Execution of Agreement in Counterparts. This
Agreement and any amendment may be executed in any number of counterparts,
either by the parties or their duly authorized attorneys-in-fact, with the same
effect as if all parties had signed the same document.
Section 5.12. Binding Effect of Agreement. Subject to the
limitations on transferability and assignment contained in this Agreement, each
and all of the covenants, terms and provisions shall be binding upon and inure
to the benefit of the successors, transferees, heirs and assigns of the
respective parties.
Section 5.13. Gender and Number. Wherever the context shall
so require, all words herein in the male gender shall be deemed to include the
female or neuter gender, all
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singular words shall include the plural and all plural words shall include the
singular.
Section 5.14. Execution of Additional Instruments. The
Corporation and the Shareholder shall execute and deliver to any parties so
requesting such additional instruments and documents as may be reasonably
required to implement the terms and provisions of this Agreement.
Section 5.15. Strict Construction. This Agreement shall not
be strictly construed against any party hereto.
Section 5.16. Effective Date. This Agreement shall be
effective as of December 29, 1995.
DATES: CORPORATION:
SILVERLEAF VACATION CLUB, INC.,
a Texas corporation
December 29, 1995 By: /s/ XXXXXX X. XXXX
---------------------------------------
Xxxxxx X. Xxxx, Chief Executive Officer
SHAREHOLDER:
December 29, 1995 By: /s/ XXXXXX X. XXXXXXXXX
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Xxxxxx X. Xxxxxxxxx
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EXHIBIT "A"
STOCK OWNERSHIP
Shareholders Number of Shares
Xxxxxx X. Xxxxxxxxx 120
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EXHIBIT "B"
__________________
PROMISSORY NOTE
Date: ______________ , 19 __
Maker: ______________________
Payee: ______________________
Place for Payment: ______________________
Principal Amount: _______________________
Annual Interest Rate on Unpaid
Principal from Date of Funding: The greater of Ten Percent (10%) or the
applicable Federal rate as determined and
adjusted from time to time for purposes of
Section 7872(f)(2)(B) of the Internal Revenue
Code of 1986, as amended.
Terms of Payment: The principal balance of this Note shall be payable
in five (5) equal annual installments, commencing one (1)
year after date. Accrued but unpaid interest shall be
payable together with each principal payment.
Annual Interest Rate on
Matured, Unpaid Amounts: Fifteen Percent (15%)
Maker promises to pay to the order of Payee at the place for
payment and according to the terms of payment the principal amount plus
interest at the rates stated above. All unpaid amounts shall be due by the
final scheduled payment date.
On default in the payment of this note and Maker's failure to
cure such default within ten (10) days after receipt of written notice of such
default from Payee, it shall become immediately due at the election of Payee.
Maker and each surety, endorser and guarantor waive all demands for payment,
presentations for payment, notices of intention to accelerate maturity, protest
and notices of protest, except for such notice of default.
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If this note is given to any attorney for collection, or if suit
is brought for collection, or if it is collected through probate, bankruptcy or
other judicial proceedings, then Maker shall pay Payee reasonable attorneys'
fees in addition to other amounts due. Reasonable attorneys' fees shall be 10%
of all amounts due unless either party pleads otherwise.
Interest on the debt evidenced by this note shall not exceed the
maximum amount of nonusurious interest that may be contracted for, taken,
reserved, charged, or received under law; any interest in excess of that
maximum amount shall be credited on the principal of the debt or, if that has
been paid, refunded. On any acceleration or required or permitted prepayment,
any such excess shall be cancelled automatically as of the acceleration or
prepayment or, if already paid, credited on the principal of the debt, or if
the principal of the debt has been paid, refunded. This provision overrides
other provisions in this and all other instruments concerning the debt.
Each Maker is responsible for all obligations represented by this note.
When the context requires, singular nouns and pronouns include the
plural.
MAKER:
________________________________
B-2
