Exhibit 10.6-A
EXECUTION COPY
--------------
AGREEMENT
---------
AGREEMENT (this "Agreement") dated as of February 5, 1998, effective for
all purposes and respects as of December 1, 1997, by and between VISTANA, INC.,
a Delaware corporation (the "Company"), and XXXX X. XXXXX ("Xxxxx").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Xxxxx has been employed by the Company as its Senior Vice
President, Chief Financial Officer and Treasurer pursuant to that certain
Employment Agreement dated as of February 10, 1997 (the "Employment Agreement")
between the Company and Xxxxx; and
WHEREAS, on November 11, 1997, the Company gave Xxxxx notice of its desire
to terminate the Employment Agreement; and
WHEREAS, the Company and Xxxxx desire to enter into this Agreement to
resolve certain matters relating to Xxxxx'x employment by the Company.
NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged, the
parties, intending legally to be bound, hereby agree as follows:
1. Effect on Contract Employment. Xxxxx'x employment by the Company
pursuant to the Employment Agreement shall be terminated as of December 1, 1997
(the "Notice Date"). All provisions of the Employment Agreement shall survive in
accordance with their respective terms, except as otherwise set forth herein.
2. Compensation; Severance Amount.
(a) The Company shall pay Xxxxx all compensation and other benefits
set forth in the Employment Agreement through the Notice Date.
(b) Subject to Section 4(b) hereof, and after giving effect to
Section 2(d) hereof, from and after the Notice Date, the Company shall pay Xxxxx
an aggregate of $520,000 (the "Severance Amount") in 24 equal monthly
installments of $21,667.67 commencing on the first business day of December 1997
and continuing on the first business day of each calendar month thereafter until
the Severance Amount is paid in full (it being understood that the Severance
Amount may, upon mutual agreement of the parties, be paid in 52 bi-weekly
payments of $10,000 in accordance with the Company's regular payroll practices).
All payments of the Severance Amount shall be made less all applicable tax
withholding and deductions.
(c) On or before February 6, 1998, the Company shall determine the
amount of accrued vacation pay (net of any vacation time utilized by Xxxxx
through the Notice Date) to which Xxxxx was entitled as of the Notice Date, and
deliver a check payable to the order of Xxxxx in the amount of such accrued
vacation pay less all applicable tax withholding and deductions.
(d) On or before February 6, 1998, the Company shall pay to Xxxxx
$9,615.40, which amount represents the difference between the Severance Amount
payable to Xxxxx pursuant to Section 2(b) hereof and the Base Salary (as defined
in the Employment Agreement) paid to Xxxxx from and after the Notice Date
through February 6, 1997.
3. At-Will Employment.
(a) From and after the Notice Date, Xxxxx shall continue to be
employed by the Company as the Company's Senior Vice President and Treasurer;
provided, however, that Xxxxx agrees that (i) Xxxxx'x employment by the Company
pursuant to this Section is not for any specified term, is at-will and may be
terminated by the Company or Xxxxx at any time, for any reason, for cause or
without cause, without any liability whatsoever, except for the obligation of
the Company to make the payments provided for herein; (ii) the Company may
dismiss Xxxxx without regard to any general or specific policies (whether
written or oral) of the Company relating to the employment or termination of
employment of the Company employees or any statements made to Xxxxx, whether
made orally or contained in any document or instrument, pertaining to Xxxxx'x
relationship with the Company; and (iii) in light of the other agreements of the
Company set forth herein, Xxxxx shall not be entitled to any compensation, other
than monthly installments of the Severance Amount during his employment by the
Company pursuant to this Section.
(b) From and after the Notice Date, Xxxxx shall cease to be the
Company's chief financial officer.
(c) During Xxxxx'x employment by the Company pursuant to this
Section, Xxxxx shall be entitled to continue his participation in the group
insurance programs under which he participated prior to the Notice Date upon the
same terms of participation.
(d) During Xxxxx'x employment by the Company pursuant to this
Section, Xxxxx shall not be entitled to earn, accrue or otherwise become
entitled to any vacation time, or any payment or compensation therefor.
4. Additional Understandings.
(a) In the event that Xxxxx relocates from the Central Florida area
prior to November 30, 1999, the Company will reimburse Xxxxx for up to $12,500
of relocation costs reasonably paid or incurred by Xxxxx upon presentation of
applicable receipts or other appropriate documentation.
-2-
(b) The Company and Xxxxx acknowledge that the restrictive covenants
contained in Sections 9, 10, 11 and 12 of the Employment Agreement shall survive
in accordance with their respective terms; provided, however, subject to the
remainder of this Section 4(b), the Company and Xxxxx agree that notwithstanding
Section 10 of the Employment Agreement, upon written notice to the Company
(which notice shall contain a detailed description of the identity of Xxxxx'x
proposed employer, the terms and conditions of proposed employment and a copy of
any employment agreement or other document or instrument relating thereto),
Xxxxx may propose to become employed or otherwise render services to any
national enterprise having time-share, vacation plan, vacation ownership or
interval ownership activities in violation of Section 10(e) of the Employment
Agreement. Within 15 business days after receipt of Xxxxx'x notice pursuant to
the preceding sentence, the Company shall, in its sole and absolute discretion,
elect, by delivery of written notice to Xxxxx, to (y) accept Xxxxx'x notice, in
which case from and after the date upon which Xxxxx commences employment with,
or first receives compensation or other remuneration from, the new employer, the
Company may offset against its obligation to pay Xxxxx the Xxxxxxxxx Amount
under Section 2(b), the entire amount of compensation received or to be received
by Xxxxx from Xxxxx'x new employer for the remainder of the period in which the
Severance Amount is payable, or (z) reject Xxxxx'x notice, in which case the
Company's obligation to pay Xxxxx the Severance Amount under Section 2(b) shall
continue; provided, however, that if Xxxxx accepts such proposed employment
despite the Company's rejection of Xxxxx'x notice, the Company's obligation to
pay Xxxxx the Xxxxxxxxx Amount under Section 2(b) shall terminate for all
purposes and in all respects as of the date Xxxxx commences employment with, or
first receives compensation or other remuneration from, the new employer.
Notwithstanding anything to the contrary contained in this Agreement, in the
event Xxxxx accepts employment with a new employer (i) Xxxxx'x employment by the
Company pursuant to Section 3 shall terminate automatically without notice; and
(ii) all restrictive covenants contained in Sections 9, 10, 11 and 12 of the
Employment Agreement shall continue to survive in accordance with their
respective terms, except that Sections 10(a), 10(b), 10(c) and 10(e) shall be of
no further force and effect.
(c) Notwithstanding the provisions of that certain Stock Option
Agreement dated as of February 27, 1997 (the "Stock Option Agreement"), the
Company and Xxxxx agree that of the options to purchase 75,000 shares of the
Company's common stock granted to Xxxxx pursuant the Stock Option Agreement (i)
options to purchase 56,250 shares of the Company's common stock were forfeited
as of the Notice Date; and (ii) options to purchase any or all of the remaining
18,750 shares of Common Stock may become vested as of March 1, 1998 at the sole
and absolute discretion of the Company's Compensation Committee (it being
understood that such options, if not vested, shall be forfeited effective March
1, 1998) (it being understood that the Compensation Committee of the Company
shall make and notify Xxxxx of its determination prior to March 15, 1998).
(d)(i) The Company and Xxxxx acknowledge that under Section 2(b) of
that certain Registration Rights Agreement dated as of February 10, 1997
(the "Registration Rights Agreement") among the Company and the other
parties thereto, Xxxxx has the right to require the Company to effect a
Shelf Registration (as such term
-3-
is defined in the Registration Rights Agreement) with respect to the 25,000
shares (the "Shares") of the Company's common stock which may be acquired
by Xxxxx pursuant to the exercise of options granted to Xxxxx pursuant to
that certain Shareholder Option Agreement dated as of February 10, 1997
among certain affiliates of Xxxxxxx X. Xxxxxxx, Xx., Xxxxxx X. Xxxxxxx and
Xxxxxxx X. Xxxxx. In consideration of the Company's agreements contained in
Section 4(d)(ii), Xxxxx hereby agrees to permanently waive his rights under
Section 2(b) of the Registration Rights Agreement.
(ii) In consideration for Xxxxx'x agreement contained in Section
4(d)(i), the Company agrees to include all of the Shares in a registration
statement (the "Resale Registration Statement") to be filed by the Company
with the Securities and Exchange Commission (the "SEC"). The Resale
Registration Statement shall provide for the sale of all of the Shares from
time to time on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, as amended, but shall not provide for an
underwritten registration. The Company may, in its sole discretion, include
other securities in the Resale Registration Statement (whether for the
account of the Company or others). In the event that the Company fails to
cause the Resale Registration Statement to be declared effective by the
SEC, prior to April 30, 1998, Xxxxx shall have the right, exercisable by
delivery of written notice to the Company prior to June 30, 1998, to
require the Company to purchase for cash all of the Shares which were not
included in the Resale Registration Statement (it being agreed that the
Company shall notify Xxxxx of the date upon which the Resale Registration
Statement is declared effective by the SEC). The purchase and sale of the
Shares contemplated by this Section shall take place on a date selected by
the Company which is within 10 days after the Company's receipt of Xxxxx'x
notice. The per Share purchase price for any of the Shares purchased by the
Company pursuant to this Section shall be equal to the average of the
closing prices of the Company's common stock on the NASDAQ National Market
System for a period 10 consecutive trading days prior to the date of
Xxxxx'x notice described in this Section.
5. Confidentiality. The terms and provisions of this Agreement shall be
treated by both parties as confidential in all respects, and, except as required
by law or permitted by prior written consent of the other parties hereto, the
parties shall not disclose these terms and provisions to any person other than
their attorneys and accountants, the federal, state and local tax authorities,
and, in Xxxxx'x case, his wife.
6. Non-Disparagement. Xxxxx shall not engage or cause others to engage in
any act detrimental to the Company, its customers, employees or other business
relations and shall not make or cause others to make any disparaging statements,
whether written or oral, with respect to the Company, its business, directors,
officers, shareholders or any affiliates thereof. The Company shall not engage
or cause others to engage in any act detrimental to Xxxxx or his business
relations and shall not make or cause others to make any disparaging statements,
whether written or oral, with respect to Xxxxx. If prospective employers
considering the employment of Xxxxx so request, the Company will provide the
dates of Xxxxx'x employment by
-4-
the Company, the positions held and indicate that Xxxxx voluntarily resigned and
remains "eligible for re-hire."
7. Release. Effective immediately on the date hereof, Xxxxx, for
himself, his affiliates, agents, servants, heirs, personal representatives and
legal representatives (the "Xxxxx Releasing Parties"), fully and unconditionally
waives, releases and forever discharges all claims, demands, causes of action,
obligations, damages and liabilities of any nature whatsoever, including, but
not limited to, claims brought under Title VII of the Civil Rights Act of 1964,
as amended (42 U.C.S. (S)(S) 2000e et seq.), Sections 1981 through 1988 of Title
42 of the United States Code (42 U.S.C. (S)(S) 1981-88), the Age Discrimination
in Employment Act (29 U.S.C. (S)(S) 621 et seq.), the Americans with
Disabilities Act (42 U.S.C. (S)(S) 12101 et seq.), the Fair Labor Standards Act
(29 U.S.C. (S)(S) 201 et seq.), or any other federal, state or local law,
ordinance, statute or regulation dealing in any respect with employment or
discrimination in employment; claims for compensation, vacation pay or benefits;
and/or any claims, demands or actions brought on the basis of any contract,
express or implied, or tort on the basis of an alleged wrongful discharge under
the common law of any state (any of the foregoing, individually, a "Claim"),
which each of the Xxxxx Releasing Parties ever had, now have, or hereafter may
have against the Company or any of its stockholders, subsidiaries, affiliates,
directors, officers, successors or assigns and their respective officers,
directors, controlling persons (if any), affiliates, employees, attorneys,
agents and stockholders, (each, a "Company Releasee") whether known or unknown,
whether now existing or which may hereafter arise, which any Xxxxx Releasing
Party had, has or claims to have against them with respect to all matters that
existed amongst the parties hereto prior to the execution of this Agreement,
except that "Claims" as herein defined shall not include claims and causes of
action arising out of or relating to this Agreement or any other agreement,
document or instrument executed and delivered at or in connection with the
transactions contemplated hereby.
Xxxxx intends in granting the Company this release that it shall be
effective as a bar to each and every Claim, and expressly consents that this
release shall be given full force and effect according to its terms and
provisions, including those relating to unknown and unsuspected Claims, if any,
(notwithstanding any federal, state or local law that expressly limits the
effectiveness of a general release of unknown, unsuspected and unanticipated
Claims), as well as those relating to any other Claims described or implied
above. Xxxxx acknowledges and agrees that this waiver is an essential and
material term of this Agreement and without such waiver, the Company would not
have entered into this Agreement. Xxxxx further agrees that in the event any
Xxxxx Releasing Party brings any Claim in which any Xxxxx Releasing Party seeks
damages against any Company Releasee or in the event any Xxxxx Releasing Party
seeks to recover against any Company Releasee in any Claim brought by a
governmental agency on behalf of any Xxxxx Releasing Party, this release shall
serve as a complete defense to such Claims. Xxxxx understands and agrees that
this Agreement and the transactions contemplated hereby are not in any way to be
interpreted as admissions by any Company Releasee that any of Xxxxx Releasing
Party has any viable Claims against any Company Releasee.
-5-
8. Covenant Not to Xxx. Xxxxx, for himself and each Xxxxx Releasing
Party, covenants and agrees with the Company to forever refrain and desist from
the institution of any demand, action, lawsuit or other proceeding against any
of the Company Releasees with respect to, relating to, or in any way arising out
of the terms and provisions of the Employment Agreement or any of the
transactions contemplated thereby (other than as may be necessary to enforce
Xxxxx'x rights hereunder).
9. Consideration/Revocation Periods. Xxxxx understands and acknowledges
that he has been given twenty-one (21) days within which to consider this
Agreement before signing it and agreeing to be bound by its terms. Xxxxx
further understands that he shall have seven (7) days after he signs this
Agreement to revoke his signature by hand delivering written notice of such
revocation to the Chairman of the Board or the President of the Company and
that, unless so revoked prior to the expiration of such seven (7) day period,
the Agreement shall become effective upon the expiration of such seven (7) day
period.
10. Voluntary and Knowledgeable Act. Xxxxx hereby acknowledges that he
has read this Agreement (and particularly the Release contained in Section 7
hereof and the Covenant Not to Xxx contained in Section 8 hereof); that he has
been encouraged to review it with an attorney of his choice; and that he
executes it voluntarily and with full knowledge of its meaning and consequence.
11. Miscellaneous.
(a) Expenses. Each party hereto shall bear its own costs and expenses
with respect to the transactions contemplated hereby.
(b) Amendment. This Agreement may be amended, modified or
supplemented but only in writing signed by each of the parties hereto.
(c) Waivers. The failure of a party hereto at any time or times to
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by a party of any condition or
of any breach of any term, covenant, representation or warranty contained in
this Agreement shall be effective unless in writing, and no waiver in any one or
more instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
(d) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS.
(e) Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR
-6-
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(f) Forum Selection and Consent to Jurisdiction. EACH OF THE COMPANY
AND XXXXX AGREE THAT ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH THIS AGREEMENT BETWEEN OR AMONG SUCH PARTIES, SHALL BE
BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF FLORIDA LOCATED
IN ORANGE COUNTY, FLORIDA, OR IN THE UNITED STATES DISTRICT COURT MIDDLE
DISTRICT OF FLORIDA, ORLANDO DIVISION. EACH OF THE COMPANY AND XXXXX HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF FLORIDA LOCATED IN ORANGE COUNTY, FLORIDA, OR IN THE UNITED STATES DISTRICT
COURT MIDDLE DISTRICT OF FLORIDA, ORLANDO DIVISION. EACH OF THE COMPANY AND
XXXXX HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(g) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
(h) Interpretation. The headings preceding the text of Articles and
Sections included in this Agreement are for convenience only and shall not be
deemed part of this Agreement or be given any effect in interpreting this
Agreement. The use of the masculine, feminine or neuter gender herein shall not
limit any provision of this Agreement. The use of the terms "including" or
"include" shall in all cases herein mean "including, without limitation" or
"include, without limitation," respectively.
(i) Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. No
assignment of any rights or obligations shall be made by any party without the
written consent of each other party.
(j) No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and, to the extent provided herein, their
respective affiliates, directors, officers, employees, agents, heirs and
representatives, and no provision of this Agreement shall be deemed to confer
upon other third parties any remedy, claim, liability, reimbursement, cause of
action or other right.
(k) Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof
-7-
shall not be affected thereby, and there shall be deemed substituted for the
provision at issue a valid, legal and enforceable provision as similar as
possible to the provision at issue.
(l) Remedies Cumulative. The remedies provided in this Agreement
shall be cumulative and shall not preclude the assertion or exercise of any
other rights or remedies available by law, in equity or otherwise.
(m) Entire Understanding. This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the matters
set forth herein and supersedes any and all prior agreements, arrangements and
understandings among the parties, including, without limitation, the Employment
Agreement (except to the extent set forth herein) and the Stock Option
Agreement.
(n) 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
THE COMPANY:
VISTANA, INC., a Florida corporation
By: /S/ Xxxxxxx X. Avril
--------------------------------------
Name: Xxxxxxx X. Avril
Title: Executive Vice President, Chief
Operating Officer
XXXXX:
/s/ Xxxx X. Xxxxx
-----------------------------------------
Xxxx X. Xxxxx
-8-
