AMENDMENT NUMBER ONE
to
EMPLOYMENT AGREEMENT
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This Amendment Number One to Employment Agreement is made and entered into
on April 12, 2000, by and between Fairfield Communities, Inc., a Delaware
corporation (the "Company"), and Xxxxx X. Xxxx ("Executive").
1. Recitals. The Company and Executive entered into the Employment
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Agreement (the "Employment Agreement") executed on August 31, 1999. The Company
and Executive desire to amend the Employment Agreement to modify the definition
of "Change in Control" and certain related provisions, subject to the terms and
limitations provided below.
2. Definitions. Terms used herein with initial capitalization which are not
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herein defined but which are defined in the Employment Agreement shall have the
meanings attributed to such terms in the Employment Agreement.
3. Amendments. Section 6.c. of the Employment Agreement is hereby amended
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by deleting such Section in its entirety and substituting the following:
"c. Change in Control. For purposes of this Agreement, the term
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"Change in Control" shall mean the happening of any of the following:
(i) During any period of 24 consecutive months, ending after the
date hereof:
(A) individuals who were directors of the Company at the
beginning of such 24-month period, and
(B) any new director whose election or nomination for
election by the Board of Directors was approved by a vote of the
greater of (1) at least two-thirds (2/3), or (2) four affirmative
votes, in each case, of the directors then still in office who
were either directors at the beginning of such 24-month period or
whose election or nomination for election was previously so
approved
cease for any reason to constitute a majority of the Board of Directors of
the Company;
(ii) Any person or entity (other than the Company or its
Subsidiary employee benefit plan or plans or any trustee of or
fiduciary with respect to such plan or plans when acting in such
capacity), or any group acting in concert, shall beneficially
own, directly or indirectly, more than fifty percent (50%) of the
total voting power represented by the then outstanding securities
of the Company entitled to vote generally in the election of
directors ("Voting Securities");
(iii) Upon a merger, combination, consolidation or
reorganization of the Company, other than a merger, combination,
consolidation or reorganization which would result in (A) the
Voting Securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding
or by being converted into Voting Securities of the surviving
entity) at least 50% of the voting power represented by the
Voting Securities of the Company or such surviving entity
outstanding immediately after such transaction and (B) at least
such 50% of voting power continuing to be held in the aggregate
by the holders of the Voting Securities of the Company
immediately prior to such transaction (conditions (A) and (B) are
referred to as the "Continuance Conditions"); or
(iv) All or substantially all of the assets of the Company
are sold or otherwise disposed of, whether in one transaction or
a series of transactions, unless the Continuance Conditions shall
have been satisfied with respect to the purchaser of such assets
and such purchaser assumes the Company's obligations under this
Agreement."
Section 8(m) of the Employment Agreement is hereby amended by deleting
such Section in its entirety and substituting the following:
"(m) Limitation on Payments to Executive. Notwithstanding
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any provision of this Agreement to the contrary, if any amount or
benefit to be paid or provided under this Agreement would be an
"Excess Parachute Payment", within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"), or
any successor provision thereto, but for the application of this
sentence, then the payments and benefits to be paid or provided
under this Agreement shall be reduced to the minimum extent
necessary (but in no event to less than zero) so that no portion
of any such payment or benefit, as so reduced, constitutes an
Excess Parachute Payment; provided, however, that the foregoing
reduction shall be made only if and to the extent that such
reduction would result in an increase in the aggregate payment
and benefits to be provided, determined on an after-tax basis
(taking into account the excise tax imposed pursuant to Section
4999 of the Code, or any successor provision thereto, any tax
imposed by any comparable provision of state law, and any
applicable federal, state and local income taxes). The
determination of whether any reduction in such payments or
benefits to be provided under this Agreement or otherwise is
required pursuant to the preceding sentence shall be made at the
expense of the Company, if requested by Executive or the Company,
by the Company's independent accountants. The fact that
Executive's right to payments or benefits may be reduced by
reason of the limitations contained in this paragraph shall not
of itself limit or otherwise affect any other rights of Executive
other than pursuant to this Agreement. In the event that any
payment or benefit intended to be provided under this Agreement
or otherwise is required to be reduced pursuant to this
paragraph, Executive shall be entitled to designate the payments
and/or benefits to be so reduced in order to give effect to this
paragraph. The Company shall provide Executive with all
information reasonably requested by Executive to permit Executive
to make such
designation. In the event that Executive fails to make such
designation within 10 business days following the date of an
occurrence of a "Change in Control", the Company may effect such
reduction in any manner it deems appropriate."
4. Miscellaneous. Except as hereby amended, the Employment
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Agreement shall remain in full force and effect and the parties hereby
ratify and reaffirm the provisions thereof, as hereby amended.
IN WITNESS WHEREOF, the Company and Executive have executed this
Amendment, effective on the date set forth above.
FAIRFIELD COMMUNITIES, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Chairman
EXECUTIVE:
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, Individually
