RESTRICTED STOCK AGREEMENT
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This Restricted Stock Agreement (the "Agreement") is entered into as of the
22nd day of May, 2000 (the "Date of Grant"), by and between Fairfield
Communities, Inc., a Delaware corporation (the "Company"), and (the
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"Participant"). The Company and the Participant agree as follows:
1. Recitals. As part of its compensation programs, the Company has
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available for award to consultants, officers, other key employees and
non-employee directors of the Company and its subsidiaries restricted shares of
the Company's Common Stock pursuant to the terms of its 2000 Incentive Stock
Plan (a copy of which is attached hereto as Exhibit A, the "Plan"). The award of
the restricted stock to the Participant and the execution of this Agreement in
the form hereof have been duly authorized by the Compensation Committee of the
Company's Board of Directors, on the date set forth above.
2. Definitions. The following terms shall have the meanings indicated when
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used herein:
(a) "Annual XXX Equivalent" shall mean (i) the sum of the XXX for each of
the thirty-one months in the XXX Period, (ii) divided by thirty-one, with the
result (iii) multiplied by twelve. The Annual XXX Equivalent shall be rounded to
the nearest tenth of a percentage point.
(b) "Cause" shall mean (i) an intentional act or acts of fraud,
embezzlement or theft constituting a felony and resulting or intended to result
directly or indirectly in gain or personal enrichment for the Participant at the
expense of the Company or any of its subsidiaries or (ii) the continued,
repeated, intentional and willful refusal to perform the duties associated with
the Participant's position with the Company or any of its subsidiaries which is
not cured within 15 days following written notice to the Participant. For
purposes of this Agreement, no act or failure to act on the part of the
Participant shall be deemed "intentional" if it was due primarily to an error in
judgment or negligence, but shall be deemed "intentional" only if done or
omitted to be done by the Participant not in good faith and without reasonable
belief that his action or omission was in the best interest of the Company or
its subsidiaries.
(c) "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.
(d) "Constructive Discharge" shall mean [in the cases of Messrs. Berk,
Dumeny, Xxxxxxx and Xxxxxx, definition matches definition contained in their
respective Employment Agreements - for others]:
(i) any reduction in the Participant's base salary;
(ii) following the occurrence of a "Change in Control", a required
relocation of the Participant of more than fifty (50) miles from the
Participant's current job location, [except that this provision shall not
apply to the possible relocation of the Participant's job from Little Rock,
Arkansas [Las Vegas, Nevada] to the Company's executive office located in
the Orlando, Florida area (which shall be considered to be the
Participant's job location, following any such relocation),] provided that,
it is understood that the Participant's job responsibilities will require
that he travel extensively to other locations on the Company's business; or
(iii) any breach of any of the material terms of this Agreement [or
the Participant's separate employment agreement] by the Company which is
not cured within 15 days following written notice thereof by the
Participant to the Company;
provided, however, that the term "Constructive Discharge" shall not include a
specific event described in the preceding clause (i), (ii) or (iii) unless the
Participant actually terminates his employment with the Company within 60 days
after the occurrence of such event.
(e) "Disability" shall mean an illness or accident which prevents the
Participant, for a continuous period lasting six months, from performing the
material job duties normally associated with his position. In the event that any
disagreement or dispute arises between the Company and the Participant as to
whether the Participant has incurred a "Disability", then, in any such event,
the Participant shall submit to a physical and/or mental examination by a
competent and qualified physician licensed under the laws of the State of the
Participant's residence who shall be mutually selected by the Company and the
Participant, and such physician shall make the determination of whether the
Participant suffers from any "Disability". In the absence of fraud or bad faith,
the determination of such physician as to the Participant's condition at such
time shall be final and binding upon both the Company and the Participant. The
entire cost of any such examination shall be borne solely by the Company.
(f) "XXX" shall mean, for each month in the XXX Period, the net earnings,
after taxes, of the Company for each such month, divided by the average of the
Company's stockholders' equity as of the beginning and the end of such month,
with such number to be expressed as a percentage to two decimal places. The XXX
shall be determined in accordance with generally accepted accounting principles
and shall be adjusted, if necessary, for any year-end audit adjustments required
by the Company's independent accountants which affect the XXX for any month in
the XXX Period.
(g) "XXX Period" shall mean the thirty-one months beginning June 2000 and
ending December 2002.
(h) "Specified Percentage" shall mean the "Specified Percentage" determined
by comparing the Annual XXX Equivalent to the targets set forth under the
heading "Annual XXX Equivalent" in the table below (the "Specified Percentage"
shall be expressed as a percentage to one decimal place and shall be pro rated
on a proportionate basis for achieving an Annual XXX Equivalent which is greater
than 20% but less than 22%):
In the cases of Messrs. Xxxx, Hanning, Howeth, Xxxxxx and Xxxxxx:
Annual XXX Equivalent Specified Percentage
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22% or greater 75%
21% 37.5%
20% or less 0%
In the case of all other employee participants:
Annual XXX Equivalent Specified Percentage
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22% or greater 100%
21% 50%
20% or less 0%
(i) "Transfer Restriction Lapse Date" shall mean, with respect to any part
or all of the Shares which Vest from time to time, as to 50% of such Vesting
shares, the Lapse Date, and as to the remaining 50% of such Vesting shares, one
year from the Lapse Date, provided, however, that in the event of a Change in
Control, the Transfer Restriction Lapse Date with respect to 100% of the Shares
(including any Shares previously Vested for which the Transfer Restriction Lapse
Date had not previously occurred) shall be the date on which such Change in
Control occurs.
3. Award. The Company hereby awards the Participant a total of
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shares (the "Shares") of the Company's common stock, par value $0.01 per share
(the "Common Stock"), issued from treasury. The Company represents and warrants
that such Shares are duly authorized, validly issued, fully paid and
non-assessable.
4. Risk of Forfeiture. The Shares will be subject to forfeiture if the
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Participant's employment with the Company is terminated (a) by either the
Company or the Participant at any time through December 31, 2001, (b) by the
Company at any time for "Cause", (c) by the Company from and after January 1,
2002, provided, however, that if such termination is without "Cause" or due to
"Disability", then only [one third] of the Shares shall be forfeited, and (d) by
the Participant from and after January 1, 2002, provided however, that if such
termination is due to "Constructive Discharge", death or "Disability", then only
[one third] of the Shares shall be forfeited. If any Shares are forfeited, the
Participant will surrender such forfeited Shares to the Company. The Participant
will not be entitled to any payment in respect of any Shares so forfeited.
The risk of forfeiture will lapse (a "Vesting"), as to all or the specified
portion of the Shares not previously forfeited (the "Non-Forfeited Shares"),
upon the occurrence of any of the following (the aggregate Vesting shall not
exceed 100%) (each date on which a Vesting occurs is referred to as a "Lapse
Date"):
(i) as to 100% of the Non-Forfeited Shares, at 12:01 a.m., Orlando,
Florida time, on January 1, 2005;
(ii) as to 100% of the Non-Forfeited Shares, upon the occurrence of a
Change in Control;
(iii)as to 66.6667% of the Non-Forfeited Shares (rounded to the nearest
whole number of shares), upon the first to occur of any one of the
following events, provided, however, that a Vesting shall occur only
if such event occurs on or after January 1, 2002: (A) upon the
Participant's death, (B) upon termination of the Participant's
employment with the Company by either the Company or the Participant
due to the Participant's "Disability", (C) upon termination of the
Participant's employment with the Company by the Participant as a
result of
"Constructive Discharge" or (D) upon termination of the Participant's
employment with the Company by the Company, other than for "Cause";
(iv) as to the Specified Percentage of the Non-Forfeited Shares, on the
date that fiscal year 2002 earnings for the Company are publicly
announced;
(v) as to 50% [37.5% in the cases of Messrs. Xxxx, Hanning, Howeth, Xxxxxx
and Xxxxxx] of the Non-Forfeited Shares, but only prior to the
triggering of subparagraph (vi) below, in the event that the Company's
Common Stock closes at or above $16.00 per share (adjusted for any
future stock split, stock dividend, combination of shares,
recapitalization or other change in the capital structure of the
Corporation or merger, consolidation, reorganization, issuance of
rights or warrants to purchase securities or any other corporate
transaction or event having an effect similar to any of the foregoing,
as determined in the reasonable judgment of the Board of Directors of
the Company or any committee of the Board of Directors of the Company
which is authorized to administer the Plan ("Certain Corporate
Transactions")) for twenty consecutive days on which the stock trades,
as evidenced (absent manifest error) by the stock tables for the New
York Stock Exchange, published in The Wall Street Journal or, if such
stock tables are no longer so published, by such other means as the
Board of Directors of the Company or any committee of the Board of
Directors of the Company which is authorized to administer the Plan
shall determine; and
(vi) as to 100% [75% in the cases of Messrs. Xxxx, Hanning, Howeth, Xxxxxx
and Xxxxxx] of the Non-Forfeited Shares (or, in the event that
subparagraph (v) above has been triggered, as to an additional 50%
[37.5% in the cases of Messrs. Xxxx, Hanning, Howeth, Xxxxxx and
Xxxxxx] of the Non-Forfeited Shares), in the event that the Company's
Common Stock closes at or above $20.00 per share, as such price is
adjusted for Certain Corporate Transactions, for twenty consecutive
days on which the stock trades, as evidenced (absent manifest error)
by the stock tables for the New York Stock Exchange, published in The
Wall Street Journal or, if such stock tables are no longer so
published, by such other means as the Board of Directors of the
Company or any committee of the Board of Directors of the Company
which is authorized to administer the Plan shall determine.
Notwithstanding 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 Participant or the Company,
by the Company's independent accountants. The fact that Participant'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
Participant 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, Participant 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 Participant with all information
reasonably requested by Participant to permit Participant to make such
designation. In the event that Participant 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.
5. Rights as Stockholder. Unless and until forfeited, the Participant shall
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have, with respect to the shares of Common Stock underlying the grant of the
Shares, all of the rights of a stockholder of such Common Stock (except as
otherwise provided herein). Any stock dividends paid in respect of Shares will
be treated as additional Shares and will be subject to the same restrictions and
other terms and conditions that apply to the Shares with respect to which such
stock dividends are issued.
6. Share Certificates.
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(a) The Participant will be issued one or more stock certificates in
respect of the Shares. Each Share certificate will be registered in the name of
the Participant, will be accompanied by a stock power duly executed by the
Participant and will bear, among any other required legends, the following
legend:
"THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING,
WITHOUT LIMITATION, THE FORFEITURE EVENTS) CONTAINED IN THE RESTRICTED
STOCK AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER HEREOF AND
FAIRFIELD COMMUNITIES, INC. A COPY OF SUCH AGREEMENT IS ON FILE IN THE
OFFICE OF THE SECRETARY OF FAIRFIELD COMMUNITIES, INC. IN ORLANDO,
FLORIDA. FAIRFIELD COMMUNITIES, INC. WILL FURNISH TO THE RECORDHOLDER
OF THIS CERTIFICATE, WITHOUT CHARGE AND UPON WRITTEN REQUEST AT ITS
PRINCIPAL PLACE OF BUSINESS, A COPY OF SUCH AGREEMENT. FAIRFIELD
COMMUNITIES, INC. RESERVES THE RIGHT TO REFUSE TO RECORD THE TRANSFER
OF THIS CERTIFICATE UNTIL ALL SUCH RESTRICTIONS ARE SATISFIED, ALL SUCH
TERMS ARE COMPLIED WITH AND ALL SUCH CONDITIONS ARE SATISFIED."
All certificates evidencing grants of Shares will be deposited with and held in
custody by the Company until the date on which the risk of forfeiture lapses and
all of the conditions and restrictions on the Shares are satisfied.
(b) New Certificates. Subject to the provisions of Sections 6(a) and 7,
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after Vesting and the satisfaction and/or lapse of the transfer and other
restrictions, terms and conditions applicable to any Shares, a new certificate
representing all or the portion of such Vested Shares for which the Transfer
Restriction Lapse Date has occurred, without the legend set forth above in
Section 6(a) or other restriction, will (in lieu, and upon cancellation, of the
certificate, or the portion thereof, previously representing such Shares) be
registered in the name of the Participant and delivered to the Participant
within fifteen business days after the later of Vesting, occurrence of the
Transfer Restriction Lapse Date or payment of the taxes provided in Section 7
below.
7. Withholding. The Participant shall, at or promptly following the time of
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Vesting and as a condition precedent to the delivery of a certificate as
provided in Section 6(b) above, pay to the Company in cash an amount equal to
any applicable withholding taxes required to be withheld or collected under
applicable federal, state or local laws or regulations. Furthermore, the Company
will have the right to deduct and withhold any such applicable taxes from, or in
respect of, any dividends or other distributions paid on or in respect of the
Shares. All taxes, if any, in respect of any grants or payments to the
Participant hereunder will be the sole responsibility of and shall be paid by
the Participant.
8. Restrictions on Transfer. The Shares, and any rights or interest in this
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Agreement, shall not, prior to the applicable Transfer Restriction Lapse Date
applicable to the particular shares at issue, be assigned, transferred, sold,
exchanged or otherwise disposed of in any way at any time by the Participant.
Any such award, rights or interests will not, prior to Transfer Restriction
Lapse Date, be pledged, encumbered or otherwise hypothecated in any way at any
time by the Participant. Any such award, rights or interests will not, prior to
the Transfer Restriction Lapse Date, be subject to execution, attachment or
similar legal process. Any attempt to sell, exchange, transfer, assign, pledge,
encumber or otherwise dispose of or hypothecate in any way any such awards,
rights or interests, or the levy of any execution, attachment or similar legal
process thereon, contrary to the terms of this Agreement, will be null and void
and without legal force or effect. Upon the occurrence of the Transfer
Restriction Lapse Date, if the Shares have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), the Participant shall
not dispose of the Shares in violation of the Securities Act.
9. Registration and Listing. The Company shall, at its sole cost and
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expense, take all necessary action to register or qualify the Shares under the
Securities Act and to list the Shares on the NYSE (or such other principal
exchange on which the Common Stock is then listed for trading), to permit the
sale of the Shares by the Participant in compliance with the Securities Act and
any state securities laws. Prior to registration, the Shares shall bear a legend
similar to the following:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, OR ANY
FEDERAL OR STATE SECURITIES LAWS. THE SHARES HAVE NOT BEEN ACQUIRED BY
THE HOLDER WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY
DISTRIBUTION THEREOF WITHIN THE MEANING OF THE SECURITIES ACT OF 1933.
NEITHER THIS SECURITY NOR ANY PORTION HEREOF OR INTEREST HEREIN MAY BE
SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS
THE SAME IS REGISTERED UNDER SAID ACT AND ANY APPLICABLE FEDERAL OR
STATE SECURITIES LAW, OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE.
10. Notices. Each notice relating to this Agreement must be in writing and
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delivered in person or by certified mail to the proper address. Each notice will
be deemed to have been given on the date it is received. Each notice to the
Company must be addressed to it at its principal office: Fairfield Communities,
Inc., 0000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, attention of the Secretary.
Each notice to the Participant must be addressed to the Participant at the
Participant's address specified below. Anyone to whom a notice may be given
under this Agreement may designate a new address by notice to that effect.
11. Amendments. The Board of Directors of the Company or any committee of
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the Board of Directors of the Company which is authorized to administer the Plan
may, without the consent of the Participant, amend this Agreement, or otherwise
take action, to accelerate the time at which the risk of forfeiture of the
Shares and the restriction on transfer shall lapse. The Board of Directors of
the Company and any committee of the Board of Directors of the Company which is
authorized to administer the Plan may not otherwise amend this Agreement without
the consent of the Participant.
12. Governing Law. This Agreement shall be construed and enforced in
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accordance with, and governed by, the laws of the State of Florida.
IN WITNESS WHEREOF, the Company and the Participant have executed this
Agreement, effective on the date set forth above.
FAIRFIELD COMMUNITIES, INC.
By:
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Name:
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Title:
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PARTICIPANT:
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[Name]
Address for Notice:
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