RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (the "Agreement") is entered into on
this 18th day of December, 1996 (the "Date of Grant"), by and between
Fairfield Communities, Inc., a Delaware corporation (the "Company"), and Xxxx
X. XxXxxxxxx (the "Participant"). The Company and the Participant agree as
follows:
1. Restricted Stock Award. Pursuant to resolutions of the Board of
Directors of the Company (the "Board") duly adopted on October 10, 1996 and
the approval of the form of this Agreement by the Compensation Committee of
the Board by unanimous written action dated November 19, 1996, the Company
hereby grants to the Participant, upon the terms and conditions set forth
below, a total of 60,000 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.
2. Risk of Forfeiture. The Shares will be subject to forfeiture if
the Participant's employment with the Company is terminated (a) by the
Participant, other than as a result of a Constructive Discharge (as defined
in Section 7(c)), (b) by the Company for Cause (as defined in Section 7(a)),
(c) by reason of the Participant's death, or (d) by reason of the
Participant's Disability (as defined in Section 7(d)). Such risk of
forfeiture will lapse as to one-half of the Shares and such Shares will
become fully vested, without restriction, on 5:00 p.m., Little Rock, Arkansas
time, on each of the first and second anniversaries of the Date of Grant. 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. Subject to Section 9 hereof, but
notwithstanding any other provision of this Agreement to the contrary, the
risk of forfeiture will lapse and all Shares shall become immediately vested,
without restriction, in the event of a Change in Control (as defined in
Section 7(b)) without notice and without any other action required by any
party hereto.
3. Rights as Stockholder. Unless and until forfeited, the
Participant shall 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 unvested Shares will be treated as additional Shares and will be
subject to the same restrictions and other terms and conditions that apply to
the unvested Shares with respect to which such stock dividends are issued.
4. Share Certificates.
(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
LITTLE ROCK, ARKANSAS. 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 Section
4(a) above, after vesting and the satisfaction and/or lapse of the
restrictions, terms and conditions applicable to any Shares, a new
certificate representing such vested Shares, without the legend set forth
above in Section 4(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 five business days after vesting.
5. Withholding. The Participant shall, at the time of vesting and
as a condition precedent to the delivery of a certificate representing such
Shares, 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. The Participant shall be entitled to elect to have his
withholding obligation at the time of vesting satisfied by surrendering to
the Company shares of Common Stock, including the Shares (provided that the
Shares are vested). The value of any such shares of Common Stock shall be
the closing price of the Common Stock on the New York Stock Exchange ("NYSE")
(or such other principal exchange on which the Common Stock is then listed
for trading) on the date of vesting of shares which gives rise to the taxable
event.
6. Restrictions on Transfer. The Shares, and any rights or interest
in this Agreement, shall not, prior to vesting, be assigned, transferred,
sold, exchanged or otherwise disposed of in any way at any time by the
Participant, other than by testamentary disposition by the Participant or the
laws of descent and distribution. Any such award, rights or interests will
not, prior to vesting, 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 vesting, 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 lapse of the
restrictions on transfer of the Shares, 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.
7. Certain Defined Terms. (a) The term "Cause" means (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
(ii) the continued, repeated, intentional and willful refusal to perform the
duties associated with the Participant's position as President and Chief
Executive Officer of the Company 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. The Participant shall not be deemed
to have been terminated for "Cause" hereunder unless and until there shall
have been delivered to the Participant a copy of a resolution duly adopted by
the affirmative vote of not less than a majority of the Board of Directors of
the Company then in office at a meeting of the Board called and held for such
purpose, after reasonable notice to the Participant and an opportunity for
the Participant, together with his counsel (if the Participant chooses to
have counsel present at such meeting), to be heard before the Board, finding
that, in the good faith opinion of the Board, the Participant had committed
an act constituting "Cause" as herein defined and specifying the particulars
thereof in detail. Nothing herein will limit the right of the Participant or
his beneficiaries to contest the validity or propriety of any such
determination.
(b) The term "Change in Control" means 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 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;
(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, thirty
percent (30%) or more 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 60% 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 60% 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.
(c) The term "Constructive Discharge" means (i) any reduction in the
Participant's then-current annual base salary, (ii) a material reduction in
the Participant's job function, duties or responsibilities, or a similar
change in the Participant's reporting relationships, (iii) a required
relocation of the Participant of more than 35 miles from the Participant's
current job location, or (iv) any breach of any of the terms of this
Agreement or Participant's Employment Agreement or the Amendment Agreement -
1996 Incentive Compensation 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), (iii) or (iv) unless the
Participant actually terminates his employment with the Company within 60
days after the occurrence of such event. Breaches of this Agreement or the
Amendment Agreement - 1996 Incentive Compensation shall be deemed also to
constitute breaches of the Employment Agreement.
(d) The term "Disability" means 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.
8. Registration and Listing. The Company shall, at its sole cost
and expense, take all necessary action to register or qualify the Shares
under the Securities Act and the Securities Exchange Act of 1934, as amended,
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, not later than each of the respective vesting dates for the
Shares.
9. Parachute Payments. Notwithstanding anything to the contrary
contained in this Agreement, if the Participant is a "disqualified
individual" (as that term is defined in Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code") or any successor provision thereto) and
if the lapse of the risk of forfeiture with respect to any of the Shares
would constitute an "excess parachute payment" (as that term is defined in
Section 280G of the Code or any successor provision thereto), when taken
together with any other compensation payable to the Participant, but for the
application of this sentence, then the number of Shares with respect to which
the risk of forfeiture otherwise would have lapsed under this Agreement, when
taken together with all other such compensation payable to the Participant,
shall be reduced to the minimum extent necessary (but in no event to less
than zero) so that the lapse of the risk of forfeiture of Shares, as so
reduced, does not constitute an excess parachute payment (the Shares
remaining, after such calculation, subject to the risk of forfeiture and
other restrictions hereunder, are herein referred to as the "Remaining
Shares"). The Company shall bear responsibility for performing the necessary
calculations under this Section 9 and shall indemnify the Participant, on a
grossed-up, after tax (federal, state and local) basis, for any error or
omission on the part of the Company which results in additional tax liability
to the Participant, within five calendar days following determination of the
amount of indemnity owed to the Participant. For purposes of applying this
Section 9 in connection with any similar provision in any other agreement,
the lapse of the risk of forfeiture of Shares shall be treated as the last
payment to be reduced. If this Section is triggered prior to the first
anniversary of the Date of Grant, then the Remaining Shares shall become
fully vested, and the risk of forfeiture and other restrictions herein
provided shall lapse, under Section 2 hereof, as to one-half of the Remaining
Shares on 5:00 p.m., Little Rock, Arkansas time, on each of the first and
second anniversaries of the Date of Grant.
10. Notices. Each notice relating to this Agreement must be in
writing and 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:
0000 Xxxxxxxx Xxxx, Xxxxxx Xxxx, Xxxxxxxx 00000; or after December 1, 1996,
00000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxx 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 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 may not otherwise amend this Agreement
without the consent of the Participant.
12. Governing Law. This Agreement is intended to be performed in the
State of Arkansas and will be construed and enforced in accordance with and
governed by the laws of such State.
IN WITNESS WHEREOF, the Company and the Participant have executed this
Agreement, effective on the date set forth above.
FAIRFIELD COMMUNITIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Chairman, Compensation Committee
PARTICIPANT:
/s/ X. X. XxXxxxxxx
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Xxxx X. XxXxxxxxx
Social Security Number:
___________________________
Address for Notice:
___________________________
___________________________
