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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. ___ )*
Equivest Finance, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
29476H403
- --------------------------------------------------------------------------------
(CUSIP Number)
R. Perry Harris
115 Long Wharf
P.O. Box 2000
Newport, RI 02840
(401) 845-0100
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
AUGUST 28, 1998
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
- -------------------------------
CUSIP NO. 29476H403
- -------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
R. Perry Harris
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [_]
Not Applicable
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(e) [_]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF 7 SOLE VOTING POWER
SHARES 3,040,000 shares
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
- --------------------------------------------------------------------------------
8 SHARED VOTING POWER
None
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9 SOLE DISPOSITIVE POWER
3,040,000 shares
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10 SHARED DISPOSITIVE POWER
None
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON [_]
3,040,000 shares
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
Not Applicable
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.1%
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14 TYPE OF REPORTING PERSON*
IN
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ITEM 1. SECURITY AND ISSUER
- ------ -------------------
This Statement relates to the Common Stock, par value $.05 per share
(the "Shares"), of Equivest Finance, Inc., a Florida corporation ("Equivest"),
which has its principal executive offices at 2 Clinton Square, Syracuse, New
York 13202.
ITEM 2. IDENTITY AND BACKGROUND
- ------ -----------------------
This Statement is filed by R. Perry Harris ("Mr. Harris"). Mr.
Harris's business address is 115 Long Wharf, P.O. Box 2000, Newport, Rhode
Island 02840.
Mr. Harris is the founder and Chief Executive Officer of Eastern
Resorts Corporation ("Eastern Resorts"). Eastern Resorts is engaged in the
development and management of vacation resorts. Eastern Resorts' principle
business and office address is 115 Long Wharf, P.O. Box 2000, Newport, Rhode
Island 02840. As a result of the Merger (as defined below) Mr. Harris is to
be appointed to the Board of Directors of Equivest as of the fifth business day
following the consummation of the Merger.
During the last five years, Mr. Harris has not been convicted in any
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and, as a result of such proceeding, was or is subject to
a judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
Mr. Harris is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
- ------ -------------------------------------------------
Equivest, ERC Acquisition Corp. (a wholly owned subsidiary of
Equivest) and Eastern Resorts entered into an Agreement and Plan of Merger,
dated as of July 17, 1998 (the "Merger Agreement"), pursuant to which Eastern
Resorts has merged with ERC Acquisition Corp. (the "Merger"), Eastern Resorts
became a wholly owned subsidiary of Equivest and the outstanding common stock of
Eastern Resorts was converted into the right to receive Shares and cash. The
Merger was consummated on August 28, 1998. As a result of the Merger, Mr. Harris
acquired 3,040,000 Shares and $14,250,000 in cash.
ITEM 4. PURPOSE OF TRANSACTION
- ------ ----------------------
On August 28, 1998, Mr. Harris received 3,040,000 Shares in the
Merger. Pursuant to the Stockholders' Agreement, dated as of August 24, 1998
(the "Stockholders Agreement"), by and among Equivest, Mr. Harris and Karen
Harris, Mr. Harris is to be appointed to the Board of Directors of Equivest as
of the fifth business day following the consummation of the Merger.
Pursuant to the Stockholders Agreement, Mr. Harris has certain
registration rights with respect to the Shares. Depending on, among things,
market or other conditions, Mr. Harris may determine to dispose of Shares in
accordance with such registration rights, including by participating in the 1998
Offering (as defined in the Stockholders Agreement).
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Other than as set forth herein, Mr. Harris does not have any plans or
proposals which relate to or would result in any of the matters referred to in
Items 4(a)-(j) of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
- ------ ------------------------------------
(a) Mr. Harris is the beneficial owner of 3,040,000 Shares,
representing approximately 12.1% of the issued and outstanding Shares (based on
21,905,706 Shares outstanding at July 31, 1998, as reported on Equivest's
Quarterly Report on Form 10-QSB for the quarter ended June 30, 1998, plus the
3.2 million Shares issued in the Merger). Karen Harris, Mr. Harris's wife, is
the beneficial owner of 160,000 Shares, which she received in the Merger. Mr.
Harris disclaims beneficial ownership of the Shares held by his wife.
(b) Mr. Harris has the sole power to vote or to direct the vote and
the sole power to dispose or direct the disposition of the 3,040,000 Shares he
beneficially owns.
(c) Except as set forth in this Statement, Mr. Harris has not effected
any transactions in the Shares in the past 60 days.
(d) To the knowledge of Mr. Harris, no other person has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the Shares beneficially owned by Mr. Harris.
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS
- ------ OR RELATIONSHIPS WITH RESPECT TO SECURITIES
OF THE ISSUER
-------------------------------------------
Mr. Harris acquired 3,040,000 Shares pursuant to the Merger Agreement.
Pursuant to the Stockholders Agreement, Mr. Harris has certain registration
rights with respect to the Shares that he beneficially owns. The Stockholders
Agreement also provides for Mr. Harris's appointment as a director of Equivest.
Under the Stockholders Agreement, until such time as Mr. Harris and Karen Harris
no longer beneficially own an aggregate at least 10% of the outstanding Shares
or 25% of their initial holdings, if less, Equivest will recommend Mr. Harris
for election as a director of Equivest, subject to the terms of the Stockholders
Agreement. Pursuant to a five year Employment Agreement between Eastern Resorts
and Mr. Harris, Mr. Harris will be entitled to be granted stock options covering
up to 60,000 Shares, at the then fair market value, per annum, based on the
performance of Eastern Resorts. The descriptions of the Merger Agreement,
the Stockholders Agreement and the Employment Agreement contained herein are
qualified by reference to the full text of these agreements, which are included
as exhibits hereto and incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
- ------ --------------------------------
1. Agreement and Plan of Merger, dated as of July 17, 1998, by and
among Equivest Finance, Inc., ERC Acquisition Corp. and Eastern Resorts
Corporation.
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2. Stockholders' Agreement, dated as of August 24, 1998, by and among
Equivest Finance, Inc., R. Perry Harris and Karen Harris.
3. Employment Agreement, dated as of August 24, 1998, between ERC
Acquisition Corp. and R. Perry Harris.
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SIGNATURE
- ---------
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, correct and
complete.
September 8, 1998 By: /s/ R. Perry Harris
-----------------------
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EXHIBIT INDEX
-------------
Exhibit
No. Document
- ------- ---------------------------------------------------------------------
1 Agreement and Plan of Merger, dated as of July 17, 1998, by and among
Equivest Finance, Inc., ERC Acquisition Corp. and Eastern Resorts
Corporation.*
2 Stockholders' Agreement, dated as of August 24, 1998, by and among
Equivest Finance, Inc., R. Perry Harris and Karen Harris.
3 Employment Agreement, dated as of August 24, 1998, between ERC
Acquisition Corp. and R. Perry Harris.
* Incorporated by reference to Exhibit 10.1 to Equivest Finance, Inc.'s
Quarterly Report on Form 10-QSB for the quarter ended June 30, 1998.
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EXHIBIT 2
================================================================================
--------------------------------
STOCKHOLDERS' AGREEMENT
--------------------------------
Between
EQUIVEST FINANCE, INC.
and
R. PERRY HARRIS AND KAREN HARRIS
Dated as of August 24, 1998
================================================================================
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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ARTICLE I DEFINITIONS...............................................................................1
SECTION 1.01. Certain Defined Terms.....................................................................1
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS........................................4
SECTION 2.01. Capacity of the Stockholder...............................................................4
SECTION 2.02. Securities Act............................................................................4
SECTION 2.03. Lock-up Agreement.........................................................................5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF COMPANY.................................................6
SECTION 3.01. Due Organization; Corporate Power and Authorization.......................................6
SECTION 3.02. No Conflicts; Required Filings and Consents...............................................7
ARTICLE IV TRANSFER OF SHARES........................................................................7
SECTION 4.01. General Restriction.......................................................................7
SECTION 4.02. Legends...................................................................................7
SECTION 4.03. Certain Information.......................................................................8
ARTICLE V REGISTRATION RIGHTS.......................................................................8
SECTION 5.01. Registration Upon Request.................................................................8
SECTION 5.02. Incidental Registration..................................................................11
SECTION 5.03. Registration Procedures..................................................................13
SECTION 5.04. Transfer of Registration Rights..........................................................16
SECTION 5.05. Preparation; Reasonable Investigation....................................................17
SECTION 5.06. Indemnification..........................................................................17
SECTION 5.07. Contribution.............................................................................19
ARTICLE VI CORPORATE GOVERNANCE.....................................................................20
SECTION 6.01. Initial Board Representation.............................................................20
SECTION 6.02. Continuing Board Representation..........................................................20
ARTICLE VII MISCELLANEOUS............................................................................21
SECTION 7.01. Expenses.................................................................................21
SECTION 7.02. Notices..................................................................................21
SECTION 7.03. Amendment................................................................................22
SECTION 7.04. Severability.............................................................................23
SECTION 7.05. Entire Agreement; Assignment.............................................................23
SECTION 7.06. Parties in Interest......................................................................23
SECTION 7.07. Specific Performance.....................................................................23
SECTION 7.08. Public Announcements.....................................................................23
SECTION 7.09. Governing Law............................................................................23
SECTION 7.10. Consent to Jurisdiction..................................................................24
SECTION 7.11. Headings.................................................................................24
</TABLE>
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<TABLE>
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SECTION 7.12. Counterparts.............................................................................24
SECTION 7.13. Termination..............................................................................24
</TABLE>
EXHIBIT A
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STOCKHOLDERS' AGREEMENT (this "Agreement") dated as of August 24,
1998 between EQUIVEST FINANCE, INC., a Florida corporation (the "Company"), and
R. Perry Harris and Karen Harris (the "Original Stockholders").
WHEREAS, the Company, ERC ACQUISITION CORP., a Delaware
corporation and a wholly owned subsidiary of the Company ("Merger Sub"), and
Eastern Resorts Corporation, a Rhode Island corporation ("ERC"), have entered
into an Agreement and Plan of Merger dated as of July 16, 1998 (the "Merger
Agreement"), which provides, upon the terms and subject to the conditions set
forth therein, for the merger of ERC with and into Merger Sub (the "Merger"),
with Merger Sub as the surviving corporation (the "Surviving Corporation");
WHEREAS, following the consummation of the Merger, each Original
Stockholder will own (beneficially or of record) the number of shares of common
stock, par value $0.05 per share, of the Company ("Company Common Stock") set
forth opposite such Original Stockholder's name on Exhibit A hereto; and
WHEREAS, it is a condition to the obligations of the parties
under the Merger Agreement that the parties hereto enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this Agreement,
the following terms have the following meanings:
"Agreement" has the meaning set forth in the preamble to this
Agreement.
"Bennett Stockholders" means, collectively, Bennett Management
and Development Corporation and Bennett Funding Group, Inc.
"Board of Directors" has the meaning set forth in Section 6.01.
"Commission" means the Securities and Exchange Commission, and
any successor commission or agency having similar powers.
"Company" has the meaning set forth in the preamble to this
Agreement.
"Company Common Stock" has the meaning set forth in the recitals
to this Agreement.
"Company Securities" has the meaning set forth in Section
5.02(a)(ii).
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"control" (including the terms "controlled by" and "under common
control with"), with respect to the relationship between or among two or more
Persons, means the possession, directly or indirectly or as trustee or executor,
of the power to direct or cause the direction of the affairs or management of a
Person, whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise.
"Delay Notice" has the meaning set forth in Section
5.01(a)(ii)(E).
"Disadvantageous Condition" has the meaning set forth in Section
5.01(a)(ii)(E).
"Encumbrance" means any pledge, lien, security interest,
mortgage, charge, claim, equity, option, proxy, voting restriction, right of
first refusal , limitation on disposition, adverse claim of ownership or use or
other encumbrance of any kind.
"ERC" has the meaning set forth in the recitals to this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Group" has the meaning comprehended by Section 13(d)(3) of the
Exchange Act and Rule 13d-5 thereunder.
"Initial Shares" has the meaning set forth in Section 5.03(e).
"Merger" has the meaning set forth in the recitals to this
Agreement.
"Merger Agreement" has the meaning set forth in the recitals to
this Agreement.
"Merger Sub" has the meaning set forth in the recitals to this
Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"NASDAQ" means the NASDAQ Small Capitalization Market.
"Nominating Committee" has the meaning set forth in Section
6.02(b).
"1998 Offering" means the first offering by the Company or the
bankruptcy estate for The Bennett Funding Group, Inc., Bennett Management &
Development Corp., and certain other related debtors of Company Common Stock
registered with the Commission commencing after the date hereof, other than any
offering registered on Form S-4, Form S-8 or pursuant to any dividend
reinvestment plan.
"Offered Shares" means up to 1,500,000 shares of Company Common
Stock to be sold by one or both of the Original Stockholders in the 1998
Offering.
"Option Shares" has the meaning set forth in Section 5.03(e).
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"Original Stockholders" has the meaning set forth in the preamble
to this Agreement.
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization, joint venture or other entity,
as well as any syndicate or group that would be deemed to be a person under
Section 13(d)(3) of the Exchange Act.
"Public Company" has the meaning set forth in Section 4.03(b).
"Recapitalization" means any stock split, dividend, distribution
or combination, or any recapitalization, merger, consolidation, exchange,
partial or complete liquidation or other similar reorganization or transaction
of, or with respect to, the capital stock of the Company.
"Registrable Securities" means all Shares held by Stockholders;
provided, however, that the Shares shall cease to be Registrable Securities when
and to the extent that (a) a registration statement with respect to such Shares
shall have been declared effective under the Securities Act and, if such
registration statement is not a "shelf" registration statement under Rule 415
under the Securities Act, such Shares shall have been disposed of pursuant to
such registration statement, (b) such Shares shall have been sold to the public
pursuant to Rule 144, or are eligible for sale to the public without volume or
manner of sale restrictions under, Rule 144(k), (c) such Shares shall have been
otherwise transferred and new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company or (d)
such Shares shall have ceased to be outstanding.
"Registration Expenses" means all out-of-pocket expenses incident
to the Company's performance of or compliance with Article V, including, without
limitation, all registration and filing fees (including filing fees with respect
to the NASD), all fees and expenses of complying with state securities or "blue
sky" laws (including reasonable fees and disbursements of underwriters' counsel
in connection with such compliance and the preparation of any "blue sky"
memoranda or surveys), all printing expenses, all listing fees, all registrars'
and transfer agents' fees, the fees and disbursements of counsel for the Company
and of its independent public accountants, including, without limitation, the
expenses of any audits and/or "cold comfort" letters required by or incident to
such performance and compliance, and the reasonable fees and disbursements of
one outside counsel retained by the holders of a majority of the Registrable
Securities being registered (which shall be the only counsel retained by the
Stockholders with respect to any registration and which counsel shall be
reasonably satisfactory to the Company), but excluding underwriting discounts
and commissions and applicable transfer taxes, if any.
"Restricted Shares" means all Shares other than (a) Shares that
have been registered under a registration statement pursuant to the Securities
Act, (b) Shares with respect to which a Sale has been made in reliance on and in
accordance with Rule 144 or (c) Shares with respect to which the holder thereof
shall have delivered to the Company either (i) an opinion, in form and substance
reasonably satisfactory to the Company, of
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counsel, who shall be reasonably satisfactory to the Company, or (ii) a "no
action" letter from the staff of the Commission, in either case to the effect
that subsequent transfers of such Shares may be effected without registration
under the Securities Act or compliance with Rule 144.
"Rule 144" means Rule 144 (or any successor provision) under the
Securities Act.
"Sale" means any sale, assignment, transfer, distribution or
other disposition of Shares or of a participation therein, whether voluntarily
or by operation of law.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Sales Agreement" has the meaning set forth in Section
2.03(c).
"Share" means any share of Company Common Stock issued pursuant
to the Merger Agreement and any securities issued in respect thereof, or in
substitution therefor, in connection with any Recapitalization.
"Stockholders" means the Original Stockholders and any Person to
whom they transfer some or all of their Registrable Securities.
"Surviving Corporation" has the meaning set forth in the
Recitals.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE STOCKHOLDERS
Each Stockholder, severally and not jointly, hereby represents
and warrants to the Company as follows:
SECTION 2.01. Capacity of the Stockholder. Such Stockholder is an
individual and has all necessary right, capacity and power to enter into this
Agreement, to carry out his or her obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by such Stockholder, and (assuming due authorization, execution and
delivery by the Company) this Agreement constitutes a legal, valid and binding
obligation of such Stockholder, enforceable against such Stockholder in
accordance with its terms.
SECTION 2.02. Securities Act. The Shares to be issued to such
Stockholder pursuant to the Merger Agreement are being acquired for investment
only and not with a view to any sale or distribution of the Shares or any part
thereof in violation of the Securities Act. Such Stockholder agrees at all times
to sell or otherwise dispose of all or any part of the Shares so acquired by
such Stockholder only pursuant to
4
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a registration, or exemption therefrom, under the Securities Act and in
compliance with applicable state securities laws. Such Stockholder is an
"accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act and has such knowledge and experience, or has consulted with
persons having knowledge and experience, in financial and business matters as to
be capable of evaluating the merits and risks of an investment in the Shares.
Such Stockholder has received all the information that such Stockholder deems
material to his or her evaluation of the business, assets, liabilities,
financial condition and results of operations of the Company and all the
information that such Stockholder has requested from the Company and considers
necessary or appropriate for deciding whether to purchase the Shares. Such
Stockholder has the ability to bear the economic risks of such Stockholder's
prospective investment and such Stockholder is able, without materially
impairing such financial condition, to hold the Shares for an indefinite period
of time and to suffer complete loss on such Stockholder's investment, in the
event such a loss should occur. Such Stockholder understands and has fully
considered for purposes of this investment the risks of this investment and
understands that (a) this investment is suitable only for an investor who is
able to bear the economic consequences of losing his or her entire investment,
in the event such a loss should occur; (b) the Shares represent a speculative
investment that involves a high degree of risk of loss under certain
circumstances; (c) there are substantial restrictions on the transferability of
the Shares and, accordingly, it may not be possible for such Stockholder to
liquidate his or her investment in the Shares in case of emergency; and (d)
there have been no representations as to the possible future value, if any, of
the Shares. Each Stockholder understands and acknowledges that the Shares will
not be registered under the Securities Act on the ground that the offering and
sale of securities contemplated by the Merger Agreement are exempt from
registration pursuant to Section 4(2) of the Securities Act, and that the
Company's reliance upon such exemption is predicated in part upon such
Stockholder's representations set forth in this Agreement.
SECTION 2.03. Lock-up Agreement.
(a) Commencing on the date hereof and continuing for a period
expiring on the first anniversary hereof, each Stockholder shall not, directly
or indirectly, offer for sale, sell or otherwise dispose of (or enter into any
transaction or device that is designed to, or could be expected to, result in
the disposition by any person at any time in the future of), or reduce his or
her risk with respect to, any shares of Company Common Stock (other than the
Offered Shares) or sell or grant options, rights or warrants with respect to any
shares of Company Common Stock, without the consent of the Company. Such
Stockholder agrees to provide, upon request, written confirmation of this
agreement to the underwriters of the 1998 Offering. The restriction contained in
this Section 2.03(a) (but not any restriction imposed by Section 2.03(b)) shall
terminate in the event that R. Perry Harris is no longer an officer or director
of the Company or any of its Subsidiaries.
(b) Each Stockholder agrees, if so required by the managing
underwriter in connection with any underwritten offering of shares of the
Company Common Stock (including the 1998 Offering and any registration pursuant
to Section 5.01 or 5.02) not to, directly or indirectly, offer for sale, sell or
otherwise dispose of (or enter into any transaction or device that is designed
to, or could be expected to, result in the disposition
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by any person at any time in the future of) any shares of Company Common Stock
or sell or grant options, rights or warrants with respect to any shares of
Company Common Stock during the 7 days prior to and the 120 days after the
effective date of any registration statement with respect to such underwritten
public offering; provided, however, with respect to the 1998 Offering, the
Original Stockholders agree to be restricted for a period ending 180 days after
the effective date of the registration statement for the 1998 Offering. Such
Stockholder agrees to provide, upon request, written confirmation of this
agreement to the underwriters of any such underwritten offering. The obligation
of each Stockholder to agree to such a restriction shall terminate at such time
as the Stockholders as a group own less than 5% of the issued and outstanding
Company Common Stock and R. Perry Harris is no longer an officer or director of
the Company or any of its Subsidiaries.
(c) The Company agrees, if so required by the managing
underwriter in connection with an underwritten offering of shares of the Company
Common Stock pursuant to Section 5.01 or 5.02 or, if requested by a Stockholder
in connection with a securities sales agreement entered into with any
representative of such Stockholder for the purposes of soliciting purchases of
Registrable Securities (a "Securities Sales Agreement") pursuant to any
registration under Section 5.01 or 5.02, to use its reasonable efforts to cause
each of its officers, directors and holders of more than 5% of the issued and
outstanding Company Common Stock not to, directly or indirectly, offer for sale,
sell, or otherwise dispose of (or enter into any transaction or device that is
designed to, or could be expected to, result in any disposition by any person at
any time in the future of) any shares of Company Common Stock during the 7 days
prior to and the 120 days after the effective date of any registration statement
with respect to such underwritten public offering or Securities Sales Agreement.
The Company agrees to provide, upon request, written confirmation of agreements
by its officers, directors and 5% shareholders to abide by the terms hereof,
assuming the Company was able to cause such agreements as provided in the
previous sentence.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY
The Company hereby represents and warrants to each Stockholder as
follows:
SECTION 3.01. Due Organization; Corporate Power and
Authorization. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida. The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby by the Company have been duly authorized by all necessary corporate
action on the part of the Company. This Agreement has been duly executed and
delivered by the Company and, assuming its due authorization, execution and
delivery by each Stockholder, constitutes a legal, valid and
6
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binding obligation of the Company, enforceable against the Company in accordance
with its terms, subject to applicable bankruptcy, insolvency, moratorium and
other similar laws relating to creditors' rights and general principles of
equity.
SECTION 3.02. No Conflicts; Required Filings and Consents.
(a) The execution and delivery of this Agreement by the Company
do not, and the performance of this Agreement by the Company will not, (i)
conflict with or violate the Articles of Incorporation or By-Laws of the
Company, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to the Company or by which it or any of its
properties is bound, or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the property or assets of the Company pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company is a party or by which the Company
or any of its properties is bound, except, in the case of clauses (ii) and
(iii), for any such breaches, defaults or other occurrences that would not
prevent or delay the performance by the Company of its obligations under this
Agreement.
(b) The execution and delivery of this Agreement by the Company
do not, and the performance of this Agreement by the Company will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for such filings with the Commission, the NASD and any state
securities regulators required in connection with any public offering of
Registrable Securities and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or delay the performance by the Company of its obligations
under this Agreement.
ARTICLE IV
TRANSFER OF SHARES
SECTION 4.01. General Restriction . No Stockholder shall,
directly or indirectly, make or solicit any Sale of, or create, incur, solicit
or assume any Encumbrance with respect to, any Share, except in compliance with
the Securities Act and this Agreement.
SECTION 4.02. Legends.
(a) The Company shall affix to each certificate evidencing Shares
a legend in substantially the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
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AS AMENDED. NO REGISTRATION OF TRANSFER OF SUCH SECURITIES WILL
BE MADE ON THE BOOKS OF THE ISSUER UNLESS SUCH TRANSFER IS MADE
IN CONNECTION WITH AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDERS'
AGREEMENT DATED AS OF AUGUST 24, 1998, A COPY OF WHICH IS ON FILE
AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER. NO REGISTRATION
OF TRANSFER OF SUCH SECURITIES WILL BE MADE ON THE BOOKS OF THE
ISSUER UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN
COMPLIED WITH."
(b) In the event that any Shares shall cease to be Restricted
Shares, the Company shall, upon the written request of the holder thereof
(accompanied by an opinion, in form and substance reasonably satisfactory to the
Company, from legal counsel reasonably satisfactory to the Company, that such
Shares are no longer Restricted Shares), issue to such holder a new certificate
evidencing such Shares without the legend required by Section 4.02(a) endorsed
thereon.
SECTION 4.03. Certain Information. (a) So long as the Company
shall be a Public Company, it shall file in a timely manner all reports and
other information required to be filed by Section 13 or 15(d) under the Exchange
Act, as the case may be, and take such other actions as shall be reasonably
necessary in order that the conditions to the availability of Rule 144 in
connection with any Sale of Shares by a Stockholder shall be met.
(b) For purposes of this Agreement, the Company shall be deemed
to be a "Public Company" if, as of any date of determination, any shares of the
Company's capital stock are registered or required to be registered under the
Exchange Act .
ARTICLE V
REGISTRATION RIGHTS
SECTION 5.01. Registration Upon Request.
(a) Upon the written request of the holder or holders of
Registrable Securities requesting that the Company effect the registration under
the Securities Act of all or part of the Registrable Securities held by such
holder or holders and specifying the intended method or methods of disposition
of such Registrable Securities, the Company shall promptly give written notice
of such requested registration to all holders of
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Registrable Securities and thereupon shall use its best efforts to effect the
registration under the Securities Act, as expeditiously as is reasonable, of:
(i) the Registrable Securities that the Company has been so
requested to register by such holder or holders, for disposition in accordance
with the intended method of disposition stated in such request, and
(ii) all other Registrable Securities that the Company has been
requested to register by the holders of Registrable Securities by written
request delivered to the Company within 15 days after the giving of such written
notice by the Company (which request shall specify the intended method of
disposition of such Registrable Securities), all to the extent requisite to
permit the disposition (in accordance with the intended methods thereof as
aforesaid) of the Registrable Securities so to be registered; provided, however,
that:
(A) the Company shall not be required to effect any registration
pursuant to this Section 5.01 unless at the time of such request it
shall then be a Public Company;
(B) the Company shall not be required to effect any registration
pursuant to this Section 5.01 prior to the first anniversary of the date hereof;
(C) the Company shall not at any time be required to effect any
registration pursuant to this Section 5.01 unless the requests from holders of
Registrable Securities for such registration cover an aggregate number of shares
of Registrable Securities at least equal to 20% of the outstanding shares of
Company Common Stock issued as consideration pursuant to the Merger Agreement;
(D) if the Company has effected a registration pursuant to this
Section 5.01, the Company shall not be required to effect another registration
pursuant to this Section 5.01 until a period of 12 months shall have elapsed
from the effective date of the initial registration pursuant to this Section
5.01; and
(E) with respect to any registration statement filed, or to be
filed, pursuant to this Section 5.01, if the Board of Directors of the Company
determines that, in its judgment, it would (because of the existence of, or in
anticipation of, any material acquisition involving the Company or any of its
subsidiaries or any material financing activity, or the unavailability for
reasons substantially beyond the Company's control of any required financial
statements, or any other event or condition the disclosure of which would, in
the reasonable opinion of the Board of Directors of the Company,(1) be
materially disadvantageous to the Company or any of its subsidiaries taken as a
whole or (2) jeopardize the consummation of any such acquisition or financing
activity) be significantly disadvantageous (a "Disadvantageous Condition") for
such a registration statement to become effective, or to be maintained
effective, the Company shall, notwithstanding any other provision of this
Article V, be entitled, upon the giving of a written notice (a
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"Delay Notice") to such effect to each holder of Registrable Securities included
or to be included in such registration statement, to cause such registration
statement to be withdrawn and the effectiveness of such registration statement
terminated or, in the event no registration statement has yet been filed, shall
be entitled not to file any such registration statement, until, in the judgment
of the Board of Directors of the Company, such Disadvantageous Condition no
longer exists (notice of which the Company shall promptly deliver to the holders
of Registrable Securities with respect to which any such registration statement
has been filed, or was to have been filed); provided, however, that in no event
shall the Company be permitted to delay registration pursuant to this Section
(i) for a period exceeding 120 consecutive days or (ii) during any 12 month
period of time following the termination of any delay period; and provided,
further, that a holder of Registrable Securities may withdraw any registration
request made under this Section 5.01 in the event that such request is delayed
as permitted by the preceding clause for a period exceeding 45 days, in which
event the registration request will not count for purposes of the limit set
forth in paragraph (b) of this Section 5.01. Upon receipt of any notice of the
existence of a Disadvantageous Condition, such holders of Registrable Securities
selling such securities pursuant to an effective registration statement shall
forthwith discontinue use of the prospectus contained in such registration
statement and, if so directed by the Company, each such holder of Registrable
Securities shall deliver to the Company all copies, other than permanent file
copies then in such holder's possession, of the prospectus then covering such
Registrable Securities current at the time of receipt of such notice, and, in
the event that no registration statement has yet been filed, all drafts of the
prospectus covering such Registrable Securities. Notwithstanding the foregoing
provisions of this subparagraph (E), no registration statement filed and
subsequently withdrawn by reason of any existing or anticipated Disadvantageous
Condition as hereinabove provided shall count as the registration statement
referred to in the limitation in Section 5.01(b), or count against the
limitations in Section 5.01(a)(ii)(E).
(b) Anything herein to the contrary notwithstanding, the Company
shall not be obligated to file more than two effective registration statements
pursuant to this Section 5.01, each of which shall allow for the distribution of
Registrable Securities for at least 90 days and both of which must occur within
three years from the date hereof; provided, however, that such three years will
be extended for that amount of time that one or more registration statement are
delayed pursuant to Section 5.01(a)(ii)(E). In the event a registration
statement under this Section 5.01 does not remain effective for a period of 90
days or for such lesser period of time necessary to permit the distribution of
all of the Registrable Securities registered pursuant to a holder's request,
then the request shall not count for purposes of the limit set forth in this
paragraph (b).
(c) The Company shall pay all Registration Expenses in
connection with the registration of Registrable Securities effected by it
pursuant to this Section 5.01.
(d) In connection with any underwritten offering with respect to
which holders of Registrable Securities shall have requested registration
pursuant to this Section
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5.01, such holders shall have the right to select the managing underwriter with
respect to such offering; provided, however, if such holders select as managing
underwriter any institution other than Salomon Smith Barney, Credit Suisse First
Boston Corporation, Merrill Lynch & Co. or Morgan Stanley & Co. Incorporated
then such selection of managing underwriter shall require the consent of the
Company, which shall not be unreasonably withheld.
SECTION 5.02. Incidental Registration.
(a) If the Company at any time proposes to register (other than
pursuant to Section 5.01) any of its authorized but unissued shares of Company
Common Stock or any other shares of Company Common Stock under the Securities
Act on a form other than Form S-4, Form S-8 or pursuant to any dividend
reinvestment plan and in a manner that would permit registration of Registrable
Securities for sale to the public under the Securities Act, it shall, on each
such occasion (including the occasion of the registration effected in connection
with the 1998 Offering), give prompt written notice to all holders of
Registrable Securities of its intention to do so, describing such securities and
specifying the form and manner and the other relevant facts involved in such
proposed registration (including, without limitation, whether or not such
registration will be in connection with an underwritten offering of Company
Common Stock and, if so, the identity of the managing underwriter and whether
such offering will be pursuant to a "best efforts" or "firm commitment"
underwriting). Upon the written request of any such holder of Registrable
Securities delivered to the Company within 15 days after such notice shall have
been given to such holder (which request shall specify the Registrable
Securities intended to be disposed of by such holder and the intended method of
disposition thereof), the Company shall use its best efforts to effect the
registration under the Securities Act, as expeditiously as is reasonable, of all
Registrable Securities that the Company has been so requested to register by the
holders of Registrable Securities, to the extent required to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Registrable Securities so to be registered; provided, however, that:
(i) if, at any time after giving such written notice of its
intention to register any of such securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities, the
Company may, at its election, give written notice of such determination to each
holder of Registrable Securities that has requested to register Registrable
Securities and thereupon the Company shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection therewith
to the extent provided in Section 5.02(b)), without prejudice, however, to the
rights of any one or more holders to request such registration be effected as a
registration under Section 5.01;
(ii) if (A) the registration so proposed by the Company involves
an underwritten offering of the securities so to be registered, to be
distributed by or through one or more underwriters of recognized standing under
underwriting terms appropriate for such a transaction, and (B) the managing
underwriter of such underwritten offering
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selected by the Company shall advise the Company that, in its judgment, the
number of securities proposed to be included in such offering by the Company
(for purposes of this Section 5.02(a), "Company Securities") and the number of
shares of Registrable Securities proposed to be included in such offering by the
holder or holders thereof should be limited due to market conditions, then the
Company shall promptly advise each such holder of Registrable Securities thereof
and may require, by written notice to each such holder accompanying such advice,
that, to the extent necessary to meet such limitation, all holders of
Registrable Securities proposing to sell shares of Registrable Securities in
such offering shall share pro rata in the number of shares of Registrable
Securities to be excluded from such offering, such sharing to be based on the
respective numbers of shares of Registrable Securities as to which registration
has been requested by such holders, and that the distribution of such
Registrable Securities as are so excluded be deferred (in case of a deferral as
to a portion of such Registrable Securities, such portion to be allocated among
such holders in proportion to the respective numbers of shares of Registrable
Securities so requested to be registered by such holders) until the completion
of the distribution of such securities by such underwriters, provided, however,
that Registrable Securities shall, if requested by the Stockholders, constitute
a minimum of 20% of the total amount of shares of Company Common Stock to be
sold in any offering;
(iii) the Company shall not be obligated to effect any
registration of Registrable Securities under this Section 5.02 that is
incidental to the registration of any of its securities in connection with any
merger, acquisition, exchange offer, dividend reinvestment plan or stock option
or other employee benefit plan;
(iv) with respect to the 1998 Offering, only an Original
Stockholder may include its Registrable Securities in such offering, subject to
the other limitations of this Agreement, and the Company shall not be obligated
to effect the registration of more than 1,500,000 Registrable Securities of any
Original Stockholder pursuant to this Section 5.02.
No registration of Registrable Securities effected under this Section 5.02 shall
relieve the Company of its obligation to effect registrations of Registrable
Securities upon the request of one or more holders pursuant to Section 5.01.
(b) There shall be no registration obligation pursuant to this
Section 5.02 with respect to shares of Company Common Stock that are not
Registrable Securities.
(c) The Company shall pay all Registration Expenses in
connection with each registration of Registrable Securities effected by it
pursuant to this Section 5.02.
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SECTION 5.03. Registration Procedures.
(a) If and whenever the Company is required to use its best
efforts to effect the registration of any Registrable Securities under the
Securities Act as provided in Section 5.01 or 5.02, the Company shall:
(i) within 60 days after receiving the written request of the
holder or holders of Registrable Securities pursuant to Section 5.01(a) or
5.02(a) (or 45 days if the Company is eligible to file such registration
statement on Form S-3), prepare and file with the Commission on any appropriate
form a registration statement with respect to such Registrable Securities and
use its best efforts to cause such registration statement to become effective;
(ii) prepare and file with the Commission such amendments
(including post-effective amendments) and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary to
keep such registration statement effective and to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
and other securities covered by such registration statement until the earlier of
(A) such time as all such Registrable Securities and other securities have been
disposed of in accordance with the intended methods of disposition by the seller
or sellers thereof set forth in such registration statement and (B) the
expiration of 90 days from the date such registration statement first becomes
effective;
(iii) furnish to each seller of such Registrable Securities such
number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus included in such registration statement
(including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the Securities Act, such documents
incorporated by reference in such registration statement or prospectus, and such
other documents as such seller may reasonably request in order to facilitate the
sale or disposition of such Registrable Securities;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement under
such other securities or "blue sky" laws of such jurisdictions as each seller
shall reasonably request, and do any and all other acts and things that may be
necessary to enable such seller to consummate the disposition in such
jurisdictions of its Registrable Securities covered by such registration
statement, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified, or to subject itself to taxation in respect of
doing business in any such jurisdiction, or to consent to general service of
process in any such jurisdiction;
(v) furnish to each seller of Registrable Securities a signed
counterpart, addressed to such seller, of a "cold comfort" letter signed by the
independent public accountants who have issued a report on the Company's
financial statements included in such registration statement, covering
substantially the same matters with respect to such
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registration statement (and the prospectus included therein) and, in the case of
such accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities and, in the case of the accountants' letter, such other
financial matters as such sellers may reasonably request;
(vi) immediately notify each seller of Registrable Securities
covered by such registration statement at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing or if it is necessary to amend or supplement such prospectus to
comply with law, and at the request of any such seller prepare and furnish to
such seller a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities or securities, such prospectus shall
not include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing and shall
otherwise comply in all material respects with law and so that such prospectus,
as amended or supplemented, will comply with law;
(vii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least 12 months, beginning with the first month of the
first fiscal quarter after the effective date of such registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act;
(viii) use its best efforts to list such securities on each
securities exchange or automated quotation system on which Shares are then
listed, if such securities are not already so listed and if such listing is then
permitted under the rules of such exchange, and provide a transfer agent and
registrar for such Registrable Securities not later than the effective date of
such registration statement; and
(ix) issue to any underwriter to which any holder of Registrable
Securities may sell such Registrable Securities in connection with any such
registration (and to any direct or indirect transferee of any such underwriter)
certificates evidencing Shares without the legends described in Section 4.02.
(x) furnish counsel for the sole underwriter or lead managing
underwriter, if any, and for the holders of Registrable Securities copies of any
request by the Commission or any state securities authority for amendments or
supplements to a registration statement and prospectus or for additional
information:
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(xi) use all reasonable efforts to obtain the withdrawal of any
order suspending the effectiveness of a registration statement at the earliest
possible time;
(xii) upon request, furnish to the sole underwriter or lead
managing underwriter of an underwritten offering of Registrable Securities, if
any, without charge, at least one signed copy of each registration statement and
any post-effective amendment thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits; and
furnish to each holder of Registrable Securities, without charge, at least one
conformed copy of each registration statement and any post-effective amendment
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);
(xiii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the lead managing underwriter, if any, and the
holders of the Registrable Securities being sold) addressed to each selling
holder covering the matters customarily covered in opinions requested in sales
of securities or underwritten offerings and such other matters as may be
reasonably requested by such holders and underwriters;
(xiv) deliver such customary documents and certificates as may
be reasonably requested by any holders of the Registrable Securities being sold
or by the managing underwriters, if any;
(xv) within a reasonable time prior to the filing of any
registration statement, any prospectus, any amendment to a registration
statement or amendment or supplement to a prospectus, provide copies of such
document to the holders of Registrable Securities and to counsel to such holders
and to the underwriter or underwriters of any underwritten offering of
Registrable Securities, if any;
(xvi) within a reasonable time prior to the filing of any
document which is to be incorporated by reference into a registration statement
or a prospectus, provide copies of such document to counsel for the holders; and
make such of the representatives of the Company as shall be reasonably requested
by such counsel available for discussion of such document; and
(xvii) make "road show" presentations and hold meetings with
potential investors, each at the Company's expense, and take such other actions
as shall be reasonably requested by the holders of Registrable Securities
covered by a registration statement.
The Company may require each seller of Registrable Securities as to which any
registration is being effected to furnish the Company with such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing and as shall be required by law
or by the Commission in connection therewith.
(b) If requested by the underwriters for any underwritten
offering of Registrable Securities on behalf of a holder or holders of
Registrable Securities pursuant
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to a registration requested under Section 5.01, the Company shall enter into an
underwriting agreement with such underwriters for such offering, such agreement
to contain such representations and warranties by the Company and such other
terms and conditions as are customarily contained in underwriting agreements
with respect to secondary distributions, including, without limitation,
indemnities to the effect and to the extent provided in Section 5.06.
(c) To the extent requested and customary for the relevant
transaction, the Company shall enter into a Securities Sales Agreement with the
holders and such representative of the selling holders as holders of the
Registrable Securities covered by any Registration Statement shall choose and
providing for, among other things, the appointment of such representative as
agent for the selling holders for the purpose of soliciting purchases of
Registrable Securities, which agreement shall be customary in form, substance
and scope and shall contain customary representations, warranties and covenants.
(d) The Company agrees, if so required by the managing
underwriters in connection with an underwritten offering of Registrable
Securities pursuant to Section 5.01 or 5.02, not to effect any public sale or
distribution of any of its equity securities or securities convertible into or
exchangeable or exercisable for any of such equity securities during the 7 days
prior to and the 60 days after the effective date of any registration statement
with respect to such underwritten public offering, except as part of such
underwritten offering or except in connection with a stock option plan, stock
purchase plan, dividend reinvestment plan, savings or similar plan, or an
acquisition, merger or exchange offer or an offering pursuant to an exemption
from registration under the Securities Act.
(e) It is understood that in any underwritten offering of
Registrable Securities, in addition to the shares of Company Common Stock (the
"Initial Shares") the underwriters have committed to purchase, the underwriting
agreement may grant the underwriters an option to purchase a number of
additional shares (the "Option Shares") equal to up to 15% of the Initial Shares
(or such other maximum amount as the NASD may then permit), to cover over-
allotments. Nothing herein shall obligate the Company to provide the
underwriters such an option. Shares of Company Common Stock proposed to be sold
by the Company and the holders shall be allocated between Initial Shares and
Option Shares as agreed or, in the absence of agreement, pursuant to Section
5.02(a)(ii). The number of Initial Shares and Option Shares to be sold by
requesting holders shall be allocated pro rata among all such holders on the
basis of the relative number of Registrable Securities each such holder has
requested to be included in such registration.
SECTION 5.04. Transfer of Registration Rights. The registration
rights of the Stockholders under this Agreement with respect to any Registrable
Securities (but no other rights under this Agreement) may be transferred to any
transferee of such Registrable Securities who acquires at least 20% of such
Stockholder's shares of Registrable Securities in a transaction which does not
cause such Registrable Securities to cease to be Restricted Securities;
provided, however, that (a) transferring Stockholders shall give the Company
written notice at or prior to the time of such transfer stating the
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name and address of the transferee and identifying the securities with respect
to which the rights under this Agreement are being transferred and (b) such
transferee shall agree in writing, in form and substance reasonably satisfactory
to the Company, to be bound as a Stockholder by the provisions of this
Agreement. Any transferee of Registrable Securities shall be entitled only to
such registration rights as have not been exercised by the holder or holders of
Registrable Securities prior to the time that such transferee acquired such
Registrable Securities.
SECTION 5.05. Preparation; Reasonable Investigation.
In connection with the preparation and filing of each registration statement
registering Registrable Securities under the Securities Act, the Company shall
give the holders of Registrable Securities on whose behalf such Registrable
Securities are to be so registered and their underwriters, if any, and their
respective counsel and accountants the opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the Commission, and each amendment thereof or supplement thereto, and
shall give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have issued a report on its financial
statements as shall be necessary, in the opinion of such holders and such
underwriters or their respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
SECTION 5.06. Indemnification.
(a) In the event of any registration of any equity securities of
the Company under the Securities Act, the Company shall, and hereby does, to the
fullest extent permitted by law, indemnify and hold harmless, in the case of any
registration statement filed pursuant to Section 5.01 or 5.02 (including in
connection with the 1998 Offering), the prospective seller of any Registrable
Securities covered by such registration statement, its directors and officers,
general and limited partners (and directors and officers thereof and, if such
prospective seller is a portfolio or investment fund, its investment advisors),
each other Person who participates as an underwriter in the offering or sale of
such securities, each officer and director of each such underwriter and each
other Person, if any, who controls such prospective seller or any such
underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, against any losses, claims, damages, liabilities and
expenses, joint or several, to which such prospective seller or any such
director, officer, partner, advisor or participating or controlling Person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions or proceedings in respect
thereof) arise out of or are based upon (i) any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus included therein,
or any amendment or supplement thereto, or any document incorporated by
reference therein, or (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company shall reimburse such seller, and each
such director, officer, partner, advisor, underwriter and controlling Person for
any legal or any other expenses reasonably incurred by them in
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connection with investigating, preparing or defending against any such loss,
claim, liability, action or proceeding, whether commenced or threatened;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with (i) information concerning ERC, Eastern Resorts Company, LLC or the
Original Stockholders at any point prior to the Closing Date; provided that the
Original Stockholders shall have been provided with copies of such document
reasonably in advance of, but in no event less than 5 business days prior to,
the filing thereof, and the Company shall have made such changes as reasonably
requested by the Original Stockholders or (ii) written information furnished to
the Company for use in the preparation thereof by such prospective seller or
underwriter, as the case may be. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such prospective
seller or any such director, officer, partner, advisor, underwriter or
controlling Person and shall survive the transfer of such securities by such
prospective seller.
(b) The Company may require, as a condition to including any
Registrable Securities in any registration statement filed pursuant to Section
5.01 or 5.02, that the Company shall have received an undertaking satisfactory
to it from (i) the prospective seller of such securities, to indemnify and hold
harmless (in the same manner and to the same extent as set forth in Section
5.05(a), except that any such prospective seller shall not in any event be
liable to the Company pursuant thereto for an amount in excess of the net
proceeds of sale of such prospective seller's Registrable Securities so to be
sold) the Company, each officer and director of the Company, each such
underwriter of such securities, each officer and director of each such
underwriter and each other Person, if any, who controls the Company or any such
underwriter within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act, and (ii) each such underwriter of such securities, to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 5.05(a)) the Company, each officer and director of the Company,
each prospective seller, its directors and officers, general and limited
partners (and directors and officers thereof and, if such prospective seller is
a portfolio or investment fund, its investment advisors), and each other Person,
if any, who controls the Company or any such prospective seller within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
with respect to any statement in or omission from such registration statement,
any preliminary prospectus, final prospectus or summary prospectus included
therein, or any amendment or supplement thereto, if such statement or omission
was made in reliance upon and in conformity with written information furnished
by such prospective seller or such underwriter, as the case may be, to the
Company for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any such director, officer or controlling
Person and shall survive the transfer of such securities by such prospective
seller.
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(c) Promptly after receipt by an indemnified party of notice of
the commencement of any action or proceeding (including any governmental
investigation) involving a claim referred to in Section 5.05(a) or (b), such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding provisions of this Section 5.05, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim (in which case, the indemnifying party shall not be liable for the fees
and expenses of more than one counsel (other than local counsel) for all sellers
of Registrable Securities, or more than one counsel (other than local counsel)
for the underwriters in connection with any one action or separate but similar
or related actions), the indemnifying party will be entitled to participate in
and to assume the defense thereof, jointly with any other indemnifying party
similarly notified, to the extent that it may wish with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof.
SECTION 5.07. Contribution. If the indemnification provided for
in Section 5.05 is unavailable to the indemnified party or parties in respect of
any losses, claims, damages or liabilities referred to therein, then each such
indemnified party and the Company shall contribute to the amount of such losses,
claims, damages or liabilities (a) as between the Company and the holders of
Registrable Securities covered by a registration statement, on the one hand, and
the underwriters, on the other, in such proportion as is appropriate to reflect
the relative benefits received by the Company and such holders, on the one hand,
and the underwriters, on the other, from the offering of the Registrable
Securities or, if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits but also
the relative fault of the Company and such holders, on the one hand, and of the
underwriters, on the other, in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations, and (b) as between the Company, on the one
hand, and each holder of Registrable Securities covered by a registration
statement, on the other, in such proportion as is appropriate to reflect the
relative fault of the Company and of each such holder in connection with such
statements or omissions, as well as any other relevant equitable considerations.
The relative benefits received by the Company and such holders, on the one hand,
and the underwriters, on the other, shall be deemed to be in the same proportion
as the total proceeds from the offering (net of underwriting discounts and
commissions but before deducting expenses) received by the Company and such
holders bear to the total underwriting discounts and commissions received by the
underwriters. The relative fault of the Company and such holders, on the one
hand, and of the underwriters, on the other, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material
19
<PAGE>
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and such holders or by the underwriters. The
relative fault of the Company, on the one hand, and of each such holder, on the
other, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact relates to information
supplied by such party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the holders of Registrable Securities agree that
it would not be just and equitable if contribution pursuant to this Section 5.07
were determined by pro rata allocation (even if the underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in the next preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the next preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.07, no underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no holder of
Registrable Securities shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities of such
holder were offered to the public exceeds the amount of any damages that such
holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Each Stockholder's obligation to contribute
pursuant to this Section 5.06 is several in the proportion that the proceeds of
the offering received by such Stockholder bears to the total proceeds of the
offering received by all the Stockholders and not joint.
ARTICLE VI
CORPORATE GOVERNANCE
SECTION 6.01. Initial Board Representation . As of the fifth
business day following the Effective Time, the Company shall (a) take such
action as may be necessary to increase the size of the Board of Directors of the
Company (the "Board of Directors") to five directors, and (b) fill the vacancy
thereby created by appointing R. Perry Harris as a director .
SECTION 6.02. Continuing Board Representation. Until such time as
the Original Stockholders no longer beneficially own shares representing in the
aggregate at least 10% of the outstanding shares of Company Common Stock or 25%
of the
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Original Stockholders initial holdings, if less, the Company covenants and
agrees as follows:
(a) except as contemplated by this Agreement, as otherwise
agreed to by the Stockholders, or required by applicable law or NASD rules, the
Company shall not take or recommend to its stockholders any action which would
result in any amendment to the By-Laws of the Company in effect on the date
hereof that would impose any qualifications to the eligibility of directors of
the Company to serve on any committee of the Board of Directors;
(b) the Company shall use its best efforts to cause the
Nominating Committee of the Board of Directors (the "Nominating Committee") (or
if the Nominating Committee makes no such recommendation, the Board of
Directors) to recommend R. Perry Harris for election as a director; provided,
however, that if despite such best efforts, Mr. Harris is not elected by the
stockholders of the Company, the Company shall have no further obligations under
this Section 6.02(b) for the applicable year.
(c) Articles and By-laws; Fiduciary Duties. The obligations of
the Company set forth in this Section 6.02 are subject to compliance with the
provisions of the Company's Articles of Incorporation and the Company's By-laws,
and the fiduciary duties of the Board of Directors and the Nominating Committee
to the Company's stockholders.
(d) No Duty to Designate; Reduction of Board Representation.
Nothing contained in this Section 6.02 shall be construed as requiring the
Original Stockholders to designate any directors or, once designated and
elected, to require any director to continue to serve in office if such director
elects to resign.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Expenses. Except as otherwise provided herein, all
costs and expenses incurred in connection with the transactions contemplated by
this Agreement shall be paid by the party incurring such costs and expenses.
SECTION 7.02. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
telecopy or facsimile, by registered or certified mail (postage prepaid, return
receipt requested) or nationally recognized overnight courier service to the
respective parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
7.02):
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if to the Company:
Richard C. Breeden
Chief Executive Officer
Equivest Finance, Inc.
100 Northfield Street
Greenwich, CT 06830
Facsimile No.: (203) 618-0063
with a copy to:
Eric C. Cotton, Esq.
General Counsel
Equivest Finance, Inc.
Two Clinton Square
Syracuse, New York 13202
Facsimile No.: (315) 422-9477
if to a Stockholder:
R. Perry Harris
Eastern Resorts Company
115 Long Wharf
P.O. Box 2000
Newport, Rhode Island
Facsimile No.: (401) 846-3888
with a copy to:
Stephen R. Goldstein, Esq.
Goldstein, Kaitz & Fellman, LLP
Watermill Center
800 South Street, Suite 380
Waltham, MA 02154
Facsimile No.: (781) 894-2129
SECTION 7.03. Amendment.
(a) Any term of this Agreement may be amended and the
observance of any such term may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a writing executed
by the Company and each Stockholder.
(b) No failure or delay by any party in exercising any right,
power or privilege under this Agreement shall operate as a waiver thereof nor
shall any single or
22
<PAGE>
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 7.04. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the terms of this Agreement remain as originally contemplated to the
fullest extent possible.
SECTION 7.05. Entire Agreement; Assignment. This Agreement
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties, or any of them, with respect thereto.
Neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto (whether by operation of law or
otherwise), except that the Company may assign all or any of its rights and
obligations hereunder to any affiliate of the Company and subject to Section
5.04; provided, however, that no such assignment shall relieve the Company of
its obligations hereunder if such assignee does not perform such obligations.
SECTION 7.06. Parties in Interest. This Agreement shall be
binding upon and shall inure solely to the benefit of, and be enforceable by,
the parties hereto, the parties indemnified hereunder and their respective
successors and permitted assigns, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any person, other than the parties
hereto or their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities of any nature whatsoever under or by reason
of this Agreement.
SECTION 7.07. Specific Performance . The parties hereto agree
that irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any
other remedy at law or equity.
SECTION 7.08. Public Announcements . Each party to this Agreement
shall use its reasonable best efforts to consult with the others before issuing
any press release or otherwise making any public statements with respect to this
Agreement or any transaction contemplated herein and shall not issue any press
release or make any such public statement prior to such consultation.
SECTION 7.09. Governing Law . This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
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SECTION 7.10. Consent to Jurisdiction.
(a) Each of the Stockholders and the Company hereby irrevocably
submits to the exclusive jurisdiction of the state courts of the State of New
York and to the jurisdiction of the United States District Court for the
Southern District of New York, for the purpose of any action or proceeding
arising out of or relating to this Agreement and each of the Stockholders and
the Company hereby irrevocably agree that all claims in respect to such action
or proceeding may be heard and determined exclusively in any New York state or
federal court sitting in the Southern District of New York. Each of the
Stockholders and the Company agree that a final judgment in any action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(b) Each of the Stockholders and the Company irrevocably consent
to the service of the summons and complaint and any other process in any other
action or proceeding relating to this Agreement, on behalf of itself or its
property, by the personal delivery of copies of such process to such party.
Nothing in this Section 7.10 shall affect the right of any party to serve legal
process in any other manner permitted by law.
SECTION 7.11. Headings . The descriptive headings contained in
this Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
SECTION 7.12. Counterparts . This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 7.13. Termination . This Agreement shall terminate with
respect to any Stockholder when such Stockholder no longer owns any shares of
Company Common Stock, and with respect to all parties hereto when the
Stockholders and their affiliates, as a group, no longer own any shares of
Company Common Stock.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its officer thereunto duly authorized and each Stockholder has
caused this Agreement to be executed, or duly executed by an authorized
signatory, as of the date first written above.
EQUIVEST FINANCE, INC
By
---------------------------------------
Name: Richard C. Breeden
Title: Chairman and Chief Executive
Officer
24
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--------------------------------------
R. Perry Harris
Address:
--------------------------------------
Karen Harris
Address:
25
<PAGE>
Exhibit A
Name of Original Stockholder Number of Shares
- ---------------------------- ----------------
R. Perry Harris 3,040,000
Karen Harris 160,000
26
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EXHIBIT 3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") dated as of August 24, 1998 (the
"Effective Date"), between Eastern Resorts Corporation, a Delaware corporation
(the "Company"), and R. Perry Harris, a resident of Newport, Rhode Island (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to assure itself of the continued services of
the Executive so that it will have the benefit of his ability, experience and
services, and the Executive is willing to enter into an agreement to that end,
upon the terms and conditions hereinafter set forth; and
WHEREAS, it is hereby acknowledged that the covenants not to compete,
detailed in Section 10(b) of this Agreement, are in partial consideration for
the sale and goodwill of the Company to Equivest Finance, a Florida corporation
("Equivest").
NOW, THEREFORE, in consideration of good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
covenant and agree as follows:
1. EMPLOYMENT
The Company hereby agrees to employ the Executive, and the Executive hereby
agrees to remain in the employ of the Company, on and subject to the terms and
conditions of this Agreement.
2. TERM
The Period of the Executive's employment under this Agreement (the
"Employment Period") shall commence on the Effective Date and shall expire on
the fifth anniversary of the Effective Date. The Employment Period shall be
automatically extended for an additional year on the first anniversary of the
Effective Date and each succeeding anniversary of the Effective Date, unless
written notice of non-extension is provided by either party to the other party
at least 180 days prior to such anniversaries.
3. POSITIONS, DUTIES AND RESPONSIBILITIES
(a) The Executive shall serve as, and with the title, office and authority of,
Chief Executive Officer of the Company and the Company shall use all reasonable
efforts to ensure that for the duration of the Employment Period, the Executive
is elected or appointed to the Board of Directors of the Company (the "Board of
the Company") and to the Board of Directors of Equivest (the "Board of
Equivest").
(b) Executive shall have effective general and active day-to-day leadership and
management of the business and affairs of the Company and the
<PAGE>
subsidiaries of the Company, subject only to the authority of the Chief
Executive Officer of Equivest (the "Equivest CEO") and the Board of the Company
and shall have all of the powers, authority, duties and responsibilities usually
incident to the position and office of Chief Executive Officer of the Company.
The Executive shall report directly to the individual who holds the position the
Equivest CEO. The Equivest CEO shall nominate, after consultation with the
Executive and the approval of the Board of Equivest, such other members of the
Board of the Company as the Equivest CEO shall determine from time to time.
(c) The Executive agrees to devote all of his business time, efforts and skills
to the performance of his duties and responsibilities under this Agreement;
provided, however, that nothing in this Agreement shall preclude the Executive
- -------- -------
from devoting reasonable periods required for (i) participating in professional,
educational, philanthropic, public interest, charitable, social or community
activities, (ii) serving as a director or member of an advisory committee of any
corporation or other entity that the Executive is serving on as of the Effective
Date or serving, subject to the prior written approval of the Equivest CEO, on
the board of directors of any other corporation or entity that is not in
competition with the Company, or (iii) managing his personal investments;
provided, further, that any such activities set forth in clauses (i) through
- -------- -------
(iii) above do not interfere with the Executive's performance of his duties and
responsibilities hereunder.
(d) The Executive shall perform his duties at the principal offices of the
Company located in Newport, Rhode Island, but from time to time the Executive
will be required to travel to other locations in the proper conduct of his
responsibilities under this Agreement; provided, however, such travel will not
-------- -------
exceed, in the aggregate, three months during any calendar year during the
Employment Period.
4.
COMPENSATION AND BENEFITS
In consideration of the services rendered by the Executive during the
Employment Period, the Company shall pay or provide the Executive the
compensation and benefits set forth below.
(a) Salary. The Company shall pay the Executive a base salary (the "Base
------ ----
Salary") equal to at least $300,000 per annum. On each anniversary of the
- ------
Effective Date during the Employment Period, the Base Salary shall be increased
by the percentage increase in the Consumers Price Index for All Urban Consumers
for the twelve calendar months prior to such anniversary. In addition, the
Board may review the Base Salary with a view towards consideration of merit
increases and, once established, the Base Salary shall not be decreased during
the Employment Period. The Base Salary shall be paid in arrears in
substantially equal installments at monthly or more frequent intervals, in
accordance with the normal payroll practices of the Company.
(b) Target Annual Bonus. The Company shall provide the Executive with the
-------------------
opportunity to earn an annual target bonus (the "Target Annual Bonus") for each
-------------------
fiscal year of the Company ending during the Employment Period, however, in no
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<PAGE>
circumstances shall the Target Annual Bonus be paid where performance does not
equal the Pre-Tax Profit Target (as defined below). The Target Annual Bonus
will be payable to the Executive as follows: (i) in the event that the pre-tax
profits of the Company equals 100% of the Pre-Tax Profit Target but less than
125% of the Pre-Tax Profit Target for a given fiscal year of the Company ending
during the Employment Period, the Target Annual Bonus for such fiscal year will
be equal to 40% of the latest Base Salary in effect at or prior to the end of
such fiscal year; and (ii) in lieu of the Target Annual Bonus described in
clause (i) of this sentence, in the event that the pre-tax profits of the
Company equals or exceeds 125% of the Pre-Tax Profit Target for a fiscal year of
the Company ending during the Employment Period, the Target Annual Bonus for
such fiscal year will be equal to 60% of the latest Base Salary in effect at or
prior to the end of such fiscal year. The Pre-Tax Profit Target will be as
follows: $5.1 million for the 1998 fiscal year; $7.1 million for the 1999 fiscal
year; $9.6 million for the 2000 fiscal year; $12.5 million for the 2001 fiscal
year; and $16.2 million for the 2002 fiscal year. Pre-tax profits for a fiscal
year means the Company's income before taxes as determined in accordance with
generally accepted accounting principles. The determination of the actual
amount of pre-tax profit shall be made for each fiscal year by the Board of
Equivest and, absent any manifest error, such determination shall be final and
binding on all interested persons. Payment of the Target Annual Bonus will be
made on a date which shall be as soon as practicable after all determinations as
to Company pre-tax profits are made for a fiscal year (the "Bonus Determination
-------------------
Date"). Notwithstanding the foregoing, in the event that there is a material
- ----
change in the Company's operations for any fiscal year during the Employment
Period, including, without limitation, a material acquisition or disposition,
the Pre-Tax Profit Targets for such year and any subsequent year during the
Employment Period will be adjusted in a manner mutually agreed to by the
Executive and the Equivest CEO.
(c) Employee Benefits. The Executive shall be entitled to participate
-----------------
in all employee benefit plans, programs, practices or arrangements of the
Company in which other senior executives of the Company are eligible to
participate from time to time, including, without limitation, any qualified or
non-qualified pension, profit sharing and savings plans, any death benefit and
disability benefit plans, any medical, dental, health and welfare plans and any
stock purchase programs that are approved by the Board of the Company on terms
and conditions at least as favorable as provided to other senior executives of
the Company or Equivest. In addition, the Executive will be provided with six
weeks' paid vacation for each full fiscal year of the Company during the
Employment Period which shall be earned ratably over the course of the year but
which shall not be carried over from year to year during the Employment Period.
(d) Fringe Benefits and Perquisites. The Executive shall be entitled
-------------------------------
to all fringe benefits and perquisites that are generally made available to
senior executives of the Company from time to time that are approved by the
Board of the Company or applicable committee thereof. In addition, the Company
shall pay the monthly automobile lease payment of the lease between the
Predecessor Company and Mercedes Benz as in effect on the Effective Date until
the expiration of such automobile lease.
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5. EQUITY INCENTIVES
(a) Annual Option Grant. As soon as practicable after the end of each
-------------------
fiscal year ending during the Employment Period, as long as the Executive is
employed by the Company on that date, the Executive shall receive a grant of
stock options from Equivest covering shares of the common stock of Equivest (the
"Common Stock") based upon achievement of the Pre-Tax Profit Targets for such
fiscal year as follows: (i) if the Company reaches at least 100%, but less than
125%, of the Pre-Tax Profit Target for a fiscal year, the Executive shall
receive for such fiscal year an option covering 30,000 shares of the Common
Stock; and (ii) in lieu of the grant of options described in clause (i) of this
sentence, if the Company equals or exceeds 125% of the Pre-Tax Profit Target for
a fiscal year, the Executive shall receive for such fiscal year an option
covering 60,000 shares of the Common Stock. Options covering shares of Common
Stock shall vest and become exercisable at a rate of 20% per year for a five-
year period and options covering shares of Common Stock shall expire ten years
from their dates of grant. The exercise purchase price of an option shall be
the fair market value of a share of the Common Stock on the date of grant of the
option. All such options shall be subject to a stock option agreement entered
into between the parties hereto on terms consistent with the foregoing;
provided, however, that the options shall be effective as of the date of grant
- -------- -------
in accordance with the terms and conditions contained herein, irrespective of
whether a stock option agreement has been executed by the parties. Except as
expressly provided in Section 7(a)(iv) of this Agreement, all unvested options
shall immediately expire upon the date of the Executive's termination of
employment. No options shall be granted to the Executive after the date of his
termination of employment.
(b) Additional Equity Incentives. The Executive shall be considered, from
----------------------------
time to time, for the grant of additional stock options or other equity
incentives, but no such grant shall be required.
6. TERMINATION OF EMPLOYMENT
The Employment Period will be terminated upon the happening of any of the
following events:
(a) Resignation other than for Good Reason. The Executive may, on 90 days'
--------------------------------------
written notice to the Company, voluntarily terminate his employment hereunder
for any reason at any time including any reason that does not constitute Good
Reason.
(b) Termination for Cause. The Company may terminate the Executive's
---------------------
employment hereunder for Cause. For purposes of this Agreement, the Executive
shall be considered to be terminated for "Cause" only upon (i) the conviction of
the Executive of an act or acts that constitutes a misdemeanor involving moral
turpitude, or a felony, whether or not appeal is taken, (ii) the conviction of
the Executive for a violation of criminal law involving the Company and its
business; or (iii) the willful fraud or material dishonesty of the Executive in
connection with his performance of duties to the Company; (iv) the willful,
material and continued failure by the Executive to perform
4
<PAGE>
his duties under this Agreement; (v) a material breach by the Executive of the
provisions detailed in Section 10 of this Agreement; (vi) any material breach by
the Executive of any provision of this Agreement, or (vii) gross insubordination
or malfeasance in connection with the duties contemplated by Section 3 hereof.
However, in no event shall the Executive's employment be considered to have been
terminated for "Cause" unless and until the Executive receives a copy of a
resolution adopted by the Board finding that, in the good faith opinion of the
Board of Equivest, the Executive is guilty of acts or omissions constituting
Cause, which resolution has been duly adopted by an affirmative vote of a
majority of the Board, excluding the Executive and any individual alleged to
have participated in the acts constituting "Cause." The Executive shall have the
opportunity to cure any such acts or omissions (other than items (i) or (ii)
above) within 15 days of the Executive's receipt of such resolution.
(c) Resignation for Good Reason. The Executive may voluntarily terminate his
---------------------------
employment hereunder for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean:
(i) a material and continuing diminution in the position, title,
authority, duties or responsibilities of the Executive as contemplated by
Section 3 hereof as a result of any action by the Company or Equivest;
provided, however, that it is expressly understood and agreed that the
-------- -------
Board of Equivest and the Equivest CEO shall be entitled to give direction
to the Executive consistent with the position, title, authority, duties and
responsibilities of the Executive, and to approve or disapprove actions of
the Company, without any such direction, approval or disapproval being
deemed to be Good Reason, and that no decision of the Board of Equivest or
the Equivest CEO relating to the strategic direction of the Company,
Company investments or the deployment of the Company resources shall
constitute Good Reason;
(ii) failure of the Executive to be a member of the Board of Equivest
other than in the event that the Executive voluntarily resigns from the
Board of Equivest; provided, however, that this clause (ii) shall no longer
-------- -------
be a basis for Good Reason resignation after the date the Executive is no
longer entitled to be a member of the Board of Equivest under Article VI of
the Shareholders' Agreement.
(iii) failure of the Executive to report principally and directly to
the individual who holds the position of Equivest CEO;
(iv) the relocation of the Company's principal executive offices to a
location more than 40 miles from its current location in Newport, Rhode
Island or the location of the Executive's own office to other than the
Company's principal executive offices without the Executive's prior written
consent;
5
<PAGE>
(v) any material breach by the Company or Equivest of this Agreement;
or
(vi) any failure by the Company to obtain an assumption of this
Agreement by a successor corporation as required under Section 11(a)
hereof.
However, in no event shall the Executive be considered to have terminated
his employment for "Good Reason" unless and until the Company receives written
notice from the Executive, within 45 days of the date the Executive knows of the
events constituting Good Reason, identifying in reasonable detail the acts or
omissions constituting "Good Reason" and the provision of this Agreement relied
upon, and such acts or omissions are not cured by the Company to the reasonable
satisfaction of the Executive within 30 days of the Company's receipt of such
notice.
(d) Termination without Cause. The Company shall have the right to terminate
-------------------------
the Executive's employment hereunder other than for Cause at any time, subject
to the consequences of such termination as set forth in Section 7 of this
Agreement.
(e) Disability. The Executive's employment hereunder shall terminate upon his
----------
Disability. For purposes of this Agreement, "Disability" shall mean the
inability of the Executive to perform his duties to the Company on account of
physical or mental illness or incapacity for a period of six consecutive months
as a result of a condition that is treated as a total and permanent disability
under the long-term disability insurance policy of the Company that covers the
Executive. The Executive's employment hereunder shall be deemed terminated by
reason of Disability fifteen days following the date of written notice from the
Board of Equivest indicating the intent of the Board of Equivest to terminate
the Executive for Disability unless the Executive return to full-time employment
prior to the expiration of such fifteen-day period.
7. COMPENSATION UPON TERMINATION OF EMPLOYMENT
In the event the Executive's employment by the Company is terminated during
the Employment Period, the Executive shall be entitled to the severance payments
and benefits specified below:
(a) Resignation for Good Reason; Termination without Cause. In the event the
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Executive voluntarily terminates his employment hereunder for Good Reason or is
terminated by the Company other than for Cause, death or Disability, the Company
shall pay the Executive and provide him with the following:
(i) Accrued Rights. The Company shall pay the Executive the sum of (A)
--------------
his earned but unpaid Base Salary through the date of termination, (B) any
earned but unpaid Target Annual Bonus for any completed fiscal year that
ended prior to the date of termination, (C) any unreimbursed business
expenses or other amounts due to the Executive from the Company as of the
date of termination (the "Accrued Rights"). The Accrued Rights shall be
made in a lump sum cash
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payment, net of any required tax withholding, no later than the fifteenth
business day following the Executive's date of termination (or the
expiration of any applicable cure period, if later). In addition, the
Company shall provide to the Executive all payments, rights and benefits
due as of the date of termination under the terms of the Company's employee
and fringe benefit plans and programs in which the Executive participated
during the Employment Period in accordance with the terms of such plans and
programs.
(ii) Pro-Rata Bonus. In the event that the Executive is terminated
--------------
pursuant to Section 6(c) or 6(d) of this Agreement after June 30th of a
fiscal year in which it is subsequently determined that the applicable Pre-
Tax Profit Target had been achieved, Executive will receive, as soon as
practicable after the Bonus Determination Date, payment of a pro-rata
Target Annual Bonus the amount of which shall be equal to the Target Annual
Bonus determined according to the provisions of Section 4(b) of this
Agreement (determined as if the Executive's employment had not terminated)
multiplied by a fraction, the numerator of which shall be the number of
days in the fiscal year prior to the date of the Executive's termination of
employment and the denominator of which shall be 365.
(iii) Severance Payment. Subject to Section 10(c) of this Agreement, the
-----------------
Company shall continue to pay the Executive his Base Salary in regular
payroll installment, at a rate in effect at the time of termination of the
Executive's employment, from such date of termination of employment until
the end of the Employment Period as then in effect.
(iv) Equity. All stock options and other equity-based rights held by
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the Executive at the date of termination shall become immediately and fully
vested and exercisable, and the Executive shall retain the right to
exercise all outstanding stock options for one year from the date of such
termination.
(v) Continued Benefits. The Company shall continue to provide the
------------------
Executive and his eligible dependents with the benefits detailed in Section
4(d) of this Agreement, on the same terms and with the same level of
contributions by the Executive, that were provided to the Executive
immediately prior to termination of employment until the earlier of (i) the
expiration of the remaining Employment Period and (ii) the Executive
becoming eligible for coverage under comparable plans of a subsequent
employer.
(b) Resignation without Good Reason; Termination for Cause. In the event the
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Executive voluntarily terminates his employment hereunder other than for Good
Reason or is terminated by the Company for Cause, the Company shall pay the
Executive and provide him with any earned but unpaid Base Salary through the
date of termination, any earned but unpaid Target Annual Bonus for any completed
fiscal year that ended prior to the date of termination and any unreimbursed
business expenses due to the Executive from the Company as of the date of
termination. Upon such termination, (i) the Executive shall not be entitled to
receive, and the Company shall have no obligation to provide, any severance
payments under this Agreement, (ii) the
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Executive and his dependents shall not be entitled to receive, the Company shall
have no obligation to provide to the Executive or his dependents, any benefits
detailed in Section 4(d) of this Agreement except as required by COBRA or other
applicable law or under the terms of the applicable plans, and (iii) options
covering shares of Common stock under this Agreement, whether vested or
otherwise shall terminate immediately and shall be of no further force or
effect.
Notwithstanding the foregoing, the Company shall have the right to
terminate the Executive's employment in the event that the pre-tax profits of
the Company falls below 75% of the Pre-Tax Profit Target for the 2000 fiscal
year or 75% of the Pre-Tax Profit Target for the 2001 fiscal year (as such
targets are adjusted from time to time pursuant to Section 4(b) of this
Agreement in the event of a material change in the operations of the Company).
In such circumstances the Executive shall be entitled to such benefits,
discussed above, as would be provided to the Executive had he terminated his
employment other than for Good Reason or the Company had terminated his
employment for Cause.
(c) Disability; Death. In the event the Executive's employment
-----------------
hereunder is terminated by reason of the Executive's Disability or death, the
Company shall pay and provide the Executive (or his legal representative) with
any earned but unpaid Base Salary through the date to termination including all
disability or life insurance benefits (as applicable), any earned but unpaid
Target Annual Bonus for any completed fiscal year that ended prior to the date
of termination and any unreimbursed business expenses due to the Executive from
the Company as of the date of the Executive's Disability or death. Any options
vested as of the date of the Executive's termination of employment by reason of
Disability or death shall remain exercisable for 90 days following such date of
termination.
(d) Release. If prior to the expiration of the Employment Period, the
-------
Executive's employment is terminated for any reason, the Executive shall execute
a release in substantially the form attached hereto in Exhibit A. Any payments
due and owing to the Executive under this Agreement shall be expressly
conditional on (i) the signing and delivery of such release by the Executive to
the Company and (ii) the expiration of the seven day revocation condition
period, as detailed in the release.
8. NO MITIGATION OR OFFSET
The Executive shall not be required to seek other employment or to reduce
any severance benefit payable to him under Section 7 hereof and no such
severance benefit shall be reduced on account of any compensation received by
the Executive from other employment. The Company's obligation to pay benefits
under this Agreement shall not be reduced by any amount owed by the Executive to
the Company.
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9. TAX WITHHOLDING; METHOD OF PAYMENT
All compensation payable pursuant to this Agreement shall be subject to
reduction by all applicable withholding, social security and other federal,
state and local taxes and deductions.
10. RESTRICTIVE COVENANTS
(a) Covenant Not to Disclose Confidential Information. The Executive
-------------------------------------------------
acknowledges that during the course of his affiliation with the Company he has
or will have access to and knowledge of certain information and data related to
the Company and it affiliates which the Company considers confidential and the
release of such information or data to unauthorized persons would be extremely
detrimental to the Company or any of its affiliates. As a consequence, the
Executive hereby agrees and acknowledges that he owes a duty to the Company and
its affiliates not to disclose, and agrees that without the prior written
consent of the Company, at any time, either during or after his employment with
the Company, he will not communicate, publish or disclose, to any person
anywhere or use, any Confidential Information (as hereinafter defined), except
as may be necessary or appropriate to conduct his duties hereunder, provided the
Executive is acting in good faith and in the best interest of the Company and
its affiliates, or as may be required by law or judicial process. The Executive
will use his best efforts at all times to hold in confidence and to safeguard
any Confidential Information from falling into the hands of any unauthorized
person and, in particular, will not permit any Confidential Information to be
read, duplicated or copied. The Executive will return to the Company all
Confidential Information in the Executive's possession or under the Executive's
control whenever the Company shall so request, and in any event will promptly
return all such Confidential Information if the Executive's relationship with
the Company is terminated for any or no reason and will not retain any copies
thereof. For purposes hereof the term "Confidential Information" shall mean any
information or data used by or belonging or relating to the Company or
affiliates that is not known generally to the industry in which the Company is
or may be engaged and which the Company or any of its affiliates maintains on a
confidential basis, including, without limitation, any and all trade secrets,
proprietary data and information relating to the business and products, price
list, customer lists, processes, procedures or standards, know-how, manuals,
business strategies, records, drawings, specifications, designed, financial
information, whether or not reduced to writing, or information or data of the
Company or any of its affiliates.
(b) Covenant Not to Compete. The Executive acknowledges that he has
-----------------------
established and will continue to establish favorable relations with the
customers, clients and accounts of the Company or any of its subsidiaries and
will have access to trade secrets of the Company or any of its subsidiaries.
Therefore, in consideration of such relations and in partial consideration for
the sale and goodwill of the Company to Equivest, and to further protect trade
secrets, directly or indirectly, of the Company or any of its subsidiaries, the
Executive, and his wife Karen Harris, will not, directly or indirectly, without
the express written consent of the Equivest CEO with the approval of the Board
of Equivest:
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(i) own or have any interest in or act as an officer, director,
partner, principal, employee, agent, representative, consultant or
independent contractor of, or in any way assist in, any business which is
engaged, directly or indirectly, in the timeshare resorts or resort
development business or a timeshare resorts or resort development division
of a hotel, hospitality or other business (a) within the eastern seaboard
of the United States of America north of the northern border of South
Carolina inland to 300 miles and seaward to 300 miles from the coastal
boundaries of such eastern seaboard during the Employment Period and for a
period of seven years following the Executive's termination or resignation
of employment for any reason, and, in addition, (b) everywhere else within
the United States of America during the Employment Period and for a period
of one year following the Executive's termination or resignation of
employment for any reason:
(ii) solicit clients, customers or accounts of the Company or any of
its subsidiaries during the Employment Period and for a period of seven
years following the Executive's termination or resignation of employment
for any reason; or
(iii) solicit or in any manner influence or encourage any person who
is or shall be in the employ or service of the Company or any of its
subsidiaries to leave such employ or service for any other employment
opportunity during the Employment Period and for a period of seven years
following the Executive's termination or resignation of employment for any
reason.
Any breach of the provisions of this Section 10(b) by Karen Harris, the wife of
the Executive, shall be treated for all purposes of this Agreement as a breach
by the Executive.
(c) Equitable Relief. Recognizing the irreparable damage will result to
----------------
the Company in the event of the breach or threatened breach of any of the
foregoing covenants and assurances by the Executive contained in paragraphs (a)
or (b) hereof, and that the Company's remedies at law for any such breach or
threatened breach will be inadequate, the Company and its successors and
assigns, in addition to such other remedies which may be available to them,
shall be entitled to an injunction, including a mandatory injunction, to be
issued by any court of competent jurisdiction ordering compliance with this
Agreement or enjoining and restraining the Executive, and each and every person,
firm or Company acting in concert or participation with him, from the
continuation of such breach and, in addition thereto, he shall pay to the
Company all ascertainable damages, including costs and reasonable attorneys'
fees sustained by the Company by reason of the breach or threatened breach of
said covenants and assurances. In the event of a breach of the said covenants
and assurances, options covering shares of Common Stock under this Agreement,
whether vested or otherwise, shall terminate immediately and shall be of no
further force or effect and any rights to future severance payments, discussed
in Section 7 of this Agreement, shall be immediately forfeited. The obligations
of the Executive and the rights of the Company, its successors and assigns
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under Section 10 of this Agreement shall survive the termination of this
Agreement. The covenants and obligations of the Executive set forth in Section
10 hereof are in addition to and not in lieu of or exclusive of any other
obligations and duties of the Executive to the Company, whether express or
implied in fact or in law. In the event that there is a judicial determination
that there has been no breach of the covenants and assurances contained in
paragraphs (A) and (b) hereof, any severance payments or options forfeited
pursuant to this Section 10(c) shall be immediately reimbursed or reinstated to
the Executive.
11. SUCCESSORS
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns and any person, firm,
corporation or other entity which succeeds to all or substantially all of the
business, assets or property of the Company. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business, assets or property of
the Company, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, the "Company"
shall mean the Company as hereinbefore defined and any successor to its
business, assets or property as aforesaid which executes and delivers an
agreement provided for in this Section 11 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amounts are due
and payable to him hereunder, all such amounts, unless otherwise provided
herein, shall be paid to the Executive's designated beneficiary or, if there be
no such designated beneficiary, to the legal representatives of the Executive's
estate.
12. NO ASSIGNMENT.
Except as to withholding of any tax under the laws of the United States
or any other country, state or locality, neither this Agreement nor any right or
interest hereunder nor any amount payable at any time hereunder shall be subject
in any manner to alienation, sale, transfer, assignment, pledge, attachment, or
other legal process, or encumbrance of any kind by the Executive or the
beneficiaries of the Executive or by his legal representatives without the
Company's prior written consent, nor shall there be any right of set-off or
counterclaim in respect of any debts or liabilities of the Executive, his
beneficiaries or legal representatives; provided, however, that nothing in this
Section 12 shall preclude the Executive from designating a beneficiary to
receive any benefit payable on his death, or the legal representatives of the
Executive from assigning any rights hereunder to the person or persons entitled
thereto under his will
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or, in case of intestacy, to the person or persons entitled thereto under the
laws of intestacy applicable to his estate.
13. ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof and, except as specifically provided
herein, cancels and supersedes any and all other agreements between the parties
with respect to the subject matter hereof. Any amendment or modification of
this Agreement shall not be binding unless it is approved in writing by the
Equivest CEO and is in writing and signed by the Company and the Executive.
14. SEVERABILITY
If a final judicial determination is made that any provision of this
Agreement is an unenforceable restriction against the Executive, the provision
hereof shall be rendered void on the extent that such judicial determination
finds such provisions unenforceable, and such unenforceable provisions shall
automatically be reconstructed and become a part of this Agreement, effective as
of the date first written above, to the maximum extent in favor of the Company
that is lawfully enforceable and such provision shall then be enforceable and
shall be enforced. A judicial determination that any provision of this
Agreement is unenforceable shall in no instance render the entire Agreement
unenforceable, but rather the Agreement will continue in full force and effect
absent any unenforceable provision to the maximum extent permitted by law.
15. NOTICES
All notices which may be necessary or proper for either the Company or the
Executive to give to the other shall be in writing and shall be delivered by
hand or sent by registered or certified mail, return receipt requested, or by
air courier, to the following addresses:
if to the Executive: R. Perry Harris
Eastern Resorts Company
115 Long Wharf
P.O. Box 2000
Newport, Rhode Island 02840
Facsimile No.: (401) 846-3888
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with a copy to: Stephen R. Goldstein, Esq.
Goldstein, Kaitz & Fellman, LLP
800 South Street, Suite 380
Waltham, MA 02453
Facsimile No.: (781) 894-2129
if to the Company: Chief Executive Officer
Equivest Finance, Inc.
Two Clinton Square
Syracuse, New York 13202
Facsimile No.: (315) 422-9477
with a copy to: Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Linda C. Quinn, Esq.
Facsimile No.: (212) 848-7179/80/81/82
Notices shall be deemed given when sent, provided that any notice required under
Section 6 hereof or notice given pursuant to Section 2 hereof shall be deemed
given only when received. Any party may by like notice to the other party
change the address at which he or they are to receive notices hereunder.
16. GOVERNING LAW
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York applicable to
contracts entered into and performed in such state.
17. GUARANTEE
By execution of this Agreement, Equivest hereby agrees to guarantee the
performance by the Company of all of its obligations under this Agreement. The
Executive may not seek payment from Equivest under this Section 17 unless (i)
the Company fails to pay the Executive an amount which the Executive is owed
under this Agreement by the date on which it is due: (ii) the Executive makes a
written demand for a payment under this Agreement to the Company following the
due date of such payment; and (iii) the amount of such payment is not paid to
the Executive within 45 days of the date such written demand is delivered to the
Company.
18. LEGAL FEES
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In the event of any controvercy or claim arising out of, or relating to
this Agreement, or the breach thereof, the losing party shall bear the cost of
all reasonable attorney fees and expenses of both parties.
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IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date first above written.
EXECUTIVE
________________________________
R. PERRY HARRIS
ERC ACQUISITION CORP.
_____________________________
By:
Title:
EQUIVEST FINANCE, INC. (solely in it's capacity
for purposes of granting options covering shares
of Common Stock of Equivest Finance, Inc. and in
it's capacity outlined in Section 17 of this
Agreement)
____________________________
BY:
TITLE:
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EXHIBIT A
RELEASE
In exchange for the payments and other benefits described in the
attached Employment Agreement dated August 24, 1998 (the "Agreement"), and on
the expiration of the seven day revocation period, during which I may, at any
time, revoke this release, I hereby release Eastern Resorts Corporation (the
"Company), Equivest Finance, Inc. and any of their respective divisions,
affiliates, subsidiaries, parents, predecessors, successors, assigns, officers,
directors, trustees, employees, agents, stockholders, administrators,
representatives, attorneys, insurers and fiduciaries, past, present and future,
and Richard C. Breeden or any subsequent Chief Executive Officer of Equivest
Finance, Inc. (collectively, the "Released Parties"), from any and all claims of
any kind which I now have or may have against the Released Parties, whether
known or unknown to me, by reason of facts which have occurred on or prior to
the date that I have signed this Release (except a claim for the payments,
options and benefits described in the Agreement or any claims for
indemnification under the By-Laws of the Company as a result of my services as
an officer and director of the Company). Such released claims include, without
limitation, any and all claims and federal, state or local laws pertaining to
employment, including the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000c et seq., the Fair
-- ---
Labor Standards Act, as amended, 29 U.S.C. Section 201 et seq., the Americans
-- ---
with Disabilities Act, as amended, 42 U.S.C. Section 1201 et seq., the
-- ---
Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981 et seq.,
-- ---
the Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701 et seq., the
-- ---
Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601 et seq., the New
-- ---
York State Human Rights Law, N.Y. Exec. Law, Section 296 et seq., and any and
-- ---
all state or local laws regarding employment discrimination and/or federal,
state or local laws of any type or description regarding employment, including,
but not limited to, any claims arising from or derivative of my employment with
the Company, as well as any and all claims under state contract or tort law.
I have read this release carefully, acknowledge that I have been given
at least 21 days to consider all of its terms, and have been advised to consult
with an attorney and any other advisors of my choice prior to executing this
Release, and I fully understand that by signing below I am voluntarily giving up
any right which I may have to sue or bring any other claims against the Released
Parties, including any rights and claims under the Age Discrimination in
Employment Act. I also understand that I have a period of 7 days after signing
this Release within which to revoke my agreement, and that neither the Company
nor any other person is obligated to make any payments or provide any other
benefits to me pursuant to the attached Agreement until 8 days have passed since
my signing of this Release without my signature having been revoked. Finally, I
have not been forced or pressured in any manner whatsoever to sign this Release,
and I agree to all of its terms voluntarily,
This Release, and the attached Agreement, are final and binding and
may not be changed or modified except in a writing signed by both parties.
[date] [signature]
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