EXHIBIT 10.1
CONSULTING AGREEMENT
THIS AGREEMENT is made as of October 6, 2002, by and between JOSEPH V.
VITTORIA ("VITTORIA"), and RESORTQUEST INTERNATIONAL, INC. (the "COMPANY").
WITNESSETH:
WHEREAS, Vittoria was previously appointed a director of the Company in
May 1998, and in connection with such appointment, Vittoria has been awarded
options to purchase 25,000 shares of the Company's common stock.
WHEREAS, the Company has now elected Vittoria as its Chairman of the
Board and the Company desires to have Vittoria provide additional services to
the Company while acting as its Chairman.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. Services. Vittoria hereby agrees to provide the Company with
consulting or advisory services in connection with the business and operations
of the Company. Vittoria shall advise the Company regarding various matters
relating to the general management and affairs of the Company, including,
without limitation, financial management issues, capital and strategic planning,
management development, succession planning, investor relations, and such other
matters as the Board of Directors may require or assign. Vittoria agrees to
devote such time, energy and efforts to the business of the Company as shall be
reasonably necessary to carry out the purposes of his engagement.
2. Consulting Fee. As the sole compensation for the services to be
provided hereunder, on the date hereof, the Company will grant to Vittoria
options to purchase 180,999 shares of common stock (the "COMMON STOCK") of the
Company. Upon availability under the Company's Amended and Restated 1998
Long-Term Incentive Plan (the "INCENTIVE PLAN"), as determined by the
Compensation Committee of the Board of Directors, the Company will grant to
Vittoria options to purchase 69,001 shares of Common Stock (collectively, the
"STOCK OPTION"). The Stock Option shall be exercisable at the fair market value
of the Common Stock, as determined by the Company's Board of Directors, on the
date of grant. The Stock Option shall have a term of five years and shall vest
in equal portions over a three year period. Upon the occurrence of a Change of
Control (as defined in the option agreement between Vittoria and the Company),
all unvested options shall accelerate and immediately vest, and remain
exercisable for a period of 90 days following the Change of Control. Upon any
termination of Vittoria's engagement as Chairman of the Board, any unvested
stock options shall revert back to the Company, in accordance with the terms of
the Incentive Plan.
3. Expenses. The Company shall pay for or reimburse to Vittoria, in
accordance with the Company's policies and procedures, any reasonable and
customary out-of-pocket expenses incurred by Vittoria in connection with
providing the consultation services pursuant hereto.
4. Independent Contractor. Vittoria agrees and understands that,
pursuant to the terms of this Agreement, Vittoria is an independent contractor
and not an employee, partner, or joint venturer of the Company. The Company will
not pay, or withhold, any federal, state, local, city, or other payroll or
employment taxes, including but not limited to FICA, state and federal income
taxes, state disability insurance taxes, or state unemployment insurance taxes
relating to income received by Vittoria from the Company pursuant to this
Agreement. Vittoria agrees to indemnify and hold the Company harmless against
any claim related to any such taxes made by any governmental authority.
5. Covenants.
(a) Vittoria and the Company understand and agree that the
purpose of the provisions of this Section 5 is to protect legitimate business
interests of the Company, as more fully described below, and is not intended to
impair or infringe upon Vittoria's right to work, earn a living, or acquire and
possess property from the fruits of his labor. Vittoria hereby acknowledges that
the post-consulting restrictions set forth in this Section 5 are reasonable and
that they do not, and will not, unduly impair his ability to earn a living after
the termination of this Agreement. Therefore, subject to the limitations of
reasonableness imposed by law upon restrictions set forth herein, Vittoria shall
be subject to the restrictions set forth in this Section 5.
(b) The following capitalized terms used in this Section 5
shall have the meanings assigned to them below, which definitions shall apply to
both the singular and the plural forms of such terms:
"CONFIDENTIAL INFORMATION" means any confidential or proprietary
information possessed by the Company, including, without limitation,
any confidential "know-how," customer lists, details of client and
consultant contracts, current and anticipated customer requirements,
pricing policies, price lists, market studies, business plans,
operational methods, marketing plans or strategies, product development
techniques or plans, computer software programs (including object code
and source code), data and documentation, data base technologies,
systems, structures and architectures, inventions and ideas, past,
current and planned research and development, compilations, devices,
methods, techniques, processes, financial information and data,
business acquisition plans, new personnel acquisition plans and any
other information that would constitute a trade secret under the common
law or statutory law of the State of Tennessee.
"PERSON" means any individual or any corporation, partnership, joint
venture, association or other entity or enterprise.
"RESTRICTED PERIOD" means the period of Vittoria's consulting for the
Company plus a period extending one (1) year from the date of
termination of this Agreement; provided, however, the Restricted Period
shall be extended for a period equal to the time during which Vittoria
is in breach of his obligations to the Company under this Section 5.
2
"RESTRICTIVE COVENANTS" means the restrictive covenants contained in
Section 5(c) hereof:
(c) Restrictive Covenants.
(i) Vittoria understands and agrees that the
Confidential Information constitutes a valuable asset of the Company
and its affiliated entities, and may not be converted to Vittoria's own
use or converted by Vittoria for the use of any other Person.
Accordingly, Vittoria hereby agrees that Vittoria shall not, directly
or indirectly, at any time during the Restricted Period or thereafter,
reveal, divulge or disclose to any Person not expressly authorized by
the Company any Confidential Information, and Vittoria shall not, at
any time during the Restricted Period or thereafter, directly or
indirectly, use or make use of any Confidential Information in
connection with any business activity other than that of the Company.
The parties acknowledge and agree that this Agreement is not intended
to, and does not, alter either the Company's rights or Vittoria's
obligations under any state or federal statutory or common law
including, without limitation, any state or federal statutory or common
law regarding trade secrets and unfair trade practices.
(ii) Vittoria shall not, during the Restricted
Period, directly or indirectly, for himself or on behalf of or in
conjunction with any other Person, (x) engage, as an officer, director,
shareholder, owner, partner, joint venturer or in a managerial capacity
whether as an employee, independent contractor, consultant or advisor,
or as sales representative, in any noncommercial property management,
rental or sales business or hotel management business in direct
competition with the Company or any subsidiary of the Company, within
one hundred (100) miles of the locations in which the Company or any of
the Company's subsidiaries conducts any noncommercial property
management, rental or sales business or hotel management business (the
"TERRITORY"), or (y) call upon any Person which is at that time, or
which has been, within one (1) year prior to that time, a customer of
the Company (including the subsidiaries thereof) within the Territory
for the purpose of providing noncommercial property management, rental
or sales services to property owners and/or renters in direct
competition with the Company or any subsidiary of the Company within
the Territory. The foregoing shall not be deemed to prohibit Vittoria
from acquiring as an investment not more than two percent (2%) of the
capital stock of a competing business whose stock is traded on a
national securities exchange or over-the-counter.
(iii) All records, designs, patents, business plans,
financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Vittoria by or on behalf of the Company or
its representatives, vendors or customers which pertain to the business
of the Company shall be and remain in the property of the Company and
be subject at all times to its discretion and control. Likewise, all
correspondence, reports, records, charts, advertising materials and
other similar data pertaining to the business, activities or future
plans of the Company which is collected by Vittoria shall be delivered
promptly to the Company without request by it upon termination of this
Agreement.
3
(d) Anything herein to the contrary notwithstanding, Vittoria
shall not be restricted from disclosing or using Confidential Information that:
(i) is or becomes generally available to the public
other than as a result of an unauthorized disclosure by Vittoria or his
agent;
(ii) becomes available to Vittoria in a manner that
is not in contravention of applicable law from a source (other than the
Company or its affiliated entities or one of its or their officers,
employees, agents or representatives) that is not known by Vittoria,
after reasonable investigation, to be bound by a confidential
relationship with the Company or its affiliated entities or by a
confidentiality or other similar agreement; or
(iii) is required to be disclosed by law, court order
or other legal process; provided, however, that in the event disclosure
is required by law, court order or legal process, Vittoria shall
provide the Company with prompt notice of such requirement so that the
Company may seek an appropriate protective order prior to any such
required disclosure by Vittoria.
(e) Enforcement of the Restrictive Covenants.
(i) In the event Vittoria breaches, or threatens to
commit a breach of, any of the provisions of the Restrictive Covenants,
the Company shall have the right and remedy to enjoin, preliminarily
and permanently, Vittoria from violating or threatening to violate the
Restrictive Covenants and to have the Restrictive Covenants
specifically enforced by any court of competent jurisdiction, it being
agreed that any breach or threatened breach of the Restrictive
Covenants would cause irreparable injury to the Company and that money
damages would not provide an adequate remedy to the Company. The rights
referred to herein shall be independent of any others and severally
enforceable, and shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company at law or in equity.
(ii) Vittoria acknowledges and agrees that the
Restrictive Covenants are reasonable and valid in all respects. If any
court determines that any Restrictive Covenant, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants
shall not thereby be affected and shall be given full effect, without
regard to the invalid portions.
6. Representation, Warranty and Covenant of Vittoria. Vittoria
represents, warrants and covenants that he neither has, nor will enter into
during the term of this Agreement, any contractual or other arrangement that
conflicts with, or would cause a breach of, or would limit his ability to
perform under, this Agreement and that the execution of this Agreement by
Vittoria and his election as Chairman of the Board and the performance of his
duties under this Agreement does not and will not violate or conflict with any
oral or written agreement with, or other duty owed to, a former employer, client
or any other person.
4
7. Term. This Agreement shall become effective as of the date hereof
and shall terminate (i) upon 30 days prior written notice of termination
provided by either party to this Agreement to the other party or (ii) the death
of Vittoria. Notwithstanding the termination of this Agreement for any reason,
Section 5 shall remain in full force and effect in accordance with its terms.
8. Assignment. Neither this Agreement nor any interest herein may be
assigned, delegated or otherwise transferred, in whole or in part, by any party
hereto without the prior written consent of the Company.
9. Notices. Any notice, request, demand, approval or other
communication which is required or permitted to be given hereunder shall be in
writing and shall be deemed given if delivered personally or sent by telegram or
telecopy (with transmission confirmed) or by certified or registered mail,
return receipt requested with postage prepaid, or by Federal Express or
equivalent overnight delivery service, addressed to the parties as follows:
If to the Company: ResortQuest International, Inc.
530 Oak Court Drive
Suite 360
Memphis, TN 38117
Attn: General Counsel
Facsimile: (901) 762-0635
with a copy to: Akin Gump Strauss Hauer & Feld LLP
1333 New Hampshire Avenue
Washington, DC 20036
Attn: Paul A. Belvin
Facsimile: (202) 887-4288
If to Vittoria: Joseph V. Vittoria
1616 South Ocean Boulevard
Palm Beach, FL 33480
or at such other address or telecopier or telephone number as either party may
designate in writing to the other party in accordance with the provisions of
this Section 9. Such notice, request, demand, approval or other communication
shall be deemed to have been given as of the date so delivered, telegraphed or
telecopied, or on the fifth day after deposit in the United States mail, or on
the second day after deposit with Federal Express or an equivalent overnight
delivery service.
10. Severability. If any part, term or provision of this Agreement is
held void, illegal, unenforceable or in conflict with any law of a state or
government having jurisdiction over this Agreement, the validity of the
remaining portions of such provisions shall not be affected thereby.
5
11. Entire Agreement. This Agreement constitutes the entire Agreement
among the parties hereto relating to the subject matters hereof and these
provisions shall supersede or replace any conflicting or additional provisions
which may be contained in any oral or written negotiations or any other writing,
document or the like in relation to the subject matter hereof. No provision of
this Agreement shall be deemed waived, amended or modified by any party unless
such waiver, amendment or modification be in writing and signed by the party
against whom such waiver, amendment or modification will be enforced. The
Agreement shall not be modified or altered by any subsequent course of
performance by and among the parties.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee notwithstanding any choice of
law principles to the contrary.
13. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14. Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and the
same instrument.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
6
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement on the date first above written.
RESORTQUEST INTERNATIONAL, INC.
By:
-----------------------------------
Name: James S. Olin
Title: President and Chief Executive Officer
----------------------------------------
JOSEPH V. VITTORIA
7