Exhibit 10.7
SEVERANCE
AGREEMENT
THIS SEVERANCE AGREEMENT
(“Agreement”) is entered into by and between John A.
Galea (“Executive”) and Interval Acquisition Corp., a
Delaware corporation (the “Company”), and is effective
as of July 31, 2008 (the “Effective
Date”).
WHEREAS, Executive is currently an
at-will employee of the Company; and
WHEREAS, the Company and Executive
have agreed that Executive shall be entitled to receive certain
severance payments upon the termination of Executive’s
employment by the Company for any reason other than
Executive’s death or Disability or for Cause (as described
below).
NOW, THEREFORE, in consideration of
the mutual agreements hereinafter set forth, Executive and the
Company have agreed and do hereby agree as follows:
1.
TERMINATION BY THE COMPANY OTHER
THAN FOR DEATH, DISABILITY OR CAUSE .
(a)
If Executive’s employment is
terminated by the Company for any reason other than
Executive’s death or Disability or for Cause (a
“Qualifying Termination”) then (i) the Company
shall pay to Executive an amount equal to twelve (12) months
of Base Salary, which amount shall be payable in equal, biweekly
installments (or, if different, in accordance with the
Company’s payroll practice as in effect from time to time)
during the twelve (12)-month period following such Qualifying
Termination (the “Severance Period”); and (ii) the
Company shall pay Executive within thirty (30) days of the date of
such Qualifying Termination in a lump sum in cash any Accrued
Obligations (as defined below) (together, the “Severance
Payments”). The payment to Executive of the Severance
Payments shall be subject to Executive’s execution and
non-revocation of a general release of the Company and its
affiliates, in a form substantially similar to that used for
similarly situated executives of the Company and its affiliates
(the “Release”), and Executive’s compliance with
the restrictive covenants set forth in Section 3 hereof.
Executive acknowledges and agrees that the Severance Payments
constitute good and valuable consideration for the
Release.
(b)
For purposes of this Agreement, the
terms “Base Salary”, “Cause” and
“Accrued Obligations,” and the phrase
“termination by the Company for Disability,” shall have
the following meanings:
(i)
“Base Salary” shall mean
Executive’s Base Salary as in effect from time to time during
his employment by the Company;
(ii)
“Accrued Obligations”
shall mean the sum of (A) any portion of Executive’s
accrued but unpaid Base Salary through the date of death or
termination of Executive’s employment for any reason,
including a Qualifying Termination; (B) any compensation
previously earned but deferred by Executive (together with any
interest or earnings thereon) that has not yet been paid and that
is not otherwise to be paid at a later date pursuant to
the executive deferred compensation plan of the
Company, if any, and (C) any reimbursements that Executive is
entitled to receive in accordance with applicable Company policies
in effect from time to time;
(iii)
“Cause” shall mean:
(A) the plea of guilty or nolo contendere to, or conviction
for, the commission of a felony offense by Executive; (B) a
material breach by Executive of a fiduciary duty owed to the
Company; (C) a material breach by Executive of any of the
covenants made by Executive in Section 3 hereof; (D) the
willful or gross neglect by Executive of his material duties; or
(E) a violation by Executive of any Company policy pertaining
to ethics, wrongdoing or conflicts of interest; and
(iv)
“termination by the Company
for Disability” shall mean the termination of
Executive’s employment by the Company following
(A) Executive’s absence from the full-time performance
of his duties with the Company for a period of four
(4) consecutive months as a result of Executive’s
incapacity due to physical or mental illness
(“Disability”) and (B) Executive’s failure
to return to the full-time performance of his duties within thirty
(30) days after written notice is provided to Executive by the
Company.
(c)
Upon any termination of
Executive’s employment other than a Qualifying Termination,
the Company shall have no obligations hereunder, except for the
payment of any Accrued Obligations.
2.
OFFSET . If Executive obtains other employment during
the Severance Period, the amount of any remaining Severance
Payments to be provided to Executive shall be reduced by the amount
of compensation and benefits earned by Executive from such other
employment through the end of the Severance Period. For purposes of
this Section 2, Executive shall have an obligation to inform
the Company regarding Executive’s employment status following
a Qualifying Termination and during the Severance
Period.
3.
RESTRICTIVE COVENANTS
.
(a)
CONFIDENTIALITY
. Executive acknowledges that,
during his employment by the Company, Executive will occupy a
position of trust and confidence. The Company and/or its affiliates
shall provide Executive with “Confidential Information”
as referred to below. Executive shall not, except as may be
required to perform Executive’s duties or as required by
applicable law, without limitation in time, communicate, divulge,
disseminate, disclose to others or otherwise use, whether directly
or indirectly, any Confidential Information regarding the Company
and/or any of affiliates.
“Confidential
Information” shall mean information about the Company or any
of its affiliates, and their respective businesses, employees,
consultants, contractors, clients and customers that is not
disclosed by the Company or any of its affiliates for financial
reporting purposes or otherwise generally made available to the
public (other than by Executive’s breach of the terms hereof)
and that was learned or developed by Executive in the course of his
employment by the Company or any of its affiliates, including
(without limitation) any proprietary knowledge, trade secrets,
data, formulae, information and client and customer
lists
2
and all papers, resumes, and records (including
computer records) of the documents containing such Confidential
Information. Executive acknowledges that such Confidential
Information is specialized, unique in nature and of great value to
the Company and its affiliates, and that such information gives the
Company and its affiliates a competitive advantage. Executive
agrees to deliver or return to the Company, at the Company’s
request at any time or upon termination of Executive’s
employment or as soon thereafter as possible, all documents,
computer tapes and disks, records, lists, data, drawings, prints,
notes and written information (and all copies thereof) furnished by
the Company and its affiliates or prepared by Executive in the
course of Executive’s employment by the Company and its
affiliates. As used in this Agreement, “subsidiaries”
and “affiliates” shall mean any company controlled by,
controlling or under common control with the Company.
(b)
NON-COMPETITION.
In consideration of the
Company’s obligation to make the Severance Payments under
certain circumstances (as described in
Section 1(a) above) and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by Executive, Executive hereby agrees and covenants
that, during Executive’s employment by the Company and for a
period of twenty-four (24) months thereafter (the “Restricted
Period”), Executive shall not, without the prior written
consent of the Company, directly or indirectly, engage in or become
associated with a Competitive Activity. For purposes of this
Agreement, (i) “Competitive Activity” means any
business or other endeavor involving Similar Products if such
business or endeavor is in a country (including the United States)
in which the Company (or any of its businesses) provides or planned
to provide during Executive’s employment by the Company such
Similar Products and (ii) “Similar Products” means
(A) any time share or vacation ownership exchange service or
program (the “Exchange Business”); (B) any travel
agency, club or service that provides such services to anyone
engaged in the Exchange Business or their members; (C) any
travel agency, club or service that is competitive with the
Company’s travel and leisure membership programs, including,
but not limited - to, the Interval Gold, Leisure Time
Passport or LiveItUp membership programs; (D) hotel management or
vacation condominium, hotel condominium, timeshare or rental
property management services; or (E) any other products or
services that are the same or similar to any of the types of
products or services that the Company (or any of its businesses)
provides, has provided or planned to provide during
Executive’s employment by the Company. The provisions of
subsections (b)(ii)(B) through (E) shall only apply if
Executive has provided services on behalf of the Company or its
affiliates in direct support of the businesses described in such
subsections.
Executive shall be considered to
have become “associated with a Competitive Activity” if
Executive becomes directly or indirectly involved as an owner,
principal, employee, officer, director, independent contractor,
representative, stockholder, financial backer, agent, partner,
member, advisor, lender, consultant or in any other individual or
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