EX-10(X)



 





Exhibit 10(x)



CHANGE OF CONTROL AGREEMENT




     AGREEMENT by and between Sea Pines Associates, Inc., a South Carolina
corporation (the “Company”), and Steven P. Birdwell (the “Executive”), dated as
of March 9, 2004.



     WHEREAS, any potential Change of Control (as defined below) of the Company
would create substantial uncertainty and anxiety among key executives
concerning the possibility of adverse changes in position or loss of
employment; and



     WHEREAS, that uncertainty and anxiety would inevitably detract from the
performance of the executive team and increase the risk of unwanted loss of key
executives; and



     WHEREAS, the Board of Directors of the Company (the “Board”) has
determined that it is in the best interests of the Company and its shareholders
to reduce the risk of those adverse consequences, and has adopted appropriate
policies aimed at safeguarding the economic interests of key executives and the
shareholders in the event of a Change of Control; and



     WHEREAS, a Change of Control Agreement is to be executed with each key
executive covered by these policies;



     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:



     1. Certain Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:



     (a) “AFR” shall mean the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.



     (b) “Board” shall have the meaning set forth in the recitals to this
Agreement.



     (c) “Business Combination” shall have the meaning set forth in Section
1(e)(iii).



     (d) “Cause” shall mean the willful engaging by the Executive in illegal
conduct or gross misconduct which is materially and demonstrably injurious to
the Company. For purposes of this provision, no act, or failure to act, on the
part of the Executive shall be considered “willful” unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief
that the Executive’s action or omission was in the best interests of the
Company. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions of a senior
officer of the Company who is senior to the Executive or based upon the advice
of counsel for the Company shall be conclusively presumed to be done, or
omitted to be done, by the Executive in good faith and in the best interests of
the Company. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Board at a meeting of
the Board called and held for such purpose (after reasonable notice is provided
to the



 









 







Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described above, and specifying
the particulars thereof in detail.



     (e) “Change of Control” shall mean:



          (i) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of
either (A) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this Section 1(e)(i), the following
acquisitions shall not constitute a Change of Control: (W) any acquisition
directly from the Company or any corporation controlled by the Company, (X) any
acquisition by the Company or any corporation controlled by the Company, (Y)
any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (Z)
any acquisition by any corporation pursuant to a transaction which complies
with clauses (A), (B) and (C) of Section 1(e)(iii); or



          (ii) That individuals who, as of the date hereof, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or



          (iii) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company or
the acquisition of assets of another corporation (a “Business Combination”), in
each case, unless, following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the
then outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related



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trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 50% or more of,
respectively, the then outstanding shares of common stock or the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries) except to the extent that such ownership existed prior to
the Business Combination and (C) at least a majority of the members of the
board of directors of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or



          (iv) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.



     (f) “Change of Control Period” shall mean the period commencing on the
Effective Date and ending on the first anniversary of the Effective Date.



     (g) “Code” shall mean the Internal Revenue Code of 1986, as amended.



     (h) “Company” shall have the meaning set forth in the recitals to this
Agreement.



     (i) “Date of Termination” means (i) if the Executive’s employment is
terminated by the Company for Cause, or by the Executive for Good Reason, the
date of receipt of the Notice of Termination or any later date specified
therein, as the case may be and (ii) if the Executive’s employment is
terminated by the Company other than for Cause, the Date of Termination shall
be the date on which the Company notifies the Executive of such termination.



     (j) “Effective Date” shall mean the first date on which a Change of
Control occurs. If a Change of Control occurs and the Executive’s employment
with the Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment arose in connection with or anticipation of a Change
of Control, then “Effective Date” shall mean the date immediately prior to the
date of such termination of employment.



     (k) “Exchange Act” shall have the meaning set forth in Section 1(e)(i).



     (l) “Executive” shall have the meaning set forth in the recitals to this
Agreement.



     (m) “Good Reason” shall mean:



          (i) a reduction by the Company of five percent or more in the Executive’s
annual base salary in effect immediately prior to the Effective Date;



          (ii) the Company requiring the Executive to be based at a location more
than 75 miles from the location at which he is based immediately prior to the
Effective Date (except



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for required travel which is substantially consistent with travel obligations
as of the date of this Agreement);



          (iii) the failure by the Company to pay the Executive any portion of the
Executive’s current compensation within seven days of the date such
compensation is due, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;



          (iv) the failure by the Company to continue any material benefit plan in
which the Executive participates immediately prior to the Effective Date
(unless the failure did not occur in bad faith and is remedied by the Company,
promptly after receipt of notice thereof given by the Executive, by the Company
providing an equitable arrangement with respect to such plan);



          (v) any purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement; or



          (vi) any failure by the Company to comply with and satisfy Section 7(c) of
this Agreement.



     For purposes of this Section 1(m), any good faith determination of “Good
Reason” made by the Executive shall be conclusive.



     (n) “Incumbent Board” shall have the meaning set forth in Section
1(e)(ii).



     (o) “Notice of Termination” means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under
the provision so indicated and (iii) if the Date of Termination is other than
the date of receipt of such notice, specifies the termination date (which date
shall be not more than 30 days after the giving of such notice). The failure
by the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of the Executive or the Company, respectively,
hereunder or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.



     (p) “Outstanding Company Common Stock” shall have the meaning set forth
in Section 1(e)(i).



     (q) “Outstanding Company Voting Securities” shall have the meaning set
forth in Section 1(e)(i).



     (r) “Person” shall have the meaning set forth in Section 1(e)(i).



     2. Termination for Cause or Good Reason; Notice of Termination. The
Company may terminate the Executive’s employment with the Company during the
Change of Control



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Period for Cause and the Executive may terminate employment during the Change
of Control Period for Good Reason. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto in accordance with Section 8(b) of this
Agreement.



     3. Obligations of the Company upon Termination. (a) Good Reason; Without
Cause. If, during the Change of Control Period, the Company shall terminate
the Executive’s employment without Cause or the Executive shall terminate
employment for Good Reason:



          (i) the Company shall pay to the Executive in a lump sum in cash within 30
days after the Date of Termination the aggregate of the following amounts:



          A. the sum of (1) the Executive’s salary through the Date of Termination
to the extent not theretofore paid, (2) the Executive’s bonus, if any, for the
fiscal year immediately preceding the Date of Termination to the extent not
therefore paid, such bonus to be the amount, if any, determined by the Board
or, if no such determination has been made prior to the Date of Termination,
the Executive’s target bonus for such fiscal year, and (3) any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon) and any unused annual vacation pay, in each case to the
extent not theretofore paid; and



          B. an amount equal to the sum of (1) the Executive’s annual base salary as
in effect immediately prior to the Effective Date or the Date of Termination,
whichever is greater, and (2) the Executive’s target bonus for the fiscal year
in which the Date of Termination occurs or, if no such target bonus has been
established, the target bonus most recently established for the Executive; and



          (ii) the Company shall provide medical, dental and life insurance coverage
for the Executive and his current spouse and eligible dependents until the
first to occur of (A) the first anniversary of the Date of Termination or (B)
the Executive accepting full-time employment.



     (b) Cause; Without Good Reason. If the Executive’s employment shall be
terminated for Cause during the Change of Control Period or if the Executive
voluntarily terminates employment during the Change of Control Period without
Good Reason, this Agreement shall terminate without further obligation to the
Executive other than the obligation to pay to the Executive (i) his salary
through the Date of Termination, and (ii) the amount of any compensation
previously deferred by the Executive.



     4. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any pension, profit
sharing, 401(k), supplemental executive retirement or stock option plan
provided by the Company and for which the Executive may qualify, nor, subject
to Section 8(f), shall anything herein limit or otherwise affect such rights as
the Executive may have under any contract or agreement with the Company.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any pension, profit sharing, 401(k), supplemental executive
retirement or stock option plan or any contract or agreement with the Company
at or subsequent to the Date of Termination shall



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be payable in accordance with such plan or contract or agreement except as
explicitly modified by this Agreement.



     5. Full Settlement. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and,
except as specifically provided herein, such amounts shall not be reduced
whether or not the Executive obtains other employment. In the event of any
contest by the Company or the Executive of the validity or enforceability of,
or liability under, any provision of this Agreement (including as a result of
any contest about the amount of any payment pursuant to this Agreement), the
nonprevailing party shall reimburse the prevailing party for the prevailing
party’s legal fees and expenses, plus in each case interest at the AFR on the
amount reimbursed for the period during which the prevailing party had paid but
not been reimbursed for such legal fees and expenses.



     6. Confidential Information. (a) The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company which shall have been obtained by the
Executive during the Executive’s employment by the Company and which shall not
be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After
termination of the Executive’s employment with the Company, the Executive shall
not, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by the
Company. In no event shall an asserted violation of the provisions of this
Section 6 constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.



     (b) The Executive agrees and acknowledges that a violation of the
covenants contained in this Section 6 will cause irreparable damage to the
Company, and that it is and will be impossible to estimate or determine the
damage that will be suffered by the Company in the event of a breach by the
Executive of any such covenant. Therefore, the Executive further agrees
that in the event of any violation or threatened violation of such covenants,
the Company shall be entitled as a matter of course to an injunction issued by
any court of competent jurisdiction restraining such violation or threatened
violation by the Executive, such right to an injunction to be cumulative and in
addition to whatever other remedies the Company may have.



     7. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal representatives.



     (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.



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     (c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly 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 and/or assets as aforesaid which
assumes and agrees to perform this Agreement by operation of law, or otherwise.



     8. Miscellaneous. (a) This Agreement shall be governed by and construed
in accordance with the laws of the State of South Carolina, without reference
to principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. The Company may
unilaterally amend this Agreement upon notice to the Executive, but such
unilateral amendment shall not be effective until the first anniversary of the
date of such notice. Except as provided in the immediately preceding
sentence, this Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective successors
and legal representatives.



     (b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:



	 	 	 	 	 
	 	 	If to the Executive:
	 
	 	 	 	 
	

	 	 	 	Steven P. Birdwell
	

	 	 	 	XXXXXXXXXX
	

	 	 	 	XXXXXXXXXX
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	If to the Company:
	 
	 	 	 	 
	

	 	 	 	Sea Pines Associates, Inc.
	

	 	 	 	32 Greenwood Drive
	

	 	 	 	Post Office Box 7000
	

	 	 	 	Hilton Head Island, SC 29938
	

	 	 	 	Attention: Chairman






or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.




     (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.



     (d) The Company may withhold from any amounts payable under this Agreement
such Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.



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     (e) The Executive’s or the Company’s failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 2, shall not be deemed to be a waiver of such provision or
right or any other provision or right of this Agreement.



     (f) The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is “at will”
and, subject to Section 1(j), the Executive’s employment may be terminated by
either the Executive or the Company at any time prior to the Effective Date, in
which case the Executive shall have no further rights under this Agreement.
This Agreement shall supersede any other agreement between the parties with
respect to the subject matter hereof.



     IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.



	 	 	 	 	 
	 	 	/s/ Steven P. Birdwell


	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	SEA PINES ASSOCIATES, INC.
	 
	 	 	 	 
	 
	 	 	 	 
	

	 	By
	 	/s/ Michael E. Lawrence


	

	 	 	 	     Michael E. Lawrence








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