Document:

Form of Non-Qualified Stock Option Grant Under DWM 2002 Equity Incentive Plan

 EXHIBIT 10.7 
  
 DICKIE WALKER MARINE, INC. 
 NOTICE OF GRANT OF 
 NON-QUALIFIED STOCK OPTION 
  
 To:                               
  
 At the direction of the Board of Directors of Dickie Walker Marine, Inc. (the
“Company”), you are hereby notified that the Board of Directors has granted to you a non-qualified stock option (the “Option”), pursuant to, and in accordance with the terms of, the Company’s Equity Incentive Plan (the
“Plan”). A copy of the Plan governing the Option granted to you is available upon request to the Chairman of the Board of the Company. Your attention is directed to all of the provisions of the Plan. The terms of the Option include those
of the Plan and the following: 
  
 1.    Grant of Option. On                         , the Company’s Board of
Directors authorized the grant to you of the right and option to purchase from the Company all or any part of an aggregate of              shares of the Company’s common stock.

  
 2.    Price of Shares. The purchase
price of the shares subject to this Option is $            . 
  
 3.    Manner of Payment. Payment of the purchase price shall be made in cash, by check, or by delivery of outstanding shares of
common stock, or by other methods provided for in the Plan. 
  
 4.    Term of Option. The Option and all rights granted hereby and pursuant to the Plan shall terminate on the earlier of
                 (ten years from the effective date of the grant), or as provided by the Plan. 
  
 5.    Exercise of Option. The Option may be exercised in accordance with the attached Exhibit A.

  
 At the time or times when you wish to exercise this Option, in
whole or in part, please refer to the provisions of the Plan dealing with methods and formalities of exercise of your Option, using the Form of Exercise provided by the Company. 
  
 DICKIE WALKER MARINE, INC. 
  

			
	 Date:                                    
            
	 	 By:                                      
                              

	 	 	 Gerald W. Montiel, CEO

 EXHIBIT A 
 TO 
 NOTICE OF GRANT 
  
 Your Option will vest over a          year period as
follows: 
  
         % of the
Option, or              shares, will vest on
                        , one year from the effective date of grant and the remaining
        % will vest equal increments of              shares on the          day of each
month, beginning on                         , until the Option is fully vested, subject to your continued employment or
engagement by the Company on such dates, and unless your Option has terminated in accordance with Paragraph 4 of the Notice of Grant or the Plan. 

 DICKIE WALKER MARINE, INC. 
 FORM OF EXERCISE OF STOCK OPTION 
  
 To the Compensation Committee of 
 the Board of Directors of 
 Dickie Walker Marine, Inc. 
  
 I hereby exercise my Stock Option granted effective as of
                    , by Dickie Walker Marine, Inc. (the “Company”), subject to all the terms and provisions of the Company’s
Equity Incentive Plan (the “Plan”) and the Notice of Grant of Stock Option, and notify you of my desire to purchase                  shares of the
Company’s common stock, pursuant to said Stock Option. 
  
 Enclosed is the sum of $                 in cash or the Company’s common stock. 
  
 I acknowledge that unless the shares issuable under the Plan have been registered under federal and state securities laws
prior to the exercise of my Option, the shares being purchased are restricted shares and may not be sold, transferred, or assigned unless an exemption from registration is available. I acknowledge and agree that the certificate evidencing such
shares will contain a legend to indicate the lack of registration and the restrictions upon transfer. Further, as to any restricted shares, I hereby represent that the shares are being acquired by me as an investment and not with a view to resale or
distribution. 
  

			
	 Date:Employment Agreement

 EXHIBIT 10.2 
  
 Sunterra Resorts, 3865 West Cheyenne Avenue, North Las Vegas, NV 89032 
  
  
  
 June 25, 2004 
  

			
	 	  	

	  
 Bob Krawczyk
 200 South Orange Avenue
 Suite 1800
 Orlando, Florida 32801
	  
	  
	  
	  
	  
	  

  

	Ref:	Offer Letter 

  
 Dear Bob: 
  
 The specifics of your offer of
employment with Sunterra Corporation are outlined below: 
  
 Start Date:

  
 Subject to the terms of this letter, your employment with Sunterra
Corporation will begin on Wednesday, August 4th, 2004. 
  
 Position: 
  
 Your position will be at Sunterra Corporation in Las Vegas, Nevada and you shall perform such duties and services that are assigned to you by this Company. You
acknowledge that your prospective employment will be subject to all policies and practices of the Company as may currently exist or as may be curtailed, modified or implemented from time to time. Further, you shall devote your full time and
attention to the affairs of the Company and to your duties as Vice President and Corporate Controller. You will be reporting to Steve West, Chief Financial Officer. 
  
 Base Salary: 
  
 Your base salary will be $200,000 a year, paid in bi-weekly intervals of $7, 692.30 and subject to applicable withholdings for FICA, state and federal taxes. The Sunterra
Corporation salary program provides performance-based salary reviews for future salary progression. 
  
 Annual Incentive (Bonus): 
  
 You will be
eligible to participate in the discretionary bonus program and earn up to 20% of your annual salary. Your actual incentive payout will be based upon achieving specified performance criteria to be established and approved with your manager.

  
 Stock Options: 
  
 As soon as practicable following the date you begin employment with the Company, you will be granted an option to purchase 40,000 shares of
the common stock of the Company pursuant to the Company’s 2002 Stock Option Plan. The options will be subject to the terms and conditions of the Stock Option Plan and shall have such other terms and conditions as are set forth in the Stock
Option Agreement (e.g., strike price, vesting and exercise requirements) describing the stock option grant. 

 Benefits: 
  
 Sunterra Corporation offers a comprehensive array of employee benefit programs, to provide peace of mind on various personal concerns. You
are eligible for the health and welfare benefit programs on the first day of the month following your employment. You and your eligible dependents will be covered by these benefits as per your coverage elections. You will accrue 3 weeks of vacation
per year. Additional vacation will be discussed as tenure increases. 
  
 Information on these plans and other benefit programs such as short-term disability, long-term disability, and employee life insurance will be provided to you after you begin your employment with us. 
  
 In the event that changes are made to any of the benefit plans , the changes will
apply to you as they do other employees of the Company. 
  
 Relocation: 
  
 You will be reimbursed for
reasonable relocation expenses including the cost of two trips to Las Vegas with your family to find housing and perform other duties. Sunterra will also provide temporary housing for up to three months during the period you are acquiring permanent
housing. Resonable expenses include costs to move your household, travel costs and meals during your move according to Sunterra’s employee relocation policy. 
  
 Employment Term: 
  

In accepting this offer you understand and agree that your employment with the Company is “at will.” As such, you agree that either you or Sunterra
Corporation may end the employment relationship at any time, with or without notice and with or without cause. By signing below, you understand and acknowledge that except for this letter, there is not and shall not be any written contract between
you and the Company concerning this offer of employment or your prospective employment, and that this letter is not intended to be and is not a contract of employment. 

 By signing and returning this letter, you confirm that this letter accurately sets forth the current understanding
between you and Sunterra Corporation and that you accept and agree to the terms as outlined. 
  
 Termination: 
  
 In the event that you are terminated without cause or for a good reason, you will be entitled to continuation of salary (less applicable withholding or similar taxes) at
the rate in effect on the termination date for a period of 6 months following the date of termination. 
  

	
	Sincerely,
	
	 /s/ Steve West

	 Steve West
 Chief Financial Officer

  
 cc: Personnel File 
  

			
	 ACCEPTED AND AGREED TO:
	 	 
		
	 /s/ Bob Krawczyk

	 	 7/6/04

	 Bob Krawczyk
	 	 DATECompensation

 Exhibit 10.3 
  
 Description of Compensation of Non-Employee Directors 
  
 The description below contains only certain information regarding the compensation of the non-employee directors of Sunterra Corporation. Additional information can be
found in our proxy statements, reports, and other exhibits filed by us with the Securities and Exchange Commission. 
  
 Effective with the first quarter of fiscal 2005, each non-employee director of Sunterra Corporation is entitled to an annual retention fee of $30,000 in addition to a fee
of $1,250 per in person meeting of the board of directors, a fee of $1,250 for the annual meeting and a fee of $750 per telephonic meeting of the board of directors. An additional annual fee of $4,000 is paid to non-employee directors for each
committee membership, a fee of $500 per meeting of the committee and an additional $5,000 for serving as the chairman of any committee (except for the audit committee chairman who receives $10,000). The non-executive chairman is also entitled to an
annual fee of $15,000. Each non-employee director is also entitled to an annual grant of stock-based compensation equivalent to $40,000 to be issued in advance on the first day of the fiscal year. 
  
 A director who is also an employee of Sunterra Corporation does not receive additional
compensation for service as a director. 
  
 Sunterra Corporation pays for or
reimburses its directors’ travel, lodging and other reasonable out-of-pocket expenses in connection with attendance at board, committee and stockholder meetings, and for other reasonable expenses related to board service such as continuing
education.

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