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EXHIBIT 10.2.3
EMPLOYMENT AGREEMENT
WITH SILVERLEAF RESORTS, INC.
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made between SILVERLEAF
RESORTS, INC., a Texas corporation ("Silverleaf"), and XXXXXX X. XXXXXXXXX (the
"Employee").
R E C I T A L S:
A. Employee is a key executive officer and employee of Silverleaf;
and
B. Silverleaf and Employee desire to continue the employment of
Employee and to agree on the terms of Employee's continued
employment.
NOW, THEREFORE, in consideration of the premises and terms hereinafter
set forth, the parties agree as follows:
A G R E E M E N T:
SECTION 1. EMPLOYMENT. Employee's employment with Silverleaf as
President is hereby continued, effective as of the Effective Date and for an
initial period of three (3) years from the Effective Date (the "Term"), unless
sooner terminated pursuant to the termination provisions of this Agreement.
Employee may not engage in other employment while he or she is in the employ of
Silverleaf pursuant to this Agreement.
SECTION 2. DUTIES. Employee agrees to devote such time, attention
and energies as are necessary to fulfill his or her duties as specified by the
Board of Directors of Silverleaf from time to time. Employee further agrees
that he or she will promote the best interests and welfare of Silverleaf and
shall perform any and all duties to the best of his or her abilities. The
Employee shall:
(a) NON-COMPETITION: Not render to others, during his or her
employment with Silverleaf, service of any kind for compensation or
promote, participate or engage in any other business activity which
would conflict or interfere with the performance of his or her duties or
loyalty under this Agreement, including, but not limited to,
participating in the promotion or sale of products or services for a
competitor of Silverleaf or otherwise engage in business with such
competitor;
(b) REGULATORY LAWS: Abide by all applicable statutes, rules
and regulations of each State in which services may be rendered; and
(c) SILVERLEAF RULES: Abide by all rules and regulations
issued by Silverleaf, which are pertinent to Employee's duties and
obligations.
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SECTION 3. COMPENSATION. As compensation for the services rendered
pursuant to this Agreement:
(a) BASE COMPENSATION: Employee shall be paid base
compensation computed at the annual rate of One Hundred Thirty Three
Thousand One Hundred One and 13/100 Dollars ($133,101.13), which shall
be payable in equal semi-monthly payments on the 1st and 15th days of
each month or as otherwise agreed by Silverleaf and Employee.
(b) ADDITIONAL INCENTIVE COMPENSATION: Employee shall be paid
additional weekly incentive compensation equal to thirty five one
hundredths percent (0.35%) of Silverleaf's net sales from timeshare and
vacation contracts. For this purpose, net sales mean only sales on
which Silverleaf has received a full down payment and which have not
been cancelled as of the due date of the payment of this incentive
compensation. The payment of this incentive compensation shall be made
as follows and shall be subject to the following chargebacks:
[1] The incentive compensation payable on net sales for
each week shall be paid on the second Friday thereafter; and
[2] If the first monthly installment due under the
contract for a net sale is not made and the contract is
subsequently cancelled, the incentive compensation paid to
Employee on the contract shall be charged back to Employee. For
this purpose, Silverleaf shall maintain a $2,000 reserve out of
Employee's incentive compensation, against which the chargebacks
shall be deducted. The reserve shall be established and
replenished on a regular basis by Silverleaf deducting, to the
extent required, ten percent (10%) of the incentive compensation
otherwise due Employee.
(c) OTHER INCENTIVE COMPENSATION: Employee shall be entitled
to participate in any other bonus, incentive, stock option or other
compensation plans of Silverleaf only to the extent the Board of
Directors of Silverleaf may deem appropriate from time to time.
(d) COMPANY VEHICLE: Silverleaf shall furnish Employee a
company owned vehicle for use by Employee in performing his or her
duties, and Silverleaf shall pay all expenses associated therewith.
(e) FRINGE BENEFITS: Silverleaf shall provide Employee health
insurance under its group plan as it may exist from time to time. The
cost of any coverage of any of the Employee's family members under
Silverleaf's group plan shall be paid by the Employee. The Employee
shall also be entitled to such vacation time, sick leave and other
fringe benefits as may be specified by the Board of Directors of
Silverleaf from time to time for its executive personnel.
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(f) TERMINATION: Employee shall be entitled to no termination
pay. At the Termination of this Agreement, the payment to Employee of
compensation earned to date shall be in full satisfaction of all claims
against Silverleaf under this Agreement, and payment is contingent upon
return of all Silverleaf's property as outlined below.
SECTION 4. CONFIDENTIALITY.
(a) NONDISCLOSURE AND NONUSE: Employee acknowledges that
during his or her employment with Silverleaf, he or she may have access
to and become acquainted with Silverleaf Confidential Information, as
defined below. Except as Employee's duties during his or her employment
with Silverleaf may require or Silverleaf may otherwise consent in
writing, Employee agrees that he or she shall not at any time disclose
or use, directly or indirectly, either during or subsequent to his or
her employment with Silverleaf, any Silverleaf Confidential Information.
(b) CONFIDENTIAL INFORMATION: For purposes of the foregoing
provisions, "Silverleaf Confidential Information" shall mean (1) any and
all confidential and proprietary business information and trade secrets
concerning the business and affairs of Silverleaf and its affiliates,
including but not limited to all marketing, sales and lead generation
techniques, know-how and studies, customer and lead lists, current and
anticipated customer requirements, price lists, business plans, training
programs, computer software and programs, and computer software and
data-base technologies, systems, structures and architectures (and
related processes, formulae, compositions, improvements, devices, know-
how, inventions, discoveries, concepts, ideas, designs, methods and
information), (2) any and all information concerning the business and
affairs of Silverleaf and its affiliates (including but not limited to
their historical financial statements, financial projections and
budgets, historical and projected sales, capital spending budgets and
plans, the names and backgrounds of key personnel, personnel training
and techniques and materials, however documented), and (3) any and all
notes, analysis, compilations, studies, summaries, and other material
prepared by or for Silverleaf and its affiliates containing or based, in
whole or in part, on any information included in the foregoing.
SECTION 5. NON-INTERFERENCE. Employee further agrees that during
his or her employment and at all times thereafter, Employee shall not, either
on his or her own account or jointly with or as a manager, agent, officer,
employee, consultant, partner, joint venturer, owner or shareholder or
otherwise on behalf of any other person, firm or corporation: (1) carry on or
be engaged or interested directly or indirectly in, or solicit, the manufacture
or sale of goods or provision of services to any person, firm or corporation
which, at any time during his or her employment has been or is a customer or in
the habit of dealing with Silverleaf or its affiliates in their business, (2)
endeavor, directly or indirectly, to canvas or solicit in competition with
Silverleaf or its affiliates or to interfere with the supply of orders for
goods or services from or by any person, firm or corporation which during this
or her employment has been or is a supplier of goods or services to Silverleaf
or its affiliates, or (3) directly or indirectly solicit or attempt to solicit
away from Silverleaf or its affiliates any of its officers, employees or
independent contractors or offer employment to any person who, on or during the
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6 months immediately preceding the date of such solicitation or offer, is or
was an officer, employee or independent contractor of Silverleaf or its
affiliates.
SECTION 6. NONCOMPETITION.
(a) COVENANT: Employee covenants and agrees that he or she
shall not, for a period of two (2) years from and after the effective
date of any Termination, working alone or in conjunction with one or
more other persons or entities, for compensation or not, permit his or
her name to be used by or engage in or carry on, directly or indirectly,
either for himself or herself or as a member of a partnership or other
entity or as a stockholder, investor, officer or director of a
corporation or as an employee, agent, associate or contractor of any
person, partnership, corporation or other entity, any business in
competition with the business of Silverleaf or its affiliates, as
carried on by Silverleaf or its affiliates immediately prior to the
effective date of any Termination, but only for as long as such
business is carried on by (1) Silverleaf or its affiliates or (2) any
person, corporation, partnership, trust or other organization or entity
deriving title from Silverleaf or its affiliates to the assets and
goodwill of the business being carried on by Silverleaf or its
affiliates immediately prior to the effective date of any Termination,
in any county of any state of the United States in which Silverleaf or
its affiliates conducts such business or markets the products of such
business immediately prior to the effective date of any Termination.
(b) TOLLING. If Employee violates any covenant contained in
this Section, then the term of such violated covenant shall be tolled
for the period commencing on the commencement of such violation and
ending upon the earlier of (1) such time as such violation shall be
cured by Employee to the reasonable satisfaction of Silverleaf, (2)
final adjudication (including appeals) of any action filed for
injunctive relief or damages arising out of such violation, and (3) the
expiration of 24 months after Termination during which no violation of
the covenant has occurred.
(c) REFORMATION. If, in any judicial proceeding, the court
shall refuse to enforce any covenant contained in this Section because
the time limit is too long, it is expressly understood and agreed
between Silverleaf and Employee that for purposes of such proceeding
such time limitation shall be deemed reduced to the extent necessary to
permit enforcement of such covenant. If, in any judicial proceeding,
the court shall refuse to enforce any covenant contained in this Section
because it is more extensive (whether as to geographic area, scope of
business or otherwise) than necessary to protect the business and
goodwill of Silverleaf and/or its affiliates, it is expressly understood
and agreed between Silverleaf and Employee that for purposes of such
proceeding the geographic area, scope of business or other aspect shall
be deemed reduced to the extent necessary to permit enforcement of such
covenant.
SECTION 7. INJUNCTIVE RELIEF. Employee acknowledges that a breach of
Sections 4, 5 or 6 hereof would cause irreparable damage to Silverleaf and/or
its affiliates, and in the event of Employee's breach of the provisions of
Sections 4, 5 or 6 hereof, Silverleaf shall be entitled to a temporary
restraining order and an injunction restraining Employee from breaching such
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Sections without the necessity of posting bond or proving irreparable harm,
such being conclusively admitted by Employee. Nothing shall be construed as
prohibiting Silverleaf from pursuing any other available remedies for such
breach, including the recovery of damages from Employee. Employee acknowledges
that the restrictions set forth in Sections 4, 5 and 6 hereof are reasonable in
scope and duration, given the nature of the business of Silverleaf and its
affiliates. Employee agrees that issuance of an injunction restraining
Employee from breaching such Sections in accordance with their terms will not
pose an unreasonable restriction on Employee's ability to obtain employment or
other work following the effective date of any Termination.
SECTION 8. EMPLOYEE INVESTMENTS. Anything to the contrary herein
notwithstanding, Employee: (1) shall not be prohibited from investing his or
her assets in such form or such manner as will not, in the aggregate, detract
from the performance by Employee of his or her duties hereunder and will not
violate the provisions of Sections 4, 5 or 6 hereof; and (2) shall not be
prohibited from purchasing stock in any publicly traded company solely as a
stockholder so long as Employee does own (together or separately or through his
or her affiliates) more than two percent (2%) of the stock in any company,
other than Silverleaf, which is engaged in the timeshare business.
SECTION 9. EMPLOYEE'S REPRESENTATIONS. Employee represents and
warrants that he or she is free to enter into and perform each of the terms and
conditions hereof, and that his or her execution and performance of this
Agreement does not and will not violate or breach any other Agreement between
Employee and any other person or entity.
SECTION 10. TERMINATION. This Agreement shall terminate upon the
expiration of its Term, or prior thereto: (1) upon written notice by either
party, at any time and for any or no reason whatsoever, at least thirty (30)
days prior to the effective date of the termination; or (2) as of the end of
the month of Employee's death or incapacity due to Employee's physical or
mental illness as determined in Silverleaf's sole discretion (the
"Termination").
SECTION 11. RETURN OF MATERIALS AND VEHICLES. Employee understands
and agrees that any training manuals, sales and promotional material, vehicles
or other equipment provided to him or her by Silverleaf in connection with this
Agreement shall remain the sole property of Silverleaf, and shall be used by
the Employee exclusively for Silverleaf's benefit. Upon termination of this
Agreement, any such material, vehicles or other equipment shall be immediately
returned to Silverleaf.
SECTION 12. NON-BINDING ALTERNATE DISPUTE RESOLUTION. Except for
actions brought by Silverleaf pursuant to Section 7 hereof:
(a) AGREEMENT TO UTILIZE: The parties shall attempt to
settle any claim or controversy arising from this Agreement through
consultation and negotiation in good faith and a spirit of mutual
cooperation prior to the commencement of any legal action. If such
attempts fail, then the dispute shall be mediated by a mutually-accepted
mediator to be chosen by the parties within forty-five (45) days after
written notice demanding mediation is sent by one party to the other
party. Neither party may unreasonably
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withhold consent to the selection of a mediator, and the parties shall
share the costs of the mediation equally. By mutual written agreement,
however, the parties may postpone mediation until they have completed
some specified but limited discovery regarding the dispute. The parties
may also agree to replace mediation with any other form of alternate
dispute resolution ("ADR") available in Texas, such as a mini-trial or
arbitration.
(b) FAILURE TO RESOLVE: Any dispute which the Parties cannot
resolve through negotiation, mediation or any other form of ADR, within
six (6) months of the date of the initial demand for mediation, may then
be submitted to the appropriate court for resolution. The use of
negotiation, mediation, or any other form of ADR procedures will not be
construed under the doctrines of laches, waiver or estoppel to affect
adversely the rights of either party.
SECTION 13. WAIVER. Silverleaf's failure at any time to require
performance by Employee of any of the provisions hereof shall not be deemed to
be a waiver of any kind nor in any way affect the rights of Silverleaf
thereafter to enforce the provisions hereof. In the event that either party to
this Agreement waives any provision of this Agreement or any rights concerning
any breach or default of the other party hereto, such waiver shall not
constitute a continuing waiver of any such provision or breach or default of
the other party hereto.
SECTION 14. SUCCESSORS, ASSIGNS, BENEFIT.
(a) SILVERLEAF SUCCESSORS: The provisions of this Agreement
shall inure to the benefit of and be binding upon Silverleaf, its
successors, assigns and other affiliated entities, including, but not
limited to, any corporation which may acquire all or substantially all
of Silverleaf's assets or with or into which Silverleaf may be
consolidated, merged or reorganized. Upon any such merger,
consolidation or reorganization, the term "Silverleaf" as used herein
shall be deemed to refer to any such successor corporation.
(b) NO ASSIGNMENT BY EMPLOYEE: The parties hereto agree that
Employee's services hereunder are personal and unique, and that
Silverleaf is executing this Agreement in reliance thereon. This
Agreement shall not be assignable by Employee.
SECTION 15. SEVERABILITY. If one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but shall be deemed
stricken and severed from this Agreement and the remaining terms of this
Agreement shall continue in full force and effect.
SECTION 16. GOVERNING LAW AND VENUE. This Agreement shall be deemed
to have been made and entered into in the State of Texas and its validity,
construction, breach, performance and operation shall be governed by the laws
of that state. The obligations hereunder of Silverleaf shall be performable in
Dallas County, Texas, and venue for any suit involving this Agreement shall lie
exclusively in Dallas County, Texas.
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SECTION 17. ENTIRE UNDERSTANDING. This Agreement sets forth the
entire understanding between the parties with respect to the employment of
Employee, and no other representations, warranties or agreements whatsoever
have been made by Silverleaf to Employee. Further, this Agreement may not be
modified or amended except by another instrument in writing executed by both of
the parties.
SECTION 18. NOTICES. All notices and communications under this
Agreement shall be sent to the parties at the following addresses or such other
addresses that the parties may subsequently designate in writing.
(a) SILVERLEAF:
Silverleaf Resorts, Inc.
Attention: Xxxxxx X. Xxxx
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
(b) EMPLOYEE:
Xxxxxx X. Xxxxxxxxx
2135 Texas Ash
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Xxxxxx, Xxxxx 00000
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SECTION 19. SECTION HEADINGS. Section and paragraph headings are
inserted herein only for convenience and shall not be used to interpret any of
the provisions hereof.
SECTION 20. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same original.
SECTION 21. EFFECTIVE DATE. This Agreement is executed on the date
set forth below, but shall be effective as of January 1, 1997 (the "Effective
Date").
Executed this 25th day of February, 1997.
"SILVERLEAF"
SILVERLEAF RESORTS, INC.
By: /s/ XXXXXX X. XXXX
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Authorized Officer
"EMPLOYEE"
/s/ XXXXXX X. XXXXXXXXX
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XXXXXX X. XXXXXXXXX
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