EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of November 1,
2001, is by and between Raintree Resorts International, Inc., a Nevada
corporation ("Employer"), and Xxxxxx X. Xxxxxxx ("Employee").
W I T N E S S E T H:
A. Employer desires to continue the services of Employee as
Project Director of The Teton Club, and continues and extends
the Employment Agreement dated as of November 9, 1998 between
Employer and Employee.
B. Employer considers the employment of Employee pursuant to the
terms of this Agreement to be in the best interests of
Employer and its equity holders to facilitate continuity of
experienced management and wishes to assure that Employee
serves Employer on an objective and impartial basis and
without distraction or conflict of interest upon the potential
termination of Employee's employment under certain
circumstances.
C. Employee is willing, on the terms and subject to the
conditions provided in this Agreement, to undertake the
responsibilities contemplated herein, furnish services to
Employer as provided herein and be subject to certain
employment restrictions and obligations.
D. Undefined capitalized terms are defined in Section 8(a).
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NOW THEREFORE, in consideration of the premises, the covenants,
representations and warranties herein contained and other good, valuable
and binding consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties hereby agree:
1. Employment Term. This Agreement shall commence as of November 1,
2001 (the "Commencement Date") and shall remain in effect from the
Commencement Date through December 31, 2004 (the "Employment Term").
Beginning on January 1, 2005, and upon each anniversary, this agreement
will be automatically renewed and the Employment Term shall be extended for
successive one year periods unless terminated by either the Employee or
Employer by giving written notice of termination not less than 120 days in
advance of the renewal date; provided that there shall be no such renewal
after the year in which Employee turns 63.
2. Responsibilities and Authority. Employer hereby employs Employee to
serve as a Vice President of Employer with a current assignment as of the
date hereof as Project Director of The Teton Club. During the Employment
Term, Employee will have the responsibility and authority to administer and
coordinate the activities of Employer and its subsidiaries relating to The
Teton Club or such other projects or other executive
administrative duties in accordance with the policy guidelines as
established by Employer's Chairman or Board.
3. Acceptance of Employment. Employee accepts employment by Employer
on the terms and conditions herein provided and agrees, subject to the
terms of this Agreement, to devote all of her full business time to advance
the business of Employer. Without Employer's Board's approval, Employee
will not serve on the Board of Directors of any non-affiliate of Employer
that is not controlled by Employee's family.
4. Compensation and Benefits. As compensation for her services
hereunder, Employee will be entitled to the following amounts.
(a) Base Salary. Employee's base cash salary for the year 2002
shall be at the aggregate rate of US$165,000.00 per annum (the "Base
Salary"). The Base Salary as in effect from time to time, will be paid
in accordance with its Company's customary payroll practices. The Base
Salary shall not be reduced below US $120,000 per annum.
(b) Bonus. Employee will be entitled to participate in any bonus
program established by the Employer's Board, the amount and
determination of which as applicable to Employee shall be fully
discretionary by Compensation Committee of Employer's Board.
(c) Benefits and Productivity Aids. Employee will be entitled to
receive the benefits (the "Benefits") listed on Schedule A.
(d) Beneficiaries. Employee will have the absolute right to
designate the beneficiaries to receive the proceeds, if any, of all
Benefits upon Employee's death.
(e) Acceleration of Payments.
(i) Occurrence of Triggering Event. Upon the occurrence of a
Triggering Event, Employee shall receive from Employer (i) a lump
sum payment equal to one-half times Base Salary and (ii) earned
Bonuses, any vested stock options and any other sums due him.
(ii) Time of Payment. All accelerated payments of Base
Salary, Bonuses and Benefits to Employee pursuant to this Section
4(e) shall be paid as promptly as possible but in any event
within 30 days after Employee provides notice of a Triggering
Event.
(iii) Reimbursement of Expenses. Employee will be promptly
reimbursed for Reimbursable Expenses.
(f) Consideration. Employee's covenants contained in Sections 6
and 7 are in return for the consideration Employee is to receive under
Section 4(e).
(g) Employer will provide all compensation and benefits listed
above.
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5. Termination. This Agreement may be terminated upon the following
terms:
(a) Termination Upon Death. This Agreement will terminate upon
the first day of the month following Employee's date of death during
the Employment Term and, other than Benefits and Reimbursable
Expenses, no further amounts will be due hereunder.
(b) Termination Upon Total Disability. Employer may terminate
this Agreement because of Total Disability upon at least 30 days'
notice to Employee; provided that (i) Employer will pay Employee her
Base Salary for the lesser of (A) period from such notice until the
date on which the disability benefits contemplated by the Benefits
begin accruing and (B) 120 days from such notice, and (ii) Employer
shall pay all other Benefits and Reimbursable Expenses owed Employee.
(c) Termination by Employer Without Cause. If terminated without
Cause, Employee shall be entitled to receive three months Base Salary.
(d) Termination by Employer With Cause. Employer shall be
entitled to terminate Employee's employment at any time for Cause.
Upon such termination for Cause, all of Employee's rights and benefits
provided for in this Agreement shall terminate immediately, except as
to any accrued and unpaid Base Salary prorated through the date of
termination and any Benefits or amounts owed for Reimbursable Expenses
incurred by Employee prior to such termination. Employee will not be
deemed to have been terminated for Cause until there has been
delivered to him a termination notice by Employer's Board.
6. Confidentiality and Solicitation.
(a) Confidentiality.
(i) Confidentiality of Information. Employee recognizes and
acknowledges that he will have access to the Trade Secrets,
access to and knowledge of which are essential to the performance
of Employee's duties hereunder. Employee will not, during the
term of her employment by Employer or thereafter, either (A)
disclose such Trade Secrets to any Person for any reason or
purpose whatsoever, except on behalf of Employer for its business
purposes during the term of this Agreement, or (B) make use of
any Trade Secrets for her own purposes or for the benefit of any
Person, except to the extent authorized by an agreement between
Employer and any such Person.
(ii) Return of Confidential Information. All samples and
copies of Trade Secrets prepared or obtained by Employee during
employment shall at all times be the property of Employer and
Employee shall deliver the same to Employer at any time upon
Employer's request, and in any event shall deliver the same to
Employer upon the termination of employment whether or not she
has been requested to do so.
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(b) Solicitation. During the Employment Term and three years
thereafter, Employee will not, and will cause her affiliates to not,
directly or indirectly, (i) solicit for employment by any Person, its
affiliates or anyone else, any employee (other than Xxx Xxxxx) or then
currently active independent contractor of Employer or its affiliates,
or any person who was an employee or then currently active independent
contractor of Employer or its affiliates, within the one year period
immediately preceding such solicitation of employment; or (ii) induce
or attempt to induce, any employee (other than Xxx Xxxxx) or
independent contractor of Employer or its affiliates, to terminate
such employee's employment or independent contractor's active
contractual relationship.
(c) Specific Performance. If there is a breach or threatened
breach of the provisions of this Section 6, Employer shall be entitled
to an injunction restraining Employee from such breach, without bond
or other security. Nothing herein shall be construed as prohibiting
Employer from pursuing any other remedies for such breach or
threatened breach.
7. Covenant Not to Compete.
(a) Non-Competition Covenant. In return for the consideration
described in Section 4, Employee agrees that he shall not for a period
of three years from the termination of her employment with Employer
(the "Non-Competition Term") in any manner whatsoever, either directly
or indirectly, with any Person in each case, within the Geographic
Area:
(i) provide or offer to provide to any Person any services,
information or other assistance relating to the business of
Employer or of any of its affiliates (as of the date of
termination of Employee's employment) or with respect to any
customer, client or prospective customer or client, of Employer
or of any of its affiliates in each case, within the Geographic
Area;
(ii) own, operate, engage in, participate in, or contribute
to, alone or as a partner, joint venturer, officer, director,
member, employee, consultant, agent, independent contractor or
stockholder of, or lender to, or in any other capacity, in each
case, any real estate, timeshare product, service or product, or
other which is the same as, similar to, or competes with Employer
or its affiliate's services or products or which compete with
Employer or its affiliate's business;
(iii) (A) call on any Acquisition Candidate with the
knowledge of such Acquisition Candidate's status as such, for the
purpose of acquiring, or arranging the acquisition of, that
Acquisition Candidate by any Person other than Employer or its
affiliates, (B) induce any Person which is a customer of Employer
or its affiliates to patronize any business directly or
indirectly in competition with the business conducted by Employer
or its affiliates; (C) canvass, solicit or accept from any Person
which is a customer of Employer or its affiliates, any such
competitive business; or (D) request or advise any Person which
is a customer of Employer or its affiliates, or its or their
successors; "Acquisition Candidate" means (I) any Person engaged
in the Timeshare Business, or the purchase or development of real
estate with the purpose of engaging in the Timeshare Business or
(II) any project with respect to the Timeshare Business, and in
either case (i) which was called on by Employer or its
affiliates, in connection with the possible acquisition by
Employer or its affiliates of that Person or project, or (ii)
with respect which Employer or its affiliates has made an
acquisition analysis; or
(iv) directly or indirectly employ, or knowingly permit any
Person, directly or indirectly, controlled by him, to employ, any
Person who was employed by Employer or its affiliates at or
within the prior one year.
(b) Employee agrees and understands that Employer's business is
highly competitive and that Employer has invested considerable sums of
money in developing real estate and timeshare properties and services,
training programs, sales programs, pricing and marketing formulas and
programs, and account records for the proper servicing of its clients
and potential clients.
(c) Employee further agrees and understands that this covenant is
necessary for the protection of Employer due to its legitimate
interest in protecting its business goodwill and Trade Secrets.
Employee further agrees and understands that, because of the
legitimate interest of Employer in protecting its business goodwill
and Trade Secrets as well as the extensive confidential information
and special knowledge received by Employee from Employer, the
restrictions enumerated in Section 7(a) are not oppressive and are, in
fact, reasonable. Employee also agrees and understands that, due to
the necessity of this covenant and the adequate consideration
supporting it, this covenant does not prevent competition, and in
fact, it encourages Employer to entrust Employee with Trade Secrets.
(d) If a court of competent jurisdiction determines that the
scope of any provision of this Section 7 is too broad to be enforced
as written, the parties intended that the court reform the provision
to such narrower scope as it determines to be reasonable and
enforceable.
(e) Employee agrees that if he breaches this covenant he will
submit to the rendition of a temporary restraining order, without
prior notice, and thereafter to a temporary and permanent injunction.
Further, Employee agrees to the jurisdiction of an appropriate court
in Xxxxxx County, Texas, for the enforcement of this covenant.
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8. Miscellaneous.
(a) Definitions. The following terms have the indicated meanings.
(i) Base Salary - defined in Section 4(a).
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(ii) Cause -
(A) the failure of Employee to substantially perform
her covenants and duties described herein (other than any
such failure resulting from Total Disability);
(B) the engaging by Employee in willful, reckless or
grossly negligent misconduct which is materially injurious
to Employer or any of its affiliates, monetarily or
otherwise;
(C) the misappropriation of Employer funds;
(D) Employee's commission of an act of dishonesty,
affecting Employer or its affiliates, or the commission of
an act constituting common law fraud or a felony; or
(E) Employee shall resign or otherwise terminate her
employment with Employer for any reason other than by mutual
written agreement with Employer.
(iii) Change of Control - is deemed to have occurred if any
"person" as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as then in effect, other than a
shareholder or its beneficiary on the date hereof or any "person"
who on the date of determination is a Director or Officer of
Employer, is or becomes the "beneficial owner" as defined in Rule
13d-3 under such Act, directly or indirectly, of securities of
Employer representing 51% or more of the combined voting power of
Employer's then outstanding equity securities.
(iv) Geographic Area - the geographic market areas (and the
specific countries and states located therein) of Employer or its
affiliates in which Employer is conducting business at the time
of the expiration of Employee's employment with Employer or its
affiliates.
(v) Person - a natural person, firm, corporation,
association, partnership (general or limited), limited liability
corporation, syndicate, governmental body, or any other entity.
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(vi) Reimbursable Expenses - all properly documented,
reasonable and necessary expenses incurred by Employee on behalf
of and in connection with the business of Employer. All moving
and housing expenses are not deemed to be Reimbursable Expenses.
(vii) Termination Notice - notice under Sections 1(a) or
1(b).
(viii) Total Disability - illness or other physical or
mental disability of Employee which shall continue for a period
of at least 45 consecutive days or three months in the aggregate
during any 12-month period during the Employment Term, which such
illness or disability shall make it impossible or impracticable
for Employee to perform any of her duties and responsibilities
hereunder.
(ix) Timeshare Business - the business of purchasing,
developing, marketing, selling and financing timeshare vacation
intervals.
(x) Trade Secrets - Employer and its affiliates' proprietary
or confidential information, including but not limited to the
following: trade secret information, ideas, concepts, software,
designs, drawings, techniques, models, data, documentation,
research, development, processes, procedures, business
acquisition or disposition plans, "know how," marketing
techniques and materials, marketing and development plans,
customer names and other information related to customers, price
lists, pricing policies, details of customer, distributor, agency
or consultant contracts, financial information and any other
information relating to the business, customers, trade, trade
secrets or industrial practices of Employer; provided that,
"Trade Secrets" shall not include information that: (A) at the
time of disclosure is in the public domain; or (B) after
disclosure is published or otherwise becomes a part of the public
domain through no act or omission of Employee or her affiliates
(but only after, and only to the extent that, such information is
published or otherwise becomes part of the public domain). In
addition, any combination of features disclosed in the course of
Employee's employment shall not be deemed to be within the
exceptions listed above merely because individual features are
separately in the public domain or in a Person's possession, but
shall be within the exceptions only if the combination itself and
its principle of operation are in the public domain or in a
Person's possession as provided in the exceptions listed above.
(xi) Triggering Event. - Following a Change of Control (A)
if Employee terminates employment with Employer; (B) the actual
termination of this Agreement by Employer; or (C) except as
expressly provided herein, Employer's refusal to renew this
Agreement for any one-year term for any reason, in each case,
other than:
(1) Employee's voluntary termination;
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(2) Termination of employment for Cause; or
(3) Termination of employment upon the death or Total
Disability.
(b) Severability. To the extent that any provision of this
Agreement may be deemed or determined to be unenforceable for any
reason, such unenforceability shall not impair or affect any other
provision, and this Agreement shall be interpreted so as to most fully
give effect to its terms and still be enforceable.
(c) Scope of Agreement. This Agreement constitutes the whole of
the agreement between the parties on the subject matter, superseding
all prior oral and written conversations, negotiations,
understandings, and agreements in effect as of the date of this
Agreement.
(d) Notices. Any notice or request to be given hereunder to
either party hereto shall be deemed effective only if in writing and
either (i) delivered personally to Employee (in the case of a notice
to Employee) or to the Board of Employer, or (ii) sent by certified or
registered mail, postage prepaid, to the addresses set forth on the
signature page hereof or to such other address as either party may
hereafter specify to the other by notice similarly served.
(e) Assignment. This Agreement and the rights and obligations of
the parties hereto shall bind and inure to the benefit of each of the
parties hereto, and shall also bind and inure to the benefit of
Employee's heirs and legal representatives and any successor or
successors of Employer by merger or consolidation and any assignee of
all or substantially all of Employer's business and properties; except
as to any such successor or assignee of Employer, neither this
Agreement nor any duties, rights or benefits hereunder may be assigned
by Employer or by Employee without the express written consent of
Employee or Employer, as the case may be.
(f) Governing Law, Construction and Submission to Jurisdiction.
This Agreement shall be construed and enforced in accordance with the
laws of the State of Texas without reference to its choice-of-law
principles. Each party hereto has had adequate opportunity to be
represented by qualified counsel and, accordingly, this Agreement
shall not be interpreted against either party. If any action is
brought to enforce or interpret this Agreement, venue for such action
will be in Xxxxxx County, Texas.
(g) Modification. No amendment, modification or waiver of any
provision hereof shall be made unless it be in writing and signed by
both of the parties hereto.
(h) Termination of Prior Agreements. When this Agreement becomes
effective it shall supersede all prior arrangements or understandings
concerning Employee's employment by Employer or Employer.
(i) Headings. The headings in this Agreement are solely for
convenience of reference and shall not affect its interpretation.
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(j) No Waiver. No failure on the part of any party hereto at any
time to require the performance by any other party of any term of this
Agreement shall be taken or held to be a waiver of such term or in any
way affect such party's right to enforce such term, and no waiver on
the part of either party of any term of this Agreement shall be taken
or held to be a waiver of any other term hereof or the breach thereof.
(k) Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed shall be an original but
all of such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
RAINTREE RESORTS INTERNATIONAL, INC.
By: /s/ Xxxxxxx X Xxxx
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Xxxxxxx X. Xxxx
Chief Executive Officer
XXXXXX X. XXXXXXX
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxx,
personally
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Schedule A
1. Two weeks annual vacation which shall not accrue from year to year.
2. Life insurance in the amount of two times Base Salary.
3. Disability insurance for Employee pursuant to Employer's plan.
4. Medical insurance for Employee and Employee's family pursuant to the
Employer's plan.
5. Reasonable use of office supplies, computers, copying and fax machines,
telephones and secretarial services.
6. Up to $5,000 (non-cumulative) per year in continuing education courses to
be pre-approved by Xxxx Xxxx or Xxxxx Xxxxxx.
