EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of September
1, 2001 by and between GREAT WESTERN LAND AND RECREATION, INC., a Delaware
corporation (the "Company"), and XXX X. XXXXX ("Employee").
Employee and the Company desire to set forth the terms and
conditions of Employee's employment with the Company. Employee understands
that the Company intends to merge with Xxxxxxx.xxx, Inc., a Nevada
corporation ("Quepasa"), with the Company being the surviving corporation. In
the event that such merger, or any other acquisition of a publicly held
company (in either case, an "Acquisition"), is consummated, the Company
agrees that it shall cause the Company, or such other corporation as may be
the surviving corporation (in either case, the "Surviving Corporation"), to
assume the Company's liabilities hereunder and to discharge such liabilities
as though the Surviving Corporation were a party to this Agreement.
Throughout this Agreement, unless the context otherwise requires, references
to the Company shall also include the Surviving Corporation.
For valuable consideration received, the parties agree as follows:
1. EMPLOYMENT. The Company agrees to employ Employee as
Chairman, Chief Executive Officer and President of the Company. Employee
agrees that he shall at all times exercise his best judgment in the
performance of these duties and shall perform such further duties as may be
required by the Company under the direction and control of the Board of
Directors of the Company.
2. DEVOTION TO EMPLOYMENT. Employee accepts employment with
the Company on the terms and conditions set forth herein and agrees to devote
his full business time and effort to perform his duties on behalf of the
Company in the position set forth in paragraph 1. While employed by the
Company, Employee shall not be actively engaged in any other business
activity which impairs his ability to satisfy his obligations to the Company
and shall not engage in any activity competitive with the Company or
detrimental to the Company's business. Employee agrees to comply with the
reasonable policies, standards and regulations established by the Company
from time to time.
3. COMPENSATION. The Company agrees to pay Employee
compensation for his services as follows:
A. SALARY. Commencing September 1, 2001, Employee's initial
annual salary shall be One Hundred Twenty-Five Thousand Dollars
($125,000), payable in semi monthly installments of Five Thousand Two
Hundred Eight Dollars ($5,208) each. The Company shall pay Employee
according to its usual practices, including withholding for applicable
federal, state and local taxes and for other normal items. Employee's
salary shall be adjusted not less frequently than annually by the Board
of
Directors of the Company or by a compensation committee selected by
the Board of Directors. The magnitude of such salary adjustment shall
be in the Board of Director's or compensation committee's discretion;
provided, however, Employee's salary shall be adjusted upward each year
by at least four percent (4%). In the event an Acquisition is
consummated, Employee's annual salary shall be increased to a minimum
of One Hundred Seventy-Five Thousand ($175,000). The increase in annual
salary caused by the consummation of an Acquisition (the "Adjustment")
shall be paid to Employee as he may direct, which direction may include
payment to a trust, a personal holding company, or such other entity or
affiliated company as Employee may deem appropriate. Apart from the
Adjustment, this paragraph shall be unmodified by the consummation of
an Acquisition.
B. STOCK OPTIONS. In the event of the consummation of an
Acquisition, the Company will cause Employee to be granted options to
acquire common shares of the Surviving Corporation upon the closing of
such Acquisition at a price per share not more than the fair market
value of such shares on the date of closing. At a minimum, Company will
cause Employee to be granted an option to acquire not less than 750,000
common shares of the Surviving Corporation, as has been approved by the
Board of Directors and the Compensation Committee of Quepasa. The
options will be evidenced by a Stock Option Agreement, and will vest
monthly over a three-year period as long as Employee continues to be
employed by the Company. The Company shall not permit any additional
options to be granted by the Surviving Corporation, unless and until
Employee has been granted an option to acquire that number of common
shares of the Surviving Corporation which shall be equal to at least
equal to the maximum number of common shares then held, or which may be
acquired pursuant to any option agreement, by any other employee, or
former employee, of the Company, the Acquisition target, or the
Surviving Corporation. For purposes of the foregoing calculation, all
common shares which may be acquired pursuant to any options, including
any common shares which may be acquired pursuant to options ("Out of
the Money Options") where the exercise price exceeds the then fair
market value by Five Dollars ($5) per share, or more, shall be
included, unless Employee, in his sole discretion, agrees to exclude
Out of the Money Options from the calculation.
C. MEDICAL AND DENTAL INSURANCE PLAN. Employee shall be
covered under the Company's medical and dental insurance plan which is
generally applicable to all employees from time to time. The Company
retains the right to modify medical insurance coverage as it deems
appropriate. Except as otherwise provided for by law or in paragraph 6
below, the Company is under no obligation or duty to provide medical
coverage to the Employee after he has ceased to serve as an employee of
the Company.
The Company shall provide for an annual physical examination
for Employee, at no cost to Employee, while Employee is employed by the
Company. Such examination will consist of a thorough examination
regarding all aspects of appropriate health care, both for prevention
and for possible sickness cure or treatment.
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D. VACATION. Employee shall be entitled to twenty (20)
days of paid vacation per fiscal year. Vacation days may be taken at
any time; provided that they are taken in increments of five (5) days
or more.
E. BONUS PLAN; STOCK OPTION PLAN. Employee shall be eligible
to participate in any bonus plan ("Bonus Plan") and/or a stock option
plan ("Stock Option Plan") based upon the future performance of the
Company which shall be offered to any other executives of the Company.
F. ADDITIONAL BENEFITS. Employee shall be offered all other
benefits, including insurance, personal days and professional days
which may be offered to any other executives of the Company. The
Company shall pay the premiums for Employee's existing split dollar
life insurance policy. If, in the future, the Company generally
provides other benefits to all employees of the Company, such benefits
also shall be provided to Employee.
G. REIMBURSEMENT OF BUSINESS EXPENSES. The Company shall
reimburse Employee for the valid business expenses of Employee incurred
by Employee in connection with the performance of his duties on behalf
of the Company; provided that Employee submits receipts or other
evidence of such expenses. Reimbursement payments shall be made by the
Company at least once a month.
Without limiting the generality of the foregoing, Company
shall provide Employee with a Company vehicle of a suitable type such
that he may use it to meet and transport visitors, customers,
stockholders, lenders, and other parties associated with the Company's
business, as well as visit any development site, proposed development
site, or ranch owned by the Company (or its successors, affiliates or
assigns) or in which Company (or such other person) may have an
ownership interest or prospective ownership interest. The vehicle
provided by the Company shall be appropriate for such visits. The
Company shall pay all costs and expenses relating to the vehicle,
including, without limitation, all lease costs, down payments, loan
payments, insurance costs, maintenance and repair expenses, and
gasoline, oil and other operational costs.
4. EMPLOYEE AT WILL. Employee is employed "at will". Subject
to the notice requirements set forth in paragraph 5 below and the severance
compensation set forth in paragraph 6 below, either Employee or the Company
may terminate Employee's employment at any time, for any reason, with or
without cause.
5. TERMINATION. Employee's employment may be terminated by
Employee by delivery to the Company of a written notice of termination at
least two (2) weeks prior to the termination date. Employee's employment
shall be terminated automatically upon the death of Employee or the permanent
incapacity of Employee to perform the services agreed to hereunder.
Employee's employment may be terminated by the Company upon Employee's
receipt of written notice of termination. Upon termination of employment,
Employee will promptly return to the Company all customer records as that
term is defined in paragraph 7
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below, all confidential information, as that term is defined in paragraph 8
below, and all other documents and equipment pertaining to the business of
the Company. Employee further agrees that Employee will not at any time use
any confidential information acquired by him during his employment with the
Company in any manner contrary to the interests of the Company.
6. SEVERANCE COMPENSATION. If Employee's employment is
terminated during the Term of this Agreement for any reason whatsoever, or
for no reason at all, Employee shall be entitled to the following:
A. For a period of time equal to two (2) times the otherwise
remaining Term, commencing immediately after the date of Employee's
termination, Company shall pay Employee an aggregate annual amount
equal to fifty percent (50%) of Employee's then current salary; and the
amounts payable hereunder shall be payable in semi-monthly installments
throughout such period;
B. To the extent Employee has a vested interest in any shares
of stock of the Company as of the date of termination, such shares
shall be the sole property of Employee and shall be under the sole
control of the Employee; however, Employee shall have no ownership
right to any shares which have not vested;
C. Employee and his family shall continue to be eligible for
group medical coverage, at Employee's personal expense, under the
Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA"), as
amended, for such duration as provided by existing law at the time of
termination;
D. The term of this Agreement (the "Term") shall be the five
(5) year period beginning on the execution hereof; provided, however,
the Term shall be automatically extended by one year upon the first
anniversary of the execution hereof, and upon each anniversary
thereafter, such that, on any given date prior to Employee reaching the
age of seventy (70) years old, this Agreement shall always evidence a
five (5) year commitment;
E. Notwithstanding the above, unless sooner terminated,
Employee's employment shall terminate and the Term of this Agreement
shall expire upon Employee reaching the age of seventy (70) years old.
Immediately upon reaching the age of seventy (70) years old, Employee,
if he is then employed by the Company, shall be entitled to receive
from the Company an amount equal to fifty percent (50%) of his last
year's salary in each of the five (5) years first following Employee's
seventieth (70th) birthday; provided that no amount shall be payable to
Employee under this paragraph for any year in which Employee has not
agreed, and has not made himself available, to provide at least ninety
(90) days of consulting services to the Company for such year; and
F. Should Employee die during the Term of this Agreement or
while there are any amounts which would otherwise be payable to
Employee hereunder, the
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amounts payable to Employee hereunder shall be paid instead to
Employee's estate or designated beneficiary.
7. CUSTOMER RECORDS.
A. EMPLOYEE'S OBLIGATIONS REGARDING CUSTOMER RECORDS. Employee
acknowledges that the list of the Company's customers or clients as it
may exist from time to time is a valuable, special and unique asset of
the Company's business. Employee shall not, during or after his
employment with the Company, divulge, furnish or make accessible to
anyone (other than in the regular course of the Company's business) any
names, addresses or telephone numbers of those individuals who conduct
business with the Company, unless Employee has been lawfully required,
or permitted by the Company in writing, to do so. In addition, the
contents of customers' files or portfolios, or any other such
information shall be kept confidential during and after Employee's
employment with the Company unless Employee has been lawfully required
to disclose such information or permitted by the Company in writing to
do so. All original records and all copies thereof of those customers
who do business with the Company, including names, or any other such
information, as well as all other secrets and confidential information
of the Company shall remain the property of the Company during and
after Employee's employment with the Company.
B. INJUNCTIVE RELIEF FOR BREACH. In the event of a breach or
threatened breach by Employee of the provisions of this section, the
Company shall be entitled to an injunction restraining Employee from
disclosing, in whole or in part, the list of the Company's customers,
any names, addresses or telephone numbers of those individuals who
conduct business with the Company, or from rendering any services to
any person, firm, partnership, joint venture, association, or other
entity to whom such information, in whole or in part, has been
disclosed or is threatened to be disclosed. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies
available to the Company for such breach or threatened breach,
including the recovery of damages from Employee.
8. CONFIDENTIAL INFORMATION.
A. EMPLOYEE'S OBLIGATIONS REGARDING CONFIDENTIAL INFORMATION.
Employee has in the past and may in the future develop, obtain or learn
about confidential information which is the property of the Company or
which the Company is under obligation not to disclose. Employee agrees
to use his best efforts and appropriate diligence to guard and protect
said information, to treat such information as confidential, and
Employee agrees that Employee will not, during or after the period of
his employment with the Company, use for Employee or others, or divulge
to others any of said confidential information which Employee may
develop, obtain or learn about during or as a result of his employment
with the Company, unless he is authorized to do so by the Company in
writing. Employee further agrees that if his employment is terminated,
Employee will not take, but will leave with the Company or
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return to the Company, all documents, records and papers and all
matters of whatever nature which bears or may bear the Company's
confidential information or which is related to the Company.
B. DEFINITION OF CONFIDENTIAL INFORMATION. For purposes of
this Agreement, the term "confidential information" shall include but
not be limited to the following: customer lists; product designs;
pricing policies; marketing strategies; business contacts; business
plans; computer software, including all rights under licenses and other
contracts relating thereto; source code and all documents relating
thereto; all intellectual property including without limitation all
trademarks, trademark registrations and applications, service marks,
copyrights, patents, trade secrets, proprietary marketing information
and know-how; books and records including lists of customers; credit
reports; sales records; price lists; sales literature; advertising
material; manuals; processes; technology; designs; statistics data;
techniques; or any information of whatever nature which gives to the
Company an opportunity to obtain an advantage over its competitors who
do not know or use it, but it is understood that said terms do not
include knowledge, skills or information which is common to the trade
or profession of Employee or which has been independently obtained by
Employee. "Confidential information" shall not include: (i) information
that has become publicly available or generally known other than
through a breach of this Agreement; or (ii) information that is
lawfully required to be disclosed.
C. CONTACT WITH CUSTOMERS. Upon Employee's termination of
employment with the Company, Employee agrees that for a period of one
(1) year from the date of termination of his employment, he shall not
contact any of the Company's customers regarding any matters pertaining
to the business relationships of the Company.
D. INJUNCTIVE RELIEF FOR BREACH. In the event of a breach or
threatened breach by the Employee of the provisions of this section,
the Company shall be entitled to an injunction restraining Employee
from disclosing, in whole or in part, any confidential information, or
from rendering any services to any person, firm, partnership, joint
venture, association, or other entity to whom such confidential
information, in whole or in part, has been disclosed. Nothing herein
shall be construed as prohibiting the Company from pursuing any other
remedies available to the Company for such breach or threatened breach,
including the recovery of damages from Employee.
9. COVENANT NOT TO COMPETE.
A. INTERESTS TO BE PROTECTED. The parties acknowledge that
during the course of his employment, Employee will perform essential
services for the Company and for clients of the Company. Therefore,
Employee will be given an opportunity to meet, work with and develop
close working relationships with the Company's clients on a first-hand
basis and will gain valuable insight as to the clients' operations,
personnel and need for services. In addition, Employee will be exposed
to, have access to, and be
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required to work with, a considerable amount of the Company's
confidential and proprietary information, including but not limited to:
information concerning the Company's methods of operation, financial
information, strategic planning, operational budget and strategies,
payroll data, computer systems, marketing plans and strategies, merger
and acquisition strategies, and customer lists. The parties also
acknowledge that Employee holds a key position in the Company and that
replacing Employee would require the Company to incur substantial
expense. The parties recognize that should Employee compete with the
Company in any manner whatsoever, it could seriously impair the
goodwill and diminish the value of the Company's business. The parties
acknowledge that the covenant not to compete contained in this section
has an extended duration; however, they agree that this covenant is
reasonable and necessary for the protection of the Company, its
shareholders and employees. For these and other reasons, the parties
agree that the following restrictive covenants are fair and reasonable
and are freely, voluntarily and knowingly entered into. Further, each
party has been given the opportunity to consult with independent legal
counsel before entering into this Agreement.
B. RESTRICTIONS ON COMPETITION. Employee agrees that he shall
not while he is then employed by the Company and for a period of one
(1) year thereafter, either as principal, partner, joint venturer,
officer, director, consultant, member, employee or otherwise, own any
controlling interest in, manage, control, render services for, or in
any manner engage in any business competing, with the business of the
Company in any state of the United States or foreign country in which
the Company is conducting business on the date of Employee's
termination. Notwithstanding this restriction, Employee may invest in,
own all or any portion of, manage, control, or render services for, any
real estate project that is at least five miles from any real estate
project owned or controlled by the Company.
C. JUDICIAL AMENDMENT. If the scope of any provision of this
Agreement is found by any Court to be too broad to permit enforcement
to its full extent, then such provision shall be enforced to the
maximum extent permitted by law. The parties agree that the scope of
any provision of this Agreement may be modified by a judge in any
proceeding to enforce this Agreement, so that such provision can be
enforced to the maximum extent permitted by law. If any provision of
this Agreement is found to be invalid or unenforceable for any reason,
it shall not affect the validity of the remaining provisions of this
Agreement.
D. INJUNCTION; REMEDIES FOR BREACH. Since a breach of the
provisions of this section of the Agreement may not adequately be
remedied by money damages, the Company shall be entitled, in addition
to any other right or remedy available to it at law or equity, to an
injunction restraining the breach or threatened breach and to specific
performance of any provision of this section of this Agreement, and, in
either case, no bond or other security shall be required in connection
therewith.
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10. NOTICES. All notices provided for by this Agreement shall be made
in writing either (i) by actual delivery of the notice into the hands of the
parties thereunto entitled or (ii) the mailing of the notice in the United
States mail to the address, as stated below (or at such other address as may
have been designated by written notice) of the party entitled thereto, by
certified mail, return receipt requested. The notice shall be deemed to be
received on the date of its actual receipt of the party entitled thereto. All
communications shall be in writing and, if sent to the Company, shall be
delivered to:
Great Western Land and Recreation, Inc.
0000 X. Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention:
Fax: (000) 000-0000
and, if sent to the Employee, shall be delivered to:
Xxx X. Xxxxx
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
11. ASSIGNMENT. This Agreement shall not be assigned without the
prior written consent of each of the parties.
12. MISCELLANEOUS.
A. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the law of the State of Arizona.
B. WAIVER. No waiver or modification of this Agreement shall
be valid unless in writing and duly executed by the party to be charged
therewith. Waiver by either party hereto of any breach or default by
the other party of any of the terms and provisions of this Agreement
shall not operate as a waiver of any other breach or default, whether
similar to or different from the breach or default waiver.
C. SEVERABILITY. All agreements, provisions,
representations, warranties and covenants contained herein are
severable, and in the event that any one or more of them shall be held
to be invalid, illegal or unenforceable in any respect by any court of
competent jurisdiction, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be
affected thereby, and this Agreement shall be interpreted as if such
invalid, illegal or unenforceable agreements, provisions or covenants
were not contained herein.
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D. GENDER. Whenever the context requires, the masculine
shall include the feminine and neuter.
E. ENTIRE AGREEMENT. This Agreement constitutes and
embodies the full and complete understanding and agreement of the
parties hereto provided, and supersedes all prior understandings or
agreements, whether oral or in writing. Any and all agreements between
the parties hereto, whether oral or in writing, prior to the date
hereof shall be deemed null and void. No amendment to this Agreement
will be valid or enforceable unless it is in writing and signed by
Employee and the Company.
F. PARTIES. This Agreement shall be binding upon and
inure to the benefit to the parties hereto, their legal
representatives, heirs and successors and permitted assigns, and no
other person shall have or be construed to have any legal or equitable
right, remedy or claim under or in respect of, or by virtue of, this
Agreement or any provision herein contained.
G. ATTORNEY'S FEES. The prevailing party in any
litigation hereunder shall be entitled to the recovery of its
reasonable attorneys' fees and costs from the other party.
H. COUNTERPARTS. This Agreement may be executed in two
(2) or more counterparts, each of which shall be deemed an original and
all of which, together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above-written.
"COMPANY" "EMPLOYEE"
GREAT WESTERN LAND AND XXX X. XXXXX
RECREATION, INC.,
By: /s/ Xxxxxxx X. Xxxxxxxx /s/ Xxx X. Xxxxx
---------------------------------- --------------------------
Xxxxxxx X. Xxxxxxxx
Senior Vice President
By: /s/ Xxxxx Xxxx
---------------------------------------
Xxxxx Xxxx, Assistant Secretary
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