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 Xxxxxxx Xxxxx ("Employee").
W I T N E S S E T H:
A. Employer desires to continue the services of Employee as its Senior
Vice President - Club Xxxxxx Resorts and continues and extends the
Employment Agreement dated as of January 1, 2001 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).
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 Senior Vice President - Club Xxxxxx of Employer. During the Employment
Term, Employee will have the responsibility and authority to administer and
coordinate the activities of Employer and its subsidiaries 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 his full business time to advance the business of
Employer. Without Employer's Chairman's approval which will not be unreasonably
withheld, 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 his services hereunder,
Employee will be entitled to the following amounts.
(a) Base Salary. Employee's current base cash salary of aggregate rate
of US$203,000.00 per annum shall continue through the year 2002 (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. Subsequent
changes in the Base Salary shall be at the full discretion of Employer's
Board or any Committee thereof but shall not be reduced below $180,000.
(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
Employer's Board or any Committee thereof.
(c) Benefits. Employee will be entitled to receive usual and customary
benefits generally provided to management and duly authorized (the
"Benefits").
(d) 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 times his 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(d) 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.
(e) Consideration. Employee's covenants contained in Sections 6 and 7
are in return for the consideration Employee is to receive under Section
4(d).
(f) Employer will provide all compensation and benefits listed above.
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5. Termination. This Agreement may be terminated upon the following term:
(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 his Base Salary for
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 six 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 his 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 his 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 his
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 his employment whether or not he has been requested to
do so.
(b) Solicitation. During the Employment Term and two years thereafter,
Employee will not, and will cause his affiliates to not, directly or
indirectly, (i) solicit
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for employment by any Person, its affiliates or anyone else, any employee
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 six-month
period immediately preceding such solicitation of employment, other than
such person (a) whose employment or independent contractor relationship was
terminated by Employer or its affiliate, or (b) who independently responded
to a general solicitation for employment by Employee or his affiliates; or
(ii) induce or attempt to induce, any employee 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
one year from the termination of his 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 venture, 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;
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(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 six months.
(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).
(ii) Cause -
(A) the failure of Employee to substantially perform his
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 his
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,
specifically including, without limitation, the United Mexican States.
(v) Person - a natural person, firm, corporation, association,
partnership (general or limited), limited liability corporation,
syndicate, governmental body, or any other entity.
(vi) Reimbursable Expenses - all properly documented, reasonable
and necessary expenses incurred by Employee on behalf of and in
connection with the business of Employer.
(vii) Termination Notice - notice under Sections 1(a) or 1(b).
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(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 his 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 his affiliates (but
only after, and only to the extent that, such information is published
or otherwise becomes part of the public domain).
(xi) Triggering Event. - (A) a Change of Control, if Employee
terminates employment with Employer upon such Change of Control; (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;
(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 is 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.
(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.
[NEXT PAGE IS SIGNATURE PAGE]
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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
-------------------------------------
Xxxxxxx X. Xxxx
Chairman
Xxxxxxx Xxxxx
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx, Personally
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Schedule A
1. Three weeks annual vacation which shall not accrue from year to year.
2. Insurance for Employee pursuant to the plan of Employer's subsidiary in
Mexico in charge of insurance and related matters accorded to other key
employees of Club Xxxxxx.
3. Reasonable use of office supplies, computers, copying and fax machines,
telephones and secretarial services.
4. Reasonable membership dues of one airline club of Employee's choice and a
corporate American Express card for corporate travel and other proper
business purposes which shall also provide for membership in one or more
airline clubs.
5. Payment of expenses of up to $1,200 per month for automobile expenses, club
dues and usage of other discretionary expenses.
