WITH SILVERLEAF RESORTS, INC.
Ex.
10.1
WITH
SILVERLEAF RESORTS,
INC.
THIS
EMPLOYMENT AGREEMENT (the
"Agreement") is made between SILVERLEAF RESORTS, INC., a Texas corporation
("Silverleaf"), and XXXXXX X. XXXXXXX (the "Employee").
RECITALS:
A.
Employee is a key executive officer and employee of Silverleaf; and
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B.
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Silverleaf
and Employee desire to continue the employment of Employee and to
agree on
the terms of Employee's continued employment.
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NOW,
THEREFORE, in consideration of the
premises and terms hereinafter set forth, the parties agree as
follows:
AGREEMENT:
Section
1. Employment. Employee's
employment with Silverleaf as Chief Financial Officer 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 reasonably specified by the Board of Directors of Silverleaf
from
time to time for an employee of Employee’s position. 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, regulations and policies issued by Silverleaf, which are pertinent
to
Employee's duties and obligations.
Section
3. Compensation. As
compensation
for the services rendered pursuant to this Agreement:
(a) Base
Compensation: Silverleaf
shall
pay Employee base compensation computed at the annual rate of Two Hundred,
Seventy-Five Thousand and No/100 Dollars ($275,000.00) payable in semi-monthly
payments on the 15th day and the last day of each month.
(b) Incentive
Compensation: Employee
shall be
entitled to participate in any 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.
(c) Fringe
Benefits: Silverleaf
shall
provide Employee health and life insurance under its group plans as they
may
exist from time to time. The cost of any coverage of any of the
Employee's family members under Silverleaf's group plans 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.
Section
4. Termination
Payments. If
Employee’s employment with Silverleaf is terminated prior to a Change of
Control, the payment to Employee of all compensation earned to the date of
termination (the “Earned Compensation”) shall be in full satisfaction of all of
Employee’s claims against Silverleaf under this Agreement and Employee shall be
entitled to no other termination pay. If Employee’s employment is
terminated after a Change of Control and during the Term or any extended Term
of
this Agreement, then the following provisions shall apply:
(a) Good
Cause or Voluntary Termination: If Silverleaf
terminates Employee’s employment for Good Cause, or if Employee voluntarily
terminates Employee’s employment other than for Good Reason, then Employee shall
be entitled to the Earned Compensation only.
(b) No
Good
Cause or Good Reason: If Silverleaf
terminates Employee’s employment other than for Good Cause, or if Employee
terminates Employee’s employment for Good Reason, then Employee shall be
entitled to the Earned Compensation and to Severance Pay. For this
purpose, Severance Pay means an amount of compensation equal to the greater
of
(a) two (2) times the sum of the total cash compensation received by the
Employee for the immediately preceding calendar year, including but not limited
to any base compensation, commissions, bonuses, and similar cash items, but
exclusive of any fringe benefits, vehicle usage and similar non-cash items
or
(b) two (2) times the sum of the Employee’s annual base
compensation. The Severance Pay shall be payable in a lump sum within
thirty (30) days after the termination of employment. As a condition
precedent to the payment of the Severance Pay, Employee agrees to execute
and
deliver to Silverleaf a general release of Silverleaf and its affiliates
from
any and all other claims that Employee might have against Silverleaf and
its
affiliates, the form of which will be provided by Silverleaf.
2
(c) Death
or Incapacity: If
Employee’s employment is terminated because of Employee’s death, or Employee’s
incapacity and inability to perform Employee’s duties hereunder due to
Employee’s physical or mental illness, then Employee shall be entitled to the
Earned Compensation only.
Section
5. Termination
Payment Definitions. For
purposes of Section 4, the following definitions shall apply:
(a) Change
of
Control: “Change of
Control” shall mean the occurrence of any of the following events after the
Effective Date:
[1] Individuals
who, on the Effective Date, constitute the Board of Directors (the “Board”) of
Silverleaf (the “Incumbent Directors”) cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to such date, whose election or nomination for election was approved
by a vote of at least two-thirds of the Incumbent Directors then on the Board
(either by a specific vote or by approval of the proxy statement of Silverleaf
in which such person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent Director; provided, however,
that no individual initially elected or nominated as a director of Silverleaf
as
a result of an actual or threatened election contest with respect to directors
or as a result of any other actual or threatened solicitation of proxies or
consents by or on behalf of any person other than the Board shall be deemed
to
be an Incumbent Director;
[2] The
consummation of any sale, transfer or other disposition of all or substantially
all of the assets of the business of Silverleaf through one transaction or
a
series of related transactions to one or more persons or entities;
[3] Any
“Person” (as such term is defined in Section 3(a)(9) of the Securities Exchange
Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14 (d)(2)
of the Exchange Act), other than Xxxxxx X. Xxxx, is or becomes a “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of Silverleaf representing more than 50% of the
combined voting power of Silverleaf’s then outstanding securities eligible to
vote for the election of the Board;
[4] The
consummation of a merger, consolidation, reorganization, statutory share
exchange or similar form of corporate transaction involving Silverleaf or any
of
its subsidiaries that requires the approval of Silverleaf’s stockholders,
whether for such transaction or the issuance of securities in the transaction;
or
3
[5] The
stockholders of Silverleaf approve a plan of complete liquidation or
dissolution.
(b)
Good
Cause: “Good Cause”
shall be deemed
to exist if Employee:
[1]
Willfully breaches or habitually neglects the duties that the Employee is
required to perform under the terms of this Agreement;
[2]
Willfully violates reasonable and substantial rules, regulations or policies
governing employee performance;
[3]
Willfully refuses to obey reasonable orders in a manner that amounts to
insubordination; or
[4]
Willfully commits clearly dishonest acts toward Silverleaf.
For
such
purposes, no act or failure to act by Employee shall be considered “willful”
unless done or omitted to be done by Employee in bad faith and without
reasonable belief that Employee’s action or omission was in the best interests
of Silverleaf or its affiliates. Any act, or failure to act, based
upon authority given pursuant to a resolution duly adopted by the Board or
based
upon the advice of counsel for Silverleaf shall be conclusively presumed to
be
done, or omitted to be done, by Employee in good faith and in the best interests
of Silverleaf. Good Cause shall also not exist pursuant to clause
[1], [2] or [3], unless Employee has failed to correct the activity alleged
to
constitute Good Cause within thirty (30) days following written notice from
Silverleaf of such activity, which notice shall specifically set forth the
nature of such activity and the corrective action reasonably sought by
Silverleaf. Notwithstanding the foregoing, the termination of the
Employee’s employment for Good Cause shall be pursuant to the action of the
Board, taken in conformity with the By-laws of Silverleaf.
(c)
Good
Reason: “Good Reason” shall mean the occurrence of any of the
following events after a Change of Control:
[1]
The failure by Silverleaf to pay Employee the compensation and benefits due
Employee under Section 3;
[2]
A material diminution in Employee’s responsibilities or authority, or a
diminution of Employee’s title;
[3]
Employee is required to relocate for purposes of Employee’s employment with
Silverleaf;
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[4]
Any material breach of this Agreement by Silverleaf; or
[5]
The failure of any successor to all or substantially all of the business
and/or
assets of Silverleaf to assume this Agreement.
Provided,
however, Employee must give written notice to Silverleaf of the event
constituting Good Reason within thirty (30) days of Employee’s knowledge of the
event, or such event shall not constitute Good Reason. Provided,
further, Good Reason shall not be deemed to exist unless Silverleaf fails to
cure the event giving rise to Good Reason within thirty (30) days after receipt
of the written notice from Employee.
Section
6. 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, timeshare member lists, other 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
7. Non-Interference. Employee
further
agrees that during his or her employment and for a period of two (2) years
after
the effective date of any Termination, 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 if it would
adversely affect Silverleaf’s 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 if it would
adversely affect Silverleaf’s business, 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 or business to any
person who, on or during the 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.
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Section
8. Noncompetition. If
the
Employee’s employment is terminated after a Change of Control and during the
Term or any extended Term of this Agreement:
(a) Covenant: Employee
covenants and agrees that he or she shall not, for a period of two (2) years
after the effective date of the 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 the 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 the 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
the
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.
6
Section
9. Injunctive
Relief. Employee
acknowledges that a breach of Sections 6, 7, or 8 hereof would cause irreparable
damage to Silverleaf and/or its affiliates, and in the event of Employee's
breach of the provisions of Sections 6, 7 or 8 hereof, Silverleaf shall be
entitled to a temporary restraining order and an injunction restraining Employee
from breaching such 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 6, 7 and 8 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
10. 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 6, 7 or 8
hereof; and (2) shall not be prohibited from purchasing stock in any publicly
traded company solely as a stockholder so long as Employee does not 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
11. 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
12. Termination. Employee’s
employment shall terminate upon the expiration of the Term of this
Agreement, 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 and inability to perform Employee’s duties
hereunder due to Employee’s physical or mental illness (the “Termination”). The Term
of
this Agreement may be extended only: (1) by the written agreement of Employee
and Silverleaf; or (2) by Silverleaf, in its sole discretion, by the giving
of
written notice to Employee of a one (1) year extension of the then Term of
this
Agreement, provided that Silverleaf may only exercise this option within sixty
(60) days before or after each anniversary of the Effective Date of this
Agreement, the option may be exercised only once for each anniversary of the
Effective Date and the exercise must be prior to the expiration of the then
Term
of this Agreement. If Silverleaf unilaterally extends the Term as
provided above, Employee, in Employee’s sole discretion, may reject the
extension by giving written notice to Silverleaf within thirty (30) days of
the
date of Silverleaf’s notice of the extension, in which event the Term shall not
be extended.
7
Section
13. 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
14. Non-Binding
Alternate Dispute Resolution. Except for
actions brought by Silverleaf pursuant to Section 9 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 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
15. 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.
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Section
16. Successors,
Assignability.
(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 or other entity 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.
(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
17. 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
18. 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.
Section
19. 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
20. 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.
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(a)
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Silverleaf:
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Silverleaf
Resorts, Inc.
Attention: Xxxxxx
X. Xxxx, Chief Executive Officer
0000
Xxxxx Xxxx, Xxxxx 000
Xxxxxx,
Xxxxx 00000
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(b)
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Employee:
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Xxxxxx
X.
Xxxxxxx
0000
Xxxxxxxx Xxxxxx
Xxxxxx,
XX 00000
Section
21. 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
22. 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
23. Effective
Date. This Agreement
is
executed on the date set forth below, but shall be effective as of February
4,
2008 (the "Effective Date").
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Dates
of Execution:
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"SILVERLEAF"
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SILVERLEAF
RESORTS, INC.
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February
4, 2008
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By:
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/S/
XXXXXX X. XXXX
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XXXXXX
X. XXXX, Chief Executive
Officer
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“EMPLOYEE”
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February
4, 2008
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/S/
XXXXXX X.
XXXXXXX
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XXXXXX
X. XXXXXXX
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