EMPLOYMENT AGREEMENT 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. XXXXXX (the “Employee”).
R E C I T A L S:
A. Employee has agreed to serve as an executive officer and employee of Silverleaf;
B. Silverleaf and Employee desire to agree on the terms of Employee’s employment.
NOW, THEREFORE, in consideration of the premises and terms hereinafter set forth, the parties
agree as follows:
A G R E E M E N T:
Section 1. Employment. Silverleaf hereby employs Employee effective as of the
Effective Date and for an initial period of two (2) years from the Effective Date (the “Term”),
unless sooner terminated pursuant to the termination provisions of this Agreement. Upon his
election by the Board of Directors, Employee shall serve as Senior Vice President—Capital Markets.
Employee may not engage in other employment while he 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 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 will promote the best interests and welfare of Silverleaf and shall perform any and all
duties to the best of his abilities. The Employee shall:
(a) Non-Competition: Not render to others, during his 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 duties
or loyalty under this Agreement, including, but not limited to, participating in the
promotion or sale of products or services for a competitor of Silverleaf or otherwise engage
in business with such competitor;
(b) Regulatory Laws: Abide by all applicable statutes, rules and regulations
of each State in which services may be rendered; and
(c) Silverleaf Rules: Abide by all rules and regulations issued by Silverleaf,
which are pertinent to Employee’s duties and obligations.
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, Twenty-five Thousand and No/100 Dollars
($225,000), payable in semi-monthly payments on the 1st and 15th days of each month.
(b) Incentive Compensation: Employee shall be granted options under the
Silverleaf 1997 Stock Option Plan and the Silverleaf 2003 Stock Option Plan to purchase an
aggregate of 267,000 shares of Silverleaf common stock. The options shall be exercisable at
a purchase price of $1.62 per share and shall vest over a three-year period. Employee shall
be entitled to participate in any other bonus, incentive, stock option or other compensation
plans of Silverleaf only to the extent the Board of Directors of Silverleaf may deem
appropriate from time to time.
(c) Indemnification: Silverleaf shall enter into an Indemnification Agreement
with Employee pursuant to which Silverleaf shall indemnify Employee for claims, losses, and
causes of action asserted, or threatened to be asserted, against Employee as a result of his
employment by Silverleaf.
(d) Fringe Benefits: Silverleaf shall provide Employee health insurance under
its group plan as it may exist from time to time. The cost of any coverage of any of the
Employee’s family members under Silverleaf’s group plan shall be paid by the Employee. The
Employee shall also be entitled to such vacation time, sick leave and other fringe benefits
as may be specified by the Board of Directors of Silverleaf from time to time for its
executive personnel.
Section 4. Termination Payments. If Employee voluntarily terminates his
employment or if Silverleaf terminates Employee’s employment for any reason, 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.
Section 5. Independent Contractor Consulting Agreement. Nothing in this
Agreement shall be deemed to terminate the Independent Contractor Consulting Agreement dated
October 14, 2002 (“Consulting Agreement”), as amended, between TradeMark Consulting, Co.
(“TradeMark”), an affiliated company owned by Employee, and Silverleaf, and TradeMark shall be
entitled to earn a success bonus as provided therein. Employee’s services to TradeMark for the
limited purpose of performing the Consulting Agreement shall not be considered a violation of any
of the restrictive terms and provisions of this Agreement.
Section 6. Confidentiality.
(a) Nondisclosure and Nonuse: Employee acknowledges that during his employment
with Silverleaf, he may have access to and become acquainted with Silverleaf
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Confidential
Information, as defined below. Except as Employee’s duties during his
employment with Silverleaf may require or Silverleaf may otherwise consent in writing,
Employee agrees that he shall not at any time disclose or use, directly or indirectly,
either during or subsequent to his 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
employment and for a period of two (2) years after the effective date of any Termination, Employee
shall not, either on his 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 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 his 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.
Section 8. Injunctive Relief. Employee acknowledges that a breach of
Sections 6 or 7 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 or 7 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
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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 and 7 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 9. Employee Investments. Anything to the contrary herein
notwithstanding, Employee: (1) shall not be prohibited from investing his assets in such form or
such manner as will not, in the aggregate, detract from the performance by Employee of his duties
hereunder and will not violate the provisions of Sections 6 and 7 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 affiliates) more than two percent (2%)
of the stock in any company, other than Silverleaf, which is engaged in the timeshare business.
Section 10. Employee’s Representations. Employee represents and warrants that
he is free to enter into and perform each of the terms and conditions hereof, and that his
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 11. 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 by the written
agreement of Employee and Silverleaf.
Section 12. Return of Materials and Vehicles: Employee understands and agrees
that any training manuals, sales and promotional material, vehicles or other equipment provided to
him 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 13. Non-Binding Alternate Dispute Resolution. Except for actions
brought by Silverleaf pursuant to Section 8 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
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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 14. Waiver. Silverleaf’s failure at any time to require performance
by Employee of any of the provisions hereof shall not be deemed to be a waiver of any kind nor in
any way affect the rights of Silverleaf thereafter to enforce the provisions hereof. In the event
that either party to this Agreement waives any provision of this Agreement or any rights concerning
any breach or default of the other party hereto, such waiver shall not constitute a continuing
waiver of any such provision or breach or default of the other party hereto.
Section 15. Successors, Assigns, Benefit.
(a) Silverleaf Successors: The provisions of this Agreement shall inure to the
benefit of and be binding upon Silverleaf, its successors, assigns and other affiliated
entities, including, but not limited to, any corporation 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 16. 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 17. Governing Law and Venue. This Agreement shall be deemed to have
been made and entered into in the State of Texas and its validity, construction, breach,
performance and operation shall be governed by the laws of that state. The obligations hereunder
of Silverleaf shall be performable in Dallas County, Texas, and venue for any suit involving this
Agreement shall lie exclusively in Dallas County, Texas.
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Section 18. 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 19. Notices. All notices and communications under this Agreement
shall be sent to the parties at the following addresses or such other addresses that the parties
may subsequently designate in writing.
(a)
|
Silverleaf: | |
| Silverleaf Resorts, Inc. | ||
| Attention: Xxxxxx X. Xxxx, Chief Executive Officer | ||
| 0000 Xxxxx Xxxx, Xxxxx 000 | ||
| Xxxxxx, Xxxxx 00000 | ||
(b)
|
Employee: | |
| Xxxxxx X. Xxxxxx | ||
| 000 Xxxxxxxxxx Xxxxx | ||
| Xxxxxxxx, Xxxxx 00000 |
Section 20. 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 21. 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 22. Effective Date. This Agreement is executed on the date set forth
below, but shall be effective as of August 16, 2005 (the “Effective Date”).
Executed this 16th day of August, 2005.
| “SILVERLEAF” | ||||||
| SILVERLEAF RESORTS, INC. | ||||||
| By: | /S/ XXXXXX X. XXXX | |||||
| XXXXXX X. XXXX, Chief Executive Officer | ||||||
| “EMPLOYEE” | ||||||
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| /S/ XXXXXX X. XXXXXX | ||||||
| XXXXXX X. XXXXXX |
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