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EXHIBIT 10.36
EMPLOYMENT AGREEMENT
WITH ILX RESORTS INCORPORATED
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made between ILX RESORTS
INCORPORATED, an Arizona corporation ("ILX" or the "Company") and Xxxxxx X.
Xxxxxxxxx (the "Employee").
R E C I T A L S:
A. ILX has agreed to employ Employee as Executive Vice President
of the Company and as President of the Company's wholly-owned
subsidiary, Varsity Clubs of America Incorporated; and
B. ILX and Employee desire to set forth 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. Employee is hereby employed as Executive Vice
President of the Company and as President of the Company's wholly-owned
subsidiary, Varsity Clubs of America Incorporated, effective as of the Effective
Date and from month to month thereafter, until terminated pursuant to the
termination provisions of this Agreement. Employee may not engage in other
employment while he is in the employ of ILX pursuant to this agreement.
SECTION 2. DUTIES. Employee agrees to devote such time, attention and
energies as are necessary to fulfill his duties as specified by the Board of
Directors of ILX from time to time. Employee further agrees that he will promote
the best interests and welfare of the Company and shall perform any and all
duties to the best of his abilities. The Employee shall also:
(a) NON-COMPETITION: Not render to others, during his
employment with ILX, 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 ILX
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
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(c) ILX RULES: Abide by all rules and regulations issued by
ILX, 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: Commencing January 1, 1998, ILX shall
pay Employee base compensation computed at the annual rate of One
Hundred Thirty Thousand and No/100 Dollars ($130,000.00), payable in
bi-weekly payments. On each anniversary of the Effective Date
Employee's base compensation shall be increased by such amounts as
shall be recommended by the ILX Compensation Committee and approved by
the Company's Board of Directors.
(b) STOCK GRANT: Commencing on the Effective Date and on each
anniversary date of the Effective Date through and including January 1,
2001, provided that Employee is employed by ILX on such date, Employee
shall be granted and awarded, at no cost or expense (inclusive of
related payroll taxes) to Employee, Thirty-Five Thousand (35,000)
shares of restricted common stock of ILX, adjusted for any stock split,
stock dividend or other recapitalization of the Company.
(c) INCENTIVE COMPENSATION: Employee shall be awarded such
additional incentive compensation, in cash or in stock, as is from time
to time recommended by the Compensation Committee of ILX and approved
by the Company's Board of Directors.
(d) FRINGE BENEFITS: ILX shall provide Employee health and
life insurance under its group plan as it may exist from time to time.
Employee shall also be entitled to such vacation time, sick leave,
employee discounts, and other fringe benefits including, but not
limited to, profit sharing contributions, as may be specified by the
Board of Directors of ILX from time to time for its executive
personnel.
SECTION 4. CONFIDENTIALITY.
(a) NONDISCLOSURE AND NONUSE: Employee acknowledges that
during his employment with ILX, he may have access to and become
acquainted with ILX Confidential Information, as defined below. Except
as Employee's duties during his employment with ILX may require or ILX
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 ILX, any ILX Confidential
Information.
(b) CONFIDENTIAL INFORMATION: For purposes of the foregoing
provisions, "ILX Confidential Information" shall mean (1) any and all
confidential and proprietary business information and trade secrets
concerning the business and affairs of ILX and its subsidiaries and
affiliates, including but not limited to all marketing, sales and lead
generation techniques, know-how and studies, customer and lead lists,
current and anticipated customer requirements, price lists, business
plans, training programs,
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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 ILX and its subsidiaries and 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 ILX and its subsidiaries and affiliates
containing or based, in whole or in part, on any information included
in the foregoing. Provided, however, "ILX Confidential Information"
shall not include information that is not unique to ILX, information
that is generally known in the timeshare industry or information that
was known by Employee prior to his employment with ILX
SECTION 5. NON INTERFERENCE. Employee further agrees that during his
employment and for a period of twelve (12) months thereafter, if Employee's
employment is terminated for Good Cause (as defined below) by the Company or
Employee voluntarily terminates his employment with the Company, 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 ILX or its subsidiaries and affiliates in their business, (2) endeavor,
directly or indirectly, to canvas or solicit in competition with ILX or its
subsidiaries and 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 ILX or its
subsidiaries and affiliates, or (3) directly or indirectly solicit or attempt to
solicit away from ILX or its subsidiaries and 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 ILX or its subsidiaries and affiliates.
SECTION 6. INJUNCTIVE RELIEF. Employee acknowledges that a breach of
Sections 4 or 5 hereof would cause irreparable damage to ILX and/or its
subsidiaries and affiliates, and in the event of Employee's breach of the
provisions of Sections 4 or 5 hereof, ILX 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 ILX 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 4 or 5 hereof are reasonable in scope and
duration, given the nature of the business of ILX and its subsidiaries and
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.
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SECTION 7. 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 4 or 5 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 ILX, which is
engaged in the timeshare business.
SECTION 8. TERMINATION. This Agreement shall terminate: (1) on December
31, 2001; or (2) 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 (3) as of the end of the month of Employee's death,
incapacity due to Employee's physical or mental illness as determined in the
Company's sole discretion (the "Termination"). In the event of Termination,
Employee shall be entitled to the following:
(a) VOLUNTARY TERMINATION, OR FOR GOOD CAUSE: If Employee
voluntarily terminates his employment, or if his employment is
terminated for Good Cause, Employee shall be entitled to no severance
pay. At the Termination, the payment to Employee of compensation earned
to date shall be in full satisfaction of all claims against ILX under
this Agreement. Good Cause shall be deemed to exist if the Employee's
employment is terminated because 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 governing employee
performance;
[3] Refuses to obey reasonable orders in a
manner that amounts to gross
insubordination;
[4] Commits clearly dishonest acts toward ILX;
or
[5] Becomes incapacitated as set forth above or
dies.
(b) INVOLUNTARY TERMINATION WITHOUT GOOD CAUSE: If ILX
terminates Employee's employment, other than for Good Cause, Employee
shall also be paid severance pay equal to his base compensation set
forth in Section 3(a) of this Agreement, payable in monthly payments on
the 30th day of each month for the 12 months following the Termination.
SECTION 9. RETURN OF MATERIALS. Employee understands and agrees that
any training manuals, sales and promotional material, or other property provided
to his by ILX in connection with this Agreement shall remain the sole property
of ILX, and shall be used by the
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Employee exclusively for the Company's benefit. Upon termination of this
Agreement, any such material, or other property shall be immediately returned to
ILX.
SECTION 10. NON-BINDING ALTERNATE DISPUTE RESOLUTION. Except for
actions brought by ILX pursuant to Section 6 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 the State of Arizona, 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 11. WAIVER. Neither party's failure at any time to require
performance by the other party hereto of any of the provisions hereof shall be
deemed to be a waiver of any kind nor in any way affect the rights of either
party 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 12. SUCCESSORS, ASSIGNS, BENEFIT.
(a) ILX SUCCESSORS: The provisions of this Agreement
shall inure to the benefit of and be binding upon
ILX, its successors, assigns and other affiliated
entities, including, but not limited to, any
corporation which may acquire all or substantially
all of the Company's assets or with or into which ILX
may be consolidated, merged or reorganized. Upon any
such merger, consolidation or reorganization, the
term "ILX" as used herein shall be deemed to refer to
any such successor corporation.
(b) NO ASSIGNMENT BY EMPLOYEE: The parties hereto agree
that Employee's services hereunder are personal and
unique, and that ILX is
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executing this Agreement in reliance thereon. This
Agreement shall not be assignable by Employee.
SECTION 13. 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 14. GOVERNING LAW AND VENUE. This Agreement shall be deemed to
have been made and entered into in the state of Arizona and its validity,
construction, breach, performance and operation shall be governed by the laws of
that state. The obligations hereunder of the parties hereto shall be performable
in Maricopa County, Arizona, and venue for any suit involving this Agreement
shall lie exclusively in Maricopa County, Arizona.
SECTION 15. 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 either party to the other. Further, this Agreement may not be modified or
amended except by another instrument in writing executed by both of the parties.
SECTION 16. 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) ILX
ILX Resorts Incorporated
Attention:
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
(b) EMPLOYEE:
SECTION 17. 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 18. 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.
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SECTION 19. EFFECTIVE DATE. This Agreement is executed on the date set
forth below, but shall be effective on and as of January 1, 1998.
Executed this day of December, 1997.
"ILX"
ILX RESORTS INCORPORATED
By:
"EMPLOYEE"
By:
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