EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of January 1, 1999, is by
and between Raintree Resorts International, Inc., a Nevada corporation
("Employer"), and Xxxxxx X. Xxxxxxx ("Employee").
W I T N E S S E T H:
A. Employer desires to continue the services of Employee as its Executive
Vice President - Chief Investment Officer.
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 January 1, 1999
(the "Commencement Date") and shall remain in effect from the
Commencement Date through December 31, 2001 (the "Employment Term").
Beginning on January 1, 2002, 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 Executive Vice President - Chief Investment Officer 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 management, Chairman
and 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.
4. Compensation and Benefits. As compensation for his services hereunder,
Employee will be entitled to the following amounts.
(a) Base Salary. Employee will receive an initial base cash salary at
the aggregate rate of US$245,000 per annum commencing January 1,
1999. (the "Base Salary"). The Base Salary then in effect will be
paid in accordance with its Company's customary payroll
practices. The Base Salary shall not be reduced below US $225,000
per annum.
(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 the Compensation Committee of Employer's Board.
(c) Benefits. Employee will be entitled to receive the benefits (the
"Benefits") listed on Schedule A.
(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 then annual Base
Salary multiplied by the number of years or fractions
thereof Employee has been employed by Employer not to exceed
two (which for purposes hereof commenced on April 15, 1998),
(ii) an amount equal to 75% of his then Base Salary in lieu
of any Bonuses whether or not earned or to be earned at the
time of a Triggering Event, (iii) all stock options granted
to Employee, which shall automatically be vested at an
exercise price equal to the lowest exercise or purchase
price of any then outstanding stock options or warrants to
purchase Common Stock issued by Employer, (iv) an amount
equal to three times the dollar value of all Benefits to be
received by Employee on annual basis, and (v) any other sums
due him. Upon the occurrence of a change of Control,
Employer shall provide Employee with continued access to his
offices and reasonable use of the office and items specified
in Exhibit A for a 30 day period.
(ii) Time of Payment. All accelerated payments of Base Salary,
Bonuses and Benefits to Employee pursuant to this Section
4(d) shall be paid by Employer as promptly as possible but
in any event prior to or on the effective date of any
termination without cause 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.
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 120 days'
notice to Employee; provided that (i) Employer will pay Employee
his Base Salary for one year from such notice, and (ii) Employer
shall pay all other Benefits and Reimbursable Expenses owed
Employee and continue such Benefits for an additional one year
period.
(c) Termination by Employer Without Cause. Termination without Cause
shall be deemed to be a Change of Control constituting a
Triggering Event as defined in Section 8. If terminated without
Cause or if Employer's Board terminates Employee's services as
Chief Investment Officer or otherwise substantially reduced or
curtails his responsibilities, power and authority to act in such
capacity ("Deemed Termination Without Cause"), Employee shall be
entitled to receive the payments specified in Section 4(d)(i).
(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 one year thereafter
if and only if Employee were Terminated with Cause, Employee will
not, and will cause his affiliates to not, directly or
indirectly, (i) solicit 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 if and only if Employee were terminated with Cause, (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; (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.
(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.
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); provided
that Employee has been notified in writing of such
failure and in which notice the specific details of
such failures are provided to Employee with reasonable
and adequate time to remedy the failures as specified;
provided that in the event the parties cannot agree to
a reasonable time period, the period shall be 90 days;
(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) A determination of "Cause" shall require Employee's
Board of Directors to make such a determination at a
Regular Meeting or Special Meeting held for such
purpose by a vote of two-thirds of the disinterested
Directors.
(iii)Change of Control - is deemed to have occurred (A) 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, is
or becomes the "beneficial owner" as defined in Rule 13d-3
under such Act, directly or indirectly, of securities of
Employer representing 50% or more of the combined voting
power of Employer's then outstanding equity securities, (B)
if any Change of Control as defined in the Option Agreement
dated as of December 1, 1998 between the Company and
Employee occurs, or (C) the date on which Employer's Board
terminates Employee's services as Chief Investment Officer
or otherwise substantially reduces or curtails his
responsibilities, power and authority to act in such
capacity ("Deemed Termination Without Cause").
(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).
(viii) Total Disability - illness or other physical or mental
disability of Employee which shall continue for a period of
at least 60 consecutive days or four 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. - Following a Change of Control, (A) if
Employee terminates employment with Employer within nine (9)
months after such Change of Control; (B) the actual
termination of this Agreement by Employer without Cause; 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 other than under
proviso (A) above;
(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. In the event that
Employee shall not be paid by Employer any payments required
hereunder as a result of a Change of Control, Employee shall be
entitled to bring an action for such purpose in Xxxxxx County,
Texas and if it is proven that he is entitled to such payments he
shall be entitled to reasonable attorney's fees and expenses as
well as additional damages equal to his Base Salary for the
period in which the action is pending and unresolved.
(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]
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
Xxxxxx X. Xxxxxxx
By: /s/ Xxxxxx x. Xxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxx,
Personally
