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EXHIBIT 10.2.2
INDEPENDENT CONTRACTOR AGREEMENT
WITH SILVERLEAF RESORTS, INC.
THIS INDEPENDENT CONTRACTOR AGREEMENT (the "Agreement") is made
between SILVERLEAF RESORTS, INC., a Texas corporation ("Silverleaf"), and
RECREATIONAL CONSULTANTS, INC., a Texas corporation ("Recreational").
R E C I T A L S:
A. Recreational is providing marketing and management services to
Silverleaf in regard to the sale of interests in Silverleaf's
timeshare resorts; and
B. Silverleaf and Recreational desire to continue their
contractual relationship and to agree on the terms of their
continued contract.
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. SERVICES. Recreational shall perform all sales
management functions for Silverleaf's timeshare sales as further defined by
Silverleaf, 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.
SECTION 2. GENERAL DUTIES. Recreational agrees to devote such
personnel, time, attention and energies as are necessary to fulfill its duties
as specified by the Board of Directors of Silverleaf from time to time.
Recreational further agrees that it will promote the best interests and welfare
of Silverleaf and shall perform any and all duties to the best of its
abilities. Recreational shall:
(a) NON-COMPETITION: Not render to others, during the
term of this Agreement, 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 its 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 Recreational's duties and
obligations.
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SECTION 3. EXECUTIVE PERSONNEL. Recreational's President, Xxxxx
X. X'Xxxxxx, or such other person as may be approved by Silverleaf's Board of
Directors, shall also serve as Executive Vice-President of Sales of Silverleaf,
subject to removal or re-election by the Board of Directors of Silverleaf. Any
compensation payable to Xxxxx X. X'Xxxxxx for these services shall be the sole
responsibility of Recreational.
SECTION 4. NONCOMPETITIVE BUSINESS. Recreational shall be free
to devote such time, attention and energy to other non-competitive business in
which Recreational may be engaged so long as Recreational provides the required
services to Silverleaf to the satisfaction of Silverleaf in its sole
discretion.
SECTION 5. COMPENSATION. As compensation for the services
rendered pursuant to this Agreement:
(a) BASE COMPENSATION: Recreational shall be paid weekly
commissions equal to one percent (1%) of Silverleaf's net sales from
timeshare and vacation contracts from Silverleaf's resorts for which
Recreational is directly responsible for management of the sales
personnel. For this purpose, net sales mean only sales on which
Silverleaf has received a full down payment and which have not been
cancelled as of the due date of the payment of this base compensation.
The payment of this base compensation shall be made as follows and
shall be subject to the following chargebacks:
[1] The base compensation payable on net sales
for each week shall be paid on the second Friday thereafter;
and
[2] If the first monthly installment due under
the contract for a net sale is not made and the contract is
subsequently cancelled, the base compensation paid to
Recreational on the contract shall be charged back to
Recreational. For this purpose, Silverleaf shall maintain a
$2,000 reserve out of Recreational's base compensation,
against which the chargebacks shall be deducted. The reserve
shall be established and replenished on a regular basis by
Silverleaf deducting, to the extent required, ten percent
(10%) of the base compensation otherwise due Recreational.
(b) INCENTIVE COMPENSATION FOR UPGRADE SALES:
Recreational shall be paid additional weekly incentive compensation,
payable on the second Friday after each week, based on the weekly
volume of upgrade net sales, according to the following initial scale:
Weekly Volume Incentive Compensation
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$125,000 $1,000.00
$150,000 $1,250.00
$175,000 $1,500.00
The weekly volumes and the incentive compensation shall be subject to
adjustment from time to time in the sole discretion of Silverleaf.
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(c) INCENTIVE COMPENSATION FOR APG: Recreational shall
also be paid monthly incentive compensation based on the monthly
average price per guest ("APG") computed on only vacation ownership
and bi-annual ownership contracts and sampler sales, and the
commissions paid thereon for the month, according to the following
scale:
APG Incentive Compensation
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$800-$849 5% of Commissions Paid
$850-$900 10% of Commissions Paid
$901-$949 15% of Commissions Paid
$950 or more 20% of Commissions Paid
The APG amounts and this incentive compensation shall also be subject
to adjustment from time to time by Silverleaf in its sole discretion.
(d) EXPENSES: Silverleaf shall furnish Recreational a
company owned vehicle for use by Recreational in performing its
duties, and Silverleaf shall pay all expenses associated therewith.
All other expenses incurred by Recreational in the performance of the
Services hereunder shall be paid by Recreational, except to the extent
otherwise agreed in writing by Silverleaf.
(e) TERMINATION: Recreational shall be entitled to no
termination pay. At the Termination of this Agreement, the payment to
Recreational of compensation earned to date shall be in full
satisfaction of all claims against Silverleaf under this Agreement,
and payment is contingent upon return of all Silverleaf's property as
outlined below.
SECTION 6. NATURE OF RELATIONSHIP. Recreational is retained as
an independent contractor, and Silverleaf and Recreational agree in regard to
such status as follows:
(a) EMPLOYEES: Recreational shall be responsible for
hiring, paying and supervising any employees employed by Recreational
in the performance of its duties under this Agreement and the
withholding of all required federal or state taxes from their
compensation, and Recreational shall indemnify and hold Silverleaf
harmless from any claims made by such employees against Silverleaf or
made by any taxing authority against Silverleaf for any such taxes.
(b) NO FRINGE BENEFITS: No employee of Recreational
shall be entitled to any fringe benefits or to participate in any
other kind of benefits furnished to Silverleaf's employees, except to
the extent otherwise agreed in writing by Silverleaf. Provided,
however, so long as Xxxxx X. X'Xxxxxx serves as Executive Vice-
President of Sales, Silverleaf shall provide him health insurance
under its group plan, with any cost of coverage of his family to be
paid by him or Recreational.
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SECTION 7. CONFIDENTIALITY.
(a) NONDISCLOSURE AND NONUSE: Recreational acknowledges
that during the term of this Agreement, it may have access to and
become acquainted with Silverleaf Confidential Information, as defined
below. Except as Recreational's duties may require or Silverleaf may
otherwise consent in writing, Recreational agrees that it and its
employees shall not at any time disclose or use, directly or
indirectly, either during or subsequent to the term of this Agreement
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, 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 8. NON-INTERFERENCE. Recreational further agrees that
during the term of this Agreement or subsequent thereto, Recreational shall
not, either on its 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 the term of this Agreement has been or is a customer
or in the habit of dealing with Silverleaf or its affiliates in their 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 the
term of this Agreement has been or is a supplier of goods or services to
Silverleaf or its affiliates, 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 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 9. NONCOMPETITION.
(a) COVENANT: Recreational covenants and agrees that it
shall not, for a period of two (2) years from and after the effective
date of any Termination, working alone or in conjunction with one or
more other persons or entities, for compensation or not, permit its
name to be used by or engage in or carry on, directly or indirectly,
either for itself 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 any 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 any 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 any Termination.
(b) TOLLING. If Recreational 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 Recreational 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 Recreational 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 Recreational
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.
SECTION 10. INJUNCTIVE RELIEF. Recreational acknowledges that a
breach of Sections 7, 8 or 9 hereof would cause irreparable damage to
Silverleaf and/or its affiliates, and in the event of Recreational's breach of
the provisions of Sections 7, 8 or 9 hereof, Silverleaf shall be entitled to a
temporary restraining order and an injunction restraining Recreational from
breaching such Sections without the necessity of posting bond or proving
irreparable harm, such being conclusively admitted by Recreational. Nothing
shall be construed as prohibiting Silverleaf from pursuing any other available
remedies for such breach, including the recovery
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of damages from Recreational. Recreational acknowledges that the restrictions
set forth in Sections 7, 8 and 9 hereof are reasonable in scope and duration,
given the nature of the business of Silverleaf and its affiliates.
Recreational agrees that issuance of an injunction restraining Recreational
from breaching such Sections in accordance with their terms will not pose an
unreasonable restriction.
SECTION 11. INVESTMENTS. Anything to the contrary herein
notwithstanding, Recreational: (1) shall not be prohibited from investing its
assets in such form or such manner as will not, in the aggregate, detract from
the performance by Recreational of its duties hereunder and will not violate
the provisions of Sections 7, 8 or 9 hereof; and (2) shall not be prohibited
from purchasing stock in any publicly traded company solely as a stockholder so
long as Recreational does own (together or separately or through its
affiliates) more than two percent (2%) of the stock in any company, other than
Silverleaf, which is engaged in the timeshare business.
SECTION 12. RECREATIONAL'S REPRESENTATIONS. Recreational
represents and warrants that it is free to enter into and perform each of the
terms and conditions hereof, and that its execution and performance of this
Agreement does not and will not violate or breach any other Agreement between
Recreational and any other person or entity.
SECTION 13. TERMINATION. This Agreement may be terminated by
either party at any time and for any or no reason whatsoever by written notice
at least thirty (30) days prior to the effective date of the termination.
SECTION 14. RETURN OF MATERIALS AND VEHICLES. Recreational
understands and agrees that any training manuals, sales and promotional
material, vehicles or other equipment provided to it or its employees by
Silverleaf in connection with this Agreement shall remain the sole property of
Silverleaf, and shall be used by Recreational and its employees exclusively for
Silverleaf's benefit. Upon termination of this Agreement, any such material,
vehicles or other equipment shall be immediately returned to Silverleaf.
SECTION 15. NON-BINDING ALTERNATE DISPUTE RESOLUTION. Except for
actions brought by Silverleaf pursuant to Section 10 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.
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(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 16. WAIVER. Silverleaf's failure at any time to require
performance by Recreational 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 17. 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 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 corporation.
(b) NO ASSIGNMENT BY RECREATIONAL: The parties hereto
agree that Recreational's services hereunder are unique, and that
Silverleaf is executing this Agreement in reliance thereon. This
Agreement shall not be assignable by Recreational.
SECTION 18. 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 19. 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 20. ENTIRE UNDERSTANDING. This Agreement sets forth the
entire understanding between the parties, and no other representations,
warranties or agreements whatsoever have been made by Silverleaf to
Recreational. Further, this Agreement may not be modified or amended except by
another instrument in writing executed by both of the parties.
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SECTION 21. 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
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
(b) RECREATIONAL:
Recreational Consultants, Inc.
Attention: Xxxxx X. X'Xxxxxx
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SECTION 22. 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 23. 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 24. EFFECTIVE DATE. This Agreement is executed on the
date set forth below, but shall be effective as of January 1, 1997 (the
"Effective Date").
Executed this 28th day of February, 1997.
"SILVERLEAF"
SILVERLEAF VACATION CLUB, INC.
By: /s/ XXXXXX XXXX
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Authorized Officer
"Recreational"
RECREATIONAL CONSULTANTS, INC.
By: /s/ XXXXX X. X'XXXXXX
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Xxxxx X. X'Xxxxxx, President
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AGREEMENT REGARDING COVENANTS
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the undersigned hereby agrees to be individually
bound by the provisions of Sections 7, 8, 9, 10 and 11 of the foregoing
Agreement in the same manner as though he was named therein in the place of
Recreational.
/s/ XXXXX X. X'XXXXXX
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XXXXX X. X'XXXXXX
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