Ex. 10.1
EMPLOYMENT AGREEMENT
WITH SILVERLEAF RESORTS, INC.
     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made between SILVERLEAF
RESORTS, INC., a Texas corporation (“Silverleaf”), and THOMAS J. MORRIS (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.

 

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     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: Robert E. Mead, Chief Executive Officer
 
  1221 River Bend, Suite 120
 
  Dallas, Texas 75247
 
   
(b)
  Employee:
 
   
 
  Thomas J. Morris
 
  819 Equestrian Drive
 
  Rockwall, Texas 75032

     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/ ROBERT E. MEAD    
 
           
 
      ROBERT E. MEAD, Chief Executive Officer    
 
                “EMPLOYEE”    

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      /S/ THOMAS J. MORRIS    
 
           
 
      THOMAS J. MORRIS    

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