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Exhibit 10.1
 
 
 
 
 

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INCENTIVE STOCK OPTION AGREEMENT

BETWEEN

SILVERLEAF RESORTS, INC.

AND
 
___________________________
 
 

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TABLE OF CONTENTS

       
Page
         
RECITALS
1
AGREEMENT
1
ARTICLE I.
1
GRANT OF OPTION
1
 
Section 1.1.
 
Grant of Option
1
 
Section 1.2.
 
Fair Market Value
1
 
Section 1.3.
 
Purchase Price
2
 
Section 1.4.
 
Time for Exercise
2
 
Section 1.5.
 
Partial Exercise
2
 
Section 1.6.
 
Fractional Shares
2
 
Section 1.7.
 
Method of Exercise
2
 
Section 1.8.
 
Termination of Option
3
 
Section 1.9.
 
Payment upon Change of Control
3
ARTICLE II
4
RESTRICTIONS AND LIMITATIONS
4
 
Section 2.1.
 
Limitations
4
 
Section 2.2.
 
Limitation on Payments
4
 
Section 2.3.
 
Effect on Other Agreements
4
 
Section 2.4.
 
Shares as Investment
4
 
Section 2.5.
 
Reclassification, Consolidation, or Merger
4
 
Section 2.6.
 
Limitations Upon Transfer of Option
4
 
Section 2.7.
 
Limitations Upon Transfer of Shares
5
 
Section 2.8.
 
Rights as Shareholder
5
ARTICLE III
5
ADMINISTRATIVE PROVISIONS
5
 
Section 3.1.
 
Notices
5
 
Section 3.2.
 
Binding Effect
5
 
Section 3.3.
 
Incentive Options
6
 
Section 3.4.
 
Incorporation of the 2008 Plan
6
 
Section 3.5.
 
Effective Date of Option Agreement
6

 
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INCENTIVE STOCK OPTION AGREEMENT
BETWEEN
SILVERLEAF RESORTS, INC.
AND
____________________________________

This Incentive Stock Option Agreement (the “Option Agreement”) is made between
SILVERLEAF RESORTS, INC., a Texas Corporation (the “Company”),
and  _____________________ (“Employee”), effective as of the date specified
below.

RECITALS:

A.           The Company has employed Employee and considers it desirable and in
its best interests that Employee be given an inducement to acquire a proprietary
interest in the Company and an added incentive to advance the interests of the
Company in the form of options to purchase common shares of the Company;

B.           The stock options granted hereunder are granted pursuant to the
terms of the 2008 Stock Option Plan for Silverleaf Resorts, Inc., which was
adopted by the Company’s shareholders effective as of July 29, 2008 (the “2008
Plan”) and are intended to be Incentive Options as defined in the 2008 Plan and
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”); and

C.           The stock options granted hereunder may not be exercised and the
stock options will terminate unless the 2008 Plan has been approved by the
shareholders within twelve (12) months of the date the 2008 Plan was adopted by
the Company.

AGREEMENT:

NOW, THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
Parties agree as follows:
 
ARTICLE I.
GRANT OF OPTION

Section 1.1.      Grant of Option.  The Company hereby grants to Employee the
right and option to purchase from it, on the terms and conditions following, all
or any part of an aggregate of  One Hundred Seventy-five Thousand (175,000)
shares of the authorized $0.01 par value common shares of the Company.

Section 1.2.      Fair Market Value.  The fair market value of the Company's
$0.01 par value common shares on the date of this Option Agreement is ONE AND
895/1,000 DOLLARS ($1.895) per share, as determined by the Compensation
Committee of the Company's Board of Directors (the “Committee”) pursuant to
Section 7.3 of the 2008 Plan.

 
 

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Section 1.3.      Purchase Price.  The purchase price for each share purchasable
hereunder shall be ONE AND 895/1,000 DOLLARS ($1.895).

Section 1.4.      Time for Exercise.   Employee may elect to exercise the
options at the times and for the number of shares indicated as follows:

 
(a)
On or after August 14, 2009, to and including August 13, 2010, 35,000 shares;

 
(b)
On or after August 14, 2010, to and including August 13, 2011, an additional
35,000 shares;

 
(c)
On or after August 14, 2011, to and including August 13, 2012, an additional
35,000 shares;

 
(d)
On or after August 14, 2012, to and including August 13, 2013, an additional
35,000 shares; and

 
(e)
On or after August 14, 2013, but before August 14, 2018 (the “Option Termination
Date”), an additional 35,000 shares.

However, if Employee does not purchase the full number of shares to which
Employee is entitled in any period above, Employee is permitted to purchase
those remaining shares in a later period through and including the Option
Termination Date, in addition to those shares which Employee may otherwise be
entitled to purchase.

Section 1.5.      Partial Exercise.  No partial exercise of an option may be for
less than 100 full shares.

Section 1.6.      Fractional Shares.  In no event shall the Company be required
to transfer fractional shares to the Employee.

Section 1.7.      Method of Exercise.  The option shall be exercised by Employee
as to all or part of the shares covered by the option by giving written notice
of such exercise to the Company, specifying the number of shares to be purchased
and specifying a business day not more than fifteen (15) days from the date such
notice is given, for the payment of the purchase price against delivery of the
shares being purchased.  Such notice shall set forth a statement, if required by
Section 8.8 of the 2008 Plan and Section 2.3 of this Option Agreement, that the
shares are being acquired for investment.

Subject to any applicable laws or regulations and to the terms of Sections 8.8,
12.5, and 13.1 of the 2008 Plan, the Company shall cause certificates for the
Shares so purchased to be delivered to Employee at the principal business office
of the Company, against payment of the full purchase price, on the date
specified in the notice of exercise, such payment to be made in cash or by
certified check or by transfer and delivery of shares of common stock of the
Company as provided in Section 7.4 of the 2008 Plan.

 
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Section 1.8.      Termination of Option.  The option and all rights granted by
this Option Agreement, to the extent those rights have not been exercised, will
terminate and become null and void on the sooner of:

 
(a)
Such date as is ten (10) years from the date of this Option Agreement;

 
(b)
The Option Termination Date as defined in Section 1.4 hereof;

 
(c)
The date which is three months after the date Employee ceases to be in the
continuous employ of the Company, if such cessation is by disability,
retirement, or dismissal other than for cause, as defined in Section 9.4 of the
2008 Plan, provided that in the event of Employee's cessation of employment
under such terms, Employee may exercise such option only to the extent that
Employee was entitled to exercise it on the date of Employee's cessation of
employment;

 
(d)
The date Employee ceases to be in the continuous employ of the Company if such
cessation is by voluntary termination or dismissal for cause as defined in
Sections 9.3 and 9.4 of the 2008 Plan;

 
(e)
The date which is one year following the death of Employee, if Employee dies
while employed by the Company or within the three-month period following the
termination of such employment if such termination was by disability,
retirement, or dismissal other than for cause.  In the event of Employee's death
under such terms, the person or persons to whom Employee's rights under the
option shall pass, whether by will or by the applicable laws of descent and
distribution, may exercise such option pursuant to Section 8.7 of the 2008 Plan
only to the extent that Employee was entitled to exercise it on the date of
Employee's death; or

 
(f)
Subject to payment being made by the Company under Section 1.9, the date of a
change of control of the Company.  A “change in control” of the Company shall
have the same meaning that such phrase has under Section 10.2 of the 2008 Plan.

For purposes of the foregoing provisions, serving as an Employee of a subsidiary
corporation or parent corporation of the Company, as defined in the 2008 Plan,
shall be deemed to be serving as an Employee of the Company.

Section 1.9.      Payment upon Change of Control.  Provided that the grant of
this option has been approved in the manner set forth in Section 2.7 hereof,
upon a change of control of the Company, the Committee, in its discretion, may
determine that each option outstanding and granted hereunder shall terminate
within a specified number of days after notice to the holder, and such holder
shall receive, with respect to each share subject to such option, an amount of
cash equal to the excess of the fair market value of such share immediately
prior to the occurrence of the change of control over the exercise price per
share of this option.  All of the provisions of this Section shall be subject to
the provisions of Section 8.10 and Article XI of the 2008 Plan.

 
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ARTICLE II
RESTRICTIONS AND LIMITATIONS

Section 2.1.      Limitations.  In accordance with the terms of Section 422 of
the Code, the option granted under this Option Agreement is limited so that the
aggregate fair market value of the stock which Employee may purchase hereunder
for the first time in any calendar year does not exceed $100,000.

Section 2.2.      Limitation on Payments .  If it is determined, in the manner
provided under Article XI of the 2008 Plan, that Article XI of the 2008 Plan
applies to a payment or payments made under this Option Agreement, then such
payment or payments to the Employee shall be reduced as provided in Article XI
of the 2008 Plan.  This reduction of payments under Article XI of the 2008 Plan
is designed to result in the maximum after tax amount for the Employee by taking
into account the effect that section 4999 of the Code could have on the payment
or payments.

Section 2.3.      Effect on Other Agreements.  Nothing herein contained shall be
deemed to modify the terms of any other agreement between the Company and
Employee.

Section 2.4.      Shares as Investment.  By accepting this option and if
required by the 2008 Plan, Employee acknowledges for Employee, Employee's heirs,
and legatees that any and all shares purchased under this Option Agreement shall
be acquired for investment and not for or with a view towards distribution, and
upon the transfer of any or all of the shares subject to the option granted
hereunder, Employee, or Employee's heirs or legatees receiving such shares,
shall deliver to the Company a representation in writing that such shares are
being acquired in good faith for investment and not for or with a view towards
distribution.

Section 2.5.      Reclassification, Consolidation, or Merger.  Adjustments to
the number of shares subject to this option and the option price for them shall
be proportionately adjusted, pursuant to Section 10.1 of the 2008 Plan.

Section 2.6.      Limitations Upon Transfer of Option.  During the lifetime of
Employee, the option and all rights granted in this Option Agreement shall be
exercisable only by the Employee, and except as Section 1.8(f) of this Option
Agreement otherwise provides, the option and all rights granted under this
Option Agreement shall not be transferred, assigned, pledged, or hypothecated in
any way (whether by operation of law or otherwise), and shall not be subject to
execution, attachment, or similar process. Upon any attempt to transfer, assign,
pledge, hypothecate, or otherwise dispose of such option or of such rights
contrary to the provisions in this Option Agreement, or upon the levy or any
attachment or similar process upon such option or such rights, such option and
such rights shall immediately become null and void.

 
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Section 2.7.      Limitations Upon Transfer of Shares.  No shares acquired by
Optionee pursuant to this Option Agreement shall be sold or disposed of within
six (6) months following the date of acquisition of such shares, unless either
the grant of this Incentive Option is approved by the Board of Directors, or a
committee of the Board of Directors that is composed solely of two or more
non-employee directors as defined in Rule 16b-3 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), or the grant of this Incentive Option
is approved or ratified, in compliance with Section 14 of the Exchange Act, by
either:  the affirmative votes of the holders of a majority of the securities of
the Company present, or represented, and entitled to vote at a meeting duly held
in accordance with the applicable laws of the state or other jurisdiction in
which the Company is incorporated, or the written consent of the holders of a
majority of the securities of the Company entitled to vote, provided that such
ratification occurs no later than the date of the next annual meeting of the
shareholders.  Any attempted sale, disposal or transfer of such shares in
violation of the foregoing restrictions on transfer shall be without
effect.  All shares transferred to Optionee pursuant to the exercise of the
option granted hereby shall be clearly marked with the foregoing restrictions on
transfer to the extent applicable.

Section 2.8.      Rights as Shareholder.  Neither Employee nor Employee's
executor, administrator, heirs, or legatees, shall be or have any rights or
privileges of a shareholder of the Company in respect of the shares transferable
upon exercise of the option granted under this Option Agreement, unless and
until certificates representing such shares shall have been endorsed,
transferred, and delivered and the Employee, or the Employee's executor,
administrator, heirs or legatees, as the case may be, has caused his name to be
entered as the shareholder of record on the books of the Company.

ARTICLE III
ADMINISTRATIVE PROVISIONS

Section 3.1.      Notices.  Any notice to be given under the terms of this
Option Agreement shall be addressed to the Parties as follows:

If to the Company:
 
Silverleaf Resorts, Inc.
Attn:  Robert E. Mead, Chief Executive Officer
1221 River Bend Drive, Suite 120
Dallas, Texas 75247

If to Employee:
 
_______________________________

_______________________________

_______________________________

Any Party may change its address by giving notice in writing, stating its new
address, to the other Party as provided in the foregoing manner.  Any notice
shall be deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as herein required, certified and deposited (postage and
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.

Section 3.2.      Binding Effect.  This Option Agreement shall be binding upon
the heirs, executors, administrators, and successors of the parties hereto.

 
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Section 3.3.      Incentive Options.  The options granted hereunder are intended
to be Incentive Options as defined in the 2008 Plan and Section 422 of the Code,
but the Company makes no warranty as to the qualification of any option as an
Incentive Option.

Section 3.4.      Incorporation of the 2008 Plan.  The terms, conditions and
limitations contained in the 2008 Plan are incorporated herein by reference and
such provisions shall control to the extent they are not specifically contrary
to a provision of this Option Agreement.

Section 3.5.      Effective Date of Option Agreement.  This Option Agreement is
effective as of the 14th day of August, 2008.

DATES OF EXECUTION:
 
SILVERLEAF RESORTS, INC.,
                ______________, ____  
By:  
       
Authorized Officer
        ______________, ____          
Employee

 

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