3.1. Base Salary. Executive’s initial base salary shall be $285,000.00 per year, whichbase salary shall be payable in accordance with the Company’s standard payroll practices andpolicies for senior executives and shall be subject to such withholdings as required by law orasotherwise permissible under such practices or policies.     3.2. Annual Bonus. Executive during the Term shall be eligible to receive an annualbonus each year, and such bonus, if any, shall be set by the Compensation Committee of theCompany’s Board of Directors or, at the discretion of such Board of Directors, the Board ofDirectors as a whole. Each such bonus shall be reasonable in light of the contribution made byExecutive for such year in relation to the contributions made and bonuses paid other seniorCompany executives for such year.     3.3. Stock Options and Restricted Stock. Executive shall be eligible for grants ofoptions to purchase stock of the Company and restricted stock grants when and as recommendedby the Compensation Committee of the Company’s Board of Directors or, at the discretion ofsuch Board of Directors, the Board of Directors as a whole. The number of shares subject toeach such stock option grant or restricted stock grant shall be reasonable in light of thecontribution made, or expected to be made, by Executive for the period for which such grant ismade in relation to the number of shares subject to stock option grants and restricted stockgrantsmade to other senior Company executives based on the contributions made, or expected to bemade, by such other senior Company executives for such period.     3.4. Employee Benefit Plans, Programs and Policies. Executive shall be eligible toparticipate in the employee benefit plans, programs and policies maintained by the Company forsimilarly situated senior executives in accordance with the terms and conditions of suchplans,programs and policies as in effect from time to time.     3.5. Vacation and Other Similar Benefits. Executive shall be entitled to vacation timeto be credited and taken in accordance with the Company’s policy from time to time in effectforsenior executives. Such vacation time shall not be carried over year to year, and shall not bepaidout upon termination of employment, or upon expiration of this Employment Agreement.     3.6. Business Expenses. Executive shall have a right to be reimbursed for Executive’sreasonable and appropriate business expenses which Executive actually incurs in connectionwith the performance of Executive’s duties and responsibilities under this EmploymentAgreement in accordance with the Company’s expense reimbursement policies and proceduresfor its senior executives.§ 4. TERMINATION OF EMPLOYMENT     4.1. General. The Company shall have the right to terminate Executive’s employmentat any time, and Executive shall have the right to resign at any time.     4.2. Termination By The Company Other Than For Death, Cause Or Disability Or ByExecutive For Good Reason.     (a) Before a Change in Control. If the Company terminatesExecutive’s employment other than for Death, Cause (as defined in § 4.2(c)) or aDisability (as defined in § 4.2(d)) before the Effective Date (as defined in §4.2(e)(l)) of a Change in Control (as defined in § 4.2(e)(2)) or Executive resignsfor Good Reason (as defined in § 4.2(f)) before such Effective Date, the Company’sonly obligation to Executive under this Employment Agreement shall
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(subject to applicable withholdings) be to pay Executive’s base salary and annual bonus, ifany, which were due and payable on the date Executive’s employment terminated and toreimburse Executive for expenses Executive had already incurred and which would haveotherwise been reimbursed but for such termination of employment.     (b) After a Change of Control. If Executive resigns for Good Reason withinone hundred eighty days (180) prior to, or eighteen (18) months following, the EffectiveDate of a Change in Control or the Company terminates Executive’s employment (otherthan for Cause or a Disability) within one hundred eighty (180) days prior to, or eighteen(18) months following, the Effective Date of a Change of Control, the Company (in lieuof any severance pay under any severance pay plans, programs or policies) shall (subjectto applicable withholdings):     (1) pay to Executive a lump sum amount equal to the product of (x)multiplied by (y), where (x) equals the sum of (A) and (B), with (A) equal to theExecutive’s annual base salary as in effect on the date the Executive’semployment terminates and (B) equal to the amount of the Executive’s mostrecently paid annual bonus, and (y) equals two;     (2) (a) with respect to options to purchase Company stock which aregranted to Executive before or after the date the Company signs this EmploymentAgreement, accelerate Executive’s right to exercise 100% of such still-outstanding options so that Executive has the right to exercise 100% of such still-outstanding options on the date Executive’s employment terminates, subject to theterms of the plan under which the options were granted; and          (b) treat Executive as if Executive had remained employed by the Company until the endof the three (3) year period which starts on the date Executive’s employment terminates forthe sole purpose that the time period over which Executive has the right to exercise suchoptions shall be the same as if there had been no termination of Executive’s employmentuntil the end of such three (3) year period;     (3) with respect to shares of restricted stock which are granted toexecutive after the date the Company signs this Employment Agreement and arestill outstanding, deem any conditions applicable to such grant to have beensatisfied in full;     (4) pay to the Executive a lump sum amount equal to the product of(x) multiplied by (y), where (x) equals two times the Company’s monthlycontribution on behalf of Executive under the plans, programs and policiesdescribed in §3.4 which provide healthcare, life insurance and accidental deathand dismemberment coverage to Executive immediately before Executive’semployment terminates, and (y) equals two; and     (5) make one or, if necessary, more than one, Gross Up Payment (asdescribed in and paid in accordance with § 4.2(g)) to Executive, if applicable.     (c) Cause. The term “Cause” as used in this Employment Agreement shall(subject to § 4.2(c)(4)) mean:
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     (1) Executive is convicted of, pleads guilty to, or confesses orotherwise admits to any felony or any act of fraud, misappropriation orembezzlement;     (2) There is any act or omission by Executive involving malfeasanceor gross negligence in the performance of Executive’s duties and responsibilitiesunder § 2 or the exercise of Executive’s powers under § 2 to the materialdetriment of the Company; or     (3) (A) Executive breaches any of the provisions of § 5 or (B)Executive violates any provision of any code of conduct adopted by the Companywhich applies to Executive and any other Company employees if the consequenceof such violation for any employee subject to such code of conduct ordinarilywould be a termination of his or her employment by the Company; provided,however,     (4) No such act or omission or event shall be treated as “Cause” under§ 4.2(c)(2) and § 4.2(c)(3) and this Employment Agreement unless (A) Executivehas been provided a detailed, written statement of the basis for the Company’sbelief that such act or omission or event constitutes “Cause” and an opportunity tomeet with the Company’s Board of Directors (together with Executive’s counselif Executive chooses to have Executive’s counsel present at such meeting) afterExecutive has had a reasonable period in which to review such statement and, ifthe act or omission or event is one which can be cured by Executive, Executivehas had at least a thirty (30) day period to take corrective action and (B) theCompany’s Board of Directors after such meeting (if Executive exercisesExecutive’s right to have a meeting) and after the end of such thirty (30) daycorrection period (if applicable) determines reasonably and in good faith and bythe affirmative vote of at least a majority or, after the Effective Date of a Changein Control, at least three-fourths of the members of such Board of Directors thenin office at a meeting called and held for such purpose that “Cause” does existunder this Employment Agreement; provided, however, if Executive is a memberof such Board of Directors, Executive shall have no right to participate in suchvote, and the number of members needed to constitute a majority of, or three-fourths of, whichever is applicable, the members of such Board of Directors shallbe determined without counting Executive as a member of such Board ofDirectors; furtherprovided,     (d) Disability. The term “Disability” as used in this Employment Agreement meansany physical or mental condition which renders Executive unable even with reasonable accommodationby the Company to perform the essential functions of Executive’s job for at least a consecutive onehundred and eighty (180) day period and which makes Executive eligible to receive benefits underthe Company’s long-term disability plan as of the date that Executive’s employment terminates.
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     (e) Effective Date and Change in Control.     (1) The term “Effective Date” as used in this Employment Agreementmeans either the date which includes the “closing” (as such term is commonlyunderstood in the United States) of the transaction which makes a Change inControl effective if the Change in Control is made effective through a transactionwhich has such a “closing” or the earliest date a Change in Control is reported inaccordance with any applicable law, regulation, rule or common practice aseffective to any government or any agency of any government or to any exchangeor market in which the Company effects any trades if the Change in Control ismade effective other than through a transaction which has such a “closing.”     (2) The term “Change in Control” as used in this EmploymentAgreement means the occurrence of any of the following events:     (A) any “person” (as that term is used in Sections 13(d) and14(d)(2) of the Securities Exchange Act of 1934), is or becomes thebeneficial owner (as defined in Rule 13d-3 under the 1934 Act), directlyor indirectly, of securities representing 30% or more of the combinedvoting power of the then outstanding securities of the Company eligible tovote for the election of the members of the Company’s Board of Directorsunless (1) such person is the Company or any subsidiary of the Company,(2) such person is an employee benefit plan (or a trust which is a part ofsuch a plan) which provides benefits exclusively to, or on behalf of,employees or former employees of the Company or a subsidiary of theCompany, (3) such person is an underwriter temporarily holding suchsecurities pursuant to an offering of such securities, (4) such person isExecutive, an entity controlled by Executive or a group which includesExecutive or (5) such person acquired such securities in a Non-QualifyingTransaction (as defined in § 4.2(e)(2)(D));     (B) during any period of two consecutive years or lessbeginning after the closing date of the initial public offering of thecommon stock of the Company, individuals who at the beginning of suchperiod constitute the Board of Directors of the Company cease, for anyreason, to constitute at least a majority of such Board of Directors, unlessthe election or nomination for election of each new director was approvedby at least two-thirds of the directors then still in office who were directorsat the beginning of the period (either by a specific vote of such directors orby the approval of the Company proxy statement in which each suchindividual is named as a nominee for a director without written objectionto such nomination by such directors); provided, however, that noindividual initially elected or nominated as a director of the Company as aresult of an actual or threatened election contest with respect to directorsor as a result of any other actual or threatened solicitation of proxies orconsents by or on behalf of any person other than the Board of Directorsof the Company shall be deemed to be approved;
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     (C) the shareholders of the Company approve anyreorganization, merger, consolidation or share exchange as a result ofwhich the common stock of the Company shall be changed, converted orexchanged into or for securities of another corporation (other than amerger with a wholly owned subsidiary of the Company) or anydissolution or liquidation of the Company or any sale or the disposition of50% or more of the assets or business of the Company, or     (D) the shareholders of the Company approve anyreorganization, merger, consolidation or share exchange or similar form ofcorporate transaction involving the Company unless (1) the persons whowere the beneficial owners of the outstanding securities eligible to vote forthe election of the members of the Company’s Board of Directorsimmediately before the consummation of such transaction hold more than60% of the voting power of the securities eligible to vote for the membersof the board of directors of the successor or survivor corporation in suchtransaction immediately following the consummation of such transactionand (2) the number of the securities of such successor or survivorcorporation representing the voting power described in § 4.2(e)(2)(D)(l)held by the persons described in § 4.2(e)(2)(D)(l) immediately followingthe consummation of such transaction is beneficially owned by each suchperson in substantially the same proportion that each such person hadbeneficially owned the outstanding securities eligible to vote for theelection of the members of the Company’s Board of Directorsimmediately before the consummation of such transaction, provided (3)the percentage described in § 4.2(e)(2)(D)(l) of the securities of thesuccessor or survivor corporation and the number described in §4.2(e)(2)(D)(2) of the securities of the successor or survivor corporationshall be determined exclusively by reference to the securities of thesuccessor or survivor corporation which result from the beneficialownership of shares of common stock of the Company by the personsdescribed in § 4.2(e)(2)(D)(l) immediately before the consummation ofsuch transaction (any transaction which satisfies all of the criteriaspecified in (1), (2) and (3) above shall be deemed to be a “Non-Qualifying Transaction”);Notwithstanding the foregoing, the initial public offering of the common stock of theCompany shall in no event constitute a Change in Control under this Employment Agreement.     (f) Good Reason. The term “Good Reason” as used in this EmploymentAgreement shall (subject to § 4.2(f)(6)) mean:     (1) there is a material reduction or, after the Effective Date of a Changein Control, any reduction in Executive’s base salary under § 3.1 or there is a materialreduction in Executive’s opportunity to receive any annual bonus and stock option grantswithout Executive’s express written consent;
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     (2) there is a material reduction in the scope, importance or prestige ofExecutive’s duties, responsibilities or powers at the Company or Executive’sreporting relationships with respect to who reports to Executive and whomExecutive reports to at the Company without Executive’s express written consent;     (3) the Company transfers Executive’s primary work site fromExecutive’s primary work site on the date the Company signs this EmploymentAgreement or, if Executive subsequently consents in writing to such a transferunder this Employment Agreement, from the primary work site which was thesubject of such consent, to a new primary work site which is more than 30 miles(measured along a straight line) from Executive’s then current primary work siteunless such new primary work site is closer (measured along a straight line) toExecutive’s primary residence than Executive’s then current primary work site;     (4) the Company after the Effective Date of a Change in Controlchanges Executive’s job title or fails to continue to make available to Executivethe same or substantially equivalent plans, programs and policies pursuant to § 3.4as made available before such Effective Date absent Executive’s express writtenconsent;     (5) there is a material breach or, after the Effective Date of a Changein Control, any breach of this Employment Agreement by the Company;provided, however,     (6) No such act or omission shall be treated as “Good Reason” underthis Agreement unless:     (A) (1) Executive delivers to the Compensation Committee of theCompany’s Board of Directors a detailed, written statement of the basisfor Executive’s belief that such act or omission constitutes Good Reason,(2) Executive delivers such statement before the later of (a) the end of theninety (90) day period which starts on the date there is an act or omissionwhich forms the basis for Executive’s belief that Good Reason exists or(b) the end of the period mutually agreed upon for purposes of this§ 4.2(f)(6)(a)(2)(B) in writing by Executive and the Chairman of the Company’s Board ofDirectors, (3) Executive gives such Board of Directors a thirty (30) day period after thedelivery of such statement to cure the basis for such belief and (4) Executive actuallysubmits Executive’s written resignation to the Chairman of the Company’s Board ofDirectors during the sixty (60) day period which begins immediately after the end of suchthirty (30) day period if Executive reasonably and in good faith determines that GoodReason continues to exist after the end of such thirty (30) day period; or     (B) the Company states in writing to Executive that Executivehas the right to treat any such act or omission as Good Reason under thisEmployment Agreement and Executive resigns during the sixty (60) dayperiod which starts on the date such statement is actually delivered toExecutive; and
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     (7) If Executive consents in writing to any reduction described in § 4.2(f)(l)or § 4.2(f)(2), to any transfer described in § 4.2(f)(3) or to any change or failuredescribed in § 4.2(f)(4) in lieu of exercising Executive’s right to resign for Good Reasonand delivers such consent to the Chairman of the Company’s Board of Directors, the datesuch consent is so delivered thereafter shall be treated under this definition as theEffective Date of a Change in Control for purposes of determining whether Executivesubsequently has Good Reason under this Employment Agreement to resign as a result of anysuch subsequent reduction, transfer or change or failure.     (g) Gross Up Payment. The term “Gross Up Payment” as used in this EmploymentAgreement shall mean a payment to or on behalf of Executive which shall be sufficient to pay (1)100% of any excise tax described in this §4.2(g), (2) 100% of any federal, state and local incometax and social security and other employment tax on the payment made to pay such excise tax as wellas any additional taxes on such payment and (3) 100% of any interest or penalties assessed by theInternal Revenue Service on Executive which are related to the timely payment of such excise tax(unless such interest or penalties are attributable to Executive’s willful misconduct or grossnegligence with respect to such timely payment). A Gross Up Payment shall be made by the Companypromptly after either the Company or the Company’s independent accountants determine that anypayments and benefits called for under this Employment Agreement together with any other paymentsand benefits made available to Executive by the Company and any other person will result inExecutive’s being subject to an excise tax under § 4999 of the Internal Revenue Code of 1986, asamended (which shall be referred to in this § 4.2(g) as the “Code”) or such an excise tax isassessed against Executive as a result of any such payments and other benefits if Executive takessuch action (other than waiving Executive’s right to any payments or benefits in excess of thepayments or benefits which Executive has expressly agreed to waive under this § 4.2(g)) as theCompany reasonably requests under the circumstances to mitigate or challenge such excise tax;provided, however, if the Company or the Company’s independent accountants make thedetermination described in this § 4.2(g) and, further, determine that Executive will not be subjectto any such excise tax if Executive waives Executive’s right to receive a part of such payments orbenefits and such part does not exceed $25,000, Executive shall irrevocably waive Executive’s rightto receive such part if an independent accountant or lawyer retained by Executive and paid by theCompany agrees with the determination made by the Company or the Company’s independent accountantswith respect to the effect of such reduction in payments or benefits. Any determinations under this§4.2(g) shall be made in accordance with § 280G of the Code and any applicable related regulations(whether proposed, temporary or final) and any related Internal Revenue Service rulings and anyrelated case law and, if the Company reasonably requests that Executive take action to mitigate orchallenge, or to mitigate and challenge, any such tax or assessment (other than waiving Executive’sright to any payments or benefits in excess of the payments or benefits which Executive hasexpressly agreed to waive under this §4.2(g)) and Executive complies with such request, the Companyshall provide Executive with such information and such expert advice and assistance from theCompany’s independent accountants, lawyers and other advisors as Executive may reasonably
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request and shall pay for all expenses incurred in effecting such compliance and anyrelated fines, penalties, interest and other assessments.     4.3. Termination By The Company For Cause or By Executive Other Than For GoodReason. If the Company terminates Executive’s employment for Cause or Executiveresignsother than for Good Reason, the Company’s only obligation to Executive under this EmploymentAgreement shall (subject to applicable withholdings) be to pay Executive’s base salary andannual bonus, if any, which were due and payable on the date Executive’s employmentterminated and to reimburse Executive for expenses Executive had already incurred and whichwould have otherwise been reimbursed but for such termination of employment.     4.4. Termination for Disability or Death.     (a) General. The Company shall have the right to terminate Executive’semployment on or after the date Executive has a Disability, and Executive’s employmentshall terminate at Executive’s death.     (b) Base Salary and Bonus. If Executive’s employment terminates under this§ 4.4, the Company’s only obligation under this Employment Agreement shall (subject toapplicable withholdings) be (1) to pay Executive or, if Executive dies, Executive’sestatethe base salary and annual bonus, if any, which were due and payable on the dateExecutive’s employment terminated and (2) to reimburse Executive or, if Executive dies,Executive’s estate for any expenses which Executive had already incurred and whichwould have otherwise been reimbursed but for such termination of employment.     4.5. Benefits at Termination of Employment. Executive upon Executive’s terminationof employment shall have the right to receive any benefits payable under the Company’semployee benefit plans, programs and policies which Executive otherwise has a nonforfeitableright to receive under the terms of such plans, programs and policies independent ofExecutive’srights under this Employment Agreement; however, if a payment is made to Executive under§ 4.2(a) or § 4.2(b), such payment shall be in lieu of any severance pay under any severance payplan, program or policy.§ 5. COVENANTS BY EXECUTIVE     5.1. Company Property.     (a) General. Executive upon the termination of Executive’s employment forany reason or, if earlier, upon the Company’s request shall promptly return allProperty(as defined in § 5.1(b)) which had been entrusted or made available to Executive by theCompany and, if any copy of any such Property was made by, or for, Executive, each andevery copy of such Property.     (b) Property. The term “Property” means records, files, memoranda, tapes,computer disks, reports, price lists, customer lists, drawings, plans, sketches, keys,computer hardware and software, cellular telephones, credit cards, access cards,identification cards, personal data assistants and the like, company cars and othertangible personal property of any kind or description.     5.2. Trade Secrets.     (a) General. Executive agrees that Executive will hold in a fiduciarycapacity for the benefit of the Company and each of its affiliates, and will not directly orindirectly
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useor disclose to any person not authorized by the Company, any Trade Secret (as defined in §5.2(b)) of the Company or its affiliates that Executive may have acquired (whether or not developedor compiled by Executive and whether or not Executive is authorized to have access to suchinformation) during the term of, and in the course of, or as a result of Executive’s employment bythe Company or its affiliates for so long as such information remains a Trade Secret.     (b) Trade Secret. The term “Trade Secret” for purposes of this EmploymentAgreement means information, including, but not limited to, technical or nontechnicaldata, a formula, a pattern, a compilation, a program, a device, a method, a technique, adrawing, a process, financial data, financial plans, product plans, or a list of actual orpotential customers or suppliers that (1) derives economic value, actual or potential, fromnot being generally known to, and not being generally readily ascertainable by propermeans by, other persons who can obtain economic value from its disclosure or use and(2) is the subject of reasonable efforts by the Company and its affiliates to maintain itssecrecy.     (c) Additional Rights. This § 5.2 is intended to provide rights to theCompany and its affiliates which are in addition to, not in lieu of, those rights theCompany and its affiliates have under the common law or applicable statutes for theprotection of trade secrets.     5.3. Confidential Information.     (a) General. Executive while employed under this Employment Agreementand thereafter during the Restricted Period (as defined in § 5.4) shall hold in a fiduciarycapacity for the benefit of the Company and its affiliates, and shall not directly orindirectly use or disclose to any person not authorized by the Company, any ConfidentialInformation (as defined in § 5.3(b)) of the Company or its affiliates that Executive mayhave acquired (whether or not developed or compiled by Executive and whether or notExecutive is authorized to have access to such information) during the term of, and in thecourse of, or as a result of Executive’s employment by the Company or its affiliates.     (b) Confidential Information. The term “Confidential Information” forpurposes of this Employment Agreement means any secret, confidential or proprietaryinformation possessed by the Company or its affiliates relating to their businesses,including, without limitation, customer lists, details of client or consultant contracts,current and anticipated customer requirements, pricing policies, price lists, marketstudies, business plans, operational methods, marketing plans or strategies, productdevelopment techniques or flaws, computer software programs (including object codesand source codes), data and documentation, base technologies, systems, structures andarchitectures, inventions and ideas, past, current and planned research and development,compilations, devices, methods, techniques, processes, future business plans, licensingstrategies, advertising campaigns, financial information and data, business acquisitionplans and new personnel acquisition plans (not otherwise included in the definition of aTrade Secret under this Employment Agreement) that has not become generally availableto the public by the act of one who has the right to disclose such information withoutviolating any right of the Company or its affiliates.
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     (c) Additional Rights. This § 5.3 is intended to provide rights tothe Company and its affiliates which are in addition to, not in lieu of, those rightsthe Company and its affiliates have under the common law or applicable statutes for theprotection of confidential information.     5.4. Restricted Period. The term “Restricted Period” for purposes of this EmploymentAgreement shall mean the one-year period following termination of Executive’s employment.     5.5. Nonsolicitation of Customers or Employees.     (a) Customers. Executive, while employed under this EmploymentAgreement and thereafter during the Restricted Period, shall not, on Executive’s ownbehalf or on behalf of any person, firm partnership, association, corporation orbusinessorganization, entity or enterprise, call on or solicit for the purpose of competingwith theCompany or its affiliates any customers of the Company or its affiliates with whomExecutive had contact, knowledge, or association at any time during Executive’semployment with the Company or its affiliates, or with respect to the RestrictedPeriod, atany time during the twelve (12) month period immediately preceding the beginning of theRestricted Period.     (b) Employees. Executive, while employed under this EmploymentAgreement and thereafter during the Restricted Period, shall not, either directly orindirectly, call on, solicit or attempt to induce any other officer, employee orindependentcontractor of the Company or its affiliates with whom Executive had contact, knowledgeof, or association at any time during Executive’s employment with the Company or itsaffiliates, or with respect to the Restricted Period, at any time during the twelve(12) month period immediately preceding the beginning of the Restricted Period, to terminatehis or her employment or business relationship with the Company or itsaffiliatesand shall not assist any other person or entity in such a solicitation.     5.6. Intellectual Property Rights. Executive hereby unconditionally and irrevocablyassigns to the Company all of Executive’s right, title and interest in any ideas, inventions,trademarks, copyrights, developments and improvements that Executive conceives, alone or withothers, during the Term, whether or not conceived during working hours, which are within thescope of the Company’s business operations or relate to any of the Company’s work, projects orresearch activities, all of which shall be referred to as “Intellectual Property,” andExecutive shallassist the Company, at the Company’s expense, in obtaining patents, copyright and trademarkregistrations for Intellectual Property, execute and deliver all documents and do any and allthings necessary and proper on Executive’s part to obtain such patents and copyright andtrademark registrations and execute specific assignments and other documents for suchIntellectual Property as may be considered necessary or appropriate by the Company at any timeduring Executive’s employment. This § 5.6 shall not apply to any invention that Executivedevelops entirely on Executive’s own time without using the Company’s equipment, supplies,facilities or trade secret or confidential information. Executive agrees not placeIntellectualProperty in the public domain or disclose any inventions to third parties without the priorwrittenconsent of the Company.     5.7. Non-Compete. Executive and the Company agree that (a) the Company isengaged in the family entertainment resort business featuring indoor waterparks, which shallbe referred to as the “Business,” (b) the Business can be conducted anywhere, (c) the Businesscan
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be and is available to any person or entity with access to sufficient capital, (d) the Businessconsequently has no geographic boundary or limitation and will have none during the Term, (e)Executive is, and is expected to continue to be during the Term, intimately involved in theBusiness wherever it operates, and (f) this § 5.7 is intended to provide fair and reasonableprotection to the Company in light of the unique circumstances of the Business. Executive thereforeagrees that Executive shall not during the Term and for the one (1) year period which starts on thedate Executive’s employment terminates under this Employment Agreement compete with the Companywithin fifty (50) miles of a location where the Company conducts its Business or is planning toconduct its Business; provided, however, Executive may own up to five percent (5%) of the stock ofa publicly traded company that engages in such competitive business so long as Executive is only apassive investor and is not actively involved in such company in any way.     5.8. Reasonable and Continuing Obligations. Executive agrees that Executive’sobligations under this § 5 are obligations which will continue beyond the date Executive’semployment terminates and that such obligations are reasonable and necessary to protect theCompany’s legitimate business interests. The Company in addition shall have the right to takesuch other action as the Company deems necessary or appropriate to compel compliance with theprovisions of this § 5.     5.9. Remedy for Breach. Executive agrees that the remedies at law of the Companyfor any actual or threatened breach by Executive of the covenants in this § 5 would beinadequateand that the Company shall be entitled to specific performance of the covenants in this § 5,including entry of an ex parte, temporary restraining order in state or federal court,preliminaryand permanent injunctive relief against activities in violation of this § 5, or both, or otherappropriate judicial remedy, writ or order, in addition to any damages and legal expenseswhichthe Company may be legally entitled to recover. Executive acknowledges and agrees that thecovenants in this § 5 shall be construed as agreements independent of any other provision ofthisor any other agreement between the Company and Executive, and that the existence of any claimor cause of action by Executive against the Company, whether predicated upon this EmploymentAgreement or any other agreement, shall not constitute a defense to the enforcement by theCompany of such covenants.§6. MISCELLANEOUS     6.1. Notices. Notices and all other communications shall be in writing and shall bedeemed to have been duly given when personally delivered or when mailed by United Statesregistered or certified mail. Notices to the Company shall be sent to 122 West WashingtonAvenue, 6th Floor, Madison, Wisconsin 53703, Attention: General Counsel. Noticesandcommunications to Executive shall be sent to the address Executive most recently provided tothe Company.     6.2. No Waiver. Except for the notice described in § 6.1, no failure by either theCompany or Executive at any time to give notice of any breach by the other of, or to requirecompliance with, any condition or provision of this Employment Agreement shall be deemed awaiver of any provisions or conditions of this Employment Agreement.     6.3. Choice of Law and Courts. This Employment Agreement shall be governed byDelaware law (except to the extent that its choice of law provisions would call for theapplicationof the law of another jurisdiction), and (subject to § 6.8) any action that maybe brought byeither
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the Company or Executive involving the enforcement of this Employment Agreement or any rights,duties, or obligations under this Employment Agreement, shall be brought exclusively in the stateor federal courts sitting in Delaware, and Executive consents and waives any objection to personaljurisdiction and venue in these courts for any such action.     6.4. Assignment and Binding Effect. This Employment Agreement shall be bindingupon and inure to the benefit of the Company and any successor to all or substantially all ofthebusiness or assets of the Company.     The Company may assign this Employment Agreement to any affiliate or successor, and no suchassignment shall be treated as a termination of Executive’s employment under this EmploymentAgreement. Executive’s rights and obligations under this Employment Agreement are personal andshall not be assigned or transferred. Any such assignment or attempted assignment by Executiveshall be null, void, and of no legal effect.     6.5. Other Agreements. This Employment Agreement replaces and merges any and allprevious agreements and understandings regarding all the terms and conditions of Executive’semployment relationship with the Company, and this Employment Agreement constitutes theentire agreement of the Company and Executive with respect to such terms and conditions.     6.6. Amendment. Except as provided in § 6.7, no amendment or modification to thisEmployment Agreement shall be effective unless it is in writing and signed by the Company andby Executive.     6.7.Severability. If any provision of this Employment Agreement shall be foundinvalid or unenforceable, in whole or in part, then such provision shall be deemed to bemodifiedor restricted to the extent and in the manner necessary to render such provision valid andenforceable, or shall be deemed excised from this Employment Agreement, as may be requiredunder applicable law, and this Employment Agreement shall be construed and enforced to themaximum extent permitted by applicable law, as if such provision had been originallyincorporated in this Employment Agreement as so modified or restricted, or as if suchprovisionhad not been originally incorporated in this Employment Agreement, as the case may be.     6.8 Arbitration. The Company shall have the right to obtain an injunction or otherequitable relief arising out of the Executive’s breach of the provisions of § 5 of thisEmploymentAgreement. However, any other controversy or claim arising out of or relating to thisEmployment Agreement or any alleged breach of this Employment Agreement shall be settledby binding arbitration in Delaware in accordance with the rules of the American ArbitrationAssociation then applicable to employment-related disputes and any judgment upon any award,which may include an award of damages, may be entered in the highest state or federal courthaving jurisdiction over such award. In the event of the termination of Executive’semployment,Executive’s sole remedy shall be arbitration under this § 6.8 and any award of damages shallbelimited to recovery of lost compensation and benefits provided for in this EmploymentAgreement. No punitive damages may be awarded to Executive. The Company and Executiveshall split equally all reasonable fees of the arbitrator.     6.9 Executive’s Legal Fees and Expenses. The Company shall (a) reimburseExecutive for all reasonable costs incurred by Executive in bringing a proceeding to enforcetheterms of this Employment Agreement, including without limitation all reasonable costs ofinvestigation and reasonable attorneys fees and expenses and (b) make a payment to or onbehalf
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of Executive which shall be sufficient to pay 100% of any federal, state and local income tax onthe reimbursement and payments made to Executive under this § 6.9. Further, the Company shall makeone or more Gross-Up Payments under § 4.2(g) if the Excise Tax under § 4.2(g) is applicable to anyamounts paid under this § 6.9.     6.10 Release. As a condition to the Company’s making any payments to Executiveafter Executive’s termination of employment under this Employment Agreement (other than thecompensation earned before such termination and the benefits due under the Company’semployee benefit plans without regard to the terms of this Employment Agreement), Executiveor, if Executive is deceased, Executive’s estate shall execute a release in the form of thereleaseattached to this Employment Agreement as Exhibit A, or in such other form as is acceptable tothe Company and Executive.     6.11 Counterparts. This Employment Agreement may be executed in counterparts,each of which will be deemed an original, but all of which together will constitute one andthe same Employment Agreement.     6.12 Headings; References. The headings and captions used in this EmploymentAgreement are used for convenience only and are not to be considered in construing orinterpreting this Employment Agreement. Any reference to a section (§) shall be to a section(§) of this Employment Agreement absent an express statement to the contrary in this EmploymentAgreement.     IN WITNESS WHEREOF, the Company and Executive have executed this Employment Agreement inmultiple originals to be effective on the IPO Closing Date.      GREAT WOLF RESORTS, INC.