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                                                                    EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT
                          WITH SILVERLEAF RESORTS, INC.

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made between SILVERLEAF
RESORTS, INC., a Texas corporation ("Silverleaf"), and MICHAEL D. JONES (the
"Employee").

                                    RECITALS:

     A.   Employee is a key executive officer and employee of Silverleaf; and

     B.   Silverleaf and Employee desire to continue the employment of Employee
          and to agree on the terms of Employee's continued employment.

     NOW, THEREFORE, in consideration of the premises and terms hereinafter set
forth, the parties agree as follows:

                                   AGREEMENT:

     SECTION 1. EMPLOYMENT. Employee's employment with Silverleaf as Vice
President-Information Services is hereby continued, effective as of the
Effective Date and for an initial period of one (1) year from the Effective Date
(the "Term"), unless sooner terminated pursuant to the termination provisions of
this Agreement. Employee may not engage in other employment while he or she is
in the employ of Silverleaf pursuant to this Agreement, unless consented to in
writing by Silverleaf.

     SECTION 2. DUTIES. Employee agrees to devote such time, attention and
energies as are necessary to fulfill his or her duties as specified by the Board
of Directors of Silverleaf from time to time. Employee further agrees that he or
she will promote the best interests and welfare of Silverleaf and shall perform
any and all duties to the best of his or her abilities. The Employee shall:

          (a) NON-COMPETITION: Not render to others, during his or her
     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 or her 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 $150,000.00 payable in semi-monthly payments
     on the 1st and 15th days of each month.

          (b) INCENTIVE COMPENSATION: Employee shall be entitled to participate
     in any 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) 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 or
her employment, if Silverleaf terminates Employee's employment for Good Cause or
if Silverleaf terminates the Employee's employment either before or more than
one (1) year after a Change of Control of Silverleaf, the payment to Employee of
all compensation earned to the date of termination 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. If Employee's employment is
terminated by Silverleaf after a Change of Control and before the expiration of
one (1) year after the change of Control, other than for Good Cause, then
Employee shall be entitled to additional severance pay equal to six (6) months
of the Employee's base compensation, being one-half (1/2) of the compensation
set forth in Subsection 3(a), as adjusted from time to time, payable in
semi-monthly payments on the 1st and 15th days of the six (6) months immediately
following such termination. For purposes of the preceding provisions, the
following definitions shall apply:

          (a) GOOD CAUSE: Good Cause shall be deemed to exist if Employee:

               [1] Willfully breaches or habitually neglects the duties that the
          Employee is required to perform under the terms of this Agreement;

               [2] Willfully violates reasonable and substantial rules governing
          employee performance;

               [3] Refuses to obey reasonable orders in a manner that amounts to
          insubordination; or

               [4] Commits clearly dishonest acts toward Silverleaf.

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          (b) CHANGE OF CONTROL: Change of Control shall mean the first to occur
     of the following:

               [1] Robert E. Mead ceases to own a majority of the issued and
          outstanding common stock of Silverleaf; or

               [2] Silverleaf files a petition in a court of bankruptcy or is
          adjudicated bankrupt.

     Additionally, no severance pay shall be payable if Employee's employment is
terminated because of Employee's death, or Employee's incapacity due to
Employee's physical or mental illness.

     SECTION 5. CONFIDENTIALITY.

          (a) NONDISCLOSURE AND NONUSE: Employee acknowledges that during his or
     her employment with Silverleaf, he or she may have access to and become
     acquainted with Silverleaf Confidential Information, as defined below.
     Except as Employee's duties during his or her employment with Silverleaf
     may require or Silverleaf may otherwise consent in writing, Employee agrees
     that he or she shall not at any time disclose or use, directly or
     indirectly, either during or subsequent to his or her 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, 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 6. NON-INTERFERENCE. Employee further agrees that during his or her
employment and for six (6) months thereafter, Employee shall not, without the
written consent of Silverleaf, either on his or her 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

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corporation which, at any time during his or her employment 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 this or her employment 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 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 7. INJUNCTIVE RELIEF. Employee acknowledges that a breach of
Sections 5 or 6 hereof would cause irreparable damage to Silverleaf and/or its
affiliates, and in the event of Employee's breach of the provisions of Sections
5 or 6 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 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 5 or 6 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 8. EMPLOYEE INVESTMENTS. Anything to the contrary herein
notwithstanding, Employee: (1) shall not be prohibited from investing his or her
assets in such form or such manner as will not, in the aggregate, detract from
the performance by Employee of his or her duties hereunder and will not violate
the provisions of Sections 5 or 6 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 or her
affiliates) more than two percent (2%) of the stock in any company, other than
Silverleaf, which is engaged in the timeshare business.

     SECTION 9. EMPLOYEE'S REPRESENTATIONS. Employee represents and warrants
that he or she is free to enter into and perform each of the terms and
conditions hereof, and that his or her 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 10. TERMINATION. This Agreement shall terminate upon the expiration
of its Term, or prior thereto: (1) upon written notice of termination of
Employee's employment 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
due to Employee's physical or mental illness as determined in Silverleaf's sole
discretion (the "Termination").

     SECTION 11. RETURN OF MATERIALS AND VEHICLES: Employee understands and
agrees that any training manuals, sales and promotional material, vehicles or
other equipment provided to him

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or her 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 12. NON-BINDING ALTERNATE DISPUTE RESOLUTION. Except for actions
brought by Silverleaf pursuant to Section 7 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.

          (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 13. 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 14. 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 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.

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     SECTION 15. 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 16. 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 17. 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 18. 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 Riverbend, Suite 120
              Dallas, Texas 75247

          (b) EMPLOYEE:

              Michael D. Jones

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     SECTION 19. 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 20. 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 21. EFFECTIVE DATE. This Agreement is executed on the date set
forth below, but shall be effective as of May 31, 2001 (the "Effective Date").

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     Executed this 31st day of May, 2001.

                                     "SILVERLEAF"

                                     SILVERLEAF RESORTS, INC.

                                     By: /s/ Robert E. Mead
                                         ---------------------------------------
                                         ROBERT E. MEAD, Chief Executive Officer

                                     "EMPLOYEE"

                                     /s/ Michael D. Jones
                                     -------------------------------------------
                                     MICHAEL D. JONES

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