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EXHIBIT 10.28
FORM OF
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This agreement is dated and made effective the May 1, 1997 (the
"Effective Date") between ▇▇▇▇▇▇▇ Sites, ("Executive") and Trendwest Resorts,
Inc., an Oregon corporation ("Company").
1. Employment. Company employs Executive and Executive accepts
employment on the terms and conditions in this agreement.
2. Duties. Executive is employed in the capacity of Executive Vice
President. In this capacity Executive shall have primary responsibility for
direction and guidance of Company's operations and implementation of the
Company's operating strategies. Executive shall report directly to, and take
direction from, Company's President and Board of Directors (the "Board") and to
no other Company employee. Executive shall perform the duties customarily
performed by an executive vice president.
3. Intensity of Effort; Other Business. Executive shall devote his
entire working time, attention and efforts to Company's business and affairs,
shall faithfully and diligently serve Company's interests and shall not engage
in any business or employment activity that is not on Company's behalf (whether
or not pursued for gain or profit) except for (a) activities approved in writing
in advance by the Board and (b) passive investments that do not involve
Executive providing any advice or services to the businesses in which the
investments are made.
4. Term. The term of this agreement is of indefinite duration. As
stated in P. 8 below, this agreement and Executive's employment relationship may
be terminated at any time, with or without cause.
5. Compensation. Executive's compensation shall be as follows:
(a) Executive's salary shall be $3,125.00 payable
semi-monthly (equal to $75,000.00 on an annualized basis) in accordance with the
Company's standard procedures. Executive's salary shall be reviewed by the Board
and adjusted as determined by the Board in its sole discretion.
(b) Executive will be eligible to receive a monthly personal
performance bonus as determined by the Company's Board based upon performance
criteria consistent with those criteria utilized to establish Executive's bonus
in prior years. The personal performance bonus, if any, shall be paid thirty
(30) days following the end of each month. The total bonus payable for any
twelve month period shall not exceed two times Executive's base salary for such
twelve month period.
6. Benefit Plans. Executive shall be eligible to participate in the
Company's Employee Benefit Package offered generally to employees. The exact
terms and conditions of the Company's benefits, including eligibility, are
governed by the benefit plans and policies of the Company, not this agreement or
any summary provided to Executive.
7. Business Expenses. Executive is authorized to incur reasonable
travel and entertainment expenses to promote Company's business. Company shall
reimburse Executive for those expenses consistent with the Company's policies
and procedures. Executive shall provide to Company the itemized expense account
information that Company reasonably requests.
8. Termination. Executive's employment may be terminated as
follows, in which event Executive's compensation and benefits shall terminate
except as otherwise provided below:
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(a) Without Cause or Good Reason. Either party may terminate
Executive's employment at any time by giving 30 calendar days' advance written
notice of termination to the other without the necessity of cause or good
reason.
(b) By Company for Cause. Company may terminate Executive's
employment for cause, without advance written notice of termination, by giving
written notice of such termination. The notice may take effect immediately or at
such later date as Company may designate. Any termination of Executive's
employment for cause must be approved by a majority of the Board other than
Executive. For purposes of this Agreement, "cause" means gross negligence,
wilful misconduct, fraud or material breach of the Company's written policies
and procedures or of this Agreement. Executive must be given reasonable advance
notice of the meeting at which his or her termination is to be considered, and a
reasonable opportunity to address the Board.
(c) Death. Executive's employment shall terminate
automatically upon Executive's death.
(d) Permanent Disability. Company may terminate Executive's
employment immediately if Executive becomes permanently disabled. For purposes
of this agreement Executive will be considered "permanently disabled" if, for a
continuous period of 24 weeks or more, Executive has been unable to perform the
essential functions of the job because of one or more mental or physical
illnesses and/or disabilities, provided that Company may grant Executive unpaid
leave if and to the extent that, in Company's judgment, doing so is required by
law.
9. Termination Payments.
(a) Termination Without Cause.
(i) If Company terminates Executive's employment
when neither cause nor permanent disability exists, Company shall pay Executive
for a period of twelve (12) months following such termination, as liquidated
damages and in lieu of all other remedies to which Executive might be entitled
arising out of the termination, termination payments equal to Executive's
monthly salary at the date of termination (these payments exclude bonuses and
any other incentive compensation) plus the amount of bonuses received by
Executive in the twelve month period preceding termination, pro rated on a
monthly basis over the twelve month payment period. Such liquidated damages
shall be paid only if Executive executes a full and final general release of all
claims against Company (including Company's officers, directors, agents,
employees and assigns) arising out of Executive's employment relationship with
Company.
(ii) In addition, if Company terminates Executive's
employment when neither cause nor permanent disability exists, but Company gives
Executive less than the 30 days' advance written notice called for above,
Company shall pay Executive, as liquidated damages and in lieu of all other
remedies to which Executive might be entitled arising out of Company's failure
to give 30 days' advance written notice, termination payments equal to the
additional salary Executive would have received if Company had given Executive
30 days' advance written notice of termination.
(iii) Termination payments shall be paid out on
regular payroll days subject to normal payroll deductions, commencing first with
the termination payments called for by subpart (ii), if any, followed by the
termination payments called for by subpart (i).
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(b) All Other Terminations. In all other cases of
termination or expiration of this agreement or of Executive's employment
(including a termination of Executive by Company for Cause, Executive's
resignation of employment or Executive's permanent disability or death),
Executive's compensation and benefits shall terminate on the date the employment
ends and Executive shall not be entitled to any termination payments or damages.
10. Confidentiality. Executive agrees that information not generally
known to the public to which Executive has been or will be exposed as a result
of Executive's employment by Company is confidential information that belongs to
Company. This includes information developed by Executive, alone or with others,
or entrusted to Company by its customers or others. Company's confidential
information includes, without limitation, customer contacts and files,
information relating to Company's trade secrets, know-how, procedures,
purchasing, accounting, marketing, sales, customers and employees. Executive
will hold Company's confidential information in strict confidence and will not
disclose or use it except as authorized by Company and for Company's benefit.
Executive shall not obtain, keep, use for Company's benefit or disclose to
Company any confidential, proprietary or trade secret information that belongs
to others, unless the party who has the rights to the information expressly
consents in writing in advance. Executive warrants that he is not a party to any
agreements, such as noncompetition agreements, that would limit his ability to
perform his duties for Company.
11. Possession of Materials. Executive agrees that upon conclusion
of employment or request by Company, Executive shall turn over to Company all
documents, files, office supplies and any other material or work product in
Executive's possession or control that were created pursuant to or derived from
Executive's services for Company.
12. Noncompetition. Executive agrees that Company has many
substantial, legitimate business interests that can be protected only by
Executive agreeing not to compete with Company under certain circumstances.
These interests include, without limitation, Company's contacts and
relationships with its customers, Company's reputation and goodwill in the
industry, and Company's rights in its confidential information. In consideration
of the promises in this agreement, together with the stock option agreement,
Executive therefore agrees that for twenty four (24) months after Executive's
employment with Company ends, regardless of the reason it ends, Executive shall
not, directly or indirectly (a) acquire, service, advise or conduct any business
in the United States competitive with Company's business acquiring, developing,
marketing or selling timeshare interests or properties, or (b) be an employee,
employer, consultant, officer, director, partner, trustee or shareholder of more
than 5% of the outstanding common stock of any person or entity that acquires,
services, advises or conducts any such business.
13. Nonraiding of Employees. Executive recognizes that Company's
workforce is a vital part of its business. Therefore, Executive agrees that for
24 months after Executive's employment with Company ends, regardless of the
reason it ends, Executive will not solicit, directly or indirectly, any employee
to leave his or her employment with Company. For purposes of this agreement, the
phrase "shall not solicit, directly or indirectly," includes, without
limitation, that Executive (a) shall not identify any Company employees to any
third party as potential candidates for employment, such as by disclosing the
names, backgrounds and qualifications of any Company employees; (b) shall not
personally or through any other person approach, recruit or otherwise solicit
employees of Company to work for any other employer; and (c) shall not
participate in any preemployment interviews with any person who was employed by
Company while Executive was employed or retained by Company.
14. Dispute Resolution. Company and Executive agree to resolve all
disputes arising out of their employment relationship by the following alternate
dispute resolution process: (a) Company and
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Executive agree to seek a fair and prompt negotiated resolution; but if this is
not successful, (b) all disputes shall be resolved by binding arbitration;
provided that during this process, (c) at the request of either party, made not
later than 75 days after the initial arbitration demand, the parties agree to
attempt to resolve any dispute by non-binding third-party intervention including
either mediation or evaluation or both (but without delaying the arbitration
hearing date). By entering into this contract, both parties give up their right
to have the dispute decided in court by a judge or jury. The provisions of the
Washington arbitration statute, Chapter 7.04 RCW, are incorporated herein to the
extent not inconsistent with the other terms of this agreement.
(a) Binding Arbitration. Any controversy or claim arising
out of or connected with Executive's employment at Company, including but not
limited to claims for compensation or severance and claims of wrongful
termination, age, sex, racial or other discrimination, or civil rights
violations shall be determined by arbitration commenced in accordance with RCW
7.04.060, provided that the total award by a single arbitrator (as opposed to a
majority of three arbitrators) shall not exceed $250,000. If either party
asserts in good faith that it is entitled to an award over $250,000, there shall
be three arbitrators. The location of the arbitration shall be Seattle,
Washington, or such other city to which the parties may agree. If Company and
Executive cannot agree on the arbitrator(s), then the arbitrator(s) shall be
selected by the administrator of the American Arbitration Association (AAA)
office nearest the city where the arbitration is to be conducted. Each
arbitrator shall be an attorney with at least 15 years' experience in commercial
law. All statutes of limitations which would otherwise be applicable shall apply
to any arbitration proceeding hereunder. Any issue about whether a controversy
or claim is covered by this agreement shall be determined by the arbitrator(s).
(b) Procedures. The arbitration shall be conducted in
accordance with this agreement using as appropriate the AAA Employment Dispute
Resolution Rules in effect on the date hereof. There shall be no discovery or
dispositive motion practice (such as motions for summary judgment or to dismiss
or the like) except the arbitrator(s) shall authorize such discovery as may be
shown to be necessary to ensure a fair hearing, and no such discovery shall
extend the time limits contained herein. The arbitrator(s) shall not be bound by
the rules of evidence or of civil procedure, but rather may consider such
writings and oral presentations as reasonable business people would use in the
conduct of their day-to-day affairs, and may require both parties to submit some
or all of their respective cases by written declaration or such other manner of
presentation as the arbitrator(s) may determine to be appropriate. The parties
agree to limit live testimony and cross-examination to the extent necessary to
ensure a fair hearing on material issues.
(c) Hearing -- Law -- Appeal Limited. The arbitrator(s)
shall take such steps as may be necessary to hold a private hearing within one
hundred twenty (120) days of the initial request for arbitration and to conclude
the hearing within two (2) days; and the arbitrator(s)'s written decision shall
be made not later than fourteen (14) calendar days after the hearing. The
parties agree that they have included these time limits in order to expedite the
proceeding, but they are not jurisdictional, and the arbitrator(s) may for good
cause allow reasonable extensions or delays, which shall not affect the validity
of the award. The written decision shall contain a brief statement of the
claim(s) determined and the award made on each claim. In making the decision and
award the arbitrator(s) shall apply applicable substantive law. Absent fraud,
collusion or willful misconduct by an arbitrator, the award shall be final and
judgment may be entered in any court having jurisdiction thereof. The
arbitrator(s) may award injunctive relief or any other remedy available from a
judge, including the joinder of parties or consolidation of this arbitration
with any other involving common issues of law or fact or which may promote
judicial economy, and may award attorneys' fees and costs to the prevailing
party, but shall not have the power to award punitive or exemplary damages. The
decision and award of the arbitrators need not be unanimous; rather, the
decision and award of two arbitrators shall be final.
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(d) Injunctive Relief. In the case of a breach of any of
Executive's obligations to Company, Company may request a court of competent
jurisdiction to issue such temporary or interim relief (including temporary
restraining orders and preliminary injunctions) as may be appropriate, either
before arbitration is commenced or pending the outcome of arbitration. No such
request shall be a waiver of the right to submit any claim or controversy to
arbitration. Any issues of law or fact which arise in connection with such
request shall, at Company's election, be determined by arbitration in accordance
with subparagraphs (a) through (c) above.
15. Attorneys' Fees; Venue and Jurisdiction. In any lawsuit or
arbitration arising out of or relating to this agreement or Executive's
employment, including without limitation arising from any alleged tort or
statutory violation, the prevailing party shall recover reasonable costs and
attorneys' fees, including on appeal. Venue and jurisdiction of any lawsuit
involving this agreement or Executive's employment shall exist exclusively in
state and federal courts in King County, Washington, unless injunctive relief is
sought by Company and, in Company's judgment, that relief might not be effective
unless obtained in some other venue. The provisions of this section are subject
to and do not supersede the dispute resolution provisions described above.
16. Governing Law. This agreement shall be governed by the internal
laws of the state of Washington without giving effect to provisions thereof
related to choice of laws or conflict of laws.
17. Saving Provision. If any part of this agreement is held to be
unenforceable, it shall not affect any other part. If any part of this agreement
is held to be unenforceable as written, it shall be enforced to the maximum
extent allowed by applicable law. The confidentiality, possession of materials,
noncompetition and nonraiding provisions of this agreement shall survive after
Executive's employment by Company ends, regardless of the reason it ends, and
shall be enforceable regardless of any claim Executive may have against Company.
18. Waiver. No waiver of any provision of this agreement shall be
valid unless in writing, signed by the party against whom the waiver is sought
to be enforced. The waiver of any breach of this agreement or failure to enforce
any provision of this agreement shall not waive any later breach.
19. Assignment; Successors. Company may assign its rights and
delegate its duties under this agreement. Executive may not assign his or her
rights or delegate his or her duties under this agreement.
20. Binding Effect. This agreement is binding upon the parties and
their personal representatives, heirs, successors and assigns.
21. Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be an original and all of which, taken
together, shall constitute a single agreement.
22. Complete Agreement. This agreement is the final and complete
expression of the parties' agreement relating to Executive's employment. This
agreement may be amended only by a writing signed by both parties; it may not be
amended orally or by course of dealing. The parties are not entering into this
agreement relying on anything not set out in this agreement. This agreement
shall control over any
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contrary policies or procedures of Company, whether in effect now or adopted
later. Company's policies and procedures that do not conflict with this
agreement, whether in effect now or adopted later, shall apply or not apply to
Executive as determined by Company in its discretion.
DATED as of the date first written above.
EXECUTIVE COMPANY
▇▇▇▇▇▇▇ Sites Trendwest Resorts, Inc.
____________________________ By: __________________________
President
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