SEPARATION, CONSULTING AND
NON-COMPETITION AGREEMENT
This
SEPARATION, CONSULTING AND NON-COMPETITION AGREEMENT (the
“Agreement”) is made and entered into on the 16th day
of June, 2008, by and between GREAT WOLF RESORTS, INC., a
Delaware corporation (the “Company”), and HERNAN
MARTINEZ (the “Executive”).
WHEREAS,
the Company and the Executive are parties to an Employment
Agreement dated June 28, 2005 (the “ Employment
Agreement ”); and
WHEREAS,
the Executive plans to tender his resignation as an officer and
employee of the Company, and the Company plans to accept such
resignation effective as of the date specified herein;
and
WHEREAS,
the Company and the Executive desire to memorialize the terms of
the Executive’s termination of employment in this Agreement
and completely resolve all matters arising out of the
Executive’s employment with the Company or the termination of
that employment, as well as all matters arising out of or related
to the Employment Agreement.
NOW,
THEREFORE, in consideration of the premises and mutual
covenants contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:
1.
Termination of the Employment Agreement; Resignation as an
Officer and Termination of Employment . The Executive and
the Company hereby agree that, effective July 15, 2008 (the
“ Separation Date ”), the Employment Agreement
shall be terminated, revoked and rescinded, and all rights and
obligations either party has or may be entitled to under the
Employment Agreement shall be null and void. The Executive and the
Company agree further that the Executive’s status as an
officer and employee of the Company shall terminate as of the
Separation Date.
2.
Consulting Services and Ongoing Cooperation . After
the Separation Date, the Executive agrees to use his reasonable
efforts to assist, advise and cooperate with the Company if the
Company so requests on issues that arose or were in any way
developing during his employment with the Company, subject to the
Executive’s availability given his employment obligations, if
any, at that time. The Executive will provide such assistance,
advice and cooperation on an occasional basis without compensation
in excess of that set forth in Section 4(a)(i) of this
Agreement. Commencing on the Separation Date and continuing through
December 31, 2008, or such earlier date on which the Executive
delivers a notice stating that he is no longer available for
consulting services (the “ Services Termination Notice
”), from time-to-time, upon written request from the Company
(an “ Additional Services Notice ”), the
Executive shall, if the Executive is available and is so willing,
furnish such assistance, advice or cooperation on a continuing or
regular basis (“ Additional Services ”) to the
Company as is within the Executive’s reasonable capability
and availability, up to and including fifty percent (50%)
of
his time during
the Company’s normal business hours. Such assistance, advice
and cooperation may include, but shall not be limited to the
preparation for, or the conduct of, any litigation, investigation
or proceeding involving matters or events which occurred during the
Executive’s employment by the Company as to which the
Executive’s knowledge or testimony may be important to the
Company. In connection with the preparation for, or the conduct of
such litigation, investigation or proceeding as described in the
preceding sentence, the Executive shall promptly provide the
Company with any records or other materials in his possession that
the Company shall request in connection with the defense or
prosecution of such litigation, investigation or proceeding. The
Executive shall cease providing Additional Services to the Company
upon receipt of written notice (a “ Cessation Notice
”) from the Company that the Additional Services are no
longer required. The Company shall pay or reimburse the Executive
for his travel expenses reasonably incurred in the course of
providing such Additional Services. The Company shall make such
payment or reimbursement within thirty (30) days of receipt of
reasonable substantiating documentation from the Executive but in
no event later than the end of the calendar year following the year
in which such expenses were incurred. The Company acknowledges that
the Executive may be unavailable to provide Additional Services for
substantial periods from time to time, including during a four-week
vacation planned for September, 2008, or may be unwilling to
provide Additional Services from time to time or at all times after
the Separation Date.
3.
Covenants by the Executive .
(i)
General . The Executive agrees that the Executive will hold
in a fiduciary capacity for the benefit of the Company and each of
its affiliates, and will not directly or indirectly use or disclose
to any person not authorized by the Company, any Trade Secret (as
defined in Section 3(a)(ii)) of the Company or its affiliates
that Executive may have acquired (whether or not developed or
compiled by Executive and whether or not Executive is authorized to
have access to such information) during the term of, and in the
course of, or as a result of Executive’s employment by the
Company or its affiliates for so long as such information remains a
Trade Secret.
(ii)
Trade Secret . The term “ Trade Secret ”
for purposes of this Employment Agreement means information,
including, but not limited to, technical or nontechnical data, a
formula, a pattern, a compilation, a program, a device, a method, a
technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or
suppliers that (a) derives economic value, actual or
potential, from not being generally known to, and not being
generally readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use and
(b) is the subject of reasonable efforts by the Company and
its affiliates to maintain its secrecy.
(iii)
Additional Rights . This Section 3(a) is intended to
provide rights to the Company and its affiliates which are in
addition to, not in lieu of, those rights the
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Company and its
affiliates have under the common law or applicable statutes for the
protection of trade secrets.
b.
Confidential Information .
(i)
General . The Executive during the Restricted Period (as
defined in Section 3(c)) shall hold in a fiduciary capacity
for the benefit of the Company and its affiliates, and shall not
directly or indirectly use or disclose to any person not authorized
by the Company, any Confidential Information (as defined in
Section 3(b)(ii)) of the Company or its affiliates that the
Executive may have acquired (whether or not developed or compiled
by the Executive and whether or not the Executive is authorized to
have access to such information) during the term of, and in the
course of, or as a result of the Executive’s employment by
the Company or its affiliates.
(ii)
Confidential Information . The term “ Confidential
Information ” for purposes of this Agreement means any
secret, confidential or proprietary information 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, market studies, business plans, operational
methods, marketing plans or strategies, product development
techniques or flaws, computer software programs (including object
codes and source codes), data and documentation, base technologies,
systems, structures and architectures, inventions and ideas, past,
current and planned research and development, compilations,
devices, methods, techniques, processes, future business plans,
licensing strategies, advertising campaigns, financial information
and data, business acquisition plans and new personnel acquisition
plans (not otherwise included in the definition of a Trade Secret
under this Agreement) that has not become generally available to
the public by the act of one who has the right to disclose such
information without violating any right of the Company or its
affiliates.
(iii)
Additional Rights . This Section 3(b) is intended to
provide rights to the Company and its affiliates which are in
addition to, not in lieu of, those rights the Company and its
affiliates have under the common law or applicable statutes for the
protection of confidential information.
c.
Restricted Period . The term “ Restricted
Period ” for purposes of this Agreement shall mean the
one-year period following the Separation Date.
d.
Nonsolicitation of Customers or Employees .
(i)
Customers . During the Restricted Period, the Executive
shall not, on the Executive’s own behalf or on behalf of any
person, firm partnership, association, corporation or business
organization, entity or enterprise, call on or solicit for the
purpose of competing with the Company or its affiliates any
customers of the Company or its affiliates with whom the Executive
had contact, knowledge, or association at any time
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during the
twelve (12) month period immediately preceding the beginning
of the Restricted Period.
(ii)
Employees . During the Restricted Period, the Executive
shall not, either directly or indirectly, call on, solicit or
attempt to induce any other officer, employee or independent
contractor of the Company or its affiliates with whom the Executive
had contact, knowledge of, or association at any time during the
twelve (12) month period immediately preceding the beginning
of the Restricted Period, to terminate his or her employment or
business relationship with the Company or its or its affiliates and
shall not assist any other person or entity in such a
solicitation.
e.
Non-Compete . The Executive and the Company agree that
(i) the Company is engaged in the family entertainment resort
business featuring indoor waterparks, which shall be referred to as
the “ Business ,” (ii) the Business can be
conducted anywhere, (iii) the Business can be and is available
to any person or entity with access to sufficient capital,
(iv) the Business consequently has no geographic boundary or
limitation, (v) the Executive is, and has been during the term
of his employment with the Company, intimately involved in the
Business wherever it operates, and (vi) this Section 3(e)
is intended to provide fair and reasonable protection to the
Company in light of the unique circumstances of the Business. The
Executive therefore agrees that Executive shall not for the one
(1) year period which starts on the Separation Date compete
with the Company within fifty (50) miles of a location where
the Company conducts its Business or is planning to conduct its
Business; provided, however, the Executive may own up to five
percent (5%) of the stock of a publicly traded company that engages
in such competitive business so long as the Executive is only a
passive investor and is not actively involved in such company in
any way.
f.
Reasonable and Continuing Obligations . The Executive agrees
that the Executive’s obligations under this Section 3
are obligations which will continue beyond the date the
Executive’s employment terminates and that such obligations
are reasonable and necessary to protect the Company’s
legitimate business interests. The Company in addition shall have
the right to take such other action as the Company deems necessary
or appropriate to compel compliance with the provisions of this
Section 3.
g.
Remedy for Breach . The Executive agrees that the remedies
at law of the Company for any actual or threatened breach by the
Executive of the covenants in this Section 3 would be
inadequate and that the Company shall be entitled to specific
performance of the covenants in this Section 3, including
entry of an ex parte, temporary restraining order in state or
federal court, preliminary and permanent injunctive relief against
activities in violation of this Section 3, or both, or other
appropriate judicial remedy, writ or order, in addition to any
damages and legal expenses which the Company may be legally
entitled to recover. The Executive acknowledges and agrees that the
covenants in this Section 3 shall be construed as agreements
independent of any other provision of this or any other agreement
between the Company and the Executive, and that the existence of
any claim or cause of action by the Executive against the Company,
whether predicated upon the Employment Agreement, this Agreement or
any o
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