EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of 4th day of September, 2002, between Xxxxxx'x
Entertainment, Inc., with offices at Xxx Xxxxxx'x Xxxxx, Xxx Xxxxx, Xxxxxx (the
"Company"), and Xxxx X. Xxxxxxx ("Executive").
The Company and Executive agree as follows:
1. INTRODUCTORY STATEMENT
The Company desires to secure the services of Executive as Chief
Executive Officer and President effective January 1, 2003, and Executive is
willing to execute this Agreement with respect to his employment. This Agreement
is effective on September 4, 2002, and shall expire January 1, 2008. This
Agreement supersedes the employment agreement between the Company and Executive
dated May 4, 1998, as amended on April 26, 2001 and February 21, 2001; this
Agreement does not supersede the Severance Agreement between the Company and
Executive dated October 29, 1998 as amended on April 26, 2000 (the "Severance
Agreement") which remains in full force and effect.
2. AGREEMENT OF EMPLOYMENT
The Company agrees to, and hereby does, employ Executive, and
Executive agrees to, and hereby does accept, employment by the Company, in a
full-time capacity as Chief Executive Officer and President effective January 1,
2003, pursuant to the provisions of this Agreement and of the bylaws of the
Company, and subject to the control of the Board of Directors ("Board"). It is
understood that the Company will use its reasonably best efforts to amend its
bylaws to clarify that Executive will report directly to the Board. It is
understood that Executive's positions as Chief Executive Officer and President
are subject to his yearly re-election to these positions by the Board. (See
paragraph 8 herein for Executive's rights if such re-election does not occur
during the term of this Agreement.) From the period of September 4, 2002,
through December 31, 2002, Executive will continue performing his duties as
Chief Operating Officer and President.
3. EXECUTIVE'S OBLIGATIONS
During the period of his service under this Agreement, Executive shall
devote substantially all of his time and energy during business hours,
faithfully and to the best of his ability, to the supervision and conduct of the
business and affairs of the Company and to the furtherance of its interests, and
to such other duties as directed by the Board. (Executive may serve on the Board
of Directors of other companies with Board approval (which will not be
unreasonably withheld), if it does not substantially interfere with his primary
duties or create a conflict of interest.)
4. COMPENSATION
Effective January 1, 2003, the Company shall pay to Executive a salary
at the rate of $1,100,000.00 per year, in equal bi-weekly installments,
PROVIDED, HOWEVER, that Executive will defer any portion of the salary greater
than $1,000,000.00 into the Company's ESSP or any successor program. The Human
Resources Committee of the Board (or any successor committee responsible for
setting compensation levels for executives, the "HRC") shall, in good faith,
review the salary of Executive, on an annual basis, with a view to consideration
of appropriate merit increases (but not decrease) in such salary. Subsequent
increases, if any, will be effective at the July HRC Meeting each year of this
Agreement. There will be no diminution of the above compensation (as increased
from time to time) except as provided in this Agreement. All payments will be
subject to Executive's chosen benefit deductions and the deductions of payroll
taxes and similar assessments as required by law. All bonus awards will be based
on the current bonus plan, unless any changes provide for an enhancement in the
amount of bonus for Executive.
Executive will use the Company's aircraft or charter aircraft for
security purposes for himself and his family for business and personal travel
(with standard charges for family members and for non-Company business usage),
including travel between Boston, Massachusetts and Las Vegas, Nevada. Executive
will also be entitled to be reimbursed for first class travel or charter
aircraft travel expenses. The Company also will provide Executive, if he so
chooses, with appropriate security arrangements at his residences.
If Executive dies or resigns pursuant to this Agreement or pursuant to
any other agreement between the Company and Executive providing for such
resignation during the period of this Agreement, service for any part of the
month in which any such event occurs shall be considered service for the entire
month.
5. PROMOTIONAL AWARD
The Company shall pay to Executive, as further consideration for
entering into this Agreement, including the Non-Competition provisions, a
Promotional Award pursuant to the Company's Executive Stock Incentive Plan (the
"Stock Plan"), of a stock option grant valued by the HRC at Five Million Dollars
($5,000,000.00) and a deferrable (as determined by the HRC) restricted stock
grant, also valued at Five Million Dollars ($5,000,000.00). The options will
have a term of at least seven (7) years. The options and restricted stock will
be based on the model currently used by the Company for its current executives
with the strike price being set by the HRC as the average of the high and low
price on September 4, 2002, which shall be the grant date. Both the option grant
and the restricted stock grant will vest in increments of twenty-five percent
(25%) on January 1, 2006, twenty-five percent (25%) on January 1, 2007, and
fifty percent (50%) on January 1, 2008. The options will be exercised according
to the Stock Plan. Should Executive be terminated Without Cause or cease
employment for Good Reason
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pursuant to paragraph 8 (but not as a consequence of death or disability), the
Promotional Award would continue to vest based on the time table set forth
above. Should Executive be terminated Without Cause or leave employment For Good
Reason, all Promotional Award stock options may be exercised until January 15,
2009. Given the fact that this Agreement ends on January 1, 2008, Executive is
granted up to January 15, 2009, to exercise vested Promotional Awards. Any other
issues will be subject to the rules of the Stock Plan.
6. BENEFITS
Executive shall be entitled to participate during the term of the
Agreement, except as otherwise provided herein, in incentive compensation
programs, including bonus programs and stock options, and to receive benefits
and perquisites at least as favorable to Executive as those presently provided
to Executive by the Company, and as may be enhanced for all senior officers.
6.1 HEALTH INSURANCE
Executive will receive the regular group health plan provided to
senior officers, which may be subject to change during the term of the
Agreement. Executive will be required to contribute to the cost of the basic
plan in the same manner as other senior officers. Executive will receive no less
favorable a health plan than other senior officers.
6.2 LONG TERM DISABILITY BENEFITS
Executive will be eligible to receive long term disability
coverage paid by the Company as follows: group plan providing $180,000 annual
maximum benefit and a supplemental plan with an additional $60,000 annual
maximum benefit. Executive will also receive, subject to Executive being able to
comply with the medical and physical eligibility requirement of the policy
(insurability) chosen by the Company, to an individual long term disability
policy with a $180,000 annual maximum benefit and an individual long term
disability excess policy with an additional $540,000 annual maximum benefit,
both fully paid by the Company during the term of this Agreement.
6.3 LIFE INSURANCE
Executive will receive life insurance paid by the Company with a
death benefit equal to at least three (3) times his current base salary.
6.4 RETIREMENT PLAN
Executive will also be eligible during the term of the Agreement
to participate in the Company's 401(k) Plan, as may be modified or changed, as
well as its Executive Supplemental Savings Plan (the "ESSP"), as may be modified
or changed from time to time, in the same manner as other senior officers of the
Company.
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6.5 FINANCIAL COUNSELING
Executive will also receive during the term of the Agreement
Twenty-Five Thousand Dollars ($25,000.00) per year of the Agreement for
financial counseling. Any unused portion will not carry over to the following
year.
6.6 VACATION
Executive will be paid for five (5) weeks paid vacation per
calendar year of the Agreement.
7. TERMINATION FROM EMPLOYMENT
7.1 Except as otherwise provided in this Agreement, the date of
Executive's termination from employment shall be January 1, 2008.
7.2 After the date of Executive's termination from employment at any
time, and for any reason or for no reason (including termination or resignation
prior to January 1, 2008, if that should occur), he will be entitled to
participate for his lifetime in the Company's group health insurance plans
applicable to senior officers, including family coverage as applicable (medical,
dental and vision coverage). His group health insurance benefits after any
termination of employment will not be less than those offered to active senior
officers of the Company, and he will be entitled to any later enhancements in
such benefits. However, during the Life Coverage Period Executive shall pay
twenty percent (20%) of the current premium (revised annually) on an after-tax
basis each quarter, and the Company shall pay eighty percent (80%) of said
premium on an after-tax basis, which contribution will be imputed income to
Executive. As soon after the end of Executive's full-time active employment
status and after Executive becomes eligible for Medicare coverage, the Company's
group health insurance plan shall become secondary to Medicare.
8. TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON
8.1 The Board reserves the right to terminate Executive from his
then current position Without Cause at any time upon at least three (3) months
prior written notice. The failure of the Board to elect Executive as Chief
Executive Officer during the annual election of officers shall also be deemed
termination Without Cause for purposes of this Agreement unless, before the
election, the Board has sent written notice initiating Termination for Cause as
provided in paragraph 13.1, and Executive is thereafter terminated for Cause.
Executive reserves the right to resign his position for Good Reason (as defined
in paragraph 13.2 herein) by giving the Company thirty (30) days written notice
which states the basis for such Good Reason.
8.2 Upon Executive's termination Without Cause or resignation from
his position for Good Reason as described in paragraph 8.1 above:
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(a) Executive will begin a Transition Period (the "Transition
Period") that provides for pay and benefits (as set forth below) for a period of
two (2) years beginning on the date of such termination Without Cause or
resignation for Good Reason from his position. His stock options will continue
in force for vesting purposes during the Transition Period. Any unvested stock
options that do not vest before the expiration of the Transition Period will be
forfeited, except those provided pursuant to the Promotional Award. The
Promotional Award will continue to vest according to its regular vesting
schedule. If a Change in Control as defined in Executive's Severance Agreement
occurs during the Transition Period, all unvested stock options and restricted
stock from the Promotional Award will immediately vest as of the date of the
Change in Control. Executive also shall be entitled: (i) to the bonus Executive
has earned but for which he has not been paid for the year prior to the year in
which he is terminated Without Cause or in which he resigns his position for
Good Reason; and (ii) to a prorated bonus for the year in which he is terminated
Without Cause or in which he resigns for Good Reason.
(b) Executive will continue to receive his then-current salary
rate and the right to participate in the Company's benefit plans during the
Transition Period, but, except as otherwise provided in subsection (a) above, he
no longer will be eligible for future bonus, stock option or restricted stock
grants or any other long-term incentive awards.
(c) In no event shall Executive be obligated to seek other
employment or take any action by way of mitigation of the amounts payable to
Executive under any provisions of this Agreement, and any amounts payable to
Executive shall not be subject to reduction for any compensation received from
other employment.
9. TERMINATION FOR CAUSE OR RESIGNATION WITHOUT GOOD REASON
9.1 The Board will have the right to terminate Executive at any time
from his then-current positions For Cause (as defined in paragraph 13.1 herein).
Executive shall resign from the Board promptly after the Company's request, in
the event Executive is so terminated or Executive resigns with or without Good
Reason. A resignation by Executive without Good Reason shall not be a breach of
this Agreement.
9.2 If Executive is terminated For Cause, or if he resigns his
position without Good Reason, then: (a) all of his rights and benefits under
this Agreement shall thereupon terminate and his employment shall be deemed
terminated on the date of such termination or resignation; (b) he shall be
entitled to all accrued rights, bonuses, payments and benefits vested or paid on
or before such date under the Company's plans and programs, but unvested stock
options or unvested restricted stock, including the Promotional Award, if any,
will be forfeited; (c) his right to exercise vested stock options will expire at
11:59 p.m. PST on the date of such termination or resignation, and all stock
options not so exercised will be forfeited; (d) his Indemnification Agreement
will
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continue in force; (e) the Escrow Agreement, if then in force, will continue in
force, unless such agreement is thereafter amended or terminated pursuant to its
terms; (f) he will be entitled to the lifetime group insurance benefits
described in paragraph 7.2 above, except that any future amendments to such
benefits shall apply to him in the same manner as such amendments apply to other
employees; and (g) his Severance Agreement and all rights thereunder will
terminate as of such termination or resignation date, unless a Change in Control
or Potential Change in Control (as such terms are defined in the Severance
Agreement) has occurred prior to such termination or resignation date.
If Executive's Severance Agreement is in force upon a Change in
Control (as defined in the Severance Agreement), the provisions of this
paragraph 9.2 will not be applicable if there is a termination of the Executive
pursuant to Section 3 of his Severance Agreement. In the event of such
termination, Executive will be entitled to the payments, rights and benefits set
forth in the Severance Agreement.
10. DEATH
In the event of Executive's death prior to January 1, 2008, during his
employment under this Agreement, his salary and all rights and benefits under
this Agreement will terminate, and his estate and beneficiary(ies) will receive
the benefits they are entitled to under the terms of the Company's benefit plans
and programs by reason of a participant's death during active employment,
including applicable rights and benefits under the Company's Stock Plans,
including any accrued but unpaid bonus. Notwithstanding anything to the contrary
contained in the Stock Plan documents or this paragraph, upon Executive's death
one hundred percent (100%) of Executive's unvested annual options, if any, and
fifty percent (50%) of the unvested Promotional Awards options and fifty percent
(50%) of the Promotional restricted stock will vest and the other fifty percent
(50%) of the Promotional Awards options and fifty percent (50%) of the
Promotional restricted stock will terminate. The Escrow Agreement, if then in
force, will continue in force (subject to its amendment or termination in
accordance with its terms) for the benefit of Executive's beneficiaries until
his deferred compensation accounts are paid in full, and Executive's
Indemnification Agreement will continue in force for the benefit of his estate.
If Executive dies during the Transition Period, all of the provisions of the
previous sentences apply, except that the remaining salary will be paid in a
lump sum to his estate.
11. DISABILITY
In the event of Executive's disability (as defined below) prior to
January 1, 2008, during his employment, he will be entitled to apply, at his
option, for the Company's long-term disability benefits. If he is accepted for
such benefits, then the terms and provisions of the Company's benefit plans and
programs (Stock Option and Restricted Stock Plan) that are applicable in the
event of such disability of an employee shall apply in lieu of the salary and
benefits under this Agreement, except that: (a) the Escrow Agreement (if then in
force) and his Indemnification Agreement will continue in
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force (subject to amendment or termination in accordance with their terms); and
(b) he will be entitled to the lifetime group insurance benefits described in
paragraph 7.2. If Executive is disabled so that he cannot perform his duties (as
determined by the HRC), then the Board may terminate his duties under this
Agreement. For purposes of this Agreement, disability will be the inability of
Executive, with or without a reasonable accommodation, to perform the essential
functions of his job (as reasonably determined by the HRC). In such event, he
will receive two (2) years salary continuation, offset by any long term
disability benefits to which he is entitled, together with all other benefits,
and during such period of salary continuation, any stock options and restricted
stock then in existence will continue in force for vesting purposes.
Notwithstanding anything to the contrary contained in the Stock Plan or this
paragraph, after the two (2) years of salary continuation has expired, one
hundred percent (100%) of Executive's unvested annual options, if any, and fifty
percent (50%) of the unvested Promotional Awards options and fifty percent (50%)
of the Promotional restricted stock will vest and the other fifty percent (50%)
of the Promotional Awards options and fifty percent (50%) of the Promotional
restricted stock will terminate. In addition, during such period of salary
continuation for disability, Executive will not be eligible to participate in
the annual bonus plan, nor will he be eligible to receive new stock option
grants or any other long-term incentive awards except to the extent approved by
the HRC.
12. CHANGE IN CONTROL
If a Change in Control, as defined in Executive's Severance Agreement,
occurs during Executive's active employment, and if the Severance Agreement is
in force when the Change in Control occurs, then the Severance Agreement
supersedes and replaces this Agreement. If, prior to a Change in Control (as
defined above), Executive's active employment has been terminated for any reason
by either party, or this Agreement is not renewed by the Company, then
Executive's Severance Agreement terminates automatically on the last day of the
sixth full month following the date of termination of Executive' s employment.
13. DEFINITIONS OF CAUSE AND GOOD REASON
13.1(a) For purposes of this Agreement, "Cause" shall mean:
(i) the willful failure of Executive to perform
substantially Executive's duties with the Company (as described in paragraph 2)
or to follow a lawful reasonable directive from the Board (other than any such
failure resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to Executive by the
Board which specifically identifies the manner in which the Board believes that
Executive has not substantially performed Executive's duties or to follow a
lawful reasonable directive and Executive is given a reasonable opportunity (not
to exceed thirty (30) days) to cure any such failure to substantially perform,
if curable;
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(ii) (A) any willful act of fraud, or embezzlement or
theft by Executive, in each case, in connection with Executive's duties
hereunder or in the course of Executive's employment hereunder or (B)
Executive's admission in any court, or conviction of, a felony involving moral
turpitude, fraud, or embezzlement, theft or misrepresentation, in each case,
against the Company.
13.1(b) Termination by the Company of this Agreement for "Cause"
shall also include Executive being found unsuitable for or having a gaming
license denied or revoked by the gaming regulatory authorities in Arizona,
California, Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi,
Missouri, Nevada, New Jersey, New York, and North Carolina.
13.1(c) Termination by the Company of this Agreement for "Cause"
shall also include (i) Executive's willful and material violation of, or
noncompliance with, any securities laws or stock exchange listing rules,
including, without limitation, the Xxxxxxxx-Xxxxx Act of 2002, provided that
such violation or noncompliance resulted in material economic harm to the
Company, or (ii) a final judicial order or determination prohibiting Executive
from service as an officer pursuant to the Securities and Exchange Act of 1934
or the rules of the New York Stock Exchange.
13.1(d) For purposes of this paragraph 13, no act or failure to act,
on the part of Executive, shall be considered "willful" unless it is done, or
omitted to be done, by Executive in bad faith and without reasonable belief that
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. The cessation of employment of
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to Executive and Executive is given an
opportunity, together with counsel for Executive, to be heard before the Board),
finding that, in the good faith opinion of the Board, Executive is guilty of the
conduct described in paragraph 13.1(a)(i)(ii), 13.1(b), and 13.1(c), and
specifying the particulars thereof in detail; PROVIDED, that if Executive is a
member of the Board, Executive shall not vote on such resolution nor shall
Executive be counted in determining the "entire membership" of the Board.
13.2 GOOD REASON. "Good Reason" shall mean, without Executive's
express written consent, the occurrence of any of the following circumstances
unless, in the case of paragraphs (a), (d), (e) or (f), such circumstances are
fully corrected prior to the date of termination specified in the written notice
given by Executive notifying the Company of his resignation for Good Reason:
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(a) The assignment to Executive of any duties materially
inconsistent with his status as Chief Executive Officer of the Company or a
material adverse alteration in the nature or status of his responsibilities;
(b) The requirement that Executive report to anyone other than
the Board;
(c) The failure of Executive to be elected/re-elected as a
member of the Board;
(d) A reduction by the Company in his annual base salary of One
Million One Hundred Thousand Dollars ($1,100,000.00) or as the same may be
increased from time to time pursuant to paragraph 4 hereof;
(e) The relocation of the Company's principal executive offices
from Las Vegas, Nevada, to a location more than fifty (50) miles from such
offices, or the Company's requiring Executive either: (i) to be based anywhere
other than the location of the Company's principal offices in Las Vegas (except
for required travel on the Company's business to an extent substantially
consistent with Executive's present business travel obligations); or (ii) to
relocate his primary residence from Boston to Las Vegas;
(f) The failure by the Company to pay to him any material
portion of his current compensation, except pursuant to a compensation deferral
elected by Executive, or deferral compensation required by this Agreement, or to
pay to Executive any material portion of an installment of deferred compensation
under any deferred compensation program of the Company within thirty (30) days
of the date such compensation is due;
(g) Except as permitted by this Agreement, the failure by the
Company to continue in effect any compensation plan in which Executive is
participating on the date of this Agreement which is material to Executive's
total compensation, including but not limited to, the Company's annual bonus
plan, the ESSP, or the Stock Option Plan or any substitute plans, unless an
equitable arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Company to
continue Executive's participation therein (or in such substitute or alternative
plan) on a basis not materially less favorable, both in terms of the amount of
benefits provided and the level of Executive's participation relative to other
participants at Executive's grade level;
(h) The failure by the Company to continue to provide Executive
with benefits substantially similar to those enjoyed by him under the Savings
and Retirement Plan and the life insurance, medical, health and accident, and
disability plans in which Executive is participating on the date of this
Agreement, the taking of any action by the Company which would directly or
indirectly materially reduce any of such
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benefits or deprive Executive of any material fringe benefit enjoyed by
Executive on the date of this Agreement, except as permitted by this Agreement;
or
(i) The failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this Agreement, as
contemplated in paragraph 19 hereof.
Executive's right to terminate his employment pursuant to this
Agreement for Good Reason shall not be affected by Executive's incapacity due to
physical or mental illness. Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any circumstance
constituting Good Reason hereunder.
Notwithstanding any provision in this Agreement to the contrary, in
the event Executive's active employment as an executive officer with the
Company, or its direct or indirect subsidiaries, terminates For Cause or
Executive ceases employment Without Good Reason, any Promotional Award of stock
options and restricted stock granted to Executive which are unvested on the date
of such termination of active employment will be forfeited as of 11:59 p.m. PST
on such date.
14. NON-COMPETITION AGREEMENT
14.1 For a period of two (2) years after Executive's full-time,
active employment (which, for purposes of this paragraph 14.1, shall not include
the salary continuation period under paragraph 8.2(a)) with the Company or a
direct or indirect subsidiary ends, he will not, directly or indirectly, engage
in any activity, including development activity, whether as an employee,
consultant, director, investor, contractor, or otherwise, directly or
indirectly, in the casino business (or any hotel or resort that operates a
casino business) in the United States, Canada or Mexico at the time such
employment ends, except with the prior specific approval of the Company.
Executive acknowledges that the restrictions are reasonable as to both time and
geographic scope, as the Company competes for customers with all gaming
establishments in these areas.
14.2 If Executive breaches any of the covenants in paragraph 14.1,
then the Company may terminate any of his rights under this Agreement upon
thirty (30) days written notice, whereupon all of the Company's obligations
under this Agreement shall terminate (including, without limitation, the right
to lifetime group insurance) without further obligation to him except for
obligations that have been paid, accrued or are vested as of or prior to such
termination date. In addition, the Company shall be entitled to seek to enforce
any such covenants, including obtaining monetary damages, specific performance
and injunctive relief.
14.3 Executive will not, at any time prior to two (2) years from the
end of Executive's full-time active employment status (which, for purposes of
this Agreement, shall not include the period of time Executive is receiving
salary continuation under paragraph 8.2(a)), directly or indirectly induce,
persuade or attempt to induce or
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persuade, any salary grade 20 or higher employee of the Company or its
subsidiaries, to leave or abandon employment with the Company, its subsidiaries
or affiliates, for any reason whatsoever (other than Executive's personal
secretary and/or assistants).
14.4. Executive will not, for the 2-year period beginning at the end
of Executive's full-time active employment (which, for purposes of this
Agreement, shall not include the period of time Executive is receiving salary
continuation under paragraph 8.2(a)) communicate with employees, customers, or
suppliers of the Company, or its subsidiaries or affiliates of the Company or
any principals or employee thereof, or any person or organization in any manner
whatsoever that is detrimental to the interest of the Company, its subsidiaries
or affiliates. Executive further agrees from the end of Executive's full-time
active employment not to make statements to the press or general public with
respect to the Company or its subsidiaries or affiliates that are detrimental to
the Company, its subsidiaries, affiliates or employees without the express
written prior authorization of the Company, and the Company agrees that it will
not to make statements to the press or general public with respect to Executive
that are detrimental to him without the express written prior authorization of
Executive. Notwithstanding the foregoing, Executive shall not be prohibited at
the expiration of the non-competition period from pursuing his own business
interests which may conflict with the interests of the Company.
14.5 Executive and Company each intends and agrees that if, in any
action before any court, agency or arbitration tribunal, legally empowered to
enforce the covenants in this paragraph 14, any term, restriction, covenant or
promise contained therein is found to be unreasonable and, accordingly,
unenforceable, then such terms, restriction, covenant or promise shall be deemed
modified to the extent necessary to make it enforceable by such court or agency.
14.6 Should any court, agency or arbitral tribunal legally empowered
to enforce the covenants contained in this paragraph 14 find that Executive has
beached the terms, restrictions covenants or promises herein (except if it has
been modified to make it enforceable): (i) the Company will not be obligated to
pay Executive the salary or benefits provided for under salary continuation
payments contained in the Agreement (including all required benefits under
benefit plans), and (ii) Executive will also reimburse the Company any salary or
benefit payments received, as well as any reasonable costs, and attorney fees to
secure such repayments.
15. CONFIDENTIALITY
15.1 Executive's position with the Company will or has resulted in
his exposure and access to confidential and proprietary information which he did
not have access to prior to holding the position, which information is of great
value to the Company and the disclosure of which by him, directly or indirectly,
would be irreparably injurious and detrimental to the Company. During his term
of employment and without limitation thereafter, Executive agrees to use his
best efforts and to observe the utmost diligence to guard and protect all
confidential or proprietary information relating to the
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Company from disclosure to third parties. Executive shall not at any time during
and after the end of his full-time active employment, make available, either
directly or indirectly, to any competitor or potential competitor of the Company
or any of its subsidiaries, or their affiliates or divulge, disclose,
communicate to any firm corporation or other business entity in any manner
whatsoever, any confidential or proprietary information covered or contemplated
by this Agreement, unless expressly authorized to do so by the Company in
writing. Notwithstanding the above, Executive may provide such Confidential
Information if ordered by a federal or state court or any governmental authority
or pursuant to subpoena. In such cases, Executive will notify the Company at
least five (5) days prior to providing such information, and the nature of the
information required to provide.
15.2 For the purpose of this Agreement, "Confidential Information"
shall mean all information of the Company, its subsidiaries and affiliates,
relating to or useful in connection with the business of the Company, its
subsidiaries, affiliates, whether or not a "trade secret" within the meaning of
applicable law, which at the time of Executive's initial employment is not
generally known to the general public and which has been or is from time to time
disclosed to or developed by Executive as a result of his employment with the
Company. Confidential Information includes, but is not limited to the Company's
product development and marketing programs, data, future plans, formula, food
and beverage procedures, recipes, finances, financial management systems, player
identification systems (Total Rewards), pricing systems, client and customer
lists, organizational charts, salary and benefit programs, training programs,
computer software, business records, files, drawings, prints, prototyping
models, letters, notes, notebooks, reports, and copies thereof, whether prepared
by him or others, and any other information or documents which Executive is told
or reasonably ought to know that the Company regards as confidential.
15.3 Executive agrees that upon separation of employment for any
reason whatsoever, he shall promptly deliver to the Company all Confidential
Information, including but not limited to, documents, reports, correspondences,
computer printouts, work papers, files, computer lists, telephone and address
books, rolodex cards, computer tapes, disks, and any and all records in his
possession (and all copies thereof) containing any such Confidential Information
created in whole or in part by Executive within the scope of his employment,
even if the items do not contain Confidential Information.
15.4 Executive shall also be required to sign a non-disclosure or
confidentiality agreement. Such an agreement shall also remain in full force and
effect, PROVIDED THAT, in the event of any conflict between any such
agreement(s) and this Agreement, this Agreement shall control.
15.5 This paragraph and any of its provisions will survive
Executive's separation of employment for any reason.
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16. INJUNCTIVE RELIEF
Executive acknowledges and agrees that the terms provided in Sections
14 and 15 are the minimum necessary to protect the Company, its affiliates and
subsidiaries, its successors and assigns in the use and enjoyment of the
Confidential Information and the good will of the business of the Company.
Executive further agrees that damages cannot fully and adequately compensate the
Company in the event of a breach or violation of the restrictive covenants
(Confidential Information and Non-Competition) and that without limiting the
right of the Company to pursue all other legal and equitable remedies available
to it, that the Company shall be entitled to seek injunctive relief, including
but not limited to a temporary restraining order, temporary injunction and
permanent injunction, to prevent any such violations or any continuation of such
violations for the protection of the Company. The granting of injunctive relief
will not act as a waiver by the Company to pursue any and all additional
remedies.
17. POST EMPLOYMENT COOPERATION
Executive agrees that upon separation for any reason from the Company,
Executive will cooperate in assuring an orderly transition of all matters being
handled by him. Upon the Company providing reasonable notice to him, he will
also appear as a witness at the Company's request and/or assist the Company in
any litigation, bankruptcy or similar matter in which the Company or any
affiliate thereof is a party or otherwise involved. The Company will defray any
reasonable out-of-pocket expenses incurred by Executive in connection with any
such appearance. In connection thereof, the Company agrees to indemnify
Executive as prescribed in Article Tenth of the Certificate of Incorporation, as
amended, of the Company.
18. RELEASE
Upon the termination of Executive's active full-time employment, and
in consideration of the actual receipt of all compensation and benefits
described in this Agreement, except for claims arising from the covenants,
agreements, and undertakings of the Company as set forth herein and except as
prohibited by statutory language, Executive will sign an agreement which forever
and unconditionally waives, and releases Xxxxxx'x Entertainment, Inc., Xxxxxx'x
Operating Company, Inc., their subsidiaries and affiliates, and their officers,
directors, agents, benefit plan trustees, and employees ("Released Parties")
from any and all claims, whether known or unknown, and regardless of type, cause
or nature, including but not limited to claims arising under all salary,
vacation, insurance, bonus, stock, and all other benefit plans, and all state
and federal anti-discrimination, civil rights and human rights laws, ordinances
and statutes, including Title VII of the Civil Rights Act of 1964 and the Age
Discrimination in Employment Act, concerning his employment with Xxxxxx'x
Entertainment, Inc., its subsidiaries and affiliates, and the cessation of that
employment.
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19. ASSUMPTION OF AGREEMENT ON MERGER, CONSOLIDATION OR SALE OF ASSETS
In the event the Company agrees to (i) enter into any merger or
consolidation with another company in which the Company is not the surviving
company; or (ii) sell or dispose of all or substantially all of its assets, and
the company which is to survive fails to make a written agreement with Executive
to either: (1) assume the Company's financial obligations to Executive under
this Agreement; or (2) make such other provision for Executive as is
satisfactory to Executive, then Executive shall have the right to resign For
Good Reason as defined under this Agreement.
20. ASSURANCES ON LIQUIDATION
The Company agrees that until the termination of this Agreement as
above provided, it will not voluntarily liquidate or dissolve without first
making a full settlement or, at the discretion of Executive, a written agreement
with Executive satisfactory to and approved by him in writing, in fulfillment of
or in lieu of its obligations to him under this Agreement.
21. AMENDMENTS
This Agreement may not be amended or modified orally, and no provision
hereof may be waived, except in a writing signed by the parties hereto.
22. ASSIGNMENT
22.1 Except as otherwise provided in paragraph 22.2, this Agreement
cannot be assigned by either party hereto, except with the written consent of
the other. Any assignment of this Agreement by either party shall not relieve
such party of its or his obligations hereunder.
22.2. The Company may elect to perform any or all of its obligations
under this Agreement through its wholly-owned subsidiary, Xxxxxx'x Operating
Company, Inc., or another subsidiary, and if the Company so elects, Executive
will be an employee of Xxxxxx'x Operating Company, Inc., or such other
subsidiary. Notwithstanding any such election, the Company's obligations to
Executive under this Agreement will continue in full force and effect as
obligations of the Company, and the Company shall retain primary liability for
their performance.
23. BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the
personal representatives and successors in interest of the Company.
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24. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Nevada as
to all matters, including but not limited to matters of validity, construction,
effect and performance.
25. JURISDICTION
Any judicial proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement or any agreement identified herein may be
brought only in state or federal courts of the State of Nevada, and by the
execution and delivery of this Agreement, each of the parties hereto accepts for
themselves the exclusive jurisdiction of the aforesaid courts and irrevocably
consents to the jurisdiction of such courts (and the appropriate appellate
courts) in any such proceedings, waives any objection to venue laid therein and
agrees to be bound by the judgment rendered thereby in connection with this
Agreement or any agreement identified herein.
26. NOTICES
Any notice to be given hereunder by either party to the other may be
effected by personal delivery, in writing, or by mail, registered or certified,
postage prepaid with return receipt requested. Mailed notices shall be addressed
to the parties at the addresses set forth below, but each party may change his
or its address by written notice in accordance with this paragraph 26. Notices
shall be deemed communicated as of the actual receipt or refusal of receipt.
If to Executive: Xxxx X. Xxxxxxx
---------------------------------
---------------------------------
And to:
Xxxxxxx Xxxxxxx, Esq.
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Company: Xxxxxx'x Entertainment, Inc.
Xxx Xxxxxx'x Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: General Counsel
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IN WITNESS WHEREOF, Executive has hereunto set his hand and the Company has
caused this Agreement to be executed in its name and on its behalf and its
corporate seal to be hereunto affixed and attested by its corporate officers
thereunto duly authorized.
/s/ XXXX X. XXXXXXX
----------------------------
Xxxx X. Xxxxxxx
Xxxxxx'x Entertainment, Inc.
By /s/ XXXXXXX X. XXXXXXXX
-----------------------
Its: Senior Vice President
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