Exhibit 10.2
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
_______________________________________
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT dated May 12, 1998
between American Gaming & Entertainment, Ltd., a Delaware
Corporation (the "Company"), and J. Xxxxxxx Xxxxxxxxxx, a resident
of New Jersey ("Executive").
A. Executive desires to continue his employment as President and
Chief Executive Officer of Company beyond the September 12, 1998
expiration of the term of his existing employment agreement dated
as of September 12, 1996 (the "Agreement").
B. The term of the Agreement expires on September 12, 1998.
C. Company desires to continue to retain the benefit of
Executive's experience and loyalty, and to employ Executive as
President and Chief Executive Officer of the Company under the
terms and conditions of the Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. All of the terms and condition of the Agreement shall remain
in full force and effect except as modified hereby. A copy of the
Agreement is attached as Exhibit "A".
2. Paragraph 1(1) shall be deleted and replaced with: "Period"
shall mean the four year period commencing on the date of the
Agreement. If the parties hereto agree to any further extension of
the Period, the term Period shall include all such extensions
thereof, provided, the Company shall not be obligated to grant any
such extensions.
IN WTNESS WHEREOF, the Company has caused the agreement to be
signed by its officer pursuant to the authority of the board, and
Executive has executed this agreement, as of the day and the year
first written above.
AMERICAN GAMING & ENTERTAINMENT, LTD.
By: /s/ Xxxx Xxxxxxxx
_________________
Name: Xxxx Xxxxxxxx
Title: Chairman
/s/ J. Xxxxxxx Xxxxxxxxxx
_________________________
J. Xxxxxxx Xxxxxxxxxx
Address: 00 Xxxxx Xxxx
Xxxx Xxxx, Xxx Xxxxxx 00000
Exhibit A
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of September 12, 1996 between
American
Gaming & Entertainment, Ltd., a Delaware corporation (the
"Company"), and J. Xxxxxxx Xxxxxxxxxx, a resident of New Jersey
("Executive").
A. Executive desires to be employed as President and Chief
Executive Officer of the Company.
B. The Company desires to retain the benefit of
Executive's experience and loyalty, and to employ Executive as
President and Chief Executive Officer of the Company.
C. The Company intends to negotiate with Shamrock Holdings
Group, Inc., formerly known as Xxxxxxx Holdings, Inc., ("Xxxxxxx"),
the Company's largest creditor and stockholder, to restructure all
obligations due from the Company to Xxxxxxx. The Company
understands that Shamrock is owned by Xxxxxxx X. Xxxxxxx, the
Trustee (the "Trustee") under Chapter 11 of the U.S. Bankruptcy
Code for certain entities related to Xxxxxxx. Executive has advised
that the Company that he would execute this Employment Agreement
and agree to participate in the negotiation and restructuring
efforts and be responsible for the day-to-day operations of the
Company only if the Company pays to Executive the signing bonus set
forth in Section 4(b) and causes to have issued to Executive the
letter of credit set forth in Section 4(g).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. Definitions.
___________
The terms used in this Agreement shall be defined as
follows:
(a) "Agreement" shall mean this Employment Agreement
as amended from time to time.
(b) "Base Salary" shall mean the annual base salary
payable to Executive pursuant to Section 4(a) hereof.
(c) "Board" shall mean the Board of Directors of the
Company.
(d) "Cause" shall mean termination of the Executive's
employment with the Company by the Board because of (i) Executive's
willful misconduct or gross negligence in the performance of, or
the willful failure or refusal by Executive to perform
substantially, Executive's duties and obligations under this
Agreement, as an officer of the Company or the lawful duties which
are otherwise assigned to Executive by the Board, (ii) the
inexcusable repeated or prolonged absence from work by Executive
(other than pursuant to a Permanent Disability (as defined below)
of Executive), (iii) any breach by Executive of Executive's
material obligations under this Agreement, (iv) the habitual abuse
of illegal or intoxicating substances by Executive,
(v) conviction or entry of a plea of guilty to any felony by
Executive, (vi) Executive's engagement in fraud, misappropriation,
embezzlement, or other act or acts of dishonesty resulting in, or
intended to result in, substantial personal enrichment of Executive
at the expense of the Company or (vii) the entry of any final civil
judgment in connection with any allegation of fraud,
misrepresentation, misappropriation or any other intentional tort
or intentional statute violation related to Executive's employment
with the Company. A Cause pursuant to clauses (i) - (iv) of this
Section 1(d) shall be deemed to exist only if such Cause has not
been cured by Executive within two weeks after written notice
thereof from the Company to Executive.
(e) A "Change in Control" shall be deemed to have
occurred if, at any time during the two-year period after the date
of this Agreement (1) any "person"(as such term is used in Sections
13(d) and 14(d) of the Exchange Act) (other than an "Affiliate" (as
defined in the Exchange Act) of Xxxxxxx) becomes the "Beneficial
Owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing greater
than 50% of the combined voting power (with respect to the election
of directors, or a merger, consolidation or liquidation of the
Company or a sale of all or substantially all of the business or
assets of the Company) of the Company's then outstanding securities
who was not as of the date of this Agreement the Beneficial Owner
of securities of the Company representing greater than 50% of such
combined voting power of the Company's securities outstanding as of
the date of this Agreement; (2) the consummation of a merger or
consolidation of the Company with or into any other corporation,
other than (A) a merger or consolidation which would result in all
or substantially all of the Beneficial Owners of voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) greater than 50% of
the combined voting power (with respect to the election of
directors, or a merger, consolidation or liquidation of the Company
or a sale of all or substantially all of the business or assets of
the Company) of the securities of the Company or of such surviving
entity outstanding immediately after such merger or consolidation
or (B) a merger, consolidation or distribution effected to
implement a recapitalization or reorganization of the Company (or
similar transaction) which results in no person (other than Xxxxxxx
or any of its Affiliates) after such transaction, directly or
indirectly, owning more than 40% of the combined voting power (with
respect to the election of directors, or a merger, consolidation or
liquidation of the Company or a sale of all or substantially all of
the business or assets of the Company) of the Company's then
outstanding securities; (3) the consummation of a plan of complete
liquidation of the Company or of an agreement for the sale or
disposition by the Company of all or substatially all of the
Company's business or assets to any person or (4) Xxxxxxx or the
Trustee exercises control over the Company, including without
limitation (A) causing the election of any person not currently a
director of the Company to the Board or (B) causing the appointment
of any person as an officer of the Company.
(f) "Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
(g) "Committee" shall mean the Compensation Committee
of the Board, if one exists and, if not, shall mean the Board.
(h) "Confidential Information" shall have the meaning
ascribed to it in Section 7 below.
(i) "Effective Date" shall mean the date of this
Agreement.
(j) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
(k) "Executive Benefit Plans" shall mean any plans
within the meaning of Sections 4(c) and (d) of this Agreement.
(l) "Period" shall mean the two-year period
commencing on the date of this Agreement. If the parties hereto
agree to any extension of the Period, the term "Period" shall
include all such extensions thereof; provided, that the Company
shall not be obligated to grant any such extension.
(m) "Permanently Disabled" shall mean prevented from
performing his obligations hereunder for a period of 120
consecutive days as a result of his physical or mental health, as
evaluated by sufficient documentation including doctors'
statements.
(n) "Stock Options" shall mean any options held by
Executive granting him the right to acquire shares of common stock
of the Company.
(o) "Substantial Breach" shall mean (1) a substantial
reduction in the nature or status of Executive's responsibilities
hereunder; provided, that it shall not be deemed to be a
Substantial Breach if Executive's duties are revised so that he
remains an officer but is removed or not reelected as President or
as Chief Operating Officer or as a director of the Company; (2) a
reduction by the Company in the Base Salary of Executive; (3) the
failure by the Company to allow Executive to participate to the
full extent in all plans, programs or benefits in accordance with
Sections 4(b) to (d), inclusive, hereof; (4) the failure by the
Company to pay, distribute or grant any amounts of cash, stock or
other compensation to Executive to which he is contractually
entitled; or (5) the failure of the Company to maintain its
principal offices during the Period in Atlantic, Bergen, Passaic,
Xxxxxx or Essex counties in New Jersey or Rockland county in New
York, provided, however, that the Company move and maintain its
principal offices through the end of the Period in Bergen, Passaic,
Xxxxxx or Essex counties in New Jersey or Rockland county in New
York upon the merger or consolidation with or into another entity.
A Substantial Breach shall be deemed to occur only if such
Substantial Breach has not been corrected by the Company within two
weeks of receipt of notice from Executive of the occurrence of such
Substantial Breach, which notice shall specifically set forth the
nature of the Substantial Breach.
2. Employment and Duties.
(a) General. From the date of this Agreement through
the end of the Period, the Company hereby employs Executive, and
Executive agrees upon the terms and conditions herein set forth, to
serve as an officer of the Company and Executive, in such capacity,
shall
perform duties substantially the same as normally performed by
persons in like positions in similar companies and substantially
the same as those performed by Executive immediately prior to the
date of this Agreement. So long as the principal offices of the
Company are not located in Bergen, Passaic, Xxxxxx or Essex
counties in New Jersey or Rockland county in New York, Executive
may work one day per week from his home and the Company shall pay
for a fax machine and fax line for Executive to work at such
location.
(b) No Other Employment. Throughout the time that
Executive is employed by the Company during the Period, Executive
shall, except as may from time to time be otherwise agreed in
writing by the Company and unless prevented for less than 120
consecutive days by ill health, devote his full-time working hours
to his duties hereunder and Executive shall not, directly or
indirectly, render services to any other person or organization for
which he receives compensation (excluding outside board activities
for a public charity, which involve modest time commitments)
without the consent of the Board or otherwise engage in activities
which would interfere with the performance of his duties hereunder;
provided, however, that the Executive may render volunteer services
for which he is not compensated so long as such services do not
interfere with the performance of his duties hereunder.
3. Term of Employment. Subject to earlier termination of
employment hereunder pursuant to Sections 5 or 6 of this Agreement,
the Company shall retain Executive during the Period and Executive
shall serve in the employ of the Company for the Period.
4. Compensation and Other Benefits. Subject to the
provisions of this Agreement, the Company shall pay and provide the
following compensation and other benefits to Executive during the
Period as compensation for services rendered hereunder:
(a) Base Salary. The Company shall pay to Executive
an annual base salary in the amount of one hundred and twenty-five
thousand dollars ($125,000) (the "Base Salary") payable in
accordance with the Company's standard payroll policies. The
Company shall be entitled to deduct or withhold all taxes and
charges which the Company may be required to deduct or withhold
therefrom. The Base Salary will be reviewed not less than annually
by the Committee and may be increased at any time but may not be
decreased without the consent of Executive.
(b) Signing Bonus. Upon the execution by the Company
and Executive of this Agreement, the Company shall promptly pay to
Executive a signing bonus in the amount of sixty-two thousand five
hundred dollars ($62,500).
(c) Incentive Compensation. At all times during the
Period, Executive shall be entitled to participate in all incentive
compensation plans and programs of the Company in which other
Company executives participate, existing from time to time. Subject
to this Section 4, the Company shall at all times maintain
incentive compensation plans and programs that provide Executive
with substantially the same opportunities for incentive
compensation as those in effect immediately prior to the date of
this Agreement.
(d) Stock Options. Executive shall be entitled to
participate in all stock option plans and programs of the Company
existing from time to time other than plans that exclude executive
employees generally; provided, that the Company shall have no
obligation to grant any options under such plans or programs; and
provided, further, that upon exercise of the Company's rights set
forth in Section 17 of the Company's Stock Option Plan the Company
may terminate such plan. Notwithstanding the terms of the plans or
agreements pursuant to which Executive's Stock Options were
granted, in the event that Executive's employment hereunder is
terminated by the Company pursuant to clause (v), (vi) or (vii) of
Section 1(d), all of Executive's Stock Options shall immediately
terminate and Executive shall have no right to exercise such Stock
Options or receive any payment for them. Upon the execution by the
Company and Executive of this Agreement, the Company shall promptly
grant to Executive options to purchase at the market price in
effect on the date of this Agreement 350,000 shares of common stock
of the Company pursuant to a stock option agreement having terms
substantially similar to the existing stock option agreement
covering Executive's existing options.
(e) Other Executive Benefit Plans. Executive shall be
eligible to participate in all pension and welfare plans and
programs of the Company for executive employees, existing from time
to time, including, without limitation, the following.
(i) All qualified benefit plans and programs
(e.g., defined contribution, supplemental retirement and Section
401(k) plans, long-term disability and life insurance plans and
programs);
(ii) All hospitalization and medical plans and
programs; and
(iii) All retirement plans and programs.
Such other executive benefit plans shall be substantially similar
to those plans in effect at the Company immediately prior to the
Effective Date.
(f) Severance Compensation. The Company shall pay to
Executive a severance payment equal to two (2) years' Base Salary
(i) in the event that Executive is terminated without Cause, (ii)
upon the occurrence of a Substantial Breach or (iii) Executive
resigns from his employment hereunder after a Change in Control.
(g) Letter of Credit. Upon execution of this
Agreement by the Company and Executive, the Company shall cause to
have issued an irrevocable letter of credit (the "L/C") in the
amount of sixty-two thousand five hundred dollars ($62,500) to be
paid to Executive in the event that (i) Executive's employment is
terminated by the Company without Cause, (ii) the Company files for
bankruptcy protection or an involuntary case is commenced against
the Company, (iii) Executive remains employed by the Company for a
period of one (1) year after the date of this Agreement, (iv) a
Substantial Breach has occurred or (v) Executive resigns from his
employment hereunder after a Change of Control.
(h) Car Allowance. The Company shall pay to Executive
a car allowance of $500 per month, payable on the first of each
month, with the payment for September 1996 being made upon
execution of this Agreement.
(i) Non-exclusivity of Rights. Nothing in this
Agreement shall prevent or limit Executive's continuing or future
participation in any benefit, bonus, incentive or other plan or
program provided by the Company, nor shall anything herein limit or
reduce such rights as Executive may have under any other agreements
with the Company (except as provided in Section 6(c)).
Notwithstanding any provision hereof, amounts which are vested
benefits or which Executive is otherwise entitled to receive under
any plan or program of the Company shall be payable in accordance
with such plan or program, except as explicitly modified by this
Agreement. Executive's entitlement to any other compensation or
benefits shall be determined in accordance with the Company's
employee benefit plans and other applicable programs, policies and
practices then in effect.
5. Termination of Employment for Cause.
(a) Compensation and Benefits. If, prior to the
expiration of the Period, (i) Executive's employment hereunder is
terminated by the Company for Cause, or (ii) Executive resigns from
his employment hereunder other than under circumstances covered by
Section 6 below, Executive shall not be eligible to receive any
compensation or benefits or to participate in any plans or programs
under Section 4 hereof with respect to the Period after the date of
such termination except for the right to receive benefits under any
plan or program, to the extent vested, in accordance with the terms
of such plan or program and except for benefits provided in
accordance with customary practices of the Company at Executive's
expense (e.g., hospitalization and medical insurance); provided,
however, that Executive's Stock Options shall be governed by the
provisions of Section 4(d) above.
(b) Date of Termination. The date of termination of
Executive's employment hereunder by the Company under this Section
5 shall be (i) immediately upon receipt by Executive of written
notice of termination for Cause; provided, that the Cause specified
in such notice shall not have been corrected by Executive within
two (2) weeks after Executive received notice of such Cause if
Executive had the right pursuant to Section 1(d) to cure such Cause
or (ii) immediately upon receipt by the Company of written notice
of Executive's resignation, except if such resignation is due to a
Substantial Breach.
6. Termination of Employment Other Than For Cause.
(a) Compensation and Benefits. If, prior to the
expiration of the Period, Executive's employment hereunder is
terminated by the Company without Cause or for any reason within
one year after a Change in Control, or if, prior to the expiration
of the Period, Executive resigns from his employment hereunder
following a Substantial Breach or for any reason within one year
after a Change in Control, or if, prior to the expiration of the
Period, Executive dies or becomes Permanently Disabled while
employed hereunder, notwithstanding such termination or
resignation, through the end of the Period:
(i) Executive shall be entitled to continue to
receive payments through the expiration of the Period under Section
4(a) above at the rate of his Base Salary as in effect on the date
of termination or resignation;
(ii) Executive shall be entitled to receive
bonuses under any incentive compensation plans described in Section
4(b) as in effect on the date of termination or resignation
determined as though Executive had remained employed pursuant to
this Agreement;
(iii) All of Executive's Stock Options shall
immediately vest and remain exercisable through the option term of
each respective Stock Option as set forth in the respective Stock
Option grant letter;
(iv) Executive shall remain eligible to
participate in all Executive Benefit plans and for purposes of
determining Executive's participation and benefits thereunder,
Executive's employment with the Company shall be deemed to continue
and his compensation shall include the payments under Section
6(a)(i) and (ii) above; and
(v) Executive shall be entitled to receive the
severance compensation described in Section 4(f).
(b) Date of Termination. The date of termination's of
Executive's employment by the Company under this Section 6 shall be
the date specified in the written notice of termination to
Executive, or if no such date is specified therein, the date on
which such notice is given to Executive. The date of resignation by
Executive under this Section 6 as a result of a Substantial Breach
shall be immediately upon receipt by the Company of written notice
of resignation; provided, that the Substantial Breach shall not
have been corrected by the Company during the two (2) week period
after such notice of such Substantial Breach was provided to the
Company pursuant to Section 1(p) hereunder. The date of termination
of Executive's employment in the event of his death shall be the
date of Executive's death or in the event Executive becomes
Permanently Disabled, 120 days after the date such disability
commenced.
(c) Reduction in Payments. The amount of any payments
of compensation and benefits to Executive under this Section 6
shall be reduced by the amount, if any, necessary to prevent any
part of such payments from being treated as an "excess parachute
payment" (as that term is defined for purposes of Section
280G(b)(1) of the Code and the related federal tax regulations);
provided, however, that such reduction shall apply only if the
reduction will result in payments to Executive under this Section
6 which have, after consideration of all applicable taxes, a
greater after-tax benefit to Executive than the amount of such
payments to Executive under this Section 6 computed without such
reduction. The determination of relative benefits shall be made by
the Company on the basis of information supplied by Executive.
7. Nondisclosure of Confidential Information.
(a) Definition. For purposes of this Agreement
"Confidential Information" means any information or compilation of
information, not generally known, which is proprietary to the
Company and relates to the Company's existing or reasonably
foreseeable business. All information which the Company identifies
as being "confidential" or "trade secret" shall be presumed to be
Confidential Information. Confidential Information shall also
include any confidential information of a parent, subsidiary or
sister corporation of the Company and any information disclosed by
a third party under contract with the Company which contract
requires such disclosed information be kept confidential.
Confidential Information shall not include information that is in
or enters the public domain other than through a breach of
confidentiality owed to the Company.
(b) Nondisclosure. During the Period and at all
times thereafter, Executive shall hold in strictest of confidence
and will never disclose, furnish, transfer, communicate, make
assessable to any person or use in any way Confidential Information
for Executive's own or another's benefit or permit the same to be
used in competition with the Company, nor will Executive accept any
employment which would, by the nature of the position, inherently
involve the use or disclosure by Executive of Confidential
Information.
8. Specific Performance and Injunctive Relief. In addition
to any other relief afforded by law, the Company shall have the
right to enforce the covenants contained in Section 7 hereof by
specific performance and by preliminary, temporary and permanent
injunctive relief, against Executive and any other person concerned
thereby, it being understood that damages, specific performance or
injunctive relief, shall be proper modes of relief and are not to
be considered as alternative remedies. If the Company is successful
in any action for specific performance or injunctive relief the
costs incurred by the Company related thereto, including reasonable
attorneys' fees and expenses, shall be paid by Executive.
9. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes any and all
oral or written understanding between the parties hereto.
10. Headings of No Effect. The Section headings contained in
this Agreement are included solely for convenience of reference and
shall not in any way affect the meaning or interpretation of any of
the provisions of this Agreement.
11. Binding Agreement. This Agreement shall be binding upon,
and inure to the benefit of, the parties hereto, any successor to
or assigns of the Company, and Executive's heirs and the personal
representative of Executive's estate.
12. Severability. If the final determination of a court of
competent jurisdiction declares, after the expiration of the time
within which judicial review (if permitted) of such determination
may be perfected, that any term or provision hereof is invalid or
unenforceable, (a) the remaining terms and provisions hereof shall
be unimpaired and (b) the invalid or unenforceable
term or provision shall be deemed replaced by a term or provision
that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision.
13. Amendment; Waiver. This Agreement may not be modified,
amended or waived in any manner except by an instrument in writing
signed by both parties hereto. The waiver by either party hereto of
compliance with any provision of this Agreement by the other party
hereto shall not operate or be construed as a waiver of any other
provision of this Agreement, or of any subsequent breach by such
party of a provision of this Agreement.
14. Renewal. The Company shall be under no obligation to
renew this Agreement.
15. Governing Law. All matters affecting this Agreement,
including the validity hereof, are to be governed by, interpreted
and construed in accordance with the laws of the State of New
Jersey.
16. Notices. Any notice hereunder by either party hereto to
the other shall be given in writing by personal delivery or
certified mail, return receipt requested. If addressed to
Executive, the notice shall be delivered or mailed to Executive at
the address specified under Executive's signature hereto or such
other address which Executive has advised the Company to send
notice to, or if addressed to the Company, the notice shall be
delivered or mailed to the Company at its executive offices and to
the attention of each member of the Board of Directors of the
Company at their respective business addresses. A notice shall be
deemed given, if by personal delivery, on the date of such delivery
or, if by certified mail, on the date shown on the applicable
return receipt.
17. Consideration. The parties acknowledge that the
restrictions contained in Section 7 hereof are a reasonable and
necessary protection of the immediate interests of the Company and
any violation of these restrictions would cause substantial injury
to the Company and that the Company would not have entered into
this Employment Agreement without receiving the additional
consideration offered by Executive in binding himself to these
restrictions.
IN WITNESS WHEREOF, the Company has caused the Agreement to be
signed by its officer pursuant to the authority of its Board, and
Executive has executed this Agreement, as of the day and year first
written above.
AMERICAN GAMING & ENTERTAINMENT, LTD.
By: /s/ Xxxx X. Xxxxxxxx
_________________________________
Name: Xxxx X. Xxxxxxxx
Title: Chairman
/s/ J. Xxxxxxx Xxxxxxxxxx
_____________________________________
J. Xxxxxxx Xxxxxxxxxx
Address: 00 Xxxxx Xxxx
Xxxx Xxxx, XX 00000
