-14-
PH03/223440.1
Exhibit 10.68
AGREEMENT
THIS AGREEMENT, dated as of August 1 , 1997 between
Players International, Inc. (together with its successors or
assigns as permitted under this Agreement, the "Company"), and
Xxxx Xxxxx ("Executive").
W I T N E S S E T H:
WHEREAS, the Company considers it essential to the best
interest of its stockholders to xxxxxx the continuous employment
of key management personnel;
WHEREAS, the Board (as hereinafter defined) of the Company
recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may exist
and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure
or distraction of management personnel to the detriment of the
Company and its stockholders;
WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued
attention and dedication of certain members of the Company's
management, including Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances
arising from the possibility of a "Change in Control" (as
hereinafter defined) of the Company, although no such change is
now contemplated; and
WHEREAS, in order to induce Executive to remain in the
employ of the Company and in consideration of Executive's
undertakings set forth herein, the Company agrees that Executive
shall receive the severance benefits set forth in this Agreement
under the circumstances as described below.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, the Company and Executive (individually a "Party"
and together the "Parties") agree as follows:
1. Definitions.
(a) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(b) "Base Compensation" shall mean the Executive's
annual base compensation payable by the Company.
(c) "Beneficial Owner" of any securities shall mean:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of securities tendered pursuant
to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for payment, purchase or exchange;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including without limitation
pursuant to any agreement, arrangement or understanding, whether
or not in writing; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of any security under this
subparagraph (ii) as a result of an oral or written agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) where voting securities are beneficially
owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii)
above) or disposing of any voting securities of the Company;
provided, however, that nothing in this Paragraph 1(b) shall
cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of any securities
acquired through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days
after the date of such acquisition.
(d) "Board" shall mean the Board of Directors of the
Company.
(e) "Cause" shall mean (i) Executive is convicted of a
felony involving moral turpitude; (ii) Executive uses alcohol or
any unlawful controlled substance to an extent that it interferes
on a continuing and material basis with the performance of his
duties under the Agreement; (iii) Executive engages in the
willful, unauthorized disclosure of Confidential Information, as
defined in Paragraph l(g), concerning the Company or any
Subsidiary, unless such disclosure was (A) believed in good faith
by Executive to be appropriate in the course of properly carrying
out his duties, or (B) required by an order of a court having
jurisdiction over the subject matter or a summons, subpoena or
order in the nature thereof of any legislative body (including
any committee thereof) or any governmental or administrative
agency; (iv) Executive, other than in the course of properly
carrying out his duties as assigned by the Company, performs
services for any other corporation or person that competes with
the Company or any Subsidiary; (v) Executive, in carrying out his
duties as assigned by the Company, engages in willful neglect or
willful misconduct resulting, or reasonably likely to result, in
either case, in material economic harm to the Company, unless
such act, or failure to act, resulted from Executive's reasonable
belief that such act or failure to act was in the best interests
of the Company; or (vi) Executive is found disqualified or not
suitable to hold a casino key employee license or other such
license by a gaming authority in any jurisdiction where the
Company operates a casino and Executive is required to be found
qualified, suitable or licensed, as the case may be.
(f) "Change in Control" shall mean the occurrence of
any one of the following events, unless the Board determines,
before the event or transaction occurs, that the event or
transaction will not be a Change of Control for purposes of this
Agreement. The Board shall determine whether a Change of Control
shall be deemed to occur for purposes of this Agreement in its
sole discretion, taking into account such facts and circumstances
as it deems appropriate, including, without limitation, whether
the event or transaction is likely to result in a change in the
Company's management that will affect Executive's position. The
Board's determination shall be binding on all persons for all
purposes. An event or transaction may be considered a Change of
Control under another plan or agreement of the Company without
being considered a Change of Control for purposes of this
Agreement. The events or transactions that may be considered a
Change of Control are the following:
(i) any Person (except the Xxxxxxx Group or its
Affiliates and Associates, Company management as of the Effective
Date and their Affiliates and Associates or the Company or any
employee benefit plan of the Company or of any Affiliate, any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such employee benefit
plan), together with all Affiliates and Associates of such
Person, shall become the Beneficial Owner in the aggregate of 30%
or more of the Voting Stock then outstanding; provided, however,
that no "Change of Control" shall be deemed to occur during any
period in which any such Person, and its Affiliates and
Associates, are bound by the terms of a standstill agreement
under which such parties have agreed not to acquire more than 30%
of the Voting Stock then outstanding or to solicit proxies;
(ii) consummation by the Company of a
reorganization, merger or consolidation (a "Business
Combination"), in each case, with respect to which all or
substantially all of the individuals and entities who were the
respective Beneficial Owners of the Voting Stock outstanding
immediately prior to such Business Combination do not, following
such Business Combination, Beneficially Own, directly or
indirectly, more than 50% of the then outstanding shares of
voting stock of the corporation resulting from such Business
Combination in substantially the same proportion as their
ownership immediately prior to such Business Combination of the
outstanding Voting Stock;
(iii) consummation of a complete liquidation
or dissolution of the Company;
(iv) sale or other disposition of all or
substantially all of the assets of the Company other than to a
corporation with respect to which, following such sale or
disposition, more than 50% of the then outstanding shares of
voting stock is then owned beneficially, directly or indirectly,
by all or substantially all of the individuals and entities who
were the Beneficial Owners, respectively, of the outstanding
Voting Stock immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the
outstanding Voting Stock immediately prior to such sale or
disposition;
(v) individuals who, as of the beginning of any
twenty-four month period, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of
the Board, provided that any individual becoming a director
subsequent to the beginning of such period whose election or
nomination for election by the Company stockholders was approved
by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
is in connection with an actual or threatened election contest
relating to the election of members of the Board (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(vi) a "change of control" as defined in the form
of indenture governing any indebtedness of the Company shall have
occurred.
(g) "Confidential Information" shall include, but not
be limited to, the Company's financial, real estate, marketing
and promotional plans and strategies. Confidential Information
does not include information that becomes available to the public
other than through a breach of the Agreement on the part of
Executive.
(h) "Disability" shall mean if, as a result of
Executive's incapacity due to physical or mental illness,
Executive shall have been absent from the full-time performance
of Executive's duties with the Company for six consecutive months
and within thirty days after written notice of termination is
given Executive shall not have returned to the full-time
performance of Executive's duties.
(i) "Good Reason" shall mean, without Executive's
express written consent and without Cause, the occurrence after a
Change in Control of the Company, or within six months before a
Change of Control, of any of the following:
(i) The assignment to Executive of any duties
inconsistent with Executive's status as an executive officer of
the Company or a substantial adverse alteration in the nature or
status of Executive's responsibilities from those in effect
immediately prior to the date that is six months before the
Change in Control of the Company;
(ii) Executive's Base Compensation is decreased by
the Company in other than an across-the-board salary adjustment
of similarly situated executives, or his benefits under any
material employee benefit plan or program of the Company or his
incentive or equity opportunity under any material incentive or
equity program of the Company is or are reduced, after taking
into account the discretion of the Board to determine the level
at which Executive participates in any performance compensation
program, on a basis not shared in common with other senior
executives of the Company as a group; or
(iii) 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 6 hereof;
provided that
(iv) Executive's termination of employment for
Good Reason must occur within 90 days after Executive learns of
the occurrence of the event constituting Good Reason and during
the term of the Agreement.
(j) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(k) "Subsidiary" shall mean any corporation in which
the Company owns 50% or more of the Voting Stock or any other
venture in which it owns 50% or more of the equity.
(l) "Termination Upon a Change in Control" shall mean
that following a Change in Control, or within six months prior to
a Change in Control, and during the term of the Agreement, (i)
the Company terminates Executive's employment without Cause or
(ii) Executive terminates his employment for Good Reason, as
described in Subparagraph 3(a).
(m) "Voting Stock" shall mean capital stock of any
class or classes having general voting power under ordinary
circumstances, in the absence of contingencies, to elect the
directors of a corporation.
2. Term of Agreement. This Agreement shall commence on March
1, 1997 and shall continue in effect through December 31, 1998;
provided that if a Change in Control of the Company occurs during
the term of this Agreement, this Agreement shall automatically
continue in effect for a period of twenty-four months beyond the
month in which such Change in Control occurs.
3. Termination Upon a Change in Control.
(a) If a Change in Control (as defined in Subparagraph
1(f)) of the Company shall have occurred, Executive shall be
entitled to the benefits provided in Paragraph 4 hereof upon the
subsequent termination of Executive's employment, or upon the
termination of Executive's employment within six months prior to
the Change of Control, if such termination occurs during the term
of the Agreement and is (y) by the Company other than for Cause
or (z) by Executive for Good Reason. Notwithstanding anything in
this Agreement to the contrary, if Executive's employment
terminates on account of Disability, Executive shall be entitled
to receive disability benefits under any disability program
maintained by the Company that covers Executive, and Executive
shall not be considered to have terminated employment under this
Agreement and shall not receive benefits pursuant to Paragraph 4
hereof.
(b) Notice of Termination. Any purported termination
of Executive's employment by the Company or by Executive shall be
communicated by written Notice of Termination to the other party
hereto in accordance with Paragraph 14 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so
indicated.
4. Compensation Payable in the Event of Termination.
(a) In the event a Termination Upon a Change in
Control occurs, Executive shall be entitled to receive promptly
following the later of his termination of employment or the
Change of Control:
(i) unpaid Base Compensation earned or accrued
through his date of termination and a lump-sum payment equal to
the present value (computed by using a discount rate per annum
determined by reference to the discount rate then published by
the Pension Benefit Guaranty Corporation for determining the
value of immediate annuities ("Present Value")) of Executive's
Base Compensation that would be due him for a period of 36 months
following termination of his employment, determined on the basis
of the average of the Base Compensation paid to Executive for the
36 months preceding his termination;
(ii) a lump-sum payment equal to the Present Value
of the aggregate performance bonus amounts he received, if any,
for the period of 36 months preceding his termination;
(iii) any performance or special incentive
bonus earned but not yet paid;
(iv) reimbursement for reasonable out-of-pocket
business expenses properly incurred but not yet reimbursed by the
Company; and
(v) any other compensation and benefits to which
he may be entitled under applicable plans, programs and
agreements of the Company and the continuation of Executive's
participation in all Employee Benefit Programs (as defined below)
during the period for which Executive is to receive payments
under clause (i) above (irrespective of the fact that such
payments are paid in a lump sum); provided, however, that in the
event the Company is precluded from providing coverage under any
such program by applicable law or regulation, it may choose to
provide Executive with a payment equal to the cost of such
coverage without regard to tax effect. "Employee Benefit
Programs" shall mean those employee welfare benefit and
retirement benefit plans and programs of the Company in which
Executive participates immediately before Executive's termination
of employment; provided, however, that the Company shall not be
prohibited from amending or terminating any Employee Benefit
Program as long as Executive continues to receive comparable
levels of coverage in the aggregate during the payment period.
(b) Notwithstanding the foregoing, in the event that
it shall be determined that any payment or distribution by the
Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (a "Payment"), would constitute an
"excess parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"), and
that it would be economically advantageous to the Company to
reduce the payment to avoid or reduce the limitation of the
Company's federal income tax deduction under Section 280G of the
Code, the aggregate present value of amounts payable or
distributable to or for the benefit of Executive pursuant to this
Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments")
shall be reduced (but not below zero) to the Reduced Amount. The
"Reduced Amount" shall be an amount expressed in present value
which maximizes the aggregate present value of Agreement Payments
without causing any Payment to be subject to the limitation of
deduction under Section 280G of the Code. For purposes of this
subparagraph (b), "present value" shall be determined in
accordance with Section 280G(d)(4) of the Code. All
determinations to be made under this Paragraph 4(b) shall be made
by the Company's independent public accountant immediately prior
to the Change of Control (the "Accounting Firm"), which firm
shall provide its determinations and. any supporting calculations
both to the Company and Executive within ten days of the
termination date. Any such determination by the Accounting Firm
shall be binding upon the Company and Executive. Executive shall
in his sole discretion determine which and how much of the
Agreement Payments shall be eliminated or reduced consistent with
the requirements of this Paragraph 4(b). Within five days after
Executive's determination, the Company shall pay (or cause to be
paid) or distribute (or cause to be distributed) to or for the
benefit of Executive such amounts as are then due to Executive
under this Agreement. All of the fees and expenses of the
Accounting Firm in performing the determinations referred to
above shall be borne solely by the Company. The Company agrees
to indemnify and hold harmless the Accounting Firm of and from
any and all claims, damages and expenses resulting from or
relating to its determinations pursuant to this Paragraph, except
for claims, damages or expenses resulting from the gross
negligence or willful misconduct of the Accounting Firm.
(c) No Mitigation; No Offset. In the event of any
termination of Executive's employment under the Agreement, he
shall be under no obligation to seek other employment, and there
shall be no offset against amounts due him under the Agreement on
account of any remuneration attributable to any subsequent
employment that he may obtain.
(d) Nature of Payments. Any amounts due Executive
under the Agreement in the event of any termination of his
employment with the Company are in the nature of severance
payments, or liquidated damages which contemplate both direct
damages and consequential damages that may be suffered as a
result of the termination of his employment, or both, and are not
in the nature of a penalty.
5. Termination by the Company. Executive hereby acknowledges
that, prior to the date that is six months before a Change of
Control, Executive is an "at will" employee of the Company.
Prior to the date that is six months before a Change of Control,
Executive hereby acknowledges that the Company may terminate
Executive's employment with the Company with or without Cause.
If the Company terminates Executive's employment without Cause
after the date that is six months before a Change in Control and
prior to the expiration of this Agreement, Executive will be
entitled to payments pursuant to Paragraphs 3 and 4 hereof.
6. Successors, Binding Agreement.
(a) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such assumption
and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle Executive
to compensation from the Company in the same amount and on the
same terms as Executive would be entitled to hereunder if
Executive terminates his employment voluntarily for Good Reason
following a Change in Control of the Company, except that for
purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the date of
termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and
be enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devises and legatees. If Executive should die after Executive's
termination of employment under circumstances entitling Executive
to benefits hereunder and while any amount would still be payable
to Executive hereunder if Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive's
devises, legates or other designee or, if there is no such
designee, to Executive's estate.
7. Representation. The Company and Executive respectively
represent and warrant to each other that, subject to any approval
that may be necessary from any pertinent regulatory authority,
each respectively is fully authorized and empowered to enter into
the Agreement and that its or his entering into this Agreement
and the performance of its or his respective obligations under
the Agreement will not violate any agreement between the Company
or Executive respectively and any other person, firm or
organization or any law or governmental regulation.
8. Entire Agreement. The Agreement contains the entire
agreement between the parties concerning the subject matter
hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or
oral, between the parties with respect thereto.
9. Amendment or Waiver. The Agreement cannot be changed,
modified or amended without the consent in writing of both
Executive and the Company. No waiver by either Party at any time
of any breach by the other Party of any condition or provision of
the Agreement shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or at any prior or subsequent
time. Any waiver must be in writing and signed by Executive or
an authorized officer of the Company, as the case may be.
10. Severability. In the event that any provision or portion of
the Agreement shall be determined to be invalid or unenforceable
for any reason, in whole or in part, the remaining provisions of
the Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by law.
11. Survivorship. The respective rights and obligations of the
Parties hereunder shall survive any termination of the Agreement
to the extent necessary to the intended preservation of such
rights and obligations.
12. Governing Law. The Agreement shall be governed by and
construed and interpreted in accordance with the laws of the
State of New Jersey without reference to principles of conflict
of laws.
13. Settlement of Disputes. In the event of any dispute under
the provisions of this Agreement other than a dispute in which
the primary relief sought is an equitable remedy such as an
injunction, the parties shall be required to have the dispute,
controversy or claim settled by arbitration in the Las Vegas,
Nevada in accordance with the National Rules for the Resolution
of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, two of whom
shall be selected by the Company and Executive, respectively, and
the third of whom shall be selected by the other two arbitrators.
Any award entered by the arbitrators shall be final, binding and
nonappealable and judgment may be entered thereon by either party
in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically
enforceable. The arbitrators shall have no authority to modify
any provision of this Agreement or to award a remedy for a
dispute involving this Agreement other than a benefit
specifically provided under or by virtue of the Agreement. If
Executive prevails on any material issue which is the subject of
such arbitration or lawsuit, the Company shall be responsible for
all of the fees of the American Arbitration Association and the
arbitrators and any expenses relating to the conduct of the
arbitration and the Executive's reasonable legal fees and
expenses. Otherwise, each party shall bear his or its own
expenses relating to the conduct of the arbitration (including
attorneys' fees and expenses) and shall share the fees of the
American Arbitration Association.
14. Notices. Any notice given to either Party shall be in
writing and shall be deemed to have been given when delivered
personally or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Party
concerned at the address indicated below or to such changed
address as such Party may subsequently give notice of:
If to the Company:
Players International, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attention: Chief Executive Officer
If to Executive:
Xxxx Xxxxx
The heading of the paragraphs contained in the
Agreement are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
16. Counterparts. The Agreement may be executed in two or more
counterparts.
IN WITNESS WHEREOF, the undersigned have executed the
Agreement as of the date first above.
Players International, Inc.
_________________________
By: Xxxxxx X. Xxxxxxxx
Its: Chief Executive Officer
_________________________
Xxxx Xxxxx
