EXHIBIT 10.1
0000 Xxxxxxxxx
Xxxxxxxx Xxxx, Xxx Xxxxxx 00000
609.449.1000
xxxxxxxxxxxx.xxx
XXXXX
ENTERTAINMENT RESORTS
September 1, 2006
Xxxx Xxxxxxx
00 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Dear Xxxx:
This letter agreement (the "Agreement") will confirm your employment
with Xxxxx Entertainment Resorts Holdings, L.P. ("TERH") and/or its affiliates
(collectively "Xxxxx").
Position: Senior Vice President - Development (or such other
position as TERH may reasonably request and which you
are qualified for by training and experience).
Base Salary: Annual Salary of $350,000 (reviewed annually and
adjusted in accordance with current TERH policy).
Initial Bonus: You shall be paid an initial, one time bonus of Two
Hundred Fifty Thousand Dollars ($250,000) within ten
(10) days following commencement of your employment,
provided that such amount shall be returned to TERH in
the event your employment with TERH terminates for any
or no reason, other than a Separation Without Cause or
for Good Reason, within six (6) months of the
commencement of your employment.
Annual Incentive Bonus: 60 - 100 percentage of base salary upon achievement of
financial parameters as approved by the Compensation
Committee of TERH, provided that you shall not be
eligible for the calendar year 2006.
Long Term Incentive: Initial grant of such number of restricted shares as
are determined by dividing Two Hundred and Fifty
Thousand Dollars ($250,000) by the closing price of
TERH common stock on the day your employment
commences, with all restrictions lapsing in one third
increments on January 1, 2008, 2009, and 2010. Will
become eligible following approval by the Compensation
Committee for grants of equity compensation awards or
options under any long term incentive program adopted
by TERH, based upon a performance model valued on
actual transactions produced as set forth in Annex "A"
hereto. In the event of any Change of Control,
including a Change of Control with Special
Circumstances, all vesting or trading restrictions
will lapse.
Benefits: Benefits and perquisites which Xxxxx provides to its
employees generally as determined by Xxxxx for
similarly situated executives and relocation pursuant
to TERH policy therefore.
Terms of Employment/ Your continued employment and
severance rights shall be subject to the terms and
Severance: conditions set forth in Annex A hereto.
Change of Control: You may terminate your employment on your own
initiative upon a Change of Control (as defined in
Annex A ) and in such event you shall be entitled to
the severance and other rights and obligations set
forth in Annex A.
Non-compete: a. You agree that if you terminate your employment
on your own initiative without Good Reason, or
if it is terminated for Cause you will not
accept employment, either as an employee,
consultant or independent contractor, with or on
behalf of any casino licensee or casino license
applicant in any market where Xxxxx operates a
casino facility or within 200 miles of such
casino facility for the remaining months of the
first year of employment;
b. You agree that for a period of twelve (12)
months after the termination of your employment
with Xxxxx you shall not solicit or contact,
directly or through any other company, any
customers whom you have met, serviced, developed
or continued to develop during your tenure with
Xxxxx; this restriction shall not apply in the
event of a Separation Without Cause or a
Separation for Good Reason, and is not intended
to apply in the event you are working in the
financial services industry as i.e., an analyst
or investment banker;
c. You agree that a period of twelve (12) months
after the termination of your employment with
Xxxxx you shall not solicit or otherwise discuss
employment, directly or through any other
company, any employees of Xxxxx, or any of its
related or affiliated companies.
d. You acknowledge and agree that the restrictive
covenants set forth herein are reasonable as to
duration, terms and geographical area and that
the same are necessary to protect the legitimate
interests of Xxxxx, impose no undue hardship on
you and are not injurious to the public. Nothing
contained in the restrictive covenants herein,
or otherwise, shall prevent you from working in
the financial services industry.
You acknowledge that upon your breach of this
Agreement, Xxxxx would sustain irreparable harm from
such breach, and, therefore, you agree that in
addition to any other remedies which Xxxxx may have
under this Agreement or otherwise, Trump's obligations
to provide severance benefits to you shall immediately
terminate, you shall have no claim to receive such
benefits from Xxxxx, the release document referred to
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above shall remain in all respects valid and binding,
and Xxxxx shall be entitled to obtain equitable
relief, including specific performance and
injunctions, restraining you from committing or
continuing any such violation of this section.
Indemnification: Xxxxx shall cover you under directors and officers
liability insurance both during, and while potential
liability exists, after your employment with Xxxxx in
commercially reasonable amounts. Xxxxx shall during
and after your employment indemnify and hold you
harmless to the fullest extent permitted by applicable
law with regard to your actions or inactions in the
performance of your duties as an officer, director
and/or employee of Xxxxx and its affiliates or as a
fiduciary of any benefit plan of Xxxxx and its
affiliates.
Attorney's Fees: TERH shall promptly reimburse you for the reasonable
legal fees and expenses incurred in negotiating this
Agreement.
Representation: You acknowledge that your entering into this Agreement
does not violate any other agreement to which you or
anyone on your behalf is a party.
Entire Agreement: This Agreement constitutes the entire understanding of
the parties with respect to the subject matter hereof
and supersedes and voids any and all prior agreements
or understandings, written or oral, regarding the
subject matter hereof.
GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New Jersey.
Your employment is expected to commence on or about December 5, 2006 or earlier
subject to and contingent upon the following:
o Obtaining or possessing a New Jersey Key license or such
equivalent qualification required by New Jersey law or the laws
of any other state or jurisdiction in which Xxxxx conducts
business,
o Satisfactory completion of a background and reference check,
o Your signing this Agreement, the Xxxxx Code of Business Conduct
and the Xxxxx Employee Handbook,
o Compliance with all employment policies including the successful
completion of a drug test; and
o Your submission of appropriate documentation of employment
eligibility in the United States.
Very truly yours,
/s/ XXXXX X. XXXXX
XXXXX X. XXXXX
President and CEO
JBP/ams
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I agree and accept the terms of this Agreement.
/s/ Xxxx Xxxxxxx September 7, 2006
--------------------------------------- ---------------------
Xxxx Xxxxxxx Date
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ANNEX A
TO XXXX XXXXXXX
LETTER AGREEMENT
1. Separation of Employment.
(a) Death. The death of Xxxx Xxxxxxx ("Executive") shall automatically
terminate Xxxxx Entertainment Resorts, Inc. ("TER") and Xxxxx Entertainment
Resorts Holdings, LP (hereinafter, together with TER, collectively, referred to
as the "Company") obligations hereunder, except as set forth in 2(a) below.
(b) Total Disability. If Executive is disabled so that in the Company's
opinion he would qualify for disability under the Company's Long Term Disability
Plan if he applied for it or, if there is no plan, Executive is unable to
perform the services required of him due to physical or mental injury or illness
for six consecutive months or for six months in any period of twelve months, (a
"Total Disability"), the Company shall be entitled to separate Executive's
employment with Executive reserving his rights to apply for disability benefits
based on becoming disabled during active employment. This separation will
terminate the Employer's obligations to Executive, except as set forth in
Section 2(b).
(c) Separation for Cause. At any time during the term of this Agreement,
the Company may separate Executive's employment for cause, in which event
Executive's employment will immediately terminate. For the purpose of this
Agreement, the Company shall have "Cause" to separate Executive's employment for
any of the following reasons: (1) dishonesty or fraud, (2) disclosure of
confidential information regarding the Company, (3) aiding a competitor (as
defined in the Non-compete provisions of the Letter Agreement) of the Company or
other material breach of the Non-compete provisions of the Letter Agreement, (4)
the use by Executive of controlled substances (not legally prescribed by a
physician) or the use of alcohol that interferes, in the sole but good faith
discretion of the Company, with the performance of Executive duties, (5) willful
misconduct, acts of moral turpitude, malfeasance or gross negligence in the
performance of his duties hereunder, or (6) the failure to obtain and maintain
all licenses, qualifications and credentials required by any state or Federal
agency or authority having jurisdiction over the Company, or its employees or
properties, in any case under clauses (1) through (6) that are materially
injurious to the business or reputation of the Company or any of it affiliates,
as determined in good faith by the Board or the CEO. Separation for Cause must
be approved by the CEO or the Board but only after reasonable notice to
Executive and a reasonable opportunity to explain and cure the conduct, unless
under the circumstances there is no cure or the time required for a cure would
materially harm the Company or any of its affiliates. The failure of Executive
to meet financial projections, budgets or target performance objectives shall
not be deemed willful misconduct or gross negligence for the purposes of this
Agreement.
(d) Separation Without Cause, or For Good Reason. Notwithstanding anything
to the contrary contained in this Agreement, the Company may in its sole
discretion, at any time, separate Executive from employment with the Company
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Without Cause upon sixty (60) days' prior written notice, and Executive may
initiate a separation for Good Reason upon thirty (30) days' prior written
notice (hereinafter, any such separation by the Company or Executive shall be
called a "Separation Without Cause").
(e) Separation by Executive Without Good Reason. Executive may terminate
his employment at any time Without Good Reason upon thirty (30) days prior
written notice.
(f) Notice of Separation. Any purported separation of Executive's
employment hereunder by the Company or Executive (other than separation by
reason of the death of Executive) shall be effective when communicated to the
other party by a Notice of Separation. For the purposes of this Agreement, a
"Notice of Separation" shall be a written notice indicating the specific
separation provision in this Agreement relied upon and the Separation Date. If
Executive vacates or abandons his job and does not give Notice of Separation,
the Separation Date will be the last day worked or such other date as the
Company may reasonably select.
2. Payments Upon Separation.
(a) Payments Upon Death. If Executive's employment hereunder is separated
by reason of Death during his active employment, the Company shall pay to
Executive's estate his Base Salary and accrued PTO through the Separation Date
at the rate in effect on the Separation Date and a pro rata bonus for current
year based on performance of the Company, paid in the following year when
bonuses are normally distributed AND ANY CASH PAYMENTS OR RESTRICTED SHARES THAT
EXECUTIVE WOULD HAVE BEEN ENTITLED TO RECEIVE UNDER THE EQUITY COMPENSATION PLAN
AS IF HE WERE STILL LIVING (EXCEPT THAT THE COMPANY SHALL HAVE THE RIGHT TO PAY
TO HIS ESTATE AND BENEFICIARY(IES) THE PRESENT CASH VALUE OF ANY RESTRICTED
SHARES, IN A LUMP SUM, AS SOON AFTER HIS DEATH AS ADMINISTRATIVELY PRACTICAL).
His estate and beneficiary(ies) will receive the benefits to which they are
entitled under the terms of the applicable benefit plans and programs by reason
of a participant's death during active employment. If Executive dies during the
Salary Continuation Period, as defined below, the remaining Salary Continuation
will be paid in a lump sum to Executive's estate and his estate and/or
beneficiary(ies) will receive the benefits applicable to an employee who dies
during employment.
(b) Payments Upon Total Disability. If Executive incurs a Separation for
Total Disability, then the terms and provisions of the Company benefit plans and
the programs (including the Company's Long Term Compensation 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 Executive shall receive
a pro rata bonus for current year based on performance of the Company, paid in
the following year when bonuses are normally distributed AND ANY CASH PAYMENTS
OR RESTRICTED SHARES THAT EXECUTIVE WOULD HAVE BEEN ENTITLED TO RECEIVE UNDER
THE EQUITY COMPENSATION PLAN AS IF HE WERE NOT DISABLED (EXCEPT THAT THE COMPANY
SHALL HAVE THE RIGHT TO PAY HIM THE PRESENT CASH VALUE OF ANY RESTRICTED SHARES,
IN A LUMP SUM, AS SOON AS HIS SEPARATION FOR TOTAL DISABILITY AS
ADMINISTRATIVELY PRACTICAL).. If Executive becomes disabled during the Salary
Continuation Period, he will not be eligible for benefits under the Company's
Long Term Disability Plan and will be entitled only to the salary and benefits
described in Paragraph 2(c) below for the periods set forth in those respective
paragraphs.
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(c) Payments Upon Separation for Cause or Without Good Reason. If
Executive's employment hereunder is separated by the Company for Cause pursuant
to Section 1(c) or by Executive Without Good Reason pursuant to Section 1(e),
then the Company shall pay Executive his Base Salary and accrued PTO through the
Separation Date at the rate in effect at the time notice of separation is given
and the Company shall have no further obligation to Executive other than COBRA
rights, if any, and other normal rights offered to terminated employees under
benefit programs, if any.
(d) Payments Upon Separation By the Company Without Cause or by Executive
With Good Reason. If Executive's employment is separated by the Company Without
Cause or by Executive with Good Reason pursuant to Section 1(d), then the
Company shall, as severance pay, provide to Executive the payment and benefits
set forth in this Section; provided, however, that Executive's entitlement to
any such payments or benefits shall be expressly subject to the Company
receiving a release prepared by the Company and executed by Executive, in the
form then used by the Company for employees generally, waiving and releasing the
Company, its subsidiaries and their officers, directors, agents, benefit plan
trustees and employees from any and all claims (except stockholder rights,
rights under this Agreement, rights to indemnification and rights to employee
benefits then accrued and vested), whether known or unknown, and regardless of
type, cause or nature, including but not limited to claims arising under all
salary, bonus, stock, vacation (PTO), insurance and 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
1991, the Age Discrimination in Employment Act as amended by the Older Worker's
Benefit Protection Act of 1990, and the American's with Disabilities Act
covering Executive's employment with the Company, its subsidiaries and
affiliates, and the cessation of that employment (the "Release"). Pursuant to
this Section 2(d), Executive will receive the following:
(A) The Company shall pay Executive over the next fifty-two (52)
weeks, Salary Continuation, plus PTO earned and unused through the
Separation Date (PTO paid in a lump sum) and Executive shall receive a pro
rata bonus for current year based on performance of the Company, paid in
the following year when bonuses are normally distributed, AND ANY CASH
PAYMENTS OR RESTRICTED SHARES THAT EXECUTIVE WOULD HAVE BEEN ENTITLED TO
RECEIVE UNDER THE EQUITY COMPENSATION PLAN AS IF HE WERE STILL EMPLOYED
(EXCEPT THAT THE COMPANY SHALL HAVE THE RIGHT TO PAY HIM THE PRESENT CASH
VALUE OF ANY RESTRICTED SHARES, IN A LUMP SUM, AS SOON AFTER HIS SEPARATION
DATE AS ADMINISTRATIVELY PRACTICAL). Executive shall also be entitled to
health and dental participation, but not eligibility for the Company's Long
Term Disability Plan, if any, and no further PTO will accrue with the
Company beginning the day following the Separation Date (the "Salary
Continuation Period"). Salary Continuation will be paid on a weekly basis.
If Executive dies during the Salary Continuation Period, the Company,
within ten (10) days of becoming aware of such event, will pay, by check,
to his estate the lump sum amount equal to the salary and bonus he would
have been paid during the remainder of the Salary Continuation Period AND
ANY CASH PAYMENTS OR RESTRICTED SHARES THAT EXECUTIVE WOULD HAVE BEEN
ENTITLED TO RECEIVE UNDER THE EQUITY COMPENSATION PLAN AS IF HE HAD DIED
BEFORE THE SALARY CONTINUATION PERIOD (The date of the check for the lump
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sum is herein referred to as the "Termination Date"). During the Salary
Continuation Period, Executive shall remain an employee of the Company and,
solely for stock option exerciseability, group health and life insurance
purposes, shall receive service credit during that period. Executive will
be responsible for the employee portion of the cost of such insurance
during the Salary Continuation Period similar to other employees. COBRA
rights will commence at the end of the Salary Continuation Period.
(B) Executive will be entitled, at the Company's expense, to
Executive outplacement services being provided at that time to terminated
executives at his grade level.
(C) All vested option grants (and those that become vested) may be
exercised during the Salary Continuation Period and may be exercisable
thereafter for a period of one year.
(D) Executive shall receive a release from the Company except for
matters violative of law or outside the scope of his employment. If the
Company does not provide the release required pursuant to this subsection
(iv), Executive's Release shall be null, void and without effect, and
Executive shall still receive all of the payments and benefits described in
subsections (i) through (iii) above in any event.
(E) To the extent that any payment under this Agreement is deemed to
be deferred compensation subject to the requirements of Section 409A of the
Internal Revenue Code, the Company and Executive shall amend this Agreement
so that such payments will be made in accordance with the requirements of
Section 409A of the Code; provided, however, that, if any payment due to
Executive is delayed as a result of Section 409A of the Code, Executive
shall be entitled to be paid interest on such amount at an annual rate
equal to the prime rate, as published in the Wall Street Journal, plus 2%,
in effect as of Executive's Date of Termination. Amendment of the Agreement
to comply with Section 409A of the Code will not result in Executive being
entitled to receive any reduced or enhanced benefit under this Agreement.
Notwithstanding the foregoing, in the event Executive is subjected to
income or excise taxes or other penalties under Section 409A of the Code by
virtue of any amount due to him, the Company will pay an additional amount
to Executive to make Executive whole for such taxes. Such additional amount
will be paid to Executive not later than the due date of Executive's tax
return for the year in which the tax or penalty is imposed.
(e) For the purposes of this agreement, "Good Reason" means the
occurrence, without Executive's express prior written consent (which may be
withheld for any reason or no reason), of any of the events or conditions
described in the following subsections (i) through (v), provided that Executive
shall have given notice of Good Reason to the Company and the Company shall not
have fully corrected the situation within twenty (20) days after such notice of
Good Reason.
(A) failure by the Company to pay or provide to Executive any
compensation or benefits to which Executive is entitled;
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(B) A change in Executive's status, reporting relationships,
positions, titles, offices or responsibilities that constitutes a material
change (any change following a Change in Control, as defined below) from
Executive's status, reporting relationships, positions, titles, offices or
responsibilities as in effect immediately before such change; or the
assignment to Executive of any duties or responsibilities that are
substantially inconsistent with Executive's status, positions, titles,
offices or responsibilities as in effect immediately before such
assignment;
(C) changing the location of Executive's principal duties to a
location outside of Atlantic City, NJ; provided that the Company may
require Executive to travel on business as long as such travel is
reasonable;
(D) Any material uncured breach by the Company of this Agreement or
any other agreement between the Company and Executive following notice and
the cure period set forth above; or
(E) The failure by the Company to obtain, before completion of a
Change in Control, an agreement in writing from any successors and assigns,
to assume and agree to perform this Agreement.
(f) Notwithstanding the foregoing, in the event payment is due to
Executive under subsection (d) following a Change of Control, then, conditioned
upon Executive's execution and non-revocation of the Release, and in lieu of the
Salary Continuation in subsection (d)(i) above, Executive shall receive, in a
lump sum within 30 days after the Separation Date, an amount equal to the sum of
two (2) times Executive's Base Salary (or the Base Salary in effect prior to the
Change in Control, if higher) plus actual annual incentive plan bonus paid to
Executive in the prior calendar year AND ANY CASH PAYMENTS THAT EXECUTIVE WOULD
HAVE BEEN ENTITLED TO RECEIVE UNDER THE EQUITY COMPENSATION PLAN. In such case,
the COBRA reimbursement rights provided in the Letter Agreement shall be
extended to twelve (12) months following the Separation Date. In addition, all
equity awards (stock, stock options, restricted stock or otherwise) shall
immediately be fully vested and any restrictions lifted upon any Change of
Control.
(g) Notwithstanding the foregoing, in the event of a Change of Control
with Special Circumstances and the termination of Executive's employment in
accordance with Section 1 (d) above within six (6) months from such Change of
Control with Special Circumstances, then, conditioned upon Executive's execution
and non-revocation of the Release, Executive shall receive, in a lump sum within
30 days after the Separation Date, an amount equal to the sum of two (2) times
Executive's Base Salary (or the Base Salary in effect prior to the Change in
Control, if higher) plus actual annual incentive plan bonus paid to Executive in
the prior calendar year AND ANY CASH PAYMENTS THAT EXECUTIVE WOULD HAVE BEEN
ENTITLED TO RECEIVE UNDER THE EQUITY COMPENSATION PLAN. In such case, the COBRA
reimbursement rights provided in the Letter Agreement shall be extended to
twelve (12) months following the Separation Date. All equity awards (stock,
stock options, restricted stock or otherwise) shall immediately be fully vested
and any restrictions lifted upon any Change of Control with Special
Circumstances.
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3. Change of Control Definition and Payments.
(a) For the purpose of this Employment Agreement, (i) a "Change of
Control" shall mean:
(A) The acquisition, other than a Change of Control with Special
Circumstances, by any person, entity or group, within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the
"Exchange Act"), (excluding, for this purpose, (A) the Company or its
subsidiaries, or any employee benefit plan of the Company or its
subsidiaries which acquires beneficial ownership of voting securities of
the Company or (B) Xxxxxx X. Xxxxx or any entity wholly-owned by him), of
beneficial ownership, (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 50% or more of either the then outstanding shares of
common stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of directors;
(B) Individuals who, as of the date hereof, constitute the Board (as
of the date hereof the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any person
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board (other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened election
contest relating to the election of the Directors of the Company, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board;
(C) Consummation of (A) a reorganization, merger or consolidation, in
each case, with respect to which persons who were the stockholders of the
Company immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, own more than 50% of the combined voting
power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated company's then outstanding voting
securities, or (B) a liquidation or dissolution of the Company or (C) the
sale of all or substantially all of the assets of the Company; or
(D) If employed by only one operating affiliate of TERH, the sale or
transfer of control over (whether by merger or otherwise) the TERH
affiliate owned casino hotel at which Executive is employed.
and, (ii) A "Change of Control with Special Circumstances" shall mean
the acquisition by Xxxxxx X. Xxxxx or any entity wholly-owned by him
of 50% or more of either the then outstanding shares of common stock
or the combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of directors.
(b) Anything in this Agreement to the contrary notwithstanding, 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
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distributed or distributable pursuant to the terms of this Agreement or
otherwise (the "Payment"), would constitute an "excess parachute payment" within
the meaning of Section 280G of the Code, Executive shall be paid an additional
amount (the "Gross-Up Payment") such that the net amount retained by Executive
after deduction of any excise tax imposed under Section 4999 of the Code, and
any federal, state and local income and employment tax and excise tax imposed
upon the Gross-Up Payment shall be equal to the Payment. For purposes of
determining the amount of the Gross-Up Payment, Executive shall be deemed to pay
federal income tax and employment taxes at the highest marginal rate of federal
income and employment taxation in the calendar year in which the Gross-Up
Payment is to be made and state and local income taxes at the highest marginal
rate of taxation in the state and locality of Executive's residence on the
Termination Date, net of the maximum reduction in federal income taxes that may
be obtained from the deduction of such state and local taxes.
(c) All determinations to be made under this Section 3 shall be made, upon
the request of either party, by an 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 10 days of the Termination Date. Any such determination by the
Accounting Firm shall be binding upon the Company and Executive. Within five
days after the Accounting Firm'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 Employment
Agreement.
(d) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after Executive knows of such
claim and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the thirty day period following the date on which it
gives such notice to the Company (or such shorter period ending on the date that
any payment of taxes with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:
(A) give the Company any information reasonably requested by the
Company relating to such claim,
(B) take such action in connection with contesting claim as the
Company shall reasonably request in from time to time, including, without
limitation, accepting legal representation with to such claim by an
attorney reasonably selected by the company,
(C) cooperate with the Company in good faith in order to effectively
contest such claim, and
(D) permit the Company to participate in any relating to such claim;
provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
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connection with such contest and shall indemnify and hold Executive
harmless, on an after-tax basis, for any Excise Tax, income tax or
employment tax, including interest and penalties, with respect thereto,
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this Section 3,
the Company shall control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearing and conferences with the
taxing authority in respect of such claim and may, at its sole option,
either direct Executive to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a termination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as
the Company shall determine; provided further, however, that if the Company
directs Executive to pay such claim and xxx for a refund the Company shall
advance the amount of such payment to Executive, on an interest-free basis
and shall indemnify and hold Executive harmless, on an after-tax basis,
from any Excise Tax, income tax or employment tax, including interest or
penalties with respect thereto, imposed with respect to income with respect
to such advance; and provided further that any extension of the statute of
limitations relating to payment of taxes for the taxable year of Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(e) If, after the receipt by Executive of an amount advanced by the
Company pursuant to this Section, Executive becomes entitled to receive any
refund with respect to such claim, Executive shall (subject to the Company's
complying with the requirements of subsection (c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by Executive of an amount
advanced by the Company pursuant to this Section, a determination is made that
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
(f) All of the fees and expenses of the Accounting Firm in performing the
determinations referred to in subsections (b) and (c) 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 subsections (b) and (c)
above, except for claims, damages or expenses resulting from the gross
negligence or wilful misconduct of the Accounting Firm.
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ANNEX "A"
EQUITY COMPENSATION PLAN
SVP DEVELOPMENT
The SVP Development for Xxxxx Entertainment Resorts will contribute
significantly to the strategic long term growth of the company. Accordingly, an
equity compensation plan has been specifically developed for this position which
includes a transaction performance model with two compensation components:
OWNERSHIP TRANSACTIONS
For successfully negotiated development transactions, the SVP Development will
receive 1.5% of TER's equity value on completed deals outside of the scope of
current Atlantic City operations and the proposed TrumpStreet Philadelphia,
Pennsylvania project. The method of compensation for these transactions will be
based in restricted shares with a three year vesting period.
LICENSING/MANAGEMENT CONTRACT/ARRANGEMENTS
In instances of fee-based transactions which may include licensing arrangements
or management contracts, the SVP Development will receive 10% of first year fees
paid in cash over three years.
The President and Chief Executive Officer and the SVP Development will discuss
all specific compensation parameters of each arrangement in advance to address
any particular or unique situations associated with the planned transaction or
venture. Any situation that would fall outside of the aforementioned parameters
would need to be approved by the TER Compensation Committee.
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