XXXX X. XXXXXX
EXECUTIVE EMPLOYMENT AGREEMENT
GOLDEN PARACHUTE
AGREEMENT ("Agreement") by and between Casino Resource Corporation, a
Minnesota corporation with its principal offices at 000 Xxxxxxxxx Xxxxxxxxx,
Xxxxx Xxxxxxx, Xxxxxxxxxxx, 00000 (the "Company"), and Xxxx X. Xxxxxx, Chief
Executive Officer, (the "Executive"), dated as of the 9th of March, 1998.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interest of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined in Section 2) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks which may be created by a pending or threatened Change
of Control, and to encourage the Executive's full attention and dedication to
the Company currently and in the event of any threatened or pending Change of
Control. The Board also believes it is imperative to provide the Executive with
compensation and benefit arrangements upon a Change of Control which ensure the
compensation and benefit expectations of the Executive will be satisfied and are
competitive with those of other corporations. Therefore, in order to accomplish
these objectives the Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. Certain Definitions.
a. The "Effective Date" shall mean the first date during the
Change of Control Period (as defined in Section 1(b)) on which
a Change of Control occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if
the Executive's employment with the Company is terminated
prior to the date on which the Change of Control occurs, and
if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect the
Change of Control or (ii) otherwise arose in connection with
or anticipation of the Change of Control, then for all
purposes of this Agreement the "Effective Date" shall mean the
date immediately prior to the date of such termination of
employment.
b. The "Change of Control Period" shall mean the period
commencing on the date hereof and ending on the third
anniversary date of such date; provided, however, that
commencing on the date one year after the date hereof and on
each annual anniversary of such date, hereafter referred to as
"Renewal Date," the Change of Control period shall be
automatically extended so as to terminate three years from
such Renewal Date, unless at least sixty (60) days prior to
the Renewal Date, the Executive shall give notice of his
determination not to extend the Change of Control Period.
2. Change of Control. For purpose of this Agreement, a "Change of Control"
shall mean:
(1)
a. The acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended, (a "Person") of beneficial ownership of 20% or more of
either (i) the outstanding shares of stock of the Company or (ii) the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors; or
b. As of the date hereof, if any two or more members within a class of the
staggered Board of seven or more Directors are removed without the
expressed approval or consent of the CEO and Chairman of the Board, or
where two or more members of the Board assume office as a result of
either an actual or threatened election contest or other actual or
threatened solicitation of proxies; or
c. A hostile reorganization, merger or consolidation which results from
either an actual or threatened election contest or actual or threatened
solicitation of proxies; or
d. A complete liquidation or dissolution of the Company, or the sale or
other disposition of all or substantially all of the assets of the
Company, other than to a corporation; which liquidation, sale or
dissolution occurs as a result of either actual or threatened
solicitation of proxies or consents by or on behalf of persons other
than the incumbent Board.
3. Employment Period. The Company hereby agrees to continue the Executive
in its employ, and the Executive hereby agrees to remain in the employ
of the Company, in accordance with this Agreement and the terms and
provision of this Agreement for a period commencing on the effective
date and ending on the third anniversary of such date, (the "Employment
Period".)
4. Terms of Employment.
a. Position and Duties.
(i.) During the Employment Period (a) the Executive's position,
authorities, duties and responsibilities of same shall be at
least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time
during the 90-day period immediately preceding the Effective
Date and (b) the Executive's services shall be performed at
the location where the Executive was employed preceding the
Effective Date or at the headquarters of the Company.
(ii.) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled,
the Executive agrees to devote attention and time during
normal business hours to the business and affairs of the
Company and as defined within his employment contract dated
May 20, 1996 and affixed hereto as Exhibit A and to discharge
the responsibilities assigned to the Executive hereunder.
During the Employment Period it shall not be in violation of
this Agreement for the Executive to (a) serve on corporate,
civic, charitable boards or committees (b) deliver lectures,
fulfill speaking engagements and (c) manage personal
investments so long as
(2)
such activities do not significantly interfere with the
performance of the Executive's responsibilities to this
Company in accordance with this Agreement.
b. Compensation
(i.) Base Salary. During the Employment Period the Executive shall
receive an "Annual Base Salary" of two hundred twenty-five
thousand dollars ($225,000), as set out within Executive
Employment Agreement attached here as Exhibit A, which shall
be paid on a bi-weekly basis in the same manner as the wage
payments of other CRC employees. Additionally, Executive shall
be paid by CRC Tunisia S.A. the sum of one hundred twenty-five
thousand dollars ($125,000), as unanimously resolved by the
Board of Directors August , 1997, annually which sum shall be
prepaid annually on payment anniversary date. During the
Employment Period, the Annual Base Salary shall increase each
year as determined by any increase in the Consumer Price Index
between January first of the prior year and January first of
the current year (see Executive Employment Agreement). Any
increase in the annual base salary shall not serve to limit or
reduce any other obligation to the Executive under this
Agreement.
(ii.) Annual Bonus. In addition to Annual Base Salary, the Executive
shall be awarded an "Annual Bonus" for each fiscal year ending
during the Employment Period where CRC and its affiliate
subsidiaries generate net income in excess of one million
dollars ($1,000,000) as set forth in CRC's audited
consolidated financial statements. Annual Bonus payable shall
be twenty five thousand dollars ($25,000) per one million
dollars ($1,000,000) net income, per fiscal year.
(iii.) Special Bonus. In addition to Annual Base Salary and any
Annual Bonus payable as here above provided, if Executive
remains employed with the Company or elects to provide
consulting services to Company through the first anniversary
of the Effective Date, the Company shall pay to the Executive
a "Special Bonus" in recognition of the Executive's services
during the crucial one year period following the Change of
Control, in cash, a sum equal to Executive's Annual Base
Salary plus salary from affiliates and Annual Bonus. The
Special Bonus shall be paid no later than thirty days
following the first anniversary of the Effective Date.
(iv.) Incentive Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies
and programs applicable generally to other peer executives of
the Company and its affiliated companies, but in no event
shall such plans, practices, policies and programs provide the
Executive with incentive opportunities less favorable in the
aggregate than the most favorable provided by the Company for
the Executive in effect at any time during the 90 day period
immediately preceding the Effective Date.
(v.) Welfare Benefit Plans. During the Employment Period the
Executive and/or the Executive's family shall be eligible for
participation in and shall receive benefit
(3)
plans, practices, policies and programs provided by the
Company and its affiliates including without limitation;
medical, prescription, dental, disability, salary
continuation, employee life, group life and travel accident
insurance to the extent applicable generally to other peer
executives of the Company.
(vi.) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable
employment expenses incurred by the Executive in accordance
with the most favorable policies, practices and programs of
the Company and its affiliates in effect for the Executive at
any time during the 90-day pay period immediately preceding
the Effective Date.
(vii.) Office and Support staff. During the Employment Period the
Executive shall be entitled to an office or offices of the
size and with the furnishings and other appointments and to
exclusive personal secretarial and other assistance, at least
equal to the most favorable of the forgoing provided to the
Executive by the Company at any time during the 90-day period
preceding the Effective Date.
(viii.) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the
Company as in effect for the Executive under his Employment
Contract attached herein as Exhibit A.
5. Termination of Employment.
a. Death or Disability. The Executive's employment shall
terminate automatically upon the death of the Executive during
the Employment Period. For purposes of this Agreement
"Disability" shall mean the absence of the Executive from the
Executive's duties from the Company on a full time basis for
90 consecutive business days as a result of incapacity due to
a mental or physical illness which is determined to be total
and permanent by a physician selected by Company and
acceptable to the Executive or the Executive's legal
representative.
b. Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean (i) Executive had theretofore
been convicted by any federal, state or local authority for,
or pleaded guilty to, an act constituting a felony, or (ii)
Executive's termination was as a result of : a) material acts
of fraud, material dishonesty or gross misconduct by
Executive; or b) repeated and willful failure or refusal by
Executive to perform his material duties as delineated herein
in Exhibit I "Employment Agreement" if termination for Cause
by Company is pursued pursuant to clause (ii)(b) of the
preceding sentence it shall be preceded by written notice to
Executive describing the specific reasons for termination in
order to allow Executive the opportunity to cure and correct
problems identified.
c. Without Cause. Executive may terminate his employment
hereunder, without Cause, provided Executive first gives to
Company a written notice of intent to terminate (see (5)(d)).
(4)
d. Notice of Termination. Any termination by the Company for
Cause, or by the Executive without any reason shall be
communicated by Notice of Termination to the other party
hereto given in accordance with Section 11(b). For purposes of
this Agreement "Notice of Termination" shall mean a written
notice which indicates the specific termination provision in
this Agreement relied upon.
6. Obligations of the Company.
a. Executive Termination (other than Cause, Death or Disability.)
If during the Employment Period the Executive shall terminate
employment without reason:
i. The Company shall pay to the Executive in a lump sum
in cash within 30 days after the Date of Termination,
the aggregate of the following amounts:
A. The sum of (1) the Executive's Annual Base
Salary through the Date of Termination to
the extent not therefore paid, (2) the
product of ("x") the Highest Annual Bonus
and ("y") a fraction, the numerator of which
is the number of days in the current fiscal
year through the Date of Termination, and
the denominator of which is 365 and (3) the
Special Bonus, if due to the Executive
pursuant to section 4(b)(iii) to the extent
not theretofore paid and (4) any
compensation previously deferred by the
Executive and any accrued vacation pay, in
each case to the extent not theretofore paid
(the sum of the amounts described in 1, 2, 3
and 4 shall refer to "Accrued Obligations");
and
B. The amount (hereafter referred to as
"Severance Amount") which shall equal the
product of 2.99 and the sum of the
Executive's Annual Base Salary and the
highest Annual Bonus, which product shall be
reduced by the present value (determined in
section 280G(d)(4) of the Internal Revenue
Code as amended); and
C. A separate lump sum supplemental retirement
benefit payable under Retirement Plan and
Supplemental Retirement Plan (SERP) of the
Company providing benefits for the Executive
which the Executive would receive if the
Executive's employment continued at the
compensation level provided for in section
4(b)(i) and 4(b)(ii) for the remainder of
the Employment Period, assuming the accrued
benefits are fully vested.
ii. For the remainder of the Employment Period, or such
longer period as any plan, program, practice or
policy may provide, the Company shall continue
benefits to the Executive and/or the Executive's
family at least equal to those which would have been
provided to them in accordance with the plans,
programs, practices and policies described in Section
4(b)(v). For purposes of determining eligibility of
the Executive for retiree benefits pursuant to such
plans, practices, programs and policies, the
Executive shall be considered to have remained
(5)
employed until the end of the Employment Period and
to have retired on the last day of such period.
iii. To the extent not theretofore paid or provided; the
Company shall timely pay or provide to the Executive
any other amounts or benefits required to be paid or
provide or which the Executive is eligible to receive
pursuant to this Agreement and under any plan,
program, practice or policy or contract or agreement
of the Company and its affiliated companies.
b. Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations, payable to Executive's estate in a lump sum in cash within
30 days of Date of Termination and the timely payment of Welfare
Benefit Continuation and Other Benefits and a lump sum cash payment
within 30 days of termination the Severance Amount and Supplemental
Retirement Amount (SERP).
c. Disability. If the Executive's employment is terminated by reason of
Executive's Disability during the Employment Period, this Agreement
shall terminate without further obligation to the Executive other than
(i) payment of Accrued Obligation within 30 days of Termination Date
and the timely payment of the Welfare Benefit Continuation and Other
Benefits and (ii) payment to the Executive in cash within 30 days of
termination an amount equal to the greater of a lump sum of Severance
Amount and Supplemental Retirement Amount (SERP).
d. Cause. If the Executive's employment is terminated for Cause during the
Employment Period, this Agreement shall terminate without further
obligation to the Executive other than an obligation to pay to the
Executive Annual Base Salary through the Date of Termination plus any
amount of compensation previously deferred by the Executive to the
extent theretofore unpaid.
7. Non-exclusivity of Rights. Except as provided in Sections 6(a) (ii),
6(b) and 6(c) nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its
affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.
8. Full Settlement; Resolution of Disputes.
In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to
the Executive under any of the provisions of this Agreement and, except
as provided in Section 6(a)(ii), such amounts shall not be reduced
whether or not the Executive obtains other employment. The Company
(6)
agrees to pay promptly as incurred, to the full extent permitted by
law, all legal fees and expenses which the Executive may reasonably
incur as a result of any contest by the Company or the Executive where
the Company is found at fault.
9. Dispute. In the event of a dispute as to whether a violation of any
provision of the Agreement has occurred, or to enforce any provision of
this Agreement, all such disputes shall be submitted to binding
arbitration before the Arbitration Association in Mississippi, in
accordance with the commercial rules of the body, and the prevailing
party shall be entitled to reasonable costs and attorneys fees.
Judgement on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.
10. Certain Additional Payments by the Company.
Anything in this Agreement to the contrary not withstanding, in the
event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive ("Payment") would be
subject to the Excise Tax (imposed by Section 4999 of the Code) or any
interest or penalties are incurred by the Executive with respect to
such Excise Tax such total amount paid by the Executive of all taxes
including without limitation income taxes and interest and penalties
thereto and any additional Excise Tax imposed upon the gross up
payment, the Executive will be reimbursed in full by Company an amount
of gross up payment equal to Excise Tax and other taxes imposed.
Any Gross Up Payment as determined pursuant to this section shall be
paid by the Company to the Executive within 5 days of receipt of an
accounting determination. If accounting determines no Excise Tax is
payable by the Executive it shall furnish the Executive with a written
opinion that failure to report the Excise Tax on the Executive's
applicable federal income tax return would not result in the imposition
of a penalty. Any determination to the contrary which would require
payment of an Excise Tax or other tax payment will be remitted in full
by Company within 10 business days after Executive has provided Company
with written claim, nature of claim, and date claim is to be paid.
11. Successors.
a. This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable
by the Executive otherwise than by will or the laws of descent
and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives.
b. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
c. 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 assume expressly 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
(7)
such succession had taken place. 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.
12. Miscellaneous.
a. This Agreement shall be governed by and construed in
accordance with the laws of the State of Mississippi, without
reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal
representatives.
b. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: Xxxx X. Xxxxxx
000 Xxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
If to the Company: Casino Resource Corporation
000 Xxxxxxxxx Xxxx.
Xxxxx Xxxxxxx, XX 00000
or to such other address as either party shall have furnished
to the other in writing in accordance herewith. Notice and
communication shall be effective when actually received by the
addressee.
c. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
d. The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or
regulation.
e. The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement
between the Executive and the Company, the employment of the
Executive by the Company is "at will" and, prior to the
Effective Date, may be terminated by either the Executive or
the Company at any time. Moreover, if prior to the Effective
Date, the Executive's employment with the Company terminates,
then the Executive shall have no further rights under this
Agreement.
(8)
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization form its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
___________________________
Xxxx X. Xxxxxx
Casino Resource Corporation
___________________________
By
(9)
