Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of July 30,
1999, by and between ▇▇▇▇▇▇'▇ Operating Company, Inc. ("Company") and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ("Executive").
The Company and the Executive agree as follows:
1. EMPLOYMENT. Subject to appropriate regulatory approvals, the Company
hereby employs the Executive as Senior Vice President and General Counsel or in
such other capacity as the Company reasonably shall designate. The Executive may
be an employee of the Company or one of its subsidiaries.
2. DUTIES. During the term of this Agreement ("Active Employment"), the
Executive shall devote substantially all of his working time, energies, and
skills to the benefit of the Company's business. The Executive agrees to serve
the Company diligently and to the best of his ability, and to follow the
policies and directions of the Company.
3. COMPENSATION. The Executive's compensation and benefits during his
Active Employment shall be as follows:
(a) BASE SALARY. The Company shall pay the Executive a base salary
("Base Salary") of $250,000 per year, which will be reviewed annually by the
Company during the term of this Agreement in accordance with its compensation
practices regarding senior executives. The Executive's Base Salary shall be paid
biweekly in accordance with the Company's normal payroll schedule. All payments
shall be subject to the Executive's chosen benefit deductions and the deduction
of payroll taxes and similar assessments as required by law.
(b) BONUS. In addition to the Base Salary, the Executive shall be
eligible for an annual bonus in accordance with the Company's bonus plan.
4. INSURANCE AND BENEFITS. The Executive will be eligible to
participate in each employee benefit plan and receive each executive benefit
that the Company provides for its senior executives, in accordance with the
applicable plan rules.
5. TERM. The term of this Agreement shall be for four (4) years,
beginning July 30, 1999, and ending July 29, 2003.
6. NO CAUSE TERMINATION/NON-RENEWAL OF AGREEMENT. The Company may
terminate the Executive's Active Employment at any time without cause upon
thirty (30) days' prior written notice ("no cause termination"). The Company
also, in its sole discretion, may elect not to renew this Agreement upon its
expiration ("non-renewal of Agreement"). In the event of such no cause
termination or non-renewal of Agreement, the Executive shall remain an employee
of the Company during the subsequent salary continuation period and shall be
entitled only to the salary and benefits set forth below, unless otherwise
specified in this Agreement.
Benefit Termination Date
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Base Salary (rate as of Separation Date) 18 months (78 weeks) ("Salary
Continuation Period") Period") from
last day worked ("Separation from
last day of Active Employment
("Separation Date"). Date").
PTO and Service Credit Separation Date (accrued PTO will
be paid within 30 days of
Separation Date).
Use of Credit Cards Separation Date.
Bonus--Payment and Eligibility (i) Eligible for prior year bonus
if Separation Date occurs during
payment year but prior to payment;
(ii) eligible for prorated bonus
for the then current year if in job
for more than 6 months and
Separation Date occurs after June
30; (iii) not eligible for bonus
for year following Separation Date.
Group Health and Life Insurance End of Salary Continuation Period.
18-month COBRA rights period for
health insurance will commence on
Separation Date. (See also
Paragraph 10.)
Retaining Existing Stock Options for (i) Options from grants made prior
Vesting and Other Rights to 7/30/99 that have vested prior
to Separation Date can be exercised
through end of Salary Continuation
Period, but unvested options from
such grants will be forfeited as of
Separation Date; (ii) options from
grants made on or after 7/30/99
retained for exercise and vesting
through end of Salary Continuation
Period. Exercise of vested options
after Salary Continuation Period
per plan rules.
Accelerated vesting of all options
not forfeited on Separation Date if
Change of Control occurs during
Salary Continuation Period.
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Retaining Existing Restricted Stock for All regular restricted stock that
Vesting and Other Rights is unvested as of the Separation
Date will be forfeited on that
date. Forfeited restricted stock
will not vest upon a Change in
Control during Salary Continuation.
See below for TARSAP.
Eligibility for New Restricted Stock Separation Date.
or New Stock Options
TARSAP Next potential vesting, based on
Performance targets, after
Separation Date, at CEO's and HRC's
discretion. Accelerated vesting of
all shares if Change of Control
occurs during Salary Continuation.
Use of Financial Counseling per End of Salary Continuation Period.
Plan Provisions The maximum remaining benefit shall
be annual benefit remaining as of
Separation Date.
Savings and Retirement Plan End of year of Separation Date.
Deductions (Active Participation) Employment termination date will be
termination date under S&RP.
Executive Deferred Compensation End of year of Separation Date.
Plan/Deferred Compensation Plan Distribution will commence after
(Active Participation) Salary Continuation Period, in
accordance with previously made
elections, and at the termination
rate unless the Executive qualifies
for the retirement rate. (See also
Paragraph 11.) 3X death benefit
provision waived for death after
Separation Date. EDCP and other
deferred compensation balances will
continue to be protected by then
existing Escrow Agreement subject
to all terms and conditions thereof
including its termination
provisions.
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7. DEATH OF EXECUTIVE. Upon the death of the Executive during his
Active Employment, his salary and all rights and benefits hereunder will
terminate, and his estate and beneficiary(ies) will receive the benefits to
which they are entitled under the terms of the Company's benefit plans and
programs by reason of a participant's death during employment, including the 3X
death benefit provided by the EDCP (3 X death benefit applies only if death
occurs during Active Employment) and the applicable rights and benefits under
the Company's stock plans. If the Executive dies during the Salary Continuation
Period, all of the provisions of the previous sentence apply except that the
remaining salary continuation will be paid in a lump sum to the Executive's
estate.
8. TERMINATION BY COMPANY FOR CAUSE. The Company shall have the right
to terminate the Executive's Active Employment for cause. Employment status and
all salary and benefits shall thereupon cease, except COBRA rights and as
otherwise provided in applicable benefit plans. Termination for cause shall be
effective immediately upon notice sent or given to the Executive and this
effective date will be both his Separation Date and date of termination of
employment. For purposes of this Agreement, the term "cause" shall mean and be
strictly limited to: (i) conviction of any crime that materially discredits the
Company or is materially detrimental to the reputation or goodwill of the
Company; (ii) commission of any material act of fraud or dishonesty against the
Company, or commission of an immoral or unethical act that materially reflects
negatively on the Company, or engaging in willful misconduct; provided that the
Executive shall first be provided with written notice of the claim against him
under this provision (ii) and with an opportunity to contest said claim before
the Board of Directors; or (iii) material breach of the Executive's obligations
under Paragraph 2. of this Agreement, as so determined by the Board of
Directors.
9. VOLUNTARY TERMINATION/NOTICE PERIOD. The Executive may terminate
this Agreement voluntarily at any time and for any or no reason during its term
upon thirty (30) days' prior written notice to the Company, except as specified
in this paragraph. If the Executive is going to work or act in competition with
the Company as described in Paragraph 14. of this Agreement, the Executive must
give the Company six (6) months' prior written notice of his intention to do so.
The written notice provided by the Executive shall specify the last day to be
worked by the Executive ("Separation Date"), which Separation Date under this
Paragraph 9. shall also be his termination of employment date and must be at
least thirty (30) days or six (6) months (as appropriate) after the date the
notice is received by the Company. Unless otherwise specified herein, or in a
writing executed by both parties, the Executive shall not receive any of the
benefits provided in this Agreement after the Separation Date set forth in his
written notice except for applicable rights and benefits that apply to employees
generally upon termination of employment.
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10. CERTAIN HEALTH INSURANCE BENEFITS. If (i) the Executive reaches the
age of 50 and, when added to his number of years of continuous service with the
Company including any period of salary continuation, the sum of his age and
years of service equals or exceeds 65, and at any time after the occurrence of
both such events the Executive's employment is terminated pursuant to Paragraph
6., above; or (ii) the Executive reaches the age of 55 and has attained 10 years
of continuous service with the Company including any period of salary
continuation, and at any time after the occurrence of both such events the
Executive's employment terminates for any reason other than by the Company for
"cause" as described in paragraph 8., above, the Executive and his then-eligible
dependents shall be entitled to participate in the Company's group health
insurance plan, as amended from time to time by the Company, after the
Executive's Separation Date or the end of the Salary Continuation Period, as
applicable, for the remainder of the Executive's life ("Life Coverage Period").
During the Life Coverage Period, the Executive shall pay 20% of the current
premium (revised annually) on an after-tax basis each quarter, and the Company
shall pay 80% of said premium on an after-tax basis, which contribution will be
imputed income to the Executive. As soon after the Separation Date as the
Executive becomes eligible for Medicare coverage, the Company's group health
insurance plan shall become secondary to Medicare.
If the Executive engages in any of the activities described in
Paragraph 14.(a), below, during the Life Coverage Period, the entitlement of the
Executive and his then-eligible dependents to participate in the Company's group
health insurance plan shall terminate automatically, without any further action
or notice by either party, subject to applicable COBRA rights, which shall
commence on the Separation Date. If the Executive engages in any of the
activities described in said Paragraph 14.(a)(i) in a business which does NOT
compete with the Company or any of its subsidiaries during the Life Coverage
Period, the Company's group health insurance plan shall become secondary to any
primary health insurance plan or coverage made available to the Executive by
that business.
The Executive shall also receive the benefits and be bound by the
provisions of this Paragraph 10 if a Change in Control, as defined in the
Executive's Severance Agreement, occurs following the effective date of this
Agreement.
11. EDCP RETIREMENT RATE. If the Executive reaches the age of 50 and,
when added to his number of years of continuous service with the Company, the
sum of his age and years of service equals or exceeds 65, and at any time after
the occurrence of both such events the Executive's employment is terminated
pursuant to Paragraph 6., above, the Executive shall be entitled to receive his
distributions from EDCP at the retirement rate. For EDCP retirement rate
purposes, the Executive will receive service credit for the Salary Continuation
Period.
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12. CHANGE IN CONTROL. If a Change in Control, as defined in the
Executive's Severance Agreement, occurs during the Executive's Active
Employment, and if the Severance Agreement is in force when the Change in
Control occurs, then the Severance Agreement supersedes and replaces this
Agreement except as provided in Paragraph 10. If, prior to a Change in Control
(as defined above), the Executive's Active Employment has been terminated for
any reason by either party or this Agreement is not renewed by the Company, then
the Executive's Severance Agreement terminates automatically.
13. DISABILITY. If the Executive becomes disabled prior to the
termination of his Active Employment or the non-renewal of this Agreement, he
will be entitled to apply at his option for the Company's long-term disability
benefits. If he is accepted for such benefits, then the terms and provisions of
the Company's benefit plans and the programs (including the EDCP and the
Company's Stock Option and Restricted Stock Plans) 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 (i) the Escrow Agreement (if then in
force) and his indemnification agreement will continue in force (the Escrow
Agreement will be subject to amendment or termination in accordance with its
terms), and (ii) he will be entitled to the lifetime group insurance benefits
described in Paragraph 10. If the Executive is disabled so that he cannot
perform his duties (as determined by the Human Resources Committee (HRC), and if
he does not apply for long-term disability benefits or is not accepted for such
benefits, then the Company may terminate his duties under this Agreement. In
such event, he will receive eighteen months salary continuation, together with
all other benefits, and during such period of salary continuation any stock
options and restricted stock grants then in existence will continue in force for
vesting purposes. However, during such period of salary continuation for
disability, Executive will not be eligible to participate in the annual bonus
plan, nor will he be eligible to receive stock option or restricted stock grants
or any other long-term incentive awards except to the extent approved by the
HRC.
If the Executive becomes disabled during the Salary Continuation
Period, he will be entitled only to the salary and benefits described in
Paragraphs 6. and 10., above, for the periods set forth in those respective
paragraphs.
14. NON-COMPETITION.
(a) NON-COMPETITION. During the Executive's Active Employment,
and during the Salary Continuation Period described in Paragraph 6., above, the
Executive:
(i) shall not engage in any activity, including development
activity, whether as employer, proprietor, partner, stockholder (other than the
holder of less than 5% of the stock of a corporation the securities of which are
traded on a national securities exchange or in the over-the-counter market),
director, officer, employee, consultant or otherwise, in competition with (x)
the casino, casino/hotel and/or casino/resort businesses conducted at the date
hereof by the Company, or any subsidiary or affiliate ("Company" for purposes of
this paragraph 14) or (y) any casino, casino/hotel and/or casino/resort business
in which the Company is substantially engaged at any time during the Active
Employment period;
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(ii) shall not solicit, in competition with the Company, any
person who is a customer of the businesses conducted by the Company at the date
hereof or of any business in which the Company is substantially engaged at any
time during the term of this Agreement.
(b) SCOPE OF COVENANTS; REMEDIES. The following provisions shall
apply to the covenants of the Executive contained in this Paragraph 14:
(i) the covenants contained in paragraphs (i) and (ii) of
Paragraph 14.(a) shall apply within the United States, Canada and Mexico, plus
any territories in which Company is actively engaged in the conduct of business
while the Executive is employed under this Agreement, including, without
limitation, the territories in which customers are then being solicited;
(ii) without limiting the right of the Company to pursue all
other legal and equitable remedies available for violation by the Executive of
the covenants contained in this Paragraph 14., it is expressly agreed by the
Executive and the Company that such other remedies cannot fully compensate the
Company for any such violation and that the Company shall be entitled to
injunctive relief to prevent any such violation or any continuing violation
thereof;
(iii) each party intends and agrees that if, in any action
before any court or agency legally empowered to enforce the covenants contained
in this Paragraph 14., any term, restriction, covenant or promise contained
therein is found to be unreasonable and accordingly unenforceable, then such
term, restriction, covenant or promise shall be deemed modified to the extent
necessary to make it enforceable by such court or agency; and
15. Any confidentiality/non-solicitation agreement that Executive has
signed with the Company shall remain in full force and effect according to its
terms.
16. POST ACTIVE-EMPLOYMENT COOPERATION. Upon the termination of his
Active Employment, the Executive will cooperate with, and provide information
to, the Company in assuring an orderly transition of all matters being handled
by him. Upon the Company providing reasonable notice to him, he will also appear
as a witness at the Company's request and/or assist the Company in any
litigation, bankruptcy or similar matter in which the Company or any affiliate
thereof is a party; PROVIDED that the Company will defray any approved
out-of-pocket expenses incurred by him in connection with any such appearance
and that, if the Executive is no longer receiving salary compensation from the
Company, the Company will compensate him for all time spent, at either his then
current compensation rate or his salary rate as of the Separation Date,
whichever is higher. The Company agrees further to indemnify him as prescribed
in his Indemnification Agreement and Article TENTH of the Certificate of
Incorporation of ▇▇▇▇▇▇'▇ Entertainment, Inc., as amended, filed on November 2,
1989, in the Office of the Secretary of State of the State of Delaware and
recorded in Book 935, Page 780, ET SEQ.
17. RELEASE. Upon the termination of the Executive's Active Employment,
and in consideration of the receipt of the salary and benefits described in this
Agreement, except for claims arising from the covenants, agreements, and
undertakings of the Company as set forth herein and except as prohibited by
statutory language, the Executive forever and unconditionally waives, and
releases ▇▇▇▇▇▇'▇ Entertainment, Inc., ▇▇▇▇▇▇'▇ Operating Company, Inc., their
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subsidiaries and affiliates, and their officers, directors, agents, benefit plan
trustees, and employees ("Released Parties") from any and all claims, whether
known or unknown, and regardless of type, cause or nature, including but not
limited to claims arising under all salary, vacation, insurance, bonus, stock,
and all other benefit plans, and all state and federal anti-discrimination,
civil rights and human rights laws, ordinances and statutes, including Title VII
of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act,
concerning his employment with ▇▇▇▇▇▇'▇ Operating Company, Inc., its
subsidiaries and affiliates, and the cessation of that employment
18. GENERAL PROVISIONS.
(a) NOTICES. Any notice to be given hereunder by either party to
the other may be effected by personal delivery, in writing, or by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the addresses set forth below, but
each party may change his or its address by written notice in accordance with
this Paragraph 18.(a). Notices shall be deemed communicated as of the actual
receipt or refusal of receipt.
If to Executive: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Company: ▇▇▇▇▇▇'▇ Operating Company, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Secretary
(b) PARTIAL INVALIDITY. If any provision in this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the remaining provision shall, nevertheless, continue in full force and without
being impaired or invalidated in any way.
(c) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee, without regard
to its conflict of laws provisions.
(d) NO CONFLICTING AGREEMENT. By signing this Agreement,
Executive warrants that he is not a party to any restrictive covenant, agreement
or contract which limits the performance of his duties and responsibilities
under this Agreement or under which such performance would constitute a breach.
(e) HEADINGS. The Section, paragraph, and subparagraph headings
are for convenience or reference only and shall not define or limit the
provisions hereof.
(f) AMENDMENTS. Any amendments to this Agreement must be in
writing and signed by both parties.
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(g) BINDING AGREEMENT. This Agreement is binding on the parties
and their heirs, successors and assigns.
(h) SURVIVAL OF PROVISIONS. The provisions of this Agreement
shall survive any termination thereof if so provided herein and if necessary or
desirable fully to accomplish the purposes of such provisions, including without
limitation the rights and obligations of the Executive under Paragraphs 6, 14,
15, 16 and 17 hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
▇▇▇▇▇▇'▇ Operating Company, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive
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