EXHIBIT 99.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of
May 23, 2005 (the "Commencement Date"), by and between Empire Resorts, Inc., a
Delaware corporation (the "Company"), and Xxxxxx Xxxxxxxxx (the "Executive")
(hereinafter collectively referred to as "the Parties").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires to employ the Executive and to enter
into an agreement embodying the terms of such employment (together with its
Exhibit, this "Agreement") and the Executive desires to enter into this
Agreement and to accept such employment, subject to the terms and provisions of
this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises of the parties contained herein, the parties, intending
to be legally bound, hereby agree as follows:
1. TERM. The term of employment under this Agreement shall be for
the period beginning on the Commencement Date and ending on the third
anniversary of the Commencement Date (the "Initial Term"). Notwithstanding the
foregoing, the Term shall end on the date on which the Executive's employment is
earlier terminated by either party in accordance with the provisions of Section
10 of this Agreement.
2. EMPLOYMENT.
(a) POSITION. The Executive shall be employed by the Company as
its Chief Financial Officer as of the Commencement Date. The Executive shall be
responsible for those functions and operations as are typically performed by a
chief financial officer. The Executive shall report to the Chief Executive
Officer.
(b) OBLIGATIONS. The Executive agrees to devote substantially his
full business time and attention to the business and affairs of the Company.
Anything herein to the contrary notwithstanding, nothing shall preclude the
Executive from (i) serving on the boards of directors of trade associations
and/or charitable organizations, (ii) engaging in charitable activities and
community affairs, and (iii) managing his personal investments and affairs,
provided that the activities described in the preceding clauses (i) through
(iii) do not materially interfere with the proper performance of his duties and
responsibilities hereunder and do not interfere with his devoting substantially
his full business time and attention to the affairs of the Company.
3. BASE SALARY. The Company agrees to pay or cause to be paid to the
Executive commencing no later than the Commencement Date and during the Term a
base salary at the rate of $275,000 per year or such larger amount as the Board
may from time to time determine (the "Base Salary"). Such Base Salary shall be
payable in accordance with the Company's customary practices applicable to its
executive officers.
4. BONUS. The Executive shall be entitled to participate in any
annual bonus plan maintained by the Company for its senior executives on such
terms and conditions as may be determined from time to time by the Compensation
Committee of the Board. The payment of any such bonus shall be in the absolute
discretion of the Board or Compensation Committee.
5. EQUITY COMPENSATION. The Executive shall be entitled to
participate in the Company's equity based incentive programs to the extent such
programs are put into place and maintained for the Company's senior executives
on such terms and conditions as may be determined from time to time by the
Compensation Committee of the Board, consistent with this Agreement, and
commensurate with his position.
6. OPTION GRANT. As of the Commencement Date the Company shall grant
the Executive a 10-year non-qualified stock option to purchase 150,000 shares of
the Company's common stock pursuant to the 2005 Equity Incentive Plan (the
"Plan"), subject to shareholder approval, at an exercise price per share as
determined under the Plan, vesting 33% 90 days following the grant date, 33% on
the first anniversary of the grant and 34% on the second anniversary of the
grant, and subject to earlier vesting as provided herein.
7. EMPLOYEE BENEFITS. The Executive shall be entitled to participate
in all employee benefit plans, practices and programs maintained by the Company
and made available to senior level executive officers generally and as may be in
effect from time to time. The Executive's participation in such plans, practices
and programs shall be on the same basis and terms as are applicable to senior
level executive officers of the Company generally. Such level of benefits shall
be at a level commensurate with his position.
8. OTHER BENEFITS.
(a) VACATION. The Executive shall be entitled to annual paid
vacation of four weeks, in accordance with the policies periodically established
by the Board for similarly situated executive officers of the Company.
(b) PERQUISITES. The Executive shall be entitled to perquisites
on the same basis as provided to other senior level executive officers at the
Company.
9. EXPENSES.
(a) The Executive shall be entitled to receive prompt
reimbursement of all expenses reasonably incurred by him in connection with the
performance of his duties hereunder or for promoting, pursuing or otherwise
furthering the business or interests of the Company, in each case in accordance
with policies established by the Board from time to time and upon receipt of
appropriate documentation.
(b) The Executive shall be entitled to reimbursement for expenses
of temporary housing in New York and periodic commutation expenses between
Nevada and New York (which shall not be greater than weekly).
10. TERMINATION.
(a) DEATH. The Executive's employment hereunder shall terminate
upon the Executive's death.
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(b) DISABILITY. If during the term of this Agreement, Executive
shall become ill, mentally or physically disabled, or otherwise incapacitated so
as to be unable regularly to perform the duties of his position for a period in
excess of 120 days ("Disability"), then the Company shall have the right to
terminate Executive's employment with the Company upon written notice to
Executive.
(c) CAUSE. The Company shall be entitled to terminate the
Executive's employment for "Cause." For purposes of this Agreement, "Cause"
shall mean that the Executive (i) pleads "guilty" or "no contest" to or is
convicted of an act which is defined as a felony under federal or state law or
as a crime under federal or state law which involves Executive's fraud or
dishonesty, (ii) in carrying out his duties, engages in conduct that constitutes
willful neglect or willful misconduct; provided such plea, conviction, neglect
or misconduct results in material economic harm to the Company, (iii)
Executive's failure to obtain or maintain required licenses in the jurisdiction
where the Company currently operates or has plans to operate, in either case as
of the commencement of Executive's employment or (iv) the Executive's material
breach of this Agreement.
The Executive's employment with the Company shall not be
terminated for Cause unless he has been given written notice by the Board of its
intention to so terminate his employment (but only if susceptible to cure), such
notice (i) to state in detail the particular act or acts or failure or failures
to act that constitute the grounds on which the proposed termination for Cause
is based and (ii) to be given within 6 months after the Board knew of such acts
or failures to act. The Executive shall have 10 days after the date that the
Preliminary Notice of Cause is given in which to cure such conduct, to the
extent such cure is possible.
(d) GOOD REASON. The Executive may terminate his employment
hereunder for "Good Reason" by delivering to the Company written notice of his
intention to terminate his employment which identifies the act or acts
constituting Good Reason in reasonable detail. The Executive may give such
notice with or without conditions, including the right to withdraw such notice
if the Company does not agree there are facts which constitute Good Reason. The
Company shall have 60 days in which to cure.
For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the following without the Executive's prior written
consent: (i) the failure to appoint or continue the Executive as Chief Financial
Officer of the Company; (ii) a material diminution in the Executive's duties, or
the assignment to the Executive of duties materially inconsistent with his
duties, positions, authority, responsibilities and reporting requirements as set
forth in Section 2 of this Agreement, or the assignment of duties which
materially impair the Executive's ability to function as the Chief Financial
Officer of the Company; (iii) a reduction in or a material delay in payment of
the Executive's total cash compensation and benefits from those required to be
provided in accordance with the provisions of this Agreement; or (iv) the
failure of the Company to obtain the assumption in writing of its obligation to
perform this Agreement by any successor to all or substantially all of the
assets of the Company not later than the effective date of such transaction.
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(e) WITHOUT CAUSE. The Company may terminate the Executive's
employment hereunder, without Cause, at any time and for any reason (or for no
reason) by giving the Executive a Notice of Termination.
(f) VOLUNTARY. The Executive may terminate his employment
hereunder at any time and for any reason other than Good Reason or Disability
(or for no reason) by giving the Company a Notice of Termination. Such voluntary
termination shall not be deemed a breach of this Agreement
(g) NOTICE OF TERMINATION. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice which indicates the specific
termination provision in this Agreement relied upon and which sets forth in
reasonable detail, if applicable, the facts and circumstances claimed to provide
a basis for termination of the Executive's employment under the provision so
indicated. For purposes of this Agreement, no purported termination of
employment which requires a Notice of Termination shall be effective without
such Notice of Termination. The Termination Date (as defined below) specified in
such Notice of Termination shall be no less than two weeks from the date the
Notice of Termination is given; PROVIDED, HOWEVER, that (i) if the Executive's
employment is terminated by the Company due to Disability, the date specified in
the Notice of Termination shall be at least 30 days from the date the Notice of
Termination is given to the Executive and (ii) if the Executive terminates his
employment in accordance with Section 10(f) of this Agreement, the date
specified in the Notice of Termination shall be at least 30 days from the date
the Notice of Termination is given to the Company.
(h) TERMINATION DATE. "Termination Date" shall mean the date of
the termination of the Executive's employment with the Company and specifically
(i) in the case of the Executive's death, his date of death; (ii) in the case of
a termination of the Executive's employment for Cause, the relevant date
specified in Section 10(c) of this Agreement; (iii) in the case of the
expiration of the Term of this Agreement in accordance with Section 1, the date
of such expiration; and (iv) in all other cases, the date specified in the
Notice of Termination.
11. COMPENSATION UPON TERMINATION OF EMPLOYMENT.
(a) FOR CAUSE; WITHOUT GOOD REASON. If during the term of this
Agreement, the Executive's employment under this Agreement is terminated by the
Company for Cause or by the Executive without Good Reason (and other than by
reason of the Executive's death or Disability), the Company's sole obligation
hereunder shall be to pay the Executive the following amounts earned hereunder
but not paid as of the Termination Date ((i) through (iv) collectively, "Accrued
Compensation"):
(i) Base Salary through the Termination Date;
(ii) reimbursement of any and all reasonable expenses
incurred in connection with the Executive's duties and
responsibilities under this Agreement in accordance with policies
established by the Board from time to time and upon receipt of
appropriate documentation; and
(iii) other or additional benefits and entitlements in
accordance with applicable plans, programs and arrangements of the
Company.
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(b) WITHOUT CAUSE OR FOR GOOD REASON. If the Executive's
employment hereunder is terminated by the Company without Cause or by the
Executive for Good Reason, the Company's sole obligation hereunder shall be as
follows:
(i) the Company shall pay the Executive the Accrued
Compensation;
(ii) the Company shall pay the Executive a Pro-rata Bonus, at
such time as other participants in the Bonus Plan are paid their
respective bonuses in respect of that fiscal year;
(iii) the Company shall continue to pay the Executive Base
Salary for a period of six (6) months following such termination
(the "Salary Continuation Period"), in equal installments, in
accordance with the Company's customary payroll practices to its
executive officers;
(c) DISABILITY. If the Executive's employment hereunder is
terminated by the Company by reason of the Executive's Disability, the Company's
sole obligation hereunder shall be as follows:
(i) the Company shall pay the Executive the Accrued
Compensation; and
(ii) the Executive shall be entitled to benefits under the
Company's regular and any supplemental long-term disability plan or
plans;
(d) DEATH. If the Executive's employment hereunder is terminated
due to his death, the Company's sole obligation hereunder shall be to pay the
Executive's estate or his beneficiaries (as the case may be) the Accrued
Compensation.
(e) DETERMINATION OF BASE SALARY. For purposes of this Section
11, Base Salary shall be determined by the Base Salary at the annualized rate in
effect on the Termination Date.
(f) CONTINUATION OF EMPLOYEE BENEFITS. Notwithstanding anything
to the contrary, in addition to any amounts payable above, the Company shall, at
its expense, during the Salary Continuation Period, provide to the Executive and
his beneficiaries continued participation in all medical, dental, vision,
prescription drug, hospitalization and life insurance coverages and in all other
employee welfare and pension benefit plans, programs and arrangements in which
the Executive was participating immediately prior to the Termination Date. COBRA
benefits will commence after the Salary Continuation Period. Notwithstanding the
foregoing, the Company's obligation to provide welfare benefits under this
Section 11(f) shall be reduced to the extent that equivalent coverages and
benefits are provided under the plans, programs or arrangements of a subsequent
employer.
(g) NO MITIGATION; NO OFFSET. In the event of any termination of
his employment hereunder, the Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
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or otherwise and no such payment shall be offset or reduced by the amount of any
compensation provided to the Executive in any subsequent employment, except as
provided in Section 11(f) of this Agreement.
(h) RELEASE. In exchange for the payment by the Company of the
amounts contemplated by Section 11(b) of this Agreement, the Executive agrees to
execute such form of release with respect to claims for such payment as is
mutually and reasonably acceptable to the Company and the Executive.
12. EMPLOYEE COVENANTS.
(a) UNAUTHORIZED DISCLOSURE. The Executive shall not, during the
term of this Agreement and thereafter, make any Unauthorized Disclosure. For
purposes of this Agreement, "Unauthorized Disclosure" shall mean disclosure by
the Executive without the prior written consent of the Board to any person,
other than an employee of the Company or a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by the
Executive of his duties as an executive officer of the Company, of any
confidential information relating to the business or prospects of the Company
including, but not limited to, any confidential information with respect to any
of the Company's customers, products, methods of distribution, strategies,
business and marketing plans and business policies and practices, except (i) to
the extent disclosure is or may be required by law, by a court of law or by any
governmental agency or other person or entity with apparent jurisdiction to
require him to divulge, disclose or make available such information or (ii) in
confidence to an attorney or other advisor for the purpose of securing
professional advice concerning the Executive's personal matters provided such
attorney or other advisor agrees to observe these confidentiality provisions.
Unauthorized Disclosure shall not include the use or disclosure by the
Executive, without consent, of any information known generally to the public or
known within the Company's trade or industry (other than as a result of
disclosure by him in violation of this Section 12(a)). This confidentiality
covenant has no temporal, geographical or territorial restriction.
(b) NON-COMPETITION. During the Non-Competition Period described
below, the Executive shall not, directly or indirectly, without the prior
written consent of the Company, own, manage, operate, join, control, be employed
by, consult with or participate in the ownership, management, operation or
control of, or be connected with (as a stockholder, partner, or otherwise) the
gaming industry in the geographic areas where the Company is operating or has
plans to operate as of the beginning of the Non-Competition Period.
(c) NON-SOLICITATION. During the Non-Competition Period described
below, the Executive shall not, either directly or indirectly, alone or in
conjunction with another person, interfere with or harm, or attempt to interfere
with or harm, the relationship of the Company, its subsidiaries and/or
affiliates, with any person who at any time was an employee of the Company.
(d) For purposes of this Agreement, the "Non-Competition Period"
means the greater of (i) one year following the voluntary termination of
Executive's employment without Good Reason, (ii) one year following termination
of the Executive by the Company for Cause, or (iii) the balance of the Salary
Continuation Period.
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(e) REMEDIES. The Executive agrees that any breach of the terms
of this Section 12 would result in irreparable injury and damage to the Company
for which the Company would have no adequate remedy at law; the Executive
therefore also agrees that in the event of said breach or any threat of breach,
the Company shall be entitled to seek an immediate injunction and restraining
order to prevent such breach and/or threatened breach and/or continued breach by
the Executive, in addition to any other remedies to which the Company may be
entitled at law or in equity. The Executive and the Company further agree that
the provisions of the covenants not to compete and solicit are reasonable and
that the Company would not have entered into this Agreement but for the
inclusion of such covenants herein. Should a court or arbitrator determine,
however, that any provision of the covenants is unreasonable, either in period
of time, geographical area, or otherwise, the parties hereto agree that the
covenants should be interpreted and enforced to the maximum extent which such
court or arbitrator deems reasonable.
13. SECTION 409A.
It is the intention of the Parties that this Agreement comply
strictly with the provisions of Section 409A of the Code and Treasury
Regulations and other Internal Revenue Service guidance promulgated thereunder
(the "Section 409A Rules"). Accordingly, this Agreement, including, but not
limited to, any provisions relating to severance payments and the terms of any
grants of restricted stock or options hereunder, may be amended from time to
time as may be necessary or appropriate to comply with the Section 409A Rules.
14. WITHHOLDING OF TAXES.
The Company may take such actions as it may deem appropriate,
consistent with applicable law, in connection with any compensation paid
pursuant to this Agreement with respect to the withholding of any taxes
(including income or employment taxes) or any other tax matters, including, but
not limited to, requiring the Executive to furnish to the Company any applicable
withholding taxes prior to the issuance of stock pursuant to an option grant or
the vesting of restricted stock.
15. INDEMNIFICATION; INSURANCE; LIMITATION OF LIABILITY.
(a) The Company agrees that if the Executive is made a party, or
is threatened to be made a party, to any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), by reason of
the fact that he is or was a director, officer or employee of the Company or is
or was serving at the request of the Company as a director, officer, member,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans, the
Executive shall be indemnified and held harmless by the Company to the fullest
extent legally permitted or authorized by the Company's certificate of
incorporation or bylaws or resolutions of the Company's Board against all cost,
expense, liability and loss (including, without limitation, attorneys' fees,
judgments, fines, ERISA excise taxes or other liabilities or penalties and
amounts paid or to be paid in settlement) reasonably incurred or suffered by the
Executive in connection therewith, and such indemnification shall continue as to
the Executive even if he has ceased to be a director, member, employee or agent
of the Company or other entity and shall inure to the benefit of the Executive's
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heirs, executors and administrators. The Company shall advance to the Executive
all costs and expenses incurred by him in connection with a Proceeding within a
reasonable time. Such request shall include an undertaking by the Executive to
repay the amount of such advance if it shall ultimately be determined that he is
not entitled by law to be indemnified against such costs and expenses; provided
that the amount of such obligation to repay shall be limited to the after-tax
amount of any such advance except to the extent the Executive is able to offset
such taxes incurred on the advance by the tax benefit, if any, attributable to a
deduction realized by him for the repayment.
(b) Neither the failure of the Company (including its Board,
independent legal counsel or stockholders) to have made a determination prior to
the commencement of any Proceeding concerning payment of amounts claimed by the
Executive under Section 15(a) above that indemnification of the Executive is
proper because he has met the applicable standard of conduct, nor a
determination by the Company (including its Board, independent legal counsel or
stockholders) that the Executive has not met such applicable standard of
conduct, shall create a presumption in any judicial proceeding that the
Executive has not met the applicable standard of conduct.
(c) The Company agrees to continue and maintain a directors' and
officers' liability insurance policy covering the Executive, until such time as
actions against the Executive are no longer permitted by law, with terms and
conditions no less favorable than the most favorable coverage then applying to
any other senior level executive officer or director of the Company.
16. REPRESENTATIONS.
(a) The Executive represents and warrants that he has the free
and unfettered right to enter into this Agreement and to perform his obligations
under it and that he knows of no agreement between him and any other person,
firm or organization, or any law or regulation, that would be violated by the
performance of his obligations under this Agreement.
(b) The Company represents that (i) the execution of this
agreement and the provision of all benefits and grants provided herein have been
duly authorized by the Company, including, where necessary, by the Board and
Compensation Committee, (ii) the execution, delivery and performance of this
Agreement does not violate any law, regulation, order, decree, agreement, plan
or corporate governance document of the Company, (iii) upon the execution and
delivery of this agreement, it shall be the valid and binding obligation of the
Company enforceable in accordance with its terms, (iv) there are no material
investigations by any governmental authority of the Company or its affiliates
pending, or to the actual knowledge of the Company, threatened, and Company
senior management knows of no facts that would warrant such investigation, (v)
there are no facts or circumstances that may result in a material financial
restatement.
17. SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns and the Company shall require
any successor or assign to expressly assume and agree to perform this Agreement
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in the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place. The term "the
Company" as used herein shall include any such successors and assigns. The term
"successors and assigns" as used herein shall mean a corporation or other entity
acquiring or otherwise succeeding to, directly or indirectly, all or
substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.
(b) Neither this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal personal representative.
18. ARBITRATION. Except with respect to the remedies set forth in
Section 12(e) hereof, if in the event of any controversy or claim between the
Company or any of its affiliates and the Executive arising out of or relating to
this Agreement, either party delivers to the other party a written demand for
arbitration of a controversy or claim, then such claim or controversy shall be
submitted to binding arbitration. The binding arbitration shall be administered
by the American Arbitration Association under its Commercial Arbitration Rules.
The arbitration shall take place in New York, NY. Each of the Company and the
Executive shall appoint one person to act as an arbitrator, and a third
arbitrator shall be chosen by the first two arbitrators (such three arbitrators,
the "Panel"). The Panel shall have no authority to award punitive damages
against the Company or the Executive. The arbitrator shall have no authority to
add to, alter, amend or refuse to enforce any portion of the disputed
agreements. The Company and the Executive each waive any right to a jury trial
or to petition for stay in any action or proceeding of any kind arising out of
or relating to this Agreement. Pending the resolution of any claim under this
Section 18, the Executive (and his beneficiaries) shall continue to receive all
payments and benefits due under this Agreement, except to the extent that the
arbitrator(s) otherwise provide.
19. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by registered or certified mail, return
receipt requested, postage prepaid, or upon receipt if overnight delivery
service or facsimile is used, addressed as follows:
TO THE EXECUTIVE:
Xxxxxx Xxxxxxxxx
[address]
TO THE COMPANY:
Empire Resorts, Inc.
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxx 00000-0000
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with a copy to:
Xxxxxx X. Xxxxxxxx
Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP
Park Avenue Tower
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
20. SETTLEMENT OF CLAIMS. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others.
21. SURVIVORSHIP. Except as otherwise set forth in this Agreement,
the respective rights and obligations of the Executive and the Company hereunder
shall survive any termination of the Executive's employment.
22. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement.
23. GOVERNING LAW. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York
without giving effect to the conflict of law principles thereof.
24. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
25. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof. This Agreement may be executed
in one or more counterparts.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has executed this
Agreement as of the day and year first above written.
THE COMPANY:
EMPIRE RESORTS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------
Xxxxx X. Xxxxxx
Chief Executive Officer
THE EXECUTIVE:
/s/ Xxxxxx Xxxxxxxxx
--------------------
Xxxxxx Xxxxxxxxx
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