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EXHIBIT 10(c)
AGREEMENT
This Agreement is entered into as of December 12, 1997 by and
between XXXXXX X. XXXXX (hereinafter referred to as the "Executive") and THE
SANDS REGENT, a Nevada corporation (the "Company").
RECITAL
The Company desires to retain the experience, expertise and
services of Executive as Chief Executive Officer of the Company and Executive
desires to provide such services on the terms and conditions set forth
hereinafter.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing Recital and the
mutual covenants herein contained, the Company and the Executive agree as
follows:
ARTICLE I.
EMPLOYMENT
SECTION 1.1. EMPLOYMENT AND POSITION
The Company shall employ Executive as its President and Chief
Executive Officer and in such other capacity or capacities as the board of
directors of the Company may from time to time prescribe. During his employment
hereunder, Executive shall devote his full energies, experience, skills,
abilities, knowledge and productive time to the performance of this Agreement
and shall not, without the prior written consent of the board of directors of
the Company, render to others services of any kind for compensation or services
without compensation which would materially interfere with the performance of
his duties under this Agreement.
SECTION 1.2. RESPONSIBILITIES, DUTIES AND AUTHORITY
The responsibilities, duties and authority of Executive shall be as
designated from time to time by the board of directors of the Company. Those
responsibilities and duties will include, but shall not be limited to, the
formulation and implementation of short and long range plans, policies and
programs necessary and appropriate for the successful operation of the Company,
within a broad policy framework to be established by the board of directors of
the Company.
SECTION 1.3. TERM OF EMPLOYMENT
The term of this Agreement shall be for the period commencing on
December 12, 1997 and ending on December 11, 1999, unless earlier terminated as
provided herein.
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ARTICLE II.
TERMINATION OF EMPLOYMENT
SECTION 2.1. TERMINATION OF AGREEMENT BY THE COMPANY
(a) The Company may terminate this Agreement at any time without
advance notice in the event Executive commits any act of gross misconduct or
willfully neglects to fulfill his duties under this Agreement. If this Agreement
is terminated pursuant to this Section 2.1(a), Executive shall be entitled to
only his salary plus accrued vacation pay through the date of such termination,
and the Company shall have no further obligations to Executive.
(b) The Company may terminate this Agreement at any time; provided,
however, that if Executive's employment is terminated by the Company other than
pursuant to Section 2.1(a) or Article IV, Executive shall be entitled to payment
by the Company of (i) $100,000 in cash, (ii) a pro rata portion of the annual
bonus provided for in Section 3.2, and (iii) COBRA insurance benefits until the
earlier of (x) 18 months from the date of such termination or (y) such time as
Executive obtains health insurance benefits from another employer, and the
Company shall have no further obligations to Executive.
SECTION 2.2. TERMINATION OF AGREEMENT BY DISABILITY OR DEATH OF EXECUTIVE
If at any time the board of directors of the Company determines in
its sole but reasonable judgment that throughout the two prior months then
ending, or if on 50% or more of the normal working days throughout the four
prior months then ending, Executive has been unable to fully perform his duties
as President and Chief Executive Officer due to mental or physical illness or
injury, this Agreement shall be terminated. If Executive dies, this Agreement
shall be terminated on the last day of the month of his death. If this Agreement
is terminated pursuant to this Section 2.2, Executive shall be entitled to only
his salary plus accrued vacation pay through the date of such termination, and
the Company shall have no further obligations to Executive.
SECTION 2.3. TERMINATION OF AGREEMENT BY EXECUTIVE
Executive may terminate this Agreement at any time upon six months
prior written notice to the board of directors of the Company. If this Agreement
is terminated pursuant to this Section 2.3, Executive shall be entitled to only
his salary plus accrued vacation pay through the date of such termination, and
the Company shall have no further obligations to Executive.
ARTICLE III.
COMPENSATION
SECTION 3.1. BASIC SALARY
Executive's basic salary shall be payable in equal monthly
installments. For the first year of Executive's employment under this Agreement,
that basic salary shall be $225,000
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per annum. For any year thereafter, any increase in Executive's basic salary
shall be determined in the sole discretion of the board of directors of the
Company.
SECTION 3.2. BONUS
Executive shall be eligible to be paid a bonus each year of the
term of this Agreement promptly after the financial statements for the calendar
year ending December 31, 1998 and 1999, as applicable, are prepared of (a)
$112,500 if income from operations, after deducting all bonuses including all
executive bonuses (including Executive's targeted bonus), of Zante, Inc. d.b.a.
The Sands Regency (the "Bonus Measure") for the calendar year then ended is at
least $0 but less than or equal to $500,000, (b) $140,625 if the Bonus Measure
for the calendar year then ended is greater than $500,000 and less than or equal
to $1,000,000 or (c) $168,750 if the Bonus Measure for the calendar year then
ended is greater than $1,000,000.
SECTION 3.3. OPTIONS
The Company hereby grants to Executive as of December 12, 1997 an
option to purchase 100,000 shares of Common Stock of the Company at an exercise
price per share equal to the closing sales price of the Common Stock of the
Company on December 12, 1997. Options to purchase 50,000 of such shares shall
vest on December 12, 1998 and the remaining options shall vest on December 12,
1999. If Executive's employment is terminated pursuant to Section 2.1(b), a pro
rata portion (based on 24 equal monthly vesting increments) of the options shall
vest.
SECTION 3.4. OTHER BENEFITS
During the term of this Agreement, Executive shall be entitled to
receive all other benefits of employment generally available to other executive
and managerial employees of the Company, when and as he becomes eligible
therefor, including, but not limited to, group health and life insurance
benefits and an annual vacation of four weeks, accruing one week per quarter.
SECTION 3.5. EXPENSES
During the term of this Agreement, the Company shall reimburse
Executive for reasonable and properly documented out-of-pocket expenses incurred
in connection with the business of the Company, subject to such policies as the
Company may from time to time reasonably establish.
SECTION 3.6. DEDUCTIONS AND WITHHOLDINGS
All amounts payable or which become payable under any provision of
this Agreement shall be subject to any deductions authorized by Executive, any
set-off or reimbursement of the Company deemed appropriate by it and all
deductions and withholdings authorized by law.
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ARTICLE IV.
PAYMENT UPON CHANGE IN CONTROL
SECTION 4.1. DEFINITIONS
The following terms used in this Article IV, shall have the meaning
specified below:
(a) "Board of Directors" shall mean the board of directors of the
Company.
(b) "Cause" shall mean termination of employment with the Company
because of (i) the Executive's willful failure or refusal to satisfactorily
perform the duties of his position after notice by the Company; (ii) the
commission by the Executive of a felony or the willful perpetration by the
Executive of a dishonest act against or breach of fiduciary duty toward the
Company; or (iii) any other act or omission by the Executive which is injurious
in any material respect to the Company.
(c) A "Change in Control" shall be deemed to have occurred if (i) any
person or group of persons (as defined in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") together with its
affiliates, excluding employee benefit plans of the Company is or becomes,
directly or indirectly, the "beneficial owner" (as defined in Rule 13d-3
promulgated under the 0000 Xxx) of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding securities;
or (ii) as a result of a proxy contest, merger, consolidation, sale of assets,
tender offer or exchange offer or as a result of any combination of the
foregoing, Directors who were members of the Board of Directors two years prior
to such time and new Directors whose election or nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds of the
Directors still in office who were Directors two years prior to such time, cease
to constitute at least two-thirds of the members of the Board of Directors; or
(iii) the shareholders of the Company approve a merger or consolidation of the
Company with any other corporation or entity regardless of which entity is the
survivor, other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or being converted into voting
securities of the surviving entity) at least 80% of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or (iv) the shareholders of the
Company approve a plan of complete liquidation or winding-up of the Company or
an agreement for the sale or disposition by the Company of all or substantially
all of the Company's assets.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Company" shall mean The Sands Regent, a Nevada corporation, its
subsidiaries and affiliates, and any successor to its business, whether direct
or indirect, by purchase of securities, merger, consolidation, purchase of all
or substantially all of the Company's assets or otherwise.
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(f) "Date of Termination" shall mean in the case of termination of the
Executive's employment by the Company for Cause or termination by the Executive
for Good Reason or termination for any other reason, the date specified in the
Notice of Termination, which date shall not be less than thirty days after the
date such Notice of Termination is given.
(g) "Disability" shall mean absence from performance of assigned duties
for the Company on a full-time basis for 12 consecutive calendar months as a
result of incapacity due to medically documented physical or mental illness;
provided that the Executive shall not have returned to the full-time performance
of the Executive's duties within 30 calendar days of actual receipt of written
Notice of Termination for the reason of Disability. Such Notice of Termination
may not be given prior to the expiration of the 12-month period of Disability.
(h) "Executive" shall have the meaning provided in the first paragraph
of this Agreement.
(i) "Good reason" shall mean the occurrence of any of the following
events without the Executive's express written consent:
(i) the assignment to the Executive of duties inconsistent with
the position and status of an executive of the Company, or a substantial
alteration in the nature, status or prestige of the Executive's responsibilities
as Chief Executive Officer of the Company from those in effect immediately prior
to a Change of Control;
(ii) a reduction by the Company in the Executive's base salary or
bonus opportunity as in effect immediately prior to the occurrence of a Change
of Control;
(iii) the reassignment of the Executive to a location which
increases the Executive's commute by more than 50 miles on a daily round trip
basis;
(iv) the Executive's assignment to a location other than the
principal executive offices of the Company;
(v) the Company's failure to continue, or a substantial change in,
the Executive's participation in any compensation or benefit plans;
(vi) the Company's failure to obtain the agreement of any
successor to assume the Agreement;
(vii) any other items which in the Company's judgment should give
the Executive the right to terminate his employment and receive severance
benefits; or
(viii) any purported termination of the employment of the
Executive by the Company which is not effected according to the requirements of
a Notice of Termination as defined in subsection (j) herein.
(j) "Notice of Termination" shall mean a notice, in writing, to the
Executive from the Company or to the Company from the Executive, which indicates
the specific termination
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provision enumerated in this Agreement relied upon, and which sets forth in
reasonable detail the facts and circumstances alleged to provide a basis for
termination of the Executive's employment by the Company or by the Executive.
Such notice must be communicated to the Executive in accordance with Section 4.3
herein.
(k) "Retirement" shall mean termination of the Executive's employment
on or after the date on which the Executive attains sixty-five years of age or
termination in accordance with any retirement agreement entered into between the
Executive and the Company.
SECTION 4.2. BENEFITS AND COMPENSATION
(a) When Benefits Payable.
No benefits shall be payable under this Article IV and the
provisions of this Article IV shall be of no force or effect unless there shall
have been a Change in Control, and the Executive's employment with the Company
shall have been terminated within three years after the Change in Control. If
such a Change in Control has occurred and the Executive's employment with the
Company is terminated within three years after the Change in Control, unless
such termination is (i) because of the death or Disability of the Executive, or
(ii) by the Executive other than for Good Reason, the Executive shall be
entitled to the benefits enumerated in this Article IV, under the conditions
imposed herein.
(b) Benefits Upon Termination for Cause.
In the event that the Executive's employment with the Company is
terminated for Cause within three years following such Change in Control, the
Executive shall receive the Executive's full base compensation (plus accrued but
unpaid vacation benefits) as earned through the Date of Termination at the rate
in effect at the time Notice of termination is given. Following payment of said
amount, the Company shall have no further obligations to the Executive under
this Agreement.
(c) Benefits Upon Retirement.
In the event that the Executive's employment with the Company is
terminated by reason of the Executive's Retirement within three years following
such Change in Control, the Executive shall be entitled to the benefits under
the Company's regular retirement program, or, if a separate retirement agreement
has been entered into between the Executive and the Company, benefits shall be
provided according to the terms of that agreement.
(d) Benefits Upon Termination Other Than For Cause, Retirement or
Disability; or Termination For Good Reason.
In the event that the employment of the Executive shall be
terminated (i) by the Company for any reason other than for Cause, Disability or
Retirement within three years after the occurrence of such Change in Control or
(ii) by the Executive for Good Reason within three years after the occurrence of
such Change in Control, then
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(i) the Executive shall be entitled to receive: (x) the Executive's
full base compensation (plus accrued but unpaid vacation benefits) as earned
through the Date of Termination at the rate in effect at the time Notice of
Termination is given; (y) for a 36-month period after such termination (or such
lesser number of months up to the date of the Executive's Retirement or until
the date the Executive obtains a new job of similar status), life, disability,
accident and health insurance coverage substantially the same as that which the
Executive received immediately prior to the Change of Control but increased to
the extent that such benefits were increased following the Change of Control;
and (z) a lump sum payment (the "Severance Payment") from the Company to the
Executive of a dollar amount equal to 300% of (a) the greater of (1) the annual
base compensation for the Executive for the twelve-month period immediately
preceding the Change of Control or (2) the annual base compensation of the
Executive in effect at the time the Notice of Termination is given and (b) any
bonus paid during the twelve-month period immediately preceding the time the
Notice of Termination is given.
(ii) all options to purchase securities of the Company then held by
the Executive shall be immediately exercisable, without regard to whether such
options are exercisable at such time pursuant to the terms of the documents
under which such options were granted; provided that if such Change of Control
is to be accomplished through a tender offer or an exchange offer, such options
shall be exercisable at a time that shall permit the Executive to tender the
shares received upon the exercise of the options in such tender or exchange
offer; and
(iii) any securities of the Company then held by the Executive that
are subject to any restriction on transfer, other than restrictions imposed only
by federal or state securities laws, shall lapse and be of no further force and
effect with the result that the Executive shall be permitted to sell, transfer
or otherwise dispose of such securities without regard to any such restrictions.
(e) Tax Deductibility of Benefit Payments.
In the event that any payment or benefit received or to be received
by the Executive in connection with the termination of the Executive's
employment pursuant to the terms of this Article IV would not be deductible (in
whole or in part) by the Company as a result of the operation of Section 280G of
the Code, the amount of the Severance Payment shall be reduced (but not below
zero) until no portion of the Severance Payment is not deductible as a result of
Section 280G of the Code.
(f) Legal Fees and Expenses.
If, following termination of the employment of the Executive within
three years after a Change of Control, the Executive shall incur any legal fees
or expenses as a result of the termination of the Executive's employment
(including any such fees or expenses incurred in contesting or disputing any
such termination or in seeking to obtain or enforce any right or benefit
provided by this Article IV), the Company shall pay or reimburse the Executive
for all such fees or expenses; provided, however, that if the Executive is
terminated for "Cause," the losing party shall pay the attorneys fees and costs
of the prevailing party.
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(g) No Mitigation.
Except as provided in subsection (d)(i)(y) of this Article IV,
the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Article IV be
reduced or offset by any compensation earned by the Executive as a result of
employment by another employer or by retirement benefits after the Date of
Termination or otherwise.
ARTICLE V.
MISCELLANEOUS
SECTION 5.1. SUCCESSORS; BINDING AGREEMENT
The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
The failure of the Company to obtain such assumption agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation form the Company in the same amount
and on the same terms as the Executive would be entitled to hereunder if the
Executive had terminated the Executive's employment for Good Reason, except that
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination.
SECTION 5.2. SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of, and be enforceable
by, the personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees of the Executive. If the
Executive should die within three years after a Change in Control and during the
term of this Agreement and while any amount would still be payable to the
Executive hereunder if the Executive had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee or other designee or if there
is no such designee, to the Executive's estate.
SECTION 5.3. NOTICE
Notices and all communications provided for in this Agreement
shall be in writing and shall be deemed to have been received when delivered or
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth at the end of this
Agreement, provided that all notices to the Company shall be directed to the
attention of the Board of Directors with a copy to the Secretary of the Company,
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.
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SECTION 5.4. NO WAIVER
No provision of this Agreement may be modified, waived or
discharged unless in writing and signed by the Executive and such officer of the
Company as may be specifically designated or authorized by the Board of
Directors or by a Committee of the Board of Directors. 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.
SECTION 5.5. ENTIRE AGREEMENT
No agreements 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 and this Agreement
constitutes the entire agreement of the parties.
SECTION 5.6. CONTROLLING LAW
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Nevada.
SECTION 5.7. INVALID PROVISION
The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
SECTION 5.8. COUNTERPARTS
This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original, and all such counterparts together
shall constitute but one and the same instrument.
SECTION 5.9. THE EXECUTIVE'S EMPLOYMENT BY THE COMPANY
Nothing contained in this Agreement (i) obligates the Company or
any subsidiary of the Company to employ the Executive in any capacity
whatsoever, or (ii) prohibits or restricts the Company (or any such subsidiary)
from terminating the employment, if any, of the Executive at any time or for any
reason whatsoever, with or without cause.
SECTION 5.10. ARBITRATION
Except as provided in Section 5.11 hereof, any controversy or claim
arising out of or relating to this Agreement, or breach thereof, shall be
settled by arbitration in accordance with the Rules of the American Arbitration
Association, and judgment upon any proper award rendered by the Arbitrators may
be entered in any court having jurisdiction thereof. There shall be three
arbitrators, one to be chosen directly by each party at will, and the third
arbitrator to be
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selected by the two arbitrators so chosen. To the extent permitted by the Rules
of the American Arbitration Association and not limited by Section 5.11 hereof,
the selected arbitrators may grant equitable relief. Each party shall pay the
fees of the arbitrator selected by him and of his own attorneys, and the
expenses of his witnesses and all other expenses connected with the presentation
of his case. The costs of the arbitration including the cost of the record or
transcripts thereof, if any, administrative fees, and all other fees and costs
shall be borne equally by the parties.
SECTION 5.11. SPECIFIC PERFORMANCE
Executive is obligated under this Agreement to render services of a
special, unique, unusual, extraordinary and intellectual character, thereby
giving this Agreement peculiar value. Any loss resulting from a breach of
Executive's obligations to render services could not be reasonably or adequately
compensated in damages in an action of law. Therefore, in addition to other
remedies provided by law or this Agreement, the Company shall have the right to
obtain injunctive relief, in the appropriate court, against the performance
elsewhere by Executive of services in direct or indirect competition with the
Company.
SECTION 5.12. WAIVERS
The waiver in any particular instance or services of instances of
any term or condition of this Agreement or any breach hereof by either party
shall not constitute a waiver of such term or condition or of any breach thereof
in any other instance.
SECTION 5.13. AMENDMENT
This Agreement is subject to amendment only by subsequent written
agreement between, and executed by, the parties hereto. Commencement or
continuation of any custom, practice or usage by the Company shall not
constitute an amendment hereof or otherwise give rise to enforceable rights or
create obligations of the Company.
SECTION 5.14. DURATION OF RIGHTS
Rights and obligations created by or arising under this Agreement
shall terminate automatically upon termination of this Agreement except as
otherwise expressly provided herein.
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IN WITNESS WHEREOF, the parties have executed this Agreement at
Reno, Nevada, effective as of the 12th day of December 1997.
"COMPANY"
THE SANDS REGENT, A NEVADA CORPORATION
By: [SIG]
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President
By: [SIG]
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Secretary
Address:
000 Xxxxx Xxxxxxxxx Xxxxxx
Xxxx, Xxxxxx 00000
"EXECUTIVE"
/s/ XXXXXX X. XXXXX
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XXXXXX X. XXXXX
Address:
0000 Xxxxxxx Xxxx
Xxxx, Xxxxxx 00000
