Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") dated as of December 31, 1999
between American Gaming & Entertainment, Ltd., a Delaware Corporation (the
"Company"), and J. Xxxxxxx Xxxxxxxxxx, a resident of New Jersey ("Executive").
A. Executive desires to continue his employment as President and
Chief Executive Officer of Company.
B. Company desires to continue to retain the benefit of Executive's
experience and loyalty, and to employ Executive as President and Chief
Executive Officer of the Company.
C. Executive and the Company have agreed to enter into this
Employment Agreement in connection with a certain letter agreement dated
November 23, 1999 ("Letter Agreement") by and among Executive; the Company;
the Company's subsidiaries and affiliates, including, without limitation,
Emerald Gaming, Inc., AMGAM Associates and American Gaming and Resorts of
Mississippi, Inc.; Shamrock Holdings Group, Inc.1; and Xxxxxxx Funding Group,
Inc.2 (collectively, the "Parties"), which Letter Agreement resolves and
settles certain claims by and among the Parties, and contemplates the
Company's continued employment of Executive for a fixed term.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
1. Definitions.
The terms used in this Agreement shall be defined as follows:
(a) "Agreement" shall mean this Employment Agreement as amended from
time to time.
(b) "Base Salary" shall mean the annual base salary payable to
Executive pursuant to Section 4(a) hereof.
_____________________
1 Shamrock Holdings Group, Inc. ("Shamrock") is operating as a debtor and
debtor in possession under Chapter 11 of Title 11, United States Code as a
result of its filing of a voluntary petition in the United States Bankruptcy
Court for the Northern District of New York.
2 Xxxxxxx Funding Group, Inc. and various affiliated entities (collectively,
the "Xxxxxxx Entities") are debtors in a substantively consolidated Chapter 11
bankruptcy proceeding pending in the United States Bankruptcy Court for the
Northern District of New York. Xxxxxxx X. Xxxxxxx is the appointed Chapter 11
Trustee ("Trustee" for the Xxxxxxx Entities.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean termination of the Executive's employment with
the Company by the Board because of (i) Executive's willful misconduct or
gross negligence in the performance of, or the willful failure or refusal by
Executive to perform substantially, Executive's duties and obligations under
this Agreement, as an officer of the Company or the lawful duties which are
otherwise assigned to Executive by the Board, (ii) the inexcusable repeated or
prolonged absence from work by Executive (other than pursuant to a Permanent
Disability (as defined below) of Executive), (iii) any breach by Executive of
Executive's material obligations under this Agreement, (iv) the habitual abuse
of illegal or intoxicating substances by Executive, (v) conviction or entry of
a plea of guilty to any felony by Executive, (vi) Executive's engagement in
fraud, misappropriation, embezzlement, or other act or acts of dishonesty
resulting in, or intended to result in, substantial personal enrichment of
Executive at the expense of the Company or (vii) the entry of any final civil
judgment in connection with any allegation of fraud, misrepresentation,
misappropriation or any other intentional tort or intentional statute
violation related to Executive's employment with the Company. A Cause pursuant
to clauses (i) - (iv) of this Section 1(d) shall be deemed to exist only if
such Cause has not been cured by Executive within two weeks after written
notice thereof from the Company to Executive.
(e) A "Change in Control" shall be deemed to have occurred if, at any
time during the thirteen (13) month period after the date of this Agreement
(1) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) (other than an "Affiliate" (as defined in the Exchange Act) of
Shamrock or the Xxxxxxx Entities) becomes the "Beneficial Owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing greater than 50% of the combined voting power
(with respect to the election of directors, or a merger, consolidation or
liquidation of the Company or a sale of all or substantially all of the
business or assets of the Company) of the Company's then outstanding
securities who was not as of the date of this Agreement the Beneficial Owner
of securities of the Company representing greater than 50% of such combined
voting power of the Company's securities outstanding as of the date of this
Agreement; (2) the consummation of a merger or consolidation of the Company
with or into any other corporation, other than (A) a merger or consolidation
which would result in all or substantially all of the Beneficial Owners of
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) greater than 50% of the
combined voting power (with respect to the election of directors, or a merger,
consolidation or liquidation of the Company or a sale of all or substantially
all of the business or assets of the Company) of the securities of the Company
or of such surviving entity outstanding immediately after such merger or
consolidation or (B) a merger, consolidation or distribution effected to
implement a recapitalization or reorganization of the Company (or similar
transaction) which results in no person (other than Shamrock, the Xxxxxxx
Entities or any of its Affiliates) after such transaction, directly or
indirectly, owning more than 40% of the combined voting power (with respect to
the election of directors, or a merger, consolidation or liquidation of the
Company or a sale of all or substantially all of the business or assets of the
Company) of the Company's then outstanding securities; (3) the consummation of
a plan of complete
liquidation of the Company or of an agreement for the sale or disposition by
the Company of all or substantially all of the Company's business or assets to
any person or (4) Shamrock, the Xxxxxxx Entities, or the Trustee exercises
control over the Company, including without limitation (A) causing the
election of any person not currently a director of the Company to the Board or
(B) causing the appointment of any person as an officer of the Company.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(g) "Committee" shall mean the Compensation Committee of the Board,
if one exists and, if not, shall mean the Board.
(h) "Confidential Information" shall have the meaning ascribed to it
in Section 7 below.
(i) "Effective Date" shall mean the date of this Agreement.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(k) "Executive Benefit Plans" shall mean any plans within the meaning
of Sections 4(b) of this Agreement.
(l) "Period" shall mean the thirteen (13) month period commencing on
the date of this Agreement. If the parties hereto agree to any extension of
the Period, the term "Period" shall include all such extensions thereof;
provided, that the Company shall not be obligated to grant any such extension.
(m) "Permanently Disabled" shall mean prevented from performing his
obligations hereunder for a period of 120 consecutive days as a result of his
physical or mental health, as evaluated by sufficient documentation including
doctors' statements.
(n) "Substantial Breach" shall mean (1) a substantial reduction in,
the nature or status of Executive's responsibilities hereunder; provided, that
it shall not be deemed to be a Substantial Breach if Executive's duties are
revised so that he remains an officer but is removed or not reelected as
President or as Chief Operating Officer or as a director of the Company; (2) a
reduction by the Company in the Base Salary of Executive; (3) the failure by
the Company to allow Executive to participate to the full extent in all plans,
programs or benefits in accordance with Sections 4(b) hereof; (4) the failure
by the Company to pay, distribute or grant any amounts of cash, stock or other
compensation to Executive to which he is contractually entitled; or (5) the
failure of the Company to maintain its principal offices during the Period in
Glen Rock, New Jersey or in Atlantic, Bergen, Passaic, Xxxxxx or
Essex counties in New Jersey or Rockland county in New York, provided,
however, that the Company move and maintain its principal offices through the
end of the Period in Glen Rock, New Jersey or in Bergen, Passaic, Xxxxxx or
Essex counties in New Jersey or Rockland county in New York upon the merger or
consolidation with or into another entity. A Substantial Breach shall be
deemed to occur only if such Substantial Breach has not been corrected by the
Company within two weeks of receipt of notice from Executive of the occurrence
of such Substantial Breach, which notice shall specifically set forth the
nature of the Substantial Breach.
2. Employment and Duties.
(a) General. From the date of this Agreement through the end of
the Period, the Company hereby employs Executive, and Executive agrees upon
the terms and conditions herein set forth, to serve as an officer of the
Company and Executive, in such capacity, shall perform duties consistent with
the Letter Agreement and substantially the same as normally performed by
persons in like positions in similar companies and substantially the same as
those performed by Executive immediately prior to the date of this Agreement.
So long as the principal offices of the Company are not located in Bergen,
Passaic, Xxxxxx or Essex counties in New Jersey or Rockland county in New
York, Executive may work one day per week from his home.
(b) No Other Employment. Throughout the time that Executive is
employed by the Company during the Period, Executive shall, except as may from
time to time be otherwise agreed in writing by the Company and unless
prevented for less than 120 consecutive days by ill health, devote his full-
time working hours to his duties hereunder and Executive shall not, directly
or indirectly, render services to any other person or organization for which
he receives compensation (excluding outside board activities for a public
charity, which involve modest time commitments) without the consent of the
Board or otherwise engage in activities which would interfere with the
performance of his duties hereunder; provided, however, that the Executive may
render volunteer services for which he is not compensated so long as such
services do not interfere with the performance of his duties hereunder.
3. Term of Employment. Subject to earlier termination of employment
hereunder pursuant to Sections 5 or 6 of this Agreement, the Company shall
retain Executive during the Period and Executive shall serve in the employ of
the Company for the Period.
4. Compensation and Other Benefits. Subject to the provisions of this
Agreement, the Company shall pay and provide the following compensation and
other benefits to Executive during the Period as compensation for services
rendered hereunder:
(a) Base Salary. The Company shall pay to Executive a base
salary in the amount of one hundred and thirty-five thousand four hundred
seventeen dollars ($135,417) (the "Base Salary") for the Period payable in
accordance with the Company's standard payroll policies. The Company shall be
entitled to deduct or withhold all taxes and charges which the Company may be
required to deduct or withhold therefrom.
(b) Other Executive Benefit Plans. Executive shall be eligible
to participate in all pension and welfare plans and programs of the Company
for executive employees, existing from time to time, including, without
limitation, the following.
(i) All qualified benefit plans and programs (e.g., defined
contribution, supplemental retirement and Section 401(k) plans, long-term
disability and life insurance plans and programs);
(ii) All hospitalization and medical plans and programs; and
(iii) All retirement plans and programs.
Such other executive benefit plans shall be substantially similar to those
plans in effect at the Company immediately prior to the Effective Date.
c) Severance Compensation. Assuming that there is no intervening
voluntary bankruptcy by the Company during the Period without Shamrock's
consent and that the conditions of this Agreement and the Letter Agreement are
satisfied, the Company shall pay to Executive a severance payment, from a
reserve account set aside and controlled by Shamrock, in an amount equal to
one hundred twenty-five thousand dollars ($125,000).
5. Termination of Employment for Cause.
(a) Compensation and Benefits. If, prior to the expiration of
the Period, (i) Executive's employment hereunder is terminated by the Company
for Cause, or (ii) Executive resigns from his employment hereunder other than
under circumstances covered by Section 6 below, Executive shall not be
eligible to receive any compensation or benefits or to participate in any
plans or programs under Section 4 hereof with respect to the Period after the
date of such termination except for the right to receive benefits under any
plan or program, to the extent vested, in accordance with the terms of such
plan or program and except for benefits provided in accordance with customary
practices of the Company at Executive's expense (e.g., hospitalization and
medical insurance).
(b) Date of Termination. The date of termination of Executive's
employment hereunder by the Company under this Section 5 shall be (i)
immediately upon receipt by Executive of written notice of termination for
Cause; provided that the Cause specified in such notice shall not have been
corrected by Executive within two (2) weeks after Executive received notice of
such Cause if Executive had the right pursuant to Section 1(d) to cure such
Cause or (ii) immediately upon receipt by the Company of written notice of
Executive's resignation, except if such resignation is due to a Substantial
Breach.
6. Termination of Employment Other Than For Cause.
(a) Compensation and Benefits. If, prior to the expiration of
the Period, Executive's employment hereunder is terminated by the Company
without Cause or for any reason within thirteen months after a Change in
Control, or if, prior to the expiration of the Period, Executive resigns from
his employment hereunder following a Substantial Breach or for any reason
within thirteen months after a Change in Control, or if, prior to the
expiration of the Period, Executive dies or becomes Permanently Disabled while
employed hereunder, notwithstanding such termination or resignation, through
the end of the Period:
(i) Executive shall be entitled to continue to receive
payments through the expiration of the Period under Section 4(a) above at the
rate of his Base Salary as in effect on the date of termination or
resignation;
(ii) Executive shall be entitled to receive the severance
compensation described in Section 4(c).
(b) Date of Termination. The date of termination's of
Executive's employment by the Company under this Section 6 shall be the date
specified in the written notice of termination to Executive or if no such date
is specified therein, the date on which such notice is given to Executive. The
date of resignation by Executive under this Section 6 as a result of a
Substantial Breach shall be immediately upon receipt by the Company of written
notice of resignation; provided, that the Substantial Breach shall not have
been corrected by the Company during the two (2) week period after such notice
of such Substantial Breach was provided to the Company pursuant to Section
1(n) hereunder. The date of termination of Executive's employment in the event
of his death shall be the date of Executive's death or in the event Executive
becomes Permanently Disabled, 120 days after the date such disability
commenced.
(c) Reduction in Payments. The amount of any payments of
compensation and benefits to Executive under this Section 6 shall be reduced
by the amount, if any, necessary to prevent any part of such payments from
being treated as an "excess parachute payment" (as that term is defined for
purposes of Section 280G(b)(1) of the Code and the related federal tax
regulations); provided, however that such reduction shall apply only if the
reduction will result in payments to Executive under this Section 6 which
have, after consideration of all applicable taxes, a greater after-tax benefit
to Executive than the amount of such payments to Executive under this Section
6 computed without such reduction. The determination of relative benefits
shall be made by the Company on the basis of information supplied by
Executive.
7. Nondisclosure of Confidential Information.
(a) Definition. For purposes of this Agreement "Confidential
Information" means any information or compilation of information, not
generally known, which is proprietary to the Company and relates to the
Company's existing or reasonably foreseeable business. All information which
the Company identifies as being "confidential" or "trade secret" shall be
presumed to be Confidential Information. Confidential Information shall also
include any confidential information of a parent, subsidiary or sister
corporation of the Company and any information disclosed by a third party
under contract with the Company which contract requires such disclosed
information be kept confidential. Confidential Information shall not include
information that is in or enters the public domain other than through a breach
of confidentiality owed to the Company.
(b) Nondisclosure. During the Period and at all times
thereafter, Executive shall hold in strictest of confidence and will never
disclose, furnish, transfer, communicate, make assessable to any person or use
in any way Confidential Information for Executive's own or another's benefit
or permit the same to be used in competition with the Company, nor will
Executive accept any employment which would, by the nature of the position,
inherently involve the use or disclosure by Executive of Confidential
Information.
8. Specific Performance and Injunctive Relief. In addition to any
other relief afforded by law, the Company shall have the right to enforce the
covenants contained in Section 7 hereof by specific performance and by
preliminary, temporary and permanent injunctive relief against Executive and
any other person concerned thereby, it being understood that damages, specific
performance or injunctive relief shall be proper modes of relief and are not
to be considered as alternative remedies. If the Company is successful in any
action for specific performance or injunctive relief the costs incurred by the
Company related thereto, including reasonable attorneys' fees and expenses,
shall be paid by Executive.
9. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any and all oral or written
understanding between the parties hereto.
10. Headings of No Effect. The Section headings contained in this
Agreement are included solely for convenience of reference and shall not in
any way affect the meaning or interpretation of any of the provisions of this
Agreement.
11. Binding Agreement. This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto, any successor to or assigns of the
Company, and Executive's heirs and the personal representative of Executive's
estate. This Agreement replaces Executive's existing Employment Agreement.
12. Severability. If the final determination of a court of competent
jurisdiction declares, after the expiration of the time within which judicial
review (if permitted) of such determination may be perfected, that any term or
provision hereof is invalid or unenforceable, (a) the remaining terms and
provisions hereof shall be unimpaired and (b) the invalid or unenforceable
term or provision shall be deemed replaced by a term or provision that is
valid and enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision.
13. Amendment; Waiver. This Agreement may not be modified, amended or
waived in any manner except with the prior written consent of Shamrock and the
Xxxxxxx Entities and by an instrument in writing signed by both parties
hereto. The waiver by either party hereto of compliance with any provision of
this Agreement by the other party hereto shall not operate or be construed as
a waiver of any other provision of this Agreement or of any subsequent breach
by such party of a provision of this Agreement.
14. Renewal. The Company shall be under no obligation to renew this
Agreement.
15. Governing Law. All matters affecting this Agreement, including the
validity hereof, are to be governed by, interpreted and construed in
accordance with the laws of the State of New Jersey.
16. Notices. Any notice hereunder by either party hereto to the other
shall be given in writing by personal delivery or certified mail, return
receipt requested. If addressed to Executive, the notice shall be delivered or
mailed to Executive at the address specified under Executive's signature
hereto or such other address which Executive has advised the Company to send
notice to, or if addressed to the Company, the notice shall be delivered or
mailed to the Company at its executive offices and to the attention of each
member of the Board of Directors of the Company at their respective business
addresses. A notice shall be deemed given, if by personal delivery, on the
date of such delivery or, if by certified mail, on the date shown on the
applicable return receipt. Copies of all notices shall simultaneously be given
in the same manner to Shamrock Holdings Group, Inc., Xxxxxxx Xxxxxx, Xxxxxxxx,
XX 00000, Attn: Xxxxxxx X. Xxxxxxx, President.
17. Consideration. The parties acknowledge that the restrictions
contained in Section 7 hereof are a reasonable and necessary protection of the
immediate interests of the Company and any violation of these restrictions
would cause substantial injury to the Company and that the Company would not
have entered into this Employment Agreement without receiving the additional
consideration offered by Executive in binding himself to these restrictions.
IN WITNESS WHEREOF, the Company has caused the Agreement to be signed by
its officer pursuant to the authority of its Board, and Executive has executed
this Agreement, as of the day and year first written above.
AMERICAN GAMING & ENTERTAINMENT, LTD.
By: XXXXXXX XXXXXXXX
___________________________________
Name: Xxxxxxx Xxxxxxxx
Title: Compensation Committee Chairman
J. XXXXXXX XXXXXXXXXX
___________________________________
J. Xxxxxxx Xxxxxxxxxx
Address: 00 Xxxxx Xxxx
Xxxx Xxxx, XX 00000
10K Xxxxx final full.doc
