EXHIBIT 10.3
FURTHER AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS FURTHER AMENDED AND RESTATED EMPLOYMENT AGREEMENT, made
and entered into this first day of February, 2001 (the "Agreement"), by and
between HARVEYS CASINO RESORTS, a Nevada corporation, hereinafter referred to as
"Harveys" and/or "Employer," and XXXX X. XXXXXXXXXX, hereinafter referred to as
"Employee," as follows:
W I T N E S S E T H:
WHEREAS, Employee and Employer previously entered into an
Employment Agreement, dated as of February 2, 1999 (the "Original Agreement"),
setting forth the terms and conditions of Employee's employment with Employer
from and after February 2, 1999, the effective time (the "Effective Date") of
the merger (the "Merger") of Harveys Acquisition Corporation, a Nevada
corporation ("Acq Corp"), with and into Harveys pursuant to the terms of the
Agreement and Plan of Merger, dated as of February 1, 1998, between Harveys and
Acq Corp; and
WHEREAS, in connection with the Merger, Harveys and Employee,
together with other members of Harveys management, entered into a Memorandum of
Understanding, dated February 1, 1998 (the "MOU"), which set forth, among other
things, certain terms regarding Employee's employment with Harveys following
consummation of the Merger, including the execution of the Original Agreement;
and
WHEREAS, Employee and Employer entered into an Amended and
Restated Employment Agreement, dated as of April 28, 2000 (the "First Amended
Employment Agreement"), which amended, restated and superceded the Original
Agreement in its entirety; and
1
WHEREAS, Employer and Employee desire to further amend and
restate the First Amended Employment Agreement as set forth herein.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements herein contained, together with other good and valuable
consideration the receipt of which is hereby acknowledged, the parties hereto do
hereby agree that the First Amended Employment Agreement is hereby amended and
restated in its entirety as follows:
I.
DEFINITIONS
1.01. Employee shall at all times mean Xxxx X. XxXxxxxxxx.
1.02. Employer shall at all times mean Harveys Casino Resorts,
a Nevada corporation, and its Successors in Interest together with its
subsidiaries.
1.03. Harveys shall at all times mean Harveys Casino Resorts,
a Nevada corporation, and its Successor in Interest together with its
subsidiaries.
1.04. Successor in Interest shall mean any entity which is the
successor or assign of Harveys, at law or at equity, and shall include without
limitation, any entity into which Harveys is merged or consolidated, or any
entity to which all or substantially all of the assets or businesses of Harveys
is transferred.
1.05. Award Agreement shall mean the Stock Option and
Restricted Stock Agreement entered in by and between Harveys and Employee as of
the Effective Date.
1.06. Deferred Compensation Agreement shall mean the Deferred
Compensation Agreement entered into by and between Harveys and Employee as of
the Effective Date.
2
II.
NATURE OF EMPLOYMENT AND DUTIES OF EMPLOYEE
2.01. In accordance with the terms of the First Amended
Employment Agreement, Employee continued to serve Harveys as Senior Vice
President, Chief Financial Officer and Treasurer/Office of the Chief Executive
Officer of Harveys and, in accordance with the terms of this Agreement, Employee
shall continue to so serve Harveys in such positions. Employee shall at all
times be subject to, observe and carry out such rules, regulations, policies,
directions, and restrictions as Harveys Board of Directors (the "Board") may
from time to time establish for senior executive officers of the Employer.
2.02. Subject to the supervision and control of the Board and
Employer's Chief Executive Officer, Employee shall do and perform all services
and acts necessary or advisable to fulfill the duties and responsibilities of
his position and shall render such services on the terms set forth herein.
Without limiting the generality of the foregoing, Employee shall be responsible
for the Employer's financial plans, policies and relationships with financial
institutions as well as managing the Employer's controller, directing the
Employer's treasury, national purchasing, budgeting, tax and accounting
functions and overseeing the Employer's data processing functions. In addition,
Employee shall have such other executive and managerial powers and duties with
respect to Harveys and its subsidiaries that are consistent with the offices of
Senior Vice President, Chief Financial Officer and Treasurer and as may
reasonably be assigned to him by the Board, including without limitation serving
on the Board of Directors of any subsidiary of Harveys.
2.03. Employee has reviewed and concurs with his
responsibilities and duties as set forth in Section 2.02 above.
3
2.04. During the Term (as defined below), Employee shall
devote substantially all of his productive time, ability and attention to the
business of Employer. In addition, Employee shall not directly or indirectly
render any service of a business, commercial or professional nature, to any
other person or organization, whether for compensation or otherwise, without the
prior written consent of the Board, PROVIDED, that, subject to the provisions of
Article X hereof, Employee shall not be precluded from involvement in charitable
or civic activities or his personal financial investments provided the same do
not materially interfere with his time or attention to the business of Employer,
and PROVIDED, further, that Employee shall not serve as a director of any other
for-profit business that is not an affiliate of Employer.
2.05. Employee agrees that he shall at all times (i) to the
best of his ability and experience conscientiously perform all of the duties and
obligations of his position with the Employer, (ii) use his best efforts to do
and perform all services, acts, or things necessary or advisable to assist in
the management and conduct of the business and otherwise advance the interests
of Employer and (iii) diligently and in the highest good faith carry out the
lawful directives of the Board, PROVIDED, that Employee shall not be obligated
to perform his duties hereunder outside the Stateline, Nevada area, except for
business trips and directors meetings outside said area which arise and result
from the normal conduct of the business of Harveys.
III.
TERM AND GENERAL CONDITIONS OF EMPLOYMENT
3.01. Employer hereby continues the employment of Employee,
and Employee hereby agrees to such continued employment by Harveys for the
period of five (5) years commencing on the Effective Date and terminating on the
fifth anniversary of the Effective Date (as the same may be extended as set
forth below, the "Term"), unless extended by mutual written agreement of the
parties; PROVIDED, that the period of employment shall automatically be
4
extended for successive one (1) year periods if neither party has provided six
(6) months prior written notice to the other of its intention to have this
Agreement lapse at the expiration of the Term; and PROVIDED FURTHER, that the
Term shall be subject to earlier termination in accordance with Articles IV, V
and VI below.
3.02. Notwithstanding anything to the contrary herein, in the
event of any termination of Employee's employment for any or no reason, Employee
and Employer shall nevertheless continue to be bound by the terms and conditions
set forth in Articles IX through XII, in Section 13.08 and, to the extent
provided therein, Section 13.09 below.
3.03. Upon consummation of the Merger, the Prior Agreement was
cancelled and terminated without further obligation of Employer. Upon the
execution of the First Amended Employment Agreement, the Original Agreement was
cancelled and terminated without further obligation of Employer or Employee.
Upon the execution of this Agreement by the parties hereto, the First Amended
Employment Agreement shall be cancelled and terminated without further
obligation of Employer or Employee and shall be superceded in its entirety by
this Agreement.
3.04. Employee hereby acknowledges and agrees that his rights
as set forth herein to receive severance and other compensation and benefits
hereunder shall supersede and replace in its entirety any severance or other
benefits that might otherwise be payable pursuant to Harveys' Change of Control
Plan as in effect on the Effective Date or as the same may be amended from time
to time or under any other severance plan, policy, agreement or arrangement in
effect immediately prior to the Effective Date or at any time during the Term.
Employee further acknowledges that as of the Effective Date, Employee shall no
longer be a participant in or have any rights under the Change of Control Plan
(or under any such other severance plan,
5
policy, agreement or arrangement in effect immediately prior to the Effective
Date or at any time during the Term), regardless of the reasons or circumstances
of his termination of employment. Employee further acknowledges that as of the
Effective Date Employee shall no longer be a participant in or have any rights
under the Company's Long Term Incentive Plan or Supplemental Executive
Retirement Plan.
IV.
TERMINATION OF EMPLOYMENT WITHOUT CAUSE
4.01. Employee's employment may be terminated by Harveys, with
or without "Cause" (as defined in Section 6.01 below), at any time and for any
or no reason. Any such termination without Cause shall be effective only upon
thirty (30) days' prior written notice to Employee (such effective date, for
purposes of this Article IV, the "Termination Date").
4.02. If Employee's termination by Employer shall be without
Cause, provided Employee executes and delivers to Employer a general release of
claims in substantially the form attached hereto as Annex B (the "Release"),
Employee shall be entitled to the following benefits:
(a) Except as provided below, Employee shall be entitled to
receive, as soon as reasonably practicable, but no more than 10
business days, after the Termination Date, a lump sum payment in an
amount equal to the product of (x) the Applicable Multiplier (as
defined below) and (y) the sum of his then Base Salary and then Annual
Target Bonus (each as defined below).
(i) "Applicable Multiplier" shall mean the lesser of (A) 1.5
or, in the event of a termination of Employee's employment by Employer
without Cause following and as a result of a Change in Control (as
defined in the Award Agreement), 2.0 and (B) a fraction, the
denominator of which is 12, and the numerator of which shall be the
number of full plus partial (calculated by the day) months remaining in
the Term following the
6
Termination Date, which numerator shall be increased by the number of
full plus partial (calculated by the day) months during any Post-Term
Restriction Period (as defined below and further described in Annex E)
if an election to have such Post-Term Restriction Period apply to
Employee is made by Employer pursuant to Section 10.01. Under no
circumstances shall the Applicable Multiplier be more than 1.5 if any
payment is made to Employee under clause (B) of the first sentence of
Section 13.09.
(ii) For purposes of this Section 4.02(a), the term "Annual
Target Bonus" shall mean Employee's annual target bonus under the
Annual Bonus Plan (as defined in Section 7.02 below) for each fiscal
year during the Term, which shall be deemed to be 50 percent of
Employee's Base Salary as in effect as of the date the relevant
business plan targets for such fiscal year are established by the
Board.
(iii) For purposes of this Agreement, the "Post-Term
Restriction Period" shall mean that period, if any, following
expiration of the Term during which Employee would be subject to the
restrictions of Section 10.01 as determined under the first paragraph
of Section 10.01, without regard to any limitation of such period by
reason of Section 10.01(a). The Post-Term Restriction Period is further
described in Annex E hereto.
(iv) Notwithstanding the foregoing, in the event that
Employee's Termination Date shall be less than one year prior to the
expiration of the Term and the Applicable Multiplier (determined as
above by including any applicable Post-Term Restriction Period) shall
be less than 1.0, Employee shall not be entitled to receive the lump
sum payment determined under the first sentence of this Section
4.02(a), but shall instead be entitled to receive (A) as soon as
reasonably practicable, but no more than 10 business days, after the
Termination Date, a lump sum payment in an amount equal to the product
7
of (x) the Applicable Multiplier and (y) his then Base Salary and (B)
as applicable, a bonus as determined under Annex E hereto.
(b) Employee shall be entitled to continuation of his Benefits
(as defined below) for that number of months immediately following the
Termination Date equal to the product of (A) the Applicable Multiplier
and (B) 12 (such number of months, the "Section 4.02 Severance
Period"), PROVIDED, that in the event that during such period, pursuant
to applicable law or the terms of the applicable plan, any Benefits may
not be provided pursuant to the terms of the specific plan referenced
herein, Employer shall provide substantially equivalent benefits by
alternate means.
(c) Subject to the provisions of the Award Agreement, Employee
shall vest as of the Termination Date in that portion of the Stock
Award and Stock Option grants (each as defined below) that would
otherwise have vested had Employee remained in Harveys employ for the
duration of the Section 4.02 Severance Period.
(d) Employee shall be entitled to payment of all amounts of
Base Salary and Benefits accrued but unpaid through the Termination
Date.
Except as set forth in this Sections 4.02, 13.08 and 13.09,
all other rights of Employee (and, except as provided in Sections 4.02, 3.02,
13.08 and 13.09, all obligations of the Employer) hereunder shall terminate as
of the Termination Date.
4.03. If, during the Term, Employee's employment shall
terminate by reason of his death or Disability, he or his estate, as applicable,
shall be entitled to (i) all amounts of Base Salary and Benefits accrued but
unpaid through the date of such termination (which shall be the date of death or
the 45th day after the date Employer provides Employee notice of termination for
Disability) and (ii) any death and/or disability benefits that may be due
Employee under any
8
benefit plans in effect from time to time. "Disability" shall mean any physical
or mental disability that prevents Employee from performing one or more of the
essential functions of his position for a period of not less than six (6) months
in any continuous 12-month period. Except as set forth in this Section 4.03 and
Section 13.08, all other rights of Employee (and, except as provided in this
Section 4.03 and Section 3.02 above and Section 13.08, all obligations of the
Employer) hereunder shall terminate as of the date of such termination of
employment.
V.
TERMINATION OF EMPLOYMENT AT EMPLOYEE'S REQUEST
5.01. Employee may, at Employee's sole option and right,
terminate his employment with Employer at any time, with or without Good Reason
(as defined below). Any such termination shall be effective only upon thirty
(30) days' prior written notice to Harveys.
(a) In the event of such termination of employment without
Good Reason, Employee shall be entitled to receive all amounts of Base
Salary and Benefits accrued but unpaid through the date of such
termination.
(b) In the event of any such termination of employment with
Good Reason, Employee shall be entitled to receive the benefits set
forth in Sections 4.02(a)-(d) as if Employee's employment had been
terminated by Employer without Cause, with the "Termination Date" as
used in such sections being the effective date of termination pursuant
to this Section 5.01.
(c) For purposes of this Section 5.01, Employee shall have
"Good Reason" to terminate his employment hereunder if (i) Employer
shall, without Employee's written consent, willfully and materially
breach its obligations under this Agreement, (ii) Employee provides
Employer written notice pursuant hereto stating with specificity the
respects in which Employee believes Employer to have willfully and
materially breached
9
its obligations under this Agreement and (iii) within thirty (30) days
following the date of such notice Employer shall not have cured such
breach.
(d) Except as set forth in this Section 5.01 (and, as
incorporated hereinabove by reference, Section 4.02) and Sections 13.08
and 13.09, all other rights of Employee (and, except as provided in
Section 3.02 above and Sections 13.08 and 13.09, all obligations of the
Employer) hereunder shall terminate as of the date of such termination
of employment.
VI.
TERMINATION OF EMPLOYMENT FOR CAUSE
6.01. Employer may at any time, at its election, by written
notice to Employee stating with specificity the reason for the termination,
terminate Employee's employment for "Cause," which shall be defined as
Employee's:
(a) Gross negligence or willful malfeasance in the performance
of his duties under this Agreement;
(b) Failure to obtain or retain any permits, licenses, or
approvals which may be required by any state or local authorities in
order to permit the Employee to continue his employment as contemplated
by this Agreement;
(c) Conviction of any felony or conviction of a crime
involving moral turpitude;
(d) Dishonesty with respect to Employer (including, without
limitation, fraud) resulting in a breach of duty to Employer involving
Employee's personal gain or profit;
(e) Engaging in any activity that is in violation of the
provisions of Article X of this Agreement, which shall not be cured
following ten days' written notice and a demand to cure such violation;
or
10
(f) Use or imparting of any confidential or proprietary
information of Employer or any subsidiary or affiliate in violation of
any confidentiality or proprietary agreement to which Employee is a
party, including without limitation the provisions of Article IX of
this Agreement; PROVIDED, that in the event such notice is provided
pursuant to Section 6.01(b), Employee shall have a period of thirty
(30) days following the date of such notice in which to cure such
failure, and if Employee shall cure such failure within such period,
Employee's employment hereunder shall be reinstated without prejudice.
6.02. Upon the provision of such notice (or, in the case of
such notice pursuant to Section 6.01(b), upon expiration of the applicable cure
period without cure), Employee's employment shall immediately cease and
terminate for Cause. In the event of such termination of employment, Employee
shall be entitled to receive all amounts of Base Salary and benefits accrued but
unpaid through the date of such termination. Except as set forth in this Section
6.02 and Section 13.08, all other rights of Employee (and, except as provided in
Section 3.02 above and Section 13.08, all obligations of the Employer) hereunder
shall terminate as of the date of such termination of employment.
VII.
COMPENSATION OF EMPLOYEE
7.01. Base Salary - Employee shall receive an annual base
salary ("Base Salary") of Three Hundred Fifty Thousand Dollars ($350,000),
payable in at least monthly installments, less all applicable Federal, state and
local taxes, Social Security and any other government mandated deductions.
Employee's Base Salary shall be reviewed by the Board no less frequently than
annually relative to specified performance-based criteria to be determined by
the Board.
11
7.02. Annual Bonus - Following the Effective Time, Employee
shall be eligible to participate in Employer's Management Incentive Plan ("MIP")
or, at the election of Employer, in a new or equivalent annual bonus plan
established by Employer having a similar structure to the MIP providing for
payment of an annual bonus (the "Annual Bonus Plan"), but in either case with
thresholds and triggering events for payment based on the achievement of Harveys
annual budget and other business plan targets to be determined by the Board
following the Effective Date. Employee's maximum annual bonus under the Annual
Bonus Plan shall not be less than $165,000.
7.03. Stock Grants and Stock Option - On the Effective Date,
Employee received (i) a restricted stock award (the "Stock Award") consisting of
180 shares of the Class A common stock, par value $.01 per share, of Harveys
("Class A Common Stock") and 18,000 shares of the Class B common stock, par
value $.01 per share, of Harveys ("Class B Common Stock") and (ii) a stock
option (the "Stock Option") to purchase 240 additional shares of Class A Common
Stock and 24,000 additional shares of Class B Common Stock, each at a price of
$20.06 per share. The Stock Awards and Stock Options shall each be subject in
all respects to the terms of Harveys 1999 Omnibus Incentive Plan, a copy of
which is attached hereto as Annex A, as the same may be amended from time to
time (the "Omnibus Plan"), the Award Agreement and that certain Stockholders
Agreement, as the same may be amended from time to time, among Harveys, Colony
HCR Voteco, LLC, a Nevada limited liability company, Colony Investors III, L.P.,
a Delaware limited partnership, and the security holders of the Company
(including Employee) as identified from time to time on Schedule A thereto, a
copy of which is attached hereto as Annex C.
12
VIII.
BENEFITS AND PERQUISITES
8.01 During the Term, Employee shall be entitled to the
benefits and perquisites as set forth in this Article VIII (collectively,
"Benefits"). 8.01. Harveys 401(k) Plan - During the Term the Employee shall be
allowed to participate in Harveys 401(k) Plan, or shall be provided with
benefits that are substantially identical to the benefits provided under such
plan as of the date hereof.
8.02. Vacation - Employee shall be entitled to five weeks of
paid vacation per year. Employee shall be afforded the usual holidays as
Employer may from time to time recognize.
8.03. Complimentary Privileges - Employee shall be entitled to
such Level I complimentary privileges as are afforded generally to senior
executives of Employer from time to time pursuant to policies adopted by the
Board.
8.04. Employer shall provide Employee with an automobile in
accordance with the Class I category of Employer's Standard Automobile Policy
and Procedures, as from time to time amended.
8.05. Disability - Employee shall also be entitled to short
term disability coverage and long term disability coverage under plans as in
effect from time to time as implemented by Employer.
8.06. Medical, Vision and Dental Insurance - Employer shall
provide medical, vision and dental benefits to Employee, his spouse and
dependents in accordance with Employer's Class One coverage under the Executive
Medical Plan, as amended from time to time.
13
8.07. Deferred Compensation Program - Employee shall be
allowed to participate in the Deferred Compensation Program as is in effect from
time to time.
8.08. Life Insurance - During the Term, Employer shall furnish
Employee with Group Term Life Insurance and Accidental Death/Dismemberment
Insurance, in each case subject to the terms of such plans as in effect from
time to time.
8.09. Additional Employee Benefit Plans - Employee shall be
entitled to participate in all additional employee benefits plans which may, in
the future, be made generally available to Employer's most senior management
employees, PROVIDED, that separate employee benefits plans may be adopted for
lower-ranking management employees as to which Employer may determine Employee
ineligible for participation, and PROVIDED, FURTHER, that Employee shall not be
entitled to participate in (i) Employer's Supplemental Executive Retirement Plan
or any other supplemental retirement plan or arrangement, (ii) Employer's Long
Term Incentive Plan or (iii) any severance plan, policy or arrangement of
Employer. This Section 8.09 shall not be construed to affect Employee's
entitlement to severance or bonus amounts as provided in this Agreement or
hereafter.
8.10. Reimbursement of Expenses - Employer shall reimburse
Employee for any expenses reasonably and necessarily incurred by him in
furtherance of his duties hereunder, including, travel, meals, and
accommodations, upon submission by him of vouchers or receipts and in compliance
with such rules and policies relating thereto as Employer may from time to time
adopt.
IX.
PROTECTION OF CONFIDENTIAL INFORMATION
Employee acknowledges that during the course of his employment
with the Employer, its subsidiaries and affiliates, he has been and will be
exposed to documents and other
14
information regarding the confidential affairs of the Employer, its subsidiaries
and affiliates, including, without limitation, Colony Capital, Inc, its
employees, owners and affiliates, including without limitation such information
about their past, present and future financial condition, the markets for their
products, key personnel, past, present or future actual or threatened
litigation, trade secrets, current and prospective customer lists, operational
methods, acquisition plans (including without limitation potential acquisition
targets), financing sources, prospects, plans for future development and other
business affairs and information about the Employer and its subsidiaries and
affiliates, including, without limitation, Colony Capital, Inc., its employees,
owners and affiliates, not readily available to the public (the "Confidential
Information"). Employee further acknowledges that the services to be performed
under this Agreement are of a special, unique, unusual, extraordinary and
intellectual character. In recognition of the foregoing, the Employee covenants
and agrees as follows:
9.01. At no time shall Employee ever divulge, disclose, or
otherwise use any Confidential Information, unless and until such information is
readily available in the public domain by reason other than Employee's
unauthorized disclosure or use thereof, unless such disclosure or use is made in
good faith and solely in furtherance of Employee's duties hereunder or expressly
authorized by the Board in writing in advance of such disclosure or use.
9.02. Upon the termination of Employee's employment at any
time and for any or no reason, or at any other time the Board may so direct,
Employee shall promptly deliver to the Employer's offices in Stateline, Nevada
all of the property and equipment of the Employer and its subsidiaries
(including any automobiles, cell phones, pagers, credit cards, personal
computers, etc.) and any and all documents, records, and files, including any
notes, memoranda, customer lists, reports or any and all other documents,
including any copies thereof, whether in
15
hard copy form or on a computer disk or hard drive, which relate to the
Employer, its subsidiaries, affiliates, successors or assigns, and/or their
respective past and present officers, directors, employees or consultants
(collectively, the "Employer Property, Records and Files"); it being expressly
understood that, upon termination of Employee's employment, Employee shall not
be authorized to retain any of the Employer Property, Records and Files, except
to the extent expressly so authorized in writing by the Board.
X.
NONCOMPETITION AND OTHER MATTERS
10.01. During the Term and for the one year period following
the date of termination of Employee's employment at any time and for any or no
reason (PROVIDED, that such period shall be six months in the event Employee's
employment terminates upon expiration of the Term), Employee shall not at any
time in any city, town, county, parish, other municipality in any state of the
United States or Native American territory (the names of each such city, town,
county, parish, other municipality or Native American territory, including,
without limitation, the name of each county in the State of Nevada being
expressly incorporated by reference herein), or any other place in the world,
where the Employer, or its subsidiaries, affiliates, successors, or assigns,
engages in owning, operating, managing and/or developing land-based or riverboat
casinos or hotels associated or materially competitive with casinos, or any
other business engaged in from time to time by the Employer or its subsidiaries,
affiliates, successors or assigns in which Employee has had significant
authority and responsibility (the "Business"), directly or indirectly, (i)
engage in a competing business for Employee's own account; (ii) enter the employ
of, or render any consulting services to, any entity that competes with the
Employer, or its subsidiaries, affiliates, successors, or assigns, in the
Business; or (iii) become interested in any such entity in any capacity,
including, without limitation, as an individual, partner, shareholder,
16
officer, director, principal, agent, trustee or consultant; PROVIDED, HOWEVER,
Employee may (A) own, directly or indirectly, solely as a passive investment,
securities of any entity traded on any national securities exchange or market if
Employee is not a controlling person of, or a member of a group which controls,
such entity and does not, directly or indirectly, own 5% or more of any class of
securities of such entity and (B) subject to the first sentence of Section 2.04
above, make passive investments in hospitality enterprises not materially
competitive with gaming and/or enterprises which are principally bar/restaurant
enterprises containing no more than 50 gaming positions, PROVIDED, that such
investments shall not materially interfere with the performance of Employee's
duties hereunder.
(a) Notwithstanding the foregoing, if (i) Employee's
employment is terminated by Employer other than for Cause or by
Employee with Good Reason and (ii) the effective date of such
termination as determined hereunder occurs within the one year period
prior to the expiration date of the Term, the restrictions set forth in
this Section 10.01 shall expire upon expiration of the Term unless
Employer provides written notice to Employee not later than two days
after such effective date that it wishes the restrictions of this
Section 10.01 to apply during the Post-Term Restriction Period (as
defined in Section 4.02 above) and pays Employee the severance
compensation provided for under Section 4.02(a) and provides the
benefits provided for under Section 4.02(b).
(b) If Employee's employment is terminated for any other
reason or under any other circumstances, the provisions of this Section
10.01 shall be effective without regard to Section 10.01(a).
10.02. During the Term and for the two year period immediately
following the date of termination of Employee's employment at any time and for
any or no reason, Employee
17
shall not at any time, directly or indirectly, solicit or induce any officer,
director, employee, agent or consultant of the Employer or any of its
successors, assigns, subsidiaries or, to the best of Employee's knowledge,
affiliates, to terminate his, her or its employment or other relationship with
the Employer or its successors, assigns, subsidiaries or, to the best of
Employee's knowledge, affiliates, for the purpose of associating with any
competitor of the Employer or its successors, assigns, subsidiaries or, to the
best of Employee's knowledge, affiliates, or otherwise encourage any such person
or entity to leave or sever his, her or its employment or other relationship
with the Employer or its successors, assigns, subsidiaries or, to the best of
Employee's knowledge, affiliates, for any other reason.
10.03. During the Term and for the two year period immediately
following the date of termination of Employee's employment at any time and for
any or no reason, Employee shall not at any time, directly or indirectly,
solicit or induce (i) any customers or clients of Employer or its successors,
assigns, subsidiaries or, to the best of Employee's knowledge, affiliates, or
(ii) any vendors, suppliers or consultants then under contract to the Employer
or its successors, assigns, subsidiaries or, to the best of Employee's
knowledge, affiliates, to terminate his, her or its relationship with the
Employer or its successors, assigns, subsidiaries or, to the best of Employee's
knowledge, affiliates, for the purpose of associating with any competitor of the
Employer or its successors, assigns, subsidiaries or, to the best of Employee's
knowledge, affiliates, or otherwise encourage such customers or clients, or
vendors, suppliers or consultants then under contract, to terminate his, her or
its relationship with the Employer or its successors, assigns, subsidiaries or,
to the best of Employee's knowledge, affiliates, for any other reason.
10.04. During the Term and thereafter following any
termination or other expiration of the Term or other termination of Employee's
employment, Employee shall not,
18
publicly or privately, disparage or otherwise make any derogatory statement
(whether written or oral) in respect of Employer or any of its subsidiaries or
affiliates, including, without limitation, Colony Capital, Inc., its employees,
owners and affiliates, or the conduct of any of their respective business or
professional activities, except to the extent required (i) by an order of a
court having jurisdiction or under subpoena from an appropriate government
agency, in which event, Executive shall use his best efforts to consult with the
Board prior to responding to any such order or subpoena and (ii) to litigate any
claim against Employer for failure to pay any amount due to Employee under the
terms of this Agreement, the Award Agreement or the Deferred Compensation
Agreement. In the event that, following any termination of his employment,
Employee shall have breached or breaches his obligations under this Section
10.04, Employee shall thereupon forfeit any and all rights he otherwise may have
to any subsequent payment or benefit pursuant to Article IV or V hereof.
XI.
RIGHTS AND REMEDIES UPON BREACH
If Employee breaches any of the provisions of Articles IX or X
above (the "Restrictive Covenants"), the Employer and its subsidiaries,
affiliates, successors or assigns shall have the rights and remedies set forth
below in this Article XI, each of which shall be independent of the others and
severally enforceable, and each of which shall be in addition to, and not in
lieu of, any other rights or remedies available to the Employer or its
subsidiaries, affiliates, successors or assigns at law or in equity.
11.01. The right and remedy to have the Restrictive Covenants
specifically enforced by any court of competent jurisdiction by injunctive
decree or otherwise, it being agreed that any breach of the Restrictive
Covenants would cause irreparable injury to the
19
Employer or its subsidiaries, affiliates, successors or assigns and that money
damages would not provide an adequate remedy to the Employer or its
subsidiaries, affiliates, successors or assigns.
11.02. Employee acknowledges and agrees that the Restrictive
Covenants are reasonable and valid in geographic and temporal scope and in all
other respects. If any court determines that any of the Restrictive Covenants,
or any part thereof, is invalid or unenforceable the remainder of the
Restrictive Covenants shall not thereby be affected and shall be given full
force and effect without regard to the invalid portions.
11.03. If any court determines that any of the Restrictive
Covenants, or any part thereof, is unenforceable because of the duration or
scope of such provision. such court shall have the power to reduce the duration
or scope of such provision, as the case may be (it being the intent of the
parties that any such reduction be limited to the minimum extent necessary, to
render such provision enforceable), and, in its reduced form, such provision
shall then be enforceable.
11.04. Employee intends to and hereby confers jurisdiction to
enforce the Restrictive Covenants upon the courts of any jurisdiction within the
geographic scope of such covenants. If the courts of any one or more of such
jurisdictions hold the Restrictive Covenants unenforceable by reason of the
breadth of such scope or otherwise, it is the intention of Employee that such
determination not bar or in any way affect the right of the Employer or its
subsidiaries, affiliates, successors or assigns to the relief provided herein in
the courts of any other jurisdiction within the geographic scope of such
covenants, as to breaches of such covenants in such other respective
jurisdictions, such covenants as they relate to each jurisdiction being, for
this purpose, severable into diverse and independent covenants.
20
XII.
ARBITRATION
Except as necessary for the Employer and its subsidiaries,
affiliates, successors or assigns or Employee to specifically enforce or enjoin
a breach of this Agreement (to the extent such remedies are otherwise
available), the parties agree that any and all disputes that may arise in
connection with, arising out of or relating to this Agreement, or any dispute
that relates in any way, in whole or in part, to Employee's employment with the
Employer or any subsidiary, the termination of that employment or any other
dispute by and between the parties or their subsidiaries, affiliates, successors
or assigns, shall be submitted to binding arbitration in Las Vegas, Nevada
according to the National Employment Dispute Resolution Rules and procedures of
the American Arbitration Association. The parties agree that the prevailing
party in any such dispute shall be entitled to reasonable attorneys' fees,
costs. and necessary disbursements in addition to any other relief to which be
or it may be entitled. This arbitration obligation extends to any and all claims
that may arise by and between the parties or their subsidiaries, affiliates,
successors or assigns, and expressly extends to, without limitation, claims or
causes of action for wrongful termination, impairment of ability to compete in
the open labor market. breach of an express or implied contract, breach of the
covenant of good faith and fair dealing. breach of fiduciary duty, fraud,
misrepresentation, defamation, slander, infliction of emotional distress,
disability, loss of future earnings, and claims under the Nevada constitution,
the United States Constitution, and applicable state and federal fair employment
laws, federal and state equal employment opportunity laws, and federal and state
labor statutes and regulations, including, but not limited to, the Civil Rights
Act of 1964, as amended, the Fair Labor Standards Act, as amended, the Americans
With Disabilities Act of 1990, as amended, the Rehabilitation Act of
21
1973, as amended, the Employee Retirement Income Security Act of 1974, as
amended, the Age Discrimination in Employment Act of 1967, as amended, and any
other state or federal law.
XIII.
MISCELLANEOUS
13.01. If any action to specifically enforce or enjoin a
breach of this Agreement is necessary, the prevailing party shall be entitled to
reasonable attorneys' fees, costs, and necessary disbursements in addition to
any other relief to which he or it may be entitled.
13.02. This Agreement shall be construed and governed by the
laws of the State of Nevada, without giving effect to conflicts of laws
principles thereof which might refer such interpretations to the laws of a
different state of jurisdiction.
13.03. This Agreement, and all of the terms and conditions
hereof, shall bind the Employer and its successors and assigns and shall bind
the Employee and his heirs, executors and administrators. No transfer or
assignment of this Agreement shall release Employer from any obligation to
Employee hereunder. Neither this Agreement, nor any of Employer's rights or
obligations hereunder, may be assigned or otherwise subject to hypothecation by
Employee. Employer may assign the rights and obligations of Employer hereunder,
in whole or in part, to any of Employer's subsidiaries, affiliates or parent
corporations, or to any other successor or assign in connection with the sale of
all or substantially all of Harveys' assets or stock or in connection with any
merger, acquisition and/or reorganization. In the event of the death of
Employee, any amounts accrued and payable hereunder that, as of the date of
death, have not been paid to Employee shall be paid on behalf of Employee to
Employee's estate at the times specified and otherwise in accordance with the
provisions of this Agreement.
13.04. Notices - All notices and other communications under
this Agreement shall be in writing and shall be given by first class mail,
certified or registered with return receipt
22
requested, or by a nationally recognized overnight delivery service to the
respective parties named below:
Employee:
Xxxx X. XxXxxxxxxx
000 Xxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxx
Xxxxxxxxx, Xxxxxx 00000
Facsimile: 000-000-0000
WITH A COPY TO:
Xxxxxxx Xxxxxx
Xxxxx, Harrison, Harvey, Branzburg & Xxxxxx LLP
000 X. Xxxxx Xx.
Xxxxxxxxxxxx, XX 00000
Facsimile: 215-568-6603
Employer:
HARVEYS CASINO RESORTS
Attn: Corporate Secretary
Highway 50 and Xxxxxxxxx Xxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxxxx, XX 00000
Facsimile: 000-000-0000
WITH A COPY TO:
Xxxx Xxxxxxxx
Colony Capital, Inc.
Suite 1200
1999 Avenue of the Stars
Xxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
AND TO:
Xxxxxxx X. Xxxxxxxxx
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
23
13.05. Nothing contained in this Agreement shall be construed
to require the commencement of any act contrary to law, and when there is any
conflict between any provision of this Agreement and any statute, law,
ordinance, or regulation, contrary to which the parties have no legal right to
contract, then the latter shall prevail; but in such an event, the provisions of
this Agreement so affected shall be curtailed and limited only to the extent
necessary to bring it within the legal requirements.
13.06. The several rights and remedies provided for in this
Agreement shall be construed as being cumulative, and no one of them shall be
deemed to be exclusive of the others or of any right or remedy allowed by law.
No waiver by Employer or Employee of any failure by Employee or Employer,
respectively, to keep or perform any provision of this Agreement shall be deemed
to be a waiver of any preceding or succeeding breach of the same or other
provision.
13.07. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties heretowith respect to the
employment of the Employee by the Employer (including, without limitation, First
Amended Employment Agreement, the Original Agreement, the Prior Agreement,
Harveys Change in Control Plan and, insofar as it relates to the subject matter
hereof, but except as provided in Section 13.08, the MOU) and, together with all
other plans, agreements and other documents specifically referenced herein,
contains all of the covenants, conditions and agreements between the parties
with respect to such employment. Annex F hereto sets forth a list of payments to
Employee pursuant to the MOU, and Employee hereby acknowledges receipt of all
such payments. Employee also acknowledges receipt of payment of the retention
bonus under Section 7.04 of the First Amended Employment Agreement. Each party
to this Agreement acknowledges that no representations, inducements,
24
promises or other agreements, oral or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein, and that no
other agreement, statement or promise not contained in this Agreement shall be
valid or binding. Any addendum to or modification of this Agreement shall be
effective only if it is in writing and signed by the parties to be charged.
13.08. To the extent applicable, Employee shall be entitled to
receive a gross-up payment with respect to payments made hereunder (including
under agreements referenced herein) and under the MOU to account for the payment
of Internal Revenue Code Section 4999 excise taxes as well as taxes imposed on
such gross up payments to the extent such excise taxes (and related taxes
imposed on any gross up payments) are imposed in connection with and as a result
of the Merger, as determined pursuant to the procedures set forth in Annex D,
PROVIDED, that Employee shall reasonably cooperate with Employer in structuring
such payments and taking such other actions to limit the extent to which such
payments may be subject to such excise tax, provided that such restructuring
does not cause Employee to suffer additional costs or other adverse
consequences. Employee shall not be entitled to any payments pursuant to this
Section 13.08 as a result of any transaction occurring after the Merger.
Notwithstanding anything contained to the contrary contained herein, the
provisions of this Section 13.08 and Annex D hereto shall survive the expiration
or termination of this Agreement for any or no reason.
13.09. If Employee's employment with the Company is terminated
by the Company without Cause either (i) as a result of a Change in Control (as
defined in the Award Agreement) or (ii) within the 12 month period immediately
preceding a Change in Control (or such longer period, not to exceed 18 months
prior to such Change in Control, during which
25
significant discussions or other material action regarding such Change in
Control occurred) at the request, directly or indirectly, of a third party who
has taken steps reasonably calculated to effect a Change in Control or otherwise
in connection with, or in anticipation of a Change in Control, (A) Employee
shall be entitled to receive at the effective date of such termination (or, if
payable in respect of clause (ii), within ten business days following such
Change in Control), a lump sum payout at maximum of the bonus otherwise payable
to Employee with respect to the then current fiscal year under the Annual Bonus
Plan, such amount pro rated through the effective date of such termination of
employment and (B) if such termination occurs under the circumstances described
in clause (ii) Employee shall be entitled to receive within ten business days
following such Change in Control a lump sum payment equal to the excess of (x)
the lump sum amount that would have been paid to Employee pursuant to Section
4.02(a) had Clause (A) of the definition of Applicable Multiplier read "2.0" in
lieu of "1.5" over (y) the lump sum amount actually paid to Employee pursuant to
Section 4.02(a). The amounts provided for in the immediately preceding sentence
shall also be paid if Employee's employment with the Company is terminated with
Good Reason if the grounds constituting Good Reason occur as the result of a
Change in Control or within the stated time frame at the request, directly or
indirectly, of such a third party or otherwise in connection with, or in
anticipation of a Change in Control. If (x) no payment is made pursuant to
either of the two immediately preceding sentences, (y) following a Change in
Control and prior to the effective date of termination of Employee's employment
the Annual Bonus Plan is terminated or amendments are made that materially
adversely affect Employee and (z) Employee's employment is not terminated prior
to the end of the fiscal year in which such termination or amendments occur,
then, in lieu of any other amounts payable to Employee under the Annual Bonus
Plan with respect to such fiscal year, Employee shall receive
26
a lump sum payout at maximum within sixty (60) days following the termination of
the Annual Bonus Plan or the fiscal year during which any such material
amendments were made. The provisions of this Section 13.09 shall survive the
expiration of the Term, but only to the extent necessary to determine whether a
Change in Control occurs within the 12 to 18 month period described in clause
(ii) of the first sentence of this Section 13.09.
13.10. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
13.11. Unless expressly provided herein or therein, the
expiration of the Term shall not alter or affect any rights or obligations of
Employer or Employee under any other agreement or plan including, without
limitation, the Award Agreement, the Omnibus Plan, the Deferred Compensation
Agreement and, to the extent provided under Section 7.02 above, the Annual Bonus
Plan.
27
13.12. This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall be an
original but all such counterparts together shall constitute one and the same
instrument.
DATED this first day of February, 2001.
EMPLOYEE:
/s/ XXXX X. XXXXXXXXXX
--------------------------------------
XXXX X. XXXXXXXXXX
EMPLOYER:
HARVEYS CASINO RESORTS
By: /s/ XXXX XXXXXXX
-----------------------------------
Name: Xxxx Xxxxxxx
Its: Executive Vice President
28
