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Exhibit 10.178
January 8, 1999
Xxxxxxx X. Xxxxxxx, President and Chief Operating Officer
0000 Xxxxxx Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
RE: Employment Agreement ("Employment Agreement"), dated as of December 1, 1998,
between Capital Gaming International, Inc. (the "Company"), and Xxxxxxx X.
Xxxxxxx ("Employee")
Dear Xx. Xxxxxxx:
This letter agreement ("Letter Agreement") is made and effective as of
January 1, 1999 and memorializes the supplementary agreements reached between
the Company and Employee with respect to the Employment Agreement. All terms not
otherwise defined herein shall have the meaning ascribed to such terms in the
Employment Agreement.
1. Location of Services to be Performed.
The Company acknowledges that Employee currently resides and works in
Las Vegas, NV. The Company agrees that Employee shall not be required as
a condition of his continued employment to relocate from the Las Vegas,
NV area or to regularly report to an office of the Company on a daily
basis which is located outside such area as a condition to continued
employment.
2. Senior Secured Notes.
Section 6.4 of the Company's First Amended and Modified Plan of
Reorganization provides that key officers would receive a confirmation
payment which included New Secured Notes. The Company and Employee
hereby mutually agree that the Company shall forthwith cause U.S. Bank
Trust National Association as Indenture Trustee to issue $125,000 in New
Secured Notes in the name of Employee as an incentive for continued
employment with the Company ("Employee Notes"), to be held in escrow and
distributed as follows:
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Xxxxxxx Xxxxxxx
Page 2.
a. The Employee Notes will be forwarded to Xxxxxxx X. Xxxxxx, c/o Southmark
Corporation, 0000 XXX Xxxxxxx, Xxxxx 000, Xxxxxx, XX 00000 who will hold
them in escrow and shall act as Escrow Agent ("Escrow Agent") pursuant
to this Letter Agreement. The Escrow Agent shall not be liable for any
action taken or omitted by him in good faith and believed by him to be
authorized hereby or within the rights or powers conferred upon him
hereunder, or in accordance with advice of counsel of his choosing, and
shall not be liable for any mistake of fact or error of judgment.
b. Employee shall not be entitled to physical distribution of the Employee
Notes or be vested as to principal until May 15, 2000 at which time the
Escrow Agent shall deliver the Employee Notes to Employee, or as
directed by Employee in writing, together with any payments of principal
which the Company has paid with respect to such Employee Notes. Any such
payments of principal (if any) shall be maintained in a segregated,
interest bearing account. If Employee is terminated prior to May 15,
2000 for Cause, or if Employee has voluntarily left the employ of the
Company prior to May 15, 2000 other than for Good Reason (each a
"Triggering Event"), the Employee will be deemed to have forfeited his
rights to receive the Employee Notes and any principal or future
interest payments. Upon two (2) weeks written notice to Employee after a
Triggering Event, Escrow Agent shall deliver the Employee Notes and all
other cash in escrow to the Company.
c. Any and all past and future interest payments on the Employee Notes will
be deemed earned by Employee as such interest payments are made
generally by the Company (November 15 and May 15 of each year commencing
November 15, 1997) and the Company will instruct U.S. Bank Trust
National Association as Indenture Trustee to forthwith make such
distribution of interest directly to Employee with respect to the
November 15, 1997, May 15, 1998 and November 15, 1998 interest payments.
d. In exchange for the agreements contained herein, Employee hereby
releases and forever discharges the Company for any claim to a
distribution of New Secured Notes pursuant to Section 6.4 of the First
Amended and Modified Plan of Reorganization.
3. New Common Stock.
Section 6.4 of the Company's First Amended and Modified Plan of
Reorganization provides that the Company shall distribute to key officers a
total of 10.0% (or 200,000) shares) of the issued and outstanding New Common
Stock of the Company (the "Key Officer Distribution") to vest as follows:
3.34% of the issued and outstanding shares of New Common Stock on the
effective date (May 29, 1997), and 3.33% of the then issued and outstanding
shares of New Common Stock on each of the first and second year
anniversaries of the effective date. The Company hereby agrees that
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Xxxxxxx Xxxxxxx
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Employee, shall be entitled to receive 50% of the Key Officer Distribution
such that Employee shall receive forthwith 66,667 shares of the issued and
outstanding shares of New Common Stock (representing the May 29, 1997 and
May 29, 1998 vested shares), with the remaining 33,333 shares of the issued
and outstanding shares of New Common Stock to be distributed to Employee on
May 29, 1999.
4. This Letter Agreement may not be modified or amended in any respect except
by an instrument in writing signed by the party against whom such
modification or amendment is sought to be enforced.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Chairman
ACCEPTED AND AGREED
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Escrow Agent
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
