EXHIBIT 10.2
XXXXXXX XXXXX
EMPLOYMENT AGREEMENT
This Employment Agreement ("Employment Agreement") is made and entered into
this ____ day of June, 2002 by and between JCC Holding Company, a Delaware
corporation (hereinafter, the "Company") and Xxxxxxx Xxxxx (hereinafter,
"Executive").
BACKGROUND
Executive currently serves as the President of the Company's following
subsidiaries: JCC Xxxxxx Development, L.L.C., a Louisiana limited liability
company ("Xxxxxx LLC"); JCC Canal Development, L.L.C., a Louisiana limited
liability company ("Canal LLC") and JCC Development Company, L.C.C., a Louisiana
limited liability company ("Development LLC") and as Vice President of
Development and Construction for the Company. The Company desires to retain
Executive as the President of these Company subsidiaries, in accordance with the
terms of this Employment Agreement. Executive is willing to serve as such in
accordance with the terms and conditions of this Employment Agreement.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Effective Date. This Employment Agreement is effective April 1, 2002
(the "Effective Date").
2. Employment. Executive is hereby employed as the President of Xxxxxx LLC,
the President of Canal LLC, the President of Development LLC and as Vice
President of Development and Construction for the Company, during the Employment
Period.
3. Employment Period. Executive's employment shall be for a term (the
"Employment Period") beginning on the Effective Date and ending March 31, 2003,
or the earlier occurrence of any of the following:
(a) Executive resigns; or
(b) The Company terminates Executive's service under Section 6 of
this Employment Agreement.
4. Extent of Service. During the Employment Period, Executive agrees to
devote his business time, attention, skill and efforts exclusively to the
faithful performance of his duties hereunder; provided, however, that it shall
not be a violation of this Employment Agreement for Executive to (i) devote
reasonable periods of time to charitable and community activities and, with the
approval of the Company, industry or professional activities, and/or (ii) manage
personal business interests and investments, so long as such activities do not
materially interfere
with the performance of Executive's responsibilities under this Employment
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been conducted by Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of activities similar
in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of Executive's
responsibilities hereunder.
5. Compensation. Salary for Executive's services for the period from
April 1, 2002 until March 31, 2003, shall be comprised of the following:
(a) Stock Options
(1) Grant. In consideration for the Executive's services
hereunder, the Company shall grant the Executive an option to purchase
215,250 shares of the Company's authorized but unissued $0.01 par
value common stock on the terms and conditions set forth in this
section.
(2) Price. Exercise price shall be the closing price of the
Company's common stock on the date of grant, May 31, 2002, $5.05.
(3) Stock Option Value. The aggregate value of the grant of these
options shall be determined by the Black-Scholes Pricing Model (the
"Stock Option Value").
The Black-Scholes Pricing Model is as follows:
C = STOCK OPTION VALUE = SN(D(1)) - KE(-RT)N(D(2))
S = the Company's stock price on the date of grant,
N = Cumulative standard normal distribution,
d1 = ( ln ( S/K + ( r + (s(2)/2) ) t) / (sv-t), d(2) = d(1) -s v-t,
K = option strike price (as determined in section (2) above),
e = exponential term (2.7183),
r = risk free rate,
t = time until the option expire,
s = standard deviation of stock returns (volatility of the
underlying stock price),
ln = natural logarithm.
The "Term" of the options shall be 5 years from the date of grant.
The "Type" of options shall be "American."
The "Standard Deviation" calculation shall be based upon the
Standard & Poor's 500 Index Five Year Monthly Historical Price
Volatility figure, until such time as the Company's stock has a
5-year performance history upon which to base this calculation.
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(4) When Exercisable.
(A) The stock options granted may be exercised only as
follows:
(i) Half of the stock options granted may be exercised
on October 1, 2002, six months after the beginning of the
employment year in which the options were granted, whether
or not the Executive's employment has been terminated during
the Employment Period; and
(ii) The remaining half of the stock options granted
may be exercised on April 1, 2003, twelve months after the
beginning of the employment year in which the options were
granted, whether or not the Executive's employment has been
terminated during the Employment Period.
(B) To the extent not exercised, the stock options granted
shall accumulate and be exercised by the Executive, in whole or
in part, in any subsequent period, but not later than 5 years
from the date the options are granted.
(5) Transfer. The options shall not be transferable by the Executive
otherwise than by will and the laws of descent and distribution. During the
lifetime of the Executive, the option shall be exercised only by the
Executive.
(6) Terms of Payment. Payment for shares of stock purchased on
exercise of this option shall be made in full in cash.
(7) Adjustment of Number of Shares and Price. The number of shares of
stock subject to the option and the option price per share shall be
appropriately adjusted for any increase or decrease in the number of
outstanding shares of common stock of the Company resulting from payment of
a stock dividend on the common stock, a subdivision or combination of
shares of the common stock, or a reclassification of the common stock.
(8) Forfeiture. Shares purchased under this option shall be
forfeited,and to the extent not exercised, the option shall in no event be
exercisable, if the Executive is not found suitable by the Louisiana Gaming
Control Board (or any other gaming regulatory agency with proper
jurisdiction) to serve as an officer or director of the Company, Xxxxxx
LLC, Canal LLC or Development LLC or not suitable to own an interest in the
Company.
(b) Cash Compensation. For the period from April 1, 2001 until March 31,
2003, Executive shall receive additional compensation in the amount of $411,850
less the Stock Option Value ($130,521), to be paid pro rata over the Employment
Period on a monthly
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basis. Additionally, Executive shall receive on or before the Effective Date the
unpaid balance of compensation under the Employment Agreement, dated March 27,
2002 of $134,348.
(c) Expenses. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses
incurred in connection with the performance of his duties in accordance
with the Company's regular reimbursement procedures in effect from time to
time.
(d) Insurance Benefits. During the Employment Period, Executive and
Executive's family shall be eligible for participation in, and shall
receive all benefits under, the healthcare benefit plans, practices,
policies and programs provided by the Company and its subsidiaries from
time to time (including, without limitation, medical, prescription, and
dental) to the extent applicable generally to peer executives.
6. Termination of Employment.
(a) Death or Disability. Executive's employment shall terminate
automatically upon Executive's death during the Employment Period. If the
Company determines in good faith that the Disability of Executive has occurred
during the Employment Period, it may give to Executive written notice in
accordance with Section 7(f) of this Employment Agreement of its intention to
terminate Executive's employment. In such event, Executive's employment with the
Company shall terminate effective on the 30th day after receipt of such written
notice by Executive (the "Disability Effective Date"), provided that, within the
30 days after such receipt, Executive shall not have returned to full-time
performance of Executive's duties. For purposes of this Employment Agreement,
"Disability" shall mean a mental or physical disability as determined by the
Board of Directors in accordance with standard and procedures similar to those
under the Company's employee long-term disability plan, if any. At any time that
the Company does not maintain such a long-term disability plan, Disability shall
mean the inability of Executive, as determined by the Board of Directors of the
Company, to substantially perform the essential functions of his regular duties
and responsibilities due to a medically determinable physical or mental illness
which has lasted (or can reasonably be expected to last) for a period of six
consecutive months or longer.
(b) Termination by the Company. The Company may terminate Executive's
employment during the Employment Period for any reason.
(c) Termination by Executive. Executive may terminate Executive's
employment during the Employment Period for any reason.
(d) Notice of Termination. Any termination by either the Company or by
Executive shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 9(f) of this Employment Agreement.
"Notice of Termination" means written notice which is effective upon receipt,
unless the Notice of Termination specifies a later date of termination not to
exceed 60 days after the date of receipt of the Notice of Termination.
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7. Confidentiality
(a) Executive's position with the Company will or has resulted in his
exposure and access to confidential and proprietary information which he did not
have access to prior to holding the position, which information is of great
value to the Company and the disclosure of which by him, directly or indirectly,
would be irreparably injurious and detrimental to the Company. During his term
of employment and without limitation thereafter, Executive agrees to use his
best efforts and to observe the utmost diligence to guard and protect all
confidential or proprietary information relating to the Company from disclosure
to third parties. Executive shall not at any time during and after his
Termination Date, make available, either directly or indirectly, to any
competitor or potential competitor of the Company or any of its subsidiaries, or
their affiliates or divulge, disclose, communicate to any firm, corporation or
other business entity in any manner whatsoever, any confidential or proprietary
information covered or contemplated by this Employment Agreement, unless
expressly authorized to do so by the Company in writing.
(b) For the purpose of this Employment Agreement, "Confidential
Information" shall mean all information of the Company, its parent, subsidiaries
and affiliates relating to or useful in connection with the business of the
Company, its parent, subsidiaries and affiliates, whether or not a "trade
secret" within the meaning of applicable law, which at the time of Executive's
initial employment is not generally known to the general public and which has
been or is from time to time disclosed to or developed by Executive as a result
of his employment with the Company. Confidential Information includes, but is
not limited to: the Company's product development and marketing programs, data,
future plans, formula, food and beverage procedures, recipes, finances,
financial management systems, player identification systems (Total Gold Card),
pricing systems, client and customer lists, organizational charts, salary and
benefit programs, training programs, computer software, business records, files,
drawings, prints, prototyping models, letters, notes, notebooks (including
notebooks containing customer information), reports, and copies thereof, whether
prepared by him or others, and any other information or documents which
Executive is told or reasonably ought to know that the Company regards as
confidential.
(c) Executive agrees that upon termination of employment for any reason
whatsoever, he shall promptly deliver to the Company all confidential
information, including but not limited to, documents, customer lists, notebooks
(including notebooks containing customer information) reports, correspondences,
computer printouts, work papers, files, computer lists, telephone and address
books, rolodex cards, computer tapes, disks, and any and all records in his
possession (and all copies thereof) containing any such confidential information
created in whole or in part by Executive within the scope of his employment,
even if the items do not contain confidential information.
(d) Executive shall also be required to sign a non-disclosure or
confidentiality agreement. Such an agreement shall also remain in full force and
effect, provided that, in the
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event of any conflict between any such agreement(s) and this Employment
Agreement, this Employment Agreement shall control.
(e) This Section and any of its provisions will survive Executive's
termination of employment for any reason.
8. Release. Upon the termination of the Executive's active employment, and
in consideration of the receipt of the compensation and benefits described in
this Agreement, except for claims arising from the covenants, agreements, and
undertakings of the Company as set forth herein and except as prohibited by
statutory language, the Executive forever and unconditionally waives, and
releases JCC Holding Company, Inc., JCC Xxxxxx Development, LLC, JCC Canal
Development, LLC, JCC Development Company, LLC, Xxxxxx'x Entertainment, Inc.,
Xxxxxx'x Operating Company, Inc., their subsidiaries and affiliates, and their
officers, directors, agents, benefit plan trustees, and Executives ("Released
Parties") from any and all claims, whether known or unknown, and regardless of
type, cause or nature, including but not limited to claims arising under all
salary, vacation, insurance, bonus, stock, and all other benefit plans, and all
state and federal anti-discrimination, civil rights and human rights laws,
ordinances and statutes, including Title VII of the Civil Rights Act of 1964 and
the Age Discrimination in Employment Act, concerning his employment with JCC
Xxxxxx Development, LLC, JCC Canal Development, LLC, JCC Development Company,
LLC, its subsidiaries and affiliates, and the cessation of that employment.
9. Miscellaneous.
(a) Waiver. Failure of either party to insist, in one or more instances,
on performance by the other in strict accordance with the terms and conditions
of this Employment Agreement shall not be deemed a waiver or relinquishment of
any right granted in this Employment Agreement or of the future performance of
any such term or condition or of any other term or condition of this Employment
Agreement, unless such waiver is contained in a writing signed by the party
making the waiver.
(b) Severability. If any provision or covenant, or any part thereof, of
this Employment Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Employment
Agreement, all of which shall remain in full force and effect.
(c) Representations and Warranties of the Company. The Company
represents and warrants that the execution of this Employment Agreement has been
duly authorized by resolution of its Compensation Committee of the Board of
Directors, and that this Employment Agreement constitutes a valid and binding
obligation of the Company in accordance with its terms.
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(d) Entire Agreement. Except as provided herein, this Employment
Agreement contains the entire agreement between the Company and Executive with
respect to the subject matter hereof and, from and after the Effective Date,
this Employment Agreement shall supersede any other agreement between the
parties with respect to the subject matter hereof.
(e) Governing Law. Except to the extent preempted by federal law, and
without regard to conflict of laws principles, the laws of the State of
Louisiana shall govern this Employment Agreement in all respects, whether as to
its validity, construction, capacity, performance or otherwise. A dispute
involving this Employment Agreement may only be enforced in the courts of
Louisiana or in arbitration upon mutual agreement of the parties to arbitrate
after notice of a dispute or disagreement is provided by one party to the other.
(f) Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given if delivered or three days after mailing if mailed, first class,
certified mail, postage prepaid:
To Company: JCC Holding Company
000 Xxxxx Xxxxxx
Xxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Secretary
To Executive: Xxxxxxx Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxx 00000
and
Xxxxxxx Xxxxx
0 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Any party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.
(g) Amendments and Modifications. This Employment Agreement may be
amended or modified only by a writing signed by both parties hereto, which makes
specific reference to this Employment Agreement.
(h) Waiver of Director Compensation. Executive agrees to waive all
director compensation including salary and meeting fees.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Employment Agreement as of the date first above written.
JCC HOLDING COMPANY:
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
Title: Chair of the Compensation Committee
of the Board of Directors
/s/ Xxxx X. Xxxxxx
--------------------------------------------
By: Xxxx X. Xxxxxx
Title: President of JCC Holding Company
and Chair of the Board of Directors
EXECUTIVE:
/s/ Xxxxxxx Xxxxx
--------------------------------------------
Xxxxxxx Xxxxx
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