XXXXXX X. XXXXX
AGREEMENT
AGREEMENT ("Agreement") by and between Casino Resource Corporation, a
Minnesota corporation with its principal offices at 000 Xxxxxxxxx Xxxxxxxxx,
Xxxxx Xxxxxxx, Xxxxxxxxxxx, 00000 (the "Company"), and Xxxxxx X. Xxxxx, Vice
President Entertainment, (the "Executive"), dated as of the 3rd of April, 1998.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interest of the Company and its shareholders to assure
that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined in Section 2) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks which may be created by a pending or threatened Change
of Control, and to encourage the Executive's full attention and dedication to
the Company currently and in the event of any threatened or pending Change of
Control. The Board also believes it is imperative to provide the Executive with
compensation and benefit arrangements upon a Change of Control which ensure the
compensation and benefit expectations of the Executive will be satisfied and are
competitive with those of other corporations. Therefore, in order to accomplish
these objectives the Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. Certain Definitions.
a. The "Effective Date" shall mean the first date during the
Change of Control Period (as defined in Section 1(b)) on which
a Change of Control occurs. Anything in this Agreement to the
contrary notwithstanding, if a Change of Control occurs and if
the Executive's employment with the Company is terminated
prior to the date on which the Change of Control occurs, and
if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect the
Change of Control or (ii) otherwise arose in connection with
or anticipation of the Change of Control, then for all
purposes of this Agreement the "Effective Date" shall mean the
date immediately prior to the date of such termination of
employment.
b. The "Change of Control Period" shall mean the period
commencing on the date hereof and ending on the third
anniversary date of such date; provided, however, that
commencing on the date one year after the date hereof and on
each annual anniversary of such date, hereafter referred to as
"Renewal Date," the Change of Control period shall be
automatically extended so as to terminate three years from
such Renewal Date, unless at least sixty (60) days prior to
the Renewal Date, the Executive or corporation shall give
notice of its determination not to extend the Change of
Control Period.
2. Change of Control. For purpose of this Agreement, a "Change of Control"
shall mean:
(1)
a. The acquisition by an individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended, (a "Person") of beneficial
ownership of 20% or more of either (i) the issued and
outstanding shares of common stock of the Company or (ii) the
combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors; or
b. If any two or more members within a class of the staggered
Board of seven or more Directors, as constituted on the date
hereof, are removed without the expressed approval or consent
of the CEO and Chairman of the Board, or if two or more
members of the Board assume office as a result of either an
actual or threatened election contest or other actual or
threatened solicitation of proxies; or
c. A hostile reorganization, merger or consolidation which
results from either an actual or threatened election contest
or actual or threatened solicitation of proxies; or
d. A complete liquidation or dissolution of the Company, or the
sale or other disposition of all or substantially all of the
assets of the Company, which liquidation, sale or dissolution
occurs as a result of either actual or threatened solicitation
of proxies or consents by or on behalf of persons other than
the incumbent Board.
3. Employment Period. The Company hereby agrees to continue the Executive
in its employ, and the Executive hereby agrees to remain in the employ
of the Company, in accordance with this Agreement and the terms and
provision of this Agreement for a period commencing on the Effective
Date and ending on the third anniversary of such date (the "Employment
Period".)
4. Terms of Employment.
a. Position and Duties.
(i.) During the Employment Period (a) the Executive's position,
authorities, duties and responsibilities of same shall be at
least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time
during the 90-day period immediately preceding the Effective
Date and (b) the Executive's services shall be performed at
the location where the Executive was employed preceding the
Effective Date or at the headquarters of the Company.
(ii.) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled,
the Executive agrees to devote attention and time during
normal business hours to the business and affairs of the
Company and to discharge the responsibilities assigned to the
Executive hereunder.
b. Compensation
(2)
(i.) Base Salary. During the Employment Period the Executive shall
receive an "Annual Base Salary" of one hundred fifteen
thousand five hundred dollars ($115,500), which is annual
salary currently paid to Executive and which sum shall be paid
on a bi-weekly basis in the same manner as the wage payments
of other Company employees. During the Employment Period, the
Annual Base Salary shall increase each year based on increases
in the Consumer Price Index. Any increase in the annual base
salary shall not serve to limit or reduce any other obligation
to the Executive under this Agreement.
(ii.) Special Bonus. In addition to Annual Base Salary as herein
provided, if Executive remains employed with the Company or
elects to provide consulting services to Company through the
first anniversary of the Effective Date, the Company shall pay
to the Executive a "Special Bonus" in recognition of the
Executive's services during the one year period following the
Change of Control, in cash, a sum equal to Executive's Annual
Base Salary. The Special Bonus shall be paid no later than
thirty days following the first anniversary of the Effective
Date.
(iii.) Incentive Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies
and programs applicable generally to other executives of the
Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the
Executive with incentive opportunities less favorable in the
aggregate than the most favorable of the same provided by the
Company for the Executive in effect at any time during the 90
day period immediately preceding the Effective Date.
(iv.) Welfare Benefit Plans. During the Employment Period the
Executive and/or the Executive's family shall be eligible for
participation in and shall receive benefit plans, practices,
policies and programs provided by the Company and its
affiliates including without limitation; medical,
prescription, dental, disability, salary continuation,
employee life, group life and travel accident insurance to the
extent applicable generally to other peer executives of the
Company.
(v.) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable
employment expenses incurred by the Executive in accordance
with the most favorable policies, practices and programs of
the Company and its affiliates in effect for the Executive at
any time during the 90-day pay period immediately preceding
the Effective Date.
(vi.) Office and Support staff. During the Employment Period the
Executive shall be entitled to an office or offices of the
size and with the furnishings and other appointments and to
exclusive personal secretarial and other assistance, at least
equal to the most favorable of the forgoing provided to the
Executive by the Company at any time during the 90-day period
preceding the Effective Date.
(3)
(vii.) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the
Company.
5. Termination of Employment.
a. Death or Disability. The Executive's employment shall
terminate automatically upon the death of the Executive during
the Employment Period. For purposes of this Agreement
"Disability" shall mean the absence of the Executive from the
Executive's duties from the Company on a full time basis for
90 consecutive business days as a result of incapacity due to
a mental or physical illness which is determined to be total
and permanent by a physician selected by Company and
acceptable to the Executive or the Executive's legal
representative.
b. Cause. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean (i) Executive had theretofore
been convicted by any federal, state or local authority for,
or pleaded guilty to, an act constituting a felony, or (ii)
Executive's termination was as a result of: a) material acts
of fraud, material dishonesty or gross misconduct by
Executive; or b) repeated and willful failure or refusal by
Executive to perform his material duties as delineated in the
Executive Employment Agreement. If termination for Cause by
Company is pursued pursuant to clause (ii)(b) of the preceding
sentence, it shall be preceded by written notice to Executive
describing the specific reasons for termination in order to
allow Executive the opportunity to cure and correct problems
identified during a 30-day period following the date of
written notice.
c. Without Cause. Executive may terminate his employment
hereunder, without Cause, provided Executive first gives to
Company a written notice of intent to terminate (see (5)(d)).
d. Notice of Termination. Any termination by the Company for
Cause, or by the Executive without any reason shall be
communicated by a "Notice of Termination" to the other party
hereto given in accordance with Section 11(b). For purposes of
this Agreement "Notice of Termination" shall mean a written
notice which indicates the specific termination provision in
this Agreement relied upon.
6. Obligations of the Company.
a. Executive Termination (for other than Cause, Death or
Disability.) If during the Employment Period the Executive
shall terminate employment without reason:
i. The Company shall pay to the Executive in a lump sum
in cash within 30 days after the Date of Termination,
the aggregate of the following amounts:
(4)
A. The sum of (1) the Executive's Annual Base
Salary through the Date of Termination to
the extent not therefore paid, (2) the
product of ("x") the Highest Annual Bonus
and ("y") a fraction, the numerator of which
is the number of days in the current fiscal
year through the Date of Termination, and
the denominator of which is 365 and (3) the
Special Bonus, if due to the Executive
pursuant to section 4(b)(iii) to the extent
not theretofore paid and (4) any
compensation previously deferred by the
Executive and any accrued vacation pay, in
each case to the extent not theretofore paid
(the sum of the amounts described in 1, 2, 3
and 4 shall refer to "Accrued Obligations");
and
B. The amount (hereafter referred to as
"Severance Amount") which shall equal the
product of 2.99 multiplied by the sum of the
Executive's Annual Base Salary, which
product shall be reduced by the present
value (determined under Section 280G(d)(4)
of the Internal Revenue Code of 1986 as
amended ("the Code")); and
C. A separate lump sum supplemental retirement
benefit payable under Retirement Plan and
Supplemental Retirement Plan (SERP) of the
Company providing benefits for the Executive
which the Executive would receive if the
Executive's employment continued at the
compensation level provided for in section
4(b)(i) and 4(b)(ii) for the remainder of
the Employment Period, assuming the accrued
benefits are fully vested; and
D. Any payment made to the Executive pursuant
to this Agreement, which shall be disallowed
in whole or in part by the Internal Revenue
Service, shall be reimbursed by the
Executive to the Company to the full extent
of the disallowance.
ii. For the remainder of the Employment Period, or such
longer period as any plan, program, practice or
policy may provide, the Company shall continue
benefits to the Executive and/or the Executive's
family at least equal to those which would have been
provided to them in accordance with the plans,
programs, practices and policies described in Section
4(b)(v). For purposes of determining eligibility of
the Executive for retiree benefits pursuant to such
plans, practices, programs and policies, the
Executive shall be considered to have remained
employed until the end of the Employment Period and
to have retired on the last day of such period.
iii. To the extent not theretofore paid or provided; the
Company shall timely pay or provide to the Executive
any other amounts or benefits required to be paid or
provide or which the Executive is eligible to receive
pursuant to this Agreement and under any plan,
program, practice or policy or contract or agreement
of the Company and its affiliated companies.
(5)
b. Death. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period, this
Agreement shall terminate without further obligations to the
Executive's legal representatives under this Agreement, other
than for payment of Accrued Obligations, payable to
Executive's estate in a lump sum in cash within 30 days of
Date of Termination and the timely payment of Welfare Benefit
Continuation and Other Benefits and a lump sum cash payment
within 30 days of termination the Severance Amount and
Supplemental Retirement Amount (SERP).
c. Disability. If the Executive's employment is terminated by
reason of Executive's Disability during the Employment Period,
this Agreement shall terminate without further obligation to
the Executive other than (i) payment of Accrued Obligation
within 30 days of Termination Date and the timely payment of
the Welfare Benefit Continuation and Other Benefits and (ii)
payment to the Executive in cash within 30 days of termination
an amount equal to the greater of a lump sum of Severance
Amount and Supplemental Retirement Amount (SERP).
d. Cause. If the Executive's employment is terminated for Cause
during the Employment Period, this Agreement shall terminate
without further obligation to the Executive other than an
obligation to pay to the Executive Annual Base Salary through
the Date of Termination plus any amount of compensation
previously deferred by the Executive to the extent theretofore
unpaid.
7. Non-exclusivity of Rights. Except as provided in Sections 6(a) (ii),
6(b) and 6(c) nothing in this Agreement shall prevent or limit the
Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated
companies and for which the Executive may qualify, nor shall anything
herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its
affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement.
8. Full Settlement; Resolution of Disputes.
In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable to
the Executive under any of the provisions of this Agreement and, except
as provided in Section 6(a)(ii), such amounts shall not be reduced
whether or not the Executive obtains other employment. The Company
agrees to pay promptly as incurred, to the full extent permitted by
law, all legal fees and expenses which the Executive may reasonably
incur as a result of any contest by the Company or the Executive where
the Company is found at fault.
9. Dispute. In the event of a dispute as to whether a violation of any
provision of the Agreement has occurred, or to enforce any provision of
this Agreement, all such disputes shall be submitted to binding
arbitration before the American Arbitration Association in Mississippi,
in accordance with the commercial rules of the body, and the prevailing
party
(6)
shall be entitled to reasonable costs and attorneys fees. Judgement on
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
10. Certain Additional Payments by the Company.
Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive ("Payment") would be
subject to the Excise Tax (imposed by Section 4999 of the Code) or any
interest or penalties are incurred by the Executive with respect to
such Excise Tax such total amount paid by the Executive of all taxes
including without limitation income taxes and interest and penalties
thereto and any additional Excise Tax imposed upon the additional
payment under this section, the Executive will be reimbursed in full by
Company an amount equal to Excise Tax and other taxes imposed.
Any payment under this section shall be paid by the Company to the
Executive within 5 days of receipt of a determination by Executive that
a payment is due. If the Company determines that no Excise Tax is
payable by the Executive it shall furnish the Executive with a written
opinion, by an independent Certified Public Accountant, that failure to
report the Excise Tax on the Executive's applicable federal income tax
return would not result in the imposition of a penalty. Any
determination by any taxing authority to the contrary which would
require payment of an Excise Tax or other tax payment will be remitted
in full by Company within 10 business days after Executive has provided
Company with written claim, nature of claim, and date claim is to be
paid.
11. Successors.
a. This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable
by the Executive otherwise than by will or the laws of descent
and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives.
b. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
c. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall
mean, the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or
otherwise.
12. Miscellaneous.
(7)
a. This Agreement shall be governed by and construed in
accordance with the laws of the State of Mississippi, without
reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal
representatives.
b. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: Xxxxxx X. Xxxxx
00000 Xxxx Xx Xxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
If to the Company: Casino Resource Corporation
000 Xxxxxxxxx Xxxx.
Xxxxx Xxxxxxx, XX 00000
or to such other address as either party shall have furnished
to the other in writing in accordance herewith. Notice and
communication shall be effective when actually received by the
addressee.
c. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
d. The Company may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or
regulation.
e. The Executive and the Company acknowledge that, except as may
otherwise be provided under any other written agreement
between the Executive and the Company, the employment of the
Executive by the Company is "at will" and, prior to the
Effective Date, may be terminated by either the Executive or
the Company at any time. Moreover, if prior to the Effective
Date, the Executive's employment with the Company terminates,
then the Executive shall have no further rights under this
Agreement.
(8)
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization form its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
___________________________
Xxxxxx X. Xxxxx
Casino Resource Corporation
___________________________
By
(9)
