EXHIBIT 10(bu)
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is effective as of November 10, 1998 ("Effective Date")
between The Claridge at Park Place, Incorporated, a New Jersey corporation
having its principal place of business at Indiana Avenue and the Boardwalk,
Atlantic City, New Jersey, 08401 ("Claridge"), and Xxxxxx X. Xxxxxxx, an
individual residing at 0 Xxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxx Xxxxxx, 00000
("Executive") .
W I T N E S S E T H
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WHEREAS, the Claridge desires to employ the Executive and the Executive
has agreed to accept employment, on the terms and conditions provided in this
Agreement; and
WHEREAS, the Claridge and the Executive are parties to an existing
Employment Agreement; and
WHEREAS, the Claridge and the Executive have agreed upon new terms and
conditions of employment as provided in this Agreement; and
WHEREAS, the Claridge and the Executive recognize it is in their mutual
interests to void the existing Employment Agreement and enter into a new
Employment Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth in this Agreement, the parties agree as follows:
1. EMPLOYMENT. The Claridge and the Executive hereby agree to
void the existing Employment Agreement dated January 1, 1997 to which they are a
party and enter this Employment Agreement. Accordingly, the Claridge employs the
Executive as its President/Chief Operating Officer. In this capacity, the
Executive shall perform such executive duties as are typical for this position
including but not limited to, those duties outlined in the Claridge's internal
controls, and such additional duties as may be specified from time to time by
the Board of Directors. In addition, the Executive may be asked to serve as a
member of the Claridge's Board of Directors without additional compensation for
these services.
2. TERM. The term of this Agreement shall commence on the
Effective Date and terminate on December 31, 2000 ("Initial Term") subject to
paragraphs 5 or 7. Thereafter, the Board may review and extend the Agreement
upon specific action by the Board.
3. COMPENSATION. (a) The Claridge shall pay the Executive a base
annual salary of TWO HUNDRED FIVE THOUSAND DOLLARS ($205,000), payable in weekly
installments consistent with the Claridge's regular payroll practice. The Board
of Directors may, from time to time, in their sole discretion, increase the base
annual salary.
(b) Until termination of the Agreement, the Executive shall
continue to receive full compensation and be entitled to all the benefits of
this Agreement. Upon termination, the Executive shall not be entitled to receive
any compensation or benefits except as set forth in this Agreement or as
otherwise agreed in writing between the parties.
(c) The Executive shall be entitled to vacation time consistent
with the Claridge's vacation plan, and shall also be entitled to participate in
any bonus plan, incentive compensation plan, qualified pension plan, qualified
profit-sharing plan, medical and/or dental reimbursement plan, group term life
insurance plan, as well
as any other employee benefit plan that may be established by the Claridge or
its operating subsidiaries. The participation in any of these plans shall be
consistent with the terms of such plans, and be available only upon the Claridge
or its operating subsidiaries having or establishing such a plan.
4. CASINO CONTROL COMMISSION. The Executive represents that he or she
possesses a casino key employee license required by the New Jersey Casino
Control Commission. The Executive will maintain this license in good standing
during employment with the Claridge. The Claridge will pay all attorneys' fees
and other costs that the Executive may incur: (a) in connection with any
investigation or proceeding against the Executive; or, (b) in which the
Executive may be involved (other than with respect to any act defined as "cause"
for termination as noted in 5(a)(ii); or, (c) relating to any criminal charges
filed against the Executive, by the Division of Gaming Enforcement of the New
Jersey Attorney General's Office or by the New Jersey Casino Control Commission.
5. TERMINATION.
(a) Notwithstanding anything to the contrary in this Agreement,
the Executive's employment may be terminated upon the occurrence of any of the
following events:
(i) Upon revocation, suspension, or termination of the
Executive's casino key employee license or failure
to comply, within a reasonable time, with any
conditions imposed upon the Executive's casino key
employee license;
(ii) Upon an act committed by the Executive constituting
"cause", defined as a breach of any of the provisions
of this Agreement; the indictment and/or conviction of
any criminal offense; the deliberate refusal by the
Executive (except by reason of disability) to perform
the duties under the terms of this Agreement ; or if
the Executive:
(1) Files a petition in bankruptcy court or is
adjudicated a bankrupt;
(2) Institutes or permits to be instituted any
procedure in bankruptcy court for
reorganization or rearrangement of the
Executive's financial affairs;
(3) Appoints a receiver of the Executive's assets or
property due to insolvency; or
(4) Makes a general assignment for the benefit of
creditors;
(iii) Upon the death or permanent disability of the
Executive;
(iv) Upon written notice by the Claridge terminating
the Executive's employment without cause;
(v) Upon the voluntary resignation by the Executive;
(vi) In the event at the time of hire the Executive is a
non-New Jersey resident and the Executive fails to
establish residency in New Jersey within six (6)
months after a Board Resolution directing the
Executive to do so. Provided that no such resolution
shall be adopted so long as: (i) a sale of the
Claridge is an option being considered by the Board of
Directors; or, (ii) the Claridge's audited financial
statements are expected to contain a "going concern"
qualification in the Independent Auditor's Report.
(b) If the Executive's employment should be terminated under:
subparagraphs 5(a)(iv) (termination without cause) above; 5(f) (diminished
responsibilities) below; or, if the Claridge elects not to renew this Agreement
pursuant to paragraph 2 above, then the Claridge shall make a lump sum payment
to the Executive equal to one hundred and twenty-five percent (125%) of the
Executive's base annual salary then in effect. Upon making of such payment, the
Claridge shall have no further liability or obligation to the Executive under
this Agreement.
(c) If the Executive's employment should be terminated under
subparagraph 5(a)(v) (voluntary resignation) above, and the Executive gives
notice of the intent to resign at least twelve (12) weeks prior to terminating
employment, then the Claridge shall continue to pay the Executive weekly
compensation for a period of twelve (12) weeks after the resignation date. Upon
expiration of this additional twelve (12) week period, the Claridge shall have
no further liability or obligation to the Executive under this Agreement. If
notice of the intent to resign to the Claridge is given less than twelve weeks
before the resignation date, the Claridge shall have no obligation to pay the
Executive beyond the resignation date.
(d) Upon termination of this Agreement under subparagraph
5(a)(iv) (termination without cause), if the Claridge has an existing stock
option plan, the Executive shall receive stock options in the Claridge, if any,
in an amount equal to those that could be exercised within one (1) year from the
date of termination. Provided, however, that such stock options must be
exercised by the Executive within 90 days after termination, or the options
shall expire.
(e) If the Executive's employment should be terminated under
subparagraphs 5(a)(i) (revocation, suspension or termination of casino key
employee license), (a)(ii) (bankruptcy) or (a)(iii) (death or permanent
disability) above, the Claridge shall have no further liability or obligation to
continue salary payments to the Executive, or the Executive's estate (as the
case may be), after the date the Executive is no longer employed by the Claridge
.
(f) If the Executive's title, responsibilities, duties or status
within the Claridge should materially diminish under circumstances other than
following a Change of Control as described in paragraph 7 below, the Executive
may resign and terminate this Agreement. In this case, the Executive shall be
entitled to a lump sum payment consistent with subparagraph 5(b). Such a
resignation will not be considered a "voluntary resignation" under subparagraph
5(a)(v).
6. NON-COMPETITION AND NON-DISCLOSURE. (a) During the term
of this Agreement, the Executive shall not, without the written consent of the
Claridge , alone or with others, directly or indirectly, participate, engage or
become interested in (as owner, stockholder, partner, lender or other investor,
director, officer, employee, consultant, or otherwise) any business activity
that is in competition with the Claridge's business as then constituted .
(b) Nothing in this Agreement shall prohibit the Executive from
acquiring or owning, without disclosure to the Company, less than one (1%)
percent of the outstanding securities of any class of any corporation listed on
a national securities exchange or traded in the over-the-counter market.
(c) During and after the term of this Agreement, the Executive
agrees that all information which may have been obtained during the course of
employment will be kept strictly confidential with respect to the business
practices, finances, developments, customer's affairs, and trade secrets of the
Claridge not generally known to the public. The Executive will not disclose such
information to any other person, firm or corporation, except solely in the
course of business on behalf of the Claridge pursuant to this Agreement. The
Executive further agrees that upon the termination of employment (irrespective
of the time, manner or cause of termination), all lists, books, written records
and data of every kind relating to or in connection with the Claridge's
customers and business will be delivered and returned to the Claridge.
(d) (i) Subject to the provisions of subparagraph 6(d)(ii)
(change of control) below, if this Agreement is
terminated pursuant to subparagraph 5(a)(v) (voluntary
resignation) above, the Executive agrees that for a
period of one (1) year thereafter the Executive shall
not compete with the Claridge, or engage in the casino
business in Atlantic City, New Jersey, as an officer,
director, stockholder, employee, representative, agent,
or consultant.
(ii) In the event the Claridge, its shareholders, or persons
having voting control enter into an agreement to sell,
acquire, merge or consolidate the assets or stock of
the Claridge with the anticipated result that a change
of control of the Claridge or the Claridge's business
as presently constituted would occur upon the closing
of such agreement, the Executive may terminate this
Agreement pursuant to subparagraph 5(a)(v) (voluntary
resignation) above. In these circumstances, the
Executive shall not be precluded from immediately
competing with the Claridge, or engaging in the casino
business in Atlantic City, New Jersey, as an officer,
director, stockholder, employee, representative, agent
or consultant. In addition, the Executive shall be
entitled to the benefits provided for in subparagraph
5(c) (voluntary resignation) above provided proper
notice of the intent to resign is given to the
Claridge.
(e) From the date of termination of this Agreement and for a
period of one (1) year thereafter, the Executive shall not, alone or with
others, directly or indirectly:
(i) solicit for the Executive's benefit or the benefit of
any person or organization other than the Claridge, the
employment or other services of any employee or
consultant of the Claridge or its subsidiaries as well
as independent companies affiliated or associated with
the Claridge; or
(ii) solicit for the Executive's benefit or the benefit of
any person or organization other than the Claridge, the
employment of any employee of any customer of the
Claridge.
(f) As additional consideration for the agreement contained in
subparagraphs 6(d) (non-compete) and (e) (no solicitation), the Executive shall
be entitled to a lump sum payment equal to twenty-five percent (25%) of the sum
of the Executive's then base annual salary. The Executive shall make a request
to receive this lump sum within ten (10) days following termination of
employment by giving notice to the Claridge consistent with paragraph 11. Within
ten (10) days following receipt of this notice, the Claridge shall send the
Executive either: (i) the lump sum payment described in this subparagraph (f);
or (ii) a notice that the Claridge has waived the Executive's obligations under
subparagraph 6(d) (non-compete) and (e) (no solicitation), in which event the
Executive shall be released from the obligations under these subparagraphs. In
this case, the Claridge shall be released from its obligation to pay the
Executive any additional consideration under this subparagraph (f). All payments
made pursuant to this subparagraph (f) shall be in addition to, and not in lieu
of, any payments to which the Executive may be entitled under paragraph 5
(termination provisions).
7. SALE OF THE CLARIDGE. The Claridge shall make its best efforts
to have any successor corporation or business entity assume the obligations
under this Agreement. If this Agreement is not assumed by a successor
corporation or business entity, the obligations of the Claridge to the Executive
hereunder shall continue in full force and effect, subject to the right of the
Claridge, in its sole discretion, to terminate the Executive pursuant to
paragraph 5 (termination provisions). If (x) during the term of this Agreement:
(a) a Change of Control (as defined below) of the Claridge occurs; or (b) by any
other transaction this Agreement is assigned to an entity not controlled by the
Board of Directors of the Company as constituted on the date hereof, and (y)
during the period commencing on the date on which either (a) or (b) occurs and
ending on the second anniversary thereof, any of the following occurs: (a) the
Successor Company (as defined below) fails to employ the Executive in Atlantic
City, New Jersey or within 25 miles thereof, or (b) the Successor Company
terminates the employment of the Executive other than for Cause (as defined
below), or (c) the rate of compensation paid by the Successor Company to the
Executive (without giving effect to any element of Compensation attributable to
Supplemental Executive Retirement Plans or Long-Term Incentive Plans) is
diminished, or (d) the duties, responsibilities or title of the Executive with
the Successor Company are diminished in any material respect from the duties,
responsibilities and title of the Executive with the Claridge on the date
hereof, then the Executive shall, within seven days after any such occurrence of
(a), (b), (c) or (d) under Clause (y), receive a payment from the Successor
Company in cash of an amount equal to three (3) times the average of the
Executive's total compensation for the preceding five (5) years of employment at
the Claridge (the "Severance Payment"). For purposes of the foregoing, "Change
of Control" shall mean the occurrence of any of the following events: (i) the
sale, lease, transfer, conveyance or other disposition of all or substantially
all of the assets of (x) The Claridge Hotel and Casino Corporation (the
"Company") and its subsidiaries or (y) Atlantic City Boardwalk Associates, LP
(the "Partnership"); (ii) the liquidation or dissolution of the Company or the
Claridge; (iii) the Company becomes aware of (by way of a report or any other
filing pursuant to Section 13(d) of the Exchange Act, proxy vote, written notice
or otherwise) the acquisition by any "person" or related group (within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Securities Exchange Act
of 1934 (the "Exchange Act"), or any successor provisions to either of the
foregoing, including any "group" acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than the Company's existing management, in a single
transaction or in a related series of transactions, by way of merger,
consolidation or other business combinations or purchase of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act, or any successor
provisions) of 50% or more of the total voting power entitled to vote in the
election of the Board of Directors of the Company or such person surviving the
transaction; (iv) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Company's Board of Directors
together with any new directors whose election or appointment by such board or
whose nomination for election by the shareholders of the Company was approved by
a vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously approved) cease for any reason to constitute a majority
of the Company's Board of Directors then in office; (v) the Company fails to
own, directly or indirectly, 100% of the capital stock of the Claridge or 100%
of the capital stock of any other person holding a gaming license to operate the
Claridge Casino Hotel in Atlantic City, New Jersey (the "Casino"); or (vi) the
ownership of the Casino by any entity other than the Partnership, the Company,
the Claridge or any successor entity or subsidiary or affiliate of any of them;
"Successor Company" shall mean the Claridge, or if a Change in Control occurs as
a result of a merger of the Claridge or the Company, the Successor Entity of
such merger, or if a Change of Control of the Claridge occurs as a result of a
sale of assets of the Claridge, the entity which purchases such assets, or if
the Employment Contract has been assigned by the Claridge to another entity,
such other entity; "Cause" shall have the meaning given to it in paragraph
5(a)(ii) hereof. In this event the Executive will be entitled to receive the
severance benefits provided for in this paragraph and shall not be precluded
from immediately competing with the Claridge or any assignee of this Agreement,
or engaging in the casino business in Atlantic City, New Jersey, as an officer,
director, stockholder, employee, representative, agent or consultant.
In the event the Executive receives a Severance Payment pursuant to this
paragraph 7, the Executive may not use the Severance Payment for the purpose of
investing in the securities of the Successor Company or otherwise exchanging the
Severance Payment for any such securities.
8. PARTICIPATION. The Executive shall devote all of his working
time, attention and best efforts to the business of the Claridge. During the
term of this Agreement the Executive shall not be engaged directly or indirectly
in any other business activity whether or not such business activity is pursued
for gain, profit or other monetary advantage. However, this shall not be
construed to prevent the Executive from investing assets in such a form and
manner which will not require any services on the part of the Executive in
the operation of the companies in which such investments are made. Neither shall
the Executive be precluded from involvement in any civic or charitable
organizations.
9. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement or breach thereof, shall be settled by arbitration in
New Jersey pursuant to New Jersey law in accordance with the rules of the
American Arbitration Association. Any judgment upon an award rendered pursuant
to arbitration may be entered in any court within the State of New Jersey having
appropriate jurisdiction. In the event of conflict between the rules of the
American Arbitration Association and any statute of the State of New Jersey, the
parties agree to be bound by the laws of New Jersey.
10. INJUNCTIVE RELIEF. The parties acknowledge that in the event
of a breach or a threatened breach by the Executive of any of the obligations
under this Agreement, the Claridge will not have an adequate remedy at law.
Accordingly, in the event of any breach or threatened breach by the Executive,
the Claridge shall be entitled to such equitable and injunctive relief as may be
available to restrain the Executive and any business, firm, partnership,
individual, corporation or entity participating in the breach or threatened
breach from the violation of the provisions of the Agreement. Nothing in this
Agreement shall be construed as prohibiting the Claridge from pursuing any other
remedies available at law or in equity for such breach or threatened breach,
including the recovery of damages and the immediate termination of the
employment of the Executive under this Agreement.
11. NOTICES. All notices shall be in writing and shall be
delivered by certified or registered mail, return receipt requested, to the
parties as follows:
If to the Claridge :
x/x Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxxx and Xxx Xxxxxxxxx
Xxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: Chairman of Human Resources
And Compensation Committee
If to the Executive:
Xxxxxx X. Xxxxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxx Xxxxxx 00000
Either party may change the address to which notices are to be
transmitted by notice given according to this paragraph.
12. MISCELLANEOUS. (a) The Executive represents to the
Claridge that there are no restrictions or agreements to which the Executive is
a party which would be violated by execution of this Agreement and subsequent
employment .
(b) This Agreement and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by and construed
in accordance with the laws of the State of New Jersey.
(c) No amendment or waiver or any provision of this Agreement
shall be effective unless in writing signed by both parties.
(d) If any provision of this Agreement is held to be invalid or
unenforceable, that provision shall be deemed limited or modified to the extent
necessary to make it valid and enforceable, and in no event shall this Agreement
or any of the provisions of this Agreement be rendered void or unenforceable.
(e) The headings of the paragraphs of this Agreement are for
convenience of reference only and shall not be given any effect in the
construction or enforcement of this Agreement.
(f) No waiver by the Claridge of any breach by the Executive of
any provision or condition of this Agreement by the Executive to be performed
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or any prior or subsequent time.
(g) This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of the Claridge, but no interest in this
Agreement shall be transferable in any manner by the Executive.
13. ENTIRE AGREEMENT. This Agreement contains the entire
Agreement of the parties. It may not be changed orally but only by an Agreement
in writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge in sought.
IN WITNESS WHEREOF, this Agreement has been executed by the
Claridge's duly authorized officer. The Executive has also executed this
Agreement.
WITNESS: EXECUTIVE
/s/ Xxxxx X. Xxxxxx, Xx. BY: /s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
ATTEST: THE CLARIDGE AT PARK
PLACE, INCORPORATED
/s/ Xxxxx X. Xxxxxx, Xx. BY: /s/ A. Xxxxx Xxxxxxx
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A. XXXXX XXXXXXX
CHAIRMAN OF THE
COMPENSATION COMMITTEE
