EMPLOYMENT AGREEMENT
AGREEMENT made as of the _____ day of _____, 1997 by and between
WHG RESORTS & CASINOS INC., a Delaware corporation (the "Company"), with its
principal place of business at c/o El San Xxxx Hotel & Casino, 0000 Xxxx Xxxx
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx Xxxx 00000 and XXXXXX X. XXXXX ("Executive")
residing at 000 Xxxx Xxxx Xxxxx, Xxxx Xxxxxx, XX 00000.
W I T N E S S E T H :
WHEREAS, the Company and Executive desire to enter into an
employment agreement on the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. DUTIES.
1.1. The Company hereby employs Executive as an
executive of the Company to perform services as Vice Chairman and the duties
associated therewith, subject to the control and direction of the Company's
Board of Directors or the Chairman of the Board and Chief Executive Officer of
the Company.
1.2. Executive hereby accepts such employment.
Throughout the period of his employment by the Company, Executive will devote
such time, attention, knowledge and skills, faithfully, diligently and to the
best of his judgment and ability as is reasonably necessary for the performance
of his duties under Section 1.1 hereof and in furtherance of the business of the
Company and will observe and carry out such rules, regulations, policies,
directions and restrictions as the Company shall from time to time establish. It
is expected that Executive will not be required to render services for more than
20 hours per month under this agreement. Executive will do such traveling as may
be reasonably required of him in the performance of his duties hereunder. At the
Company's request, Executive shall serve as an officer or director of the
Company or any affiliate of the Company without additional compensation except
that Executive shall be entitled to receive directors fees for service as a
director of Xxxxxxxx Hospitality Group Inc. ("WHGI") and other subsidiaries of
the Company on the same basis as other directors of WHGI and such other
subsidiaries. In rendering his services to the Company, Executive shall not be
required to report to the Company's offices on a regular basis and shall not be
required to relocate. It is also expressly acknowledged that Executive has other
duties and responsibilities, including the fact that Executive is currently
serving as a Director of Midland Co., Reliance Group Holdings, Inc., Reliance
Insurance Co. and X.X. Xxxxxxxx, Inc.
Executive's performance of his duties under Section 1.1 shall be subject to the
performance of Executive's obligations to others.
2. TERM OF EMPLOYMENT. Executive shall be employed under this
agreement for an initial term of three years commencing on April 21, 1997 and
ending April 20, 2000.
3. BASE SALARY. As base compensation for the performance by
Executive of his obligations under Section 1 hereof, the Company shall pay
Executive a base salary at the rate of not less than $100,000 per year, payable
in accordance with the Company's customary payroll practices for senior
executives.
4. ADDITIONAL BENEFITS. In addition to his base salary,
Executive shall be entitled to the following benefits:
(i) Executive shall be entitled to participate in bonus
and incentive plans, including stock option plans, generally available to senior
executives of the Company which may be in effect from time to time during the
period of his employment hereunder. The Company shall be under no obligation to
institute or continue the existence of any such plans.
(ii) Executive shall be entitled to participate, to the
extent he is eligible under the terms and conditions thereof, in any health and
life insurance plans generally available to the executives of the Company which
may be in effect from time to time during the period of his employment
hereunder. The Company shall be under no obligation to institute or continue the
existence of any such plans.
(iii) The Company shall reimburse Executive for
reasonable and necessary expenses incurred by him in connection with the
business of the Company, including, but not limited to, such items as
entertainment, travel and lodging, gifts and similar items as shall be deemed
necessary and commensurate with his position as Vice Chairman in accordance with
the reimbursement policy followed by the Company with respect to its executives.
Executive will present receipts or vouchers for any requested reimbursements in
accordance with the Company's policies.
(iv) Executive shall be entitled to paid vacation each
year during the period of his employment hereunder in accordance with the
Company's customary practices, such vacations to be taken at times mutually
agreeable to Executive and the Board of Directors of the Company.
5. TERMINATION BENEFITS.
5.1. If (A) the Company terminates Executive's
employment in violation of this Agreement or otherwise breaches its obligations
to Executive under this Agreement; (B) the Company is deemed to terminate
Executive's employment in violation of this Agreement, as provided in Section
5.3, and Executive gives the written notice to the Company provided for
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in such Section; or (C) at any time during the term of this Agreement
individuals who presently constitute the Board of Directors of the Company, or
who have been recommended for election to the Board by two-thirds of the Board
consisting of individuals who are either presently on the Board or such
recommended successors (such present directors or recommended directors being
hereafter referred to as "Acceptable Directors"), cease for any reason to
constitute at least a majority of such Board, and Executive gives the written
notice to the Company provided for in Section hereof; then, upon the happening
of any such events, (i) the Company shall pay to Executive within fifteen (15)
days after such termination or breach (as severance pay and liquidated damages,
in lieu of any other rights or remedies which might otherwise be available to
him under this Agreement, and without mitigation of any kind or amount, whether
or not Executive shall seek or accept other employment), a lump sum payment
equal in amount to the aggregate base salary which would have been payable to
Executive pursuant to Section 3 of this Agreement during the remaining term
hereof (for purposes of this Section 5.1, the rate of Executive's base salary
shall be deemed to be Executive's base salary at the highest annual rate in
effect during the one-year period immediately preceding termination or breach);
and (ii) Executive shall have the right, exercisable within thirty (30) days
after such termination or breach to sell to the Company any or all options held
by Executive to purchase the Company common stock and options to purchase the
securities of any other company at least 20% of the voting securities of which
are owned by the Company ("Related Company") at a price per share equal to the
amount by which (i) the average closing price of the Company common stock or the
securities of such Related Company, as the case may be, on the New York Stock
Exchange (or other applicable trading market if not listed on the New York Stock
Exchange) during the thirty-day period immediately preceding the date on which
he notifies the Company of his election to sell such options plus the fair
market value per share of other securities or assets which Executive would be
entitled to receive upon exercise of such options exceeds (ii) the option
exercise price for each such share. All options not yet fully exercisable shall
be deemed fully exercisable for purposes of the foregoing computation. Such
payments shall be made by the Company within fifteen (15) days after Executive
has notified the Company of the exercise of his right to sell such options and
shall not require any further authorization or approval of the Board of
Directors of the Company. In addition to the foregoing, the obligations of the
Company to pay for the benefits provided in Section 4 hereof shall remain in
full force and effect.
5.2. If it shall be determined that any amount payable
by the Company under this Section 5 to or for the benefit of Executive (a "Base
Payment") would be subject to the excise tax (the "Excise Tax") imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), then
Executive shall be entitled to receive an additional payment (the "Gross-Up
Payment") in an amount such that the net amount retained by Executive, after the
calculation and deduction of any Excise Tax on the Base Payment and any federal,
state and local income taxes and Excise Tax on the Gross-Up Payment, shall be
equal to the Base Payment. In determining this amount, the amount of the
Gross-Up Payment attributable to federal income taxes shall be reduced by the
maximum reduction in federal income taxes that could be obtained by the
deduction of the portion of the Gross-Up Payment attributable to state and local
income taxes. Finally, the Gross-Up Payment shall be reduced by income or Excise
Tax withholding payments made by the Company to any federal, state or local
taxing authority
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with respect to the Gross-Up Payment that was not deducted from compensation
payable to Executive. All determinations required to be made under this Section
, including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment, and the assumptions to be utilized in arriving at such
determination, except as specified above, shall be made by the Company's
independent auditors (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and Executive within fifteen (15)
business days after the receipt of notice from Executive that there should be a
Gross-Up Payment. The determination of tax liability made by the Accounting Firm
shall be subject to review by Executive's tax advisor, and, if Executive's tax
advisor does not agree with the determination reached by the Accounting Firm,
then the Accounting Firm and Executive's tax advisor shall jointly designate a
nationally recognized public accounting firm, which shall make the
determination. All fees and expenses of the accountants and tax advisors
retained by either Executive or the Company shall be borne by the Company. Any
Gross-Up Payment shall be paid by the Company to Executive within five (5) days
after the receipt of the determination. Any determination by a jointly
designated public accounting firm shall be binding upon the Company and
Executive.
5.3. The Company shall be deemed to have terminated
Executive's employment in violation of this Agreement for all purposes
hereunder, if, among other things, without his prior written consent,
5.3.1. Executive is placed in any position of
lesser stature than that of Vice Chairman of the Company; is assigned duties
inconsistent with such position or duties which, if performed, would result in a
significant change in the nature or scope of powers, authority, functions or
duties inherent in such position on the date hereof; is assigned performance
requirements or working conditions which are at variance with the performance
requirements and working conditions in effect on the date hereof; or is accorded
treatment on a general basis which is in derogation of his status as Vice
Chairman;
5.3.2. Executive ceases to serve as a member
of the Board of Directors of the Company;
5.3.3. The Company discontinues or reduces
(from the highest level in effect during the term of this Agreement) the amount
of base salary payable to Executive pursuant to this Agreement; or
5.3.4. The Company discontinues or reduces
(from the level in effect on the date hereof) the perquisites or fringe benefits
inherent in Executive's position on the date hereof;
and Executive gives written notice of his election to deem such act to
constitute termination, in which event termination pursuant to this Section 5.3,
shall be deemed to have occurred upon the date of the giving of such notice.
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5.4. In the event of a change in the constitution of
the Board of Directors of the Company such that it does not include a majority
of Acceptable Directors as provided in clause (C) of Section 5.1 hereof, and in
the further event that at any time thereafter, Executive gives written notice of
the election to terminate this Agreement, termination pursuant to this Section 5
shall be deemed to have occurred upon the date of the giving of such notice.
6. ENTIRE AGREEMENT. This agreement supersedes any prior
agreement or understanding with respect to the subject matter hereof and
constitutes the entire agreement of the parties hereto. No amendment or
modification hereof shall be valid or binding unless made in writing and signed
by the party against whom enforcement thereof is sought.
7. NOTICES. Any notice required, permitted or desired to be
given pursuant to any of the provisions of this agreement shall be deemed to
have been sufficiently given or served for all purposes if delivered in person
or sent by certified mail, return receipt requested, postage and fees prepaid,
or sent by responsible overnight delivery service or transmitted by telephone
facsimile to either of the parties at such party's address set forth below, or
to such other address as such party may specify from time to time by notice to
the other given in accordance with the provisions hereof:
If to the Company:
WHG Resorts & Casinos Inc.
0000 Xxxx Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx Xxxx 00000
Attention: President
If to Executive:
Xxxxxx X. Xxxxx
000 Xxxx Xxxx Xxxxx
Xxxx Xxxxxx, XX 00000
The date of the giving of any notice sent by mail shall be the date two days
after the posting of the mail.
8. NO ASSIGNMENT. Neither this agreement nor the right to
receive any payments hereunder may be assigned by Executive. Neither this
agreement nor the right to Executive's services hereunder may be assigned by the
Company. This agreement shall be binding upon and shall inure to the benefit of
Executive, his heirs, executors and administrators and the Company, its
successors and assigns.
9. NO WAIVER. No course of dealing nor any delay on the part of
the Company or Executive in exercising any rights hereunder shall operate as a
waiver of any such rights
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hereunder shall operate as a waiver of any such rights. No waiver of any default
or breach of this agreement shall be deemed a continuing waiver or a waiver of
any other breach or default.
10. GOVERNING LAW. This agreement shall be governed, interpreted
and construed in accordance with the laws of the State of New York applicable to
agreements entered into and to be performed entirely therein.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be duly executed on the day and year first above written.
WHG RESORTS & CASINOS INC.
By: ______________________________
Xxxxx X. Xxxxxxxx, Chairman
______________________________
XXXXXX X. XXXXX
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