EXHIBIT 10.12
PRIVATE & CONFIDENTIAL
November 26, 1999
Mr. Xxxxx Xxxxxxxx
0000 Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxx
00000
Dear Xxxxx:
Re: Employment with MI Entertainment Corp.
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In accordance with our recent discussions, this letter confirms that the terms
and conditions of your employment with MI Entertainment Corp. (the
"Corporation"), shall be as follows:
1. Position: You are appointed Executive Vice-President and CFO of the
Corporation reporting to the Chairman and carrying out your day-to-day
duties from the Corporation's head office at Santa Xxxxx Race Track.
2. Remuneration: Your Base Salary shall be US $300,000 per annum (less
statutorily required deductions), payable monthly in arrears and otherwise
in accordance with the Corporation's standard payroll practices.
Annual Bonus: In addition to your Base Salary, you shall receive an
Annual Bonus (inclusive of all entitlement to vacation pay, whether
vacation is taken or not in any period and less the required withholding
taxes and other statutory deductions) in an amount equal to the greater of
US $150,000 or one-half of one percent (0.5%) of the net profits before
income tax of the Corporation for each such full fiscal year completed
during your employment.
"Net profits before income tax of the Corporation" for the purposes of this
Agreement shall be determined and paid in accordance with the stated
policies prescribed by the Corporation from time to time, in its sole
discretion.
3. Signing Bonus: In addition, you shall receive a one-time lump-sum signing
bonus of US $100,000 (less statutorily required deductions and inclusive of
all entitlement to vacation pay) after completion of your eighth week of
employment.
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4. Benefits: During your employment by the Corporation, you will be entitled
to:
(a) participate in all group insurance and benefit programs generally
applicable to salaried employees of the Corporation from time to time,
with the exception of the Magna Employee Equity Participation and
Profit Sharing Plan or any equivalent or related plans in effect from
time to time;
(b) three (3) weeks vacation in respect of each completed twelve (12)
month period, to be taken at such time or times as are mutually
convenient to you and the Corporation, but not payment in lieu
thereof;
(c) receive an automobile allowance of US $875 per month for the purchase
or lease of a domestic vehicle, provided that you shall be responsible
for all automobile operating costs including, without limitation,
fuel, repairs, maintenance, insurance premiums and insurance
deductibles;
(d) reimbursement for all reasonable and documented business expenses
incurred on behalf of the Corporation in carrying out your duties, in
accordance with the Corporation's policies from time to time, but
excluding automobile operating costs; and
(e) reimbursement of your reasonable travel expenses to and from Las Vegas
until the earlier of your family's relocation to California and
December 31, 2000.
5. Stock Options: Subject to the express approval of the Board of Directors of
the Corporation and any regulatory bodies having jurisdiction (including
the consent of NASDAQ to the listing of the underlying shares), and subject
to you entering into a Stock Option Agreement with the Corporation in the
standard form contemplated by the Corporation Incentive Stock Option Plan,
the Corporation shall grant you options to purchase 25,000 Class A
Subordinate Voting shares of the Corporation at an exercise price per share
which is equal to 100% of the last sale price of such shares on NASDAQ on
the trading day prior to the date of the Corporation's Board approval. Such
options shall be exercisable by you only in accordance with the terms and
conditions set forth in the Stock Option Agreement referred to above. Upon
receipt of an executed copy of this Agreement, we will place this matter
before the Board of Directors of the Corporation at the earliest
opportunity.
6. Termination: Your employment and this Agreement, including all benefits
provided for under this agreement, will terminate without notice or payment
in lieu thereof, on: (a) the acceptance by the Corporation of your
voluntary resignation, (b) at the Corporation's option, your disability for
an aggregate of six (6) months or more in any twenty-four (24) month
period, subject to any statutory requirement to accommodate such
disability, (c) your death; or (d) your dismissal for just cause or by
reason of your breach of the terms of this Agreement.
Otherwise, you or the Corporation may, at any time, terminate your
employment and this Agreement by providing the other party with twelve (12)
months' prior written notice of intention to terminate. In addition the
Corporation may elect to terminate your employment immediately by paying
you a retiring allowance of US $300,000 (less statutorily required
deductions) either in a lump sum within
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thirty (30) days of the date of termination or monthly in arrears in six
(6) equal installments commencing thirty (30) days after the date of
termination. If your employment is terminated pursuant to this paragraph,
the Corporation shall maintain on your behalf the benefits referred to in
paragraph 4(a) (except for Short Term and Long Term disability benefits)
for a period of not less than the period required by applicable statute.
Your Short Term and Long Term disability benefits shall be maintained for
the period required by applicable statute.
In the event that you breach the provisions of paragraph 7, the payment of
any further installments of such retiring allowance will immediately cease.
Further, the amount paid in each installment will be offset by any income
earned, during the period you are entitled to receive installments, from
alternate or self-employment.
Upon termination of this Agreement, other than upon your resignation under
paragraph 6(a) or for dismissal for cause or for breach under sub-paragraph
(d), any stock options referenced in paragraph 5 which have vested, will
continue to be exercisable in accordance with the said Stock Option
Agreement.
The termination provisions set forth above represent all severance pay
entitlement, notice of termination or pay in lieu thereof, salary, bonuses,
automobile allowances, vacation and/or vacation pay and other remuneration
and benefits payable or otherwise provided to you in relation to your
employment by the Corporation or any affiliates of Magna International Inc.
(the "Magna Group").
7. Other Conditions: You hereby acknowledge as reasonable and agree that you
shall abide by the following terms and conditions:
i) Technology, Know-How, Inventions, Patents: That all designs, devices,
improvements, inventions and ideas made or conceived by you resulting
from your access to the business of the Corporation shall be exclusive
property of the Corporation and you and your estate agree to take all
necessary steps to ensure that such property rights are protected.
ii) Confidentiality: You shall keep confidential at all times during or
after your employment, any information (including proprietary or
confidential information) about the business and affairs of, or
belonging to, the Corporation, or any member of the Magna Group or
their respective customers or suppliers, including information which,
though technically not trade secrets, the dissemination or knowledge
whereof might prove prejudicial to any of them.
iii) Non-Competition: During the term of your employment with the
Corporation and for a period of six (6) months after the cessation of
your employment, you shall not, directly or indirectly, in any
capacity compete with the business of the Corporation or any other
member of the Magna Group in respect of which you have had, access to
proprietary or confidential information or solicit the employees
thereof.
8. Term: Subject to earlier termination in accordance with the terms of this
Agreement, your employment with the Corporation shall commence on January 1,
2000, or such earlier or later date as may be mutually agreed upon, (the
"Start Date") and shall expire on December 31, 2004. This Agreement may be
renewed for a subsequent term on such terms and conditions as may be
mutually
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agreed upon in writing. Upon termination of this Agreement, paragraph 7
shall continue in full force and effect. This Agreement shall be null and
void and of no effect if you do not commence employment by January 1, 2000.
9. Assignability: The Corporation may, in its sole discretion, assign this
Agreement to an affiliated or other organization at any time. Upon any such
assignment, the terms and conditions of this Agreement shall continue in
full force and effect.
If the terms of employment as set out in this Agreement are acceptable to you,
please sign and date three copies of this Agreement in the places indicated and
return two fully signed copies to the attention of Xxxxx Xxxxx by December 21,
1999, after which, if not so signed and returned, this Agreement shall become
null and void and of no effect. Upon execution by you, this Agreement: (i)
replaces any prior written or oral employment contract or other Agreement
concerning remuneration between you and the Corporation, or any member of the
Magna Group; (ii) will continue to apply to your employment in a similar or
other capacity with the Corporation, or any member of the Magna Group and, (iii)
will continue to be applicable in the event that your employment with the
Corporation continues beyond the expiry date of the term specified above without
this Agreement being formally extended or replaced.
Yours very truly,
MI ENTERTAINMENT CORP.
Per:
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Xxxxx Xxxxxxxx
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I hereby accept the terms and conditions set out above and acknowledge that this
Agreement contains all of the terms and conditions of my employment with the
Corporation and that no other terms, conditions or representations other than
those within this letter form part of this Agreement. I confirm that I am not
subject to any restrictions (contractual or otherwise) arising from my former
employment which would prevent or impair me in carrying out my duties and
functions with the Corporation. Furthermore, I confirm that during the term of
my employment I will not offer to the Corporation any confidential or
proprietary information that I have knowledge of with respect to my former
employers, nor will I provide such information to the Corporation should I be
requested to do so, until such time as such information is no longer
confidential, proprietary or comes into the public domain.
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Date Xxxxx Xxxxxxxx
