EMPLOYMENT AGREEMENT
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THIS AGREEMENT, dated this 1st day of January, 1997, is entered into by
and between Latin American Casinos, Inc., a Delaware corporation ("Employer")
and Xxxxx Xxxxx ("Employee").
W I T N E S S E T H:
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WHEREAS, Employer desires to retain the services of Employee upon the
terms and conditions stated herein, and
WHEREAS, Employee desires to be employed by Employer upon the terms and
conditions stated herein.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and promises contained herein, the parties hereby agree as follows:
1. Employment Term. Employer herewith employs Employee as Chairman of
the Board of Directors and Chief Executive Officer of Employer for a period of
five years from the date hereof. This Agreement shall continue in effect for
annual renewal periods subsequent to the aforementioned 5 year period, provided
that this Agreement may be cancelled effective at the end of either the
aforementioned 5 year period or any annual renewal period subsequent to such 5
year period, by either party by giving notice to the other delivered at least
one hundred and twenty (120) days before the end of such period.
2. Duties. Employee's executive duties shall involve the supervision
and operation of the Employer's business and such other executive duties as may
be determined by the Board of Directors. The Employee shall devote all of his
working time, attention and energies to the business of the Employer, but shall
not be precluded from engaging in other
activities, or investments, that do not affect his required attention to the
Employer's business.
3. Compensation.
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(a) The Employer shall pay to the Employee, the following
compensation as his Base Salary per annum for his services to be rendered
hereunder the sum of $275,000 from the effective date hereof until December 31,
1997. Employee's base annual salary shall automatically increase by $25,000 per
annum each year throughout the term of this Agreement, including any renewals
hereof.
(b) Beginning on January 1, 1998 through the termination of
this Agreement, the Employee shall receive from the Employer an adjustment in
the Base Salary to reflect (increases but not decreases) in the Consumer Price
Index. Such amount shall be calculated as follows:
(i) Definitions: For the purpose of this
Paragraph, the following definitions shall apply:
(A) The term "Base Year" shall mean the full
calendar year of 1997.
(B) The term "Price Index" shall mean the
'Consumer Price Index' published by the Bureau of
Labor Statistics of the U.S. Department of Labor-All
Items for all Urban Consumers (presently denominated
"CPI-U") 1967 Base = 100, or a successor or
substitute index appropriately adjusted. (ii) The
term "Price Index for the Base Year" shall mean the
average
of the monthly Price Indexes for each of the 12 months of the
Base Year.
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(iii) Effective as of January 1, 1998 and each
succeeding January 1 thereafter throughout the term of this
Agreement, there shall be made a cost of living adjustment of
the Base Salary payable hereunder. The adjustments shall be
based on such percentage difference between the Price Index
for the preceding month of September and Price Index for the
Base Year.
(iv) In the event the Price Index for December in any
calendar year during the term of this Agreement reflects a
change from the Price Index for the Base year, then the Base
Salary herein provided to be paid as of the first full week in
January following such month of December (unchanged by any
adjustments under this Paragraph) shall be multiplied by the
percentage difference between the price Index for December and
the Price Index for the Base Year, and the resulting sum shall
be added to or subtracted from such Base Salary effective as
of such first full week in January. Said adjusted Base Salary
shall thereafter be payable hereunder, in equal installments
with the Base Salary, until it is readjusted pursuant to the
terms of this Agreement. In no event shall the Base Salary be
reduced as a result of the application of this paragraph (b).
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4. Bonus. Payment of a bonus shall be left to the discretion of
the Board of Directors.
5. Reimbursement of Expenses. Employee shall be entitled to
reimbursement for all reasonable actual out-of-pocket business related expenses
incurred by him which shall be substantiated. Further, Employee shall be
entitled to a non-accountable expense allowance not to exceed three thousand
five hundred dollars ($3,500) per month, increasing each successive year by five
hundred dollars ($500) per month, throughout the term of this Agreement,
including any renewal periods hereof.
6. Automobile. Employer shall provide employee with an automobile
of Employee's choice from Company inventory. Employee shall be entitled to
reimbursement for all reasonable business related costs directly associated with
the operation and maintenance of such automobile including fuel and repairs.
7. Benefits; Insurance; Legal Expenses.
(a) Employee shall be entitled to participate in all benefit
programs of Employer offered generally to employees and/or to officers and
directors on the same basis as other employees of the Employer.
(b) Employee shall be entitled to participate in all insurance
programs of Employer, and shall be provided the following minimum insurance
coverage:
(i) major medical insurance for him and his
dependents, together with basic hospital/medical care
insurance such as Blue Cross and Blue Shield; and
(ii) indemnification insurance for acts committed
within the scope of
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employment, if available.
(c) In addition to insurance coverage provided for all
employees of the Employer, due to his extensive travel in Latin America, the
Employer shall provide insurance coverage for the Employee for (i) long-term
health care and (ii) any and all losses, injuries or other damages suffered as a
result of kidnapping.
(d) In addition to any right of indemnification that the
Employee has or may have pursuant to applicable state law, or articles of
incorporation or by-laws of the Employer, the Employer agrees to pay and advance
all expenses incurred or to be incurred by the Employee, including reasonable
attorneys fees and disbursements, in connection with the defense by the Employee
of any and all litigation or adversary proceedings commenced during the term of
this Agreement, unless otherwise prohibited by law. Notwithstanding the
foregoing, in the event that a court of competent jurisdiction has found that
the Employee has committed fraud with respect to the Employer or any other
intentional tort wherein the employee has procured a pecuniary benefit at the
expense of the Employer, then this subparagraph 7(b) shall be void, and the
Employee shall reimburse the Employer for all expenses advanced hereunder.
8. Hours of Vacation. Employee shall work full time and shall be
entitled to four weeks paid vacation per year.
9. Takeovers, Mergers, etc. In the event of either a merger,
consolidation, sale or conveyance of substantially all of the assets of the
Employer or sale of either majority or plurality control by one or more of the
controlling stockholders of the Employer, which results in the discharge of the
Employee, then in such event, Employer shall pay to Employee
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a sum of money equal to (i) 200% of the sum of the balance of payments remaining
through the term of this Agreement for Base Salary together with adjustments
made to date as stated in Paragraph 3 hereof, and (ii) 200% of the sums of all
other monies paid to the Employee pursuant to the terms of this Agreement during
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the last 12 months prior to such event times the number of years remaining on
the term at this Agreement, within 30 days of such event.
10. Disability.
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(a) In the event Employee should die or become permanently
disabled as that term is hereinafter defined, his employment shall terminate
immediately provided, however, that the Corporation shall continue to pay the
annual Base Salary of such Employee as adjusted in accordance with paragraph 3
hereof on a monthly basis for twenty-four (24) months to the Employee, or in the
event of his death, to his spouse, or if she should predecease him, to his
estate.
(b) The term "permanently disabled" shall mean the inability
to perform the duties required to be performed hereunder for a period of 90 days
within any 365 day period.
11. Discharge.
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(a) Employee may not be discharged except for cause. In the
event of a dismissal for cause, Employee shall be entitled to a statement
setting forth the nature of the cause alleged and the facts which constitute
such cause.
(b) The meaning of the term "cause", for the purposes of this
paragraph, shall be defined to mean a breach of fiduciary obligation to the
Employer.
12. Covenant not to Compete.
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(a) The Employee covenants and agrees that during the term of
this Agreement and until one year after the termination of his employment with
the Employer, he shall not directly or indirectly:
(i) Compete with or be engaged in the same
business as the
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Employer or any parent, subsidiary, or affiliate of the
Employer, or employed by, or act as consultant or lender to,
or be a director, officer, employee, owner, or partner of, any
business or organization which, at the time of such
termination, directly or indirectly competes with or is
engaged in the same business as the Employer or any parent,
subsidiary, or affiliate of the Employer within a 100 mile
radius of any office maintained by the Employer, except that,
in each case, the provisions of this section will not be
deemed breached merely because the Employee owns no more than
5% of the outstanding common stock of a corporation, if, at
the time of its acquisition by the Employee, such stock is
listed on a national securities exchange, is reported on
NASDAQ, or is regularly traded in the over-the-counter market;
or
(ii) solicit in connection with the same business
as the Employer, any customer of the Employer who was at any
time during the term of this Agreement, a customer of the
Employer.
(b) Notwithstanding anything to the contrary, in the
event that the Employer terminates this Agreement in accordance with the terms
of paragraph 1 hereof or in the event Employee is discharged as a result of a
hostile take over, then the terms of this paragraph 12, "Covenant Not to
Compete", shall not be enforced.
(c) If any term of this paragraph 12, "Covenant Not to
Compete" is found by any court having jurisdiction to be too broad, then and in
that case, such term shall nevertheless remain effective, but shall be
considered amended (as to the time or area or otherwise, as the case may be) to
a point considered by said court, as reasonable, and as so
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amended, shall be fully enforceable.
13. No Waiver. The failure of any of the parties hereto
enforce any provision hereof on any occasion shall not be deemed to be a waiver
of any preceding or succeeding breach of such provision or of any other
provision.
14. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties hereto an no amendment, modification
or waiver of any provision herein shall be effective unless in writing, executed
by the party charged therewith.
15. Governing Law. This Agreement shall be construed,
interpreted and enforced in accordance with and shall be governed by the laws of
the State of Florida applicable to agreements to be wholly performed therein.
16. Binding Effect. This Agreement shall bind and inure to the
benefit of the parties, their successors and assigns.
17. Attorney's Fees. In the case that litigation should arise
pertaining to this Agreement or any portion thereof, the party which shall be
entitled to receive reasonable attorney's fees resulting therefrom.
18. Assignment and Delegation of Duties. This Agreement may not
be assigned by the parties hereto. This Agreement is in the nature of a personal
services contract and the duties imposed hereby are non-delegable.
19. Paragraph Headings. The paragraph headings herein have been
inserted for convenience of reference only, and shall in no way modify or
restrict any of the terms of provisions hereof.
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20. Notices. Any Notice under the provisions of this
Agreement shall be given by registered or certified mail, return receipt
requested, directed to the addresses set forth above, unless notice of a new
address has been sent pursuant to the terms of this paragraph.
21. Unenforceability; Severability. If any provision of this
Agreement is found to be void or unenforceable by a court of competent
jurisdiction, the remaining provisions of this Agreement, shall nevertheless, be
binding upon the parties with the same force and effect as though the
unenforceable part has been severed and deleted.
22. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be deemed to be duplicate originals.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
EMPLOYER: EMPLOYEE:
Latin American Casinos, Inc.
BY: /s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxx Xxxxx
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Xxxxxx X. Xxxxxxxxx Xxxxx Xxxxx
Vice-President and Chief Financial Officer
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