EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into this
8th day of October, 1997 by and between Hard Rock Hotel, Inc., a Nevada
corporation, (the "Company") and Xxxx X. Xxxxxxxx, a resident of the State of
Nevada ("Executive").
WITNESSETH
WHEREAS, Executive is Senior Vice President of Harveys Casino Resorts, a
Nevada corporation ("Harveys") and acts as General Manager of the Hard Rock
Hotel and Casino located in Las Vegas, Nevada (the "Hard Rock"); and
WHEREAS, pursuant to the terms of a management agreement (the
"Management Agreement") Harveys manages the Hard Rock and the parties hereto
are entering into this Agreement in anticipation of and in connection with
the termination of the Management Agreement; and
WHEREAS, the Company has determined that the future services of
Executive will be of value to the Company and desires that Executive remain
at the Hard Rock as an employee of the Company in accordance with the terms
hereof, and
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements contained herein, together with good and valuable consideration
the receipt of which is hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby employs Executive and
Executive hereby accepts such employment commencing on the date of, and
immediately following, the final closing of the sale of Xxxxxx'x equity
interest in the Company to Xxxxx Xxxxxx or his designee and the termination
of the Management Agreement and any employment agreement between Harveys and
Executive (the "Commencement Date") and shall continue thereafter until the
fourth anniversary of the Commencement Date (the "Termination Date"), unless
sooner terminated in accordance with the terms hereof.
2. DUTIES OF EXECUTIVE. Executive shall be employed to serve in the
capacity of Senior Vice President of the Company and General Manager of the
Hard Rock. Executive shall be responsible for the overall supervision,
direction, and control of the operations of the Hard Rock facility and shall
direct the operating departments with a view to the successful implementation
of business policies and plans for the Hard Rock. Executive shall provide
support in the conceptual, strategic and policy formulation functions of the
Company and shall direct and coordinate the activities of the Hard Rock to
attempt to obtain optimum efficiency and economy of operations in order to
attempt to maximize profits. Executive shall devote his full business time,
attention and ability to the affairs of the Company during the term of this
Agreement; PROVIDED, HOWEVER, that Employee shall not be precluded from
involvement in charitable or civic activities or his
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personal financial investments provided that the same do not interfere with
his time and attention to the affairs of the Company. Executive will report
directly to Xxxxx Xxxxxx or such other person designated by the Board (as
defined below) who is reasonably acceptable to Executive.
3. BASE SALARY, BONUS AND REIMBURSEMENT FOR EXPENSES.
3.1 BASE SALARY. The Company shall pay to Executive a base
salary (the "Base Salary") of $250,000 per annum. The Base Salary shall be
payable in equal bi-weekly installments in arrears. For purposes of this
Agreement, the Base Salary and the Minimum Bonus (as hereinafter defined) are
collectively referred to as "Annual Compensation." Executive's job
performance will be evaluated at least annually for consideration of merit
increases in the Base Salary and any other form of supplemental income or
benefits that the Company may award to its senior officers.
3.2 BONUS. Executive shall be eligible to receive an annual
bonus to be determined by the Company's Board of Directors (the "Board")
based upon the financial performance of the Company and Executive's
contribution to such performance, which bonus shall not in any event be less
than $75,000 per annum (payable initially within 30 days after the end of
Company's fiscal year ended November 30, 1997 and thereafter within 30 days
after the end of the Company's calendar and/or fiscal year as the case may
be) commencing as of the date hereof and each anniversary of the date hereof,
and pro rated for any short year of the employment term.
3.3 REIMBURSEMENT OF EXPENSES. The Company will promptly
reimburse Executive for all reasonable and necessary expenses incurred by
Executive for travel, entertainment and miscellaneous business expenses,
including brokerage commissions on the sale of Executive's New Jersey home
and, up to a maximum of Six Thousand Dollars ($6,000), accounting and legal
fees incurred by Executive in connection with this Agreement. In addition,
the Company shall not require Executive to reimburse the Company for all or
part of that certain Thirteen Thousand Dollars ($13,000) bonus previously
received by Executive.
4. BENEFITS.
4.1 GENERALLY. Executive shall be entitled to participate in the
Company's group insurance, hospitalization and health and benefit plans as
well as all other benefit plans that the Company provides to its senior
executives to the extent such plans are established by the Company which the
parties hereto anticipate will be similar to those established by Harveys.
4.2 AUTOMOBILE. The Company shall provide Executive during the
term of this Agreement with the use of an automobile equal to or better than
that currently utilized by Executive and shall reimburse Executive for all
registration and title expenses, insurance premiums, maintenance and fuel
costs, in connection with the ownership and operation thereof. Executive
represents and warrants to the Company that Executive is
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currently receiving from Harveys the use of an automobile along with the
reimbursement of registration and title expenses, insurance premiums,
maintenance and fuel costs in connection with the ownership and operation of
such automobile.
4.3 RELOCATION LOAN. The Company shall loan Executive an amount
of money equal to, and on the same terms, as the current loan to Executive
from Harveys with respect to Executive's relocation from New Jersey to Nevada.
5. FACILITIES. Executive shall be furnished with office, supplies and
personnel which are necessary or appropriate for the adequate performance by
Executive of his duties be deemed to include, without limitation, a full time
administrative assistant.
6. NON-DISCLOSURE; NON-SOLICITATION. During the term of this
Agreement and thereafter, Executive shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge
or data relating to the Company or its affiliates, and their respective
businesses, which shall not be public knowledge (other than information which
becomes public as a result of acts of Executive or his representatives in
violation of this Agreement), including, without limitation, customer/client
lists, matters subject to litigation, and technology or financial information
of the Company or its subsidiaries, without the prior written consent of the
Company. In addition, during the term of this Agreement and for a two (2)
year period thereafter, Executive shall not, directly or indirectly, solicit
or contact any employee of the Company or any affiliate of the Company, with
a view to inducing or encouraging such employee to leave the employ of the
Company or its affiliates, for the purpose of being employed by Executive,
an employer affiliated with Executive or any competitor of the Company or
any affiliate hereof. Executive acknowledges that the provisions of this
Paragraph 6 are reasonable and necessary for the protection of the Company
and that the Company will be irrevocably damaged if such provisions are not
specifically enforced. Accordingly, Executive agree that, in addition to any
other relief to which the Company may be entitled in the form of actual or
punitive damages, the Company shall be entitled to seek and obtain injunctive
relief from a court of competent jurisdiction (without posting a bond
therefor) for the purpose of restraining Executive from any actual or
threatened breach of such provisions.
7. TERMINATION.
7.1 Executive's employment under this Agreement shall terminate
upon the occurence of any of the following:
(a) DEATH OR DISABILITY. If Executive dies or becomes
"Permanently Disabled" (meaning that he becomes mentally or physically
disabled, and if he has for six (6) successive months, or for shorter periods
aggregating nine (9) months in any period of eighteen (18) consecutive
months, been unable to substantially perform his duties hereunder),
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(b) RESIGNATION. The voluntary resignation of Executive
provided that Executive agrees that he will give not less than three (3)
month's advance written notice of such resignation to the Board, which notice
may be waived by the Company in its sole discretion.
(c) CAUSE. For "Cause," which for purposes of this
Agreement, shall only be any of the following:
(i) Executive's breach of any of the covenants contained
in Paragraph 6 of this Agreement;
(ii) willful and material failure or refusal by
Executive to perform or fulfill his obligations and duties
under this Agreement, other than by reason of Permanent
Disability as provided in Paragraph 7.1(a) above, provided
that Executive shall first be given written notice of such
failure, specifying the particulars in detail, and shall have
a period of thirty (30) days thereafter to cure or rebut the
claimed basis of such failures (and notwithstanding the
foregoing, Executive shall not be deemed to have been
terminated pursuant to this subparagraph (ii) unless and
until there shall have been delivered to Executive, together
with such written notice, a copy of a resolution, duly
adopted by the affirmative vote of not less than a majority
of the entire membership of the Board (after reasonable
notice to Executive and an opportunity for him, together with
his counsel, to be heard in person or telephonically before
the Board), finding that in the good faith determination of
the Board, Executive was guilty of such failure; or
(iii) an act of fraud, theft or embezzlement by
Executive, the commission of a felony by Executive, or the
entry by Executive of a plea of guilty or nolo contendere in
a court of competent jurisdiction for any crime (other than
minor traffic violations) or involving moral turpitude; or
(iv) the failure of Executive to obtain any requisite
license, permit or approval based on suitability from any
state, county, or other governmental authority having
jurisdiction over the gaming operations of the Company (the
"Gaming Authorities") which would preclude Executive from
carrying out his duties as set forth in this Agreement; or
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(v) if, after the initial receipt by Executive of any
requisite license, permit or approval from the Gaming
Authorities, the execution of Executive's duties as set forth
in this Agreement will, as evidenced by communications from
any senior official of any of the Gaming Authorities,
materially preclude or unduly delay the issuance of, or
result in the imposition of unduly burdensome terms and
conditions on, or revocation of, any liquor, gaming or other
license, permit or approval, necessary or appropriate to the
proposed, contemplated or actual operations of the Company;
PROVIDED, HOWEVER, that this subparagraph (v) shall not be
applicable if Executive shall, within a reasonable period of
time after receipt of written notice from the Board
specifying the nature of the issues involved hereunder,
remedy the situation to the satisfaction of the applicable
Gaming Authorities; or
(vi) a default of Executive of any other material
provision of this Agreement, provided that the termination of
Executive's employment pursuant to this subparagraph (vi) shall
not constitute valid termination for good cause unless
Executive shall have first received written notice from the
Board stating with specificity the nature of such breach and
affording Executive at least thirty (30) days to correct the
breach.
(d) COMPANY BREACH. In the event of the Company's willful
and material breach of any provision of this Agreement (which shall be deemed
to include, but not be limited to, any failure to timely pay any undisputed
amounts owing to Executive hereunder), Executive shall have the right to
terminate his employment hereunder; provided that Executive shall give
written notice to the Company of his intent to so terminate setting forth the
basis for such termination, and the Company shall then have thirty (30) days
after receipt of such notice to cure fully the subject breach.
7.2 TERMINATION OBLIGATIONS OF EXECUTIVE. In the event
Executive's employment with the Company is terminated, Executive, or his
legal representative in case of termination by death or Executive's physical
or mental incapacity to serve, shall:
(a) by the close of the effective date of termination,
resign from all corporate and board positions held in the Company and any of
its subsidiary and affiliated companies;
(b) promptly return to a representative designated by the
Company all property, including but not limited to, automobiles, keys,
identification
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cards and credit cards of the Company or any of its subsidiaries or
affiliated companies; and
(c) incur no further expenses or obligations on behalf of
the Company, or any of its subsidiaries and affiliated companies.
8. CHANGE OF CONTROL. In the event of a "Change of Control" (as
defined below), all equity granted to Executive in accordance with this
Agreement which has not vested as of the date of the Change of Control shall
immediately vest (and the put shall become exercisable by Executive). For
purposes of this Agreement "Change of Control" shall mean that Xxxxx Xxxxxx
and/or his affiliates no longer, directly or indirectly, beneficially own(s)
in the aggregate shares of capital stock of the Company having thirty-three
and one-third percent (33-1/3%) or more of the aggregate voting power of all
shares of capital stock of the Company at the time outstanding and any person
or any group shall, directly or indirectly, beneficially own in the aggregate
shares of capital stock of the Company having xxxxxx-three and one-third
percent (33-1/3%) or more of the aggregate voting power of all shares of
capital stock of the Company at the time outstanding. For the purposes of
this Paragraph 8, the term "person" shall have the same meaning ascribed to
such term pursuant to the Securities Act of 1933, as amended. For the
purposes of this Paragraph 8, the terms "beneficially owned" and "group"
shall have the respective meanings ascribed to them pursuant to Section 13(d)
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
The term "affiliate" as used in this Agreement shall have the same meaning
as ascribed to such term in Section 12b-2 of the Securities Exchange Act of
1934, as amended.
9. TERMINATION COMPENSATION
9.1 SEVERANCE COMPENSATION. If Executive shall terminate his
employment under this Agreement pursuant to Paragraph 7.1(d), or if the
Company shall terminate Executive's employment with the Company for any
reason other than those set forth in Paragraph 7.1(a), (b) or (c), the
Company shall pay Executive (i) his total Annual Compensation through the
date of termination at the rate in effect at the time notice of such
termination is given in lieu of any further salary or other payments to
Executive hereunder for periods subsequent to the date of termination; (ii)
in lieu of any further salary or other payments to Executive hereunder other
than payments relating to Executive's right to sell the Shares to Lily Pond
as set forth in the Letter Agreement of even date herewith (the "Letter
Agreement") for periods subsequent to the date of termination, the Company
shall pay as liquidated damages to Executive on the fifteenth day following
the date of termination, a lump sum amount equal to the product of (A) the
total Annual Compensation in effect as of the date of termination, multiplied
by (B) the number of years (including partial years) remaining in the
employment term hereunder (provided, that such number used as a multiplier
shall not be less than one); (iii) Executive shall vest in any non-vested
equity granted to him by the Company and Lily Pond Investments, Inc., a
Nevada corporation; (iv) the Company shall pay the
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amount of any forfeitures that result from any non-vesting under any of the
Company's employee benefit, welfare, stock option or other plans (qualified
or non-qualified); and (v) the Company shall continue to provide the benefits
and payments due Executive as provided in Paragraph 4 above for the unexpired
portion of the employment term; PROVIDED, HOWEVER, that Executive shall only be
entitled to such payment and benefits as long as he is in compliance with
Paragraph 6 of this Agreement.
10. REPRESENTATIONS AND WARRANTIES OF EXECUTIVE. Executive represents
and warrants to the Company that (i) as of the Commencement Date, Executive
shall be under no contractual or other restriction or obligation which is
inconsistent with the execution of this Agreement, the performance of his
duties hereunder, or the other rights of the Company hereunder, and (ii)
Executive is under no physical or mental disability that would hinder the
performance of his duties under this Agreement.
11. GENERAL PROVISIONS.
11.1 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns and
Executive, his assignees, and his estate. Neither Executive, his designees,
nor his estate shall commute, pledge, encumber, sell or otherwise dispose of
the rights to receive the payments provided in this Agreement, which payments
and the rights thereto are expressly declared to be nontransferable and
nonassignable (except by death or otherwise by operation of law).
11.2 GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Nevada from time to time in effect.
11.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same Agreement.
11.4 NO WAIVER. Except as otherwise expressly set forth herein,
no failure on the part of either party hereto to exercise and no delay in
exercising any right, power or remedy hereunder shall operate as a waiver
hereof nor shall any single or partial exercise of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of
any other right, power or remedy.
11.5 HEADINGS. The headings of the Paragraphs of this Agreement
have been inserted for convenience of reference only and shall in no way
restrict any of the terms or provisions hereof.
11.6 INDEMNIFICATION. Subject to Nevada Revised Statutes Section
78.751, as may be amended, and to the fullest extent permitted by law, the
Company agrees to defend, indemnify and hold Executive harmless from and
against any liabilities, costs and expenses (including without limitation, in
connection with any actions relating to licensing by any Gaming Authorities)
arising in relation to Executive's services as an officer, director or
employee of the Company or any of its affiliates to the fullest extent
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permitted by applicable law. Subject to the foregoing, the Company shall pay
on a regular basis to the fullest extent permitted by law, any legal and
other professional fees and expenses incurred with respect to a matter which
is the subject of indemnification. The Company will continue to maintain
directors and officers liability insurance.
11.7 NOTICES. Any notice under this Agreement shall be given in
writing and delivered in person or mailed by certified or registered mail,
addressed to the respective party at the address as set out below, or at such
other address as either party may elect to provide in advance in writing to
the other party:
EXECUTIVE:
Xxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxx
Xxx Xxxxx, Xxxxxx 00000
COMPANY:
Hard Rock Hotel, Inc.
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx
WITH A COPY TO:
Xxxxxx & Silver, Ltd.
0000 Xxxxxx Xxxxxx Xxxxxxx
00xx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxxx X. Xxxx
11.8 SEVERABILITY. If any provision of this Agreement is held by
a court of competent jurisdiction to be invalid, illegal, or unenforceable by
reason of any rule of law or public policy, all other provisions of this
Agreement shall nevertheless remain in effect. No provision of this Agreement
shall be deemed dependent on any other provision unless so expressed herein.
11.9 GAMING AUTHORITIES APPROVAL. Nothing contained in this
Agreement shall be construed to require the commencement of any act contrary
to law, and when there is any conflict between any provision of this
Agreement and any statute, law, ordinance, or regulation, contrary to which
the parties have no legal right to contract, then the latter shall prevail;
but in such an event, the provisions of this Agreement so affected shall be
curtailed and limited only to the extent necessary to bring it within the
legal requirements. Notwithstanding anything contained in this Agreement to
the contrary, this Agreement and the terms and conditions contained herein
shall be contingent upon all requisite approvals of the applicable Gaming
Authorities.
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11.10 NO WAIVER. The several rights and remedies provided for in
this Agreement shall be construed as being cumulative, and no one of them
shall be deemed to be exclusive of the others or of any right or remedy
allowed by law. No waiver by Company or Executive any failure to Executive or
Company, respectively, to keep or perform any provision of this Agreement
shall be deemed to be a waiver of any preceding or succeeding breach of the
same or other provision.
11.11 MERGER. This Agreement and the Letter Agreement supersede
any and all other agreements, either oral or in writing, between the parties
hereto with respect to the employment of the Executive by the Company.
11.12 NO REPRESENTATIONS. Each party to this Agreement
acknowledges that except as set forth in the Letter Agreement, no
representations, inducements, promises or other agreements, oral or
otherwise, have been made by any party, anyone acting on behalf of any party,
which are not embodied herein and that no other agreement, statement or
promise not contained in this Agreement shall be valid or binding. Any
addendum to or modification of this Agreement shall be effective only if it
is in writing and signed by the parties to be charged.
11.13 DRAFTING AMBIGUITIES. Each party to this Agreement has been
afforded an opportunity to have this Agreement reviewed by his or its
respective counsel. The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting Party shall not be
employed in the interpretation of this Agreement or of any amendments or
exhibits to this Agreement.
11.14 SURVIVAL. The terms and conditions of Paragraphs 6, 9 and
11.6 shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Hard Rock Hotel, Inc., a Nevada
corporation
By: /s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx, President
/s/ Xxxx X. Xxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxx
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