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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of June
28, 1999 between Fitzgeralds Gaming Corporation, a Nevada corporation (the
"Company") and Xxxxxx X. Xxxxxxxx, an individual ("Executive").
PRELIMINARY STATEMENTS
The Company is in the business of owning and operating casino hotel
resorts (the "Company Business"). Executive is currently employed by the Company
as the Chairman of the Board, Chief Executive Officer and President of the
Company.
The Company desires to retain the services of Executive, and Executive
desires to be so retained, on the terms and conditions herein contained.
AGREEMENT
In consideration of the various covenants and agreements hereinafter
set forth, the parties hereto agree as follows:
1. Term of Employment. The Company hereby employs Executive and
Executive accepts such employment commencing on the date of this Agreement (the
"Commencement Date") and terminating on the fourth anniversary of the
Commencement Date, unless sooner terminated as hereinafter provided; provided,
however, that the term of this Agreement may be extended for successive one (1)
year terms upon the mutual agreement of the parties hereto.
2. Services to be Rendered.
2.1. Duties. Executive shall be employed to serve in the
capacity of Chairman of the Board, Chief Executive Officer and President of the
Company, with the duties and powers customarily associated with such position.
Executive shall also perform such other duties pertaining to the Company
Business as the Board of Directors of the Company (the "Board") may from time to
time direct and in the manner which the Board may from time to time direct,
provided such duties are consistent with the role of a Chairman of the Board,
Chief Executive Officer and President of an entity of similar size and nature.
Executive hereby consents to serve as an officer and/or director of the Company
or any subsidiary or any company, partnership or entity which, directly or
indirectly, controls, is controlled by or is under common control with the
Company (an "affiliate") without any additional salary or compensation except as
expressly set forth in this Agreement, if so requested by the Board, provided
that any such appointment will not materially increase the scope of Executive's
duties in effect as of the date of this Agreement.
2.2. Exclusive Services. Executive shall at all times
faithfully, industriously and to the best of his ability, experience and talents
perform to the satisfaction of the Board all of the duties that may be assigned
to him hereunder and shall devote such time to the performance of these duties
as may be necessary therefor. Executive shall be available to perform the duties
assigned to him pursuant to this Agreement; provided, however, that Executive
may devote time
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to charitable or civic activities or his personal investments, to the extent
that the same do not materially interfere with his time and attention to the
affairs of the Company.
3. Compensation and Benefits. The Company shall pay the
compensation and benefits expressly set forth in this Agreement to Executive
during the term of this Agreement and Executive shall accept such compensation
and benefits as payment in full for all services rendered by Executive to or for
the benefit of the Company.
3.1. Base Salary. Beginning on April 1, 1999, Executive shall
be entitled to a base salary (the "Base Salary") of Five Hundred Twenty Thousand
Dollars ($520,000) per annum; provided, however, that between April 1, 1999 and
the Commencement Date, the Company shall only be obligated to pay Executive the
difference between the Base Salary and the base salary paid to Executive by the
Company under any prior employment arrangement. The Base Salary shall increase
by a minimum of five percent (5%) on the first day of July of each year during
the term of this Agreement. The exact increase in the Base Salary shall be set
by the Board or by a compensation committee, if any, appointed by the Board. The
Base Salary shall accrue in equal monthly installments in arrears and shall be
payable in accordance with the payroll practices of the Company in effect from
time to time.
3.2. Discretionary Bonus. In addition to the Base Salary,
Executive shall be entitled to such bonus compensation as Executive may be
awarded, from time to time, by the Board or by a compensation committee, if any,
appointed by the Board.
3.3. Split Dollar Life Insurance. The Company has obtained, or
will obtain, and shall pay all premiums payable with respect to one (1) or more
split dollar life insurance policies aggregating Ten Million Dollars
($10,000,000) payable over a period of ten (10) years commencing on June 12,
1996, for the benefit of Executive (collectively, the "Split Dollar Policy"). In
the event that Executive's employment is terminated for reasons other than those
set forth in Sections 7.1, 7.2 or 7.3 of this Agreement, the Company shall, at
Executive's option, (i) continue to be obligated to maintain the Split Dollar
Policy until June 12, 2006 or (ii) pay Executive the present value of the then
remaining payments due under the Split Dollar Policy giving effect to the past
obligation for an additional one (1) year of premium payments of the Split
Dollar Policy since the Split Dollar Policy was to commence in June of 1995.
3.4. Term and Group Life Insurance. The Company shall pay all
premiums due and payable with respect to a One Million Dollar ($1,000,000) term
life insurance policy and a One Hundred Thousand Dollar ($100,000) group life
insurance policy, in each case for the benefit of Executive or his designees.
3.5. Tax Return Preparation. The Company shall pay Executive
on or before December 31 of each year during the term of this Agreement, the sum
of Five Thousand Dollars ($5,000) per year for tax return preparation for each
year in which Executive's personal tax return is affected by the open years
during which the Company and certain of its affiliates were so-called "Subchaper
S" corporations or limited partnerships. The Company acknowledges and reaffirms
its obligation to indemnify, defend and hold Executive harmless from any and all
taxes, costs, expenses (including reasonable attorney's fees), obligations,
actions, causes of action, suits or other liabilities in relation to the
structure of the Company at formation in 1991.
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3.6. Expenses. The Company shall reimburse Executive for
reasonable out-of-pocket expenses incurred in connection with the Company
Business and the performance of his duties pursuant to this Agreement, subject
to such policies as the Board may from time to time establish.
3.7. Vacation. Executive shall be entitled to paid vacation to
be taken at a time or times which will not materially interfere with his duties
as set forth in this Agreement.
3.8. Automobile. The Company shall furnish Executive with an
automobile allowance in an amount of One Thousand Five Hundred Dollars ($1,500)
per month.
3.9. Benefits. Executive shall be entitled to participate in
the Company's hospitalization, executive medical, group health and disability
benefit plans and all pension plans, profit-sharing plans, savings plans,
deferred compensation plans, stock option plans, health and accident plans and
other benefits and plans as the Company provides to its senior executives to the
extent such plans are established by the Company and to the extent that
Executive is eligible to participate in such plans
3.10. Withholding and Other Deductions. All compensation
payable to Executive hereunder shall be subject to such deductions as the
Company is from time to time required to make pursuant to law, governmental
regulation or order.
3.11. Retention and Severance Program. Notwithstanding
anything contained in this Agreement to the contrary, Executive shall be
entitled to all benefits contained in the Company's Retention and Severance
Program at such time as such Retention and Severance Program is adopted by the
Board. In the event of any inconsistency between this Agreement and the
Retention and Severance Program, the document containing the terms and
conditions which are more favorable to Executive with respect to the issue in
question, in Executive's sole discretion, shall supersede and control.
4. Representations and Warranties of Executive. Executive
represents and warrants to the Company that (i) Executive is 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.
5. Certain Covenants.
5.1. Noncompetition. From and after the Commencement Date and
until the expiration or earlier termination of this Agreement (such period, the
"Restricted Period"), Executive shall not have any ownership interest (of record
or beneficial) in, or have any interest as an employee, salesman, consultant,
officer or director in, or otherwise aid or assist in any manner, any firm,
corporation, partnership, proprietorship or other business that engages in a
business in direct competition with the Company, in any county, city or part
thereof in which the Company or any affiliate of the Company owns, operates, or
manages a facility or establishment engaged in the Company Business at any time
during the term of this Agreement; provided, however, that Executive may own,
directly or indirectly, solely as an investment, securities of any entity which
are traded on any national securities exchange if Executive (i) is not a
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controlling person of, or a member of a group which controls, such entity; or
(ii) does not, directly or indirectly, own one percent (1%) or more of any class
of securities of any such entity. The determination as to whether Executive has
violated this Section 5.1 shall be made in good faith by the Board.
5.2. Trade Secrets. During the term of this Agreement and
thereafter, Executive shall hold in a fiduciary capacity for the benefit of the
Company or its affiliates, and their respective businesses, all secret or
confidential information of the Company 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).
5.3. Rights and Remedies Upon Breach. If Executive breaches or
threatens to commit a breach of any of the provisions of this Section 5 (the
"Restrictive Covenants"), the Company shall have the right and remedy to have
the Restrictive Covenants specifically enforced by any court having equity
jurisdiction, all without the need to post a bond or any other security or to
prove any amount of actual damage or that money damages would not provide an
adequate remedy, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide adequate remedy to the Company.
5.4. Severability of Covenants/Blue Penciling. If any court
determines that any of the Restrictive Covenants, or any part thereof; is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions. If any court determines that any of the Restrictive Covenants,
or any part thereof; are unenforceable because of the duration of such provision
or the area covered thereby, such court shall have the power to reduce the
duration or area of such provision and, in its reduced form, such provision
shall then be enforceable and shall be enforced. Executive hereby waives any and
all right to attack the validity of the Restrictive Covenants on the grounds of
the breadth of their geographic scope or the length of their term.
5.5. Enforceability in Jurisdictions. The Company and
Executive intend to and do hereby confer jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the geographical scope of
such covenants. If the courts of any one or more of such jurisdictions hold the
Restrictive Covenants wholly unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the Company and Executive that such
determination not bar or in any way affect the right of the Company to the
relief provided above in the courts of any other jurisdiction within the
geographical scope of such covenants, as to breaches of such covenants in such
other respective jurisdictions, such covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.
6. Proprietary Rights.
6.1. Disclosure of Executive's Knowledge. Executive shall make
available to the Company at no cost to the Company all knowledge possessed by
him relating to any methods, developments, inventions and/or improvements,
whether patented, patentable or unpatentable, which concern in any way the
Company Business, whether acquired by Executive before or during the term of
employment, provided that nothing herein shall be construed as requiring any
disclosure where any such method, development, invention and/or improvement is
lawfully protected from disclosure as a trade secret of any third party or by
any other lawful bar
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to such disclosure.
6.2. Ownership of Patent Rights, Copyrights, and Trade
Secrets. To the fullest extent permitted by Nevada law, Executive shall assign,
and does hereby assign, to the Company all of Executive's right, title and
interest in and to all inventions, improvements, developments, trade secrets,
discoveries, computer software, tradenames and trademarks conceived, improved,
developed, discovered or written by Executive, alone or in collaboration with
others, during the term of this Agreement which relate in any manner to the
Company Business, whether or not the same shall be conceived, improved,
developed, discovered or written during customary working hours on the Company's
premises. During the term of this Agreement, Executive shall promptly and fully
disclose to the Company all matters within the scope of this Section 6.2, and
shall, upon request of the Company, execute, acknowledge, deliver and file any
and all documents necessary or useful to vest in the Company all of Executive's
right, title and interest in and to all such matters. All expenses incurred in
connection with the execution, acknowledgment, delivery and filing of any papers
or documents within the scope of this Section 6.2 shall be borne by the Company.
All matters within the scope of this Section 6.2 shall constitute trade secrets
of the Company subject to the provisions of Section 5.2 of this Agreement, until
such matters cease to be trade secrets by operation of law.
7. Termination.
7.1. Death or Total Disability of Executive. If Executive dies
or becomes totally disabled during the term of this Agreement, Executive's
employment hereunder shall automatically terminate; provided, however, that in
the event of Executive's death or total disability, Executive shall be entitled
to receive the Base Salary which would have otherwise been paid to him, but for
the death or total disability for a period of the lesser of (i) one (1) year or
(ii) the remainder of the term of this Agreement. For these purposes, Executive
shall be deemed totally disabled if Executive has, in fact, not fully discharged
Executive's duties hereunder for a period of one hundred eighty (180) days due
to a physical or mental incapacitation.
7.2. Termination for Good Cause. Executive's employment
hereunder may be terminated by the Company for "good cause." The term "good
cause" is defined as any one or more of the following occurrences:
(a) Executive's conviction by, or entry of a
plea of guilty or nolo contendere in, a court of competent and final
jurisdiction for any crime involving moral turpitude or would constitute a
felony in the jurisdiction involved;
(b) Executive's conviction of the commission of
an act of fraud, whether prior to or subsequent to the date hereof upon the
Company;
(c) Executive's continuing repeated willful
failure or refusal to perform Executive's duties as required by this Agreement;
(d) the failure of Executive to obtain and
maintain 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
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Authorities") which would preclude Executive from carrying out his duties as set
forth in this Agreement;
(e) Executive's breach of any other provision of
this Agreement, provided that termination of Executive's employment pursuant to
Section 7.2(c) or this Section 7.2(f) 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
fifteen (15) days to correct the breach alleged; provided, however, that if such
breach cannot be cured within such fifteen (15) day period, Executive shall be
afforded a reasonable time period thereafter to cure such breach provided that
Executive commences the cure of such breach within the fifteen (15) day period
and diligently proceeds to cure such breach to completion.
7.3. Resignation of Executive. The Company shall have the
right to terminate this Agreement and Executive's employment hereunder due to
the voluntary resignation of Executive, provided that Executive shall deliver no
less than sixty (60) days prior written notice of such resignation to the Board,
which notice may be waived by the Board.
7.4. Severance Compensation. Upon the occurrence of any of the
events referred to in Sections 7.2 or 7.3 above, Executive (or Executive's heirs
or representatives) shall be entitled to receive only such portion (if any) of
the Base Salary as may theretofore have accrued but be unpaid on the date on
which the termination shall take effect.
7.5. Return of the Company's Property. If this Agreement is
terminated, the Company shall have the right, at its option, to require
Executive to vacate his offices prior to the effective date of termination and
to cease all activities on the Company's behalf. Upon the termination of his
employment in any manner, Executive shall immediately surrender to the Company
all lists, books and records of, or in connection with, the Company Business,
and all other property belonging to the Company, it being distinctly understood
that all such lists, books and records, and other documents, are the property of
the Company.
8. Arbitration. Any claim or controversy arising out of or
relating to this Agreement shall be settled by arbitration in Las Vegas, Nevada,
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrators may be
entered in any court having jurisdiction. There shall be three (3) arbitrators,
one to be chosen directly by each party at will, and the third arbitrator to be
selected by the two (2) arbitrators so chosen. Each party shall pay the fees of
the arbitrator it selects and of its own attorneys, the expenses of its
witnesses and all other expenses connected with presenting its case. Other costs
of the arbitration, including the cost of any record or transcripts of the
arbitration, administrative fees, the fee of the third arbitrator, and all other
fees and costs, shall be borne equally by the parties.
9. General Relationship. Executive shall be considered an
employee of the Company within the meaning of all federal, state and local laws
and regulations including, but not limited to, laws and regulations governing
unemployment insurance, workers' compensation, industrial accident, labor and
taxes.
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10. Miscellaneous.
10.1. Modification, Prior Claims. This Agreement sets forth
the entire understanding of the parties with respect to the subject matter
hereof, supersedes all existing agreements including, without limitation, prior
employment agreements, between them concerning such subject matter, and may be
modified only by a written instrument duly executed by each party.
10.2. Assignment. The rights of the Company under this
Agreement may, without the consent of Executive, be assigned by the Company, in
its sole and unfettered discretion, (i) to any person, firm, corporation or
other business entity which at any time, whether by purchase, merger or
otherwise, directly or indirectly, acquires all or substantially all of the
assets or business of the Company, and (ii) to any subsidiary or affiliate of
the Company.
10.3. Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive
Executive's termination of employment with the Company and/or its affiliates.
10.4. Third Party Beneficiaries. This Agreement does not
create, and shall not be construed as creating, any rights enforceable by any
person not a party to this Agreement.
10.5. Waiver. The failure of either party hereto at any time
to enforce performance by the other party of any provision of this Agreement
shall in no way affect such party's rights thereafter to enforce the same, nor
shall the waiver by either party of any breach of any provision hereof be deemed
to be a waiver by such party of any other breach of the same or any other
provision hereof.
10.6. Hiring At Will. Any continuance of Executive's
employment by the Company after the term of this Agreement shall be deemed a
hiring at will (unless such continuance is the subject of a new written
agreement) and shall be subject to termination with or without cause by either
party upon delivery of notice thereof.
10.7. Section Headings. The headings of the several Sections
in this Agreement are inserted solely for the convenience of the parties and are
not a part of and are not intended to govern, limit or aid in the construction
of any term or provision hereof.
10.8. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be delivered by courier or other means
of personal service (including by means of a nationally recognized courier
service or professional messenger service), or sent by telex or telecopy or
mailed first class, postage prepaid. by certified mail, return receipt
requested, in all cases, addressed to:
Company: Fitzgeralds Gaming Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: Chairman, Compensation Committee
of Board of Directors
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With a copy to: Fitzgeralds Gaming Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: General Counsel
And to: Xxxxxx X. Xxxxxx, Esq.
Xxxxxx & Silver, Ltd.
Ninth Floor
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxx 00000
Executive: Xx. Xxxxxx X. Xxxxxxxx
c/o Fitzgeralds Gaming Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000
With a copy to: Xxx X. Xxxxxx, Esq.
Berkley, Gordon, Levine, Xxxxxxxxx
& Xxxxxxxxx, LLP
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
All notices, requests and other communications shall be deemed given on the date
of actual receipt or delivery as evidenced by written receipt, acknowledgment or
other evidence of actual receipt or delivery to the address. In case of service
by telecopy, a copy of such notice shall be personally delivered or sent by
registered or certified mail, in the manner set forth above, within three (3)
business days thereafter. Any party hereto may from time to time by notice in
writing served as set forth above designate a different address or a different
or additional person to which all such notices or communications thereafter are
to be given.
10.9. Severability. All Sections, clauses and covenants
contained in this Agreement are severable, and in the event any of them shall be
held to be invalid by any court, this Agreement shall be interpreted as if such
invalid Sections, clauses or covenants were not contained herein.
10.10. Governing Law and Venue. This Agreement is to be
governed by and construed in accordance with the laws of the State of Nevada
applicable to contracts made and to be performed wholly within such State, and
without regard to the conflicts of laws principles thereof. Subject to Section 8
of this Agreement, any suit brought hereon shall be brought in the state or
federal courts sitting in Xxxxx County, Nevada, the parties hereto hereby
waiving any claim or defense that such forum is not convenient or proper. Each
party hereby agrees that any such court shall have in personam jurisdiction over
it and consents to service of process in any manner authorized by Nevada law.
10.11. Non-transferability of Interest. None of the rights of
Executive to receive any form of compensation payable pursuant to this Agreement
shall be assignable or transferable except through a testamentary disposition or
by the laws of descent and distribution upon the death of Executive. Any
attempted assignment, transfer, conveyance, or other disposition (other than as
aforesaid) of any interest in the rights of Executive to receive any form of
compensation
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to be made by the Company pursuant to this Agreement shall be void.
10.12. Attorneys' Fees. Subject to the provisions of Section 8
of this Agreement with respect to arbitration, if any legal action, arbitration
or other proceeding is brought for the enforcement of this Agreement, or because
of any alleged dispute, breach, default or misrepresentation in connection with
this Agreement, the successful or prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs it incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
10.13. Gender. Where the context so requires, the use of the
masculine gender shall include the feminine and/or neuter genders and the
singular shall include the plural, and vice versa, and the word "person" shall
include any corporation, firm, partnership or other form of association.
10.14. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
10.15. Construction. The language in all parts of this
Agreement shall in all cases be construed simply, according to its fair meaning,
and not strictly for or against any of the parties hereto. Without limitation,
there shall be no presumption against any party on the ground that such party
was responsible for drafting this Agreement or any part thereof.
10.16. Approval of the Gaming Authorities. Notwithstanding
anything contained in this Agreement, this Agreement and the terms and
conditions contained herein shall be contingent upon receipt of all requisite
approvals, if any, of the applicable Gaming Authorities.
10.17. Board Action. Any Board action referenced in this
Agreement shall be performed only with the affirmative vote of a majority of the
disinterested members of the Board.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date hereinabove set forth.
COMPANY: EMPLOYEE:
Fitzgeralds Gaming Corporation,
a Nevada corporation
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx
Director Chairman, President & CEO
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