Exhibit 10.4
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Dated: January 1, 2000
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EMPLOYMENT AGREEMENT
- by and between -
HOLLYWOOD CASINO CORPORATION
- and -
XXXXXX X. XXXXX III
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TABLE OF CONTENTS
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Page
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RECITALS.......................................................... 1
1. DEFINITIONS................................................... 2
2. PRIOR EMPLOYMENT.............................................. 3
3. BASIC EMPLOYMENT AGREEMENT.................................... 4
4. DUTIES OF EMPLOYEE............................................ 4
5. ACCEPTANCE OF EMPLOYMENT...................................... 5
6. TERM.......................................................... 5
7. SPECIAL TERMINATION PROVISIONS................................ 5
8. COMPENSATION TO EMPLOYEE...................................... 6
(a) Base Salary........................................... 6
(b) Base Salary Adjustment................................ 7
(c) Incentive Bonus....................................... 7
(d) Employee Benefit Plans................................ 7
(e) Expense Reimbursement................................. 8
(f) Licensing Expenses.................................... 8
(g) Vacations and Holidays................................ 8
9. LICENSING REQUIREMENTS........................................ 8
10. CONFIDENTIALITY...............................................10
11. RESTRICTIVE COVENANT..........................................11
11. BEST EVIDENCE.................................................11
12. SUCCESSION....................................................11
13. ASSIGNMENT....................................................12
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14. AMENDMENT OR MODIFICATION.....................................12
15. GOVERNING LAW.................................................12
16. NOTICES.......................................................12
17. INTERPRETATION................................................13
18. SEVERABILITY..................................................13
19. DISPUTE RESOLUTION............................................13
20. WAIVER........................................................13
21. PAROL.........................................................14
EXECUTION PAGE....................................................15
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 1st day of January, 2000, by and between HOLLYWOOD CASINO CORPORATION, a
Delaware corporation ("Employer"), and XXXXXX X. XXXXX III("Employee").
W I T N E S S E T H:
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WHEREAS, Employer is a corporation, duly organized and existing under
the laws of the State of Delaware, which develops and/or operates riverboat and
dockside casinos and related support facilities in emerging and established
gaming jurisdictions and which has a need for qualified, experienced personnel;
WHEREAS, Employee is an adult individual currently residing at 0000
Xxxxxxx Xxxxx, Xxxxxx, Xxxxx 00000;
WHEREAS, Employee has represented and warranted to Employer that
Employee possesses sufficient qualifications and expertise in order to fulfill
the terms of the employment stated in this Agreement; and
WHEREAS, Employer is willing to employ Employee, and Employee is
desirous of accepting employment from Employer, under the terms and pursuant to
the conditions set forth herein.
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NOW, THEREFORE, for and in consideration of the foregoing recitals, and
in consideration of the mutual covenants, agreements, understandings,
undertakings, representations, warranties and promises hereinafter set forth,
and intending to be legally bound thereby, Employer and Employee do hereby
covenant and agree as follows:
1. DEFINITIONS. As used in this Agreement, the words and terms
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hereinafter defined have the respective meanings ascribed to them herein, unless
a different meaning clearly appears from the context:
(a) "Cause" - means
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(i) the conviction of Employee of a felony by a court of competent
jurisdiction; (ii) the indictment of Employee by a state or federal
grand jury of competent jurisdiction for embezzlement or
misappropriation of Employer's funds or for any act of dishonesty or
lack of fidelity towards Employer; (iii) a decree of a court of
competent jurisdiction that Employee is not mentally competent or is
unable to handle his own affairs; (iv) the written confession by
Employee of any act of dishonesty towards Employer or any
embezzlement or misappropriation of Employer's funds; (v) the payment
(or, by the operation solely of the effect of a deductible, the
failure of payment) by a surety or insurer of a claim under a
fidelity bond issued to the benefit of Employer reimbursing Employer
for a loss due to the wrongful act or wrongful omission to act of
Employee (the occurrence of which shall cause Employee to be indebted
to Employer for the greater of either (A) the loss incurred by
Employer or (B) the sums paid by Employer to Employee pursuant to
this Agreement); (vi) Employee's breach of the restrictive covenant
set forth in Paragraph 11 of this Agreement, or (vii) Employee's
failure to maintain in force and in good standing any and all
licenses, permits and/or approvals required of Employee by the
relevant governmental authorities for the discharge of the
obligations of Employee under this Agreement, provided that should
Employee's required licenses, permits and/or approvals be suspended
pending a final license, permit or approval revocation determination,
this Agreement shall not terminate but any compensation which would
otherwise be paid by Employer to Employee under Paragraph 8 of this
Agreement shall be suspended and accrued pending the final resolution
of such final license, permit and/or approval revocation
determination, and, in the event such final resolution of such final
license, permit and/or approval revocation determination does not
revoke Employee's licenses, permits
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and/or approvals, any compensation which has been so suspended and
accrued shall be paid by Employer to Employee, provided, however,
that Employee's disability due to illness or accident or any other
mental or physical incapacity shall not constitute "Cause" as defined
herein.
(b) "Complete Disability" - means the inability of Employee, due to
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illness or accident or other mental or physical incapacity, to perform
his obligations under this Agreement for a period of three hundred
sixty (360) calendar days in the aggregate over a period of five
hundred (500) consecutive calendar days, such "Complete Disability" to
become effective upon the expiration of such three hundred sixtieth
(360th) day.
(c) "Confidential Information" - means any information in any form,
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regardless of the medium or media by which such information is
recorded or communicated, that is in the possession of Employer being
neither in the public domain nor routinely available to third
parties, and if directly or indirectly disclosed to Employer's
competitors (i) would assist such competitors in competing against
Employer, (ii) would diminish or eliminate any competitive advantage
now enjoyed by Employer,(iii) would cause financial injury or loss to
Employer, or (iv) would reveal proprietary information or trade
secrets of Employer.
(d) "Effective Date" - means January 1, 2000.
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(e) "Employee" - means Xxxxxx X. Xxxxx III.
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(f) "Employer" - means Hollywood Casino Corporation, a Delaware
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corporation.
(g) "Employer's Affiliates" - means any parent, subsidiary,
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affiliate or other legal entity of Employer.
(h) "Prior Employment" - means any prior employment Employee has had
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with either Employer or Employer's Affiliates.
2. PRIOR EMPLOYMENT. This Agreement supersedes and replaces any and
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all prior employment agreements, whether written or oral, by and between
Employee, on the one side, and Employer or Employer's Affiliates, on the other
side, including, without limitation, that certain Employment Agreement dated as
of May 1, 1996, between Employer and Employee. From and
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after the Effective Date, Employee shall be the employee of Employer under the
terms and pursuant to the conditions set forth in this Agreement.
3. BASIC EMPLOYMENT AGREEMENT. Subject to the terms and pursuant to
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the conditions hereinafter set forth, Employer hereby employs Employee during
the Term hereinafter specified to serve in a managerial or executive capacity,
under a title and with such duties not inconsistent with those set forth in
Paragraph 4 of this Agreement, as the same may be modified and/or assigned to
Employee by Employer from time to time. Notwithstanding the foregoing, Employer
and Employee hereby covenant and agree that, in the absence of mutual consent of
both Employer and Employee, Employee shall not be assigned duties by Employer
which would require that Employee maintain his principal place of residence or
primary place of employment outside of the greater metropolitan area of Dallas,
Texas.
4. DUTIES OF EMPLOYEE. Employee shall perform such duties assigned to
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Employee by Employer as are generally associated with the duties of President
and Chief Operating Officer of Employer, or such similar duties as may be
assigned to Employee by the Chairman of the Board of Directors of Employer,
including but not limited to (i) the efficient and continuous operation of
Employer and Employer's Affiliates; (ii) the preparation of relevant budgets and
allocation of relevant funds; (iii) the selection and delegation of duties and
responsibilities of subordinates; (iv) the direction, review and oversight of
all operations and programs under Employee's supervision; and (v) such other and
further duties specifically related to such duties as assigned by Employer to
Employee. In the performance of his duties hereunder, Employee shall report
directly to the Chairman of the Board/Chief Executive Officer and the Board of
Directors of Employer. Notwithstanding the foregoing, Employee shall devote
such time
to Employer's Affiliates as required by Employer, provided such duties are not
inconsistent with Employee's primary duties to Employer hereunder.
5. ACCEPTANCE OF EMPLOYMENT. Employee hereby unconditionally accepts
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the employment set forth hereunder, under the terms and pursuant to the
conditions set forth in this Agreement. Employee hereby covenants and agrees
that, during the Term of this Agreement, Employee will devote the whole of his
normal and customary working time and best efforts solely to the performance of
Employee's duties under this Agreement.
6. TERM. The term of this Agreement shall commence on January 1, 2000
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and expire on 12:00 p.m. on December 31, 2003 (the "Term"), unless sooner
terminated as provided herein.
7. SPECIAL TERMINATION PROVISIONS. Notwithstanding the provisions of
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Paragraph 6 above, this Agreement and all parties' rights and obligations
hereunder shall terminate upon the occurrence of any of the following events:
(a) the death of Employee; provided, however, that any and all
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employee benefits due and owing to Employee shall be paid to the
spouse of Employee in the event of such death;
(b) the giving of written notice from Employer to Employee of the
termination of this Agreement upon the Complete Disability of
Employee; provided, however, that a termination pursuant to this
Paragraph 7(b) shall not affect Employee's vesting or continued rights
in any stock option plan set forth in Paragraph 8(c) of this
Agreement;
(c) the giving of written notice by Employer to Employee of the
termination of this Agreement upon the discharge of Employee for
Cause;
(d) the giving of written notice by Employer to Employee of the
termination of this Agreement without Cause; provided, however, that,
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if Employer gives Employee written notice of termination of this
Agreement without Cause, such notice must be accompanied by Employer's
written tender to Employee of Employer's commitment to
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continue to pay to Employee the compensation set forth in Paragraph
8(a) of this Agreement; and/or
(e) a Change of Control (as defined in that certain Indenture dated
as of May 19, 1999, among Employer, HWCC-Tunica, Inc., HWCC-
Shreveport, Inc. and State Street Bank and Trust Company, as
Trustee); provided, however, that, in the event of such Change of
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Control, Employer shall be obligated to pay to Employee an amount
(the "Severance Amount") equal to the aggregate compensation which
would have been paid by Employer to Employee under Paragraph 8(a) of
this Agreement during the period (the "Severance Period") from the
date of termination to the later to occur of the expiration date of
this Agreement or thirty-six (36) months from the date of termination
assuming that such termination had not occurred. Employee shall have
the right, exercisable by written notice to Employer, to elect to
have the Severance Amount paid by Employer to Employee in (i) a lump
sum payment not later than the date of occurrence of the Change of
Control or (ii) equal monthly installments during the Severance
Period.
8. COMPENSATION TO EMPLOYEE. For and in complete consideration for
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Employee's full and faithful performance of his duties under this Agreement,
Employer hereby covenants and agrees to pay to Employee, and Employee hereby
covenants and agrees to accept from Employer, the following items of
compensation:
(a) Base Salary. Employer hereby covenants and agrees to pay to
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Employee, and Employee hereby covenants and agrees to accept from Employer, an
annual base salary of Four Hundred Sixty-Eight Thousand and No/100 Dollars
($468,000.00), effective January 1, 2000, payable in such equal regular
installments as is Employer's custom and usage. Such base salary shall be
exclusive of and in addition to any other benefits which Employer, in its sole
discretion, may make available to Employee, including, but not limited to, any
pension plans, bonus plans, retirement plans, company life insurance plan,
medical and/or hospitalization plans, or any and all
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other benefit plans which may from time to time be in available to executive
officers of Employer generally during the Term of this Agreement.
(b) Base Salary Adjustment. The base salary prescribed in Paragraph
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8(a) above may be adjusted at such time and in such manner as the Compensation
Committee of the Board of Directors of Employer may determine in accordance with
the executive compensation policy of Employer then in effect; provided, however,
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that such base salary shall never be less than $468,000 per annum.
(c) Incentive Bonus. Employee shall be eligible to receive one or
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more incentive compensation bonuses based upon such performance and other
criteria as Employer shall determine in its sole discretion. After the
Effective Date of this Agreement, Employer will implement an incentive bonus
program in which Employee will participate and which will be used to determine
Employee's incentive bonus. The incentive bonus shall be payable by Employer to
Employee no later than the first day of March of the year following the calendar
year for which the incentive bonus is accrued (or in accordance with the terms
of any applicable incentive bonus program), and, where applicable, shall be
prorated based upon the number of days Employee was employed by Employer during
such calendar year. Any incentive bonus shall be in addition to Employee's
participation in any and all profit sharing plans, bonus participation plans,
stock options or other incentive compensation to which Employee is entitled to
participate or receive.
(d) Employee Benefit Plans. Employer hereby covenants and agrees that
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it shall include Employee, if otherwise eligible, in any pension plans,
retirement plans, company life insurance plans, medical and/or hospitalization
plans, and/or any and all other benefit plans which may be placed in effect by
Employer during the Term of this Agreement.
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(e) Expense Reimbursement. During the Term of this Agreement, Employer
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shall either pay directly or reimburse Employee for Employee's reasonable
expenses incurred for the benefit of Employer in accordance with Employer's
general policy regarding reimbursement, as the same may be amended, modified or
changed from time to time. Such reimbursable expenses shall include, but are
not limited to, reasonable entertainment and promotional expenses, gift and
travel expenses, dues and expenses of membership in clubs, professional
societies and fraternal organizations, and the like. Prior to reimbursement,
Employee shall provide Employer with sufficient detailed invoices of such
expenses in accordance with the then applicable guidelines of the Internal
Revenue Service so as to permit Employer to claim a deduction of such expenses.
(f) Licensing Expenses. Employer hereby covenants and agrees that
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Employer shall pay all licensing fees and expenses incurred by Employee in
securing and maintaining such licenses and permits required of Employee in order
to perform his duties under this Agreement.
(g) Vacations and Holidays. Commencing as of the Effective Date of
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this Agreement, Employee shall be entitled to (i) annual paid vacation leave in
accordance with Employer's standard policy therefor, to be taken at such times
as selected by Employee and approved by Employer, and (ii) the following paid
holidays (or, at Employer's option, an equivalent number of paid days off): New
Year's Day, Xx. Xxxxxx Xxxxxx Xxxx, Xx.'s Birthday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day.
9. LICENSING REQUIREMENTS. (a) Employer and Employee hereby
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covenant and agree that this Agreement may be subject to the approval of (i) the
Illinois Gaming Board (the "IGB") pursuant to the provisions of the Illinois
Riverboat Gambling Act, as amended (the "Illinois Gaming Act"), and the
regulations promulgated thereunder, (ii) the Mississippi Gaming
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Commission (the "MGC") pursuant to the provisions of the Mississippi Gaming
Control Act, as amended (the "Mississippi Gaming Act"), and the regulations
promulgated thereunder, (iii) the Louisiana Gaming Control Board (the "LGCB")
pursuant to the provisions of the Louisiana Riverboat Economic Development and
Gaming Control Act, as amended (the "Louisiana Gaming Act"), and the regulations
promulgated thereunder, and/or (iv) any and all other applicable gaming
authorities (the "Other Gaming Authorities") and any and all other applicable
gaming statutes (the "Other Gaming Acts") and the regulations promulgated
thereunder. If this Agreement is required by the Illinois Gaming Act, the
Mississippi Gaming Act, the Louisiana Gaming Act and/or the Other Gaming Acts
and the regulations promulgated thereunder to be approved by the IGB, the MGC,
the LGCB and/or the Other Gaming Authorities, as applicable, but is not so
approved by any such gaming regulatory authority, this Agreement shall
immediately terminate and shall be null and void and of no further force or
effect; provided, however, should this Agreement be required to be approved but
is not so approved by the IGB, the MGC, the LGCB and/or the Other Gaming
Authorities, Employer and Employee hereby covenant and agree that, with the
exception of the provisions of Paragraph 8 of this Agreement, this Agreement
shall be modified and amended so as to receive the appropriate approval from the
IGB, the MGC, the LGCB and/or the Other Gaming Authorities.
(b) Employer and Employee hereby covenant and agree that, in order for
Employee to discharge the duties required under this Agreement, Employee shall
hold any necessary and appropriate casino key employee license (the "License")
in gaming jurisdictions in which Employer or Employer's Affiliates may now or
hereafter maintain casino operations. In the event that any applicable gaming
regulatory authority (the "Authority") objects to the renewal of
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Employee's License or refuses to renew Employee's License, Employer, at
Employer's sole cost and expense, shall promptly defend such action and shall
take such reasonable steps as may be required to either remove the Authority's
objections or secure the Authority's approval. Notwithstanding the foregoing, if
the source of the Authority's objections or the Authority's refusal to renew
Employee's License arise as a result of any of the events described in Paragraph
1(a) of this Agreement, Employer's obligations under this Paragraph 9 shall not
be operative and Employee shall promptly reimburse Employer upon demand for any
expenses incurred by Employer pursuant to this Paragraph 9.
10. CONFIDENTIALITY. Employee hereby warrants, covenants and agrees
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that, without the prior express written approval of Employer, Employee shall
hold in the strictest confidence and shall not disclose to any person, firm,
corporation or other entity, any and all of Employer's Confidential Information,
including, but not limited to, (i) information, letters, photographs, graphs,
samples, or computer software of a confidential nature; (ii) information or
other documents concerning Employer's business, customers or suppliers; (iii)
Employer's marketing methods, files and credit and collection techniques and
files; or (iv) Employer's trade secrets, technical information, design, process,
procedure, improvement and other "know-how" or information not of a public
nature, regardless of how such information came into the custody of Employee.
The warranty, covenant and agreement set forth in this Paragraph 10 shall not
expire, shall survive this Agreement and shall be binding upon Employee without
regard to the passage of time or other events.
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11. RESTRICTIVE COVENANT. Employee hereby covenants and agrees that,
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during the Term of this Agreement or until December 31, 2004, if Employer
terminates Employee pursuant to Paragraph 7(d) above and is continuing to make
payments to Employee as provided therein, Employee shall not directly or
indirectly, either as a principal, agent, employee, employer, consultant,
partner, shareholder of a closely held corporation or shareholder in excess of
five percent (5%) of a publicly traded corporation, corporate officer or
director, or in any other individual or representative capacity, engage or
otherwise participate in any manner or fashion in any business that is in
competition in any manner whatsoever with the principal business activity of
Employer or Employer's Affiliates, in or about any state in which Employer or
Employer's Affiliates are licensed to conduct casino operations (the "Operating
States"), including without limitation any waterways which are wholly within the
Operating States, which are partly within the Operating States and partly
without the Operating States, or which form a boundary between the Operating
States and any other state or body public. Employee hereby further acknowledges
and agrees that the restrictive covenant contained in this Paragraph 11 is
reasonable as to duration, terms and geographical area and that the same
protects the legitimate interests of Employer and Employer's Affiliates, imposes
no undue hardship on Employee and is not injurious to the public.
Notwithstanding anything express or implied herein to the contrary, the
restrictive covenant contained in this Paragraph 11 shall not apply in the event
of the termination of this Agreement due to a Change of Control.
12. BEST EVIDENCE. This Agreement shall be executed in original and
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"Xerox" or photostatic copies and each copy bearing original signatures in ink
shall be deemed an original.
13. SUCCESSION. This Agreement shall be binding upon and inure to the
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benefit of Employer and Employee and their respective successors and assigns.
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14. ASSIGNMENT. Employee shall not assign this Agreement or delegate
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his duties hereunder without the express written prior consent of Employer
thereto. Any purported assignment by Employee in violation of this Paragraph 14
shall be null and void and of no force or effect. Employer shall have the right
to assign this Agreement freely; provided, however, that in the event of such an
assignment by Employer and the assignee subsequently defaults under the terms of
this Agreement, Employer shall remain liable for compliance with the terms of
Paragraph 8 of this Agreement.
15. AMENDMENT OR MODIFICATION. This Agreement may not be amended,
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modified, changed or altered except by a writing signed by both Employer and
Employee.
16. GOVERNING LAW. This Agreement shall be governed by and construed
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in accordance with the laws of the State of Texas in effect on the Effective
Date of this Agreement.
17. NOTICES. Any and all notices required under this Agreement shall
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be in writing and shall either hand-delivered; mailed by certified mail, return
receipt requested; or sent via telecopier addressed to:
TO EMPLOYER: Chairman of the Board
----------- Hollywood Casino Corporation
Two Xxxxxxxx Xxxxx, Xxxxx 0000
00000 Xxxx Xxxx, XX 48
Xxxxxx, Xxxxx 00000
WITH COPY TO: General Counsel
------------ Hollywood Casino Corporation
Two Xxxxxxxx Xxxxx, Xxxxx 0000
00000 Xxxx Xxxx, XX 48
Xxxxxx, Xxxxx 00000
TO EMPLOYEE: Xxxxxx X. Xxxxx III
----------- 0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
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All notices hand-delivered shall be deemed delivered as of the date
actually delivered. All notices mailed shall be deemed delivered as of three
(3) business days after the date postmarked. All notices sent via telecopier
shall be deemed delivered as of the next business day following the date of the
confirmation of delivery. Any changes in any of the addresses listed herein
shall be made by notice as provided in this Paragraph 17.
18. INTERPRETATION. The preamble recitals to this Agreement are
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incorporated into and made a part of this Agreement. Titles of paragraphs are
for convenience only and are not to be considered a part of this Agreement.
19. SEVERABILITY. In the event any one or more provisions of this
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Agreement is declared judicially void or otherwise unenforceable, the remainder
of this Agreement shall survive and such provision(s) shall be deemed modified
or amended so as to fulfill the intent of the parties hereto.
20. DISPUTE RESOLUTION. Except for equitable actions seeking to
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enforce the provisions of Paragraphs 10 and 11 of this Agreement, jurisdiction
and venue for which is hereby granted to Dallas County, Texas, any and all
claims, disputes or controversies arising between the parties hereto regarding
any of the terms of this Agreement or the breach thereof, on the written demand
of either of the parties hereto, shall be submitted to and be determined by
final and binding arbitration held in Dallas, Texas, in accordance with the
Employment Dispute Resolution Rules of the American Arbitration Association.
This Agreement to arbitrate shall be specifically enforceable in any court of
competent jurisdiction.
21. WAIVER. None of the terms of this Agreement, including this
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Paragraph 21, or any term, right or remedy hereunder shall be deemed waived
unless such waiver is in writing and
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signed by the party to be charged therewith and in no event by reason of any
failure to assert or delay in asserting any such term, right or remedy or
similar term, right or remedy hereunder.
22. PAROL. This Agreement constitutes the entire agreement between
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Employer and Employee with respect to the subject matter hereto and this
Agreement supersedes any prior understandings, agreements or undertakings by and
between Employer and Employee with respect to the subject matter hereof.
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IN WITNESS WHERE AND INTENDING TO BE LEGALLY BOUND THEREBY, the parties
hereto have executed and delivered this Agreement as of the year and date first
above written.
EMPLOYER:
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HOLLYWOOD CASINO CORPORATION, a
Delaware corporation
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Chairman of the Board
& Chief Executive Officer
EMPLOYEE:
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/s/ Xxxxxx X. Xxxxx III
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XXXXXX X. XXXXX III
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