EXHIBIT 10.16
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT AND GENERAL RELEASE ("Agreement"), is made
this the 19th day of July, 2001, by and between the following parties:
EMPLOYEE: Xxxxxxxx X. Xxxxxxx (hereinafter "Executive"); and
COMPANY: JCC Holding Company, a Delaware corporation (hereinafter the
"Company").
Whereas, Executive has been properly notified by the Company that his
Employment Agreement dated May 6, 1999, a copy of which is annexed hereto as
Exhibit A and incorporated herein by referenced (the "Employment Agreement"),
will not be renewed in accordance with its terms;
Whereas, Executive does not desire to continue his employment in his
current capacity until the end of his Employment Agreement; and
Whereas, the parties have agreed to enter into this Agreement to
confirm the agreed upon terms, conditions and arrangements concerning the
separation of Executive from his employment with the Company which will
supersede all provisions, rights and obligations by both parties contained in
Executive's Employment Agreement.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Executive's last day of active employment with the Company will be
July 15, 2001, (the "Separation Date"), and he has no present or future right to
further employment with the Company thereafter.
2. The Company will pay Executive in full settlement of any claims by
Executive for wages or benefits of any type (except those specified in Paragraph
4 below) the following:
(a) a lump sum payment of $429,000.00, minus customary deductions
and statutory withholdings. It is understood and agreed that
this payment represents the salary Executive would have earned
had he remained employed through the end of his Employment
Period (as defined in Employment Agreement);
(b) a lump sum payment equal to all earned vacation up to December
31, 2001;
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(c) a lump sum bonus of $143,000.00, minus customary deductions
and statutory withholdings; and
(d) a lump sum payment of $100,000.00, minus customary deductions
and statutory withholdings, as consideration for Executive's
promises and obligations agreed to herein and for waiving any
and all rights and privileges granted under Executive's
Employment Agreement effective November 1, 1998.
3. Payment of amounts 2(a) through 2(d) above to Executive will be made
by wire transfer to his account at the bank that he has previously designated to
the Company for deposit of his compensation, with instructions by the Company to
the depository bank to notify him of receipt of the wire transfer and to place
this money directly into his designated account, in the amount of $672,000,plus
the amount due for accrued annual leave through December 31, 2001, minus
customary deductions and statutory withholdings, on the date of the execution of
this Agreement.
4. Regarding salary, benefits and related matters ("Benefits"), the
following schedule summarizes Executive's participation in each of the
applicable salary and benefit plans and the respective dates on which such
participation, or eligibility, terminates:
BENEFIT TERMINATION DATE
------- ----------------
Base Salary: See Paragraph 2
Active Working Status: Separation Date
Use of Credit Cards: Separation Date
Bonus--Payment: See Paragraph 2. Not eligible for any other bonus.
Insurance Including Health, Dental,
Vision, Life: From July 15, 2001 until December 31, 2002. Executive will
continue to be responsible for any cost normally allowed to
the Executive. The eighteen (18) month COBRA rights period
for medical and health insurance will commence on Separation
Date. If Executive becomes re-employed with another employer
during this period and is eligible to receive medical and
health insurance benefits under another plan Executive must
participate in such plan, and the benefits under this
Agreement shall be secondary to those provided under such
other plan.
Automobile Lease/Payment: Separation Date
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Apartment Lease/Payment: Separation Date
Other Executive Privileges/
Benefits/Memberships/Perks: Separation Date
Long Term Compensation Plan: Separation Date; no vesting
Restricted Cash Award: Separation Date; no vesting
Savings and Retirement Plan
(Active Participation): Separation Date
5. Executive will vacate his office on or before Separation Date, by
which time Executive will turn over to the Company, all of the Company's files,
records, equipment and/or other property kept or maintained by Executive in his
offices or elsewhere, including without limitation, all Company keys and credit
cards. In addition, on or before the same date, Executive will pay any expense
account balance which he has with the Company. Executive covenants and agrees
that he will not retain any copies of proprietary information belonging to the
Company.
6. Executive covenants and agrees he will cooperate with the Company in
assuring an orderly transition of all matters handled by him. Upon the Company
providing reasonable written notice to Executive, he will also appear as a
witness at the Company's request and/or assist the Company in any litigation,
including arbitration, bankruptcy or similar matter in which the Company or any
affiliate thereof is a party or otherwise involved. The Company will pay
Executive a $1,243.00 per diem and reimburse any reasonable out-of-pocket
expenses incurred by Executive in connection with any such appearance.
7. Company will issue a Letter of Recommendation to Executive and all
parties requesting such Letter of Recommendation, a copy of which has been
provided to and approved by Executive. No other written or verbal communication,
except the mutually-accepted Letter of Recommendation whatsoever will be
forwarded to anyone who may inquire about the past performance of Executive.
8. Company agrees to pay all reasonable attorneys fees (including
expenses advanced by counsel for Executive) incurred by Executive in negotiating
and finalizing this Agreement within five (5) business days after receipt of an
invoice for such fees.
9. The Company agrees to provide outplacement counseling services at
its expense for the executive, namely the Key Executive Service, at Right
Associates, in Memphis,
Tennessee, and the Company agrees that these
outplacement counseling services shall begin on Tuesday, September 4, 2001.
10. In the event it shall be determined that any payment or
distribution by the Company or the Company to or for the benefit of Executive
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise, but determined without regard to any additional
payments required under this Agreement would be subject to the
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excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the "Excise Tax"), then Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by Executive
of all taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.
11. In consideration of the payments, promises, assurances, and
benefits described herein, Executive and Company further hereby covenant and
agree as follows:
(a) Executive and Company have mutually and unconditionally
remised, released, waived, and forever discharged and by these
presents do for each of themselves, for each of their
respective representatives, and assigns, remise, release,
waive, and forever discharge each other.
(i) Executive agrees to unconditionally remise, release,
waive, and forever discharge the Company, Jazz Casino
Company, L.L.C., Xxxxxx'x Entertainment, Inc., and
Xxxxxx'x Operating Company, Inc. and their respective
subsidiaries and affiliates, their officers,
directors, agents, benefit plan trustees, employees,
and former employees ("Released Parties") from any
and all causes of action, suits, debts, damages,
judgments, executions, and claims whatsoever, in law
or equity, whether known or unknown, and regardless
of type, cause or nature, including but not limited
to claims arising under all salary, vacation,
insurance, bonus, stock and all other benefit plans,
and all state and federal anti-discrimination, civil
rights and human rights laws, ordinances and
statutes, including but not limited to, Title VII of
the Civil Rights Act of 1964 and 1991, Americans with
Disabilities Act, and the Age Discrimination in
Employment Act, which Executive or his personal
representatives or assigns, ever had, now has, or
hereafter can, shall, or may have concerning his
employment with
JCC Holding Company, its subsidiaries
and affiliates, and the cessation of that employment,
excepting only the obligations of the Company under
this Agreement or any rights Executive has to any
vested benefits under the Company benefit plan unless
otherwise indicated.
(ii) The Company agrees to unconditionally remise,
release, waive, and forever discharge any and all
claims and causes of action that the Company, and/or
its affiliates, successors, or assigns, may have, or
allege, against the executive, both known and
unknown, that could be brought at this time and/or at
any other time in the future by virtue of his
employment with the Company, such employment ending
on July 15, 2001;
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(b) Executive will not cause, encourage or participate in any
legal or equitable proceedings against any of the Released
Parties with respect to the matters referred to in this
Agreement, and he will not participate in any manner in any
other legal or equitable proceedings against any of the
Released Parties, except where required by law or except if
necessary to enforce this Agreement. In the event of any
breach by Executive of this Agreement, and his failure to cure
said breach to the Company's satisfaction within five (5)
business days of its occurrence, any and all payments and
other benefits provided for in this Agreement shall
immediately cease and will no longer be due or owing. The
enforcement of or failure to enforce this or any other
provision in this Agreement shall not affect any other
remedies available to the Company or the Released Parties;
(c) The Company agrees to also indemnify and hold Executive
harmless from any and all claims that may be made, or alleged,
against him, by the Company and/or any other party, for acts
or omissions emanating by virtue of his employment with the
Company. By this indemnification and hold harmless provision,
the Company is bound to fully and completely protect and
defend Executive from all claims that may be lodged against
him, and in particular to pay for any costs of defense,
including reasonable attorneys fees as well as other expenses
of litigation, as these costs and expenses are incurred that
are not covered by insurance. The Company also agrees to pay
in full any and all judgments, including any legal interest
and other costs, that may be granted in any proceeding(s)
against the Executive for his alleged acts or omissions during
the course of his employment with the Company, such employment
ending on July 15, 2001 and that are not covered by insurance,
Executive has the right to select his own counsel provided the
selection is acceptable to the party paying Executive's legal
fees; and
(d) Executive shall relinquish, release and return to the Company
all memberships in organizations, clubs, etc. that were paid
by the Company, regardless of whether such memberships are in
the name of Executive or Company; however, Executive has the
right to continue his participation in these entities in his
own right, as he deems fit.
12. Executive also confirms that he has no charge, complaint or action
against the Company in any forum or form. Accordingly, in the event that any
such claim, charge, complaint or action is filed, except as otherwise provided
in this Agreement, Executive shall not be able to recover any relief or recovery
therefrom, including costs and attorneys fees.
13. The existence and terms of this Agreement shall be confidential,
and neither party will reveal or engage in any action which either knows will
result in the revelation of any information concerning the contents of this
Agreement to anyone, including but not limited to past, present or future
employees of the Released Parties, provided, however, such disclosure may be
made (a) when required by law, (b) in the case of the Company, in order to
prepare this Agreement and/or to implement the terms and provisions thereof; and
in the case of Executive, to an attorney with whom Executive chooses to consult
regarding his consideration of this
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Agreement and, to the extent necessary, to his estate and tax advisors,
outplacement counselors, immediate family, prospective employers, and search
firms. Executive is responsible to ensure that these persons will also maintain
in confidence the terms of this Agreement. In addition, this Agreement may be
used as evidence in a subsequent proceeding in which any of the parties allege a
breach of this Agreement. Notwithstanding the foregoing, Executive is expressly
permitted to discuss his job performance with outplacement counselors,
individuals assisting in the employment search, prospective employers, and/or
search firms.
14. Executive, for a period of two (2) years immediately following the
Separation Date, will not communicate with employees, customers or suppliers of
the Company or any of the Released Parties, franchisees of the Released Parties
or of any of the subsidiaries or affiliates of the Company or any principals or
employees thereof, or any other person or organization in any manner whatsoever
that is detrimental to the interests of the Company or any of the other Released
Parties. Executive further agrees not to make any statements to the press or the
general public with respect to the Company or any of the other Released Parties
without the express prior authorization of the Company.
15. Executive's positions with the Company resulted in his exposure and
access to confidential and proprietary information of the Company and its
affiliates, including without limitation sales and marketing information,
customer account records, training and operations material, personnel records,
pricing and financial information relating to the business and affairs of the
Company and its affiliates (the "Confidential Information"), to which he did not
have access prior to holding those positions, which Confidential Information is
not generally known and of economic, actual or potential, value to the Company
and the disclosure of which by him, either directly or indirectly, would be
irreparably injurious and detrimental to the Company. Executive agrees to use
his best efforts and to observe the utmost diligence to guard and protect the
Confidential Information from disclosure to third parties as follows: Executive,
for a period of two (2) years immediately following the Separation Date, will
not make available, either directly or indirectly, to any competitor or
potential competitor of the Company or divulge, disclose, or communicate to any
person, firm, corporation or other business entity in any manner whatsoever, the
Confidential Information, unless expressly authorized to do so by the Company in
writing. Any non-disclosure or similar agreement that Executive has signed with
the Company shall remain in full force and effect, provided that in the event of
any conflict between any such agreement(s) and this Agreement, this Agreement
shall control.
16. Executive, for a period of two (2) years immediately following the
Separation Date, will not, either directly or indirectly, induce, persuade, or
attempt to induce or persuade any salary grade 20 or higher employee at that
time, or who has been within one (1) year of the Separation Date of the Company,
or any of the other Released Parties to leave or abandon employment with the
Company or any of the other Released Parties for any reason whatsoever.
17. By voluntarily executing this Agreement, the Company confirms it is
relying on its own judgment and on advice of its attorneys, and not upon any
recommendation or representation of Executive or his agents, attorneys, or other
representatives. By voluntarily executing this Agreement, Executive confirms he
is relying on his own judgment and on advice of his attorneys, and not upon any
recommendations or representations of the Company or its
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directors, officers, employees, agents, attorneys, or other representatives.
Executive acknowledges that the nature and extent of the benefits and payments
made available to him have been explained and that he understands them.
Executive agrees that these benefits and payments are being received in exchange
for a full and complete release of all federal and state claims of any kind
which he may have against the Company; that he intends to be bound by this
Agreement; that he has accepted these benefits and payments as being in full
accord, satisfaction, compromise and settlement of any and all disputed claims;
that the provision of these benefits and payments shall be deemed or construed
at any time for any purpose as an admission by the Company or any of the
Released Parties of any legal violation or liability of any kind; that he has
entered into this Agreement knowingly and voluntarily and only after having the
opportunity to review its terms with an attorney; and that the terms and
conditions of this Agreement were the result of the meetings, discussions and
compromises between the parties hereto.
18. Executive understands nothing in this Agreement, including the
payment of any sum by the Company, constitutes an admission by the Company of
any legal wrong prohibited by local, state and federal law, contract or tort,
rule or regulation in connection with the employment and termination of
Executive's employment and agrees that he would not receive the monies or other
benefits specified herein, except for his execution of this Agreement and
fulfillment of the promises contained herein.
19. This Agreement may not be modified, altered or changed except upon
express written consent of both parties wherein specific reference is made to
this Agreement.
20. This Agreement shall be governed and conformed in accordance with
the laws of the State of Louisiana without regard to Louisiana conflict of laws
provisions. Should any provision, including the general release language of this
Agreement, be declared illegal or unenforceable by any court of competent
jurisdiction and cannot be modified to be enforceable, such provision shall
immediately become null and void, leaving the remainder of the Agreement in full
force and effect.
21. This Agreement sets forth the entire agreement between the parties
hereto and fully supercedes any prior agreements or understandings between the
parties. Upon execution of this Agreement by all parties, Executive's Employment
Agreement shall terminate and it shall be null and void. Executive will have no
cause of action against the Company under his prior Employment Agreement.
Executive acknowledges he has not relied on any representations, promises or
agreements of any kind made to him in connection with his decision to sign this
Agreement, except for those set forth in this Agreement.
22. This Agreement shall bind and inure to the benefit of Executive and
the Company and their respective heirs, executors, administrators, successors,
and assigns. This Agreement is intended solely and exclusively for the benefit
of the parties hereto, and their heirs, executors, administrators and assigns,
and no other person or entity shall have standing to require satisfaction or
performance of the terms or conditions of this Agreement and no other person or
entity shall be deemed to be a beneficiary of this Agreement, except that
Executive's counsel shall have the right to bring an action for attorneys fees,
which are due and owing for negotiating and finalizing this Agreement only.
Specifically excluded from this exception is the right of
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Executive's counsel to seek payment of reasonable attorneys fees and costs for
enforcement of this Agreement, in which event Section 23 shall apply.
23. If either party commences a proceeding to enforce its rights under
this Agreement, the prevailing party in such action shall be entitled to recover
from the other party any reasonable attorneys' fees and other fees and expenses
incurred by such prevailing party in connection with such action.
24. Each party has cooperated in the drafting and preparation of this
Agreement. Consequently, provisions of this Agreement shall not be construed
against any party by virtue of that party's having been a drafter of the
provision or Agreement.
25. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same instrument, notwithstanding that all of the parties hereto are not
signatories to the original or the same counterpart. In addition, this Agreement
may contain more than one counterpart of the signature pages, and this Agreement
may be executed by the affixing of the signatures of each of the parties to one
of such counterpart signature pages; all of such counterpart signature pages
shall be read as though one, and they shall have the same force and effect as
though all of the signers had signed a single signature page.
26. For purposes of the effectiveness of this Agreement, facsimile
signatures shall be deemed to be originals thereof and any party furnishing
signatures by facsimile shall deliver originals of same to the other party
within five business days of sending the facsimile.
27. Executive has been advised by the Company, orally and by this
written statement, to consult with an attorney before he signs this Agreement.
Executive also has been advised, and he understands: (1) that he has up to
twenty-one (21) days to consider this Agreement; (2) that he can revoke this
Agreement for a period of seven (7) days following the day he executes this
Agreement; and (3) that this Agreement shall not be effective or enforceable
until this revocation period has expired. If the last day of the revocation
period is a Saturday, Sunday, or legal holiday in Louisiana, then the revocation
period shall not expire until the next following day which is not a Saturday,
Sunday, or legal holiday. Any revocation within this seven (7) day period must
be submitted, in writing, to Xxxx Xxxxx, or his designee at One Canal Place, 000
Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxx 00000 and state, "I hereby
revoke my acceptance of our
Separation Agreement." Such revocation must be
personally delivered within seven (7) days of the execution of the Agreement or,
if mailed, postmarked within the same time period.
[Signatures are on the following page.]
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IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her
signature and seal or has caused this instrument to be executed (and its seal to
be affixed hereto) by its officer(s) thereunto duly authorized, as of the day
and date first above written.
EXECUTIVE:
By: /s/ Xxxxxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
COMPANY:
JCC Holding Company
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
As Its: Chair of the Board
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EXHIBIT A
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XXXXXXXXX X. XXXXXXX
EMPLOYMENT AGREEMENT
This EMPLOYMENT Agreement (this "Agreement") is made and entered into
this 6th day of May, 1999 by and between
JCC Holding Company, a Delaware
corporation (hereinafter, the "Company"), and Xxxxxxxxx X. Xxxxxxx (hereinafter,
"Executive").
BACKGROUND
Executive currently serves as the President of the Company. The Company
desires to retain Executive as the President and Chief Executive Officer of the
Company, in accordance with the terms of this Agreement. Executive is willing to
serve as such in accordance with the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Effective Date. This Agreement is effective retroactively to
November 1, 1998 (the "Effective Date").
2. Employment. Executive is hereby employed as the President and Chief
Executive Officer of the Company. In such capacity, Executive shall have such
responsibilities in accordance with the policies and objectives established by
the Board of Directors of the Company, which shall be consistent with the
responsibilities of similarly situated executives of comparable companies in
similar lines of business. In his capacity as President and Chief Executive
Officer of the Company, Executive will report directly to the Board of
Directors.
3. Employment Period. Unless earlier terminated herein in accordance
with Section 7 hereof, Executive's employment shall be for a term beginning on
the Effective Date and ending December 31, 2000 (the "Employment Period").
Beginning on December 31, 2000 and on each December 31 thereafter, the
Employment Period shall, without further action by Executive or the Company, be
extended by an additional one-year period; provided, however, that either party
may, by notice to the other given no later than the June 30 prior to the end of
the then-current Employment Period, cause the Employment Period to cease to
extend automatically. Upon such notice, the Employment Period shall terminate
upon the expiration of the then-current term, including any prior extensions.
4. Extent of Service. During the Employment Period, and excluding any
periods of vacation and sick leave to which Executive is entitled, Executive
agrees to devote his business time, attention, skill and efforts exclusively to
the faithful performance of his duties hereunder; provided, however, that it
shall not be a violation of
this Agreement for Executive to (i) devote reasonable periods of time to
charitable and community activities and, with the approval of the Company,
industry or professional activities, and/or (ii) manage personal business
interests and investments, so long as such activities do not materially
interfere with the performance of Executive's responsibilities under this
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been conducted by Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of activities similar
in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of Executive's
responsibilities hereunder.
5. Compensation and Benefits.
(a) Base Salary. During the Employment Period, the Company
will pay to Executive an annual base salary in an initial amount to be
determined by the Board of Directors, but in no event less than U.S. $260,000
("Base Salary"), less normal withholdings, payable in equal monthly or more
frequent installments as are customary under the Company's payroll practices
from time to time. The Compensation Committee of the Board of Directors of the
Company shall review Executive's Base Salary annually and in its sole
discretion, subject to approval of the Board of Directors of the Company, may
further increase Executive's Base Salary from year to year. The annual review of
Executive's salary by the Compensation Committee of the Board of Directors (the
"Committee") will consider, among other things, Executive's own performance and
the Company's performance. The first annual review will be no later than
December 31, 1999.
(b) Annual Bonus. Executive's annual cash bonus for 1998 shall
be $95,335, which amount was paid in March 1999. Executive's annual cash bonus
for 1999 and years thereafter shall be based on corporate and/or individual
performance criteria established annually by the Committee, with a target bonus
of 50% of Base Salary for target performance ("Target Bonus") and appropriate
collars to be established by the Committee for threshold or exceptional
performance.
(c) Incentive, Savings and Retirement Plans. During the
Employment Period, Executive shall be entitled to participate in all incentive,
deferred compensation, savings and retirement plans, practices, policies and
programs applicable generally to senior management personnel of the Company and
its subsidiaries ("Peer Executives") from time to time, and on the same basis as
such Peer Executives. Without limiting the foregoing, the Company will adopt a
long-term compensation plan (the "LTIP") under which Executive will be granted
each year during the Employment Period an equity-based award designed such that
there is a reasonable expectation, upon achievement of applicable vesting
criteria, of creating value for Executive over the life of the award in an
amount approximately equivalent to 145% of his Base Salary in the year of grant.
Such long-term incentive opportunity may be in the form of stock options,
restricted stock or such other long-term incentives related to Company common
stock as determined by the Committee from time to time. The LTIP and awards to
Executive thereunder will be based on the assumption that the common stock of
the Company will appreciate at an
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annual rate of 10% over the performance period, but no adjustment will be made
in granted awards if this appreciation rate is not actually achieved. The LTIP
will be designed and adopted by the Committee as soon as practicable after the
Effective Date.
To the extent that any incentive award to Executive consists
of stock options, restricted stock or other equity-based awards in the nature of
rights that may be vested and/or exercised ("Equity Awards"), the instruments
evidencing such Equity Awards shall provide that in the event Executive's
employment is terminated (i) by the Company for any reason other than for Cause,
or (ii) by the Executive for Good Reason, or (iii) by reason of Executive's
death, the award will continue to vest and/or become exercisable over the
18-month period immediately following Executive's Date of Termination (as
defined hereinafter) unless the Date of Termination occurs within two years
after the occurrence of a Change of Control, in which case such Equity Awards
shall vest immediately as of the Date of Termination and shall remain
exercisable over the 24-month period following the Date of Termination. The
initial grant of awards to Executive under the LTIP is described on Exhibit A
attached hereto.
(d) Welfare Benefit Plans. During the Employment Period,
Executive and Executive's family shall be eligible for participation in, and
shall receive all benefits under, the welfare benefit plans, practices, policies
and programs provided by the Company and its subsidiaries from time to time
(including, without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident insurance plans
and programs) ("Welfare Plans") to the extent applicable generally to Peer
Executives.
(e) Prior Service Credit. Executive shall be given credit for
14 years of prior service with Xxxxxx'x Entertainment, Inc. ("Xxxxxx'x") for all
purposes (other than for financial benefit accrual purposes) under the plans,
programs, policies, agreements and practices covering Executive pursuant to this
Section 5, to the extent that any such plan, program, policy, agreement or
practice permits prior service credit.
(f) Expenses. During the Employment Period, Executive shall be
entitled to receive prompt reimbursement for all reasonable business travel,
entertainment and other expenses incurred by Executive in accordance with the
policies, practices and procedures of the Company and its subsidiaries to the
extent applicable generally to Peer Executives.
(g) Vacation. During the Employment Period, Executive shall be
entitled to up to four-weeks paid vacation in accordance with the plans,
policies, programs and practices of the Company applicable generally to Peer
Executives.
(h) Automobile. During the Employment Period, the Company
shall lease or buy (at the Company's option) an automobile for the exclusive use
by Executive in and around New Orleans on Company business and for incidental
personal use. The make and model of such automobile, and the financial terms of
the lease or purchase, shall be as approved by the Chairman of the Board of the
Company. It is intended that
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the automobile will be a mid-sized four-door sedan or similar vehicle. The
Company will fully reimburse Executive for any income tax liability incurred
with respect to the foregoing benefit.
(i) Apartment Expenses. The parties acknowledge that, during
the Employment Period, Executive will maintain his primary family residence in
Memphis,
Tennessee, and that he may be required to reside on an interim basis in
New Orleans, Louisiana in order to fulfill his obligations under this Agreement.
During the Employment Period, the Company shall reimburse Executive's rental and
related maintenance fees and expenses for an apartment in New Orleans, Louisiana
selected by Executive. In addition, during the Employment Period, the Company
shall reimburse Executive's expenses for travel between Memphis and New Orleans
and, if on any weekend Executive is unable for business reasons to return to
Memphis, the Company will reimburse Executive for the expenses of travel to New
Orleans for Executive's spouse and immediately family members. The Company will
fully reimburse Executive for any income tax liability incurred with respect to
the foregoing expense reimbursements (including income tax liability with
respect to the tax gross-up payments).
(j) Fringe Benefits. During the Employment Period, Executive
shall be entitled to all other fringe benefits in effect for Peer Executives in
accordance with the plans, practices, programs and policies of the Company and
its subsidiaries.
6. Change of Control. For the purposes of this Agreement, a "Change of
Control" shall mean:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or
more of the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors, which
currently consists of the Class A and Class B stock of the Company (the
"Outstanding Company Voting Securities"); provided, however, that for purposes
of this subsection (a), the following acquisitions shall not constitute a Change
of Control under this subsection (a): (i) any acquisition by a Person who is on
the Effective Date the beneficial owner of 40% or more of the Outstanding
Company Voting Securities unless such acquisition results in such Person being
the beneficial owner of 60% or more of the Outstanding Company Voting
Securities, (ii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or the Company, or (iii) any acquisition
by any corporation pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of subsection (c) of this Section 6; or
(b) Individuals who, as of the Effective Date, constitute the
Board of Directors of the Company (the "Incumbent Board") cease for any reason
to constitute at least a majority of such Board; provided, however, that any
individual becoming a
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director of the Company subsequent to the Effective Date whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
(c) Consummation of a reorganization, merger, consolidation or
share exchange or sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 66 2/3% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 40% or more of the combined voting power of the then
outstanding voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination, and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination.
7. Termination of Employment.
(a) Death or Disability. Executive's employment shall
terminate automatically upon Executive's death during the Employment Period. If
the Company determines in good faith that the Disability of Executive has
occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to Executive written notice in accordance with
Section 16(f) of this Agreement of its intention to terminate Executive's
employment. In such event, Executive's employment with the Company shall
terminate effective on the 30th day after receipt of such written notice by
Executive (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, Executive shall not have returned to full-time performance
of Executive's duties. For purposes of this Agreement, "Disability" shall mean a
mental or
-5-
physical disability as determined by the Board of Directors of the Company in
accordance with standards and procedures similar to those under the Company's
employee long-term disability plan, if any. At any time that the Company does
not maintain such a long-term disability plan, Disability shall mean the
inability of Executive, as determined by the Board of Directors of the Company,
to substantially perform the essential functions of his regular duties and
responsibilities due to a medically determinable physical or mental illness
which has lasted (or can reasonably be expected to last) for a period of six
consecutive months or longer.
(b) Termination by the Company. The Company may terminate
Executive's employment during the Employment Period with or without Cause. For
purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of Executive to
perform substantially Executive's duties with the Company (other than any such
failure resulting from incapacity due to physical or mental illness, and
specifically excluding any failure by Executive, after good faith efforts, to
meet performance expectations), after a written demand for substantial
performance is delivered to Executive by the Chairman or the Board of Directors
of the Company which specifically identifies the manner in which such Board or
the Chairman believes that Executive has not substantially performed Executive's
duties, or
(ii) the willful engaging by Executive in illegal
conduct; or
(iii) the willful engaging by Executive in gross
misconduct which is materially and demonstrably injurious to the Company; or
(iv) the breach by Executive of the covenants contain
in Section 11 of this Agreement.
For purposes of this provision, no act or failure to act, on the part
of Executive, shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by Executive in good faith and in
the best interests of the Company. The cessation of employment of Executive
shall not be deemed to be for Cause unless and until there shall have been
delivered to Executive a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board of
Directors of the Company at a meeting of such Board called and held for such
purpose (after 30 days' notice is provided to Executive specifying the reason
for termination hereunder and Executive is given an opportunity, together with
counsel, to be heard before such Board), finding that, in the good faith opinion
of such Board, Executive is guilty of the conduct described in subparagraph (i),
(ii), (iii) or (iv) above, and specifying the particulars thereof in detail.
-6-
(c) Termination by Executive. Executive's employment may be
terminated by Executive for Good Reason or no reason. For purposes of this
Agreement, "Good Reason" shall mean:
(i) without the written consent of Executive, the
assignment to Executive of any duties inconsistent with Executive's position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 2 of this Agreement, or
any other action by the Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly (not more than 30 days) after receipt of notice
thereof given by Executive; or
(ii) a reduction by the Company in Executive's Base
Salary and/or benefits as in effect on the Effective Date or as the same may be
increased from time to time, or the failure by the Company to increase
Executive's Base Salary each year during the Employment Period by an amount
which at least equals, on a percentage basis, the average percentage increase in
base salary for Peer Executives; or
(iii) the failure by the Company to honor all the
terms and provisions of this Agreement, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly (not more than 30 days) after receipt of notice
thereof given by Executive; or
(iv) the purported termination of Executive otherwise
than pursuant to the terms of this Agreement; or
(v) any failure by the Company to comply with and
satisfy Section 15(c) of this Agreement; or
(vi) any termination by Executive for any reason or
no reason during the 30-day period beginning on the first anniversary of a
Change of Control.
Good Reason shall not include Executive's death or Disability.
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason hereunder. Any
good faith determination of Good Reason made by Executive shall be conclusive,
but the Company shall have an opportunity to cure any claimed event of Good
Reason (other than under clause (vi) above) within 30 days of notice from
Executive and the Board's good faith determination of cure shall be binding. The
Company shall notify Executive of the timely cure of any claimed event of Good
Reason and the manner in which such cure was effected, and any Notice of
Termination delivered by Executive based on such claimed Good Reason shall be
deemed withdrawn and shall not be effective to terminate the Agreement.
(d) Notice of Termination. Any termination by the Company for
Cause, or by Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 16(f) of
this
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Agreement. For purposes of this Agreement, a "Notice of Termination" means a
written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than 60 days after
the giving of such notice). The failure by Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of Executive or the
Company, respectively, hereunder or preclude Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing Executive's
or the Company's rights hereunder at a later date.
(e) Date of Termination. "Date of Termination" means (i) if
Executive's employment is terminated by the Company for Cause or by Executive
for Good Reason, the date specified in the Notice of Termination (which shall
not be less than 30 days after the date of delivery of the Notice of
Termination), (ii) if Executive's employment is terminated by reason of death or
Disability, the date of death or the Disability Effective Date, as the case may
be, and (iii) if Executive's employment is terminated for any other reason, the
date of receipt of the Notice of Termination, or any later date specified
therein (which shall not be more than 60 days after the date of delivery of the
Notice of Termination).
8. Obligations of the Company upon Termination.
(a) Termination by Executive for Good Reason; Termination by
the Company Other Than for Cause or Disability. If, during the Employment
Period, the Company shall terminate Executive's employment other than for Cause
or Disability, or Executive shall terminate employment for Good Reason, then in
consideration of Executive's services rendered prior to such termination:
(i) the Company shall pay to Executive in a lump sum
in cash within 30 days after the Date of Termination the aggregate of the
following amounts:
A. the sum of (1) Executive's Base Salary
through the Date of Termination to the extent not theretofore paid, (2)
the product of (x) Executive's Target Bonus (as defined in Section 5(b)
for the year in which the Date of Termination occurs and (y) a
fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of
which is 365, (3) any accrued vacation pay to the extent not
theretofore paid, and (4) unless Executive has elected a different
payout date in a prior deferral election, any compensation previously
deferred by Executive (together with any accrued interest or earnings
thereon) to the extent not theretofore paid (the sum of the amounts
described in clauses (1), (2), (3) and (4) shall be hereinafter
referred to as the "Accrued Obligations"); and
-8-
B. the amount equal to 200% (or 299% in the
event the Date of Termination occurs within two years after the
occurrence of a Change of Control) of the sum of (1) Executive's Base
Salary in effect as of the Date of Termination, and (2) Executive's
Target Bonus for the year in which the Date of Termination occurs (the
"Severance Payment"); and
(ii) for 18 months after the Date of Termination, or
such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue medical and health
insurance benefits to Executive and/or Executive's family at least equal to
those which would have been provided to them in accordance with Section 5(d) of
this Agreement if Executive's employment had not been terminated (and Executive
shall continue to be responsible for any cost thereof normally allocated to the
employee); provided, however, that (A) post-termination insurance coverage
provided pursuant to this provision shall offset any period of continuation
coverage provided under COBRA applicable to such benefits, and (B) if Executive
becomes re-employed with another employer and is eligible to receive medical and
health insurance benefits under another employer provided plan, the medical and
health insurance benefits described herein shall be secondary to those provided
under such other plan during such applicable period of eligibility; and
(iii) as shall be set forth in the instruments
evidencing such awards, all stock options and other equity-based awards in the
nature of rights that may be vested and/or exercised ("Equity Awards") that are
held by Executive as of the Date of Termination will continue to vest and/or
become exercisable over the 18-month period immediately following the Date of
Termination; provided, however that if the Date of Termination occurs within two
years after the occurrence of a Change of Control, then all of Executive's
Equity Awards shall vest immediately as of the Date of Termination and shall
remain exercisable over the 24-month period following the Date of Termination;
and
(iv) to the extent not theretofore paid or provided,
the Company shall timely pay or provide to Executive any other amounts or
benefits required to be paid or provided or which Executive is eligible to
receive under any plan, program, policy or practice or contract or agreement of
the Company, including without limitation COBRA rights to the extent not fully
offset (such other amounts and benefits shall be hereinafter referred to as the
"Other Benefits").
(b) Death or Disability. If Executive's employment is
terminated by reason of Executive's death or Disability during the Employment
Period, this Agreement shall terminate without further obligations to Executive
or Executive's legal representatives under this Agreement, other than for
payment of Accrued Obligations (as defined in Section 8(a)(i)(A) above) and the
timely payment or provision of Other Benefits (as defined in Section 8(a)(iv)
above). Accrued Obligations shall be paid to Executive or Executive's legal
representative, estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination. With respect to the provision of
Other Benefits, the term Other Benefits as used in this Section 8(b) shall
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include, without limitation, and Executive or Executive's legal representative,
estate and/or beneficiaries shall be entitled to receive, benefits under such
plans, programs, practices and policies relating to death or disability, if any,
as are applicable to Executive on the Date of Termination.
(c) Cause or Voluntary Termination without Good Reason. If
Executive's employment shall be terminated for Cause during the Employment
Period, or if Executive voluntarily terminates employment during the Employment
Period without Good Reason, this Agreement shall terminate without further
obligations to Executive, other than for payment of Accrued Obligations (as
defined in Section 8(a)(i)(A) above, but excluding the pro-rata bonus described
in clause 2 thereof) and the timely payment or provision of Other Benefits (as
defined in Section 8(a)(iv) above).
(d) Expiration of Employment Period. If the Employment Period
expires by reason of the Company's giving notice of non-renewal pursuant to
Section 3 of this Agreement, this Agreement shall terminate upon the expiration
of the then-current term, including any prior extensions (the "Expiration
Date"), without further obligations to Executive, other than for (i) payment of
Accrued Obligations (as defined in Section 8(a)(i)(A) above, but excluding the
pro-rata bonus described in clause 2 thereof), (ii) the timely payment to
Executive of the actual bonus earned by him with respect to the last year of the
Employment Period, (iii) the timely payment or provision of Other Benefits (as
defined in Section 8(a)(iv) above), and (iv) payment or provision of the
following severance benefits:
(A) the Company shall pay to Executive in a
lump sum in cash within 30 days after the Expiration Date the amount
equal to 100% of Executive's Base Salary in effect as of the Expiration
Date (or 299% of such Base Salary in the event the Expiration Date
occurs within two years after the occurrence of a Change of Control);
and
(B) for 12 months after the Expiration Date
(or 18 months after the Expiration Date if the Expiration Date occurs
within two years after the occurrence of a Change of Control), the
Company shall continue medical and health insurance benefits to
Executive and/or Executive's family at least equal to those which would
have been provided to them in accordance with Section 5(d) of this
Agreement if Executive's employment had not been terminated (and
Executive shall continue to be responsible for any cost thereof
normally allocated to the employee); provided, however, that (A)
post-termination insurance coverage provided pursuant to this provision
shall offset any period of continuation coverage provided under COBRA
applicable to such benefits, and (B) if Executive becomes re-employed
with another employer and is eligible to receive medical and health
insurance benefits under another employer provided plan, the medical
and health insurance benefits described herein shall be secondary to
those provided under such other plan during such applicable period of
eligibility.
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9. Non-exclusivity of Rights. Nothing in this Agreement shall prevent
or limit Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or its subsidiaries and for which
Executive may qualify, nor, subject to Section 16(d), shall anything herein
limit or otherwise affect such rights as Executive may have under any contract
or agreement with the Company or its subsidiaries. Amounts which are vested
benefits or which Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Company or
any of its subsidiaries at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
10. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company or the Company to or for the benefit of
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 10) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by Executive with respect to such excise tax (such excise
tax, together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after payment
by Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon
the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 10(c), all
determinations required to be made under this Section 10, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the Company's regular independent accounting firm at the expense of the
Company or, at the election and expense of Executive, another nationally
recognized independent accounting firm (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and Executive
within 15 business days of the receipt of notice from Executive that there has
been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, Executive shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 10, shall be paid by the Company to Executive within 15 business
days of the receipt of the Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon the
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Company and Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 10(c) and Executive thereafter
is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of
Executive.
(c) Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than 15 business days after Executive is informed in
writing of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. Executive shall not
pay such claim prior to the expiration of the 30-day period following the date
on which it gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the
Company notifies Executive in writing prior to the expiration of such period
that it desires to contest such claim, Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim,
(ii) take such action in connection with contesting
such claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in
order effectively to contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation of the foregoing provisions of
this Section 10(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and Executive agrees to prosecute such contest
to a determination before any
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administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if the
Company directs Executive to pay such claim and xxx for a refund, the Company
shall advance the amount of such payment to Executive, on an interest-free basis
and shall indemnify and hold Executive harmless, on an after-tax basis, from any
Excise Tax or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and Executive shall be entitled to settle or contest,
as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced
by the Company pursuant to Section 10(c), Executive becomes entitled to receive
any refund with respect to such claim, Executive shall (subject to the Company's
complying with the requirements of Section 10(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by Executive of an amount
advanced by the Company pursuant to Section 10(c), a determination is made that
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
11. Confidential Information. 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, Xxxxxx'x or any of their respective
affiliated companies, and their respective businesses, which shall have been
obtained by Executive during Executive's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by Executive or representatives of Executive in violation of this
Agreement). After termination of Executive's employment with the Company,
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it.
12. Full Settlement; Partial Security for Payment. The Company's
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not
-13-
Executive obtains other employment. As partial security for the Company's
obligations under this Agreement, and without limiting Executive's ability to
enforce all of his rights under this Agreement, the Company will purchase on or
before the Effective Date an irrevocable stand-by letter of credit (the "LOC")
in favor of Executive in an amount equal to one times his Base Salary as in
effect on the Effective Date. The LOC shall by its terms provide for prompt
payment to Executive of any amount due under this Agreement (up to the LOC
limit) upon no condition other than receipt (by facsimile or otherwise) by the
LOC issuer of a signed notice from Executive that such amount is past due.
13. Costs of Enforcement. The Company agrees to pay as incurred, to the
full extent permitted by law, all legal fees and expenses which Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by Executive about the amount of
any payment pursuant to this Agreement).
14. Representations and Warranties. Executive hereby represents and
warrants to the Company that Executive is not a party to, or otherwise subject
to, any covenant not to compete with any person or entity, and Executive's
execution of this Agreement and performance of his obligations hereunder will
not violate the terms or conditions of any contract or obligation, written or
oral, between Executive and any other person or entity.
15. Assignment and Successors.
(a) This Agreement is personal to Executive and without the
prior written consent of the Company shall not be assignable by Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
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16. Miscellaneous.
(a) Waiver. Failure of either party to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted in this Agreement or of the future performance of any such
term or condition or of any other term or condition of this Agreement, unless
such waiver is contained in a writing signed by the party making the waiver.
(b) Severability. If any provision or covenant, or any part
thereof, of this Agreement should be held by any court to be invalid, illegal or
unenforceable, either in whole or in part, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of
the remaining provisions or covenants, or any part thereof, of this Agreement,
all of which shall remain in full force and effect.
(c) Other Agents. Nothing in this Agreement is to be
interpreted as limiting the Company from employing other personnel on such terms
and conditions as may be satisfactory to it.
(d) Entire Agreement. Except as provided herein, this
Agreement contains the entire agreement between the Company and Executive with
respect to the subject matter hereof and, from and after the Effective Date,
this Agreement shall supersede any other agreement between the parties with
respect to the subject matter hereof.
(e) Governing Law. Except to the extent preempted by federal
law, and without regard to conflict of laws principles, the laws of the State of
Tennessee shall govern this Agreement in all respects, whether as to its
validity, construction, capacity, performance or otherwise.
(f) Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given if delivered or three days after mailing if
mailed, first class, certified mail, postage prepaid:
To Company:
JCC Holding Company
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Secretary
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To Executive: Xxxxxxxxx X. Xxxxxxx
000 Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Any party may change the address to which notices, requests, demands and other
communications shall be delivered or mailed by giving notice thereof to the
other party in the same manner provided herein.
(g) Amendments and Modifications. This Agreement may be
amended or modified only by a writing signed by both parties hereto, which makes
specific reference to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Employment Agreement as of the date first above written.
JCC HOLDING COMPANY
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Xxxxx X. Xxxx
Title: Chairman of the Board of Directors
EXECUTIVE:
/s/ Xxxxxxxxx X. Xxxxxxx
------------------------------------------
Xxxxxxxxx X. Xxxxxxx
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EXHIBIT A
INITIAL GRANT OF AWARDS TO EXECUTIVE UNDER THE
LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK AWARDS
NUMBER OF SHARES: 55,000 shares
VESTING SCHEDULE: Fully vested as of January 1, 2003, subject to earlier vesting
in accordance with the following schedule, where:
Goal #1 = completion of casino and garage on time and on
budget;
Goal #2 = Phase I and Phase II completed for 2nd floor by
November, 2000; and
Goal #3 = construction and facility leasing of Xxxxxx Street
substantially complete by November 1, 2001.
Percent of shares with respect to which restrictions lapse early upon attainment
of Goal:
Goal #1 Goal #2 Goal #3
------- ------- -------
33% 33% 34%
STOCK OPTION GRANTS
NUMBER OF OPTIONS: 115,000
EXERCISE PRICE: $3.625 (fair market value as of grant date)
VESTING SCHEDULE: January 1, 2003, subject to earlier vesting in accordance
with the following schedule (where Average Share Price means
the average price per share of
JCC Holding Company common
stock over any 20 trading days in a 30 consecutive trading
day period)
Cumulative Percentage
of Option Shares Vested Average Share Price
----------------------- -------------------
20% $5.00
40% $6.00
60% $7.00
80% $8.00
100% $9.00
