EXHIBIT 10.01
XXXX X. XXXXXX
EMPLOYMENT AGREEMENT
This Employment Agreement ("Employment Agreement") is made and entered
into this 27th day of March 2002, by and between JCC Holding Company, a Delaware
corporation (hereinafter, the "Company") and Xxxx X. Xxxxxx (hereinafter,
"Executive").
BACKGROUND
Executive currently serves as the President of the Company and
President of Jazz Casino Company, LLC, a Louisiana limited liability company and
a subsidiary of the Company ("Jazz LLC"). The Company desires to retain
Executive as the President of the Company and as the President of Jazz LLC, in
accordance with the terms of this Employment Agreement. Executive is willing to
serve as such in accordance with the terms and conditions of this 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. Effective Date. This Employment Agreement is effective retroactively
to June 15, 2001 (the "Effective Date").
2. Employment. Executive is hereby employed as the President of the
Company and as the President of Jazz LCC, during the Employment Period.
3. Employment Period. Executive's employment shall be for a term (the
"Employment Period") beginning on the Effective Date and ending on the date when
any of the following occurs:
(a) Executive resigns; or
(b) The Company terminates Executive's service under Section 6 of
this Employment Agreement.
4. Extent of Service. During the Employment Period, 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 Employment 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 Employment 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. In lieu of a salary for Executive's services for the
period from June 15, 2001 until March 31, 2002 only, the Company grants to the
Executive the following:
(a) Stock Options
(1) Grant. Subject to the provisions of Section 5(d) of this
Employment Agreement, in consideration for the Executive's services
hereunder, the Company shall grant the Executive an option to purchase
shares of the Company's authorized but unissued $0.01 par value common
stock on the terms and conditions set forth in this section of an
aggregate value of approximately $411,850 per year, plus any Cumulative
Rollover Amount pursuant to section (4) below.
(2) Price. The purchase price of the shares of common stock
subject to this option shall be equal to the closing price of the
Company's common stock on March 1, 2002 for the period of June 15, 2001
to March 31, 2002. For each annual period thereafter, the strike price
shall be re-set annually by the Compensation Committee.
(3) Number. The number of shares of common stock subject to
the Annual Grant of options shall be equal to the aggregate value of
the Annual Grant as determined in section (1) divided by the value of
the stock options as determined by the Black-Scholes Pricing Model (the
"Stock Option Value"), not to exceed 2.499% of the total number of
shares of the Company's common stock currently outstanding on the date
of the Annual Grant.
The Black-Scholes Pricing Model is as follows:
(-rt)
C = STOCK OPTION VALUE = SN(d ) - Ke N(d )
(1) (2)
S = the Company's stock price on the date of grant,
N = Cumulative standard normal distribution,
(2)
d = (ln (S/K + (r + (s /2))t)/(s(square root -)
(1)
t), d = d -s (square root -) t,
(2) (1)
K = option strike price (as determined in section
(2) above),
e = exponential term (2.7183),
r = risk free rate,
t = time until the option expire,
s = standard deviation of stock returns (volatility
of the underlying stock price),
ln = natural logarithm.
The "Term" of the options shall be 5 years from the date
of grant.
The "Type" of options shall be "American."
The "Standard Deviation" calculation shall be based upon
the Standard & Poor's 500 Index Five Year Monthly
Historical Price Volatility figure, until such time as
the Company's stock has a 5-year performance history
upon which to base this calculation.
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(4) Rollover. When the number of shares of common stock
subject to the Annual Grant of options exceeds 2.499% of the total
number of shares of the Company's common stock currently outstanding,
the portion of the Annual Grant not awarded will roll-over to the next
period's Annual Grant (the "Annual Rollover Amount"). The Annual
Rollover Amount shall equal $411,850 minus the aggregate value (rounded
to the nearest dollar) of the options awarded as part of the Annual
Grant. The Annual Rollover Amount may be cumulative and each Annual
Grant which does not award enough shares to extinguish the Annual
Rollover Amount may be carried-forward to successive years (the
"Cumulative Rollover Amount").
(5) When Exercisable.
(A) For the initial period beginning June
15, 2001 and ending March 31, 2002, half of the
options granted may be exercised on the date of the
grant and the remaining half on April 1, 2002.
(B) For each subsequent year beginning April
1 and ending March 31, the stock options granted may
be exercised only as follows:
(i) Half of the stock options
granted may be exercised on October 1, six
months after the beginning of the employment
year in which the options were granted; and
(ii) The remaining half of the
stock options granted may be exercised on
April 1, twelve months after the beginning
of the employment year in which the options
were granted.
(C) To the extent not exercised, the stock
options granted shall accumulate and be exercised by
the Executive, in whole or in part, in any subsequent
period but not later than 5 years from the date the
options are granted.
(6) Cash Out. Upon the Executive's termination of employment
with the Company, the Company shall pay the Executive the value of any
Cumulative Rollover Amount accrued and not awarded.
(7) Transfer. The option shall not be transferable by the
Executive otherwise than by will and the laws of descent and
distribution. During the lifetime of the Executive, the option shall be
exercised only by the Executive.
(8) Terms of Payment. Payment for shares of stock purchased on
exercise of this option shall be made in full in cash.
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(9) Adjustment of Number of Shares and Price. The number of
shares of stock subject to the option and the option price per share
shall be appropriately adjusted for any increase or decrease in the
number of outstanding shares of common stock of the corporation
resulting form payment of a stock dividend on the common stock, a
subdivision or combination of shares of the common stock, or a
reclassification of the common stock.
(10) Forfeiture. Shares purchased under this option shall be
forfeited, and to the extent not exercised, the option shall in no
event be exercisable, if the Executive is not found suitable by the
Louisiana Gaming Control Board (or any other gaming regulatory agency
with proper jurisdiction) to serve as an Officer or Director of the
Company or Jazz LLC or not suitable to own an interest in the Company.
(b) For the period from June 15, 2001 until March 31, 2002, Executive
may receive additional compensation at the discretion of the
Compensation Committee of Board. Additionally, for each
successive annual fiscal period, beginning April 1 and ending
March 31, the Compensation Committee of the Board shall review
Executive's compensation annually and may award appropriate
compensation in its discretion. The first such review shall cover
the period beginning April 1, 2002 and ending March 31, 2003.
(c) 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.
(d) Fair Labor Standards Act ("FLSA") Compliance. Executive shall be
paid compensation by the Company to assure compliance with the
FLSA. The value of any such compensation shall be deducted from
the value of the options to be awarded under Section 5(a) of this
Employment Agreement so as to reduce the number of options
granted under Section 5(a) by the value of the compensation paid.
6. 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, it may give to Executive written notice in
accordance with Section 7(f) of this Employment 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 Employment Agreement,
"Disability" shall mean a mental or physical disability as determined by the
Board of Directors in accordance with standard and procedures similar to
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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 for any reason.
(c) Termination by Executive. Executive may terminate
Executive's employment during the Employment Period for any reason.
(d) Notice of Termination. Any termination by either the
Company or by Executive shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 9(f) of this Employment
Agreement. "Notice of Termination" means written notice which is effective upon
receipt, unless the Notice of Termination specifies a later date of termination
not to exceed 60 days after the date of receipt of the Notice of Termination.
7. Confidentiality
(a) Executive's position with the Company will or has resulted
in his exposure and access to confidential and proprietary information which he
did not have access to prior to holding the position, which information is of
great value to the Company and the disclosure of which by him, directly or
indirectly, would be irreparably injurious and detrimental to the Company.
During his term of employment and without limitation thereafter, Executive
agrees to use his best efforts and to observe the utmost diligence to guard and
protect all confidential or proprietary information relating to the Company from
disclosure to third parties. Executive shall not at any time during and after
his Termination Date, make available, either directly or indirectly, to any
competitor or potential competitor of the Company or any of its subsidiaries, or
their affiliates or divulge, disclose, communicate to any firm, corporation or
other business entity in any manner whatsoever, any confidential or proprietary
information covered or contemplated by this Employment Agreement, unless
expressly authorized to do so by the Company in writing.
(b) For the purpose of this Employment Agreement,
"Confidential Information" shall mean all information of the Company, its
parent, subsidiaries and affiliates relating to or useful in connection with the
business of the Company, its parent, subsidiaries and affiliates, whether or not
a "trade secret" within the meaning of applicable law, which at the time of
Executive's initial employment is not generally known to the general public and
which has been or is from time to time disclosed to or developed by Executive as
a result of his employment with the Company. Confidential Information includes,
but is not limited to: the Company's product development and marketing programs,
data, future plans, formula, food and beverage procedures, recipes, finances,
financial management systems, player identification systems (Total Gold Card),
pricing systems, client and customer lists, organizational charts, salary and
benefit programs, training programs, computer software, business records, files,
drawings, prints, prototyping models, letters, notes, notebooks (including
notebooks containing customer
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information), reports, and copies thereof, whether prepared by him or others,
and any other information or documents which Executive is told or reasonably
ought to know that the Company regards as confidential.
(c) Executive agrees that upon termination of employment for
any reason whatsoever, he shall promptly deliver to the Company all confidential
information, including but not limited to, documents, customer lists, notebooks
(including notebooks containing customer information) reports, correspondences,
computer printouts, work papers, files, computer lists, telephone and address
books, rolodex cards, computer tapes, disks, and any and all records in his
possession (and all copies thereof) containing any such confidential information
created in whole or in part by Executive within the scope of his employment,
even if the items do not contain confidential information.
(d) Executive shall also be required to sign a non-disclosure
or confidentiality agreement. Such an agreement shall also remain in full force
and effect, provided that, in the event of any conflict between any such
agreement(s) and this Employment Agreement, this Employment Agreement shall
control.
(e) This Section and any of its provisions will survive
Executive's termination of employment for any reason.
8. Release. Upon the termination of the Executive's Active Employment,
and in consideration of the receipt of the compensation and benefits described
in this Agreement, except for claims arising from the covenants, agreements, and
undertakings of the Company as set forth herein and except as prohibited by
statutory language, the Executive forever and unconditionally waives, and
releases JCC Holding Company, Inc., JCC Xxxxxx Development, LLC, JCC Canal
Development, LLC, JCC Development Company, LLC, Xxxxxx'x Entertainment, Inc.,
Xxxxxx'x Operating Company, Inc., their subsidiaries and affiliates, and their
officers, directors, agents, benefit plan trustees, and Executives ("Released
Parties") from any and all claims, 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 Title VII of the Civil Rights Act of 1964 and
the Age Discrimination in Employment Act, concerning his employment with JCC
Xxxxxx Development, LLC, JCC Canal Development, LLC, JCC Development Company,
LLC, its subsidiaries and affiliates, and the cessation of that employment.
9. 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 Employment Agreement shall not be deemed a waiver or
relinquishment of any right granted in this Employment Agreement or of the
future performance of any such term or condition or of any other term or
condition of this Employment Agreement, unless such waiver is contained in a
writing signed by the party making the waiver.
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(b) Severability. If any provision or covenant, or any part
thereof, of this Employment 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 Employment Agreement, all of which shall remain in full force and effect.
(c) Representations and Warranties of the Company. The Company
represents and warrants that the execution of this Employment Agreement has been
duly authorized by resolution of its Compensation Committee of the Board of
Directors, and that this Employment Agreement constitutes a valid and binding
obligation of the Company in accordance with its terms.
(d) Entire Agreement. Except as provided herein, this
Employment 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 Employment 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
Louisiana shall govern this Employment Agreement in all respects, whether as to
its validity, construction, capacity, performance or otherwise. A dispute
involving this Employment Agreement may only be enforced in the courts of
Louisiana or in arbitration upon mutual agreement of the parties to arbitrate
after notice of a dispute or disagreement is provided by one party to the other.
(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
Xxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Secretary
To Executive: Xxxx X. Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxxx Xxxxx, Xxxxx 000
Xxx 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.
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(g) Amendments and Modifications. This Employment Agreement
may be amended or modified only by a writing signed by both parties hereto,
which makes specific reference to this Employment 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/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
Title: Chair of the Compensation Committee
of the Board of Directors
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
L. Xxxxxxx Xxxxxx
Title: Vice President - Finance, Treasurer
& Secretary, JCC Holding Company
EXECUTIVE:
/s/ Xxxx Xxxxxx
-------------------------------------------
Xxxx X. Xxxxxx
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