Exhibit 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the _____ day of February, 2001 by
and between Penn National Gaming, Inc., a Pennsylvania corporation with its
principal offices at Wyomissing Professional Center, 000 Xxxxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (the "Company") and Xxxxx
XxXxxxxxx, an individual residing at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx
00000 (the "Executive").
In consideration of their mutual promises and covenants set forth
herein, and intending to be legally bound hereby, Company and Executive agree
as follows:
1. EMPLOYMENT. Company hereby employs Executive and
Executive accepts such employment on the terms and conditions hereinafter set
forth.
2. TERM. The term of this Agreement shall begin on February
15, 2001 and shall terminate on February 14, 2003 unless sooner terminated in
accordance with Paragraph 12 hereof.
3. COMPENSATION. For all services rendered by Executive
under this Agreement, Company agrees to pay Executive a salary at the annual
rate of $500,000 ("Annual Salary"), payable in equal biweekly installments.
Executive shall also participate in the Company's Senior Management Incentive
Compensation Plan as the same may be adopted and amended, from time to time,
by the Board of Directors of Company including, but not limited to, being
eligible for individual awards and incentive stock options (initially options
to purchase 150,000 shares of Company's common stock in accordance with
Company's Incentive Stock Option Plan) which might be granted pursuant to the
terms and provisions of any such Plan.
4. DUTIES.
4.1 Until such time as Executive receives all necessary
regulatory licenses and approvals, Executive is engaged hereunder as an
employee of Company, reporting to the Chairman of the Board of Directors of
Company (the "Chairman") with such duties as the Chairman shall determine but
which shall not include any duties with respect to or authority over any
aspect of Company's gaming operations nor shall any employee of Company's
gaming operations report to Executive. From and after such time as Executive
receives all necessary regulatory licenses and approvals, he shall be and
become President and Chief Operating Officer of Company, and he agrees
thereafter to perform the duties and services incident to that position, or
such other or further duties and services of a similar nature as may be
reasonably required of him by the Chairman. Executive agrees to serve as an
officer of Company or any subsidiary of Company or affiliated company without
additional compensation.
4.2 Executive shall have such power and authority as
shall reasonably be required to enable Executive to perform his duties
hereunder in an efficient manner, provided, that in exercising such power and
authority and performing such duties, Executive shall at all times be subject
to the supervision of the Chairman.
4.3 Executive shall devote his full business time,
attention, energies and best efforts to the performance of his duties
hereunder and to the promotion of the business and interests of Company and
of any of its corporate subsidiaries or affiliated companies. The foregoing
shall not be construed, however, as preventing Executive from investing his
assets in such form or manner as will not require services on the part of
Executive in the operations of the business in which such investment is made
and provided such business is not in competition with Company or, if in
competition, such business has a class of securities registered under the
Securities Exchange Act of 1934 and the interest of Executive therein is
solely that of an investor owning not more than 3% of any class of the
outstanding equity securities of such business. Executive may also act as a
director of or engage in other activities for any charitable, educational or
other non-profit institution, so long as such activities do not materially
interfere with the performance of Executive's duties hereunder.
5. BENEFITS. During the term of this Agreement, Executive
shall be entitled to participate in such medical insurance, retirement
programs, and other fringe benefit programs of Company now or hereafter
existing to the extent and on the same terms and conditions as are accorded
to other executive officers of Company, provided, however, that nothing
herein shall be deemed to require grants or awards to Executive under any
benefit plans which provide for awards or grants at the discretion of the
Board of Directors or of any committee or administrator. Nothing contained in
this Agreement shall require Company to establish, maintain or continue any
of the benefits already in existence or hereafter adopted for employees of
Company, nor restrict the right of Company to amend, modify or terminate such
benefit programs in a manner which does not discriminate against Executive as
compared to other executive employees of Company. Company shall maintain life
insurance on the life of Executive in the amount of One Million Dollars, to
the extent it can be issued at standard rates, and Executive may name the
beneficiary of such policy.
6. VACATIONS. Executive shall be entitled in each calendar
year to four weeks of vacation time. Each vacation shall be taken by
Executive at such time or times as agreed upon by the Chairman and Executive,
and any portion of Executive's allowable vacation time not used during the
calendar year shall be forfeited.
7. AUTOMOBILE. During the term of this Agreement, Company
shall provide Executive with an automobile of such make and model consistent
with Company's policy for its provision of automobiles to executive officers.
Company shall reimburse Executive for all expenses arising from or related to
the maintenance, repair and daily operation of such automobile in carrying
out Executive's duties hereunder, including but not limited to, fuel, service
and insurance costs, provided that Executive presents vouchers evidencing
such expenses as required by Company.
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8. REIMBURSEMENT OF BUSINESS EXPENSES. Company will pay, or
reimburse Executive for, all ordinary and reasonable out-of-pocket business
expenses incurred by Executive in connection with his performance of services
hereunder, in accordance with Company's expense authorization and approval
procedures then in effect, and provided Executive submits detailed vouchers
and other records reasonably requested by Company in support of the amount
and nature of the expenses.
9. RELOCATION EXPENSES. From the date hereof until not
later than August 31, 2001, Company shall reimburse Executive for all
temporary housing expenses in the Wyomissing area until Executive moves his
family to such area. Company shall also pay: (a) the cost, including airfare,
for two family trips to the Wyomissing area for the purpose of obtaining
housing in the Wyomissing area; (b) during the period ending not later than
August 31, 2001, Executive's transportation expenses between his home in
Weston, Florida and Wyomissing; and (c) all standard closing costs (but not
including the repayment of any mortgages or other liens on such house) for
the sale of Executive's house in Weston, Florida in an amount equal to the
difference, if any, between $600,000 and the sale price net of such standard
closing costs (the "Net Sale Price"). In addition, if Executive has not sold
or leased his Weston, Florida house prior to the time he moves his family to
the Wyomissing area, Company will pay the mortgage, taxes and property
insurance for this house until the house is sold or leased; provided,
however, Company may purchase the house from Executive or require Executive
to sell the house, in either case, so long as the Net Sale Price is not less
than $600,000.
10. DISABILITY OF THE EXECUTIVE. If the Executive is unable
to perform his services by reason of incapacity, either mental or physical,
for a period aggregating ninety days in any twelve month period, Company
shall have the option of reducing, in whole or in part, the Annual Salary or
other compensation thereafter payable to Executive pursuant to the terms of
this Agreement during the continued period of illness or incapacity or of
declaring at any time thereafter, upon thirty days notice, that Executive's
employment hereunder is terminated. In the event this Agreement is terminated
because of disability, Company shall pay all sums owed to Executive as Annual
Salary and reimbursement which would otherwise be payable to Executive up to
the date of Executive's termination and upon such payment all obligations of
the Company hereunder shall cease. The payments due hereunder shall be made
within thirty days after the date of termination. Company agrees to provide
Executive, during the term of this Agreement, at no cost to Executive,
long-term disability insurance coverage consistent with the present coverage
provided by Company, if any.
11. DEATH. In the event of the death of Executive during
the term of this Agreement, this Agreement shall terminate effective as of
the date of Executive's death, and Company shall not have any further
obligation or liability hereunder except that Company shall pay to
Executive's designated beneficiary or, if none, his estate (i) the portion,
if any, of the Executive's Annual Salary, and any reimbursements, for the
period up to Executive's date of death which remains unpaid, and (ii) an
amount equal to fifty percent of Executive's Annual Salary in effect at the
time of his death, which death benefit shall be in addition to any life
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insurance carried or paid for by Company on the life of Executive.
12. TERMINATION OF EMPLOYMENT.
12.1 This Agreement shall terminate upon the occurrence
of the first to occur of the following events:
12.1.1 The expiration of the term set forth in
Paragraph 2 hereof, or of any renewal or extension thereof;
12.1.2 Immediately upon Executive's death;
12.1.3 At the election of Company (A) if Executive
becomes disabled as set forth in Paragraph 10 hereof, or (B) if Executive's
application for any necessary regulatory license or approval is rejected due to
unsuitability or Executive's license issued by any gaming regulatory commission
or similar agency is terminated or suspended for any reason whatsoever or
Company's Compliance Committee determines at any time that Executive's continued
employment may adversely affect the license status of Company or any of its
affiliates with any gaming regulatory agency, board or commission, or (C) if
Executive is convicted of committing a felony, or (D) if Executive willfully
commits a material breach of any Company policy applying to the conduct of
Company's executive employees and does not cure such breach or failure within
thirty days after the giving of written notice thereof to Executive by the
Chairman; or
12.1.4 Immediately upon Company discontinuing its
gaming operations. The merger, consolidation or sale of the gaming operations of
Company shall not be deemed a discontinuance of the gaming operations of Company
for purposes of this provision.
12.2 In the event Executive shall voluntarily
terminate his employment under this Agreement prior to the expiration of the
original term of this Agreement or any extension or renewal hereof, or shall be
discharged under paragraph 12.1.3 hereof, Executive shall be entitled to receive
his Annual Salary and any reimbursements due to the date of termination of his
employment, but the Company shall not have any further obligations or liability
under this Agreement. In the event Company shall terminate Executive's
employment for any reason other than as set forth in the foregoing subsections
of this Section 12, or Executive's employment terminates after a Change in
Control (as defined in Company's Amended and Restated 1994 Stock Option Plan, as
further amended from time to time), and thereafter Executive's duties hereunder
are diminished in any material way, Company shall continue to pay Executive's
Annual Salary and benefits provided pursuant to Section 5 above for the balance
of the Term hereof and Company shall not have any further obligations or
liability to Executive on account of or with respect to any such termination.
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13. RESTRICTIONS.
13.1 Executive recognizes and acknowledges that he
will have access to certain confidential information of Company and that such
information constitutes valuable, special and unique property of Company.
Executive agrees that he will not, for any reason or purpose whatsoever, during
his employment by Company and for a period of twenty four months thereafter,
disclose any of such confidential information to any party, and that he will
keep inviolate and secret all information or knowledge which he has access to by
virtue of his employment hereunder, except as necessary in the ordinary course
of performing his duties hereunder.
13.2 Executive further agrees that during his
employment by Company and for a period of twenty four months thereafter,
Executive shall not, without the prior written consent of Company, directly or
indirectly, solicit the employment, consulting or other services of any other
employee of Company or any of its subsidiaries or affiliated companies, or
otherwise induce any of such employees to leave such employment or to breach an
employment agreement with any of them.
13.3 Executive acknowledges and agrees that
Executive's services hereunder are special, unique, unusual and extraordinary
giving them particular value, the loss of which cannot reasonably or adequately
be compensated for by damages, and that the restrictions contained in this
Section 13 are, in view of the nature of the business of Company, reasonable and
necessary to protect the legitimate interests of Company, and that any violation
of any provisions of this Section 13 will result in irreparable injury to
Company. Executive also acknowledges that Company shall be entitled to temporary
and permanent injunctive relief, without the necessity of proving actual
damages, and to an equitable accounting of all earnings, profits and other
benefits arising from any such violation, which rights shall be cumulative and
in addition to any other rights or remedies to which Company may be entitled. In
the event of any such violation, Company shall be entitled to commence an action
for temporary and permanent injunctive relief and other equitable relief in any
court of competent jurisdiction and Executive further irrevocably submits to the
jurisdiction of any Pennsylvania court or Federal court sitting in the Eastern
District of Pennsylvania over any suit, action or proceeding arising out of or
relating to this Section 13. The Executive hereby waives, to the fullest extent
permitted by law, any objection that he may now or hereafter have to such
jurisdiction or to the venue of any such suit, action or proceeding brought in
such a court and any claim that such suit, action or proceeding has been brought
in any inconvenient forum. Effective service of process may be made upon the
Executive by mail under the notice provisions contained in Section 14 hereof.
13.4 The provisions of this Section 13 shall survive
the termination of this Agreement.
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13.5 The provisions of Section 13 shall be considered
severable and the invalidity or unenforceability of any part thereof shall not
affect the validity or enforceability of the remaining parts or portions
thereof.
14. NOTICES. All notices, demands and requests of any kind
which either party may be required or may desire to serve upon the other party
hereto in connection with this Agreement shall be delivered only by courier or
other means of personal service, which provides written verification of receipt
or by registered or certified mail return receipt requested (the "Notice"). Any
such Notice or demand so delivered by registered or certified mail or courier
shall be deposited in the United States mail, or in the case of courier,
deposited with the courier, with postage thereon fully prepaid. All Notices
shall be addressed to the parties to be served as follows:
If to Company: If to Executive:
Wyomissing Professional Center Xxxxx XxXxxxxxx
000 Xxxxxxxxx Xxxxxxxxx, 0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000 Xxxxxx, Xxxxxxx 00000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
ATTENTION: Chairman
Either of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other party
given under this Section. All such notices, requests, demands, and other
communications shall be effective when received at the respective address set
forth above or as then in effect pursuant to any such change.
15. ASSIGNMENT. Executive may not assign any rights (other
than the right to receive income hereunder and upon death to his estate) under
this Agreement without the prior written consent of Company. If Company, or any
entity resulting from any merger or consolidation with or into Company, is
merged with or consolidated into or with any other entity or entities, or if
substantially all of the assets of any of the aforementioned entities is sold or
otherwise transferred to another entity, the provisions of this Agreement shall
be binding upon and shall inure to the benefit of the continuing entity in, or
the entity resulting from, such merger or consolidation, or the entity to which
such assets are sold or transferred.
16. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts) of
the Commonwealth of Pennsylvania.
17. ENTIRE AGREEMENT; MODIFICATION. This Agreement sets forth
the entire understanding between the parties hereto with respect to the subject
matter hereof and supersedes and is instead of all other employment arrangements
between Executive and Company. This Agreement cannot be changed, modified or
terminated except upon written amendment duly
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executed by the parties hereto.
18. REMEDIES CUMULATIVE; NO WAIVER. No remedy conferred upon
Company by this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to any
other remedy given hereunder or now or hereafter existing at law or in equity.
No delay or omission by Company in exercising any right, remedy or power
hereunder or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by Company from
time to time and as often as may be deemed expedient or necessary by Company in
its sole discretion.
19. ENFORCEABILITY. If any provision of this Agreement shall
be invalid or unenforceable, in whole or in part, then such provision shall be
deemed to be modified or restricted to the extent and in the manner necessary to
render the same valid and enforceable, or shall be deemed excised from this
Agreement, as the case may require, and this Agreement shall be construed and
enforced to the maximum extent permitted by law, as if such provision had been
originally incorporated herein as so modified or restricted, or as if such
provision had not been originally incorporated herein, as the case may be.
20. REGULATORY COMPLIANCE. The terms and provisions hereof
shall be conditioned on and subject to compliance with all laws, rules and
regulations of all jurisdictions, or agencies, boards or commissions thereof,
having regulatory jurisdiction over the employment or activities of Executive
hereunder.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as
of the date first above written.
PENN NATIONAL GAMING, INC.
BY:
-----------------------------
Xxxxx X. Xxxxxxx, Chairman
Witness:
--------------------------- ---------------------------------
Xxxxx XxXxxxxxx
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