EMPLOYMENT AGREEMENT
AGREEMENT made as of the 27th day of October, 1996 by and between
XXXXXXXX HOSPITALITY GROUP INC., a Delaware corporation (the "Company") with its
principal place of business at c/o El San Xxxx Hotel & Casino, 0000 Xxxx Xxxx
Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxx Xxxx 00000 and XXXXX XXXXXXX ("Executive")
residing at 0 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, Xxxxxx Xxxx 00000.
W I T N E S S E T H :
WHEREAS, the Company and Executive are parties to an employment
agreement dated October 27, 1994 which expires on October 27, 1996; and
WHEREAS, the Company and Executive desire to enter into a new
employment agreement on the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, the parties hereto agree as follows:
1. DUTIES.
1.1 The Company hereby employs Executive as an executive of the
Company to perform services as President and Chief Operating Officer or to
perform such other supervisory, managerial or executive duties on behalf of the
Company as the Board of Directors or the Chairman of the Board of the Company
may from time to time determine.
1.2 Executive hereby accepts such employment. Throughout the period
of his employment by the Company, Executive will devote his full time,
attention, knowledge and skills, faithfully, diligently and to the best of his
judgment and ability, to the performance of the duties assigned to him under
Section 1.1 hereof and in furtherance of the business of the Company and any
affiliate of the Company, and will observe and carry out such rules,
regulations, policies, directions and restrictions as the Company and any
affiliate of the Company shall from time to time establish. Executive shall at
all times conduct himself in a manner so as to remain eligible to perform his
duties under the laws of the Commonwealth of Puerto Rico, including laws, rules
and regulations relating to gambling. Executive will do such traveling as may be
reasonably required of him in the performance of his duties hereunder. At the
Company's request, Executive shall serve as an officer or director of the
Company or any affiliate of the Company without additional compensation.
1.3 Executive shall not, without the written approval of a majority
of the Company's Board of Directors first had and obtained in each instance,
directly or indirectly, accept employment or compensation from or perform
services of any nature for, any business enterprise other than the Company or
any affiliate of the Company. The foregoing shall not
preclude Executive's participation in non-profit organizations and/or
associations related to the tourism and hotel industries that will directly or
indirectly benefit the Company.
2. TERM OF EMPLOYMENT. Executive shall be employed under this agreement
for an initial term of two years commencing October 27, 1996 and ending October
27, 1998; provided, however, that the term shall be deemed automatically
extended from time to time such that such term shall at no time be less than one
year and provided further that such term and Executive's employment hereunder
may be terminated earlier by either party as provided in Section 6 hereof.
3. BASE COMPENSATION. As base compensation for the performance by
Executive of his obligations under Section 1 hereof, the Company shall pay
Executive a salary at the rate of not less than $300,000 per year, payable in
accordance with the Company's customary payroll practices for senior executives.
4. ADDITIONAL BENEFITS. In addition to his base salary, Executive shall
be entitled to the following benefits:
(i) Executive shall be entitled to participate in bonus and
incentive plans generally available to senior executives of the Company which
may be in effect from time to time during the period of his employment
hereunder. The Company shall be under no obligation to institute or continue the
existence of any such plans. Executive's bonus for the fiscal year ended June
30, 1997 shall not be less than $50,000.
(ii) Executive shall be entitled to participate, to the extent he
is eligible under the terms and conditions thereof, in any health and life
insurance plans generally available to the executives of the Company which may
be in effect from time to time during the period of his employment hereunder.
The Company shall be under no obligation to institute or continue the existence
of any such plans; provided, however, that during the period of Executive's
employment hereunder, the Company shall, to the extent it is available at normal
rates, provide Executive with (i) $500,000 in term life insurance, and (ii)
additional whole life insurance, with respect to which executive shall be
entitled to the cash surrender value, in a face amount equal to the lesser of
$500,000 or such amount of whole life insurance as may be obtained by the
payment of annual premiums of $5,000. Executive shall be entitled to designate
the beneficiaries under each of such policies. Executive shall submit to any
physical examinations which may be necessary to obtain such insurance.
(iii) The Company shall reimburse Executive for reasonable and
necessary expenses incurred by him in connection with the business of the
Company, including, but not limited to, travel and lodging, in accordance with
the reimbursement policy followed by the Company with respect to its executives.
Executive will present receipts or vouchers for any requested reimbursements in
accordance with the Company's policies.
(iv) Executive shall be entitled to paid vacation each year
during the period of his employment hereunder in accordance with the Company's
customary practices, such vacations to be taken at times mutually agreeable to
Executive and the Board of Directors
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of the Company. Vacation time may not be accumulated and Executive shall not be
entitled to payment for unused vacation time if he voluntarily leaves the
employment of the Company or is terminated for cause. In other circumstances,
vacation time shall be prorated.
5. RESTRICTED ACTIVITIES.
5.1 During the period of his employment hereunder and a further
period of one year following the effective date of termination of such
employment, Executive shall not directly or indirectly, own, manage, operate,
invest in or otherwise participate in or be connected with, in any manner,
whether as an officer, director, employee, partner, investor or otherwise (i)
any entity which is engaged in the same or any similar business as the Company
or (ii) any entity which is engaged in any business which renders services to or
otherwise does business with the Company or any hotel or other facility owned or
managed by the Company; or (iii) any tenant of any hotel or other facility owned
or managed by the Company; or (iv) any entity which owns property which is
leased or utilized by the Company or any hotel or other facility owned or
managed by the Company or which may be necessary or desirable to or for the
Company or any hotel or other facility owned or managed by the Company. To the
extent the restrictions in this Section 5.1 apply after the period of
Executive's employment hereunder, the geographical area to which such
restrictions are applicable shall be the Commonwealth of Puerto Rico and the
Caribbean. Nothing herein contained shall be deemed to prohibit Executive from
passively investing his funds in securities of a company if the securities of
such company are listed for trading on a national stock exchange or traded in
the over-the-counter market and Executive's holdings therein represent less than
one percent of the total number of shares or principal amount of other
securities of such company outstanding.
5.2 During the period of his employment hereunder and for a further
period of one year following the effective date of termination of such
employment, Executive shall not, for himself or on behalf of any other person,
partnership, corporation or entity, directly or indirectly, (i) call on any
customer or client of the Company or any hotel or other facility owned or
managed by the Company for the purpose of soliciting, diverting or taking away
any customer or client from the Company or such hotel or facility or (ii)
induce, influence or seek to induce or influence any person who has been engaged
as an employee, representative, agent, independent contractor or otherwise by
the Company or any hotel or facility managed by the Company, to terminate his or
her relationship with the Company or such hotel or facility.
6. TERMINATION AND DEATH BENEFITS.
6.1 Executive may terminate his employment hereunder by providing
the Company at least 90 days' prior written notice designating his desired
termination date. In such event, Executive shall be entitled to continue to
receive all payments and benefits to which he is entitled hereunder, and
Executive shall continue to perform his obligations hereunder through the
effective date of the termination set forth in Executive's notice, or such
earlier date as the Company shall determine to terminate Executive's employment
as provided in this Section 6.1. If Executive has performed his obligations
through the effective date of termination, the Company shall also pay Executive
an amount equal to one year's base salary payable as follows: an amount equal to
three months' base salary shall be paid on the termination date, and the
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balance shall be paid in equal installments beginning on the first customary
salary payment date of the Company occurring after three months from the
termination date and ending on the customary salary payment date occurring 12
months from the termination date. If Executive shall commence new employment at
any time prior to one year after the termination date, the amount payable by the
Company under the preceding sentence shall be reduced by the amount of
compensation paid to or accrued by Executive with respect to such new employment
during such one year period, but in no event shall the amount payable by the
Company to Executive be less than three months' base salary. After receipt of
Executive's notice of termination, the Company shall have the right to terminate
Executive's employment at an earlier date then that set forth in Executive's
notice by providing written notice to Executive of such earlier date.
6.2 The Company may terminate Executive's employment hereunder
without cause by providing Executive at least 90 days' prior written notice
designating the desired termination date. In such event, Executive shall be
entitled to continue to receive all payments and benefits to which he is
entitled hereunder and shall continue to perform his obligations hereunder
through the effective date of such termination set forth in the Company's
notice. If Executive has performed his obligations through the effective date of
termination, the Company shall also pay Executive an amount equal to two years'
base salary, payable one-half on the termination date and the balance on the
first anniversary of the termination date.
6.3 The Company may also terminate Executive's employment hereunder
with cause by providing Executive at least ten days' prior written notice
designating the desired termination date. In such event, Executive shall be
entitled to continue to receive all payments and benefits to which he is
entitled hereunder and shall continue to perform his obligations hereunder
through the effective date of such termination set forth in the Company's
notice. For purposes hereof, cause shall only include: (i) the commission by
Executive of a felony or any act of dishonesty or act of infidelity to the
Company; (ii) the willful failure to follow lawful directions of the Board of
Directors of the Company; or (ii) the failure to maintain in good standing any
licenses or permits required by governmental authorities for the performance of
Executive's obligation. It is understood that the mere poor financial
performance of the Company shall not be deemed grounds for termination of
Executive for cause.
6.4 In the event Executive shall die during the period of
Executive's employment hereunder, the Company shall pay death benefits to
Executive's wife or to such other person or persons as he shall, at his option,
from time to time designate by written instrument delivered to the Company, each
subsequent designation to be deemed to revoke all prior designations, or if his
wife shall predecease him and no such designation is made, to his estate, in an
amount equal to one year's base salary, payable in a lump sum within 90 days
after Executive's death. In the event Executive shall die after the period of
Executive's employment hereunder but prior to the date payments are to be made
by the Company pursuant to Sections 6.1 through 6.3 above, such payments shall
nevertheless be made when due to Executive's beneficiary determined as provided
above in this Section 6.4.
7. ENTIRE AGREEMENT. This agreement supersedes any prior agreement or
understanding with respect to the subject matter hereof and constitutes the
entire agreement of
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the parties hereto. No amendment or modification hereof shall be valid or
binding unless made in writing and signed by the party against whom enforcement
thereof is sought.
8. NOTICES. Any notice required, permitted or desired to be given
pursuant to any of the provisions of this agreement shall be deemed to have been
sufficiently given or served for all purposes if delivered in person or sent by
certified mail, return receipt requested, postage and fees prepaid, or sent by
responsible overnight delivery service or transmitted by telephone facsimile to
either of the parties at such party's address set forth below, or to such other
address as such party may specify from time to time by notice to the other given
in accordance with the provisions hereof:
If to the Company:
Xxxxxxxx Hospitality Group Inc.
c/o El San Xxxx Hotel & Casino
0000 Xxxx Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx Xxxx 00000
Attention: Chairman of the Board
If to Executive:
0 Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxxxx, XX 00000
The date of the giving of any notice sent by mail shall be the date two days
after the posting of the mail.
9. NO ASSIGNMENT. Neither this agreement nor the right to receive and
payments hereunder may be assigned by Executive. Neither this agreement nor the
right to Executive's services hereunder may be assigned by the Company. This
agreement shall be binding upon and shall inure to the benefit of Executive, his
heirs, executors and administrators and the Company, its successors and assigns.
10. NO WAIVER. No course of dealing nor any delay on the part of the
Company or Executive in exercising any rights hereunder shall operate as a
waiver of any such rights hereunder shall operate as a waiver of any such
rights. No waiver of any default or breach of this agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
11. GOVERNING LAW. This agreement shall be governed, interpreted and
construed in accordance with the laws of the Commonwealth of Puerto Rico
applicable to agreements entered into and to be performed entirely therein.
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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed on the day and year first above written.
XXXXXXXX HOSPITALITY GROUP INC.
By:
----------------------------
Xxxxx X. Xxxxxxxx, Chairman
----------------------------
XXXXX XXXXXXX
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