EMPLOYMENT AGREEMENT
AGREEMENT made this 11th day of February, 1997 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 XXXXXXX X. XXXXXXX ("Executive")
residing at 00 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000.
W I T N E S S E T H :
WHEREAS, the Company and Executive desire to enter into an 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 Senior Vice President -- Chief Financial
Officer and such other related supervisory, managerial or executive duties on
behalf of the Company as the Board of
Directors, the President or the Chairman of the Board of the Company may from
time to time determine. Executive shall report directly to the President of the
Company.
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 Company's business, and will
observe and carry out such rules, regulations, policies, directions and
restrictions as the Company shall from time to time establish. Executive shall
sign and deliver to the Company such periodic statements of adherence to the
Company's policies as the Company shall require. 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.
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. 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. Executive
represents that (i) the resume of Executive
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attached hereto is true and correct, and (ii) he is not a party to any contract
or agreement which would prohibit or inhibit the performance of his duties
hereunder.
2. TERM OF EMPLOYMENT. Executive shall be employed under this
agreement for a term of two years commencing on a date mutually agreeable to the
Company and the Executive, but no later than March 1, 1997, and ending two years
from such commencement date. The term may be extended by mutual agreement of the
parties at the end of the first year of this agreement and each year thereafter.
The Company may also terminate Executive's employment under this agreement for
"cause" as provided in Paragraph 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 $185,000 per year, payable from
the date Executive's employment commences, 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, incentive and salary deferment 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. Executive has been provided a copy of the
Company's bonus and incentive plan as currently in effect, which, among
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other matters, provides for senior management incentives up to 35% of salary on
the terms and conditions set forth in such plan.
(ii) Executive shall be entitled to participate, to
the extent he is eligible under the terms and conditions thereof, in any health,
medical, disability 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.
(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. Executive shall also
be entitled to senior executive privileges at the hotels managed by the Company
as agreed to by the President of the Company.
(iv) Executive shall be entitled to paid vacation
each year during the period of his employment in accordance with the Company's
customary practices, such vacations to be taken at times mutually agreeable to
Executive and the Board of Directors of the Company. Vacation time may not be
accumulated from year to year.
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(v) For a period not to exceed 90 days from the
commencement date of Executive's employment under this agreement, Executive
shall be provided housing in one of the hotels managed by the Company at no cost
to Executive.
5. TERMINATION FOR CAUSE. Upon ten days prior written notice, the
Company may terminate this Agreement for "cause." "Cause" shall mean the
occurrence of any of the following: (i) the indictment of Executive for a
felony; (ii) the commission by Executive of any act of dishonesty or act of
infidelity toward the Company, including any embezzlement or misappropriation of
the Company's funds; (iii) a willful failure to follow lawful directions of the
Chief Operating Officer, Chief Executive Officer or the Board of Directors of
the Company or (iv) Executive's failure to maintain in force and in good
standing any and all licenses, permits and approvals required of Executive by
any relevant governmental authorities for the performance of Executive's
obligations.
6. RESTRICTED ACTIVITIES.
6.1 During the term of this agreement, 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
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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. 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.
6.2 During the term of this agreement and for a period of
one year thereafter, 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, casino 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, casino or
facility, for the benefit of any other hotel, casino or other 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, casino or facility managed by the Company, to
terminate his or her relationship with the Company or such hotel, casino or
facility to go to work for any other hotel, casino or other facility.
7. CHANGES IN OWNERSHIP. If during the term of this
agreement there shall be a change in the ownership of the Company such that the
current owners of the Company no longer own directly or indirectly at least 50%
thereof, and if within 45 days following such
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change of ownership Executive notifies the Company in writing of his intention
to terminate his employment under this agreement, the Company shall continue to
pay Executive's base salary and shall continue to provide health and life
insurance benefits to Executive from the date of such termination until the
earlier to occur of (i) the expiration of the term of this agreement; or (ii)
one year after the date of such change in ownership, or (iii) the date Executive
begins other employment. In such event and as a condition to such payments
Executive shall use reasonable efforts to obtain other employment as promptly as
possible. If Executive's compensation level at such other employment is less
than Executive's base salary under this agreement, the Company will pay
Executive an amount equal to such difference at the same time as Executive's
salary otherwise would have been paid under this agreement, such payment to be
continued until the earlier to occur of the events identified in clauses (i) and
(ii) above. If the change of ownership referred to in the first sentence of this
paragraph occurs and Executive desires to continue his employment hereunder but
the Company does not desire to so continue Executive's employment, the Company
may terminate this agreement on 30 days' prior notice to Executive and on the
effective date of such termination, the Company shall pay to Executive as
severance an amount equal to one year's base salary hereunder.
8. SEVERANCE PAYMENTS. If Executive shall not have been terminated
for cause or resigned his employment hereunder prior to one year from the date
hereof, and if this agreement is not renewed by the Company at the end of the
initial two year term, or if this agreement is terminated by the Company after
one year from the date hereof but prior to the end of the term for reasons other
than the causes specified in clauses (i) or (ii) of Paragraph 5,
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Executive shall receive severance pay equal to six months' base salary hereunder
along with continued medical and life insurance coverage for the same period.
9. INDEMNIFICATION. The Company agrees to indemnify Executive and
hold Executive harmless for any and all costs, expenses, damages, obligations or
losses incurred by Executive in the lawful performance of his duties hereunder.
10. RELOCATION. The Company will pay the cost of relocating
Executive's personal items, related incidental expenses and one car from New
Jersey to Puerto Rico, not to exceed $8,000. The Company will also pay the
excise tax of importing one car into Puerto Rico up to $5,000. If the Company's
corporate offices are relocated to the mainland United States while Executive is
employed hereunder, and Executive chooses to relocate his family to that new
location, the Company will pay Executive's cost of so relocating his family and
household goods, not to exceed $35,000. If the Company terminates this agreement
for reasons other than cause and Executive still resides in Puerto Rico, the
Company will pay the cost of relocating Executive back to the United States up
to $8,000.
11. ENTIRE AGREEMENT. This agreement supersedes any prior agreement
or understanding with respect to the subject matter hereof and constitutes the
entire agreement of 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.
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12. 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: President
If to Executive:
00 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
The date of the giving of any notice sent by mail shall be the date two days
after the posting of the mail.
13. SUCCESSORS AND ASSIGNS; NO ASSIGNMENT WITHOUT CONSENT. This
agreement shall inure to the benefit of and shall be binding upon the Company,
its successors and permitted assigns. Neither this agreement nor the right to
receive payments hereunder may be assigned by Executive without Executive's
prior consent. Neither this agreement nor the right to
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Executive's services hereunder may be assigned by the Company without
Executive's prior consent.
14. 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. 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.
15. 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.
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:
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Xxxxx X. Xxxxxxx, President
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XXXXXXX X. XXXXXXX
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