EXHIBIT - 10.22
DEFERRED COMPENSATION AGREEMENT
This Deferred Compensation Agreement (the "Agreement") is made this Twenty
Second day of November, 2006, between Waterford Gaming, L.L.C., a Delaware
limited liability company ("Gaming") and Xxxx Xxxxx ("Angel"). This Agreement
entirely replaces and supersedes the agreement dated November 17, 2003.
PRELIMINARY STATEMENT
The following is a recital of certain facts upon which this Agreement is based:
Gaming was formed on September 30, 1996, to hold a 50% partnership interest in
Trading Cove Associates, a Connecticut general partnership ("Trading Cove"),
which was the former manager and the original developer of the Mohegan Sun
Gaming and Entertainment Complex located in Uncasville, Connecticut (the
"Mohegan Sun"), which is owned by the Mohegan Tribe of Indians of Connecticut.
Through December 31, 2014, Trading Cove is entitled to receive payments equal to
5% of the gross revenues generated by the Mohegan Sun, including its recently
completed expansion.
Gaming derives all of its income, other than interest income, from its
partnership interest in Trading Cove.
As of June 11, 2003, Gaming, and its affiliate, Waterford Gaming Finance Corp.,
a Delaware corporation ("Gaming Finance"), issued notes in the total sum of
$155,000,000 (the "Notes") which will mature on September 15, 2012.
Gaming currently anticipates that a substantial portion, and possibly all, of
Gaming's assets will be expended in satisfying Gaming's obligations under the
Notes.
Angel is an employee of Mystic Suites, L.L.C., a Connecticut limited liability
company ("Mystic"), an affiliate of Gaming and has been instrumental in
assisting Gaming with all of its financial activities including structuring,
negotiating and completing the offering and issuance of the Notes. In
recognition of Angel's extraordinary performance on behalf of Gaming in causing
the Notes to be issued, and as an inducement to Angel to remain in the employ of
Mystic or one or more of Mystic's affiliates, Gaming has agreed to make an
extraordinary payment to Angel if and only to the extent that funds are
available to Gaming to do so, all upon the terms and conditions set forth in
this Agreement.
Now, therefore, the parties hereto agree as follows:
1. Deferred Compensation Payments. In recognition of Angel's activities in
assisting Gaming in the issuance of the Notes, and subject to the
provisions of Section 2 hereof, for each quarter beginning with the quarter
ending September 30, 2012, Gaming agrees to pay to Angel on each Payment
Date (as herein defined), based on Gaming's financial statements for the
applicable quarter, 5% of: (a) amounts received by Gaming during the
quarter from each and every source; minus (b) debts and obligations
actually incurred by Gaming or Gaming Finance during the quarter in the
ordinary course of their respective businesses, not including bonuses or
any other form of compensation paid by Gaming and Gaming Finance to their
respective officers, directors, shareholders, or partners, other than
compensation paid to Xxx Xxxxxx under his Employment Agreement with Gaming
("Deferred Compensation Payment").
2. Payment Provisions. Notwithstanding anything herein to the contrary
contained, the Deferred Compensation Payments shall only be due and payable
as follows:
(i) The full amount of a Deferred Compensation Payment shall be paid to Angel
if, on a Payment Date, Angel is then an employee of Mystic or an Affiliate
(as herein defined) of Mystic.
(ii) The full amount of a Deferred Compensation Payment shall be paid to Angel
(or to his heirs, if applicable) if Angel has died or has become Disabled
(as herein defined) prior to a Payment Date and at the time of Angel's
death or Disability, Angel was employed by Mystic or an Affiliate of
Mystic.
(iii) A portion of a Deferred Compensation Payment shall be paid to Angel, which
portion is to be proportionate to the amount by which Angel has Vested (as
herein defined) on a Payment Date, if, on or prior to such Payment Date,
Angel has been terminated by Mystic or an Affiliate of Mystic other than
for Cause (as herein defined).
All Deferred Compensation Payments shall be made on a 1099 basis.
3. Definitions. For purposes of this Agreement, the following definitions shall
apply:
"Affiliate" shall mean: (i) any Person that, directly or indirectly, through one
or more intermediaries, controls or is controlled by or is under common control
with the specified Person; (ii) any person that is an officer or director of,
member or partner in, or trustee or legal representative of or serves in a
similar capacity with respect to the specified Person or of which the specified
Person is an officer, director, member, partner, or trustee or with respect to
which the specified Person serves in a similar capacity; (iii) any Person that,
directly or indirectly, is the beneficial owner of, or controls, 10% or more of
any class of equity securities of or otherwise has a substantial beneficial
interest (10% or more) in, the specified Person, or of which the specified
person is directly or indirectly the owner of 10% or more of any class of equity
securities or in which the specified Person has a substantial beneficial
interest (10% or more); and (iv) any member of the Immediate Family of the
specified Person.
Termination for "Cause" shall mean: (i) termination as a result of Angel's
breach of trust or other fiduciary duty that has or may have a materially
adverse impact upon Mystic or any of its Affiliates; (ii) any act by Angel
constituting fraud, embezzlement, dishonesty or other similar misconduct that
has or may have a material adverse impact upon Mystic or any of Mystic's
Affiliates; (iii) Angel's conviction for a felony that has or may materially
adversely impact the business or reputation of Mystic or an Affiliate of Mystic.
"Disabled" or "Disability" shall mean Angel's inability, whether mental or
physical, to render services reasonably requested by Mystic or an Affiliate of
Mystic consistent with Angel's job description for three (3) consecutive months
or twelve (12) weeks during any nine (9) month period.
"Entity" shall mean any general partnership, limited partnership, corporation,
limited liability company, limited liability partnership, joint venture, trust,
business trust, or association.
"Immediate Family" shall mean with respect to any Person, its spouse, parents,
parents-in-law, issue, nephews, nieces, children-in-law, and
grandchildren-in-law.
"Payment Date" shall mean, for each Deferred Compensation Payment, no later than
the last day of the quarter following the quarter on which the Deferred
Compensation Payment is based.
"Person" shall mean an individual or Entity, and the heirs, executors,
administrators, successors, and assigns of such person or Entity when the
context so admits; and unless the context otherwise requires, the singular shall
include the plural, and the masculine gender shall include the feminine and the
neutral and visa versa.
"Quarter" shall mean calendar quarter.
"Vested" shall mean fifty percent (50%) as of the date hereof, which percentage
shall increase by ten percent (10%) on February 1st of each calendar year
hereafter so long as on each such February 1st Angel is then an employee of
Mystic or an Affiliate of Mystic, until February 1, 2011, on which date Angel
will be fully vested (i.e., on February 1, 2011, Angel's Vested amount shall be
100%).
4. Modification. If, for any reason, a court determines that any part of this
Agreement is unreasonable in scope or otherwise unenforceable, such provision
will be deemed modified and fully enforceable, as so modified, to the extent the
court determines what would be reasonable and enforceable under the
circumstances.
5. Entire Agreement. This Agreement sets forth the entire understanding and
agreement of the parties with respect to the issues encompassed herein and
supersedes any prior and contemporaneous agreements, correspondence, term
sheets, negotiations, understandings, documents, or commitments, written or
oral, with regard to the subject matter contemplated by this Agreement. The
provisions hereof will not reduce, restrict, limit, or modify payments, if any,
due to Angel by any other party.
6. Waivers and Amendments. This Agreement may be amended, superseded, canceled,
renewed, or extended, and the terms and conditions of this Agreement may be
waived, only by a written instrument signed by the parties or, in the case of a
waiver, the party granting the waiver. No delay on the part of any party in
exercising any right, power, or privilege under this Agreement will operate as a
waiver of such right, power, or privilege, nor will any waiver on the part of
any party of any right, power, or privilege under this Agreement, nor any single
or partial exercise of any right, power, or privilege under this Agreement,
preclude any other or future exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege under this Agreement.
7. Governing Law. This Agreement, and the rights, duties, and remedies of the
parties relating to this Agreement and the subject matter of this Agreement,
will be governed by and construed in accordance with the laws of the State of
Connecticut, without regard to principles of conflicts of laws.
8. Jurisdiction; Venue; Arbitration. If there is a dispute between the parties
hereto with regard to any of the matters set forth in this Agreement or its
subject matter, the parties will first use their best efforts to resolve such
dispute among themselves. If the parties are unable to resolve such dispute
within thirty (30) calendar days of the initiation of such efforts, such dispute
will be settled by arbitration in Philadelphia, Pennsylvania or other place
agreed to by Gaming and Angel, which will be the sole and exclusive procedure
for resolution of any such dispute. Within ten (10) calendar days of receipt of
written notice from one party that it is submitting the matter to arbitration,
Angel, on the one hand, and Gaming, on the other, will each designate in writing
an arbitrator to resolve the dispute who will, in turn, jointly select a third
arbitrator within twenty (20) calendar days of their designation, with the third
arbitrator to be selected in accordance with procedures established by the
American Arbitration Association. The arbitrators so designated will each be a
person experienced in commercial and business affairs who is not a
representative of any party and who has not received any compensation, directly
or indirectly, from any party or any affiliate of any party at any time after
the date of this Agreement or during the two (2) year period preceding the date
of this Agreement. The arbitration will be governed by the Commercial
Arbitration Rules of the American Arbitration Association in effect at the time
of initiation of such arbitration. The determination of the arbitrators as to
the resolution of any such dispute will be binding and conclusive upon the
parties. Each party will pay the fees and expenses of its respective designated
arbitrator and its own costs and expenses of the arbitration. The fees and
expenses of the third arbitrator will be paid equally by Angel and Gaming. Any
arbitration award may be entered in and enforced by any court having
jurisdiction thereof, and the parties consent and commit themselves to the
jurisdiction of the state and federal courts of the State of Connecticut for
purposes of the enforcement of any arbitration award.
9. Interpretation and Certain Rules of Construction. This Agreement is being
entered into by competent persons who are experienced in business and have had
an opportunity to be represented by counsel. Therefore, any ambiguous language
in this Agreement will not necessarily be construed against any particular party
as the drafter of such language. The headings of this Agreement are for
convenience or reference only and will not limit or otherwise affect the meaning
or interpretation of any of the provisions of this Agreement.
10. Counterparts. This Agreement may be executed in counterparts, each of which
will be deemed an original but all of which together will constitute one and the
same Agreement.
11. Severability. If any provision of this Agreement is determined to be illegal
or invalid, such illegality or invalidity will have no effect on the other
provisions of this Agreement, which will remain valid, operative, and
enforceable.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
WATERFORD GAMING, L.L.C., a Delaware
limited liability company
By: Waterford Group, LLC, a Delaware
limited liability company,
Member
By: Xxxxxx Suites, Inc., Member
By: ____________________________
Its:____________________________
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Xxxx Xxxxx
