Exhibit 10.80
Xx. Xxxxx X. Xxxxxx
March 23, 1999
[PLAYERS INTERNATIONAL, INC. LETTERHEAD]
March 23, 1999
Xx. Xxxxx X. Xxxxxx
Players International, Inc.
Citicenter Building, Suite 000
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
Re: Employment Agreement
Dear Xxxxx:
As you know, your Employment Agreement with Players
International, Inc. (together with its successors in interest,
the "Company") dated as of August 1, 1996, as amended by the
Restated Amendment dated as of January 29, 1999 (collectively,
the "Employment Agreement"), will not be extended beyond its
expiration on March 23, 1999.
This letter agreement supplements your Employment Agreement with
respect to the payments and benefits which you are entitled to
receive upon your termination of employment from the Company on
March 23, and thereafter, if a Change in Control occurs with any
entity referenced on Exhibit C to this letter (a "Completed
Change of Control Transaction"). This letter also sets forth our
agreement as to the terms and conditions on which you are being
retained to provide consulting services to the Company following
your termination of employment. Defined terms not otherwise
defined in this letter shall have the same meaning as set forth
in your Employment Agreement.
A. Termination Arrangements
We are confirming that, subject to your executing and not
revoking the release attached as Exhibit A (the "Release") and
subject to your compliance with the confidentiality and non-
competition covenants of Paragraph 10 of the Employment
Agreement, you will be entitled to the following payments under
the Employment Agreement within three business days after the
expiration of the revocation period for the Release unless
otherwise indicated below:
1. Any unpaid base compensation, earned or accrued, through
your date of termination.
2. A lump sum cash payment equal to your base compensation
payments, at the rate in effect at the time of termination, that
would have been paid for a period of six months following
termination of your employment, with no reduction for present
value. This amount totals $150,000.
3. A lump sum cash payment representing the balance of your
annual performance bonus for the Company's fiscal year ended
March 31, 1999, in an agreed amount of $20,000.
4. Reimbursement for expenses incurred but not yet reimbursed
as of March 23, 1999 as provided in Paragraph 8 of your
Employment Agreement.
5. The immediate vesting of all unvested Company stock options
held by you, with the rights provided in Paragraph 9(c)(v) of the
Employment Agreement and, if a Change in Control Transaction
thereafter occurs, Paragraph 9(d) of your Employment Agreement.
Notwithstanding the foregoing, you agree that upon a Change in
Control (as defined in the Employment Agreement), the Company
may, if required by the Change in Control agreement, require that
you surrender for cancellation all of your outstanding options
and stock appreciation rights in exchange for a cash payment
equal to the amount (if any) by which the Change in Control Price
of the stock underlying your options and stock appreciation
rights exceeds the applicable option price (or base price, in the
case of stock appreciation rights), and, in that event, all such
options and stock appreciation rights will be canceled (without
regard to whether the fair market value of the stock exceeds the
option price or base price at such time).
6. Any other compensation and benefits to which you may be
entitled with respect to your service before March 23, 1999 under
applicable plans, programs and agreements of the Company.
7. Continuation of coverage under the employee benefit programs
listed on Exhibit B through September 22, 1999 (except that, in
lieu of continued coverage, the Company may elect to make a
payment to you equal to the Company's cost of such coverage
without regard to tax effect (a "Benefit Commutation Payment")).
The COBRA health care continuation coverage period under Section
4980B of the Internal Revenue Code of 1986, as amended (the
"Code"), shall commence, as applicable, on (i) September 23,
1999, (ii) such earlier date as the Company shall have made a
Benefit Commutation Payment to you, or (iii) notwithstanding
clause (ii) above, if a Completed Change in Control Transaction
occurs, upon the expiration of the period for which continued
Employee Benefits are required to be provided under
Paragraph 9(d) of your Employment Agreement, or on such earlier
date as the Company shall have made a Benefit Commutation Payment
with respect to such Paragraph 9(d) benefits.
8. The Merger Agreement with Jackpot dated February 9, 1999 is
a "Pre-October 1999 Agreement" for purposes of Paragraph 9(d) of
the Restated Amendment. Thus, you will retain the right to
receive the Change in Control benefits provided under
Paragraph 9(d) of the Employment Agreement with respect to the
Jackpot transaction if it occurs and any other Completed Change
in Control Transaction if it does not. Thus, you will receive
the following additional payments upon the occurrence of a
Completed Change in Control Transaction:
(a) A lump sum payment equal to the Present Value of the
Base Compensation that would be due you for a period of
36 months following your termination of employment,
determined on the basis of the average Base
Compensation paid to you for 36 months preceding
March 24, 1999, determined by treating the payment
called for by paragraph 1 above as though it were made
on March 23, 1999. This payment shall be reduced by
any payments made to you under paragraph 2 above.
(b) A lump sum payment equal to the Present Value of the
aggregate performance bonus amounts that you received
for the period of 36 months preceding March 24, 1999,
determined by treating the payment called for by
paragraph 3 above as through it were made on March 23,
1999.
(c) The immediate vesting of all Company stock options then
held by you, with the ability to exercise the options
for the period set forth in Paragraphs 9(c)(v) and 9(d)
of the Employment Agreement (subject to the
inapplicability of the last sentence of Paragraph 5
above).
(d) Continuation of coverage under the employee benefit
programs described on Exhibit B during the 36-month
period following the Change in Control, reduced by a
period equal to the period with respect to which you
receive continued coverage, or a Benefit Commutation
Payment, under the first sentence of paragraph 7 above
(except that, in lieu of continued coverage, the
Company may elect to make a Benefit Commutation Payment
to you). The COBRA health care continuation coverage
period under Section 4980B of the Code shall commence
upon the date determined in clause (iii) of the last
sentence of paragraph 7 above.
(e) The foregoing benefits will be limited as provided in
Paragraph 9(d) of the Employment Agreement with respect
to Section 280G of the Code.
9. All of the foregoing payments will be made subject to any
required tax withholding.
10. Your rights under your Employment Agreement shall continue
in effect for the period set forth in Paragraph 18 thereof.
B. Consulting Arrangements
The following paragraphs set forth our agreement as to the terms
and conditions upon which you are being retained to provide
consulting services to the Company (the "Consulting
Arrangement"). The terms of your Consulting Arrangement are
included in this letter as a matter of convenience and the
Consulting Arrangement described below is separate and
independent from your Employment Agreement and the preceding
provisions of this letter which supplement your Employment
Agreement.
1. Unless sooner terminated as provided in paragraph 4 below,
you will provide consulting services on matters within your
expertise from March 24, 1999 through the date of the Special
Meeting of the Company's Stockholders to approve the Change in
Control transaction with Jackpot Enterprises, Inc. (the
"Stockholders Meeting"). The actual period over which consulting
services are provided under the Consulting Arrangement is
referred to below as the "Consulting Period".
2. Your services will be provided at the request of the
Company's Chief Executive Officer. In general, your services
during the Consulting Period will not exceed an average of two
days per week. If at the end of the Consulting Period, you have
performed consulting services for more than an average of two
days per week, your compensation as provided in Paragraph 3 below
will be appropriately adjusted. Except as provided in the
following sentence, you may provide such services at times and
places which are reasonably convenient to you so as not to
interfere with any employment or self-employment which you may
pursue following your termination of employment from the Company.
However, provided the Company gives you reasonable advance
notice, taking into account your actual obligations and prior
commitments to employment and self-employment, you agree to use
your best efforts to provide your services at such sites and
times as are requested by the Chief Executive Officer.
3. Unless otherwise agreed in writing, you will be compensated
at the rate of $5,000 per month, payable in arrears on the 30th
day following your termination of employment and on the
corresponding day of each succeeding month through the date of
the Shareholder's Meeting, unless the Consulting Arrangement is
terminated earlier as provided in Paragraph 4 below. If the
Consulting Arrangement is terminated prior to a monthly payment
date, the final payment will be pro-rated based on the number of
days from the beginning of the most recent monthly payment period
until the date of termination. All such payments will be made
regardless of the number of days during any month that the
Company requests that any services be provided. All such
payments will be made without withholding for taxes, which shall
be your sole responsibility.
4. Either you or the Company may terminate the Consulting
Arrangement on 30 days prior written notice to the other,
delivered in the same manner as provided under Paragraph 21 of
your Employment Agreement.
5. You shall not be entitled to participate in any Company
employee benefit plans as a result of payments for consulting
services; provided, however, that this shall not affect your
entitlement to Employee Benefits as set forth in Paragraphs 7 and
8(d) of Part A of this letter.
6. You shall be entitled to indemnification by the Company
until the expiration of the Consulting Period on the same basis
as set forth in Paragraph 12 of your Employment Agreement,
notwithstanding that your employment will terminate on March 23,
1999. The foregoing provisions of this Paragraph 6 shall be in
addition to and shall in no way limit any rights which you may
have under (i) Nevada Revised Statutes, Title 7, Chapter 78.751,
(ii) Article IX of the Company's Capital By-Laws, (iii) your
Employment Agreement, (iv) the Agreement and Plan of Merger dated
as of February 8, 1999 among the Company, Jackpot Enterprises,
Inc. and JEI Merger Corp., and (v) all directors' and officers'
and all other liability insurance policies maintained by the
Company.
7. The Company will continue to reimburse you for all
reasonable expenses which you incur prior to the termination of
this Consulting Arrangement on matters relating to the Company on
the same basis as was being done immediately prior to your
termination of employment.
Sincerely,
PLAYERS INTERNATIONAL, INC.
By:___________________________________
Chief Executive Officer
Agreed and Accepted:
_________________________ Date:_______________
Xxxxx X. Xxxxxx
