EXHIBIT (10)(d)
NON-COMPETITION AND CONFIDENTIALITY AGREEMENT
Agreement made as of the 16th day of December, 1996,
by and among Xxxxxxx Gaming & Entertainment, Inc., a Delaware
corporation (the "Company"), Sun International Hotels, Ltd., a
corporation organized and existing under the laws of The
Commonwealth of The Bahamas ("Sun"), and Xxxxxx X. Xxxxxxxxx
("Executive").
WHEREAS, Executive is a senior executive of the
Company and has devoted a substantial amount of his business,
time and efforts to its business affairs; and
WHEREAS, Sun has agreed to acquire all of the
outstanding stock of the Company; and
WHEREAS, as a result of the acquisition, Executive's
employment may be terminated; and
WHEREAS, the Company and Sun believe that, because of
the expertise, knowledge and contacts of Executive in the gaming
industry, it is important that Executive not compete with the
business of the Company should Executive's employment be
terminated; and
WHEREAS, the Company is willing to provide payments
to Executive for agreeing not to compete with the Company in the
event that Executive's employment is terminated and Sun is
willing to guarantee such payments;
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements hereinafter set forth and
intending to be legally bound hereby, the parties hereto agree as
follows:
1. Definitions. For all purposes of this
Agreement, the following terms shall have the meanings specified
in this Section unless the context clearly otherwise requires:
(a) "Board" shall mean the board of directors of the
Company or its successor.
(b) "Termination Date" shall mean the date of
receipt of the Notice of Termination described in Section 2
hereof or any later date specified therein, as the case may be.
(c) "Termination of Employment" shall mean the
termination of Executive's actual employment relationship with
the Company.
2. Notice of Termination. Any Termination of
Employment shall be communicated by a Notice of Termination to
Executive given in accordance with Section 13 hereof. For
purposes of this Agreement, a "Notice of Termination" means a
written notice that Executive is to be terminated and if the
Termination Date is other than the date of receipt of such
notice, specifies the Termination Date (which date shall not be
more than 15 days after the giving of such notice).
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3. Payment upon Termination. In the event of
Executive's Termination of Employment for any reason, and in
exchange for Executive's undertakings pursuant to Sections 7 and
8, the Company shall pay Executive the amount of $2,750,000.
Subject to the provisions of Section 9, payment shall be made in
3 installments of $1,375,000, on the later of the Termination
Date or January 2, 1997, and $825,000 and $550,000 on January 2
of the next two immediately succeeding years. Further, Sun
agrees to cause the Company to make all payments to Executive of
the sums due at the times stated above or to make such payments
to Executive directly.
4. Other Payments. Executive agrees and
acknowledges that he shall not be entitled to any payments or
benefits under any other plan, policy or program of the Company
relating to the period specified in Sections 7 and 8.
5. Establishment of Trust. The Company may
establish an irrevocable trust fund pursuant to a trust agreement
to hold assets to satisfy its obligations hereunder. Funding of
such trust fund shall be subject to the Board's discretion, as
set forth in the agreement pursuant to which the fund will be
established.
6. Enforcement. In the event that the Company
shall fail or refuse to make timely payment of any amounts due
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Executive under Sections 3 and 4 because of a dispute with
Executive, the Company shall pay to an escrow agent, who shall
invest such sum with interest to be paid to the prevailing party,
any amount remaining unpaid under Section 3 or 4. In such event,
the parties shall then engage in arbitration in the City of New
York, New York in accordance with the commercial arbitration
rules then in effect of the American Arbitration Association,
before a panel of three arbitrators, two of whom shall be
selected by the Company and Executive, respectively, and the
third of whom shall be selected by the other two arbitrators.
Any award entered by the arbitrators shall be final, binding and
nonappealable and judgment may be entered thereon by either party
in accordance with applicable law in any court of competent
jurisdiction. This arbitration provision shall be specifically
enforceable. The arbitrators shall have no authority to modify
any provision of this Agreement or to award a remedy for a
dispute involving this Agreement other than a benefit
specifically provided under or by virtue of the Agreement. If
Executive prevails on any material issue which is the subject of
such arbitration, the Company shall be responsible for all of the
fees of the American Arbitration Association and the arbitrators
and any expenses relating to the conduct of the arbitration
(including reasonable attorneys' fees and expenses). Otherwise,
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each party shall be responsible for his or its own expenses
relating to the conduct of the arbitration (including reasonable
attorneys' fees and expenses) and shall share the fees of the
American Arbitration Association.
7. Confidential Information. Executive recognizes
and acknowledges that, by reason of his employment by and service
to the Company, he has had access to confidential information of
the Company and its affiliates, including, without limitation,
information and knowledge pertaining to the Company's business,
which consists of customer and related information, current and
future marketing plans and techniques, designs and drawings for
developmental projects of the Company and budgets and related
financial information ("Confidential Information").
"Confidential Information" shall not include information obtained
or possessed by reason of Executive's positions or capacities
with Players International, Inc., a Nevada corporation
("Players"), or The Xxxxxxx Group, Inc. or their respective
affiliates. Executive acknowledges that such Confidential
Information is a valuable and unique asset and covenants that he
will not, for a period of three years after the Termination Date,
disclose any such Confidential Information to any person for any
reason whatsoever without the prior written authorization of the
Company, unless such information is in the public domain through
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no fault of Executive or otherwise available to Executive from
sources other than the Company or except as may be required by
law.
8. Non-Competition.
(a) For a period of three years after the
Termination Date, Executive will not, unless acting with the
prior written consent of the Company, (which, only in the case of
other businesses in Atlantic City, will not be unreasonably
withheld on or after 18 months following the Termination Date) or
except as provided in paragraph (b) directly or indirectly, own,
manage, operate, join, control, finance or participate in the
ownership, management, operation, control or financing of, or be
connected as an officer, director, employee, partner, principal,
agent, representative, consultant or otherwise with, or use or
permit his name to be used in connection with, any business or
enterprise which is directly involved in the operation of a
casino hotel anywhere within the Company's "service area." For
the purposes of this Section, "service area" shall mean the
geographic area comprising the city of Atlantic City, New Jersey,
the state of Connecticut and The Commonwealth of The Bahamas.
(b) The foregoing restrictions shall not be
construed to prohibit (i) the ownership by Executive of less than
five percent (5%) of any class of securities of any corporation
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which is engaged in any of the foregoing businesses having a
class of securities registered pursuant to the Securities
Exchange Act of 1934 (the "Exchange Act"), provided that such
ownership represents a passive investment and that neither
Executive nor any group of persons including Executive in any
way, either directly or indirectly, manages or exercises control
of any such corporation, guarantees any of its financial
obligations, otherwise takes any part in its business, other than
exercising his rights as a shareholder, or seeks to do any of the
foregoing, (ii) any activities undertaken by Executive in
connection with the business of Players (with which Executive is
currently associated), or any successor thereto or affiliate
thereof, (1) outside of the service area, as defined above, (2)
not related to the actual operation of a casino hotel in Atlantic
City, New Jersey, or (3) after 18 months from the Termination
Date, in Atlantic City, New Jersey or (iii) any activities
undertaken by Executive in connection with the business of a
multi-jurisdiction gaming business or enterprise so long as
Executive's has no involvement in the operations of that business
or enterprise within the Company's service area, as defined
above.
(c) Executive further covenants and agrees that for
a period of one year after the Termination Date, he will not,
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directly or indirectly, solicit or hire, or encourage the
solicitation or hiring of, any person who was a managerial or
higher level employee of the Company at any time during the term
of Executive's employment by the Company by any employer other
than the Company for any position as an employee, independent
contractor, consultant or otherwise. The foregoing covenant of
Executive shall not apply to any person who is involuntarily
terminated by the Company or whose termination agreement with the
Company permits such a position or after 6 months have elapsed
after the date on which such person voluntarily terminates
employment from the Company.
9. Equitable Relief.
(a) Executive acknowledges that the restrictions
contained in Sections 7 and 8 are reasonable and necessary to
protect the legitimate interests of the Company and its
affiliates, that the Company would not have entered into this
Agreement in the absence of such restrictions, and that any
violation of any provision of those Sections will result in
irreparable injury to the Company. Executive represents that his
experience and capabilities are such that the restrictions
contained in Section 8 will not prevent Executive from obtaining
employment or otherwise earning a living at the same general
level of economic benefit as anticipated by this Agreement.
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Executive further represents and acknowledges that (i) he has
been advised by the Company to consult his own legal counsel in
respect of this Agreement, and (ii) that he has had full
opportunity, prior to execution of this Agreement, to review
thoroughly this Agreement with his counsel.
(b) Executive agrees that the Company shall be
entitled to preliminary and permanent injunctive relief, without
the necessity of proving actual damages, as well as a return (or
a cancellation of the obligation to pay under Section 3) of that
portion of the payments that have been made (or would have been
made) to Executive under Section 3 that are attributable to the
period during which and after Executive is finally determined, by
a court of last resort, unless no appeal is taken, to have
violated the requirements of Sections 7 or 8. In the event that
any of the provisions of Sections 7 or 8 should ever be
adjudicated to exceed the time, geographic, service, or other
limitations permitted by applicable law in any jurisdiction, then
such provisions shall be deemed reformed in such jurisdiction to
the maximum time, geographic, service, or other limitations
permitted by applicable law.
(c) Executive irrevocably and unconditionally (i)
agrees that any suit, action or other legal proceeding arising
out of Sections 7 or 8, including without limitation, any action
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commenced by the Company for preliminary and permanent injunctive
relief or other equitable relief, may be brought in the United
States District Court for the District of New Jersey, or if such
court does not have jurisdiction or will not accept jurisdiction,
in any court of general jurisdiction in Atlantic County, New
Jersey, (ii) consents to the non-exclusive jurisdiction of any
such court in any such suit, action or proceeding, and (iii)
waives any objection which Executive may have to the laying of
venue of any such suit, action or proceeding in any such court.
Executive also irrevocably and unconditionally consents to the
service of any process, pleadings, notices or other papers in a
manner permitted by the notice provisions of Section 13.
(d) Executive agrees that he will provide, and that
the Company may similarly provide, a copy of Section 8 to any
business or enterprise if there is a potential for conflict with
the provisions of Section 8, (i) which he may directly or
indirectly own, manage, operate, finance, join, control or
participate in the ownership, management, operation, financing or
control, or (ii) with which he may be connected with as an
officer, director, employee, partner, principal, agent,
representative, consultant or otherwise, or in connection with
which he may use or permit his name to be used; provided,
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however, that this provision shall not apply after expiration of
the time period set forth therein.
10. No Set-Off. Except as provided in Section 9,
the Company's (and Sun's) obligation to make the payments
provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company (or sun) may
have against Executive or others.
11. Taxes. Any payment required under this
Agreement shall be subject to all requirements of the law with
regard to the withholding of taxes, filing, making of reports and
the like, and the Company shall use its best efforts to satisfy
promptly all such requirements.
12. Successor Company. The Company shall require
any successor or successors (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company,
by agreement in form and substance satisfactory to Executive, to
acknowledge expressly that this Agreement is binding upon and
enforceable against the Company in accordance with the terms
hereof, and to become jointly and severally obligated with the
Company to perform this Agreement in the same manner and to the
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same extent that the Company would be required to perform if no
such succession or successions had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement. As used
in this Agreement, the Company shall mean the Company as
hereinbefore defined and any such successor or successors to its
business and/or assets, jointly and severally.
13. Notice. All notices and other communications
required or permitted hereunder or necessary or convenient in
connection herewith shall be in writing and shall be delivered
personally or mailed by registered or certified mail, return
receipt requested, or by overnight express courier service, as
follows:
If to the Company, to: 0000 Xxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
ATTN: President
If to Sun, to: Sun International Hotels Ltd.
N 4777
Paradise Island
Nassau, Bahamas
Attn: Xxxxxxx Xxxxx,
Fax # 000-000-0000
If to Executive, to: X. X. Xxxxxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
or to such other names or addresses as the Company, Sun or
Executive, as the case may be, shall designate by notice to the
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other party hereto in the manner specified in this Section. Any
such notice shall be deemed delivered and effective when received
in the case of personal delivery, five days after deposit,
postage prepaid, with the U.S. Postal Service in the case of
registered or certified mail, or on the next business day in the
case of overnight express courier service.
14. Governing Law. This Agreement shall be governed
by and interpreted under the laws of the state of New Jersey
without giving effect to any conflict of laws provisions.
15. Contents of Agreement, Amendment and Assignment.
(a) This Agreement supersedes all prior agreements,
sets forth the entire understanding between the parties hereto
with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment
executed by Executive and approved by the Board.
(b) Nothing in this Agreement shall be construed as
giving Executive any right to be retained in the employ of the
Company.
(c) All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and
be enforceable by the respective heirs, representatives,
successors and assigns of the parties hereto, except that the
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duties and responsibilities of Executive and the Company
hereunder shall not be assignable in whole or in part.
16. Severability. If any provision of this
Agreement or application thereof to anyone or under any
circumstances shall be determined to be invalid or unenforceable,
such invalidity or unenforceability shall not affect any other
provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or
application.
17. Remedies Cumulative; No Waiver. No right
conferred upon Executive by this Agreement is intended to be
exclusive of any other right or remedy, and each and every such
right or remedy shall be cumulative and shall be in addition to
any other right or remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by Executive
in exercising any right, remedy or power hereunder or existing at
law or in equity shall be construed as a waiver thereof.
18. Miscellaneous. All section headings are for
convenience only. This Agreement may be executed in several
counterparts, each of which is an original. It shall not
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be necessary in making proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be
legally bound, have executed this Agreement as of the date first
above written.
XXXXXXX GAMING & ENTERTAINMENT, INC.
/s/Xxxxxxx X. Xxxxxxx /s/Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
ATTEST:
Secretary
SUN INTERNATIONAL HOTELS, LTD.
/s/Xxxxxxx X. Xxxxx
ATTEST:
Secretary
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