EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of March 1st, 1997
(the "Employment Agreement"), between XXXXXXXXX XXXXX INCORPORATED, a Kentucky
corporation ("Company") and XXXXXX X. XXXXXX ("Xxxxxx").
1. EMPLOYMENT. The Company hereby employs Xxxxxx, and Xxxxxx hereby
accepts employment, in the capacity of Senior Vice President, Finance and
Development, and Chief Financial Officer of the Company. Xxxxxx shall exert his
best efforts and devote his full time and attention to the business and affairs
of the Company. Xxxxxx shall have all powers and responsibilities as provided in
the Company's current bylaws attendant to the position of Chief Financial
Officer and/or as delegated to him by the Company's President and Chief
Executive Officer (the "CEO"). Xxxxxx shall be responsible for managing and
supervising those departments of the Company assigned to him by the CEO from
time to time and for executing the Company's business policies.
2. COMPENSATION AND PERQUISITES.
A. SALARY. As partial compensation for the services rendered by
Xxxxxx hereunder, the Company shall pay to Xxxxxx a base salary of $170,000 a
year, payable in accordance with the Company's payroll procedures. Salary
adjustments, if any, shall be made, in the discretion of the Board of Directors,
at any time but will normally occur on January 1 of each year in accordance with
standard company policy.
B. EXPENSES. The Company will reimburse Xxxxxx for all reasonable
and necessary travel and other out-of-pocket expenses incurred by him in the
performance of his duties. The Company will pay Xxxxxx'x reasonable travel and
entertainment expenses and other reasonable expenses incurred on behalf of the
Company's business. The Company also will pay for such expenses for Xxxxxx'x
wife when she travels with him on the Company's business. Xxxxxx shall present
to the Company from time to time an itemized account of such expenses in such
form as may be required by the Company.
C. AUTOMOBILE. The Company will provide Xxxxxx with an automobile
and will pay for maintenance, repairs, insurance and all costs incident thereto.
D. DUES. The Company will pay for Xxxxxx'x dues (excluding any
initiation fee) for any one country club and for a mutually acceptable number of
professional or business clubs and associations to which he may belong.
E. MOVING EXPENSES. The Company will pay to Xxxxxx reasonable moving
expenses which includes but is not limited to, transportation costs, dislocation
allowance, temporary housing, sales expenses relating to home, living allowances
and the gross up of such expenses to cover tax liability (not to exceed $97,000)
incurred by him in connection with his relocation to Louisville, Kentucky.
Xxxxxx shall present to the Company an itemized account of such expenses. The
full reimbursement of moving expenses shall be deemed to have been earned at the
end of one year's employment (February 28, 1998). In the event that Xxxxxx
voluntarily leaves the Company's employment prior to such date, Xxxxxx shall
repay to the Company a pro rata portion of the moving expenses, calculated by
multiplying the number of months remaining in the twelve-month period times the
sum derived by dividing the total moving expenses by twelve. The Company shall
be entitled to off-set this amount against any amounts owed by the Company to
Xxxxxx.
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3. EMPLOYEE BENEFITS.
A. EMPLOYEE STOCK PURCHASE PLAN. Xxxxxx shall be entitled to
participate in the Xxxxxxxxx Downs Incorporated (1995) Employee Stock Purchase
Plan, subject to and on a basis consistent with the terms, conditions and
overall administration of such plan.
B. EMPLOYEE STOCK OPTION PLAN. Xxxxxx shall be entitled to
participate in the Xxxxxxxxx Downs Incorporated (1993) Stock Option Plan,
subject to and on a basis consistent with the terms, conditions and overall
administration of such plan. Xxxxxx shall receive an initial stock option grant
of 10,000 shares of the Company's Common Stock, as of March 1, 1997, and shall
execute the Company's standard stock option agreement.
C. LIFE INSURANCE. The Company shall provide to Xxxxxx life
insurance, major medical and health insurance and disability insurance on the
same basis as generally provided for other full-time employees of the Company.
D. INCENTIVE COMPENSATION PLAN. Xxxxxx shall be entitled to
participate in the Xxxxxxxxx Xxxxx Incorporated (1997) Incentive Compensation
Plan, subject to and on a basis consistent with the terms, conditions and
overall administration of such plan. Under the terms of such plan, Xxxxxx'x
Target Award (as defined in such plan) shall be set at 35% of base compensation.
Xxxxxx'x award for 1997 shall be calculated as if Xxxxxx was employed for the
full 1997 calendar year.
E. SECTION 401(K) PROFIT SHARING PLAN. Xxxxxx shall be entitled
to participate in the Xxxxxxxxx Downs Incorporated's Section 401(k) Profit
Sharing Plan, subject to and on a basis consistent with the terms, conditions
and overall administration of such plan.
4. VACATION. The Company shall give Xxxxxx twenty (20) vacation days
with pay during each 12 month period during the term of this Agreement, for a
total of approximately thirty-four (34) paid time off days. The time for using
such vacation days shall be determined by mutual agreement between the CEO and
Xxxxxx.
5. TERMINATION.
(A) BY COMPANY. The Company shall pay to Xxxxxx one year's base
compensation (excluding bonus) in the event that Xxxxxx is terminated by the
Company without just cause. It is stipulated that any payments made in
accordance with the foregoing shall be paid to and received by Xxxxxx as
liquidated damages for the unlawful termination of his employment and not as a
penalty and Xxxxxx shall be entitled to receive no further sums under this
Employment Agreement or as a result of his employment with the Company except
such as have accrued as of the date of such termination or as otherwise
specifically provided in this Employment Agreement. In consideration of the
receipt of such payment, Xxxxxx specifically releases and discharges any and all
claims and causes of action of any kind or nature whatsoever, whether known or
unknown and whether specifically mentioned or not, which may exist or might be
claimed to exist at or prior to the date of termination of employment, as well
as any future injuries, losses or damages not now known or anticipated but which
may later develop or become discovered (including the effects or consequences
thereof), and which are attributable to the claims. This waiver includes any
claims which might exist as of this date under the Age Discrimination in
Employment Act ("ADEA"). However, Xxxxxx is not
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waiving any such ADEA claims which might arise after the date of execution of
this Employment Agreement.
"Just cause" shall mean [i] the willful and continued failure by
Xxxxxx to substantially perform his duties hereunder (other than any such
failure resulting from incapacity due to physical or mental illness), after
demand for substantial performance is delivered by the Company that specifically
identifies the manner in which the Company believes Xxxxxx has not substantially
performed his duties, or [ii] the willful engaging by Xxxxxx in misconduct which
is materially injurious to the Company, monetarily or otherwise, or [iii] the
willful violation by Xxxxxx of the provisions of this Agreement. "Just cause"
shall not mean differences relating to business philosophy and/or strategic
direction. For purposes of this paragraph, no act, or failure to act, on
Xxxxxx'x part, shall be considered "willful" unless done, or omitted to be done,
by him not in good faith and without reasonable belief that such action or
omission was in the best interest of the Company. Should Xxxxxx'x employment be
terminated for just cause, the Company shall be obligated to pay Xxxxxx'x then
base salary only through the end of the month during which such termination
occurs, plus such other sums as are payable under this Employment Agreement and
which shall have accrued through the end of such month.
(B) TERMINATION BY XXXXXX. Xxxxxx may at any time resign from his
position after giving the Company not less than sixty (60) days prior written
notice of the effective date of his resignation. Any such resignation shall not
be deemed to be a material breach by Xxxxxx of this Agreement and Xxxxxx shall
not be entitled to receive the severance pay contemplated by Paragraph 6(A)
above. It is further agreed that upon such resignation, except for obligations
of either party to the other which have accrued through the date of Xxxxxx'x
resignation as otherwise specifically provided in this Employment Agreement,
Xxxxxx and the Company shall become and remain fully and finally released from
all further and future obligations of performance under this Agreement.
6. NON-DISCLOSURE. Xxxxxx agrees that he shall not, at any time during
or following his employment with the Company, disclose or use, except in
the course of such employment, in the pursuit of the business of the Company,
any confidential information or proprietary data of the Company.
7. NOTICES. All notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be sufficiently
given if and when mailed in the continental United States by registered or
certified mail or personally delivered to the party entitled thereto at the
address stated below or to such changed address as the addressee may have given
by a similar notice:
To the Company: Xxxxxxxxx Downs Incorporated
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
To Xxxxxx: Xxxxxx X. Xxxxxx
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
8. AMENDMENT OR MODIFICATION; WAIVER. No provision of this Employment
Agreement may be amended, modified or waived unless such amendment, modification
or waiver shall be authorized by the CEO and shall be agreed to in writing,
signed by Xxxxxx and by the CEO. Except as otherwise specifically provided in
this Employment Agreement, no waiver by either party hereto of any breach by the
other party
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thereto of any condition or provision of this Employment Agreement to be
performed by such other party shall be deemed a waiver of a subsequent breach of
such condition or provision or a waiver of a similar or dissimilar provision or
condition at the same or at any prior or subsequent time.
9. SEVERABILITY. In the event that any provision or portion of this
Employment Agreement shall be determined to be invalid or unenforceable for any
reason, the remaining provisions and portions of this Employment Agreement shall
be unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
10. APPLICABLE LAW. This Employment Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Kentucky.
IN WITNESS WHEREOF, the parties have executed this Agreement the date and
year first above written.
XXXXXXXXX DOWNS INCORPORATED
By: /S/ XXXXXX X. XXXXXX
-------------------------
Xxxxxx X. Xxxxxx, President and
Chief Executive Officer
By: /S/ XXXXXX X. XXXXXX
--------------------------
Xxxxxx X. Xxxxxx
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