EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated and effective as of the
15th day of April, 1998 (the "Effective Date") is made and entered into by and
between O M OPERATING, L.L.C., a limited liability company organized under the
laws of the State of Louisiana (the "EMPLOYER") and XXXXXX X. XXXXXXXX, in his
individual capacity (the "EMPLOYEE"). EMPLOYER and EMPLOYEE are hereinafter
sometimes collectively referred to as the "Parties" and each singularly as a
"Party."
R E C I T A L S
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WHEREAS, EMPLOYER requires the services and expertise of EMPLOYEE; and
WHEREAS, EMPLOYER wishes to employ and EMPLOYEE wishes to be employed upon
the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual promises and covenants set
forth herein, EMPLOYER and EMPLOYEE agree as follows:
ARTICLE I
DEFINITIONS
1.01 As used in this Agreement, and unless the context requires a
different meaning, the following terms have the meanings indicated (such
meanings to be equally applicable to both the singular and the plural forms of
the terms defined):
"Affiliate" means an entity which is, directly or indirectly, Controlling,
Controlled by or under common Control with the predicate entity.
"Control" (including the terms "Controlling," "Controlled by" and "under
common Control with") means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of the
predicate entity whether through the ownership of voting securities, by
contract, or otherwise.
"Dollars" means dollars of the United States of America.
"Person" means any natural person, corporation, governmental agency,
association, partnership or other entity.
"Term" has the meaning assigned to it in Article III.
1.02 Other Defined Terms; Use of Defined Terms. The words "hereof,"
"herein," and "hereunder," and words of similar import, when used in this
Agreement,
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shall refer to this Agreement, and Article, Section, Schedule, Annex and like
references are intended to refer to this Agreement unless otherwise specified.
Terms for which meanings are provided in this Agreement shall, unless otherwise
defined or the context otherwise requires, have such meanings when used in each
notice or other communication delivered or given from time to time under or in
connection with this Agreement.
ARTICLE II
DUTIES OF EMPLOYMENT
2.01 Employment. The EMPLOYER is hereby employed by EMPLOYER, and
EMPLOYEE agrees to be so employed by EMPLOYER, to serve for the Term subject to
earlier termination as hereinafter provided.
2.02 EMPLOYEE Duties. EMPLOYEE shall have the authority to seek and
locate additional sites for video poker truck stop operations to be reviewed by
EMPLOYER and shall report to the Manager of EMPLOYER and assist such Manager in
the day-to-day operations of EMPLOYER's business as delegated from time to time
by such Manager; provided, however, that EMPLOYEE shall not be expected to
perform any duties that are not consistent with the historical duties that he
has performed for EMPLOYER. Upon specific request by EMPLOYER with respect to
specific issues, EMPLOYEE shall assist EMPLOYER in attempting to understand the
regulatory requirements and compliance therewith. It is understood that EMPLOYEE
may own his own truck stop locations as permitted under separate agreements
between the EMPLOYER, EMPLOYEE and/or North American Gaming and Entertainment
Corporation ("NAG"). In the event EMPLOYEE or his Affiliates do own truck stop
locations, then EMPLOYEE shall be permitted to spend reasonable time in the
management and operation of those locations, provided it shall not unreasonably
interfere with the performance of his duties under this Agreement. It is
further understood that EMPLOYEE shall not be required to work more than 20
hours per week under this Agreement.
ARTICLE III
TERM AND TERMINATION
3.01 Term. The term of the EMPLOYEE's employment hereunder shall commence
on the Effective Date and terminate on the date of the last to occur of the
following:
(i) April 14, 2002, or (ii) the date that certain promissory note in the
original principal amount of $4,000,000.00 made by EMPLOYEE payable
to North American Gaming and Entertainment Corporation ("NAG"), of
even date herewith, is paid in full.
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3.02 EMPLOYEE's Termination of Agreement. EMPLOYEE may terminate this
Agreement at any time by giving EMPLOYER notice in accordance with Article VI at
least thirty (30) days prior to the date of termination chosen by EMPLOYEE.
3.03 EMPLOYER's Right to Terminate the Agreement for "Cause." The
EMPLOYER, acting through the written election of NAG on behalf of EMPLOYER, may
terminate the EMPLOYEE's employment, effective as described below, for "Cause"
which for purposes of this Agreement means the occurrence of any of the
following:
The EMPLOYEE's act or acts in connection, directly or indirectly, with
the EMPLOYEE's employment duties, of dishonesty, fraud or willful
misconduct, which could have a material and adverse affect on the EMPLOYER
including, without limitation, embezzlement, misappropriation of funds or
property of the EMPLOYER or any of its Affiliates for personal gain, or,
except as permitted under the Operating Agreement of EMPLOYER, securing or
attempting to secure personally any profit in connection with any
transaction entered into on behalf of the EMPLOYER or any of its
Affiliates.
Prior to declaring the EMPLOYEE in default and sending him a notice of
termination under this Section 3.03, EMPLOYER shall give EMPLOYEE written notice
of the allegations and an opportunity to respond to the President of NAG to the
allegations within five (5) days after receipt of the notice. In the event NAG,
acting on behalf of EMPLOYER, is not persuaded by the EMPLOYEE's response not to
terminate the EMPLOYEE, NAG, acting on behalf of EMPLOYER, may then terminate
the EMPLOYEE immediately at any time, without further delay, after five (5) days
following EMPLOYEE's receipt of the original notice, acting through the written
election of NAG on behalf of EMPLOYER, by "second written notice" of same to
EMPLOYEE.
3.04 EMPLOYER's Right to Terminate the Agreement for Reasons Other than for
"Cause." The EMPLOYER, acting through the written election of NAG on behalf of
EMPLOYER, may terminate the EMPLOYEE's employment for the following reasons if
EMPLOYEE fails to cure the alleged default within thirty (30) days after
EMPLOYEE's receipt of the notice of the alleged default:
(a) The continued failure or refusal by EMPLOYEE to substantially
perform his duties with EMPLOYER, after a written demand for substantial
performance is delivered to EMPLOYEE by NAG, acting on behalf of EMPLOYER,
which written demand specifically identifies the manner in which NAG,
acting on behalf of EMPLOYER, believes that EMPLOYEE has not substantially
performed or has refused to substantially perform his duties; or
(b) Any material violation of this Agreement by the EMPLOYEE; or
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(c) (i) A final determination has been made by applicable governmental
authorities in accordance with applicable administrative and judicial
process that EMPLOYEE fails to meet the suitability requirements under the
Louisiana Video Draw Poker Devices Control Law or other applicable gaming
laws necessary to be employed by the EMPLOYER in the capacity contemplated
by this Agreement, or (ii) EMPLOYEE ceases to be a Louisiana resident.
(d) The EMPLOYEE's indictment of, or plea of guilty or nolo contendere
to, a felony involving EMPLOYEE (other than one involving a hunting crime).
Except as permitted under Sections 3.03, 3.04, 3.05 and 3.06, EMPLOYER may not
remove EMPLOYEE from his position or terminate this Agreement.
3.05 EMPLOYER's Right to Terminate Agreement Due to EMPLOYEE's Inability to
Perform Essential Functions of Position. EMPLOYER, acting through the written
election of NAG on behalf of EMPLOYER, may immediately terminate this Agreement
should EMPLOYEE, due to a physical or mental disability or infirmity, for a
period of time in excess of one hundred eighty (180) consecutive days, become
unable to perform, with or without reasonable accommodation, either (i) the
duties and obligations set forth herein or (ii) the essential functions of the
EMPLOYEE's position. In the event EMPLOYEE suffers a disability or infirmity
EMPLOYER shall not terminate EMPLOYEE under Sections 3.03 or 3.04 solely as a
result of absences. During this 180 day period, EMPLOYEE's Basic Compensation
shall be reduced by the amount received by EMPLOYEE under any short-term or
long-term disability policies provided by EMPLOYER and adjusted so that the net
taxable income remains the same.
3.06 EMPLOYER's Right to Terminate the Agreement because of the EMPLOYEE's
Death. In the event that EMPLOYEE dies during the Term, the EMPLOYER shall be
deemed to have terminated the EMPLOYEE under this Section 3.06.
ARTICLE IV
COMPENSATION
4.01 Basic Compensation. EMPLOYER agrees to pay EMPLOYEE for his services
as employee an annual salary as follows for each year during the Term, to be
paid in weekly installments in accordance with the EMPLOYER's normal payroll
practice and on the EMPLOYER's regularly scheduled paydays (hereinafter referred
to as "Basic Compensation"):
$250,000.00.
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NAG, acting on behalf of EMPLOYER and EMPLOYEE shall meet at the end of each
year to discuss raising the Basic Compensation.
4.02 Compensation Following Termination.
(a) In the event EMPLOYEE terminates this Agreement in accordance with
Section 3.02, none of EMPLOYEE's compensation described in this Article accrued
up to the date of termination or previously paid to the EMPLOYEE shall be
affected. However, all Basic Compensation, as well as any other benefits
provided hereunder, shall cease immediately upon the effective date of said
termination.
(b) EMPLOYER may terminate this Agreement for Cause as defined in
Section 3.03, which shall be effective immediately upon EMPLOYEE'S receipt of
the second written notice. All Basic Compensation, as well as any other
benefits provided hereunder, shall cease immediately, as of the effective date
of said termination.
(c) In the event of termination pursuant to Sections 3.05 or 3.06,
EMPLOYEE or his heirs, legatees or personal representative (as applicable) shall
receive Basic Compensation at EMPLOYEE's then current annual salary for the
remainder of the Term (i.e., the Term defined in Section 3.01 (unaffected by
non-permitted and permitted prior terminations) payable at the regular payroll
dates.
(d) In the event of termination pursuant to Section 3.04, EMPLOYEE or
his heirs, legatees or personal representative (as applicable) shall receive
Basic Compensation at EMPLOYEE'S than current annual salary for the remainder of
the Term (i.e., the Term defined in Section 3.01 (unaffected by non-permitted
and permitted prior terminations) payable at the regular payroll dates;
provided, however, that in the event EMPLOYEE is terminated under Section
3.04(c), the Basic Compensation shall be reduced to an annual salary of
$175,000.00 for the remainder of the Term (i.e., the Term defined in Section
3.01 (unaffected by non-permitted and permitted prior terminations). If
EMPLOYEE is terminated under Section 3.04(d) as the result of an indictment that
later results in a conviction or plea of guilty or nolo contendere that would
have rendered EMPLOYEE unsuitable under the Louisiana Video Poker Devices
Control Act or other applicable gaming laws as contemplated under Section
3.04(c), then from the date the conviction or plea of guilty or nolo contendere
becomes final, EMPLOYEE shall be deemed to have been terminated under Section
3.04(c) thereby reducing the amount of the payments to subsequently be made to
EMPLOYEE.
(e) In the event this Agreement is terminated by EMPLOYER in a manner
that is not pursuant to Sections 3.03, 3.04, 3.05 or 3.06, then EMPLOYEE shall
receive Basic Compensation for the remainder of the Term in a lump sum due and
payable withing thirty (30) days after termination. In addition, all other
employee
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benefits shall be continued for the remainder of the Term, to the same
extent being offered to EMPLOYEE prior to termination.
Notwithstanding the foregoing, EMPLOYER shall not be obligated to make
payments to EMPLOYEE if a final determination has been made by applicable
governmental authorities in accordance with applicable administrative and
judicial process that the making of such payments would cause any of the
EMPLOYER's gaming related licenses to be eligible for suspension or revocation
under Louisiana law, but, in this event, EMPLOYEE shall be permitted to assign,
transfer or donate (collectively, "Transfer") his right to receive these
payments to one or more persons whose receipt of such payments would not cause
the EMPLOYER's gaming related licenses to be eligible for suspension or
revocation. In the event that the payments may not be made under this
provision, then such period of nonpayment shall merely constitute a moratorium
on payments. In the event that in the future such payments are permitted as a
result of a Transfer or otherwise, the payments shall resume for the same period
of time that they would have otherwise been paid.
ARTICLE V
BENEFITS
5.01 Benefit Plans. The EMPLOYER agrees to include and enroll the
EMPLOYEE, if the EMPLOYEE is eligible, in benefit plans determined by EMPLOYER
to be appropriate for its employees.
5.02 Vacation. The EMPLOYEE shall be entitled each year to four (4) weeks
vacation, during which time his compensation shall be paid in full. There shall
be no accumulation of vacation benefits from year to year.
5.03 Expenses. The EMPLOYER recognizes that EMPLOYEE will have to
incur certain out-of-pocket expenses, including, but not limited to, travel
expense, entertainment related to his services and the EMPLOYER's business, and
EMPLOYER agrees to reimburse EMPLOYEE for all reasonable expenses necessarily
incurred in the performance of his duties within thirty (30) days after
presentation of a voucher or documentation indicating the amount and business
purposes of any such expenses.
5.04 Automobile. During the Term, EMPLOYER shall provide EMPLOYEE with a
reasonable vehicle (comparable to the vehicle currently furnished to EMPLOYEE)
for use by EMPLOYEE for both personal and business purposes. EMPLOYER shall pay
for all fuel used by EMPLOYEE for this EMPLOYER owned vehicle during the course
of EMPLOYEE performing his duties on behalf of EMPLOYER. EMPLOYER shall furnish
EMPLOYEE with a company Visa card for use in purchasing gasoline for this
vehicle. EMPLOYER shall also allow EMPLOYEE to use the company Visa card to pay
for all maintenance expenses for the vehicle. EMPLOYER shall also pay for all
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automobile insurance on this vehicle which insurance shall be reasonable in
scope and amount and shall name EMPLOYEE as an additional insured.
5.05 Cellular Phone. During the Term, EMPLOYER shall furnish EMPLOYEE
with a cellular phone and shall pay all reasonable expenses incurred by EMPLOYEE
for the use of this phone for business purposes.
ARTICLE VI
NOTICES
All notices, requests, consents, and other communication required or
permitted hereunder shall be in writing and shall be personally delivered,
electronically delivered by facsimile or telex or mailed by using U.S. first-
class, registered or certified mail, return receipt requested, postage prepaid,
to the following addresses or to such other address as the parties hereto may
designate in writing:
EMPLOYER: 00000 Xxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xx. Xxxxxxx X. Xxxxxxx
GLAST, XXXXXXXX & XXXXXX (APC)
2200 One Galleria Tower
00000 Xxxx Xxxx, X.X. 00
Xxxxxx, Xxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
EMPLOYEE: 000 X. Xxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000)000-0000
With a copy to: Mr. G. Xxxxx Xxxxx, Xx.
KEAN, MILLER, HAWTHORNE,
X'XXXXXX, XxXXXXX & XXXXXX, L.L.P.
Post Office Box 3513 (70821)
Suite 2200, Xxx Xxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
Telephone: (000) 000-0000
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Facsimile: (000) 000-0000
All such notices, requests, consents and other communications shall be deemed to
be properly given if delivered personally or, if sent by U.S. Mail, registered
or certified, return receipt requested, three (3) business days after the same
have been deposited in the United States Mail, addressed and postage prepaid as
set forth above or, if sent by Federal Express (or other nationally recognized
overnight carrier), the day after delivery to Federal Express (or other
nationally recognized overnight carrier) or, if sent electronically, upon
verification of receipt.
ARTICLE VII
MISCELLANEOUS
7.01 Reserved.
7.02 Office Location. The Parties agree that EMPLOYER will not require
EMPLOYEE to relocate without the consent of EMPLOYEE. A transfer of EMPLOYEE
without his approval shall constitute a violation of this Agreement by EMPLOYER.
7.03 Assignment. This Agreement and the rights and obligations arising
hereunder shall bind and inure to the benefit of each of the Parties hereto, and
shall also bind and inure to the benefit of EMPLOYEE's heirs and legal
representatives and any successor or successors of EMPLOYER by merger or
consolidation and any assignee of all or substantially all of EMPLOYER's
business and properties; except as to any such successor or assignee of
EMPLOYER, neither this Agreement nor any duties, rights or benefits hereunder
may be assigned by either Party without the express written consent of the other
Party.
7.04 Governing Law and Jurisdiction. This Agreement shall be construed
and enforced in accordance with the internal laws of the State of Louisiana
without regard to its principles of conflicts that may direct the application of
the laws of another jurisdiction. This Agreement shall be deemed made in East
Baton Rouge Parish, Louisiana. Any legal action or proceeding with respect to
this Agreement, and any actions for enforcement of any judgment in respect
thereof may be brought in the courts of the State of Louisiana located in East
Baton Rouge Parish, Louisiana or of the United States of America for the Middle
District of Louisiana, and by execution and delivery of this Agreement, EMPLOYER
hereby accepts for itself and in respect of its property, generally and
conditionally the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any thereof. EMPLOYER irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered certified mail,
postage pre-paid, to EMPLOYER at the address set forth in Article VI hereof.
EMPLOYER hereby irrevocably waives any objection which it may now or hereafter
have to the laying of venue of any of the aforesaid actions or proceedings
arising out
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of or in connection with this Agreement brought in the courts referred to above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect the right of
EMPLOYEE to serve process in any other matter permitted by law or to commence
legal proceedings or otherwise proceed against EMPLOYER in any other
jurisdiction.
7.05 Modification. No modification or waiver of any provision hereof
shall be made unless it is in writing and signed by both of the Parties hereto.
7.06 Construction. The negotiating and drafting of this Agreement has
been participated in by each Party hereto, and not by either Party to the
exclusion of the other and, for all purposes, this Agreement shall be deemed to
have been drafted jointly by the Parties with the advice and assistance of
counsel. The language used in this Agreement will be deemed to be the language
chosen by the Parties hereto to express their mutual intent, and no rule of
strict construction shall be applied against either Party. References to
Section, Article and like references are intended to refer to this Agreement,
unless otherwise specified. Any reference to any federal, state, local or
foreign statues or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
7.07 Severability. To the extent that any provision of this Agreement
may be deemed or determined to be invalid or unenforceable for any reasons, such
invalidity or unenforceability shall not impair or affect any other provision,
and this Agreement shall be interpreted as to most fully give effect to its
terms and still be valid and enforceable.
7.08 Administrative Cooperation. Each Party agrees, at the request and
expense of the other party, at any time and from time to time following the
execution hereof, to execute and deliver to the other Party all such further
instruments and to take all further administrative and ministerial actions as
may be reasonably necessary or appropriate in order to carry out the purposes
and intent of this Agreement.
7.09 Headings. The headings throughout this Agreement are inserted for
reference purposes only, and are not to be construed or taken into account in
interpreting the terms and provisions of any Article or Section, nor to be
deemed in any way to qualify, modify or explain the effects of any such term or
provision.
7.10 Scope of Agreement. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof, superseding all
prior oral and written conversations, negotiations, understandings and
agreements in effect as of the date of this Agreement.
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7.11 No Impact on Other Agreements with EMPLOYEE or His Affiliates. In
order to induce EMPLOYEE to enter into this Agreement and to perform the
services specified herein, EMPLOYER hereby acknowledges and agrees that this
Agreement is to be considered separate and apart from any other agreement, note,
document, instrument or arrangement between EMPLOYEE and EMPLOYER or any
Affiliate of either. EMPLOYER shall have no right of offset under any of such
other agreements, documents, notes, instruments or arrangements for any damage,
cost, claim or expense which EMPLOYER might have at any time, or claim to have,
against EMPLOYEE under this Agreement. EMPLOYER acknowledges and agrees that
EMPLOYEE would not enter into this Agreement or perform the services
contemplated hereunder, unless EMPLOYER agreed to the provisions of this Section
7.11 in order to clarify the relationship between this Agreement and the other
relationships described in this Section 7.11. Further, EMPLOYER agrees not to
take any action, or fail to take any action, inconsistent with the provisions of
this Section 7.11. Finally, EMPLOYER shall be entitled to the fees and expense
reimbursements provided herein notwithstanding the status of any of the other
relationships referred to in this Section 7.11.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
EMPLOYER:
O M OPERATING, L.L.C.
By: /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx, Manager
By: North American Gaming and
Entertainment Corporation, as Member
By: /s/ X. X. Xxxxx, XX
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Printed Name X. X. Xxxxx, XX
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Title: President
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By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, as Member
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EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, Individually
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