EMPLOYMENT AGREEMENT
Exhibit
10.2
This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into
as of June 1, 2009 (the “Effective Date”), by and between Empire Resorts, Inc.,
a Delaware corporation (the “Company”), and Xxxxxx X. Xxxxxxxxx (“Executive”,
and the Company and the Executive collectively referred to herein as the
“Parties”).
W I T N E S S E T H:
WHEREAS,
the Company desires to hire Executive and to employ him as the Chief Executive
Officer (“CEO”) of the Company, and the Parties desire to enter into this
Agreement embodying the terms of such employment;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
promises of the Parties contained herein, the Parties, intending to be legally
bound, hereby agree as follows:
1. Title and Job
Duties.
A. Subject
to the terms and conditions set forth in this Agreement, the Company agrees to
employ Executive as CEO. Executive shall report directly to the Board
of Directors of the Company (the “Board”).
B. Executive
accepts such employment and agrees, during the term of his employment, to devote
substantially all his work time and attention to the Company, and agrees
faithfully to perform his duties and responsibilities in an efficient,
trustworthy and business like manner. Executive also agrees that the
Board shall determine from time to time such other duties as may be assigned to
him customary for a Chief Executive Officer. Executive agrees to
carry out and abide by such directions of the Board. Executive
acknowledges that he will perform substantially all his duties in the Company’s
New York office or New York City Metro Area..
C. Anything
herein to the contrary notwithstanding, during the Term, nothing shall preclude
the Executive from managing his personal affairs and investments, existing real
estate development projects, existing legal matters and responsibilities with
the Catskill Litigation Trust, provided that none of these activities materially
interfere with the proper performance of his duties and responsibilities
hereunder.
2. Salary and Additional
Compensation.
A. Base
Salary. During the Term, the Company shall pay to Executive an
annual base salary of $500,000, less applicable withholdings and deductions, in
accordance with the Company’s normal payroll procedures.
B. Bonus. The
Executive shall be entitled to participate in any annual bonus plan maintained
by the Company for its senior executives on such terms and conditions as may be
determined from time to time by the Compensation Committee of the
Board. The payment of any such bonus shall be in the absolute
discretion of the Board or Compensation Committee.
Xxxxxx X.
Xxxxxxxxx
June 1,
2009
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D. Sign-on Stock Option
Grants. As of the date of execution of this Agreement
(“Execution Date”), the Company shall grant the Executive, subject to
stockholder approval of an amendment to the Company’s 2005 Equity Incentive Plan
(the “Plan”), a 5-year non-qualified stock option to purchase 500,000 shares of
the Company’s common stock pursuant to the Plan, at an exercise price per share
determined at the close of business on the Execution Date, which shall be the
date of grant. The options under this paragraph shall vest 33% six (6) months
following the grant date, 33% twelve (12) months following the grant date, and
34% eighteen (18) months following the grant date, and subject to earlier
vesting as provided herein. If this Agreement is not extended as
provided herein for an additional 12 months after the initial six-month period
of the Term, all of the options granted under this paragraph shall vest on
December 31, 2009, provided, however, if Executive is terminated for Cause or if
Executive resigns, all options granted hereunder shall be considered in
accordance with, and governed by, the Plan. For purposes of this Agreement,
“Cause” shall mean that the Executive (i) pleads “guilty” or “no contest”
to or is convicted of an act which is defined as a felony under federal or state
law or as a crime under federal or state law which involves Executive’s fraud or
dishonesty, (ii) in carrying out his duties, engages in conduct that
constitutes willful neglect or willful misconduct; provided such plea,
conviction, neglect or misconduct results in material economic harm to the
Company, (iii) Executive’s failure to apply for, eventually obtain and
subsequently maintain required licenses in the jurisdiction where the Company
currently operates or has plans to operate, or (iv) the Executive’s
material breach of this Agreement. The options shall not
terminate before their ultimate 5-year expiration date because the Term or any
extension thereof has previously expired.
E. Additional Stock Option
Grants. The Company shall grant the Executive, subject to
stockholder approval of an amendment to the Company’s Plan, a 10-year
non-qualified stock option to purchase 1,000,000 shares of the Company’s common
stock pursuant to the Plan, at an exercise price per share determined at the
close of business on the Execution Date, which shall be the date of grant,
vesting upon the consummation of a Debt Restructure (as defined in 3.B below)
with an entity sourced by the Executive before or after the Effective Date,
including but not limited to the persons and entities set forth on Exhibit A,
their beneficial owners, family members or affiliates. The options shall not
terminate before their ultimate 10-year expiration date because the Term or any
extension thereof has previously expired.
F. Previous Stock Option
Grants. Nothing in this Agreement shall affect the terms and
conditions relating to the grant of 500,000 stock options to the Executive prior
to the date of this Agreement, provided, however, that the April 27, 2009 grant
of 250,000 options shall vest upon a Debt Restructure. The options
shall not terminate before their ultimate 5-year expiration date because the
Term or any extension thereof has previously expired.
Xxxxxx X.
Xxxxxxxxx
June 1,
2009
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G. Expenses. In
accordance with Company policy, the Company shall reimburse Executive for all
reasonable business expenses properly and necessarily incurred and paid by
Executive in the performance of his duties under this Agreement upon his
presentment of detailed receipts in the form required by the Company’s policy,
however, Executive acknowledges and agrees that the Company shall not reimburse
Executive for travel expenses related to travel between Florida and New
York.
H. Benefits. The
Executive shall be entitled to participate in all employee benefit plans,
practices and programs maintained by the Company and made available to senior
level executive officers generally and as may be in effect from time to
time. The Executive’s participation in such plans, practices and
programs shall be on the same basis and terms as are applicable to senior level
executive officers of the Company generally. Such level of benefits
shall be at a level commensurate with the Executive’s position as Chief
Executive Officer. In addition, all options referenced in Sections 2
D., E., and F. hereof shall be exercisable by the estate of Executive through
the respective term of each such option.
I. Vacation. Executive
shall be entitled to four (4) weeks vacation on an annual basis.
K. Assistance. The
Company shall provide the Executive access to a Secretary during business hours.
Should the Executive believe that it is necessary to hire a full or part-time
executive assistant, the decision to hire such an assistant shall be in the sole
discretion of the Board of Directors of the Company and the Company shall
determine the appropriate duties and salary level of the assistant.
3. Term and
Termination.
A. The
term of this Agreement (“Term”) will commence on the Effective Date and shall
remain in effect through December 31, 2009 and will continue for a subsequent
one (1) year extension if a Debt Restructure, as defined in paragraph 3.B below,
has occurred during the initial six month Term.
B. For
purposes of this Agreement, “Debt Restructure” shall be defined as the
combination of one or more of a restructuring, refinancing, deferral of puts
under the Convertible Secured Notes, a buy out of note holders’ interests in the
Convertible Secured Notes, in whole or part, or other similar transaction(s)
between the Effective Date and December 31, 2010, relating to all of the
Company's existing secured debt obligations under its $65,000,000 5½%
Convertible Senior Notes due 2014 and credit facility with Bank of Scotland
(“Secured Debt Obligations”), such that either (i) the Company has restructured
its Secured Debt Obligations so that the Secured Debt Obligations or any
replacements thereof shall not become due prior to December 31, 2010 (other than
any interest payments thereon) and has not filed for bankruptcy protection under
the Federal bankruptcy laws, or (ii) on or before December 31, 2010, the Company
has filed for and emerged from bankruptcy under the Federal bankruptcy laws, and
the Company’s shareholders at the time the Company emerges from bankruptcy hold
at least fifty percent (50%) of the equity in the post-bankruptcy or
post-restructured Company.
Xxxxxx X.
Xxxxxxxxx
June 1,
2009
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4. Confidentiality
Agreement.
A. Executive
understands that during the Term, he may have access to unpublished and
otherwise confidential information both of a technical and non-technical nature,
relating to the business of the Company and any of its parents, subsidiaries,
divisions, affiliates (collectively, “Affiliated Entities”), or clients,
including without limitation any of their actual or anticipated business,
research or development, any of their technology or the implementation or
exploitation thereof, including without limitation information Executive and
others have collected, obtained or created, information pertaining to clients,
accounts, vendors, prices, costs, materials, processes, codes, material results,
technology, system designs, system specifications, materials of construction,
trade secrets and equipment designs, including information disclosed to the
Company by others under agreements to hold such information confidential
(collectively, the “Confidential Information”). Executive agrees to
observe all Company policies and procedures concerning such Confidential
Information. Executive further agrees not to disclose or use, either
during his employment or at any time thereafter, any Confidential Information
for any purpose, including without limitation any competitive purpose, unless
authorized to do so by the Company in writing, except that he may disclose and
use such information when necessary in the performance of his duties for the
Company. Executive’s obligations under this Agreement will continue
with respect to Confidential Information, whether or not his employment is
terminated, until such information becomes generally available from public
sources through no fault of Executive. Notwithstanding the foregoing,
however, Executive shall be permitted to disclose Confidential Information as
may be required by a subpoena or other governmental order, provided that he
first notifies the Company of such subpoena, order or other requirement and
allows the Company the opportunity to obtain a protective order or other
appropriate remedy.
B. During
Executive’s employment, upon the Company’s request, or upon the termination of
his employment for any reason, Executive will promptly deliver to the Company
all documents, records, files, notebooks, manuals, letters, notes, reports,
customer and supplier lists, cost and profit data, e-mail, apparatus, computers,
blackberries or other PDAs, hardware, software, drawings, blueprints, and any
other material of the Company or any of its Affiliated Entities or clients,
including all materials pertaining to Confidential Information developed by
Executive or others, and all copies of such materials, whether of a technical,
business or fiscal nature, whether on the hard drive of a laptop or desktop
computer, in hard copy, disk or any other format, which are in his possession,
custody or control.
C. Executive
will promptly disclose to the Company any idea, invention, discovery or
improvement, whether patentable or not related to the gaming business of the
Company (“Creations”), conceived or made by him alone or with others at any time
during his employment. Executive agrees that the Company owns any
such Creations, conceived or made by Executive alone or with others at any time
during his employment, to the extent of the Executive’s interests therein, and
Executive hereby assigns and agrees to assign to the Company all rights he has
or may acquire therein and agrees to execute any and all applications,
assignments and other instruments relating thereto which the Company deems
necessary or desirable. These obligations shall continue beyond the
termination of his employment with respect to Creations and derivatives of such
Creations conceived or made during his employment with the
Company. Executive understands that the obligation to assign
Creations to the Company shall not apply to any Creation which is developed
entirely on his own time without using any of the Company’s equipment, supplies,
facilities, and/or Confidential Information unless such Creation (a) relates in
any way to the business or to the current or anticipated research or development
of the Company or any of its Affiliated Entities; or (b) results in any way from
his work at the Company.
Xxxxxx X.
Xxxxxxxxx
June 1,
2009
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D. Executive
will not assert any rights to any invention, discovery, idea or improvement
relating to the business of the Company or any of its Affiliated Entities or to
his duties hereunder as having been made or acquired by Executive prior to his
work for the Company, except for the matters, if any, described in Appendix A to
this Agreement.
E. During
the Term, if Executive incorporates into a product or process of the Company or
any of its Affiliated Entities anything listed or described in Appendix A, the
Company is hereby granted and shall have a non-exclusive, royalty-free,
irrevocable, perpetual, worldwide license (with the right to grant and authorize
sublicenses) to make, have made, modify, use, sell, offer to sell, import,
reproduce, distribute, publish, prepare derivative works of, display, perform
publicly and by means of digital audio transmission and otherwise exploit as
part of or in connection with any product, process or machine.
F. Executive
agrees to cooperate fully with the Company, both during and after his employment
with the Company, with respect to the procurement, maintenance and enforcement
of copyrights, patents, trademarks and other intellectual property rights (both
in the United States and foreign countries) relating to such
Creations. Executive shall sign all papers, including, without
limitation, copyright applications, patent applications, declarations, oaths,
formal assignments, assignments of priority rights and powers of attorney, which
the Company may deem necessary or desirable in order to protect its rights and
interests in any Creations. Executive further agrees that if the
Company is unable, after reasonable effort, to secure Executive’s signature on
any such papers, any officer of the Company shall be entitled to execute such
papers as his agent and attorney-in-fact and Executive hereby irrevocably
designates and appoints each officer of the Company as his agent and
attorney-in-fact to execute any such papers on his behalf and to take any and
all actions as the Company may deem necessary or desirable in order to protect
its rights and interests in any Creations, under the conditions described in
this paragraph.
5. Non-solicitation;
non-competition.
A. Executive
agrees that, during the Term and until twelve (12) months thereafter, Executive
will not, directly or indirectly, including on behalf of any person, firm or
other entity, employ or solicit for employment any employee of the Company or
any of its Affiliated Entities, or anyone who was an employee of the Company or
any of its Affiliated Entities within the six (6) months prior to the
termination of Executive’s employment, or induce any such employee to terminate
his or her employment with the Company or any of its Affiliated
Entities.
Xxxxxx X.
Xxxxxxxxx
June 1,
2009
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B. Executive
further agrees that, during the Term and until twelve (12) months after the
termination of his employment, Executive will not, directly or indirectly,
including on behalf of any person, firm or other entity, without the express
written consent of an authorized representative of the Company, (i) perform
services within the Territory (as defined below) for any Competing Business (as
defined below), whether as an employee, consultant, agent, contractor or in any
other capacity, (ii) hold office as an officer or director or like position in
any Competing Business, (iii) request any present or future customers or
suppliers of the Company or any of its Affiliated Entities to curtail or cancel
their business with the Company or any of its Affiliated Entities, and (iv)
accept business from such customers or suppliers of the Company or any of its
Affiliated Entities. These obligations will continue for the
specified period regardless of whether the termination of Executive’s employment
was voluntary or involuntary or with or without Cause.
C. “Competing
Business” means any entity or person (other than the Company) which is engaged
in the operation, development or planning of, or the preparation of applications
or obtaining of approvals for, gaming projects within the
Territory.
D. “Territory”
shall mean 120 miles of Monticello, New York
E. Executive
agrees that in the event a court determines the length of time or the geographic
area or activities prohibited under this Section 7 are too restrictive to be
enforceable, the court may reduce the scope of the restriction to the extent
necessary to make the restriction enforceable.
F. Representation and
Warranty. Executive represents and warrants to the Company
that he is not subject to any non-competition provision of any other agreement
restricting his ability fully to act hereunder. Executive hereby
indemnifies and holds the Company harmless against any losses, claims, expenses
(including attorneys’ fees), damages or liabilities incurred by the Company as a
result of a breach of the foregoing representation and warranty.
G. Injunctive
Relief. Without limiting the remedies available to the
Company, Executive acknowledges that a breach of any of the covenants contained
in Sections 6 and 7 above may result in material irreparable injury to the
Company for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach or threat thereof, the Company shall be entitled, without the
requirement to post bond or other security, to obtain a temporary restraining
order and/or injunction restraining Executive from engaging in activities
prohibited by this Agreement or such other relief as may be required to
specifically enforce any of the covenants in Sections 6 and 7 of this
Agreement.
6. Notice. Any
notice or other communication required or permitted to be given to the Parties
shall be deemed to have been given if personally delivered, if sent by
nationally recognized overnight courier or if mailed by certified or registered
mail, return receipt requested, first class postage prepaid, and addressed as
follows:
Xxxxxx X.
Xxxxxxxxx
June 1,
2009
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If
to Executive, prior to July 1, 2009
to:
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Xxxxxx
X. Xxxxxxxxx
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0000
Xxxxx Xxxxxx, 0xx Xxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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ii
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If
to the Company, to:
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Empire
Resorts, Inc.
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X.X.
Xxx 0000
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Xxxxxxxxxx,
Xxx Xxxx 00000-0000
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Attn.
Compensation Committee Chairman
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with
a copy to:
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Xxxxxx
X. Xxxxxxxx, Esq.
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Xxxxxx
Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx
LLP
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00
Xxxx 00xx Xxxxxx
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Xxx
Xxxx, Xxx Xxxx 00000
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7. Severability. If
any provision of this Agreement is declared void or unenforceable by a court of
competent jurisdiction, all other provisions shall nonetheless remain in full
force and effect.
8. Governing
Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, without regard
to the conflict of laws provisions thereof. Any action, suit or other
legal proceeding that is commenced to resolve any matter arising under or
relating to any provision of this Agreement shall be submitted to the exclusive
jurisdiction of any state or federal court in New York County.
9. Waiver. The
waiver by either Party of a breach of any provision of this Agreement shall not
be or be construed as a waiver of any subsequent breach. The failure
of a Party to insist upon strict adherence to any provision of this Agreement on
one or more occasions shall not be considered a waiver or deprive that Party of
the right thereafter to insist upon strict adherence to that provision or any
other provision of this Agreement. Any waiver must be in
writing.
10. Assignment. This
Agreement is a personal contract and Executive may not sell, transfer, assign,
pledge or hypothecate his rights, interests and obligations
hereunder. Except as otherwise herein expressly provided, this
Agreement shall be binding upon and shall inure to the benefit of Executive and
his personal representatives and shall inure to the benefit of and be binding
upon the Company and its successors and assigns, including without limitation,
any corporation or other entity into which the Company is merged or which
acquires all or substantially all of the assets of the Company.
Xxxxxx X.
Xxxxxxxxx
June 1,
2009
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11. Entire
Agreement. This Agreement (together with Exhibits A and B
hereto) embodies all of the representations, warranties, and agreements between
the Parties relating to Executive’s employment with the Company. No
other representations, warranties, covenants, understandings, or agreements
exist between the Parties relating to Executive’s employment. This
Agreement shall supersede all prior agreements, written or oral, relating to
Executive’s employment. This Agreement may not be amended or modified
except by a writing signed by the Parties.
[Signature
page follows]
Xxxxxx X.
Xxxxxxxxx
June 1,
2009
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IN
WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed and
delivered on the date above.
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EMPIRE
RESORTS, INC.
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By:
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/s/ Xxxxx Xxxx | ||
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Name:
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Xxxxx Xxxx | ||
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Title:
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Special Operating Committee | ||
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Agreed
to and Accepted:
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/s/
Xxxxxx X. Xxxxxxxxx
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Xxxxxx
X. Xxxxxxxxx
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