11
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-K/A-2
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to
___________
Commission file number: 0-14897
PLAYERS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Nevada 95-4175832
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
Suite 800, 1300 Atlantic Avenue, Atlantic City, New Jersey
(Address of principal executive offices)
08401
(Zip Code)
(609) 449-7777
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.005 par value
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of August 11, 1998, the aggregate market value of the
registrant's Common Stock held by non-affiliates of the
registrants was not less than $120,000,000.
As of August 11, 1998, there were 31,941,737 shares of the
registrant's Common Stock outstanding, net of treasury stock.
GENERAL
Players International, Inc. (the "Company") hereby amends
its Annual Report on Form 10-K for the fiscal year ended March
31, 1998, by deleting its responses to Item 14 contained in its
original filing and replacing such section with the following:
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K
(a)(1) Financial Statements
Players International, Inc.:
CONSOLIDATED BALANCE SHEETS AT MARCH 31, 1998 AND 1997
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED MARCH 31, 1998:
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(a)(2) Financial Statement Schedules
Page
Riverside Joint Venture:
INDEPENDENT AUDITORS' REPORT............................ 7
BALANCE SHEETS AS OF DECEMBER 31, 1997 AND 1996......... 8
STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31,
1997 AND 1996........................................... 9
STATEMENTS OF PARTNERS' CAPITAL FOR THE YEARS ENDED DECEMBER
31, 1997 AND 1996....................................... 10
NOTES TO FINANCIAL STATEMENTS........................... 12
All other schedules have been omitted because they are not
applicable or not required or the required information is
included in the Consolidated Financial Statements or Notes
thereto.
(a)(3) Listing of Exhibits:
Exhibit
Number Description
3.1(1) Articles of Incorporation, as amended, of Players
International, Inc. (the "Company").
3.2(12) By-laws of the Company, as amended.
4.1(12) Indenture among certain subsidiaries of the Company and
First Fidelity Bank, National Association, as Trustee,
including form of Note (the "Senior Note Indenture").
4.2(1) Form of First Supplemental Indenture to the Senior Note
Indenture.
4.3(1) Form of Second Supplemental Indenture to the Senior
Note Indenture.
4.4(11) Form of Third Supplemental Indenture to the Senior Note
Indenture.
4.5(17) Form of Fourth Supplemental Indenture to the Senior
Note Indenture.
4.6(17) Form of Fifth Supplemental Indenture to the Senior Note
Indenture.
4.7(17) Form of Sixth Supplemental Indenture to the Senior Note
Indenture.
10.1(3) The Company's 1985 Incentive Stock Option Plan.
10.2(4) Amendment No. 1 to the Company's 1985 Incentive Stock
Option Plan.
10.3(5) The Company's 1990 Incentive Stock Option and Non-
Qualified Stock Option Plan, as amended.
10.4(2) The Company's 1993 Stock Incentive Plan.
10.5(2) Form of Registration Rights Agreement dated as of June
23, 1992 by and among the Company, Southern Illinois
Riverboat/Casino Cruises, Inc., and the purchasers
named therein.
10.6(2) Agreement dated February 12, 1993 by and between
Jebaco, Inc. and the Company with respect to the
assignment of an option agreement relating to the
Downtowner Hotel (now known as the Players Hotel).
10.7(2) Option Agreement dated December 24, 1991 by and among
The Beeber Corporation and Elisabeth S. Woodward and
Jebaco, Inc. with respect to the Downtowner Hotel (now
known as the Players Hotel).
10.8(2) Amendment to Option Agreement dated March 9, 1993 by
and among The Beeber Corporation and Elisabeth S.
Woodward and Players Lake Charles, Inc., a subsidiary
of the Company, with respect to the Downtowner Hotel
(now known as the Players Hotel).
10.9(2) License and Services Agreement dated December 8, 1992
by and among The Griffin Group, Inc., the Company and
Southern Illinois Riverboat/Casino Cruises, Inc., as
amended.
10.10(2)Joint Venture Agreement dated May 1993 between
Amerihost and a subsidiary of the Company with respect
to a hotel in Metropolis, Illinois adjacent to the
Company's Metropolis riverboat.
10.11(6)Lease dated March 19, 1993 by and among the Beeber
Corporation and Players Lake Charles, Inc., a
subsidiary of the Company.
10.12(7)Agreement of Purchase and Sale dated June 16, 1994,
between Gem Mesquite, Ltd. And Players Nevada, Inc., a
subsidiary of the Company (including form of letter
Agreement from the Company to Gem Mesquite, Ltd.
relating to registration rights).
10.13(7)Transfer of Data Agreement dated June 16, 1994, between
Gem Gaming, Inc. and Players Nevada, Inc. (including
form of Promissory Note).
10.14(7)Development Consulting Agreement dated June 16, 1994,
between Gem Gaming, Inc. and Players Nevada, Inc.
(including form of 1994 Series G Warrant).
10.15(7)Option Transfer Agreement dated June 16, 1994, between
Gem Gaming, Inc., Gem Mesquite, Ltd. and Players
Nevada, Inc.
10.16(8)The Company's 1994 Directors Stock Incentive Plan, as
adopted April 14, 1994, and as amended July 14, 1994.
10.17(9)Agreement for Sale of Partnership Interests among the
Company and certain of its subsidiaries and Showboat,
Inc. and certain of its subsidiaries.
10.18(1)Asset Purchase Agreement dated August 16, 1995 among
the Company, Players Lake Charles, Inc. and the Beeber
Corporation.
10.19(1)Form of Credit Agreement ("Credit Agreement") among the
Company, First Interstate Bank of Nevada, N.A., Bankers
Trust Company, BT Securities Corporation, and certain
other Lenders party thereto.
10.20(1)Form of Revolving Promissory Notes made by the Company
in favor of the Lenders party to the Credit Agreement.
10.21(1)Form of Swing Line Promissory Note made by the Company
in favor of First Interstate Bank of Nevada, N.A.
10.22(1)Form of Guaranty made by Players Lake Charles, Inc.,
Players Nevada, Inc., Southern Illinois
Riverboat/Casino Cruises, Inc., Players Bluegrass
Downs, Inc., Players Riverboat Management, Inc.,
Players Riverboat, Inc., Players Mesquite Golf Club,
Inc., Players Indiana, Inc., Players Riverboat, LLC,
Players Mesquite Land, Inc., Players Maryland Heights,
Inc., River Bottom Inc. and Showboat Star Partnership
in favor of First Interstate Bank of Nevada, N.A.
10.23(1)Form of Company Pledge Agreement between the Company
and First Interstate Bank of Nevada, N.A.
10.24(1)Form of Company Pledge Agreement (Nevada) between the
Company and First Interstate Bank of Nevada, N.A.
10.25(1)Form of First Amendment to Company Pledge Agreement
(Nevada) between the Company and First Interstate Bank
of Nevada, N.A.
10.26(1)Form of LLC Membership Interest Security Agreement
between the Company and First Interstate Bank of
Nevada, N.A.
10.27(1)Form of Company Security Agreement between the Company
and First Interstate Bank of Nevada, N.A.
10.28(1)Form of Subsidiary Security Agreement (Nevada) among
Players Nevada, Inc., Players Mesquite Golf Club, Inc.,
Players Mesquite Land, Inc. and First Interstate Bank
of Nevada, N.A.
10.29(1)Form of Subsidiary Security Agreement (Louisiana) among
Players Lake Charles, Inc., Showboat Star Partnership,
Players Riverboat LLC and First Interstate Bank of
Nevada, N.A.
10.30(1)Form of Subsidiary Security Agreement (Illinois)
between Southern Illinois Riverboat/Casino Cruises,
Inc. and First Interstate Bank of Nevada, N.A.
10.31(1)Form of Partnership Interest Security Agreement between
Players Riverboat Management, Inc. and First Interstate
Bank of Nevada, N.A.
10.32(1)Form of Collateral Account Agreement between the
Company and First Interstate Bank of Nevada, N.A.
10.33(1)Form of Nevada Deed of Trust, Fixture Filing and
Security Agreement with Assignment of Rents relating to
the Credit Agreement.
10.34(1)Form of Louisiana Act of Mortgage, Fixture Filing and
Security Agreement between Players Lake Charles, Inc.
and First Interstate Bank of Nevada, N.A.
10.35(1)Form of Illinois Mortgage Fixture Filing and Security
Agreement with Assignment of Rents relating to the
Credit Agreement.
10.36(1)Form of First Preferred Ship Mortgage made by Showboat
Star Partnership (an entity owned, directly or
indirectly, by the Company and its subsidiaries) to
First Interstate Bank of Nevada, N.A.
10.37(1)Form of Environmental Indemnity made by the Company to
First Interstate Bank of Nevada, N.A.
10.38(1)Form of Master Vessel and Collateral Trust Agreement
between First Interstate Bank of Nevada, N.A. as
Administrative Agent and First Interstate Bank of
Nevada, N.A. as Trustee and acknowledged and accepted
by the Company.
10.39(10)Partnership Agreement dated November 2, 1995, by and
between Harrah's Maryland Heights Corporation and
Players MH, L.P.
10.40(10)Guaranty of Players International, Inc. dated November
2, 1995.
10.41(10)Management Agreement dated November 2, 1995 by and
between Riverside Joint Venture and Harrah's Maryland
Heights Operating Company.
10.42(10)License Agreement dated November 2, 1995 by and among
Players International, Inc., Riverside Joint Venture
and Harrah's Maryland Heights Operating Company.
10.43(10)Ground Lease dated November 3, 1995 by and between
Harrah's Maryland Heights LLC and Riverside Joint
Venture.
10.44(10)Lease Agreement dated as of November 3, 1995 by and
between Riverside Joint Venture and Players MH, L.P.
10.45(10)Parent Guaranty of Players International, Inc. dated
November 3, 1995.
10.46(10)Right of First Refusal to Purchase dated November 3,
1995 by and between Harrah's Maryland Heights LLC and
Players MH, L.P.
10.47(10)Option Agreement dated November 3, 1995 by and between
Riverside Joint Venture and Harrah's Maryland Heights,
L.L.C.
10.48(10)Development of Agreement (Earth City Expressway
Extension) by and between the City of Maryland Heights
and Riverside Joint Venture.
10.49(11)Form of Agreement between the Company and Lake Charles
Construction Corporation dated November 15, 1995 for
the Players Island-Entertainment Barge.
10.50(11)Agreement between the Company and Lake Charles
Construction Corporation dated February 16, 1996 for
the Players Island-Entertainment Barge.
10.51(13)Retirement Agreement and General Release dated
September 9, 1996 between the Company and Edward
Fishman.
10.52(13)Retirement Agreement and General Release dated
September 9, 1996 between the Company and David
Fishman.
10.53(14)Amended and Restated Credit Agreement, dated as of
December 16, 1996, among the Company and the Lenders
party thereto, Wells Fargo Bank, N.A., Bankers Trust
Company and BT Securities Corporation.
10.54(15)Purchase Agreement by and among Players Nevada, Inc.,
Players Mesquite Land, Inc., Players Mesquite Golf
Club, Inc. and RBG, LLC.
10.55(16)March 17, 1997 Letter Agreement to the Asset Purchase
Agreement Extending Closing Date.
10.56(16)March 18, 1997 Letter Agreement to the Asset Purchase
Agreement Regarding Application of Due of Due Diligence
Fee.
10.57(16)March 18, 1997 Letter Agreement to the Asset Purchase
Agreement Regarding Certain Matters Incident to
Closing.
10.58(18)Asset Purchase Agreement dated as of September 30, 1997
by and between Lakeshore Hotels, Ltd. and Players
International, Inc.
10.59(18)November 13, 1997 Amendment No. 1 to Asset Purchase
Agreement
10.60(18)December 17, 1997 Amendment No. 2 to Asset Purchase
Agreement
10.61(17)January 9, 1998 Letter Agreement with Wells Fargo Bank
regarding terms of Reducing Revolving Credit Agreement.
10.62(18)Second Amended and Restated Credit Agreement, dated as
of March 11, 1998, among the Company and the Lenders
party thereto and Wells Fargo Bank, N.A.
10.63(18)March 24, 1998 Letter Agreement regarding execution of
the Settlement and Admission Fee Agreement.
10.64(18)Settlement and Admission Fee Agreement dated May 15,
1998 among Players Lake Charles, L.L.C., Showboat Star
Partnership and the City of Lake Charles.
10.65 Howard A. Goldberg Employment Agreement dated October
1, 1996.
10.66 Peter J. Aranow Employment Agreement dated October 1,
1996.
10.67 Patrick Madamba Employment Agreement dated March 31,
1997.
10.68 John Groom Change of Control Agreement dated August 1,
1997.
21(18) Subsidiaries of Players International, Inc.
27(18) Financial Data Schedule
___________
(1)Filed as an exhibit to the Company's Registration
Statement on Form S-4, File No. 33-60085, and
incorporated herein by reference.
(2)Filed as an exhibit to the Company's Registration
Statement on Form S-3, File No. 33-61026, and
incorporated herein by reference.
(3)Filed as an exhibit to the Company's Registration
Statement on Form 10 filed on August 13, 1986, File No.
0-14897, as amended on Form 8 filed October 17, 1987,
and incorporated herein by reference.
(4)Filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1988, and
incorporated herein by reference.
(5)Filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1991, and
incorporated herein by reference.
(6)Filed as an exhibit to the Company's Registration
Statement on Form S-3, as amended by Form S-3, File No.
33-75006, and incorporated herein by reference.
(7)Filed as an exhibit to the Company's Current Report on
Form 8-K filed on June 24, 1994, and incorporated herein
by reference.
(8)Filed as an exhibit to the Company's Registration
Statement on Form S-3 filed on July 24, 1994, and
incorporated herein by reference.
(9)Filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1995, and
incorporated herein by reference.
(10) Filed as an exhibit to the Company's Quarterly Report
on Form 10-Q for the quarter ended December 31, 1995,
and incorporated herein by reference.
(11) Filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1996, and
incorporated herein by reference.
(12) Filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1996, and
incorporated herein by reference.
(13) Filed as an exhibit to the Company's Form 8-K dated
September 17, 1996, and incorporated herein by reference.
(14) Filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1996, and
incorporated herein by reference.
(15) Filed as an exhibit to the Company's Form 8-K/A. Filing
dated March 18, 1997, and incorporated herein by
reference.
(16) Filed as an exhibit to the Company's Form 8-K. Filing
dated March 18, 1997, and incorporated herein by reference.
(17) Filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1997, and
incorporated herein by reference.
(18) Filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1998, and
incorporated herein by reference.
_____________
(b) Reports on form 8-K filed during the last quarter of the
period covered by this report:
None
(c) Exhibits required by Item 601 of Regulation S-K:
The exhibits incorporated by reference herein are set forth
in Item 14(a)(3) above.
(d) Included below are separate financial statements of
subsidiaries not consolidated and 50% or less owned.
Independent Auditors' Report
The Partners
Riverside Joint Venture:
We have audited the accompanying balance sheets of Riverside
Joint Venture, a Missouri general partnership, as of December 31,
1997 and 1996 and the related statements of operations, partners'
capital, and cash flows for the years then ended. These
financial statements are the responsibility of the General
Partners of the Partnership. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. These standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by the General
Partners of the Partnership, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Riverside Joint Venture as of December 31, 1997 and 1996, and
the results of its operations and its cash flows for the years
then ended, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
February 27, 1998
RIVERSIDE JOINT VENTURE
Balance Sheets
December 31, 1997 and 1996
Assets 1997 1996
Current assets:
Cash and cash equivalents $ 10,244,249 $ 20,289,463
Receivables 3,151,091 89,174
Inventories 473,409 -
Prepaid expenses and other 69,565 72,399
------------- -------------
Total current assets 13,938,314 20,451,036
------------- -------------
Fixed assets, at cost:
Land 10,996,224 10,996,224
Land improvements 28,549,609 -
Buildings 98,939,095 -
Boats 40,104,483 -
Furniture, fixtures and equipment 12,074,190 -
Construction-in-process - 140,296,893
------------- -------------
190,663,601 151,293,117
Less: accumulated depreciation
and amortization (7,297,726) -
------------- -------------
Total fixed assets 183,365,875 151,293,117
------------- -------------
Pre-opening costs - 1,366,429
Other assets,net of
accumulated amortization of $269,463 8,910,778 6,750,159
------------- -------------
Total assets $ 206,214,967 $ 179,860,741
============= =============
Liabilities and Partners' Capital
Liabilities:
Accounts payable $ 1,415,920 $ 22,738,357
Accrued expenses 2,294,655 -
Due to partner 3,330,555 635,499
------------- -------------
Total liabilities 7,041,130 23,373,856
Partners' capital 199,173,837 156,486,885
Commitments and contingencies (notes 5 and 7)
------------- -------------
Total liabilities and partners' capital$206,214,967 $ 179,860,741
============= =============
See accompanying notes to financial statements.
RIVERSIDE JOINT VENTURE
Statements of Operations
Years ended December 31, 1997 and 1996
1997 1996
Revenues:
Property rental to partners $ 11,830,054 $ -
Food and beverage 8,283,773 -
Lodging 3,818,375 -
Other 2,316,231 -
Interest income 800,001 1,241,954
Less: casino promotional allowances (342,907) -
------------- -------------
Total revenues 26,705,527 1,241,954
------------- -------------
Direct operating expenses:
Food and beverage 8,257,157 -
Lodging 2,112,214 -
Other 1,715,204 -
------------- -------------
Total operating expenses 12,084,575 -
------------- -------------
Operating profit before undistributed
expenses and pre-opening costs 14,620,952 1,241,954
------------- -------------
Undistributed expenses:
General and administrative 5,772,585 -
Depreciation and amortization 7,567,189 -
Property taxes and insurance 4,195,900 -
Facility operations 3,939,158 -
Management fees 119,487 -
Entertainment 518,948 -
Interest 51,866 -
------------- -------------
Total undistributed expenses 22,165,133 -
------------- -------------
Preopening costs 3,774,139 -
------------- -------------
Net income (loss) $(11,318,320) $ 1,241,954
============= =============
See accompanying notes to financial statements.
RIVERSIDE JOINT VENTURE
Statements of Partners' Capital
Years ended December 31, 1997 and 1996
Harrah's Maryland Players
Heights Corp. MH, LP Total
Balance at December 31, 1995 $ 21,022,058 $ 21,422,873 $ 42,444,931
Capital contributions 55,000,000 57,800,000 112,800,000
Net income 620,977 620,977 1,241,954
------------ ------------ ------------
Balance at December 31, 1996 76,643,035 79,843,850 156,486,885
Capital contributions 29,415,689 24,589,583 54,005,272
Net loss (5,659,160) (5,659,160) (11,318,320)
------------ ------------ ------------
Balance at December 31, 1997 $100,399,564 $ 98,774,273 $199,173,837
============ ============ ============
Ownership percentages 50% 50% 100%
============ ============ ============
See accompanying notes to financial statements.
RIVERSIDE JOINT VENTURE
Statements of Cash Flows
Years ended December 31, 1997 and 1996
1997 1996
Cash flows from operating activities:
Net income (loss) $(11,318,320) $ 1,241,954
Depreciation and amortization 7,567,189 -
Changes in assets and liabilities:
Receivables (3,061,917) 8,286
Inventories (473,409) -
Prepayments and other 2,834 (72,399)
Preopening costs 1,366,429 -
Accounts payable and accrued expenses 2,414,112 (53,403)
Due to partner 2,695,056 -
------------- ------------
Net cash (used in) provided by
operating activities (808,026) 1,124,438
------------- ------------
Cash flows from investing activities
Fixed asset expenditures (60,812,378) (102,218,122)
Increase in other assets (2,430,082) (1,030,159)
Expenditures for other assets - (681,751)
------------- -------------
Net cash used in investing activities (63,242,460) (103,930,032)
------------- -------------
Cash flows from financing activities:
Capital contributions 54,005,272 112,800,000
Payment of note payable - ( 3,700,000)
------------- -------------
Net cash provided by financing activities 54,005,272 109,100,000
------------- -------------
Net increase (decrease) in cash and
cash equivalents (10,045,214) 6,294,406
Cash and cash equivalents, beginning of year 20,289,463 13,995,057
------------- -------------
Cash and cash equivalents, end of year $ 10,244,249 $ 20,289,463
============= =============
See accompanying notes to financial statements.
RIVERSIDE JOINT VENTURE
Notes to Financial Statements
December 31, 1997 and 1996
(1) Organization
Riverside Joint Venture, a Missouri general partnership
(the Partnership), was formed on November 2, 1995 for the
purpose of constructing, developing and owning Riverport
Casino Center which includes a hotel, four riverboat
casinos, restaurants and other entertainment offerings. The
Partnership was considered a development stage enterprise
prior to the commencement of operations in March 1997.
The Partnership acquired certain rights, title and
interest under all agreements, plans, drawings and studies
relating to the development from its general partners,
Harrah's Maryland Heights Corporation (HMHC) and Players MH,
LP (PMHLP).
Leasing Arrangements and Operation of the Riverboat Casinos
HMHC is a wholly-owned indirect subsidiary of Harrah's
Entertainment Inc. (Harrah's). PMHLP is a wholly-owned
subsidiary of Players International, Inc. (Players). Each
parent has guaranteed certain obligations of each partner.
Harrah's, through a subsidiary, owns the land upon which the
facility known as Riverport Casino Center is located, and
has leased the land to the Partnership under a Ground Lease.
Harrah's subsidiary and PMHLP sublease space from the
Partnership for casino, specialty restaurant and office
purposes. Each sub-tenant pays the Partnership 50% of the
Partnership's monthly operating losses in rent for its
subleased premises. PMHLP is additionally obligated to pay
the Partnership a percentage of gaming revenues as
percentage rent. The Partnership in turn pays this
percentage rent to Harrah's under the Ground Lease.
The Partnership is not responsible for and does not
assume any liability in connection with the activities and
operations of the subleased premises.
A subsidiary of Harrah's manages the operations of the
hotel, restaurants and parking operations for the
Partnership at Riverport Casino Center pursuant to a
management contract. PMHLP manages the operation of retail
shops for the Partnership at Riverport Casino Center
pursuant to a management contract.
(2) Summary of Significant Accounting Policies
(a) Basis of Accounting
The accompanying financial statements have been
prepared on the accrual basis of accounting. During
1996, the Partnership financial statements were
prepared as a development stage enterprise.
(b) Cash and Cash Equivalents
For purposes of the statement of cash flows, the
Partnership considers all highly liquid investments
purchased with an original term to maturity of three
months or less to be cash equivalents.
(c) Preopening Costs
Preopening costs, representing primarily salaries and
wages, advertising, training and other costs which were
incurred prior to the opening of the Riverport Casino
Center, were deferred as incurred and expensed upon the
opening of the facility.
(d) Fixed Assets
Fixed assets are stated at cost and are depreciated
using the straight-line method over their estimated
useful lives.
(e) Income Taxes
No provision for state or federal income taxes has been
made as the liability for such taxes is that of the
individual partners rather than the Partnership.
(f) Inventories
Inventories are stated at the lower of cost or market
and consist primarily of food, beverage and operating
supplies.
(g) Revenue Recognition
Food and beverage and lodging revenues include
aggregate amounts generated by each department.
(h) Promotional Allowances
Promotional allowances consist principally of the
retail value of complimentary food and beverage,
lodging and entertainment provided to patrons of
Riverport Casino Center. The estimated costs of
providing such complimentary services are classified as
direct operating expenses.
(i) Management Estimates
In preparing the financial statements, management is
required to make estimates and assumptions that affect
the reported balances of assets and liabilities as of
the date of the statements of financial position and
income and expenses for the period. Actual results
could differ significantly from these estimates.
(j) Reclassifications
Certain 1996 amounts have been reclassified to conform
to the 1997 presentation.
(3) Partnership Agreement
The ownership percentage of each partner is 50%. In
accordance with the partnership agreement and the first
amendment to it dated June 28, 1996, each partner made an
initial cash contribution of $20,000,000 and have made
additional cash contributions pursuant to a Cost Budget.
Each partner also contributed an agreed upon amount of pre-
development costs consisting of land, lock-up costs for
negative easements, land covenant payments and design and
construction fees. These contributed assets were written-
down to their estimated fair value and the resulting losses
were allocated to the contributing partner based upon the
terms of the agreement.
The agreement gives each partner a right of first
refusal to purchase the other partner's property subject to
special rules regarding foreclosure sales and bankruptcy.
Players has the additional right to buy out the Management
Agreement at its fair value if Players elects not to
purchase all of Harrah's property. Harrah's has an
additional right for seven years (expiring November 3, 2002)
to acquire Players' property upon changes in control of
Players and also the right to buy out Partnership land upon
termination of the Ground Lease. There are several remedies
for defaults which include enforcement against each partner,
enforcement against parental guaranties and appraisal buy-
outs of the other partner's interest.
(4) Other Assets
Included in other assets at December 31, 1997 is
approximately $5,673,951 for restrictive covenants which
were assigned to the Partnership from HMHC as part of the
Partnership Agreement. These covenants are to be amortized
over a 30-year period commencing with the opening date of
the Riverport Casino Center. The Partnership is required to
pay $650,000 a year through July 1998 as part of assuming
the covenants from HMHC. These future payments are included
in other assets and accrued expenses at December 31, 1997 at
their present value. The Partnership has pledged a
$1,300,000 certificate of deposit to Riverport Farm Partners
as collateral for future payments.
(5) Commitments and Contingencies
In order to develop and construct Riverport Casino
Center the Partnership has entered into agreements with
several contractors, engineering and architectural firms
which are provided for in the Cost Budget. The Partnership
has also entered into an agreement with the Howard Bend
Levee District to fund levee improvements and with the City
of Maryland Heights to fund certain improvements to the
Earth City Expressway. Obligations incurred during the
construction period are included in the Cost Budget and
funded via each Partner's capital contribution. The
specific commitments under these two agreements, which are
not currently funded through partner's capital contributions
consist of:
Beneficiary Commitment
City of Maryland Heights The Partnership conditionally
agreed to loan $2,250,000,
purchase bonds, and guarantee
for five years after issuance,
gaming tax revenues to the City
which would be used to fund the
City's debt service for bonds
issued for certain improvements
to the Earth City Expressway.
However, the City did not
satisfy the conditions prior to
an established deadline. The
City has not officially released
Riverside Joint Venture from
these obligations.
Howard Bend Levee District
The Partnership has agreed to pay the Howard Bend Levee
District (the District):
(i) following the opening
of the riverboat casinos, up to
$1,750,000 to fund off-site
levee improvements; and
(ii) following the issuance
of bonds to fund design of a
second phase of levee
improvements ("Phase II") and if
the District determines to
proceed with such improvements
without bonds, beginning
December 31, 1997 between
$600,000 and $700,000 per year
to fund debt service or bonds or
costs of Phase II improvements,
as the case may be.
(6) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107
(SFAS 107), Disclosures about Fair Value of Financial
Instruments, requires entities to disclose the fair value of
all financial assets and liabilities for which it is
practicable to estimate. Value is defined in SFAS 107 as
the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a
forced or liquidation sale. The Partnership believes the
carrying amount of such financial assets and liabilities
approximate their fair value at December 31, 1997 and 1996.
(7) Pending Litigation
As permitted by current state law and approved in
advance by the Missouri Gaming Commission, the casinos at
Riverport Casino Center are located in a basin within 1,000
feet of the Missouri River. A lawsuit was filed in 1996,
after construction of the Riverport Casino Center was
commenced, seeking to invalidate the provision of the law
that permitted casinos to be located in such basins. On
November 25, 1997, the Missouri Supreme Court ruled that
casinos could be located in basins only if such casinos are
located directly upon the waters of the Missouri River.
Following this decision, the Missouri Gaming Commission
initiated disciplinary proceedings against the Riverport
Casino Center casinos and all other casinos in Missouri
similarly situated. These proceedings will result in
hearings to determine whether or not the casinos at
Riverport Casino Center are in compliance with the law as
interpreted by the Missouri Supreme Court. In the meantime,
Players and Harrah's have filed suit seeking declaratory
judgment that their gaming facilities do in fact meet the
state constitutional and statutory mandates as interpreted
by the Missouri Supreme Court. In addition, Players,
Harrah's and other casino companies, have initiated a
petition referendum that will appear on the ballot in
Missouri at the general election in November, 1998, at which
time the voters of Missouri will determine whether to amend
the state's constitution so as to expressly permit the
location of the casinos in basins as currently designed.
Management is unable to predict at this time the final
outcome of the matter, or whether that outcome could
materially affect the Partnership's results of operations,
cash flows or financial position.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Players International, Inc.
Date: August 12, 1998 By /s/ Peter J. Aranow
Peter J. Aranow
Executive Vice President Finance,
Chief Financial Officer, Treasurer and Secretary
(Principal Financial Officer)
24
PH02/243518.1
Exhibit 10.66
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of October 1, 1996 between Players
International, Inc. (together with its successors or assigns as
permitted under this Agreement, the "Company"), and Peter J.
Aranow ("Executive").
W I T N E S S E T H:
The Company and Executive entered into an Employment
Agreement as of May 26, 1993 (the "Agreement"). The parties now
desire to amend and restate the Agreement to reflect Executive's
current position, compensation and other arrangements with the
Company. Therefore, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, the Company and Executive (individually a "Party"
and together the "Parties") agree that the Agreement is amended
and restated as of October 1, 1996, to read as follows:
1. Definitions
(a) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(b) "Base Compensation" shall mean the compensation
provided for in Paragraph 4, subject to such increases as may be
approved by the Board from time to time.
(c) "Beneficial Owner" of any securities shall mean:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of securities tendered pursuant
to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for payment, purchase or exchange;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including without limitation
pursuant to any agreement, arrangement or understanding, whether
or not in writing; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of any security under this
subparagraph (ii) as a result of an oral or written agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) where voting securities are beneficially
owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii)
above) or disposing of any voting securities of the Company;
provided, however, that nothing in this Paragraph 1(c) shall
cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of any securities
acquired through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days
after the date of such acquisition.
(d) "Board" shall mean the Board of Directors of the
Company.
(e) "Business Day" shall mean any day other than a
weekend, a federal or state holiday or a vacation day for
Executive.
(f) "Cause" shall mean (i) Executive is convicted of a
felony involving moral turpitude; (ii) Executive uses alcohol or
any unlawful controlled substance to an extent that it interferes
on a continuing and material basis with the performance of his
duties under the Agreement; (iii) Executive engages in the
willful, unauthorized disclosure of Confidential Information, as
defined in Paragraph 10(c), concerning the Company or any
Subsidiary, unless such disclosure was (A) believed in good faith
by Executive to be appropriate in the course of properly carrying
out his duties under the Agreement, or (B) required by an order
of a court having jurisdiction over the subject matter or a
summons, subpoena or order in the nature thereof of any
legislative body (including any committee thereof) or any
governmental or administrative agency; (iv) Executive, other than
in the course of properly carrying out his duties under the
Agreement, performs services for any other corporation or person
that competes with the Company or any Subsidiary; or (v)
Executive, in carrying out his duties under the Agreement,
engages in willful neglect or willful misconduct resulting, or
reasonably likely to result, in either case, in material economic
harm to the Company, unless such act, or failure to act, resulted
from Executive's reasonable belief that such act or failure to
act was in the best interests of the Company.
(g) "Change in Control" shall mean the occurrence of
any one of the following events:
(i) any Person (except the Griffin Group or its
Affiliates and Associates, Company management as of the Effective
Date and their Affiliates and Associates or the Company or any
employee benefit plan of the Company or of any Affiliate, any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such employee benefit
plan), together with all Affiliates and Associates of such
Person, shall become the Beneficial Owner in the aggregate of 30%
or more of the Voting Stock then outstanding; provided, however,
that no "Change of Control" shall be deemed to occur during any
period in which any such Person, and its Affiliates and
Associates, are bound by the terms of a standstill agreement
under which such parties have agreed not to acquire more than 30%
of the Voting Stock then outstanding or to solicit proxies;
(ii) consummation by the Company of a reorganization,
merger or consolidation (a "Business Combination"), in each case,
with respect to which all or substantially all of the individuals
and entities who were the respective Beneficial Owners of the
Voting Stock outstanding immediately prior to such Business
Combination do not, following such Business Combination,
Beneficially Own, directly or indirectly, more than 50% of the
then outstanding shares of voting stock of the corporation
resulting from such Business Combination in substantially the
same proportion as their ownership immediately prior to such
Business Combination of the outstanding Voting Stock;
(iii) consummation of a complete liquidation or
dissolution of the Company;
(iv) sale or other disposition of all or substantially
all of the assets of the Company other than to a corporation with
respect to which, following such sale or disposition, more than
50% of the then outstanding shares of voting stock is then owned
beneficially, directly or indirectly, by all or substantially all
of the individuals and entities who were the Beneficial Owners,
respectively, of the outstanding Voting Stock immediately prior
to such sale or disposition in substantially the same proportion
as their ownership of the outstanding Voting Stock immediately
prior to such sale or disposition;
(v) individuals who, as of the beginning of any twenty-
four month period, constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a majority of the
Board, provided that any individual becoming a director
subsequent to the beginning of such period whose election or
nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election
contest relating to the election of members of the Board (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act); or
(vi) a "change of control" as defined in the form of
indenture governing any indebtedness of the Company shall have
occurred.
(h) "Constructive Termination Without Cause" shall
mean that:
(i) without Executive's prior written consent, one or
more of the following events occurs:
(A) Executive is removed from the position of
Executive Vice President - Finance and Treasurer of the Company
for any reason other than the termination of his employment;
(B) Executive suffers a material diminution in
the authorities, duties, reporting relationships or
responsibilities as specified in Paragraph 3(a) or the assignment
to him of duties and responsibilities materially inconsistent
with those specified in Paragraph 3(a);
(C) Executive's Base Compensation as provided for
in Paragraph 4 is decreased by the Company, or his benefits under
any material employee benefit plan or program of the Company or
his incentive or equity opportunity under any material incentive
or equity program of the Company is or are reduced, after taking
into account the discretion of the Board to determine the level
at which Executive participates in any performance compensation
program as provided in Paragraph 4, on a basis not shared in
common with other senior executives of the Company as a group;
(D) the Company fails to obtain a written
agreement from any successor of the Company to assume and perform
the Agreement; or
(E) following a Change of Control, the Company
moves its principal executive offices more than 50 miles from
Atlantic City, New Jersey, or such other place where the
Company's principal executive offices are located immediately
prior to the Change of Control; and
(ii) within 90 days of learning of the occurrence
of such event, Executive terminates his employment with the
Company.
(i) "Disability" shall mean Executive's inability, for
a period of six consecutive months, to render substantially the
services provided for in Paragraph 3(a) by reason of permanent
mental or physical disability, whether resulting from illness,
accident or otherwise. In the case of a dispute as to whether
Executive has incurred a Disability, Executive agrees to submit
to a physical examination by two physicians, one selected by
Executive and the other by the Company and, in the event they do
not agree, to a physical examination by an additional physician
selected by the first two physicians whose decision shall be
final and binding on both parties.
(j) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(k) "Subsidiary" shall mean any corporation in which
the Company owns 50% or more of the Voting Stock or any other
venture in which it owns 50% or more of the equity.
(l) "Term of Employment" shall mean the two-year
period specified in Paragraph 2.
(m) "Termination by the Company Due to Loss of
License" shall mean a termination of Executive's employment by
the Company following a termination of Executive's license to
take part in the casino and gaming business in any state in which
the Company conducts business (other than a termination of such
license (i) due to Executive's death or Disability or (ii) based
upon facts that constitute Cause within the meaning of this
Agreement).
(n) "Termination Upon a Change in Control" shall mean
that following a Change in Control (i) the Company terminates
Executive's employment without Cause or (ii) there is a
Constructive Termination Without Cause.
(o) "Voting Stock" shall mean capital stock of any
class or classes having general voting power under ordinary
circumstances, in the absence of contingencies, to elect the
directors of a corporation.
2. Term of Employment.
(a) The Company hereby continues to employ Executive,
and Executive hereby accepts such continuation of employment, in
the position and with the duties and responsibilities as set
forth in Paragraph 3 for the Term of Employment, subject to the
terms and conditions of the Agreement.
(b) The Term of Employment shall commence on the date
hereof and shall, unless sooner terminated as provided in
Paragraph 9, terminate upon the close of business on
September 30, 1998.
3. Position, Duties and Authorities.
(a) During the Term of Employment, Executive shall be
employed as Executive Vice President - Finance and Treasurer of
the Company and his duties, responsibilities and authorities
shall be as set forth on Exhibit A. Executive shall report
directly to and be subject to supervision by the Board and the
Company's Chief Executive Officer.
(b) Anything herein to the contrary notwithstanding,
nothing shall preclude Executive from engaging in charitable,
community and business affairs, managing his personal
investments and serving as a member of boards of directors so
long as such activities do not materially interfere with his
carrying out his duties and responsibilities under the Agreement.
(c) During the term of Employment, Executive shall
perform his services from an office in Atlantic City, New Jersey
and at such other offices of the Company as may be required by
his duties; provided, however, that Executive shall not be
required to move his home from Hastings on Hudson, New York.
4. Base Compensation. During the Term of Employment,
Executive shall be paid by the Company Base Compensation payable
no less frequently than in equal semi-monthly installments at an
annualized rate of no less than $300,000 per annum for the period
through March 31, 1997, and $250,000 for the balance of the Term
of Employment. The Company shall be entitled to make proper
withholdings from Executive's Base Compensation (and all other
payments of compensation under this Agreement) as required by
law.
5. Performance Bonus. The Company may, but is not
required, to adopt a bonus or short term performance compensation
program for senior level executives. In the event that such a
program is adopted, Executive shall participate in such program
but the Board shall determine Executive's level of participation
for each year of the Term of Employment in its sole discretion;
provided, however, that the Board shall have the discretion to
grant additional individual bonus compensation in excess of the
foregoing general performance bonus program to Executive or any
other executive or the Company in recognition of performance
achievements particular to any of them.
6. Stock Options and Stock Grant. The Company may, but is
not required, to grant to Executive shares of Voting Stock as
well as stock options to purchase shares of Voting Stock subject
to restrictions determined by the Board, in either event in the
sole discretion of the Board, for any year during the Term of
Employment, which shall be made pursuant to an equity
compensation plan approved by the Board generally for senior
level executives of the Company; provided, however, that the
Board shall have the discretion to grant additional options or
restricted shares to Executive or any other executive or the
Company in recognition of performance achievements particular to
any of them. The Company shall use its best effort to maintain
any and all registration statements for any shares subject to
option to permit such shares to be freely tradeable upon
exercise.
7. Employee Benefit Programs. During the Term of
Employment, Executive and his spouse and dependents shall be
entitled, at the Company's expense, to the employee welfare
benefit and retirement benefit coverages provided to Executive
and his spouse and dependents on the date of this Agreement as
listed on Exhibit B hereto and incorporated herein (the "Employee
Benefit Programs") which shall be subject to review by the
Compensation Committee of the Board; provided, however, that the
foregoing shall not prohibit the Company from amending or
terminating any such Employee Benefit Program so long as
Executive and his spouse and dependents otherwise receive the
required levels of coverage in the aggregate.
8. Business Expenses Reimbursement. During the Term of
Employment, Executive shall be entitled to receive reimbursement
by the Company, upon submission of adequate documentation, for
all reasonable, out-of-pocket ordinary and necessary business
expenses incurred by him in performing services under the
Agreement. In addition, any reasonable legal fees and expenses
incurred in connection with the preparation and negotiation of
the Agreement or qualification as a licensee in any jurisdiction
shall be paid by the Company.
9. Termination of Employment.
(a) Termination Due to Death or Disability. In the
event of the termination of Executive's employment under the
Agreement due to his death or Disability, Executive or his legal
representatives as the case may be, shall be entitled to:
(i) (A) in the case of death, continued Base
Compensation at the rate in effect at the time of his death for a
period of 3 months following the month in which such termination
of employment due to death occurs, or (B) in the case of
Disability, the disability benefit available under and only to
the extent of the insurance maintained as provided in Paragraph
7;
(ii) any performance or special incentive bonus earned
but not yet paid;
(iii) a pro rata portion of any applicable
performance bonus for the year in
which his employment terminates due to death or Disability based
on performance of the Company for the year during which such
termination occurs or, if performance results are not available,
based on the performance bonus, if any, paid to Executive for the
prior year; and
(iv) any other compensation and benefits to which he or
his legal representatives or beneficiaries may be entitled under
applicable plans, programs and agreements of the Company,
including, without limitation, life insurance benefits as
provided in Paragraph 7.
(b) Termination by the Company for Cause. Within 60
days of knowing, or having reasonable basis for knowing, of an
event constituting Cause the Company may give Executive written
notice of its intention to terminate him for Cause, specifying in
such notice the event forming the basis for Cause. The preceding
sentence notwithstanding, Executive's employment shall not be
deemed to have been terminated for Cause unless the Company has
given or delivered to Executive (1) reasonable notice setting
forth the reasons for the Company's intention to terminate
Executive's employment for Cause; (2) if the written notice is of
an event constituting Cause under clause (ii) or (iv) of
Paragraph l(f) and if the event is capable of being cured,
Executive shall have 10 Business Days following actual receipt of
such notice in which to cure; (3) a reasonable opportunity at any
time during the 30-day period after Executive's receipt of such
notice, for Executive, together with his counsel, to be heard
before the Board, and (4) a second written notice from the
Company stating that, in the good faith opinion of not less than
a majority of the entire membership of the Board, Executive was
guilty of the conduct giving rise to termination for Cause;
provided, however, that the Company may, in its sole discretion,
suspend Executive from performance of his duties on the date of
delivery of such notice and such date shall be the effective date
of any termination under this Paragraph. In the event
Executive's employment is terminated by the Company for Cause,
Executive shall be entitled to:
(i) unpaid Base Compensation earned or accrued at the
rate in effect at the time of his termination through the date of
termination of his employment;
(ii) any performance or special incentive bonus earned
but not yet paid;
(iii) reimbursement for expenses incurred but not
yet reimbursed by the Company pursuant to Paragraph 8; and
(iv) any other compensation and benefits to which he
may be entitled under applicable plans, programs and agreements
of the Company.
Executive's entitlement to the foregoing shall be without
prejudice to the right of the Company for any damages to which it
may be entitled as a result of such Cause.
(c) Termination Without Cause; Constructive
Termination Without Cause; Expiration of the Agreement. In the
event Executive's employment is terminated by the Company without
Cause (which shall not include a termination pursuant to
Paragraph 9(a) or 9(d)) or in the event of a Constructive
Termination Without Cause, or in the event this Agreement expires
by its terms on the second anniversary of the date hereof or the
expiration date of any renewal and the Company has not, at least
six months prior to such date, given Executive written notice of
its intention not to renew the Agreement ("Non-Renewal Notice"),
Executive, upon executing and not revoking a release of the
Company as to all matters arising in the course of his employment
by the Company and the termination thereof, in the form attached
hereto as Exhibit C, shall be entitled to receive:
(i) unpaid Base Compensation earned or accrued through
his date of termination and continued Base Compensation payments,
at the rate in effect at the time of his termination, for (A)
solely in the case of expiration of this Agreement by its terms
on the second anniversary, a number of months equal to six months
minus the number of months of notice of Non-Renewal actually
provided to Executive or (B) in all other cases to which this
Paragraph 9(c) is applicable, a period of 12 months following
termination of his employment or through the end of the Term of
Employment, whichever is longer, payable, at Executive's option,
either (1) over such 12 months or the remaining Term of
Employment, as the case may be, or (2) in a lump-sum payment
promptly following termination of Executive's employment equal to
the then present value using a discount rate per annum determined
by reference to the discount rate then published by the Pension
Benefit Guaranty Corporation for determining the value of
immediate annuities (the "Present Value") of the remaining Base
Compensation due Executive through the end of such 12 months or
the remaining Term of Employment;
(ii) except in a case of a termination of employment by
reason of expiration of this Agreement on the second anniversary
of the date hereof, continued performance bonuses for a period of
12 months following termination of his employment or through the
end of the Term of Employment, whichever is longer, in amounts
determined under the then applicable program of the Company to
the extent then applicable to Executive, or, to the extent such
amounts are not reasonably determinable, in amounts based on
performance bonuses paid to Executive for the last complete
fiscal year of the Company ended prior to the completion of such
12-month period;
(iii) any performance or special incentive bonus
earned but not yet paid;
(iv) reimbursement for expenses incurred but not yet
reimbursed by the Company pursuant to Paragraph 8;
(v) the immediate vesting of all stock options
previously granted to Executive, notwithstanding the terms of any
such grant to the contrary, with and the ability to exercise any
such options for 12 months following the date of termination but
in no event after the expiration of the stated option term and
provided that this clause shall not apply to the Non-Qualified
Stock Option and Stock Appreciation Right granted to Executive on
September 19, 1996; and
(vi) any other compensation and benefits to which he
may be entitled under applicable plans, programs and agreements
of the Company and the continuation of all Employee Benefit
Programs provided under Paragraph 7 during the period for which
Executive is to receive payments under clause (i) above
(irrespective of the fact that such payments are paid in a lump
sum); provided, however, that in the event the Company is
precluded from providing coverage under any such program by
applicable law or regulation it may choose to provide Executive
with a payment equal to the cost of such coverage without regard
to tax effect.
(d) Termination Upon a Change in Control. In the
event a Termination Upon a Change in Control occurs, or in the
event Executive is terminated under subparagraph (c) within six
months prior to the occurrence of a Change in Control, Executive
shall be entitled to receive (taking into account any benefits
provided under subparagraph (c)), promptly following his
termination of employment:
(i) unpaid Base Compensation earned or accrued through
his date of termination and a lump-sum payment equal to the
Present Value of Executive's Base Compensation that would be due
him for a period of 36 months following termination of his
employment, determined on the basis of the average of the Base
Compensation paid to Executive for the 36 months preceding his
termination;
(ii) a lump-sum payment equal to the Present Value of
the aggregate performance bonus amounts he received, if any, for
the period of 36 months preceding his termination;
(iii) any performance or special incentive bonus
earned but not yet paid;
(iv) reimbursement for expenses incurred but not yet
reimbursed by the Company pursuant to Paragraph 8;
(v) the immediate vesting of all stock options
previously granted to Executive, notwithstanding the terms of any
such grant to the contrary, with the ability to exercise any such
options for 12 months following the date of termination but in no
event after the expiration of the stated option term; and
(vi) any other compensation and benefits to which he
may be entitled under applicable plans, programs and agreements
of the Company provided under Paragraph 7 during the period for
which Executive is to receive payments under clause (i) above
(irrespective of the fact that such payments are paid in a lump
sum); provided, however, that in the event the Company is
precluded from providing coverage under any such program by
applicable law or regulation it may choose to provide Executive
with a payment equal to the cost of such coverage without regard
to tax effect.
Notwithstanding the foregoing, in the event that it shall be
determined that any payment or distribution by the Company to or
for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess
parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and that
it would be economically advantageous to the Company to reduce
the Payment to avoid or reduce the limitation of the Company's
federal income tax deduction under Section 280G of the Code, the
aggregate present value of amounts payable or distributable to or
for the benefit of Executive pursuant to this Agreement (such
payments or distributions pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount"
shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any
Payment to be subject to the limitation of deduction under
Section 280G of the Code. For purposes of this subparagraph (d),
"present value" shall be determined in accordance with Section
280G(d)(4) of the Code. All determinations to be made under this
Paragraph 9(d) shall be made by the Company's independent public
accountant immediately prior to the Change of Control (the
"Accounting Firm"), which firm shall provide its determinations
and any supporting calculations both to the Company and Executive
within 10 days of the termination date. Any such determination
by the Accounting Firm shall be binding upon the Company and
Executive. Executive shall in his sole discretion determine
which and how much of the Agreement Payments shall be eliminated
or reduced consistent with the requirements of this Paragraph
9(d). Within five days after Executive's determination, the
Company shall pay (or cause to be paid) or distribute (or cause
to be distributed) to or for the benefit of Executive such
amounts as are then due to Executive under this Agreement. All
of the fees and expenses of the Accounting Firm in performing the
determinations referred to above shall be borne solely by the
Company. The Company agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and
expenses resulting from or relating to its determinations
pursuant to this Paragraph, except for claims, damages or
expenses resulting from the gross negligence or willful
misconduct of the Accounting Firm.
(e) Termination of the Company Due to Loss of License.
In the event of a Termination by the Company Due to Loss of
License, Executive shall be entitled to:
(i) unpaid Base Compensation earned or accrued through
the date of termination and continued Base Compensation payments
at the rate in effect at the time of termination, for six months;
(ii) any performance bonus earned but not yet paid;
(iii) reimbursement for expenses incurred but not
yet reimbursed by the Company pursuant to Paragraph 8; and
(iv) any other compensation and benefits to which he
may be entitled under applicable plans, programs and agreements
of the Company.
Notwithstanding the above, if Executive's Loss of License was not
the result of any activity that Executive knew, or should have
known, would result in his Loss of License, then the Base
Compensation continuation provided for in subparagraph (i) above
shall be for 12 months rather than six months.
(f) No Mitigation; No Offset. In the event of any
termination of Executive's employment under the Agreement, he
shall be under no obligation to seek other employment, and there
shall be no offset against amounts due him under the Agreement on
account of any remuneration attributable to any subsequent
employment that he may obtain.
(g) Nature of Payments. Any amounts due Executive
under the Agreement in the event of any termination of his
employment with the Company are in the nature of severance
payments, or liquidated damages which contemplate both direct
damages and consequential damages that be may suffer as a result
of the termination of his employment, or both, and are not in the
nature of a penalty.
10. Covenant Not to Compete; Covenants to Protect
Confidential Information.
(a) If Executive voluntarily terminates his employment
with the Company, or if the Company terminates the employment of
Executive for Cause, Executive shall not for a one-year period
engage in competition with the Company within the meaning of
Paragraph 10(b). If Executive is terminated on any other basis
resulting in payments to Executive (irrespective of the fact that
such payments are paid in a lump sum) with respect to a period
after such termination (the "Post Termination Payment Period"),
Executive shall not engage in such competition for a period equal
to the Post Termination Payment Period. If Executive is in
breach of this Paragraph 10(a), since a remedy at law will not
suffice to remedy the damage suffered thereby, the Company shall
be entitled to specific performance.
(b) Executive shall be engaging in competition with
the Company if he is engaged in the gaming business within the
primary geographic market area of any location in which the
Company is engaging in the gaming business at the time of the
termination of Executive's employment, whether as an employee,
consultant, partner, principal, agent, representative or
stockholder or in any other corporate or representative capacity,
so long as the Company is engaged in the gaming business in the
location in question. The Company agrees that it is not engaged
in the gaming business in Atlantic City, New Jersey on the date
of this Agreement. The foregoing restrictions shall not be
construed to prohibit the ownership by Executive of less than
five percent (5 %) of any class of securities of any corporation
which is engaged in any of the foregoing businesses having a
class of securities registered pursuant to 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.
(c) Executive shall not, during the Term of Employment
or thereafter, without the prior written consent of the Company,
divulge, publish or otherwise disclose to any other person any
Confidential Information regarding the Company or any Subsidiary
except in the course of carrying out his responsibilities on
behalf of the Company (e.g., providing information to the
Company's attorneys, accountants, bankers, etc.) or if required
to do so pursuant to the order of a court having jurisdiction
over the subject matter or a summons, subpoena or order in the
nature thereof of any legislative body (including any committee
thereof) or any governmental or administrative agency. For this
purpose, Confidential Information shall include, but not be
limited to, the Company's financial, real estate, marketing and
promotional plans and strategies. Confidential Information does
not include information that becomes available to the public
other than through a breach of the Agreement on the part of
Executive.
(d) Executive shall not during the term of Employment
or thereafter, without the prior written consent of a Subject
Party, as hereafter defined, divulge, publish, or otherwise
disclose to any other person any Confidential Information
regarding a Subject Party except in the course of carrying out
responsibilities on behalf of Subject Party (e.g., providing
information to advisors) or if required to do so under
circumstances as described in Paragraph 10(c) in connection with
disclosure of Confidential Information about the Company. For
this purpose, Confidential Information about a Subject Party
shall include non-public financial information about a Subject
Party including non-public information regarding his business and
investment activities. Confidential Information does not include
information that becomes available to the public other than
through a breach of the Agreement on the part of Executive.
Executive further agrees he will not during the Term of
Employment or thereafter publish any book or article about, or
disclose in any public forum, his personal experiences with, or
other personal information about, a Subject Party. Affiliates of
a Subject Party or their respective heirs, successors and assigns
are expressly intended as third party beneficiaries of the
provisions of this Paragraph 10(d) and shall be entitled to
enforce the provisions hereof independent of the Company by
injunction or otherwise and to any damages suffered by reason of
any breach of this Paragraph 10(d). For purposes hereof, Subject
Party shall be Mr. Merv Griffin.
11. Equitable Relief.
(a) Executive acknowledges and agrees that the
restrictions contained in Paragraph 10 are reasonable and
necessary to protect and preserve the legitimate interests,
properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence
of such restrictions and that irreparable injury will be suffered
by the Company should Executive breach any of the provisions of
that Paragraph. Executive 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 further acknowledges and agrees that a
breach of any of the restrictions in Paragraph 10 cannot be
adequately compensated by monetary damages. Executive agrees
that the Company shall be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual
damages, as well as an equitable accounting of all earnings,
profits and other benefits arising from any violation of
Paragraph 10, which rights shall be cumulative and in addition to
any other rights or remedies to which the Company may be
entitled. In the event that any of the provisions of this
Paragraph should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable
law in any jurisdiction, it is the intention of the parties that
the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable
law, that such amendment shall apply only within the jurisdiction
of the court that made such adjudication and that the provision
otherwise be enforced to the maximum extent permitted by law.
(c) Executive irrevocably and unconditionally (i)
agrees that any suit, action or other legal proceeding arising
out of Paragraph 10, including without limitation, any action
commenced by the Company for preliminary and permanent injunctive
relief and 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 City, 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 Paragraph 21.
12. Indemnification.
(a) The Company shall indemnify Executive to the
fullest extent permitted by Delaware law in effect as of the date
hereof against all costs, expenses, liabilities and losses
(including, without limitation, attorneys' fees, judgments,
fines, penalties, ERISA excise taxes and amounts paid in
settlement) reasonably incurred by Executive in connection with a
Proceeding and this obligation shall survive the termination of
this Agreement with respect to matters arising during the Term of
Employment. For the purposes of this Paragraph 12, "Term of
Employment" shall mean the period commencing May 26, 1993, and
ending on the date specified in Paragraph 2 and a "Proceeding"
shall mean any action, suit or proceeding, whether civil,
criminal, administrative or investigative, in which Executive is
made, or is threatened to be made, a party to, or a witness in,
such action, suit or proceeding by reason of the fact that he is
or was an officer, director or employee of the Company or is or
was serving as an officer, director, member, employee, trustee or
agent of any other entity at the request of the Company.
(b) The Company shall advance to Executive all
reasonable costs and expenses incurred by him in connection with
a Proceeding within 20 days after receipt by the Company of a
written request for such advance. Such request shall include an
itemized list of the costs and expenses and an undertaking by
Executive to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be
indemnified against such costs and expenses.
(c) Executive shall not be entitled to indemnification
under this Paragraph 12 unless he meets the standard of conduct
specified in the Delaware General Corporation Law.
Notwithstanding the foregoing, to the extent permitted by law
neither Section 145(d) of the Delaware General Corporation Law
nor any similar provision shall apply to indemnification under
this Paragraph 12, so that if Executive in fact meets the
applicable standard of conduct, he shall be entitled to such
indemnification whether or not the Company (whether by the board
of directors, the shareholders, independent legal counsel or
other party) determines that indemnification is proper because he
has met such applicable standard of conduct. Neither the failure
of the Company to have made such a determination prior to the
commencement by Executive of any suit or arbitration proceeding
seeking indemnification, nor a determination by the Company that
he has not met such applicable standard of conduct, shall create
a presumption that he has not met the applicable standard of
conduct.
(d) The Company shall not settle any Proceeding or
claim in any manner which would impose on Executive any penalty
or limitation without his prior written consent. Neither the
Company nor Executive will unreasonably withhold its or his
consent to any proposed settlement.
13. Assignability; Binding Nature. This Agreement shall be
binding upon and inure to the benefit of the Parties (and in the
case of Paragraph 10(d), to the benefit of the Subject Party) and
their respective successors, heirs and assigns. No rights or
obligations of the Company under the Agreement may be assigned or
transferred by Executive or the Company except that (a) such
rights or obligations of the Company may be assigned or
transferred pursuant to a merger or consolidation in which the
Company is not the continuing entity, or the sale or liquidation
of all or substantially all of the assets of the Company,
provided that the assignee or transferee is the successor to all
or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and
duties of the Company, as contained in the Agreement, either
contractually or as a matter of law, and (b) such obligations of
the Company may be transferred by Executive by will or pursuant
to the laws of descent or distribution or pursuant to any express
transfer provisions in an instrument granting Executive a stock
option. The Company shall take all reasonable legal action
necessary to effect such assignment and assumption of the
Company's liabilities, obligations and duties under the Agreement
in circumstances clause (a) of the preceding sentence.
14. Representation. The Company and Executive respectively
represent and warrant to each other that, subject to any approval
that may be necessary from any pertinent regulatory authority,
each respectively is fully authorized and empowered to enter into
the Agreement and that its or his entering into the Agreement and
the performance of its or his respective obligations under the
Agreement will not violate any agreement between the Company or
Executive respectively and any other person, firm or organization
or any law or governmental regulation.
15. Entire Agreement. The Agreement contains the entire
agreement between the Parties concerning the subject matter
hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or
oral, between the Parties with respect thereto.
16. Amendment or Waiver. The Agreement cannot be changed,
modified or amended without the consent in writing of both
Executive and the Company. No waiver by either Party at any time
of any breach by the other Party of any condition or provision of
the Agreement shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or at any prior or subsequent
time. Any waiver must be in writing and signed by Executive or
an authorized officer of the Company, as the case may be.
17. Severability. In the event that any provision or
portion of the Agreement shall be determined to be invalid or
unenforceable for any reason, in whole or in part, the remaining
provisions of the Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted
by law.
18. Survivorship. The respective rights and obligations of
the Parties hereunder shall survive any termination of the
Agreement to the extent necessary to the intended preservation of
such rights and obligations.
19. Governing Law. The Agreement shall be governed by and
construed and interpreted in accordance with the laws of New
Jersey without reference to principles of conflict of laws.
20. Settlement of Disputes. In the event of any dispute
under the provisions of this Agreement other than a dispute in
which the primary relief sought is an equitable remedy such as an
injunction, the parties shall be required to have the dispute,
controversy or claim settled by arbitration in the City of New
York, New York in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American
Arbitration Association, before a panel of three arbitrators, two
of whom shall be selected by the Company and Employee,
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 Employee prevails on any material issue which is
the subject of such arbitration or lawsuit, 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 and the Employee's reasonable legal
fees and expenses. Otherwise, each party shall bear his or its
own expenses relating to the conduct of the arbitration
(including attorneys' fees and expenses) and shall share the fees
of the American Arbitration Association.
21. Notices. Any notice given to either Party shall be in
writing and, except as provided in the second sentence of
Paragraph 9(b), shall be deemed to have been given when delivered
personally or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Party
concerned at the address indicated below or to such changed
address as such Party may subsequently give notice of:
If to the Company or the Board:
Players International, Inc.
1300 Atlantic Avenue
Suite 800
Atlantic City, NJ 08401
Attention: General Counsel
With a copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103-6993
Attention: Robert J. Lichtenstein, Esquire
If to Executive:
Peter J. Aranow
665 N. Broadway
Hastings on Hudson, NY 10706
With a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022-4677
Attention: Stephen T. Lindo, Esquire
22. Headings. The headings of the paragraphs contained in
the Agreement are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
23. Counterparts. The Agreement may be executed in two or
more counterparts.
IN WITNESS WHEREOF, the undersigned have executed the
Agreement as of the date first written above.
Players International, Inc.
By: Howard A. Goldberg
Its: Chief Executive Officer
Peter J. Aranow
EXHIBIT A
Peter Aranow, EVP Finance & Treasurer - Duties
Organizational Development
Examination of Systems, Structures, Communications
Investor Relations
Bank Relations
Cash Management
Board of Directors Management
Records
Information and Communication
Committee Administration
Supervision of Management of Corporate Office
Supervision of Internal Financial Analysis
Supervision of Industry/Other Financial Analysis
Examination of Particular Market(s)
Overall Economic Environment
Member - Compliance Committee
Member - Executive Committee
-14-
PH03/223440.1
Exhibit 10.68
AGREEMENT
THIS AGREEMENT, dated as of August 1 , 1997 between
Players International, Inc. (together with its successors or
assigns as permitted under this Agreement, the "Company"), and
John Groom ("Executive").
W I T N E S S E T H:
WHEREAS, the Company considers it essential to the best
interest of its stockholders to foster the continuous employment
of key management personnel;
WHEREAS, the Board (as hereinafter defined) of the Company
recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may exist
and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure
or distraction of management personnel to the detriment of the
Company and its stockholders;
WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued
attention and dedication of certain members of the Company's
management, including Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances
arising from the possibility of a "Change in Control" (as
hereinafter defined) of the Company, although no such change is
now contemplated; and
WHEREAS, in order to induce Executive to remain in the
employ of the Company and in consideration of Executive's
undertakings set forth herein, the Company agrees that Executive
shall receive the severance benefits set forth in this Agreement
under the circumstances as described below.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, the Company and Executive (individually a "Party"
and together the "Parties") agree as follows:
1. Definitions.
(a) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(b) "Base Compensation" shall mean the Executive's
annual base compensation payable by the Company.
(c) "Beneficial Owner" of any securities shall mean:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of securities tendered pursuant
to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for payment, purchase or exchange;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including without limitation
pursuant to any agreement, arrangement or understanding, whether
or not in writing; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of any security under this
subparagraph (ii) as a result of an oral or written agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) where voting securities are beneficially
owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii)
above) or disposing of any voting securities of the Company;
provided, however, that nothing in this Paragraph 1(b) shall
cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of any securities
acquired through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days
after the date of such acquisition.
(d) "Board" shall mean the Board of Directors of the
Company.
(e) "Cause" shall mean (i) Executive is convicted of a
felony involving moral turpitude; (ii) Executive uses alcohol or
any unlawful controlled substance to an extent that it interferes
on a continuing and material basis with the performance of his
duties under the Agreement; (iii) Executive engages in the
willful, unauthorized disclosure of Confidential Information, as
defined in Paragraph l(g), concerning the Company or any
Subsidiary, unless such disclosure was (A) believed in good faith
by Executive to be appropriate in the course of properly carrying
out his duties, or (B) required by an order of a court having
jurisdiction over the subject matter or a summons, subpoena or
order in the nature thereof of any legislative body (including
any committee thereof) or any governmental or administrative
agency; (iv) Executive, other than in the course of properly
carrying out his duties as assigned by the Company, performs
services for any other corporation or person that competes with
the Company or any Subsidiary; (v) Executive, in carrying out his
duties as assigned by the Company, engages in willful neglect or
willful misconduct resulting, or reasonably likely to result, in
either case, in material economic harm to the Company, unless
such act, or failure to act, resulted from Executive's reasonable
belief that such act or failure to act was in the best interests
of the Company; or (vi) Executive is found disqualified or not
suitable to hold a casino key employee license or other such
license by a gaming authority in any jurisdiction where the
Company operates a casino and Executive is required to be found
qualified, suitable or licensed, as the case may be.
(f) "Change in Control" shall mean the occurrence of
any one of the following events, unless the Board determines,
before the event or transaction occurs, that the event or
transaction will not be a Change of Control for purposes of this
Agreement. The Board shall determine whether a Change of Control
shall be deemed to occur for purposes of this Agreement in its
sole discretion, taking into account such facts and circumstances
as it deems appropriate, including, without limitation, whether
the event or transaction is likely to result in a change in the
Company's management that will affect Executive's position. The
Board's determination shall be binding on all persons for all
purposes. An event or transaction may be considered a Change of
Control under another plan or agreement of the Company without
being considered a Change of Control for purposes of this
Agreement. The events or transactions that may be considered a
Change of Control are the following:
(i) any Person (except the Griffin Group or its
Affiliates and Associates, Company management as of the Effective
Date and their Affiliates and Associates or the Company or any
employee benefit plan of the Company or of any Affiliate, any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such employee benefit
plan), together with all Affiliates and Associates of such
Person, shall become the Beneficial Owner in the aggregate of 30%
or more of the Voting Stock then outstanding; provided, however,
that no "Change of Control" shall be deemed to occur during any
period in which any such Person, and its Affiliates and
Associates, are bound by the terms of a standstill agreement
under which such parties have agreed not to acquire more than 30%
of the Voting Stock then outstanding or to solicit proxies;
(ii) consummation by the Company of a
reorganization, merger or consolidation (a "Business
Combination"), in each case, with respect to which all or
substantially all of the individuals and entities who were the
respective Beneficial Owners of the Voting Stock outstanding
immediately prior to such Business Combination do not, following
such Business Combination, Beneficially Own, directly or
indirectly, more than 50% of the then outstanding shares of
voting stock of the corporation resulting from such Business
Combination in substantially the same proportion as their
ownership immediately prior to such Business Combination of the
outstanding Voting Stock;
(iii) consummation of a complete liquidation
or dissolution of the Company;
(iv) sale or other disposition of all or
substantially all of the assets of the Company other than to a
corporation with respect to which, following such sale or
disposition, more than 50% of the then outstanding shares of
voting stock is then owned beneficially, directly or indirectly,
by all or substantially all of the individuals and entities who
were the Beneficial Owners, respectively, of the outstanding
Voting Stock immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the
outstanding Voting Stock immediately prior to such sale or
disposition;
(v) individuals who, as of the beginning of any
twenty-four month period, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of
the Board, provided that any individual becoming a director
subsequent to the beginning of such period whose election or
nomination for election by the Company stockholders was approved
by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
is in connection with an actual or threatened election contest
relating to the election of members of the Board (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(vi) a "change of control" as defined in the form
of indenture governing any indebtedness of the Company shall have
occurred.
(g) "Confidential Information" shall include, but not
be limited to, the Company's financial, real estate, marketing
and promotional plans and strategies. Confidential Information
does not include information that becomes available to the public
other than through a breach of the Agreement on the part of
Executive.
(h) "Disability" shall mean if, as a result of
Executive's incapacity due to physical or mental illness,
Executive shall have been absent from the full-time performance
of Executive's duties with the Company for six consecutive months
and within thirty days after written notice of termination is
given Executive shall not have returned to the full-time
performance of Executive's duties.
(i) "Good Reason" shall mean, without Executive's
express written consent and without Cause, the occurrence after a
Change in Control of the Company, or within six months before a
Change of Control, of any of the following:
(i) The assignment to Executive of any duties
inconsistent with Executive's status as an executive officer of
the Company or a substantial adverse alteration in the nature or
status of Executive's responsibilities from those in effect
immediately prior to the date that is six months before the
Change in Control of the Company;
(ii) Executive's Base Compensation is decreased by
the Company in other than an across-the-board salary adjustment
of similarly situated executives, or his benefits under any
material employee benefit plan or program of the Company or his
incentive or equity opportunity under any material incentive or
equity program of the Company is or are reduced, after taking
into account the discretion of the Board to determine the level
at which Executive participates in any performance compensation
program, on a basis not shared in common with other senior
executives of the Company as a group; or
(iii) The failure of the Company to obtain a
satisfactory agreement from any successor to assume and agree to
perform this Agreement, as contemplated in Paragraph 6 hereof;
provided that
(iv) Executive's termination of employment for
Good Reason must occur within 90 days after Executive learns of
the occurrence of the event constituting Good Reason and during
the term of the Agreement.
(j) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(k) "Subsidiary" shall mean any corporation in which
the Company owns 50% or more of the Voting Stock or any other
venture in which it owns 50% or more of the equity.
(l) "Termination Upon a Change in Control" shall mean
that following a Change in Control, or within six months prior to
a Change in Control, and during the term of the Agreement, (i)
the Company terminates Executive's employment without Cause or
(ii) Executive terminates his employment for Good Reason, as
described in Subparagraph 3(a).
(m) "Voting Stock" shall mean capital stock of any
class or classes having general voting power under ordinary
circumstances, in the absence of contingencies, to elect the
directors of a corporation.
2. Term of Agreement. This Agreement shall commence on March
1, 1997 and shall continue in effect through December 31, 1998;
provided that if a Change in Control of the Company occurs during
the term of this Agreement, this Agreement shall automatically
continue in effect for a period of twenty-four months beyond the
month in which such Change in Control occurs.
3. Termination Upon a Change in Control.
(a) If a Change in Control (as defined in Subparagraph
1(f)) of the Company shall have occurred, Executive shall be
entitled to the benefits provided in Paragraph 4 hereof upon the
subsequent termination of Executive's employment, or upon the
termination of Executive's employment within six months prior to
the Change of Control, if such termination occurs during the term
of the Agreement and is (y) by the Company other than for Cause
or (z) by Executive for Good Reason. Notwithstanding anything in
this Agreement to the contrary, if Executive's employment
terminates on account of Disability, Executive shall be entitled
to receive disability benefits under any disability program
maintained by the Company that covers Executive, and Executive
shall not be considered to have terminated employment under this
Agreement and shall not receive benefits pursuant to Paragraph 4
hereof.
(b) Notice of Termination. Any purported termination
of Executive's employment by the Company or by Executive shall be
communicated by written Notice of Termination to the other party
hereto in accordance with Paragraph 14 hereof. For purposes of
this Agreement, a "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so
indicated.
4. Compensation Payable in the Event of Termination.
(a) In the event a Termination Upon a Change in
Control occurs, Executive shall be entitled to receive promptly
following the later of his termination of employment or the
Change of Control:
(i) unpaid Base Compensation earned or accrued
through his date of termination and a lump-sum payment equal to
the present value (computed by using a discount rate per annum
determined by reference to the discount rate then published by
the Pension Benefit Guaranty Corporation for determining the
value of immediate annuities ("Present Value")) of Executive's
Base Compensation that would be due him for a period of 36 months
following termination of his employment, determined on the basis
of the average of the Base Compensation paid to Executive for the
36 months preceding his termination;
(ii) a lump-sum payment equal to the Present Value
of the aggregate performance bonus amounts he received, if any,
for the period of 36 months preceding his termination;
(iii) any performance or special incentive
bonus earned but not yet paid;
(iv) reimbursement for reasonable out-of-pocket
business expenses properly incurred but not yet reimbursed by the
Company; and
(v) any other compensation and benefits to which
he may be entitled under applicable plans, programs and
agreements of the Company and the continuation of Executive's
participation in all Employee Benefit Programs (as defined below)
during the period for which Executive is to receive payments
under clause (i) above (irrespective of the fact that such
payments are paid in a lump sum); provided, however, that in the
event the Company is precluded from providing coverage under any
such program by applicable law or regulation, it may choose to
provide Executive with a payment equal to the cost of such
coverage without regard to tax effect. "Employee Benefit
Programs" shall mean those employee welfare benefit and
retirement benefit plans and programs of the Company in which
Executive participates immediately before Executive's termination
of employment; provided, however, that the Company shall not be
prohibited from amending or terminating any Employee Benefit
Program as long as Executive continues to receive comparable
levels of coverage in the aggregate during the payment period.
(b) Notwithstanding the foregoing, in the event that
it shall be determined that any payment or distribution by the
Company to or for the benefit of Executive, whether paid or
payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise (a "Payment"), would constitute an
"excess parachute payment" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code"), and
that it would be economically advantageous to the Company to
reduce the payment to avoid or reduce the limitation of the
Company's federal income tax deduction under Section 280G of the
Code, the aggregate present value of amounts payable or
distributable to or for the benefit of Executive pursuant to this
Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments")
shall be reduced (but not below zero) to the Reduced Amount. The
"Reduced Amount" shall be an amount expressed in present value
which maximizes the aggregate present value of Agreement Payments
without causing any Payment to be subject to the limitation of
deduction under Section 280G of the Code. For purposes of this
subparagraph (b), "present value" shall be determined in
accordance with Section 280G(d)(4) of the Code. All
determinations to be made under this Paragraph 4(b) shall be made
by the Company's independent public accountant immediately prior
to the Change of Control (the "Accounting Firm"), which firm
shall provide its determinations and. any supporting calculations
both to the Company and Executive within ten days of the
termination date. Any such determination by the Accounting Firm
shall be binding upon the Company and Executive. Executive shall
in his sole discretion determine which and how much of the
Agreement Payments shall be eliminated or reduced consistent with
the requirements of this Paragraph 4(b). Within five days after
Executive's determination, the Company shall pay (or cause to be
paid) or distribute (or cause to be distributed) to or for the
benefit of Executive such amounts as are then due to Executive
under this Agreement. All of the fees and expenses of the
Accounting Firm in performing the determinations referred to
above shall be borne solely by the Company. The Company agrees
to indemnify and hold harmless the Accounting Firm of and from
any and all claims, damages and expenses resulting from or
relating to its determinations pursuant to this Paragraph, except
for claims, damages or expenses resulting from the gross
negligence or willful misconduct of the Accounting Firm.
(c) No Mitigation; No Offset. In the event of any
termination of Executive's employment under the Agreement, he
shall be under no obligation to seek other employment, and there
shall be no offset against amounts due him under the Agreement on
account of any remuneration attributable to any subsequent
employment that he may obtain.
(d) Nature of Payments. Any amounts due Executive
under the Agreement in the event of any termination of his
employment with the Company are in the nature of severance
payments, or liquidated damages which contemplate both direct
damages and consequential damages that may be suffered as a
result of the termination of his employment, or both, and are not
in the nature of a penalty.
5. Termination by the Company. Executive hereby acknowledges
that, prior to the date that is six months before a Change of
Control, Executive is an "at will" employee of the Company.
Prior to the date that is six months before a Change of Control,
Executive hereby acknowledges that the Company may terminate
Executive's employment with the Company with or without Cause.
If the Company terminates Executive's employment without Cause
after the date that is six months before a Change in Control and
prior to the expiration of this Agreement, Executive will be
entitled to payments pursuant to Paragraphs 3 and 4 hereof.
6. Successors, Binding Agreement.
(a) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such assumption
and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle Executive
to compensation from the Company in the same amount and on the
same terms as Executive would be entitled to hereunder if
Executive terminates his employment voluntarily for Good Reason
following a Change in Control of the Company, except that for
purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the date of
termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and
be enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devises and legatees. If Executive should die after Executive's
termination of employment under circumstances entitling Executive
to benefits hereunder and while any amount would still be payable
to Executive hereunder if Executive had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive's
devises, legates or other designee or, if there is no such
designee, to Executive's estate.
7. Representation. The Company and Executive respectively
represent and warrant to each other that, subject to any approval
that may be necessary from any pertinent regulatory authority,
each respectively is fully authorized and empowered to enter into
the Agreement and that its or his entering into this Agreement
and the performance of its or his respective obligations under
the Agreement will not violate any agreement between the Company
or Executive respectively and any other person, firm or
organization or any law or governmental regulation.
8. Entire Agreement. The Agreement contains the entire
agreement between the parties concerning the subject matter
hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or
oral, between the parties with respect thereto.
9. Amendment or Waiver. The Agreement cannot be changed,
modified or amended without the consent in writing of both
Executive and the Company. No waiver by either Party at any time
of any breach by the other Party of any condition or provision of
the Agreement shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or at any prior or subsequent
time. Any waiver must be in writing and signed by Executive or
an authorized officer of the Company, as the case may be.
10. Severability. In the event that any provision or portion of
the Agreement shall be determined to be invalid or unenforceable
for any reason, in whole or in part, the remaining provisions of
the Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by law.
11. Survivorship. The respective rights and obligations of the
Parties hereunder shall survive any termination of the Agreement
to the extent necessary to the intended preservation of such
rights and obligations.
12. Governing Law. The Agreement shall be governed by and
construed and interpreted in accordance with the laws of the
State of New Jersey without reference to principles of conflict
of laws.
13. Settlement of Disputes. In the event of any dispute under
the provisions of this Agreement other than a dispute in which
the primary relief sought is an equitable remedy such as an
injunction, the parties shall be required to have the dispute,
controversy or claim settled by arbitration in the Las Vegas,
Nevada in accordance with the National Rules for the Resolution
of Employment Disputes 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 or lawsuit, 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 and the Executive's reasonable legal fees and
expenses. Otherwise, each party shall bear his or its own
expenses relating to the conduct of the arbitration (including
attorneys' fees and expenses) and shall share the fees of the
American Arbitration Association.
14. Notices. Any notice given to either Party shall be in
writing and shall be deemed to have been given when delivered
personally or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Party
concerned at the address indicated below or to such changed
address as such Party may subsequently give notice of:
If to the Company:
Players International, Inc.
1300 Atlantic Avenue
Suite 800
Atlantic City, NJ 08401
Attention: Chief Executive Officer
If to Executive:
John Groom
The heading of the paragraphs contained in the
Agreement are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
16. Counterparts. The Agreement may be executed in two or more
counterparts.
IN WITNESS WHEREOF, the undersigned have executed the
Agreement as of the date first above.
Players International, Inc.
_________________________
By: Howard A. Goldberg
Its: Chief Executive Officer
_________________________
John Groom
23
PH02/243474.1
Exhibit 10.65
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of October 1, 1996 between Players
International, Inc. (together with its successors or assigns as
permitted under this agreement, the "Company"), and Howard A.
Goldberg ("Executive").
W I T N E S S E T H:
The Company and Executive entered into an Employment
Agreement as of May 19, 1993 (the "Agreement"). The parties now
desire to amend and restate the Agreement to reflect Executive's
current position, compensation and other arrangements with the
Company. Therefore, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, the Company and Executive (individually a "Party"
and together the "Parties") agree that the Agreement is amended
and restated as of October 1, 1996, to read as follows:
1. Definitions
(a) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(b) "Base Compensation" shall mean the compensation
provided for in Paragraph 4, subject to such increases as may be
approved by the Board from time to time.
(c) "Beneficial Owner" of any securities shall mean:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of securities tendered pursuant
to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for payment, purchase or exchange;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including without limitation
pursuant to any agreement, arrangement or understanding, whether
or not in writing; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of any security under this
subparagraph (ii) as a result of an oral or written agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) where voting securities are beneficially
owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii)
above) or disposing of any voting securities of the Company;
provided, however, that nothing in this Paragraph l(c) shall
cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of any securities
acquired through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days
after the date of such acquisition.
(d) "Board" shall mean the Board of Directors of the
Company.
(e) "Business Day" shall mean any day other than a
weekend, a federal or state holiday or a vacation day for
Executive.
(f) "Cause" shall mean (i) Executive is convicted of a
felony involving moral turpitude; (ii) Executive uses alcohol or
any unlawful controlled substance to an extent that it interferes
on a continuing and material basis with the performance of his
duties under the Agreement; (iii) Executive engages in the
willful, unauthorized disclosure of Confidential Information, as
defined in Paragraph 10(c), concerning the Company or any
Subsidiary, unless such disclosure was (A) believed in good faith
by Executive to be appropriate in the course of properly carrying
out his duties under the Agreement, or (B) required by an order
of a court having jurisdiction over the subject matter or a
summons, subpoena or order in the nature thereof of any
legislative body (including any committee thereof) or any
governmental or administrative agency; (iv) Executive, other than
in the course of properly carrying out his duties under the
Agreement, performs services for any other corporation or person
that competes with the Company or any Subsidiary; or (v)
Executive, in carrying out his duties under the Agreement,
engages in willful neglect or willful misconduct resulting, or
reasonably likely to result, in either case, in material economic
harm to the Company, unless such act, or failure to act, resulted
from Executive's reasonable belief that such act or failure to
act was in the best interests of the Company.
(g) "Change in Control" shall mean the occurrence of
any one of the following events:
(i) any Person (except the Griffin Group or its
Affiliates and Associates, Company management as of the Effective
Date and their Affiliates and Associates or the Company or any
employee benefit plan of the Company or of any Affiliate, any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such employee benefit
plan), together with all Affiliates and Associates of such
Person, shall become the Beneficial Owner in the aggregate of 30%
or more of the Voting Stock then outstanding; provided, however,
that no "Change of Control" shall be deemed to occur during any
period in which any such Person, and its Affiliates and
Associates, are bound by the terms of a standstill agreement
under which such parties have agreed not to acquire more than 30%
of the Voting Stock then outstanding or to solicit proxies;
(ii) consummation by the Company of a reorganization,
merger or consolidation (a "Business Combination"), in each case,
with respect to which all or substantially all of the individuals
and entities who were the respective Beneficial Owners of the
Voting Stock outstanding immediately prior to such Business
Combination do not, following such Business Combination,
Beneficially Own, directly or indirectly, more than 50% of the
then outstanding shares of voting stock of the corporation
resulting from such Business Combination in substantially the
same proportion as their ownership immediately prior to such
Business Combination of the outstanding Voting Stock;
(iii) consummation of a complete liquidation or
dissolution of the Company;
(iv) sale or other disposition of all or substantially
all of the assets of the Company other than to a corporation with
respect to which, following such sale or disposition, more than
50% of the then outstanding shares of voting stock is then owned
beneficially, directly or indirectly, by all or substantially all
of the individuals and entities who were the Beneficial Owners,
respectively, of the outstanding Voting Stock immediately prior
to such sale or disposition in substantially the same proportion
as their ownership of the outstanding Voting Stock immediately
prior to such sale or disposition;
(v) individuals who, as of the beginning of any twenty-
four month period, constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a majority of the
Board, provided that any individual becoming a director
subsequent to the beginning of such period whose election or
nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election
contest relating to the election of members of the Board (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act); or
(vi) a "change of control" as defined in the form of
indenture governing any indebtedness of the Company shall have
occurred.
(h) "Constructive Termination Without Cause" shall
mean that:
(i) without Executive's prior written consent, one or
more of the following events occurs:
(A) Executive is removed from the position of
Chief Executive Officer of the Company for any reason other than
the termination of his employment;
(B) Executive suffers a material diminution in
the authorities, duties, reporting relationships or
responsibilities normally associated with the foregoing position
or there are assigned to him duties and responsibilities
materially inconsistent with those normally associated with such
position;
(C) Executive's Base Compensation as provided for
in Paragraph 4 is decreased by the Company, or his benefits under
any material employee benefit plan or program of the Company or
his incentive or equity opportunity under any material incentive
or equity program of the Company is or are reduced, after taking
into account the discretion of the Board to determine the level
at which Executive participates in any performance compensation
program as provided in Paragraph 4, on a basis not shared in
common with other senior executives of the Company as a group;
(D) the Company fails to obtain a written
agreement from any successor of the Company to assume and perform
the Agreement; or
(E) following a Change of Control, the Company
moves its principal executive offices more than 50 miles from
Atlantic City, New Jersey, or such other place where the
Company's principal executive offices are located immediately
prior to the Change of Control) or Executive is removed from
membership on, or fails to be reelected to, the Board, if
Executive is a member of the Board immediately prior to the
Change of Control; and
(ii) within 90 days of learning of the occurrence
of such event, Executive terminates his employment with the
Company.
(i) "Disability" shall mean Executive's inability, for
a period of six consecutive months, to render substantially the
services provided for in Paragraph 3(a) by reason of permanent
mental or physical disability, whether resulting from illness,
accident or otherwise. In the case of a dispute as to whether
Executive has incurred a Disability, Executive agrees to submit
to a physical examination by two physicians, one selected by
Executive and the other by the Company and, in the event they do
not agree, to a physical examination by an additional physician
selected by the first two physicians whose decision shall be
final and binding on both parties.
(j) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(k) "Subsidiary" shall mean any corporation in which
the Company owns 50% or more of the Voting Stock or any other
venture in which it owns 50 % or more of the equity.
(l) "Term of Employment" shall mean the three-year
period specified in Paragraph 2.
(m) "Termination by the Company Due to Loss of
License" shall mean a termination of Executive's employment by
the Company following a termination of Executive's license to
take part in the casino and gaming business in any state in which
the Company conducts business (other than a termination of such
license (i) due to Executive's death or Disability or (ii) based
upon facts that constitute Cause within the meaning of this
Agreement).
(n) "Termination Upon a Change in Control" shall mean
that following a Change in Control (i) the Company terminates
Executive's employment without Cause, (ii) there is a
Constructive Termination Without Cause, or (iii) Executive
terminates employment from the Company within 180 days of the
Change of Control because, in the good faith determination of
Executive, there has been a change in circumstances with the
Company that directly or indirectly affects Executive's position,
duties or responsibilities or status as in effect immediately
preceding the Change of Control and he is no longer able
effectively to discharge his duties and responsibilities and the
Board concurs in such determination, by a majority vote of the
members who were members prior to the Change of Control, made in
a reasonable fashion, excluding for this purpose any such members
who would not have been treated as members of the Incumbent
Board.
(o) "Voting Stock" shall mean capital stock of any
class or classes having general voting power under ordinary
circumstances, in the absence of contingencies, to elect the
directors of a corporation.
2. Term of Employment.
(a) The Company hereby continues to employ Executive,
and Executive hereby accepts such continuation of employment, in
the position and with the duties and responsibilities as set
forth in Paragraph 3 for the Term of Employment, subject to the
terms and conditions of the Agreement.
(b) The Term of Employment shall commence on the date
hereof and shall, unless sooner terminated as provided in
Paragraph 9, terminate upon the close of business on September
30, 1999 unless it has sooner terminated as provided in Paragraph
9.
3. Position, Duties and Authorities.
(a) During the Term of Employment, Executive shall be
employed as Chief Executive Officer of the Company and, subject
to supervision by the Board, he shall have overall charge of the
business operations of the Company, with the duties
responsibilities and authorities normally associated with such
position. It is also the intention of the Parties that Executive
shall serve as a director of the Company throughout the Term of
Employment but, except as provided in Paragraph 1(h)(i)(E), it
shall not be a breach of the terms of this Agreement if Executive
is not elected or reelected to the Board. Executive shall be
entitled to no additional remuneration for serving on the Board
or as an officer or director of a Subsidiary.
(b) Anything herein to the contrary notwithstanding,
nothing shall preclude Executive from (i) engaging in charitable,
community and business affairs, managing his personal investments
and serving as a member of boards of directors so long as such
activities do not materially interfere with his carrying out his
duties and responsibilities under the Agreement or (ii) having
his name appear in the name of the law firm in which he was a
member immediately prior to his employment by the Company and
receiving nominal compensation therefor so long as Executive
renders no services to such firm.
(c) During the term of Employment, Executive shall
perform his services from an office in Atlantic City, New Jersey
and at such other offices of the Company as may be required by
his duties; provided, however, that Executive shall not be
required to move his home from Linwood, New Jersey.
4. Base Compensation. During the Term of Employment,
Executive shall be paid by the Company Base Compensation payable
no less frequently than in equal semi-monthly installments at an
annualized rate of no less than $450,000 per annum, subject to
annual review by the Board for possible increase in accordance
with its normal review procedure for senior level executives.
The Company shall be entitled to make proper withholdings from
Executive's Base Compensation (and all other payments of
compensation under this Agreement) as required by law.
5. Performance Bonus. The Company may, but is not
required, to adopt a bonus or short term performance compensation
program for senior level executives. In the event that such a
program is adopted, Executive shall participate in such program
but the Board shall determine Executive's level of participation
for each year of the Term of Employment in its sole discretion;
provided, however, that the Board shall have the discretion to
grant additional individual bonus compensation in excess of the
foregoing general performance bonus program to Executive or any
other executive or the Company in recognition of performance
achievements particular to any of them.
6. Stock Options and Stock Grant. The Company may, but is
not required, to grant to Executive shares of Voting Stock as
well as stock options to purchase shares of Voting Stock subject
to restrictions determined by the Board, in either event in the
sole discretion of the Board, for any year during the Term of
Employment, which shall be made pursuant to an equity
compensation plan approved by the Board generally for senior
level executives of the Company; provided, however, that the
Board shall have the discretion to grant additional options or
restricted shares to Executive or any other executive or the
Company in recognition of performance achievements particular to
any of them. The Company shall use its best effort to maintain
any and all registration statements for any shares subject to
option to permit such shares to be freely tradeable upon
exercise.
7. Employee Benefit Programs. During the Tern of
Employment, Executive and his spouse and dependents shall be
entitled, at the Company's expense, to the employee welfare
benefit and retirement benefit coverages provided to Executive
and his spouse and dependents on the date of this Agreement as
listed on Exhibit A hereto and incorporated herein (the "Employee
Benefit Programs"); provided, however, that the foregoing shall
not prohibit the Company from amending or terminating any such
Employee Benefit Program so long as Executive and his spouse an
dependents otherwise receive the required levels of coverage in
the aggregate; and provided, further, that Executive may request
the Compensation Committee of the Board, which shall decide in
its sole discretion, to permit the Company to change any of the
coverages provided hereunder. To the extent possible, the amount
of any life insurance shall be provided by an individual policy
(or policies) that gives Executive, his legal representatives or
beneficiaries, and trusts of which Executive was the settlor, as
applicable, the right to assume the policy, upon payment to the
Company of the cash surrender value, in the event of his
termination of employment.
8. Business Expense Reimbursement. During the Term of
Employment, Executive shall be entitled to receive reimbursement
by the Company, upon submission of adequate documentation, for
all reasonable, out-of-pocket ordinary and necessary business
expenses incurred by him in performing services under the
Agreement. In addition, any reasonable legal fees and expenses
incurred in connection with the preparation and negotiation of
the Agreement or qualification as a licensee in any jurisdiction
shall be paid by the Company.
9. Termination of Employment.
(a) Termination Due to Death or Disability. In the
event of the termination of Executive's employment under the
Agreement due to his death or Disability, Executive or his legal
representatives as the case may be, shall be entitled to:
(i) (A) in the case of death, continued Base
Compensation at the rate in effect at the time of his death for a
period of 3 months following the month in which such termination
of employment due to death occurs, or (B) in the case of
Disability, the disability benefit available under and only to
the extent of the insurance maintained as provided in Paragraph
7;
(ii) any performance or special incentive bonus earned
but not yet paid;
(iii) a pro rata portion of any applicable
performance bonus for the year in which his employment terminates
due to death or Disability based on performance of the Company
for the year during which such termination occurs or, if
performance results are not available, based on the performance
bonus, if any, paid to Executive for the prior year; and
(iv) any other compensation and benefits to which he or
his legal representatives or beneficiaries may be entitled under
applicable plans, programs and agreements of the Company,
including, without limitation, life insurance benefits and the
right to acquire any life insurance policy which has not then
matured for the cash surrender value pursuant to Paragraph 7.
(b) Termination by the Company for Cause. Within 60
days of knowing, or having reasonable basis for knowing, of an
event constituting Cause the Company may give Executive written
notice of its intention to terminate him for Cause, specifying in
such notice the event forming the basis for Cause. The preceding
sentence notwithstanding, Executive's employment shall not be
deemed to have been terminated for Cause unless the Company has
given or delivered to Executive (1) reasonable notice setting
forth the reasons for the Company's intention to terminate
Executive's employment for Cause; (2) if the written notice is of
an event constituting Cause under clause (ii) or (iv) of
Paragraph l(f) and if the event is capable of being cured,
Executive shall have 10 Business Days following actual receipt of
such notice in which to cure; (3) a reasonable opportunity at any
time during the 30-day period after Executive's receipt of such
notice, for Executive, together with his counsel, to be heard
before the Board, and (4) a second written notice from the
Company stating that, in the good faith opinion of not less than
a majority of the entire membership of the Board, Executive was
guilty of the conduct giving rise to termination for Cause;
provided, however, that the Company may, in its sole discretion,
suspend Executive from performance of his duties on the date of
delivery of such notice and such date shall be the effective date
of any termination under this Paragraph. In the event
Executive's employment is terminated by the Company for Cause,
Executive shall be entitled to:
(i) unpaid Base Compensation earned or accrued at the
rate in effect at the time of his termination through the date of
termination of his employment;
(ii) any performance or special incentive bonus earned
but not yet paid;
(iii) reimbursement for expenses incurred but not
yet reimbursed by the Company pursuant to Paragraph 8; and
(iv) any other compensation and benefits to which he
may be entitled under applicable plans, programs and agreements
of the Company.
Executive's entitlement to the foregoing shall be without
prejudice to the right of the Company for any damages to which it
may be entitled as a result of such Cause.
(c) Termination Without Cause; Constructive
Termination Without Cause; Expiration of the Agreement. In the
event Executive's employment is terminated by the Company without
Cause (which shall not include a termination pursuant to
Paragraph 9(a) or 9(d)) or in the event of a Constructive
Termination Without Cause, or in the event this Agreement expires
by its terms on the third anniversary of the date hereof or the
expiration date of any renewal and the Company has not, at least
six months prior to such date, given Executive written notice of
its intention not to renew the Agreement ("Non-Renewal Notice"),
Executive, upon executing and not revoking a release of the
Company as to all matters arising in the course of his employment
by the Company and the termination thereof, in the form attached
hereto as Exhibit B, shall be entitled to receive:
(i) unpaid Base Compensation earned or accrued through
his date of termination and continued Base Compensation payments,
at the rate in effect at the time of his termination, for (A)
solely in the case of expiration of this Agreement by its terms
on the third anniversary, a number of months equal to six months
minus the number of months of notice of Non-Renewal actually
provided to Executive or (B) in all other cases to which this
Paragraph 9(c) is applicable, a period of 12 months following
termination of his employment or through the end of the Term of
Employment, whichever is longer, payable, at Executive's option,
either (1) over such 12 months or the remaining Term of
Employment, as the case may be, or (2) in a lump-sum payment
promptly following termination of Executive's employment equal to
the then present value using a discount rate per annum determined
by reference to the discount rate then published by the Pension
Benefit Guaranty Corporation for determining the value of
immediate annuities (the "Present Value") of the remaining Base
Compensation due Executive through the end of such 12 months or
the remaining Term of Employment;
(ii) except in a case of a termination of employment by
reason of expiration of this Agreement on the third anniversary
of the date hereof, continued performance bonuses for a period of
12 months following termination of his employment or through the
end of the Term of Employment, whichever is longer, in amounts
determined under the then applicable program of the Company, or,
to the extent such amounts are not reasonably determinable, in
amounts based on performance bonuses paid to Executive for the
last complete fiscal year of the Company ended prior to the
completion of such 12-month period;
(iii) any performance or special incentive bonus
earned but not yet paid;
(iv) reimbursement for expenses incurred but not
yet reimbursed by the Company pursuant to Paragraph 8;
(v) the immediate vesting of all stock options
previously granted to Executive, notwithstanding the terms of any
such grant to the contrary, with and the ability to exercise any
such options for 12 months following the date of termination but
in no event after the expiration of the option term; and
(vi) any other compensation and benefits to which he
may be entitled under applicable plans, programs and agreements
of the Company, including, without limitation, life insurance
benefits, and the right to acquire any life insurance policy
which has not then matured for the cash surrender value pursuant
to Paragraph 7, and the continuation of all Employee Benefit
Programs provided under Paragraph 7 during the period for which
Executive is to receive payments under clause (i) above
(irrespective of the fact that such payments are paid in a lump
sum); provided, however, that in the event the Company is
precluded from providing coverage under any such program by
applicable law or regulation it may choose to provide Executive
with a payment equal to the cost of such coverage without regard
to tax effect.
(d) Termination Upon a Change in Control. In the
event a Termination Upon a Change in Control occurs, or in the
event Executive is terminated under subparagraph (c) within six
months prior to the occurrence of a Change in Control, Executive
shall be entitled to receive (taking into account any benefits
provided under subparagraph (c)), promptly following his
termination of employment:
(i) unpaid Base Compensation earned or accrued through
his date of termination and a lump-sum payment equal to the
Present Value of Executive's Base Compensation that would be due
him for a period of 36 months following termination of his
employment, determined on the basis of the average of the Base
Compensation paid to Executive for the 36 months preceding his
termination;
(ii) a lump-sum payment equal to the Present Value of
the aggregate performance bonus amounts he received, if any, for
the period of 36 months preceding his termination or, if greater,
a lump-sum payment equal to 150% of the largest performance bonus
paid to Executive during the 36 months preceding his termination;
(iii) any performance or special incentive bonus
earned but not yet paid;
(iv) reimbursement for expenses incurred but not yet
reimbursed by the Company pursuant to Paragraph 8;
(v) the immediate vesting of all stock options
previously granted to Executive, notwithstanding the terms of
any such grant to the contrary, with the ability to exercise any
such options for 12 months following the date of termination but
in no event after the expiration of the option term; and
(vi) any other compensation and benefits to which he
may be entitled under applicable plans, programs and agreements
of the Company and the right to acquire any life insurance policy
which has riot then matured for the cash surrender value pursuant
to Paragraph 7, and the continuation of all Employee Benefit
Programs provided under Paragraph 7 during the period for which
Executive is to receive payments under clause (i) above
irrespective of the fact that such payments are paid in a lump
sum); provided, however, that in the event the Company is
precluded from providing coverage under any such program by
applicable law or regulation it may choose to provide Executive
with a payment equal to the cost of such coverage without regard
to tax effect.
Notwithstanding the foregoing, in the event that it shall be
determined that any payment or distribution by the Company to or
for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess
parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and that
it would be economically advantageous to the Company to reduce
the Payment to avoid or reduce the limitation of the Company's
federal income tax deduction under Section 280G of the Code, the
aggregate present value of amounts payable or distributable to or
for the benefit of Executive pursuant to this Agreement (such
payments or distributions pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount"
shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any
Payment to be subject to the limitation of deduction under
Section 280G of the Code. For purposes of this subparagraph (d),
"present value" shall be determined in accordance with Section
280G(d)(4) of the Code. All determinations to be made under this
Paragraph 9(d) shall be made by the Company's independent public
accountant immediately prior to the Change of Control (the
"Accounting Firm"), which firm shall provide its determinations
and any supporting calculations both to the Company and Executive
within 10 days of the termination date. Any such determination
by the Accounting Firm shall be binding upon the Company and
Executive. Executive shall in his sole discretion determine
which and how much of the Agreement Payments shall be eliminated
or reduced consistent with the requirements of this Paragraph
9(d). Within five days after Executive's determination, the
Company shall pay (or cause to be paid) or distribute (or cause
to be distributed) to or for the benefit of Executive such
amounts as are then due to Executive under this Agreement. All
of the fees and expenses of the Accounting Firm in performing the
determinations referred to above shall be borne solely by the
Company. The Company agrees to indemnify. and hold harmless the
Accounting Firm of and from any and all claims, damages and
expenses resulting from or relating to its determinations
pursuant to this Paragraph, except for claims, damages or
expenses resulting from the gross negligence or willful
misconduct of the Accounting Firm.
(e) Termination of the Company Due to Loss of License.
In the event of a Termination by the Company Due to Loss of
License, Executive shall be entitled to:
(i) unpaid Base Compensation earned or accrued through
the date of termination and continued Base Compensation payments
at the rate in effect at the time of termination, for six months;
(ii) any performance bonus earned but not yet paid;
(iii) reimbursement for expenses incurred but not
yet reimbursed by the Company pursuant to Paragraph 8; and
(iv) any other compensation and benefits to which he
may be entitled under applicable plans, programs and agreements
of the Company.
Notwithstanding the above, if Executive's Loss of License was not
the result of any activity that Executive knew, or should have
known, would result in his Loss of License, then the Base
Compensation continuation provided for in subparagraph (i) above
shall be for 12 months rather than six months.
(f) No Mitigation; No Offset. In the event of any
termination of Executive's employment under the Agreement, he
shall be under no obligation to seek other employment, and there
shall be no offset against amounts due him under the Agreement on
account of any remuneration attributable to any subsequent
employment that he may obtain.
(g) Nature of Payments. Any amounts due Executive
under the Agreement in the event of any termination of his
employment with the Company are in the nature of severance
payments, or liquidated damages which contemplate both direct
damages and consequential damages that be may suffer as a result
of the termination of his employment, or both, and are not in the
nature of a penalty.
10. Covenant Not to Compete; Covenants to Protect
Confidential Information.
(a) If Executive voluntarily terminates his employment
with the Company, or if the Company terminates the Employment of
Executive for Cause, Executive shall not for a one-year period
engage in competition with the Company within the meaning of
Paragraph 10(b). If Executive is terminated on any other basis
resulting in payments to Executive (irrespective of the fact that
such payments are paid in a lump sum) with respect to a period
after such termination (the "Post Termination Payment Period"),
Executive shall not engage in such competition for a period equal
to the Post Termination Payment Period. If Executive is in
breach of this Paragraph 10(a), since a remedy at law will not
suffice to remedy the damage suffered thereby, the Company shall
be entitled to specific performance.
(b) Executive shall be engaging in competition with
the Company if he is engaged in the gaming business within the
primary geographic market area of any location in which the
Company is engaging in the gaming business at the time of the
termination of Executive's employment, whether as an employee,
consultant, partner, principal, agent, representative or
stockholder or in any other corporate or representative capacity,
so long as the Company is engaged in the gaming business in the
location in question. The Company agrees that it is not engaged
in the gaming business in Atlantic City, New Jersey, on the date
of this Agreement. The foregoing restrictions shall not be
construed to prohibit the ownership by Executive of less than
five percent (5 %) of any class of securities of any corporation
which is engaged in any of the foregoing businesses having a
class of securities registered pursuant to 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.
(c) Executive shall not, during the Term of Employment
or thereafter, without the prior written consent of the Company,
divulge, publish or otherwise disclose to any other person any
Confidential Information regarding the Company or any Subsidiary
except in the course of carrying out his responsibilities on
behalf of the Company (e.g., providing information to the
Company's attorneys, accountants, bankers, etc.) or if required
to do so pursuant to the order of a court having jurisdiction
over the subject matter or a summons, subpoena or order in the
nature thereof of any legislative body (including any committee
thereof) or any governmental or administrative agency. For this
purpose, Confidential Information shall include, but not be
limited to, the Company's financial , real estate, marketing and
promotional plans and strategies. Confidential Information does
not include information that becomes available to the public
other than through a breach of the Agreement on the part of
Executive.
(d) Executive shall not during the term of Employment
or thereafter, without the prior written consent of a Subject
Party, as hereafter defined, divulge, publish, or otherwise
disclose to any other person any Confidential Information
regarding a Subject Party except in the course of carrying out
responsibilities on behalf of Subject Party (e.g., providing
information to advisors) or if required to do so under
circumstances as described in Paragraph 10(c) in connection with
disclosure of Confidential Information about the Company. For
this purpose, Confidential Information about a Subject Party
shall include non-public financial information about a Subject
Party including non-public information regarding his business and
investment activities. Confidential Information does not include
information that becomes available to the public other than
through a breach of the Agreement on the part of Executive.
Executive further agrees he will not during the Term of
Employment or thereafter publish any book or article about, or
disclose in any public forum, his personal experiences with, or
other personal information about, a Subject Party. Affiliates of
a Subject Party or their respective heirs, successors and assigns
are expressly intended as third party beneficiaries of the
provisions of this Paragraph 10(d) and shall be entitled to
enforce the provisions hereof independent of the Company by
injunction or otherwise and to any damages suffered by reason of
any breach of this Paragraph 10(d). For purposes hereof, Subject
Party shall be Mr. Merv Griffin.
11. Equitable Relief.
(a) Executive acknowledges and agrees that the
restrictions contained in Paragraph 10 are reasonable and
necessary to protect and preserve the legitimate interests,
properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence
of such restrictions and that irreparable injury will be suffered
by the Company should Executive breach any of the provisions of
that Paragraph. Executive 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 further acknowledges and agrees that a
breach of any of the restrictions in Paragraph 10 cannot be
adequately compensated by monetary damages. Executive agrees
that the Company shall be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual
damages, as well as an equitable accounting of all earnings,
profits and other benefits arising from any violation of
Paragraph 10, which rights shall be cumulative and in addition to
any other rights or remedies to which the Company may be
entitled. In the event that any of the provisions of this
Paragraph should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable
law in any jurisdiction, it is the intention of the parties that
the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable
law, that such amendment shall apply only within the jurisdiction
of the court that made such adjudication and that the provision
otherwise be enforced to the maximum extent permitted by law.
(c) Executive irrevocably and unconditionally (i)
agrees that any suit, action or other legal proceeding arising
out of Paragraph 10, including without limitation, any action
commenced by the Company for preliminary and permanent injunctive
relief and 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 City, 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 Paragraph 21.
12. Indemnification.
(a) The Company shall indemnify Executive to the
fullest extent permitted by Delaware law in effect as of the date
hereof against all costs, expenses, liabilities and losses
(including, without limitation, attorneys' fees, judgments,
fines, penalties, ERISA excise taxes and amounts paid in
settlement) reasonably incurred by Executive in connection with a
Proceeding and this obligation shall survive the termination of
this Agreement with respect to matters arising during the Term of
Employment. For the purposes of this Paragraph 12, "Term of
Employment" shall mean the period commencing May 19, 1993, and
ending on the date specified in Paragraph 2 and a "Proceeding"
shall mean any action, suit or proceeding, whether civil,
criminal, administrative or investigative, in which Executive is
made, or is threatened to be made, a party to, or a witness in,
such action, suit or proceeding by reason of the fact that he is
or was an officer, director or employee of the Company or is or
was serving as an officer, director, member, employee, trustee or
agent of any other entity at the request of the Company.
(b) The Company shall advance to Executive all
reasonable costs and expenses incurred by him in connection with
a Proceeding within 20 days after receipt by the Company of a
written request for such advance. Such request shall include an
itemized list of the costs and expenses and an understanding by
Executive to repay the amount of such advance if it shall
ultimately be determined that he is not entitled to be
indemnified against such costs and expenses.
(c) Executive shall not be entitled to indemnification
under this Paragraph 12 unless he meets the standard of conduct
specified in the Delaware General Corporation Law.
Notwithstanding the foregoing, to the extent permitted by law
neither Section 145(d) of the Delaware General Corporation Law
nor any similar provision shall apply to indemnification under
this Paragraph 12, so that if Executive in fact meets the
applicable standard of conduct, he shall be entitled to such
indemnification whether or not the Company (whether by the board
of directors, the shareholders, independent legal counsel or
other party) determines that indemnification is proper because he
has met such applicable standard of conduct. Neither the failure
of the Company to have made such a determination prior to the
commencement by Executive of any suit or arbitration proceeding
seeking indemnification, nor a determination by the Company that
he has not met such applicable standard of conduct, shall create
a presumption that he has not met the applicable standard of
conduct.
(d) The Company shall not settle any Proceeding or
claim in any manner which would impose on Executive any penalty
or limitation without his prior written consent. Neither the
Company nor Executive will unreasonably withhold its or his
consent to any proposed settlement.
13. Assignability; Binding Nature. This Agreement shall be
binding upon and inure to the benefit of the Parties (and in the
case of Paragraph 10(d), to the benefit of the Subject Party) and
their respective successors, heirs and assigns. No rights or
obligations of the Company under the Agreement may be assigned or
transferred by Executive or the Company except that (a) such
rights or obligations of the Company may be assigned or
transferred pursuant to a merger or consolidation in which the
Company is not the continuing entity, or the sale or liquidation
of all or substantially all of the assets of the Company,
provided that the assignee or transferee is the successor to all
or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and
duties of the Company, as contained in the Agreement, either
contractually or as a matter of law, and (b) such obligations of
the Company may be transferred by Executive by will or pursuant
to the laws of descent or distribution or pursuant to any express
transfer provisions in an instrument granting Executive a stock
option. The Company shall take all reasonable legal action
necessary to effect such assignment and assumption of the
Company's liabilities, obligations and duties under the Agreement
in circumstances clause (a) of the preceding sentence.
14. Representation. The Company and Executive respectively
represent and warrant to each other that, subject to any approval
that may be necessary from any pertinent regulatory authority,
each respectively is fully authorized and empowered to enter into
the Agreement and that its or his entering into the Agreement and
the performance of its or his respective obligations under the
Agreement will not violate any agreement between the Company or
Executive respectively and any other person, firm or organization
or any law or governmental regulation.
15. Entire Agreement The Agreement contains the entire
agreement between the Parties concerning the subject matter
hereof and supersedes all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or
oral, between the Parties with respect thereto.
16. Amendment or Waiver. The Agreement cannot be changed,
modified or amended without the consent in writing of both
Executive and the Company. No waiver by either Party at any time
of any breach by the other Party of any condition or provision of
the Agreement shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or at any prior or subsequent
time. Any waiver must be in writing and signed by Executive or
an authorized officer of the Company, as the case may be.
17. Severability. In the event that any provision or
portion of the Agreement shall be determined to be invalid or
unenforceable for any reason, in whole or in part, the remaining
provisions of the Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted
by law.
18. Survivorship. The respective rights and obligations of
the Parties hereunder shall survive any termination of the
Agreement to the extent necessary to the intended preservation of
such rights and obligations.
19. Governing Law. The Agreement shall be governed by and
construed and interpreted in accordance with the laws of New
Jersey without reference to principles of conflict of laws.
20. Settlement of Disputes. In the event of any dispute
under the provisions of this Agreement other than a dispute in
which the primary relief sought is an equitable remedy such as an
injunction, the parties shall be required to have the dispute,
controversy or claim settled by arbitration in the City of New
York, New York in accordance with the National Rules for the
Resolution of Employment Disputes then in effect of the American
Arbitration Association, before a panel of three arbitrators, two
of whom shall be selected by the Company and Employee,
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 Employee prevails on any material issue which is
the subject of such arbitration or lawsuit, 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 and the Employee's reasonable legal
fees and expenses. Otherwise, each party shall bear his or its
own expenses relating to the conduct of the arbitration
(including attorneys' fees and expenses) and shall share the fees
of the American Arbitration Association.
21. Notice. Any notice given to either Party shall be in
writing and, except as provided in the second sentence of
Paragraph 9(b), shall be deemed to have been given when delivered
personally or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to de Party
concerned at the address indicated below or to such changed
address as such Party may subsequently give notice of:
If to the Company or the Board:
Players International, Inc.
1300 Atlantic Avenue
Suite 800
Atlantic City, NJ 08401
Attention: General Counsel
With a copy to:
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103-6993
Attention: Robert J. Lichtenstein, Esquire
If to Executive:
Howard Goldberg
117 Cheltenham Avenue
Linwood, NJ 08221
With a copy to:
Willkie, Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022-4677
Attention: Stephen T. Lindo, Esquire
22. Headings. The headings of the paragraphs contained in
the Agreement are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
23. Counterparts. The Agreement may be executed in two or
more counterparts.
IN WITNESS WHEREOF, the undersigned have executed the
Agreement as of the date first written above.
Players International Inc.
By:
_________________________________
Edward Fishman
Its: Chairman
_____________________________________
Howard Goldberg
21
PH06/154834.1
Exhibit 10.67
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of March 31, 1997 between Players
International, Inc. (together with its successors or assigns as
permitted under this Agreement, the "Company"), and Patrick
Madamba, Jr. ("Executive").
W I T N E S S E T H:
The Company and Executive entered into an Employment
Agreement as of January 9, 1995 (the "Agreement"). The Agreement
was amended as of November 16, 1995, and was assigned from the
Company to Players Services, Inc. as of April 1, 1996. The
parties now desire to amend and restate the Agreement to reflect
Executive's current position, compensation and other arrangements
with the Company. Therefore, in consideration and other
arrangements with the Company. Therefore, in consideration of
the premises and mutual covenants contained herein and for other
good and valuable consideration, the Company and Executive
(individually a "Party" and together the "Parties") agree that
the Agreement is amended and restated as of March 31, 1997, to
read as follows:
1. Definitions
(a) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(b) "Base Compensation" shall mean the compensation
provided for in Paragraph 4, subject to such increases as may be
approved by the Board from time to time.
(c) "Beneficial Owner" of any securities shall mean:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of securities tendered pursuant
to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for payment, pursuant or exchange;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including without limitation
pursuant to any agreement, arrangement or understanding, whether
or not in writing; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of any security under this
subparagraph (ii) as a result of an oral or written agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not then reportable by such Person
or Scheduled 13D under the Exchange Act (or any comparable or
successor report); or
(iii) where voting securities are beneficially
owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii)
above) or disposing of any voting securities of the Company;
provided, however, that nothing in this Paragraph 1(c) shall
cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of any securities
acquired through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days
after the date of such acquisition.
(d) "Board" shall mean the Board of Directors of the
Company.
(e) "Cause" shall mean (i) Executive is convicted of a
felony involving moral turpitude; (ii) Executive uses alcohol or
any unlawful controlled substance to an extent that it interferes
on a continuing and material basis with the performance of his
duties under the Agreement; (iii) Executive engages in the
willful, unauthorized disclosure of Confidential Information, as
defined in Paragraph 10(c), concerning the Company or any
Subsidiary, unless such disclosure was (A) believed in good faith
by Executive to be appropriate in the course of properly carrying
out his duties under the Agreement, or (B) required by an order
of a court having jurisdiction over the subject matter or a
summons, subpoena or order in the nature thereof of any
legislative body (including any committee thereof) or any
governmental or administrative agency; (iv) Executive, other than
in the course of properly carrying out duties under the
Agreement, perform services for any other corporation or person
that competes with the Company or any Subsidiary; (v) Executive,
in carrying out his duties under the Agreement, engages in
willful neglect or willful neglect or willful misconduct
resulting, or reasonably likely to result, in either case, in
material economic harm to the Company, unless such act, or
failure to act, resulted from Executive's reasonable belief that
such act or failure to act was in the best interests of the
Company; (vi) Executive breaches a material term of this
Agreement; or (vii) Executive is found disqualified or not
suitable to hold a casino key employee license or other such
license by a gaming authority in any jurisdiction where the
Company operates a casino and Executive is required to be found
qualified, suitable or licensed, as the case may be.
(f) "Change in Control" shall mean the occurrence of
any one of the following events:
(i) any Person (except the Griffin Group or its
Affiliates and Associates, Company management as of the Effective
Date and their Affiliates and Associates or the Company or any
employee benefit plan of the Company or of any Affiliate, any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such employee benefit
plan), together with all Affiliates and Associates of such
Person, shall become the Beneficial Owner in the aggregate of 30%
or more of the Voting Stock then outstanding; provided, however,
that no "Change of Control" shall be deemed to occur during any
period in which any such Person, and its Affiliates and
Associates, are bound by the terms of a standstill agreement
under which such parties have agreed not to acquire more than 30%
of the Voting Stock then outstanding or to solicit proxies;
(ii) consummation by the Company of a
reorganization, merger or consolidation (a "Business
Combination"), in each case, with respect to which all or
substantially all of the individuals and entities who were the
respective Beneficial Owners of the Voting Stock outstanding
immediately prior to such Business Combination do not, following
such Business Combination, Beneficially own, directly or
indirectly, more than 50% of the then outstanding shares of
voting stock of the corporation resulting from such Business
Combination in substantially the same proportion as their
ownership immediately prior to such Business Combination of the
outstanding Voting Stock;
(iii) Consummation of a complete liquidation
or dissolution of the Company;
(iv) sale or other disposition of all or
substantially all of the assets of the Company other than to a
corporation with respect to which, following such sale or
disposition, more than 50% of the then outstanding shares of
voting stock is then owned beneficially, directly or indirectly,
by all or substantially all of the individuals and entities who
were the Beneficial Owners, respectively, of the outstanding
Voting Stock immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the
outstanding Voting Stock immediately prior to such sale or
disposition;
(v) individuals who, as of the beginning of any
twenty-four month period, consitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majortiy of
the Board, provided that any individual becoming a director
subsequent to the beginning of such period whose election or
nomination for election by the Company stockholders was approved
by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
is in connection with an actual or threatened election contest
relating to the election of members of the Board (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(vi) a "change of control" as defined in the form
of indenture governing any indebtedness of the Company shall have
occurred.
(g) "Constructive Termination Without Cause" shall
mean that:
(i) without Executive's prior written consent,
one or more of the following events occurs without Cause:
(A) following a Change of Control or within
six (6) months prior to any such Change of Control, Executive is
assigned any duties inconsistent with Executive's status as an
executive officer of the Company or a substantial adverse
alteration occurs in the nature and status of Executive's
responsibilities, authorities, duties or reporting relationships
from those in effect within six (6) months of a Change in Control
of the Company;
(B) following a Change of Control or within
six (6) months prior to any such Change of Control, Executive's
Base Compensation as provided for in Paragraph 4 is decreased by
the Company, or his benefits under any material employee benefit
plan or program of the Company or his incentive or equity
opportunity under any material incentive or equity program of the
Company is or are reduced, after taking into account the
discretion of the Board to determine the level at which Executive
participates in any performance compensation program as provided
in Paragraph 4, on a basis not shared in common with other senior
executives of the Company as a group;
(C) the Company fails to obtain a written
agreement from any successor of the Company to assume and perform
the Agreement; or
(D) following the Change of Control, the
Company moves its principal executive offices more than 50 miles
from Atlantic City, New Jersey, or such other place where the
Company's principal executive offices are located immediately
prior to the Change of Control; and
(ii) within 90 days of learning of the occurrence
of such event, Executive terminates his employment with the
Company.
(h) "Disability" shall mean Executive's inability, for
a period of six consecutive months, to render substantially the
services provided for in Paragraph 3(a) by reason of permanent
mental or physical disability, whether resulting from illness,
accident or otherwise. In the case of a dispute as to whether
Executive has incurred a Disability. Executive agrees to submit
to a physical examination by two physicians, one selected by
Executive and the other by the Company and, in the event they do
not agree, to a physical examination by an additional physician
selected by the first two physicians whose decision shall be
final and binding on both parties.
(i) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(j) "Subsidiary" shall mean any corporation in which
the Company owns 50% or more of the Voting Stock or any other
venture in which if owns 50% or more of the equity.
(k) "Term of Employment" shall mean the period
specified in Paragraph 2.
(l) "Termination Upon a Change of Control" shall mean
that following a Change in Control (i) the Company terminates
Executive's employment without Cause or (ii) there is a
Constructive Termination Without Cause.
(m) "Voting Stock" shall mean capital stock of any
class or classes having general voting power under ordinary
circumstances, in the absence of contingencies, to elect the
directors of a corporation.
2. Term of Employment.
(a) The Company hereby agrees to continue to employ
Executive, and Executive hereby accepts such continuation of
employment, in the position and with the duties and
responsibilities as set forth in Paragraph 3 for the Term of
Employment, subject to the terms and conditions of the Agreement.
(b) The Term of Employment shall commence on the date
hereof and shall, unless sooner terminated or extended as
provided in Paragraph 9, terminate upon the close of business on
January 22, 1999.
3. Position, Duties and Authorities.
(a) During the Term of Employment, Executive shall be
employed as Vice President - Compliance and Legal Affairs of the
Company or such other more senior position as the Company may
determine in its sole discretion. Executive's duties,
responsibilities and authorities shall consist of those regularly
rendered by a Vice President - Compliance and Legal Affairs or
such other duties appropriate to any senior position within the
Company in which Executive may serve during the Term of
Employment, as the case may be.
(b) Anything herein to the contrary notwithstanding,
nothing shall preclude Executive from engaging in charitable,
community and business affairs, managing his personal investments
and serving as a member of boards of directors so long as such
activities do not materially interfere with his carrying out his
duties and responsibilities under the Agreement.
(c) During the term of Employment, Executive shall
perform his services from an office in Atlantic City, New Jersey
and at such other offices of the Company as may be required by
his duties; provided, however, that Executive shall not be
required to move his home from Atlantic County, New Jersey.
4. Base Compensation. During the Term of Employment,
Executive shall be paid by the Company or any of its Affiliates
Base Compensation payable no less frequently than in equal semi-
monthly installments at an annualized rate of no less than
$150,000 per annum for the period commencing January 23, 1997
through January 22, 1999. The Company shall be entitled to make
proper withholdings from Executive's Base Compensation (and all
other payments of compensation under this Agreement) as required
by law.
5. Performance Bonus. The Company may, but is not
required, to adopt a bonus or short term performance compensation
program for senior executives. In the event that such a program
is adopted, Executive shall participate in such program but the
Board shall determine Executive's level of participation for each
year of the Term of Employment in its sole discretion; provided,
however, that the Board shall have the discretion to grant
additional individual bonus compensation in excess of the
foregoing general performance bonus program to Executive or any
other executive or the Company in recognition of performance
achievements particular to any of them.
6. Stock Options and Stock Grant.
(a) The Company may, but is not required, to grant to
Executive shares of Voting Stock as well as stock options to
purchase of Voting Stock subject to restrictions determined by
the Board, in either event in the sole discretion of the Board,
for any year during the Term of Employment, which shall be made
pursuant to an equity compensation plan approved by the Board
generally for senior level executives of the Company; provided,
however, that the Board shall have the discretion to grant
additional options or restricted shares to Executive or any other
executive or the Company in recognition of performance
achievements particular to any of them. The Company shall use
its best effort to maintain any and all registration statements
of any shares subject to option or issued pursuant to the
exercise of a stock appreciation right to permit such shares to
be freely tradeable upon exercise.
(b) The Company has granted to Executive options to
purchase shares of the Company as set forth on Exhibit "A."
7. Employment Benefit Program. Executive shall be
entitled to receive such benefits as are generally available to
all other executive employees of the Company. Executive shall
also be entitled to receive all perquisites available to other
executive employees of the Company. Executive, his spouse and
all minor children shall be entitled, at the Company's sole cost
and expense, to medical, surgical, hospitalization, dental and
visual coverage (which may include any such coverage furnished
Executive under any insured program provided by the Company to
its employees) providing Executive, his spouse and minor children
with such coverage for such expenses as is provided to other
executive employees of Employer. Without limiting foregoing, in
the event that during the Term of Employment, the Company
terminates the long term care and disability coverage that is
provided by the Company terminates the long term care and
disability coverage that is provided by the Company to executive
employees of the Company as of the effective date of this
Agreement, the Company shall pay directly to an insurer
designated by Executive a maximum amount of $175.00 per month for
comparable long term care and disability coverage.
8. Business Expenses Reimbursement. During the Term of
Employment, Executive shall be entitled to receive from the
Company, upon submission of adequate documentation, reimbursement
for all reasonable, out-of-pocket ordinary and necessary business
expenses incurred by him in performing services under the
Agreement. Such expenses may include reasonable continuing
education, travel expenses, entertainment and promotional
expenses, dues and expenses of membership of civic groups,
professional societies and fraternal organizations including, but
not limited to, all costs to Executive to maintain Executive's
license in good standing to practice law in the State of New
Jersey. In addition, any expenses incurred in connection with
the qualification as a licensee in any jurisdiction shall be paid
by the Company.
9. Termination of Employment.
(a) Termination Due to Death or Disability. In the
event of the termination of Executive's employment under the
Agreement due to his death or Disability, Executive or his legal
representatives as the case may be, shall be entitled to:
(i) in the case of Disability, the disability
benefit available under the only to the extent of the insurance
maintained as provided in Paragraph 7; and
(ii) any other compensation and benefits to which
he or his legal representatives or beneficiaries may be entitled
under applicable plans, program and agreements of the Company,
including, without limitation, life insurance benefits as may be
provided in Paragraph 7.
(b) Termination by the Company for Cause. The Company
may terminate Executive for Cause. The preceding sentence
notwithstanding, Executive's employment shall not be deemed to
have been terminated for Cause unless the Company has given or
delivered to Executive at or prior to any such for Cause
termination reasonable notice setting forth the reasons for the
Company's termination of Executive's employment for Cause. In
the event Executive's employment is terminated by the Company for
Cause, Executive shall be entitled to:
(i) unpaid Base Compensation earned or accrued at
the rate in effect at the time of his termination through the
date of termination of his employment;
(ii) reimbursement for expense incurred but not
yet reimbursed by the Company pursuant to Paragraph 8; and
(iii) any other compensation and benefits to
which he may be entitled under applicable plans, programs and
agreements of the Company.
Executive's entitlement to the foregoing shall be without
prejudice to the right of the Company for any damages to which it
may be entitled as a result of such Cause.
(c) Termination without Cause: Constructive
Termination Without Cause; Expiration of the Agreement. In the
event Executive's employment is terminated by the Company without
Cause (which shall not include a termination pursuant to
Paragraph 9(a) or 9(d)), or in the event of a Constructive
Termination Without Cause, Executive shall be entitled to
receive;
(i) unpaid Base Compensation earned or accrued
through his date of termination and continued Base Compensation
payments, at the rate in effect at the time of his termination,
through the end of the Term of Employment in a lump-sum payment
promptly following termination of Executive's employment;
(ii) any performance or special incentive bonus
earned but not yet paid;
(iii) reimbursement for expenses incurred but
not yet reimbursed by the Company pursuant to Paragraph 8; and
(iv) any other compensation and benefits to which
he may be entitled under applicable plans, programs and
agreements of the Company.
(d) Termination Upon a Change in Control. In the
event a Termination Upon a Change in Control occurs within two
(2) years following any Change of Control, or in the event
Executive is terminated under subparagraph (c) within six months
prior to the occurrence of a Change in Control, Executive shall
be entitled to receive (taking into account any benefits provided
under subparagraph (c)), promptly following the later of his
termination of employment or the Change of Control:
(i) unpaid Base Compensation earned or accrued
through his date of termination and a lump-sum payment equal to
the then present value (using a discount rate per annum
determined by reference to the discount rate then published by
the Pension Benefit Guaranty Corporation for determining the
value of immediate annuities (the "Present Value")) of
Executive's Base Compensation that would be due him for a period
of 36 months following termination of his employment, determined
on the basis of the average of the Base Compensation paid to
Executive for the 36 months preceding his termination;
(ii) a lump-sum payment equal to the Present Value
of the aggregate performance bonus amounts he received, if any,
for the period of 36 months preceding his termination;
(iii) any performance or special incentive
bonus earned but not yet paid;
(iv) reimbursement for expenses incurred but not
yet reimbursed by the Company pursuant to Paragraph 8;
(v) the immediate vesting of all stock options
previously granted to Executive, notwithstanding the terms of any
such grant to the contrary, with the ability to exercise any such
options for 12 months following the date of termination but in no
event after the expiration of the stated option term; and
(vi) any other compensation and benefits to which
he may be entitled under applicable plans, programs and
agreements of the Company and the continuation of Executive's
participation in all Employee Benefit Programs (as defined below)
during the period for which Executive is to receive payments
under clause (i) above (irrespective of the fact that such
payments are paid in a lump sum); provided, however, that in the
event the Company is precluded from providing coverage under any
such program by applicable law or regulation it may choose to
provide Executive with a payment equal to the cost of such
coverage without regard to tax effect. "Employee Benefit
Programs" shall mean those employee welfare and retirement
benefit plans and programs of the Company in which Executive
participates immediately before Executive's termination of
employment; provided, however, that the Company shall not be
prohibited from amending or terminating any Employee Benefit
Program as long as Executive continues to receive comparable
levels of coverage in the aggregate during the payment period.
Notwithstanding the foregoing, in the event that it shall be
determined that any payment or distribution by the Company to or
for the benefit of Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would constitute an "excess
parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), and that
it would be economically advantageous to the Company to reduce
the payment to avoid or reduce the limitation of the Company's
federal income tax deduction under Section 280G of the Code, the
aggregate present value of amounts payable or distributable to or
for the benefit of Executive pursuant to this Agreement (such
payments or distributions pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount"
shall be an amount expressed in present value which maximizes the
aggregate present value of Agreement Payments without causing any
Payment to be subject to the limitation of deduction under
Section 280G of the Code. For purposes of this subparagraph (d),
"present value" shall be determined in accordance with Section
280G(d)(4) of the Code. All determinations to be made under this
Paragraph 9(d) shall be made by the Company's independent public
accountant immediately prior to the Change of Control (the
"Accounting Firm"), which firm shall provide its determinations
and any supporting calculations both the Company and Executive
within ten days of the termination date. Any such determination
by the Accounting Firm shall be binding upon the Company and
Executive. Executive shall in his sole discretion determine
which and how much of the Agreement Payments shall be eliminated
or reduced consistent with the requirements of this Paragraph
9(d). Within five days after Executive's determination, the
Company shall pay (or cause to be paid) or distribute (or cause
to be distributed) to or for the benefit of Executive such
amounts as are then due to Executive under this Agreement. All
of the fees and expenses of the Accounting Firm in performing the
determinations referred to above shall be borne solely by the
Company. The Company agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and
expenses resulting from or relating to its determinations
pursuant to this Paragraph, except for claims, damages or
expenses resulting from the gross negligence or willful
misconduct of the Accounting Firm.
The Paragraph 9(d) shall survive any termination of this
Agreement other than a termination of this Agreement by reason of
Executive's termination of employment for Cause.
(e) No Mitigation; No Offset. In the event of any
termination of Executive's employment under the Agreement, he
shall be under no obligation to seek other employment, and there
shall be no offset against amounts due him under the Agreement on
account of any remuneration attributable to any subsequent
employment that he may obtain.
(f) Nature of Payments. Any amounts due Executive
under the Agreement in the event of any termination of his
employment with the Company are in the nature of severance
payments, or liquidated damages which contemplate both direct
damages and consequential damages that may be suffered as a
result of the termination of his employment, or both, and are not
in the nature of a penalty.
10. Covenant Not to Compete; Covenants to Project
Confidential Information and Not Solicit Employees; Return of
Records; Inventions and Improvements.
(a) If Executive voluntarily terminates his
employments with the Company (except in cases where Executive
voluntarily terminates his employment with the Company after the
nature expiration of the Term of Employment because of the
Company's failure to renew this Agreement on at least as
favorable terms to Executive as provided to Executive under this
Agreement), or if the Company terminates the employment of
Executive for Cause, Executive shall not for a one-year period
engage in competition with the Company within the meaning of
Paragraph 10(b). If Executive is in breach of this Paragraph
10(a), since a remedy at law will not suffice to remedy the
damage suffered thereby, the Company shall be entitled to
specific performance.
(b) Executive shall be engaging in competition with
the Company if he is engaged in the gaming business within 100
miles of any location in which the Company is engaging in the
gaming business at the time of the termination of Executive's
employment, whether as an employee, consultant, partner,
principal, agent, representative or stockholder or in any other
corporate or representative capacity, so long as the Company is
engaged in the gaming business in the location in question. The
Company agrees that it is not engaged in the gaming business in
either Atlantic City, New Jersey or Las Vegas, Nevada on the date
of this Agreement. The foregoing restrictions shall not be
construed to prohibit the ownership by Executive of less than one
percent (1%) of any class of securities of any corporation which
is engaged in any of the foregoing business having a class of
securities registered pursuant to 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.
(c) Executive shall not, during the Term of Employment
or thereafter, without the prior written consent of the Company,
divulge, publish or otherwise disclose to any other person any
Confidential Information regarding the Company or any Subsidiary
except in the course of carrying out his responsibilities on
behalf of the Company (e.g., providing information to the
Company's attorneys, accountants, bankers, etc.) or if required
to do so pursuant to the order of a court having jurisdiction
over the subject matter or a summons, subpoena or order in the
nature thereof of any legislative body (including any committee
thereof) or any governmental or administrative agency. For this
purpose, Confidential Information shall include, but not be
limited to, the Company's financial, real estate, marketing and
promotional plans and strategies, and non-public personal
financial information about the Company's executives.
Confidential Information does not include information that
becomes available to the public other than through a breach of
the Agreement on the part of Executive.
(d) Executive shall not during the Term of Employment
or thereafter, without the prior written consent of a Subject
Party, as hereafter defined, divulge, publish, or otherwise
disclose to any person any Confidential Information regarding a
Subject Party except in the course of carrying out
responsibilities on behalf of Subject Party (e.g., providing
information to advisors) or if required to do so under
circumstances as described in Paragraph 10(c) in connection with
disclosure of Confidential Information about the Company. For
this purpose, Confidential Information about a Subject Party
shall include non-public financial information about a Subject
Party shall include non-public financial information about a
Subject Party including non-party information regarding his
business and investment activities. Confidential Information
does not include information that becomes available to the public
other than through a breach of the Agreement on the party of
Executive. Executive further agrees he will not during the Term
of Employment or thereafter publish any book or article about, or
disclose in any public forum, his personal experiences with, or
other personal information about, a Subject Party. Affiliates of
a Subject Party or their respective heirs, successors and assigns
are expressly intended as third party beneficiaries of the
provisions of this Paragraph 10(d) and shall be entitled to
enforce the provision hereof independent of the Company by
injunction or otherwise and to any damages suffered by reason of
any breach of this Paragraph 10(d). For purposes hereof, Subject
Party shall be Mr. Merv Griffin.
(e) For a period of one (1) year after the termination
of Executive's employment for any reason whatsoever, Executive
will not solicit or endeavor to entice away from the Company
(whether for his own business or on behalf of another person or
entity) any of the Company's employees who have had access to
Confidential Information to work for a person or business
engaging in competition with the Company within the meaning of
Paragraph 10(b). This Paragraph shall not prohibit any employer
of Executive from employing any employee of Players, so long as
Employee did not, directly or indirectly, solicit or endeavor to
entice away from the Company any employee of the Company.
(f) Upon the termination of Executive's employment (or
at any other time so requested), Executive agrees to promptly
deliver to the Company all of the Company's assets, files,
documents, business records, notes, designs, data, manuals,
equipment, keys, credit cards, lists of customers, and any other
materials of any nature which are in Executive's possession or
control, including materials which contain Confidential
Information, and any copies of the foregoing.
(g) Executive shall treat as and for the Company's
sole benefit, and shall fully and promptly disclose and assign to
the Company without additional compensation, all ideas, writings,
discoveries, techniques, methods, developments, inventions and
improvements which may be made, conceived or reduced to practice
by Executive during the Term of Employment and every other item
of knowledge relating to any of the business affairs of the
Company. Executive, without cost or expense to Executive, shall
execute all documents and cooperate in all other acts reasonably
required of Executive to protect the rights to the ideas,
discoveries, inventions and improvements referred to herein and
shall surrender to the Company upon termination of Executive's
employment all documents, agreements and other writings produced
by or coming into Executive's possession.
This Paragraph 10 and Paragraph 11 below shall survive any
termination of this Agreement.
11. Equitable Relief.
(a) Executive acknowledges and agrees that the
restrictions contained in Paragraph 10 are reasonable and
necessary to protect and preserve the legitimate interests,
properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence
of such restrictions and that irreparable injury will be suffered
by the Company should Executive breach any of the provisions of
that Paragraph. Executive 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 further acknowledges and agrees that a
breach of any of the restrictions in Paragraph 10 cannot be
adequately compensated by monetary damages. Executive agrees
that the Company shall be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual
damages, as well as an equitable accounting of all earnings,
profits and other benefits arising from any violation of
Paragraph 10, which rights shall be cumulative and in addition to
any other rights or remedies to which the Company may be
entitled. In the event that any of the provisions of this
Paragraph should ever be adjudicated to exceed the time,
geographic, service, or other limitations permitted by applicable
law in any jurisdiction, it is the intention of the parties that
the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable
law, that such amendment shall apply only within the jurisdiction
of the court that made such adjudication and that the provision
otherwise be enforced to the maximum extend permitted by law.
(c) Executive irrevocably and unconditionally (i)
agrees that any suit, action or other legal proceeding arising
out of Paragraph 10, including without limitation, any action
commenced by the Company for preliminary and permanent injunctive
relief and 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 City, 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 Paragraph 20.
12. Assignability: Binding Nature. This Agreement shall
be binding upon and inure to the benefit of the Parties (and in
the case of Paragraph 10(d), to the benefit of the Subject party)
and their respective successors, heirs and assigns. No rights or
obligations of the Company under the Agreement may be assigned or
transferred by Executive or the Company except that (a) such
rights or obligations of the Company may be assigned or
transferred pursuant to a merger or consolidation in which the
Company is not the continuing entity, or the sale or liquidation
of all or substantially all of the assets of the Company,
provided that the assignee or transferee is the successor to all
or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and
duties of the Company, as contained in the Agreement, either
contractually or as a matter of law, and (b) such obligations of
the Company may be transferred by Executive by will or pursuant
to the law of descent or distribution or pursuant to any express
transfer provisions in an instrument granting Executive stock
option. The Company shall take all reasonable legal action
necessary to effect such assignment and assumption of the
Company's liabilities, obligations and duties under the Agreement
in circumstances clause (a) of the preceding sentence.
13. Representation. The Company and Executive respectively
represent and warrant to each other that, subject to any approval
that may be necessary from any pertinent regulatory authority,
each respectively is fully authorized and empowered to enter into
the Agreement and that its or his entering into this Agreement
and the performance of its or his respective obligations under
the Agreement will not violate any agreement between the Company
or Executive respectively and any other person, firm or
organization or any law or governmental regulation.
14. Entire Agreement. The Agreement contains the entire
agreement between the parties concerning the subject matter
hereof and supersedes all prior agreements, understandings,
discussion, negotiations and undertakings, whether written or
oral, between the parties with respect thereto.
15. Amendment or Waiver. The Agreement cannot be changed,
modified or amended without the consent in writing of both
Executive and the Company. No waiver by either Party at any time
of any breach by the other Party of any condition or provision of
the Agreement shall be deemed a waiver of a similar or dissimilar
condition or provision at the same or at any prior or subsequent
time. Any waiver must be in writing and signed by Executive or
an authorized officer of the Company, as the case may be.
16. Severability. In the event that any provision or
portion of the Agreement shall be determined to be invalid or
unenforceable for any reason, in whole or in part, the remaining
provisions of the Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted
by law.
17. Survivorship. The respective rights and obligations of
the Parties hereunder shall survive any termination of the
Agreement to the extent necessary to the intended preservation of
such rights and obligations.
18. Governing Law. The Agreement shall be governed by and
construed and interpreted in accordance with the laws of the
State of New Jersey without reference to principles of conflict
of laws.
19. Settlement of Disputes. In the event of any dispute
under the provisions of this Agreement other than a dispute in
which the primary relief sought is an equitable remedy such as an
injunction, the parties shall be required to have the dispute,
controversy or claim settled by arbitration in the Atlantic City,
New Jersey in accordance with the National Rules of the
Resolution of Employment Disputes then in effect of the American
Arbitration Association, before a panel of three arbitrators, two
of whom shall be selected by the Company and Employee,
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 on any material issue which is the subject of such
arbitration or lawsuit, 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 and the Employee's reasonable legal fees and
expenses. Otherwise, each party shall bear his or its own
expenses relating to the conduct of the arbitration (including
attorneys' fees and expenses) and shall share the fees of the
American Arbitration Association.
20. Notices. Any notice given to either Party shall be in
writing and, except as provided in the second sentence of
Paragraph 9(b), shall be deemed to have been given when delivered
personally or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Party
concerning at the address indicated below or to such changed
address as such Party may subsequently give notice of:
If to the Company:
Players International, Inc.
1300 Atlantic Avenue
Suite 800
Atlantic City, NJ 08401
Attention: Chief Executive Officer
If to Executive:
Patrick Madamba, Jr.
1011B East Shore Drive
Brigantine, NJ 08203
21. Heading. The heading of the paragraphs contained in
the Agreement are for convenience of reference only, do not
constitute a part of this Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
22. Counterparts. The Agreement may be executed in two or
more counterparts.
IN WITNESS WHEREOF, the undersigned have executed the
Agreement as of the date first above.
ATTEST: Players International, Inc.
____________________
By: Howard A. Goldberg
Its: Chief Executive Officer
Patrick Madamba, Jr.
