Executive Employment Agreement - Gameco Inc. and Ian M. Stewart
EXECUTIVE EMPLOYMENT AGREEMENT
IAN M. STEWART
EXECUTIVE EMPLOYMENT AGREEMENT
("AGREEMENT")
EXECUTIVE EMPLOYMENT AGREEMENT, effective February 22, 2002 ("Effective
Date"), by and between Gameco, Inc., a Delaware corporation (the "Company"), and
Ian M. Stewart (the "Executive").
WHEREAS, the Company desires to employ the Executive and the Executive
desires to be so employed by the Company from and after the date of this
Agreement, it being specifically acknowledged by each party hereto that upon
execution and delivery of this Agreement, the employment agreement dated June
23, 1999, between the Executive and Colonial Holdings, Inc. (a subsidiary of the
Company) shall be terminated and superseded by this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
ARTICLE I
EMPLOYMENT DUTIES AND BENEFITS
SECTION 1.1 EMPLOYMENT. The Company hereby employs the Executive as
President of Pari-Mutuel Wagering and Video Poker Operations of the Company. The
Executive accepts such employment and agrees to perform the duties and
responsibilities assigned to him under this Agreement.
SECTION 1.2 DUTIES AND RESPONSIBILITIES. During the period of employment,
the Executive agrees to serve the Company as President of Pari-Mutuel Wagering
and Video Poker Operations and in such other offices and directorships of the
Company and of its subsidiaries and related companies (collectively,
"Affiliates") to which he may be elected or appointed, and to perform the duties
commensurate with such positions and such other reasonable and appropriate
duties as may be requested of him by the board of directors of the Company (the
"Board of Directors") and of the Affiliates, as applicable, in accordance with
this Agreement and in compliance with all applicable laws and regulations.
Excluding periods of vacation and sick leave to which the Executive is entitled,
Executive shall devote such time, energy, and skill to the business and affairs
of the Company and its Affiliates and to the promotion of their interests as is
necessary to perform the duties required of him by this Agreement.
SECTION 1.3 WORKING FACILITIES; LOCATION. The Executive shall be furnished
with facilities and services suitable to his position and adequate for the
performance of his duties under this Agreement. The principal place of
performance by the Executive of his duties hereunder shall be in New Kent
County, Virginia, or at such other location as he may reasonably be required to
travel in the performance of his responsibilities.
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SECTION 1.4 VACATIONS. The Executive shall be entitled each year during the
Term, as defined below, to a vacation with full salary and benefits, for the
number of weeks established by the Board of Directors.
SECTION 1.5 EXPENSES. The Executive is authorized to incur reasonable
expenses for promoting the business of the Company, including expenses for
entertainment, travel and similar items. The Company will promptly reimburse the
Executive for all such expenses upon the presentation by the Executive, from
time to time, of an itemized account of such expenditures.
SECTION 1.6 VEHICLE ALLOWANCE. The Executive shall be paid a vehicle
allowance of $500 per month or, at his election, the Company shall lease for not
more than $500 per month a vehicle for the use of the Executive, the make and
model of which shall be mutually agreeable to the Company and the Executive.
SECTION 1.7 BENEFIT PLANS. From the effective date of this Agreement, the
Executive shall be entitled to participate in benefit plans provided to
employees of the Company or Affiliates. Such participation shall be based upon
the policies established by the Board of Directors as applicable to the
Executive.
ARTICLE II
COMPENSATION
SECTION 2.1 BASE SALARY. During the Term, the Company shall pay to the
Executive a base salary at the rate of $200,000 per annum for the period
February 22, 2002 through February 21, 2003 and at the rate of $215,000 per
annum for the period February 22, 2003 through February 22, 2004.
SECTION 2.2 BONUS AND BONUS PLAN PARTICIPATION. The Executive will be
entitled to an annual bonus for each year during the Term of up to 33% of the
Executive's base salary. The amount of the percentage within that limit shall be
determined in the sole discretion of the Board of Directors and shall be based
on written objectives defined by the Board of Directors.
ARTICLE III
TERM OF EMPLOYMENT AND TERMINATION
SECTION 3.1 TERM. This Agreement shall be for a period of two years
commencing on February 22, 2002; subject, however, to termination during such
period as provided in this Article (the "Term").
SECTION 3.2 TERMINATION BY THE COMPANY WITH CAUSE. The Company may
terminate the Executive's employment, at any time, for cause upon ten days'
written notice and opportunity for the Executive to remedy any non-compliance
with the terms of this Agreement (if such non-compliance can be remedied).
Grounds for termination "for cause" shall be any of the following: (i)
intentional and material breach of his duty of loyalty or care to the Company,
(ii) gross negligence or willful misconduct in performance of his duties during
the
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course of his employment, (iii) persistent failure to abide by the corporate
policies and procedures established by the Board of Directors; (iv) persistent
failure to execute the reasonable and lawful instructions of the Board of
Directors relating to the operation of the Company's business, and (v)
conviction of any felony or loss of the Executive's necessary gaming licenses or
other regulatory approval. Upon the date of termination of the Executive's
employment pursuant to this Section 3.2, the Company's obligation to pay any
compensation (including bonuses) shall terminate, at which time the Company
shall be responsible for compensating the Executive for any unpaid salary and
vacation time not taken. Subject to this exception and the obligation of the
Company to compensate the Executive through the notice period, no other
compensation shall be payable to the Executive should this Agreement be
terminated pursuant to this Section 3.2.
SECTION 3.3 TERMINATION OR CESSATION OF EMPLOYMENT WITHOUT CAUSE. If the
Executive's employment is terminated or ceased without cause, all compensation
shall cease, but the Company shall be obligated to compensate the Executive with
a lump sum severance payment equal to the present value of his salary otherwise
payable during the remaining Term of this Agreement. In the event the
Executive's employment is terminated pursuant to this section 3.3, the Executive
shall be entitled to participate in the bonus payable pursuant to SECTION 2.2,
with respect to the year in which his employment is terminated, prorated for the
year based on the number of full months employed during such year compared to
12. In addition, the non-competition covenant in SECTION 4.1(c) below shall be
automatically terminated on the effective date of any termination of Executive's
employment without cause.
SECTION 3.4 TERMINATION UPON DEATH OF THE EXECUTIVE. In addition to any
other provision relating to termination, this Agreement shall terminate upon the
Executive's death. In such event, all unpaid compensation, compensation for
vacation time not taken by the Executive and all expense reimbursements due to
the Executive shall be paid to the Executive's estate. In the event the
Executive's employment is terminated pursuant to this Section 3.4, the
Executive's estate also shall be entitled to a death benefit equal to six
months' salary and to participate, in the bonus payable pursuant to SECTION 2.2
with respect to the year in which his employment is terminated, prorated for the
year based on the number of full months worked during such year compared to 12.
SECTION 3.5 TERMINATION UPON SALE. (a) If during the Term, the Company:
(i) is merged into another company;
(ii) sells all or substantially all of its assets to another
company or person;
(iii) experiences a change in ownership of 50% or more of its
common stock; or
(iv) issues shares in excess of 50% of its then outstanding
stock to another company or person
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and the Executive is not offered, by the acquiring company or person, an
employment position, or not offered an employment position satisfactory to
him, he shall be deemed Terminated Without Cause and shall be entitled to a
severance payment in an amount equal to one year's Base Salary, which shall
be in addition to amounts payable to the Executive under Section 3.3 above.
(b) The foregoing subsection 3.5(a) shall not apply if the Executive
is an equity participant in any of the transactions described in subsection
3.5(a)(i)-(iv) above.
ARTICLE IV
CONFIDENTIALITY AND COMPETITION
SECTION 4.1 FURTHER OBLIGATIONS OF THE EXECUTIVE DURING AND AFTER
EMPLOYMENT.
(a) The Executive agrees that during the term of his employment under
this Agreement and for an additional period of one year, he will engage in
no business activities which are or may be competitive with, or which might
place him in a competing position to that of, the Company or any Affiliate
except as authorized by the Company's Board of Directors.
(b) The Executive realizes that during the course of his employment,
the Executive will have produced and/or have access to confidential plans,
information, business opportunity records, notebooks, data, specifications,
trade secrets, customer lists and account lists of the Company and its
Affiliates ("Confidential Information"). Therefore, during and subsequent
to his employment by the Company, or by an Affiliate, the Executive agrees
to hold in confidence and not to directly or indirectly disclose or use or
copy or make lists of any such Confidential Information, except to the
extent authorized by the Company in writing. All records, files, business
plans, documents, equipment and the like, or copies thereof, relating to
Company's business, or the business of an Affiliate, which the Executive
shall prepare, or use, or come into contact with, shall remain the sole
property of the Company, or of the Affiliate, and shall not be removed from
the Company's or the Affiliate's premises without its written consent, and
shall be promptly returned to the Company upon termination or resignation
of employment with the Company or its Affiliates.
(c) Because of his employment by the Company, the Executive will have
access to trade secrets and confidential information about the Company, its
business plans, its business accounts, its business opportunities, its
expansion plans into other geographic areas and its methods of doing
business. The Executive agrees that for the Term of this Agreement and an
additional period of one year he will not take any actions which are
calculated to persuade any employee, vendor or supplier of the Company to
terminate or modify in any adverse manner his or its association with the
Company.
(d) In the event a court of competent jurisdiction finds any provision
of this Section 4.1 to be so overbroad as to be unenforceable, then such
provision shall be
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reduced in scope by the court, to the extent deemed necessary by the court
to render the provision reasonable and enforceable. The Executive
acknowledges and agrees that any breach of this Agreement by the Executive
would cause immediate irreparable harm to the Company. The Executive agrees
that should he violate any of the terms and conditions of this Agreement,
the Company, at its sole discretion, shall be entitled to seek and obtain
immediate injunctive relief and enjoin further and future violations of
this Agreement.
ARTICLE V
DISABILITY AND ILLNESS
SECTION 5.1 DISABILITY AND SALARY CONTINUATION.
(a) Definition of Total Disability. For purposes of this Agreement,
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the terms "totally disabled" and "total disability" shall mean disability
as defined in any total disability insurance policy or policies, if any, in
effect with respect to the Executive. If no insurance policy is in effect,
"total disability" shall mean a medically determinable physical or mental
condition which, in the opinion of two physicians chosen by the mutual
consent of the parties, renders the Executive unable to perform
substantially all of the duties required pursuant to this Agreement. Total
disability shall be deemed to have occurred on the date of the disabling
injury or onset of the disabling illness, as determined by the two
independent physicians. In the event that the two independent physicians
are unable to agree as to the date of the disabling injury or onset of the
disabling illness, such date shall be deemed to be the later of the two
dates determined by the physicians chosen pursuant to this Section 5.1(a).
(b) Salary Continuation. If the Executive becomes totally disabled
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during the term of this Agreement, his full salary shall be continued for
90 days from the date of the disabling injury or onset of the disabling
illness as determined in accordance with the provisions of SECTION 5.1(a)
above, and thereafter the Executive's employment may be terminated in
accordance with the provisions of SECTION 3.3.
SECTION 5.2 Illness. If the Executive is unable to perform the services
required under this Agreement by reason of illness or physical injury not
amounting to total disability, also as determined in this Article, the
compensation otherwise payable to the Executive under this Agreement shall be
continued for a period of six months and he shall be entitled to participate in
the bonus payable in Section 2.2 with respect to the year in which the illness
occurred, prorated for the year based on the number of months worked during such
year compared to 12, after which the Executive's employment may be terminated
and the Company shall have no further obligation to the Executive.
ARTICLE VI
GENERAL MATTERS
SECTION 6.1 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Virginia and shall be construed in accordance therewith.
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SECTION 6.2 NO WAIVER. No provision of this Agreement may be waived except
by an agreement in writing signed by the waiving party. A waiver of any term or
provision shall not be construed as a waiver of any other term or provision.
SECTION 6.3 AMENDMENT. This Agreement may be amended, altered or revoked at
any time, in whole or in part, by filing with this Agreement a written
instrument setting forth such changes, signed by each of the parties.
SECTION 6.4 BENEFIT. This Agreement shall be binding upon the Executive and
the Company, and shall not be assignable by either party without the other
party's written consent.
SECTION 6.5 SEVERABILITY. If any provision of this Agreement is declared by
any court of competent jurisdiction to be invalid for any reason, such
invalidity shall not affect the remaining provisions. On the contrary, such
remaining provisions shall be fully severable, and this Agreement shall be
construed and enforced as if such invalid provisions had not been included in
the Agreement.
SECTION 6.6 EFFECTIVE DATE. The effective date of this Agreement shall be
February 22, 2002.
SECTION 6.7 ARBITRATION. The Company and the Executive expressly agree that
except for matters arising under Article IV of this Agreement, all disputes
arising out of this Agreement shall be resolved by arbitration in accordance
with the following provisions. Either party must demand in writing such
arbitration within ten days after the controversy arises by sending a notice to
arbitrate to both the other party and to the American Arbitration Association
(hereinafter referred to as "AAA"). The controversy shall then be arbitrated
pursuant to the rules promulgated by the AAA at the AAA's offices located in
Denver, Colorado. The parties will select by mutual agreement the arbitrator or
arbitrators (hereinafter collectively referred to as "arbitrator") to hear and
resolve the controversy. The arbitrator shall be governed by the express terms
of this Agreement and the laws of the State of Virginia. The arbitrator's
decision shall be final and binding on the parties and shall bar any suit,
action, or proceeding instituted in any federal, state, or local court or
administrative tribunal. Notwithstanding the preceding sentence, the
arbitrator's judgment may be entered in any court of competent jurisdiction.
These arbitration provisions shall survive the termination of this Agreement.
GAMECO, INC.
By:
__________________________________________
Jeffrey P. Jacobs, Chief Executive Officer
EXECUTIVE:
__________________________________________
Ian M. Stewart
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