EXHIBIT 10.12
January 1, 2000
PRIVATE & CONFIDENTIAL
Mr. Jerry Campbell
1677 Hayball Road
Jackson, Michigan
49201
Dear Jerry:
RE: EMPLOYMENT WITH MI ENTERTAINMENT CORP.
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In accordance with our recent discussions, we are delighted to confirm the
terms and conditions of your employment with MI Entertainment Corp. (the
"Corporation"), as follows:
1. POSITION: You are appointed President and CEO of the Corporation
reporting to the Chairman and carrying out your day-to-day duties
from an office in Michigan and the Corporation's head office at
Santa Anita Race Track. You will also be appointed to the Board of
Directors of the Corporation at the earliest opportunity after
commencement of your employment.
2. BASE SALARY: Your Base Salary shall be U.S. $300,000 per annum (less
statutorily required deductions), payable monthly in arrears and
otherwise in accordance with the Corporation's standard payroll
practices.
3. ANNUAL BONUS: In addition to your Base Salary, you shall receive (a)
a bonus (the "Basic Bonus") equal to 2% of the pre-tax profits of
the Corporation at the end of each year of employment, and (b) a
discretionary bonus (the "Discretionary Bonus") as determined by the
Board based on your progress with respect to the guidelines set
forth in Schedule A (the Basic Bonus and the Discretionary Bonus are
referred to herein collectively as the "Annual Bonus"). The Annual
Bonus shall be inclusive of all entitlement to vacation pay, and
less statutorily required deductions.
4. BENEFITS: During your employment by the Corporation, you will be
entitled to:
(a) participate in all group insurance and benefit programs
generally applicable to salaried employees of the
Corporation from time to time, with the exception of any
Employee Equity Participation and Profit Sharing Plan or
any equivalent or related plans in effect from time to time;
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(b) four weeks vacation in respect of each completed twelve
month period, to be taken at such time or times as are
mutually convenient to you and the Corporation, but not
payment in lieu thereof;
(c) receive an automobile allowance of U.S. $875 per month for
a North American vehicle; provided that you shall be
responsible for all automobile operating costs including,
without limitation, fuel, repairs, maintenance, insurance
premiums and insurance deductibles; and
(d) reimbursement for all reasonable and documented business
expenses incurred on behalf of the Corporation in carrying
out your duties, in accordance with the Corporation's
policies from time to time, but excluding automobile
operating costs.
5. MIE STOCK OPTIONS: Subject to the express approval of the Board of
Directors of the Corporation and any regulatory bodies having
jurisdiction (including the consent of The New York Stock Exchange
and/or NASDAQ to the listing of the underlying shares), and subject
to you entering into a Stock Option Agreement with the Corporation
in the standard form contemplated by the Corporation's Incentive
Stock Option Plan, the Corporation shall grant you options (vesting
over three years) to purchase 1,000,000 Shares at an exercise price
per share which is equal to the issue price of the Shares to
shareholders of Magna International Inc. Such options shall be
exercisable by you only in accordance with the terms and conditions
set forth in the Stock Option Agreement referred to above. Upon
receipt of an executed copy of this agreement, we will place this
matter before the Board of Directors of the Corporation at the
earliest opportunity.
The above noted stock option agreement will contain a provision that
in the event that your employment with the corporation is terminated
for reasons other than just cause or your voluntary resignation, the
above-noted options will vest in their entirety and be exercisable
for a period of ninety (90) days.
6. TERMINATION: Your employment and this agreement, including all
benefits provided for under this agreement, will terminate on: (a)
the acceptance by the Corporation of your voluntary resignation; (b)
at the Corporation's option, your disability for an aggregate of six
months or more in any twenty-four month period, subject to any
statutory requirement to accommodate such disability; (c) your
death; or (d) your dismissal for just cause or by reason of your
breach of the terms of this agreement.
Otherwise, you or the Corporation may, at any time, terminate your
employment and this agreement by providing the other party with
twelve months prior written notice of intention to terminate. In
addition the Corporation may elect to terminate your employment
immediately by paying you a retiring allowance of U.S. $300,000
(less statutorily required deductions) either in a lump sum within
thirty days of the day of termination or monthly in arrears in
twelve equal instalments commencing thirty days after the day of
termination. If your employment is terminated pursuant to this
paragraph, the Corporation shall maintain on your behalf the
benefits referred to in paragraph 4(a) for a period of not less than
the period required by applicable statute.
In the event that you breach the provisions of paragraph 7, the
payment of any further instalments of such retiring allowance will
immediately cease. Further, the amount paid in each instalment will
be offset by any income earned, during the period you are entitled
to receive instalments, from alternate or self-employment.
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On termination of this agreement other than for dismissal for cause
or for breach under sub-paragraph 6(d), the Corporation will also
pay your Annual Bonus on a prorated basis and, to the extent that
any stock options referenced in paragraph 5 have vested, they will
continue to be exercisable in accordance with the said Stock Option
Agreement.
The termination provisions set forth above represent all severance
pay entitlement, notice of termination or pay in lieu thereof,
salary, bonuses, automobile allowances, vacation and/or vacation pay
and other remuneration and benefits payable or otherwise provided to
you in relation to your employment by the Corporation or any
affiliates of Magna International Inc. (the "Magna Group").
7. OTHER CONDITIONS: You hereby acknowledge as reasonable and agree that
you shall abide by the following terms and conditions:
a) TECHNOLOGY, KNOW-HOW, INVENTIONS, PATENTS: That all
designs, devices, improvements, inventions and ideas made
or conceived by you resulting from your access to the
business of the Corporation and/or the Magna Group shall be
exclusive property of the Magna Group, and you and your
estate agree to take all necessary steps to ensure that
such property rights are protected.
b) CONFIDENTIALITY: You shall keep confidential at any time
during or after your employment, any information (including
proprietary or confidential information) about the business
and affairs of, or belonging to, the Corporation or any
member of the Magna Group or their respective customers or
suppliers, including information which, though technically
not trade secrets, the dissemination or knowledge whereof
might prove prejudicial to any of them.
c) NON-COMPETITION: During the term of your employment with
the Corporation and for a period of six months after the
termination of your employment, you shall not, directly or
indirectly, in any capacity compete with the business of
the Corporation or of any member of the Magna Group in
respect of which you have had access to proprietary or
confidential information or solicit the employees thereof.
8. TERM: Subject to earlier termination in accordance with the terms of
this agreement, your employment with the Corporation shall commence
on January 1, 2000, or such earlier or later date as may be mutually
agreed upon, (the "Start Date") and shall expire on December 31,
2002. This Agreement may be renewed for a subsequent term on such
terms and conditions as be mutually agreed upon in writing. Upon
expiry or other termination of this agreement, paragraph 7 shall
continue in full force and effect. This agreement shall be null and
void and of no effect if you do not commence employment by January
1, 2000.
9. ASSIGNABILITY: The Corporation may, in its sole discretion, assign
this agreement to an affiliated or other organization at any time.
Upon any such assignment, the terms and conditions of this agreement
shall continue in full force and affect.
If the terms of employment as set out in this agreement are acceptable to
you, please sign and date three copies in the places indicated and return two
fully signed copies to the attention of the Chairman by January 1, 2000,
after which, if not so signed and returned, this agreement shall become null
and void and of no effect. Upon execution by you, this agreement (i) replaces
any prior written or oral employment contract or other agreement concerning
remuneration between you and the Corporation or any member of the Magna
Group, (ii) will continue to apply to your employment in a similar or other
capacity with the Corporation or any member of the Magna Group, and (iii) will
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continue to be applicable in the event that your employment with the
Corporation continues beyond the expiry date of the term specified above
without this agreement being formally extended or replaced.
Yours very truly,
MAGNA VENTURES INC.
Per: ____________________
Frank Stronach
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I hereby accept the terms and conditions set out above and acknowledge that
this agreement contains all the terms and conditions of my employment with MI
Entertainment Corp. and that no other terms, conditions or representations
other than those within this letter form part of this agreement and confirm
that I am not subject to any restrictions (contractual or otherwise) arising
from my former employment which would prevent or impair me in carrying out my
duties and functions with the Corporation. Furthermore, I confirm that during
the term of my employment I will not offer to the Corporation any
confidential or proprietary information that I have knowledge of with respect
to my former employers, nor will I provide such information to the
Corporation should I be requested to do so, until such time as such
information is no longer confidential, proprietary or comes into the public
domain.
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Date , 1999 Jerry Campbell
SCHEDULE A
You Shall be entitled to a Discretionary Bonus equal to $1,000,000 less Base
Salary and Basic Bonus based on your success in furthering the foregoing:
(a) Furthering of our corporate strategy, i.e.:
(1) completing our racetrack consolidation strategy;
(2) "bundling", or combining, our simucast horse racing products and
marketing the signal under the corporate brand name;
(3) leveraging our competitive position in the horse racing industry
and, ultimately, our brand name, in expanding our distribution
channels and sports wagering products;
(4) enhancing the facilities at some of our horse racetracks; and
(5) developing total entertainment destinations centered on some of
our horse racetracks.
(b) Effecting synergies related to pursuing Corporate Strategy including:
(1) improving business systems;
(2) rationalising financial reporting;
(3) cost cutting; and
(4) advance IT network.