Exhibit 10.36
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made on December 23, 1998,
by and between HOLLYWOOD PARK, INC. a Delaware corporation ("Company"), and G.
MICHAEL FINNIGAN, an individual ("Executive"), with respect to the following
facts and circumstances:
RECITALS
Executive is currently employed as executive vice president and chief
financial officer of the Company and president of its Sports and Entertainment
Division. Company desires to retain Executive as President and Chief Executive
Officer of Realty Investment Group, Inc., a subsidiary (the "Realty Subsidiary")
of the Company which will conduct all of the real estate business and related
development activities of the Company and its operating subsidiaries.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein, the parties hereto agree as follows:
ARTICLE 1
EMPLOYMENT AND TERM
1.1 Employment. Company agrees to engage Executive in the capacity as
President and Chief Executive Officer of the Realty Subsidiary on the Effective
Date (as hereinafter defined) and Executive hereby accepts such engagement by
Company upon the terms and conditions specified below. The Company agrees that
throughout the Term it shall take all such action as may be necessary or
appropriate in order to cause all of the real estate business and related
development activities of the Company and its subsidiaries to be conducted
through or under the control and supervision of the Realty Subsidiary. The
Company will form Realty Subsidiary within thirty days of the date hereof.
1.2 Term. The term of this Agreement (the "Term") shall commence on
January 1, 1999 (or such earlier date on which Executive shall be released from
his current duties (such date being referred to as the "Effective Date") and
shall continue in force until three years from and after the Effective Date,
unless earlier terminated under Article 6 below. Each 12-month period commencing
as of the Effective Date is sometimes called a year of the "Term," and the date
which is 365 days from and after the Effective Date shall be referred to as the
"Anniversary Date"). At least ninety (90) days prior to the expiration of the
Term (as the same may be extended from time to time) , Executive and Company
shall advise each other whether they wish to renew the term of this Agreement
and the proposed basis for such renewal.
ARTICLE 2
DUTIES OF EXECUTIVE
2.1 Duties. Executive shall perform all the duties and obligations of
President and Chief Executive Officer of the Realty Subsidiary, including
primary responsibility for Company's real estate and related operations subject
to the control and supervision of the Board of Directors of Realty Subsidiary
and such other executive duties consistent with the foregoing as may be assigned
to him from time to time by the Board of Directors of Realty Subsidiary.
Executive shall report to the Chairman of the Board of Realty Subsidiary, who
shall at all times be R. D. Hubbard or another person acceptable to Executive.
Executive shall perform the services contemplated herein faithfully, diligently,
to the best of his ability and in the best interests of Company. Executive
shall devote substantially all his business time and efforts to the rendition of
such services. Executive shall, at all times perform such services in
compliance with, and to the extent of his authority, shall to the best of his
ability cause Realty Subsidiary to be in compliance with, any and all laws,
rules and regulations applicable to Realty Subsidiary of which Executive is
aware. Executive may rely on Company's and Realty Subsidiary's inside counsel
and outside lawyers in connection with such matters. Executive shall, at all
times during the Term, in all material respects adhere to and obey any and all
written internal rules and regulations governing the conduct of Company's
employees, as established or modified from time to time; provided, however, in
the event of any conflict between the provisions of this Agreement and any such
rules or regulations, the provisions of this Agreement shall control.
2.2 Location of Services. Executive's principal place of employment
shall be at Company's headquarters in the greater Los Angeles, California area.
Executive understands he will be required to travel to Company's various
operations as part of his employment.
2.3 Exclusive Service. Except as otherwise expressly provided herein,
Executive shall devote substantially all his business time, attention, energies,
skills, learning and best efforts to the business of Company. Executive may
participate in social, civic, charitable, religious, business, educational or
professional associations, so long as such participation does not materially
interfere with the duties and obligations of Executive hereunder. This Section
2.3, however, shall not be construed to prevent Executive from making passive
outside investments so long as such investments do not require material time of
Executive or otherwise interfere with the performance of Executive's duties and
obligations hereunder. Executive shall not make any investment in an enterprise
that competes with Company without the prior written approval of Company after
full disclosure of the facts and circumstances; provided, however, that so long
as Executive does not utilize material, non-public information this sentence
shall not preclude Executive from owning up to one percent (1%) of the
securities of a publicly traded entity.
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ARTICLE 3
COMPENSATION
3.1 Salary. In consideration for Executive's services hereunder,
Company shall pay or cause Realty Subsidiary to pay Executive an annual salary
at the rate of Four Hundred Thousand Dollars ($400,000) per year during each of
the years of the Term; payable in accordance with Company's regular payroll
schedule from time to time (less any deductions required for Social Security,
state, federal and local withholding taxes, and any other authorized or mandated
withholdings).
3.2 Bonus. Executive shall be entitled to earn a bonus with respect
to each year of the Term during which Executive is employed under this Agreement
of up to Two Hundred Thousand Dollars ($200,000) per year. The bonus referable
to the initial year of the Term shall be determined in the discretion of the
Board. For each of the following years in the Term, one-half of the Bonus will
be earned based on whether Realty Subsidiary meets performance targets
established by the Board within three (3) months of the start of each year, and
the second half at the discretion of the Board of Directors.
ARTICLE 4
EXECUTIVE BENEFITS
4.1 Vacation. In accordance with the general policies of Company
applicable generally to other senior executives of Company pursuant to Company's
personnel policies from time to time, Executive shall be entitled to four weeks
vacation each calendar year, without reduction in compensation.
4.2 Company Employee Benefits. Executive shall receive all group
insurance and pension plan benefits and any other benefits on the same basis as
they are available generally to other senior executives of Company under Company
personnel policies in effect from time to time.
4.3 Benefits. Executive shall receive all other such fringe benefits
as Company may offer generally to other senior executives of Company under
Company personnel policies in effect from time to time, such as health and
disability insurance coverage and paid sick leave, but not less than those
currently received.
4.4 Indemnification. Executive shall have the benefit of
indemnification as provided under applicable law and the bylaws of Company,
which indemnification shall continue after the termination of this Agreement for
such period as may be necessary to continue to indemnify Executive for his acts
during the term hereof. Company shall cause Executive to be covered by the
current policies of directors and officers liability insurance covering
directors and officers of Company, copies of which have been provided to
Executive, in accordance with their terms, to the maximum extent of the coverage
available for any director or officer of Company. Company shall use commercially
reasonable efforts to cause the current policies of directors
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and officers liability insurance covering directors and officers of Company to
be maintained throughout the term of Executive's employment with Company and for
such period thereafter as may be necessary to continue to cover acts of
Executive during the term of his employment (provided that Company may
substitute therefor, or allow to be substituted therefor, policies of at least
the same coverage and amounts containing terms and conditions which are, in the
aggregate, no less advantageous to the insured in any material respect).
ARTICLE 5
REIMBURSEMENT FOR EXPENSES
Executive shall be reimbursed by Company and Realty Subsidiary for all
ordinary and necessary expenses incurred by Executive in the performance of his
duties or otherwise in furtherance of the business of Company or Realty
Subsidiary in accordance with the policies of Company or Realty Subsidiary in
effect from time to time. Executive shall keep accurate and complete records of
all such expenses, including but not limited to, proof of payment and purpose.
Executive shall account fully for all such expenses to Company or Realty
Subsidiary.
ARTICLE 6
TERMINATION
6.1 Termination for Cause. Without limiting the generality of Section
6.2, Company shall have the right to terminate Executive's employment, without
further obligation or liability to Executive, upon the occurrence of any one or
more of the following events, which events shall be deemed termination for
cause.
6.1.1 Failure to Perform Duties. If Executive neglects to perform the
duties of his employment under this Agreement in a professional and businesslike
manner after having received written notice specifying such failure to perform
and a reasonable opportunity, not to exceed ten days, to perform or if such
performance cannot be completed within such time period, commenced within such
period and diligently pursued to completion as soon as practicable thereafter.
6.1.2 Willful Breach. If Executive willfully commits a material breach
of this Agreement or a material willful breach of his fiduciary duty to Company.
6.1.3 Wrongful Acts. If Executive is convicted of a felony or any other
serious crime, commits a serious wrongful act or engages in other misconduct
involving acts of moral turpitude that would make the continuance of his
employment by Company materially detrimental to Company, which determination
shall be made in the reasonable exercise of Company's judgment.
6.1.4 Disability. If Executive is physically or mentally disabled from
the performance of a major portion of his duties for a continuous period of 120
days or greater, which determination shall be made in the reasonable exercise of
Company's judgment,
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provided, however, if Executive's disability is the result of a serious health
condition as defined by the federal Family and Medical Leave Act (or its
California equivalent) ("FMLA"), Executive's employment shall not be terminated
due to such disability at any time during or after any period of FMLA-qualified
leave except as permitted by FMLA. If there should be a dispute between Company
and Executive as to Executive's physical or mental disability for purposes of
this Agreement, the question shall be settled by the opinion of an impartial
reputable physician or psychiatrist agreed upon by the parties or their
representatives, or if the parties cannot agree within ten days after a request
for designation of such party, then a physician or psychiatrist designed by the
Los Angeles County Medical Association. The certification of such physician or
psychiatrist as to the questioned dispute shall be final and binding upon the
parties hereto.
6.2 Termination Without Cause. Notwithstanding anything to the
contrary herein, Company shall have the right to terminate Executive's
employment under this Agreement at any time without cause by giving notice of
such termination to Executive.
6.3 Termination by Executive for Good Reason. Executive may
terminate his employment under this Agreement on thirty (30) days prior notice
to Company for good reason. For purposes of this Agreement, "good reason" shall
mean and be limited to (a) a material breach of this Agreement by Company
(including without limitation any material reduction in the authority or duties
of Executive or any relocation of his or its principal place of business outside
the greater Los Angeles metropolitan area) and the failure of Company to remedy
such breach within thirty (30) days after written notice (or as soon thereafter
as practicable so long as it commences effectuation of such remedy within such
time period and diligently pursues such remedy to completion as soon as
practicable); (b) a "change of control" with respect to the ownership of
Company. For purposes of this Agreement, a change of control shall mean (1) a
sale of substantially all of the property or more than eighty percent (80%) of
the then outstanding stock of Company to another corporation; or (2) the
dissolution of liquidation of Company or the reorganization, merger or
consolidation of Company with one or more corporations as a result of which
Company is not the surviving corporation; or (c) the failure of R. D. Hubbard or
another person acceptable to Executive in his sole discretion to be Chairman of
the Board of Directors of Realty Subsidiary.
6.4 Effectiveness on Notice. Any termination under this Section 6
shall be effective upon receipt of notice by Executive or Company, as the case
may be, of such termination or upon such other later date as may be provided
herein or specified by Company or Executive in the notice (the "Termination
Date").
6.5 Effect of Termination.
6.5.1 Payment of Salary and Expenses Upon Termination. If the Term
of this Agreement is terminated, all benefits provided to Executive by Company
hereunder shall thereupon cease and Company shall pay or cause to be paid to
Executive all accrued but unpaid salary and vacation benefits. In addition,
promptly upon submission by Executive of his unpaid expenses incurred prior to
the Termination Date and owing to Executive pursuant to Article 5, reimbursement
for such expenses shall be made.
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6.5.2 Termination for Disability. In the event of a termination under
Section 6.1.4 (for disability), Executive may be eligible for benefits under the
California State Disability Insurance program for his first six months of
disability. In addition Executive shall be eligible for the benefits provided
for under any long term disability insurance policy which Company may have as in
effect from time to time. Eligibility and benefits with regard to either
insurance program shall be governed by the provisions of the insurance program
or policy and shall not be the responsibility of Company.
6.5.3 Termination Without Cause or Termination by Executive for Good
Reason. If Company terminates Executive without cause or Executive terminates
for good reason under clause (a) of Section 6.3 only, the following shall apply:
(a) Executive shall be entitled to receive an amount equal to
his annual compensation for one year (equal to his salary at
the time of Termination and bonus (determined based on his
bonus for the last completed year) as of the date of
termination), plus any amounts payable under Section 6.5.1
above, plus continuation of health and disability insurance
coverage for a period of six (6) months after Termination at
Company's expense; and
(b) In addition to those already vested, all unvested stock
options that would have vested on future Anniversary Dates
of the Agreement shall be deemed immediately and fully
vested and exercisable by Executive; and
6.6 Suspension. In lieu of terminating Executive's employment
hereunder for cause under Section 6.1, Company shall have the right, at its sole
election, to suspend the operation of this Agreement during the continuance of
events or circumstances under Section 6.1 for an aggregate of not more than 30
days during the Term (the "Default Period") by giving Executive written notice
of Company's election to do so at any time during the Default Period. Company
shall have the right to extend the Term beyond its normal expiration date by the
period(s) of any suspension(s). Company's exercise of its right to suspend the
operation of this Agreement shall not preclude Company from subsequently
terminating Executive's employment hereunder. Executive shall not render
services to any other person, firm or corporation in the casino business during
any period of suspension. Executive shall be entitled to continued compensation
pursuant to the provisions hereof during the Default Period.
6.7 DEFRA Limitation. The payments that Executive shall be entitled to
receive hereunder and upon the exercise of his stock options shall in all events
be limited by the provisions of Section 280G of the Internal Revenue Code
("Code") and the regulations thereunder (or their then equivalents) and no
payment shall be made that would have the result of limiting the deductibility
of such payments by Company or that would result in the imposition of an excise
tax under Section 4999 of the Code.
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6.8 Exercisability of Options. As provided in the Option Agreement,
all options terminate no later than ninety (90) days after the termination,
regardless of the cause of such termination.
ARTICLE 7
CONFIDENTIALITY
7.1 Nondisclosure of Confidential Material. In the performance of his
duties, Executive may have access to confidential records, including, but not
limited to, development, marketing, organizational, financial, managerial,
administrative and sales information, data, specifications and processes
presently owned or at any time hereafter developed or used by Company or its
agents or consultants that is not otherwise part of the public domain
(collectively, the "Confidential Material"). All such Confidential Material is
considered secret and is disclosed to Executive in confidence. Executive
acknowledges that the Confidential Material constitutes proprietary information
of Company which draws independent economic value, actual or potential, from not
being generally known to the public or to other persons who could obtain
economic value from its disclosure or use, and that Company has taken efforts
reasonable under the circumstances, of which this Section 7.1 is an example, to
maintain its secrecy. Except in the performance of his duties to Company or as
required by a court order, Executive shall not, directly or indirectly for any
reason whatsoever, disclose, divulge, communicate, use or otherwise disclose any
such Confidential Material, unless such Confidential Material ceases to be
confidential because it has become part of the public domain (not due to a
breach by Executive of his obligations hereunder). Executive shall also take
all reasonable actions appropriate to maintain the secrecy of all Confidential
Information. All records, lists, memoranda, correspondence, reports, manuals,
files, drawings, documents, equipment, and other tangible items (including
computer software), wherever located, incorporating the Confidential Material,
which Executive shall prepare, use or encounter, shall be and remain Company's
sole and exclusive property and shall be included in the Confidential Material.
Upon termination of this Agreement, or whenever requested by Company, Executive
shall promptly deliver to Company any and all of the Confidential Material, not
previously delivered to Company, that is in the possession or under the control
of Executive.
7.2 Assignment of Intellectual Property Rights. Any ideas, processes,
know-how, copyrightable works, maskworks, trade or service marks, trade secrets,
inventions, developments, discoveries, improvements and other matters that may
be protected by intellectual property rights, that relate to Company's business
and are the results of Executive's efforts during the Term (collectively, the
"Executive Work Product"), whether conceived or developed alone or with others,
and whether or not conceived during the regular working hours of Company, shall
be deemed works made for hire and are the property of Company. In the event that
for whatever reason such Executive Work Product shall not be deemed a work made
for hire, Executive agrees that such Executive Work Product shall become the
sole and exclusive property of Company, and Executive hereby assigns to Company
his entire right, title and interest in and to each and every patent, copyright,
trade or service mark (including any attendant goodwill), trade secret or other
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intellectual property right embodied in Executive Work Product. Company shall
also have the right, in its sole discretion to keep any and all of Executive
Work Product as Company's Confidential Material. The foregoing work made for
hire and assignment provisions are and shall be in consideration of this
agreement of employment by Company, and no further consideration is or shall be
provided to Executive by Company with respect to these provisions. Executive
agrees to execute any assignment documents Company may require confirming
Company's ownership of any of Executive Work Product. Executive also waives any
and all moral rights with respect to any such works, including without
limitation any and all rights of identification of authorship and/or rights of
approval, restriction or limitation on use or subsequent modifications.
Executive promptly will disclose to Company any Executive Work Product.
7.3 No Unfair Competition After Termination of Agreement. Executive
hereby acknowledges that the sale or unauthorized use or disclosure of any of
Company's Confidential Material obtained by Executive by any means whatsoever,
at any time before, during or after the Term shall constitute unfair
competition. Executive shall not engage in any unfair competition with Company
either during the Term or at any time thereafter.
7.4 Irreparable Injury. The promised service of Executive under this
Agreement and the other promises of this Article 7 are of special, unique,
unusual, extraordinary, or intellectual character, which gives them peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in an action at law.
7.5 Remedies for Breach. Executive agrees that money damages will
not be a sufficient remedy for any breach of the obligations under this Article
7 and Article 2 hereof and that Company shall be entitled to injunctive relief
(which shall include, but not be limited to, restraining Executive from directly
or indirectly using or disclosing the Confidential Material) and to specific
performance as remedies for any such breach. Executive agrees that Company shall
be entitled to such relief, including temporary restraining orders, preliminary
injunctions and permanent injunctions, without the necessity of proving actual
damages and without the necessity of posting a bond or making any undertaking in
connection therewith. Any such requirement of a bond or undertaking is hereby
waived by Executive and Executive acknowledges that in the absence of such a
waiver, a bond or undertaking might otherwise be required by the court. Such
remedies shall not be deemed to be the exclusive remedies for any breach of the
obligations in this Article 7, but shall be in addition to all other remedies
available at law or in equity.
ARTICLE 8
ARBITRATION
In the event there is any dispute between Executive and Company which the
parties are unable to resolve themselves, including any dispute with regard to
the application, interpretation or validity of this Agreement or any dispute
with regard to any aspect of Executive's employment or the termination of
Executive's employment, both Executive and Company agree by entering into this
Agreement that the exclusive remedy for determining any such dispute, regardless
of its nature, will be by arbitration in accordance with the then
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applicable rules of the American Arbitration Association; provided, however, the
breach of the obligation to provide services under this Agreement or of the
obligations of Article 7 may be enforced by an action for injunctive relief and
damages in a court of competent jurisdiction. In the event of any conflict
between this Agreement and the rules of the American Arbitration Association,
the provisions of this Agreement shall be determinative. In the event the
parties are unable to agree upon an arbitrator, the parties shall select a
single arbitrator from a list designated by the Los Angeles Office of the
American Arbitration Association of seven arbitrators all of whom shall be
retired judges of the Superior of appellate courts resident in Los Angeles who
are members of the "Independent List" of retired judges. If the parties are
unable to select an arbitrator from the list provided by the American
Arbitration Association, then the parties shall each strike names alternatively
from the list, with the first to strike being determined by lot. After each
party has used three strikes, the remaining name on the list shall be the
arbitrator. This agreement to resolve any disputes by binding arbitration shall
extend to claims against any shareholder or partner of Company, any brother-
sister company, parent, subsidiary or affiliate of Company, any officer,
director, employee, or agent of Company, or of any of the above, and shall apply
as well to claims arising out of state and federal statutes and local ordinances
as well as to claims arising under the common law. Unless mutually agreed by the
parties otherwise, any arbitration shall take place in Los Angeles County,
California. In the event the parties are unable to agree upon a location for the
arbitration, the location within Los Angeles County shall be determined by the
arbitrator. The prevailing party in such arbitration proceeding, as determined
by the arbitrator, and in any enforcement or other court proceedings, shall be
entitled to the extent permitted by law, to reimbursement from the other party
for all of the prevailing party's costs (including but not limited to the
arbitrator's compensation), expenses and attorneys' fees.
ARTICLE 9
MISCELLANEOUS
9.1 Amendments. The provisions of this Agreement may not be waived,
altered, amended or repealed in whole or in part except by the signed written
consent of the parties sought to be bound by such waiver, alteration, amendment
or repeal.
9.2 Entire Agreement. This Agreement and the nonqualified Option
Amendment of even date herewith constitutes the total and complete agreement of
the parties and supersedes all prior and contemporaneous understandings and
agreements heretofore made, and there are no other representations,
understandings or agreements.
9.3 Counterparts. This Agreement may be executed in one of more
counterparts, each of which shall be deemed and original, but all of which shall
together constitute one and the same instrument.
9.4 Severability. Each term, covenant, condition or provision of this
Agreement shall be viewed as separate and distinct, and in the event that any
such term, covenant, condition or provision shall be deemed by an arbitrator or
a court of competent jurisdiction to be invalid or unenforceable, the court or
arbitrator finding such invalidity or
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unenforceability shall modify or reform this Agreement to give as much effect as
possible to the terms and provisions of this Agreement. Any term or provision
which cannot be so modified or reformed shall be deleted and the remaining terms
and provisions shall continue in full force and effect.
9.5 Waiver or Delay. The failure or delay on the part of Company, or
Executive to exercise any right or remedy, power or privilege hereunder shall
not operate as a waiver thereof. A waiver, to be effective, must be in writing
and signed by the party making the waiver. A written waiver of default shall
not operate as a waiver of any other default or of the same type of default on a
future occasion.
9.6 Successors and Assigns. This Agreement shall be binding on and
shall inure to the benefit of the parties to it and their respective heirs,
legal representatives, successors and assigns, except as otherwise provided
herein.
9.7 No Assignment or Transfer by Executive. Neither this Agreement
nor any of the rights, benefits, obligations or duties hereunder may be assigned
or transferred by Executive. Any purported assignment or transfer by Executive
shall be void.
9.8 Necessary Acts. Each party to this Agreement shall perform any
further acts and execute and deliver any additional agreements, assignments or
documents that may be reasonably necessary to carry out the provisions or to
effectuate the purpose of this Agreement.
9.9 Governing Law. This Agreement and all subsequent agreements
between the parties shall be governed by and interpreted, construed and enforced
in accordance with the laws of the State of California.
9.10 Notices. All notices, requests, demands and other communications
to be given under this Agreement shall be in writing and shall be deemed to have
been duly given on the date of service, if personally served on the party to
whom notice is to be given, or 48 hours after mailing, if mailed to the party to
whom notice is to be given by certified or registered mail, return receipt
requested, postage prepaid, and properly addressed to the party at his address
set forth as follows or any other address that any party may designate by
written notice to the other parties:
To Executive: G. Michael Finnigan
26804 Rolling Hills Road
Rolling Hills Estates, California 90274
To Company: Hollywood Park, Inc.
1050 South Prairie Avenue
Inglewood, California 90301
Attn: R. D. Hubbard
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9.11 Headings and Captions. The headings and captions used herein are
solely for the purpose of reference only and are not to be considered as
construing or interpreting the provisions of this Agreement.
9.12 Construction. All terms and definitions contained herein shall be
construed in such a manner that shall give effect to the fullest extent possible
to the express or implied intent of the parties hereby.
9.13 Counsel. Executive has been advised by Company that he should
consider seeking the advice of counsel in connection with the execution of this
Agreement and Executive has had an opportunity to do so. Executive has read and
understands this Agreement, and has sought the advice of counsel to the extent
he has determined appropriate.
9.14 Withholding of Compensation. Executive hereby agrees that
Company may deduct and withhold from the compensation or other amounts payable
to Executive hereunder or otherwise in connection with Executive's employment
any amounts required to be deducted and withheld by Company under the provisions
of any applicable Federal, state and local statute, law, regulation, ordinance
or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first written above.
EXECUTIVE COMPANY
/s/ G. Michael Finnigan Hollywood Park, Inc., a Delaware corporation
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G. Michael Finnigan
Social Security No:____________ By: /s/ R. D. Hubbard
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Its: Chief Executive Officer
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