EXHIBIT 10.39
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of January 1, 1999,
by and between HOLLYWOOD PARK OPERATING COMPANY, a Delaware corporation
("Company"), and DONALD M. ROBBINS, an individual ("Executive"), with respect to
the following facts and circumstances:
RECITALS
The Company wishes to employ Executive as president of its Horse Racing
Division and Executive wishes to be so employed.
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 of the Horse Racing Division of the Company on the Effective Date (as
hereinafter defined) and Executive hereby accepts such engagement by Company
upon the terms and conditions specified below.
1.2 Term. The term of this Agreement (the "Term") shall commence on
January 1, 1999 (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".
ARTICLE 2
DUTIES OF EXECUTIVE
2.1 Duties. Executive shall perform all the duties and obligations of
President of the Horse Racing Division of the Company, including primary
responsibility for Company's horse racing and related operations subject to the
control and supervision of the Board of Directors of the Company (the "Board")
and such other executive duties consistent with the foregoing as may be assigned
to him from time to time by the Board of Directors. Executive shall report to
the Chief Executive Officer ("CEO") of the Company, or, if specified by the CEO,
to the Chief Operating Officer. 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 the Company to be in
compliance with, any and all laws, rules and regulations applicable to it of
which Executive is aware. Executive may rely on the Company'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.
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.
ARTICLE 3
COMPENSATION
3.1 Salary. In consideration for Executive's services hereunder, Company
shall pay to Executive an annual salary at the rate of Two Hundred Ninety-Five
Thousand Dollars ($295,000) 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 eligible to be considered for a bonus with
respect to each year of the Term during which Executive is employed under this
Agreement. The amount, if any, of each such bonus shall be determined in the
discretion of the Board or a committee thereof.
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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. In addition, the Company will continue to pay the premiums on
Executive's term life insurance policy and his club dues and expenses,
consistent with past practice.
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 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 for all ordinary and necessary
expenses incurred by Executive in the performance of his duties or otherwise in
furtherance of the business of Company in accordance with the policies of
Company 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.
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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, 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 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
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termination or upon such other later date as may be provided herein or specified
by Company or Executive in the notice (the "Termination Date").
6.4 Effect of Termination.
6.4.1 Payment of Salary and Expenses Upon Termination. If 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.
6.4.2 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.
6.4.3 Termination Without Cause. If Company terminates Executive
without cause, the following shall apply:
(a)(i) If such termination occurs prior to January 1, 2000,
Executive shall be entitled to receive in a lump sum an
amount equal to two times his annual compensation
(equal to his salary at the time of Termination and
bonus (determined based on his bonus, if any, for the
last completed year)) payable on the date of
termination, plus any amounts payable under Section
6.4.1 above,
(ii) If such Termination occurs after January 1, 2000,
Executive shall be entitled to receive in a lump sum an
amount equal to his annual compensation for the balance
of the Term (equal to his salary at the time of
Termination and bonus (determined based on his bonus,
if any, for the last completed year and prorated for
partial year's severance)) payable on the date of
Termination, but in no event less than one year's
compensation (salary and bonus), plus any amounts
payable under Section 6.4.1 above.
(b) continuation of health and disability insurance and the
other benefits provided in Section 4.3 hereof for a
period of six (6) months after Termination at Company's
expense; and
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(c) 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.
6.5 Termination after Term. If Executive's employment with the Company is
terminated without cause at any time after the end of the Term, whether or not
this contract is extended or otherwise terminates in accordance with its terms,
Executive shall be entitled to receive in a lump sum an amount equal to one
year's compensation (salary and bonus) plus the amounts contemplated by clauses
(b) and (c) of Section 6.4.
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 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
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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
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,
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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 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
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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 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 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. The Company
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may assign this Agreement to any entity which, at the time of such assignment,
is an affiliate of the Company.
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: Donald M. Robbins
828 Via Lido Sound
Newport Beach, California 92663
To Company: Hollywood Park Operating Company
1050 South Prairie Avenue
Inglewood, California 90301
Attn: R. D. Hubbard
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
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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/ Donald M. Robbins Hollywood Park Operating Company, a
- ---------------------------------- Delaware Corporation
Donald M. Robbins
Social Security No:_______________ By: /s/ R.D. Hubbard
---------------------------------
Its: Chairman and CEO
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