EXHIBIT 10.172
AMENDMENT
TO THE AMENDED AND RESTATED EMPLOYMENT AGREEMENT BETWEEN
CAPITAL GAMING INTERNATIONAL, INC. AND WILLIAM S. PAPAZIAN
Amendment No. 1
---------------
This Amendment No. 1 is made as of this 28th day of May,
1997, to the Amended and Restated Employment Agreement (the "Employment
Agreement") between Capital Gaming International, Inc. (the "Company") and
William S. Papazian (the "Employee") dated May 17, 1996.
W I T N E S S E T H
WHEREAS, the Corporation and the Employee desire to amend
the Employment Agreement as follows, as permitted under Section 15(f) of the
Employment Agreement:
1. The first sentence of Section 1 of the Employment
Agreement is hereby amended, to read in its entirety as follows:
Unless terminated earlier as herein provided, the Term of
the Employee's employment with the Company hereunder shall
commence on the date hereof and shall end on the third
anniversary of the effective date of the Company's Plan of
Reorganization in the Company's chapter 11 case, Case Number
96-19829 ("Plan of Reorganization"); provided, however, that
this Agreement and the Term of the Employee's employment
with the Company hereunder shall automatically be extended
for one year commencing on the third anniversary of the
effective date of the Plan of Reorganization and on each
successive one year anniversary after the third anniversary
unless the Employee or the Company shall have given written
notice to the other at least ninety (90) days prior to such
anniversary that the Term shall expire at the end of the
current three year or one year Term, as applicable.
2. Section 9(d)(iii) of the Employment Agreement is hereby
amended, to read in its entirety as follows:
In the event of any Termination Without Cause, the Employee
shall be entitled to and the Company shall be obligated to
pay the Employee a lump sum severance payment of $600,000.
3. The second sentence of Section 9(f) of the Employment
Agreement is hereby amended, to read in its entirety as follows:
In the event of Voluntary Termination, the Employee is
entitled to payment equal to one year Salary, payable in
twelve (12) equal monthly installments and in consideration
of such payments, the Employee consents and covenants to use
his good faith best efforts to effectuate a transition of
new management in a manner which maintains the then existing
Indian gaming management agreements, or at the option of the
Company, effectuate a run-off of the then existing Indian
gaming management agreements and tribal loans for as long as
necessary after such resignation, but in no event more than
twelve (12) months. As used herein, the term "best efforts"
shall not require the Employee to incur nonreimbursable
business expenses and shall not require that the Employee be
employed exclusively by the Company.
4. A new Section 15(o) shall be added to the Employment
Agreement to read in its entirety as follows:
Plan of Reorganization Distributions. Notwithstanding
anything to the contrary in the Plan of Reorganization, all
distributions of cash and New Secured Notes to be made to
the Employee under Section 6.4 of the Plan of Reorganization
prior to the Compliance Date shall be deferred until and
shall become payable on the Compliance Date; provided,
however, that in the event the Compliance Date occurs after
June 1, 1997, the Employee shall be deemed to have
irrevocably waived his entitlement to his share of New
Secured Notes under Section 6.4 of the Plan of
Reorganization; provided, further, however, that in the
event the Compliance Date does not occur prior to the one
year anniversary of the effective date of the Plan of
-2-
Reorganization, Employee shall be deemed to have waived
irrevocably his entitlement to his share of the $250,000
cash payment provided for in Section 6.4 of the Plan of
Reorganization. Notwithstanding the occurrence of the
Compliance Date, such distributions under the Plan of
Reorganization shall not be made if, on or before the
Compliance Date, the Bankruptcy Court shall have entered an
order, at the request of the Advisory Committee,2 staying
such distributions for cause; in the event the Bankruptcy
Court stays any such distributions, the distributions shall
be delayed only during the existence of such stay. The term
"Compliance Date," as used herein, shall mean the later to
occur of (i) the 20th day after the Debtor complies in all
material respects with the information requests contained in
Paul Silverstein's letter to William S. Papazian dated March
11, 1997, and (ii) the appointment of a suitable Chief
Financial Officer (recognizing the Reorganized Debtor's
financial condition and prospects), with the approval of the
Advisory Committee, which approval shall not be unreasonably
withheld.
5. A new Section 15(p) shall be added to the Employment
Agreement to read in its entirety as follows:
Employee Loans. So long as Employee is not in default of the
provisions of this Employment Agreement, as soon as
practicable but in no event later than thirty (30) days
after receipt of a written request by Employee, the Company
shall be obligated to make a loan to Employee in an amount
not to exceed the Employee's then unpaid share of the
$250,000 cash payment referred to in Section 6.4 of the Plan
of Reorganization (the "Employee Loan"). Any such Employee
Loan shall be unsecured, accrue interest at the rate of six
(6%) percent per annum and mature on the earlier to occur
of: (i) the date the Employee is entitled to receive his
share of the $250,000 cash payment provided for in section
6.4 of the Plan of the Plan of Reorganization; and (ii) the
one year anniversary of the effective date of the Plan of
2 The term "Advisory Committee" as used herein shall have the same
meaning as such term has in the Company's plan of reorganization, as
confirmed by order of the United States Bankruptcy Court for the
District of New Jersey on or about March 19, 1997.
-3-
Reorganization. The Company's obligations to make cash
payments to Employee under section 6.4 of the Plan of
Reorganization shall be offset against any amounts payable
as interest or principal under any then outstanding Employee
Loan.
The Employment Agreement, except as herein amended, is
hereby ratified, conformed and approved in all respects.
-4-
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment No. 1 to the Employment Agreement as of 28th day of May, 1997.
CAPITAL GAMING INTERNATIONAL, INC.
By:
---------------------------------------
Name:
Title:
EMPLOYEE
By:
----------------------------------------
William S. Papazian