EXHIBIT 10.2
KOHLENBERG SEVERANCE AGREEMENT
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement") is made as of June 23, 1999,
by and between Trans World Gaming Corp. (the "Company") and Stanley Kohlenberg
(the "Executive").
WITNESSETH
WHEREAS, the Executive previously was employed as a consultant to the
Company pursuant to the provisions of a consulting agreement dated January 1,
1997, and amended February 28, 1997, between the Company and the Executive (the
"Consulting Agreement") (which Consulting Agreement expired on March 31, 1999)
and has further served the Company as its Chief Executive Officer pursuant to
the terms of a Board Resolution passed on September 25, 1998 (the "Resolution");
WHEREAS, since September 25, 1998, the Executive has continued to serve
as Chief Executive Officer in accordance with the terms of the Resolution;
WHEREAS, the Board of Directors of the Company and the Executive have
agreed to terminate the services of the Executive (the "Termination");
WHEREAS, the Company and the Executive have agreed that the Executive's
employment shall be terminated as of June 30, 1999; and
WHEREAS, the Company and the Executive wish to enter into this
Agreement in order to set forth and memorialize the obligations of the Company
and the Executive in connection with the Termination.
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
1. TERMINATION. The Company and the Executive agree to the
Termination. The Executive shall be deemed to have been terminated effective
upon the employment by the Company of a new Chief Financial Officer, Chief
Executive Officer, or an equivalent position (the "Termination Date"). On and
after the Termination Date, all of the rights and responsibilities of each of
the Company and the Executive resulting from and with respect to the Termination
shall be solely as set forth in this Agreement.
2. PAYMENTS AND BENEFITS TO THE EXECUTIVE. In consideration of the
covenants and the other terms and conditions of this Agreement for the benefit
of the Company, the Company agrees and covenants to provide the following to the
Executive, or to the estate, heirs, devisees or assigns of the Executive should
he die before the Company fulfills all of its obligations set forth in this
Section 2:
A. The Company agrees to pay to the Executive his current
salary, in equal semi-monthly
payments, through December 31, 1999 (the "Severance
Payments"). Except for director's fees or other fees and
expenses separately negotiated by and between the Executive
and the Company, during the period that the Executive
receives the Severance Payments, he shall not be entitled to
receive any fees for the services he renders hereunder to the
Company in connection with his obligations set forth in
Section 3 hereof.
B. Executive will continue to participate, on the same basis as
he had participated prior to the Termination Date in all
life, health, disability and accident plans in which he
participated on the date immediately prior to the Termination
Date through December 31, 1999.
C. In addition to the Severance Payments, on the Termination
Date, the Company shall pay to the Executive $15,000, in a
lump-sum payment, which amount represents 4 weeks of paid
vacation time.
D. The Executive currently owns the following options to
purchase common stock of the Company:
EXERCISE EXPIRATION
NUMBER PRICE DATE
------ ------- -----
1,000 $ 3.13 May 21, 2000
25,000 $ 1.44 March 6, 2001
75,000 $ 1.00 December 30, 2002
1,000 $ 1.00 March 30, 2002
1,000 $ 0.56 June 29, 2002
1,000 $ 0.35 September 29, 2002
1,000 $ 0.30 December 30, 2002
1,000 $ 0.63 March 30, 2003
1,000 $ 0.46 June 29, 2003
1,000 $ 0.31 September 29, 2003
25,000 $ 0.24 December 30, 2003
For so long as the Executive continues to serve the Company
as a director, the terms of each of the Option Agreements by
and between the Company and the Executive dated May 22, 1995,
March 7, 1996, December 31, 1996, March 31, 1997, June 30,
1997, September 30, 1997, December 31, 1997,
March 31, 1998, June 30, 1998, September 30, 1998, and
December 31, 1998, (the "Option Agreements") shall continue
in full force and effect and the options granted thereunder
will expire only in accordance with such terms.
E. Nothing in this Agreement shall affect the Executive's rights
to indemnification as provided in the Company's Articles of
Incorporation or Bylaws or under the corporate law of the
State of Nevada nor his rights to obtain continued coverage
under the Company's directors and officers liability
insurance policy, as in effect from time to time.
3. MUTUAL RELEASE.
A. In consideration of the covenants and the other terms and
conditions of this Agreement, the Executive agrees and
covenants, on behalf of himself, his heirs and personal
representatives, to release completely and forever discharge
the Company from any and all charges, claims and actions
relating to or otherwise arising out of the Executive's
employment by, or the termination of his employment with, the
Company for all periods of time up to and including June 30,
1999 [THE TERMINATION DATE]. The Executive has not brought
any such charges, claims or actions to the attention of or
against the Company before signing this Agreement, and the
Executive covenants not bring any such charges, claims or
actions against the Company in the future, other than
charges, claims or actions relating to the Company's
obligations under this Agreement. If the Executive violates
the provisions of this Section 4.A. by filing or bringing any
such charges, claims or actions (other than charges, claims
or actions relating to the Company's obligations under this
Agreement for which the Company agrees to pay all actual and
direct costs including reasonable attorney's fees and
expenses incurred by the Executive in bringing such charge,
claim or action if the Executive succeeds on the merits of
such charge, claim or action) in a court of competent
jurisdiction contrary to this Section 4.A, then, in addition
to any other rights and remedies that the Company may have,
the Executive agrees promptly return all Severance Payments
received from the Company and to pay all actual and direct
costs of the Company in defending against such charges,
claims or actions brought by the Executive or on his behalf,
including reasonable attorney's fees and expenses. As
referred to in this Section 4.A (as well as for purposes of
Sections 4.B and 4.C below), the term "Company" includes any
of its current or future subsidiaries and affiliates, their
respective successors and assigns, and all of their
respective past, present and future controlling persons,
directors, officers, representatives, shareholders, agents,
employees, noteholders and their respective heirs, personal
representatives, successors and assigns, or any of them.
B. In consideration of the covenants and the other terms and
conditions of this
Agreement, the Company agrees and covenants to release
completely and forever discharge the Executive from any and
all charges, claims and actions (except for fraud and
criminal acts committed in his official capacity as a
director and/or officer) relating to or otherwise arising out
of the Executive's employment with the Company for all
periods of time up to and including June 30, 1999 [THE
TERMINATION DATE]. The Company has not brought any such
charges, claims or actions to the attention of or against the
Executive before signing this Agreement, and the Company
covenants not bring any such charges, claims or actions
against the Executive in the future, other than charges,
claims or actions relating to the Executive's express
obligations under this Agreement. If the Company violates the
provisions of this Section 4.B by filing or bringing any such
charges, claims or actions (other than charges, claims or
actions relating to the Executive's obligations under this
Agreement, for which the Executive agrees to pay all actual
and direct costs including reasonable attorney's fees and
expenses incurred by the Company in bringing such charge,
claim or action if the Company succeeds on the merits of such
charge, claim or action) in a court of competent jurisdiction
contrary to this Section 4.B, then, in addition to any other
rights and remedies that the Executive may have, the Company
agrees to pay all actual and direct costs of the Executive in
defending against such charges, claims or actions brought by
the Company, including reasonable attorney's fees and
expenses.
C. The Executive hereby specifically and unconditionally
releases the Company from any and all claims that the
Executive may have against any of them and that arose on or
before the date of this Agreement under any federal or state
law, regulation or policy, including but not limited to the
Federal Age Discrimination in Employment Act (the "ADEA"), as
well as any claim attributable to the Company's solicitation
of the Executive's consent to the terms of this Agreement,
and further acknowledges and represents that:
i. the Executive waives his claims under ADEA knowingly and
voluntarily in exchange for the commitments made herein
by the Company, and that certain of the benefits
provided thereby constitute consideration of value to
which the Executive would not otherwise have been
entitled;
ii. the Executive consulted an attorney in connection with
this Agreement;
iii. the Executive has been given a period of 21 days within
which to consider the terms hereof;
iv. the Executive may revoke the waiver of ADEA claims set
forth in this Section 4.B for a period of 7 days
following the execution of this Agreement and the
Executive's waiver of
ADEA claims hereunder shall not become effective until
the revocation period has expired;
v. if the Executive revokes the waiver of ADEA claims in
accordance with subsection (iv) above, then the
Executive shall cease to receive any and all of the
payments and benefits specified in Section 2 hereof, but
such revocation shall not be effective with respect to
the remainder of this Agreement and the consideration
received by the Executive prior to the revocation shall
be valid and adequate consideration with respect to the
remainder of this Agreement; and
vi. this Agreement complies in all respects with Section
7(f) of ADEA and the waiver provisions of the Federal
Older Worker Benefit Protection Act.
4. CONFIDENTIALITY. The Executive and the Company agree that they
will keep the terms and conditions of this Agreement confidential (except as
disclosure may otherwise be required by the Company in connection with its
obligations under federal and state securities laws as a publicly owned
company), and that all discussions and announcements that the Executive and the
Company have with employees, shareholders, noteholders and bondholders of the
Company and any and all other persons or parties shall be wholly consistent with
the terms of the mutually agreed upon press release or Form 8-K which is
attached hereto as EXHIBIT A. Executive shall support the current and new
management of the Company and will use his best efforts to efficiently and
effectively transition the Company to its new management. The Executive shall
refrain, to the extent permitted by law, from taking or assisting others in
taking any actions that reasonably could be expected to diminish the perceived
market value of the Company or undermine the efforts of the Company's management
to manage the Company's operations.
5. NONCOMPETITION. For so long as the Executive receives Severance
Payments, the Executive hereby covenants and agrees that the Executive (and any
person or entity controlled by, under common control with or controlling the
Executive) will not, without the prior written consent of the Company (which
consent shall not unreasonably be withheld, conditioned or delayed) directly or
indirectly be associated as an officer, director or greater than 5% shareholder,
employee, consultant, agent or representative to or with any person or entity
engaged in the casino or gaming business in an area within a 100-mile radius of
any existing casino owned on the Termination Date by the Company. The Executive
agrees that if he commits or threatens to commit a breach of any of the
provisions of this Section 6, the Company shall have the right and remedy to
have the provisions of this Section 6 specifically enforced by any court having
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause immediate irreparable injury to the Company and
that money damages will not provide an adequate remedy at law for any such
breach or threatened breach, PROVIDED HOWEVER, that the Company shall first
submit written notice to the Executive that it intends to invoke its rights as
set forth in this Section 6 and the Executive shall have 20 days in which to
cure his breach or threatened breach. Such right and remedy shall be in addition
to, and not in lieu of, any other rights and remedies available to the
Company at law or in equity. If any of the provisions of, or covenants contained
in, this Section 6 are hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the remainder of the provisions or the
enforceability thereof in any other jurisdiction, which shall be given full
effect, without regard to the invalid portions or the unenforceability in such
other jurisdiction, the parties agree that the court making such determination
shall have the power to reduce the duration and/or geographic scope of such
provision or covenants and, in its reduced form, said provision or covenant
shall be enforceable; provided, however, that the determination of such court
shall not affect the enforceability of this Section 6 in any other jurisdiction.
6. NONINTERFERENCE. For a period of 1 year following the Termination
Date, without the written consent of the Company, whose consent will not
unreasonably be withheld, conditioned or delayed, the Executive shall not,
directly or indirectly, for whatever reason, whether for his own account or for
the account of any other person or entity: (i) solicit, employ or otherwise
interfere with any of the Employer's existing contracts or relationships with
any investor, customer, affiliate, employee, officer, director, supplier or any
independent contractor performing services or providing goods to the Company and
reasonably known to the Executive on and as of the Termination Date, whether the
such person or entity is employed by or associated with the Company on the
Termination Date; (ii) solicit or otherwise interfere with any existing or
proposed contract reasonably known to the Executive on the Termination Date
between the Company and any other party whatsoever; (iii) except in connection
with his role as a director of the Company or in the course of providing
post-Termination services, contact employees of the Company regarding the
business or operations of the Company, provided, however, that nothing in this
Agreement shall affect the Executive's ability to (x) contact employees of the
Company with respect to affairs of a personal or social nature or (y) except in
connection with his role as a director of the Company or in the course of
providing post-Termination services under Section 3 hereof, converse with any of
Messrs. Tottenham, Baker, Sterrett, or Heurtematte regarding the status of the
Executive's severance benefits as set forth in Section 2 of this Agreement; or
(iv) except in connection with his role as a director of the Company or in the
course of providing post-Termination services under Section 3 hereof, contact
Value Partners, Ltd. or U.S. Bancorp Libra Investments (or any of their
investors who are holders of debt or equity instruments issued by the Company as
of the date hereof).
7. COVENANT NOT TO DISCLOSE. The Executive hereby agrees that he
possesses certain data and knowledge of operations of the business of the
Company which are proprietary in nature and confidential. The Executive hereby
covenants and agrees that he will not, at any time after the Termination Date,
reveal, divulge or make known to any person or use for his own account or for
the account of any other person or entity, any confidential or proprietary
record, data, trade secret, financial information, intellectual property,
business know-how, personnel policy, customer list of the Company as of the
Termination Date, or any other confidential or proprietary information
whatsoever relating to the Company, whether or not obtained with the knowledge
and permission of the Company (exclusive of any information which at the time of
disclosure generally is available to and known by the public, other than as a
result of any unauthorized disclosure by the Executive). The Executive further
covenants and agrees that he shall not divulge any such confidential or
proprietary information that he may acquire during any transition period in
which he assists or consults with the Company to facilitate the transition to
new management and the continued success
of the business of the Company.
8. CERTAIN ACTIONS. The Executive hereby agrees and covenants that
from the date of this Agreement until June 30, 1999:
A. The Executive shall not directly or indirectly solicit or
encourage any person who is an associate or affiliate of the
Executive to solicit proxies or consents in opposition to any
proposal submitted by the Company's Board of Directors to a
vote of the Company's shareholders.
B. The Executive shall not, nor shall he encourage any person
who is an associate or affiliate of the Executive to (i) join
with or assist any person or entity, directly or indirectly,
in opposing, or make any statement in opposition to, any
proposal submitted by the Company's management to a vote of
the Company's shareholders, or (ii) join with or assist any
person or entity, directory or indirectly, in supporting or
endorsing, or make any statement in favor of, any proposal
submitted to a vote of the Company's shareholders that is
opposed by Company's Board of Directors.
9. BINDING AGREEMENT; TERMINATION. This Agreement shall be binding
upon and inure to the benefit of any successor to the Company (whether direct or
indirect, by purchase, merger or consolidation, by operation of law, or
otherwise) or any person which acquires all or substantially all of the assets
of the Company or any assignee of the Company (collectively "Successor"), and
the Company will require any Successor to expressly assume and agree to perform
and carry out the obligations of this Agreement and any instrument executed by
the Company hereunder in the same manner and to the same extent as the Company.
This Agreement shall also be binding on and inure to the benefit of Executive
and is not assignable by the Executive. This Agreement shall terminate upon the
death of Executive and his heirs and beneficiaries shall have the right to
receive all of the compensation under Section 2 which is due the Executive
hereunder.
10. WITHHOLDING. All payments required to be made by the Company
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Company may
reasonably determine should be withheld pursuant to any applicable law and
regulation.
11. MITIGATION. The Executive shall not be required to mitigate the
amount of any payments or other benefits hereunder by seeking other employment
or otherwise, nor shall the amount of any such benefits be reduced by any
compensation earned by the Executive as a result of employment by another
employer.
12. REPRESENTATION. The Company and the Executive represent that they
have reviewed this Agreement, and that each of them is fully aware of the
content of this Agreement and of its legal effect, and acknowledge that this is
a legally valid and binding obligation of the parties.
13. AMENDMENT AND WAIVER. The terms of this Agreement may not be
modified other
than in a writing signed by both parties. No term or condition of this Agreement
shall be deemed to have been waived, nor shall there be any estoppel against
enforcement of any provision of this Agreement, except by written instrument of
the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver unless specifically stated therein, and each such
waiver shall operate only as to the specific term or condition for the future or
as to any act other than that specifically waived.
14. NOTICES. All notices, demands, consents or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given when: (i) personally delivered, or (ii) sent postage prepaid by
registered or certified mail, return receipt requested, such receipt showing
delivery to have been made, or (iii) sent overnight by prepaid receipt courier
addressed as follows:
If to Executive: Stanley Kohlenberg
Two Beekman Place
New York, New York 10022
If to the Company: Trans World Gaming Corp.
One Penn Plaza
Suite 1503
New York, New York 10119
Attention: Maureen Weppler
Secretary
15. ENTIRE AGREEMENT. This Agreement incorporates the entire
understanding among the parties relating to the subject matter hereof, recites
the sole consideration for the promises exchanged and supercedes any prior
agreements, written or oral, between the Company and the Executive with respect
to the subject matter hereof. In reaching this Agreement, no party has relied
upon any representation or promise except those set forth herein.
16. INVALID PROVISIONS: If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.
17. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, except to the extent that
applicable federal law preempts the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
Release as of the day and year first above written.
WITNESS: TRANS WORLD GAMING CORP.
/s/ Maureen Weppler /s/ Julio E. Heurtematte, Jr.
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Director
STANLEY KOHLENBERG
/s/ Maureen Weppler /s/ Stanley Kohlenberg
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