Exhibit 10.1

 

EXECUTION VERSION

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of this 23rd day
of June, 2010, by and between the Seneca Gaming Corporation (“Parent”), a
governmental instrumentality of the Seneca Nation of Indians of New York (the
“Nation”) and Lee K. Shannon (“Executive”).  This Agreement shall become
effective as of the Commencement Date (as defined in Section 2 below).

 

W I T N E S S E T H:

 

WHEREAS, Parent desires that Executive serve as the Senior Vice President and
General Counsel of Parent and each of the Seneca Niagara Falls Gaming
Corporation, the Seneca Territory Gaming Corporation, the Seneca Erie Gaming
Corporation, and the Lewiston Golf Course Corporation, each a wholly-owned
subsidiary of Parent and a governmental instrumentality of the Nation, and each
of the wholly-owned subsidiaries of Parent formed or acquired in the future
(unless otherwise determined by the Board of Directors of Parent) (collectively,
the “Subsidiaries” and together with Parent, “Employer”); and

 

WHEREAS, Executive desires to serve as Senior Vice President and General Counsel
of Employer in accordance with the terms and conditions of this Agreement.

 

IT IS HEREBY AGREED AS FOLLOWS:

 

1.                                       Employment. Upon the Commencement Date,
Employer hereby employs Executive as its Senior Vice President and General
Counsel.  Executive shall report and be accountable to and work under the
authority of the President and Chief Executive Officer and the Board of
Directors of Parent (the “Board”).  Executive shall perform such duties and have
such responsibilities that are customary for such position, including those set
forth on Exhibit A hereto, and those that may be specified from time to time by
the President and Chief Executive Officer and/or the Board.  Without limiting
the foregoing, such duties shall further include an affirmative obligation to
mentor and train enrolled Seneca Nation members and other Native American
employees of Employer in furtherance of the Nation’s efforts to promote the
development and advancement of Native Americans.

 

2.                                       Term.  The term of this Agreement shall
commence on the date mutually agreed upon by Executive and Employer that is
within 30 days of the date hereof (the “Commencement Date”) and terminate on the
day before the third anniversary of the Commencement Date (the “Termination
Date”), unless renewed by a subsequent written agreement of the parties.  The
parties shall enter into good faith discussions regarding the
renewal/non-renewal of this Agreement no later than 180 days prior to the
Termination Date.  If Employer elects not to renew the Agreement then, beginning
on the first day following the Termination Date, Employer shall: (i) pay
Executive his Base Compensation earned, but unpaid, through the Termination
Date; (ii) continue to pay Executive his Base Compensation in effect as of the
Termination Date for a period following his termination (the “Post-Expiration
Period”) of three months; and (iii) to the extent elected by Executive, pay for
the cost of Executive’s premiums for continuation healthcare coverage under
Section 4980B of the Internal Revenue Code of 1986, as amended

 

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(“COBRA”), for the lesser of (1) the Post-Expiration Period, (2) until Executive
is no longer eligible for COBRA continuation coverage, or (3) until Executive
obtains comparable healthcare benefits from any other employer during the
Post-Expiration Period, whereupon Employer shall have no further liability or
obligation to Executive for healthcare coverage under this Agreement or
otherwise.

 

3.                                       Compensation.

 

(a)                                  Executive shall be paid a base salary
(“Base Compensation”) at the annual rate of Four Hundred Thousand Dollars
($400,000.00) for Employer’s fiscal year ending September 30, 2010.  Employer
shall review the Base Compensation on an annual basis (prior to or in connection
with the close of its fiscal year) at which time Employer shall determine in its
sole discretion whether or not the Base Compensation shall be increased and the
timing thereof.  The Base Compensation shall be payable in periodic payments in
accordance with Employer’s regular payroll practices, and shall be prorated for
periods less than 12 months in duration.

 

(b)                                 Executive shall be entitled to participate
in such standard employee benefit plans and insurance programs offered by
Employer to other full-time executives of Employer at the same level of
Executive, or which it may adopt from time to time for such executives (such as
401(k) retirement plans and health and welfare benefit plans), in accordance
with the terms and conditions thereof.

 

(c)                                  Executive shall be provided with three
weeks paid vacation during each fiscal year (limited to five days for the
remainder of the fiscal year ending September 30, 2010).  The vacation days
shall accrue, expire and otherwise be administered in accordance with Employer’s
vacation policy, as in effect from time to time.

 

(d)                                 Executive shall be entitled to reimbursement
of his business expenses, in accordance with Employer’s policies, as in effect
from time to time.

 

(e)                                  Executive shall also be eligible to
participate in any performance or incentive compensation programs that Employer
may adopt in the future for its executives at the same level as Executive.  Said
additional performance or incentive compensation, if any, shall be in addition
to and shall not lessen or reduce the Base Compensation.

 

(f)                                    Should Executive become unable to perform
the duties required under this Agreement as a result of temporary, documented
mental or physical disability (such documentation to be delivered to Employer
promptly), Executive shall be eligible to continue to receive his Base
Compensation for the period during which the documented disability prevents
performance of his duties, provided that such Base Compensation shall only be
payable for a maximum period of up to 180 days following the first day of missed
performance as a result of the disability.

 

(g)                                 The Parent shall pay (or reimburse Executive
if paid by Executive) for (i) Executive’s attorney registration dues, (ii) the
annual dues for membership in attorney bar associations, and (iii) the
reasonable costs and expenses related to fulfilling

 

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Executive’s continuing legal education requirements.

 

4.                                       Licensing Issues.  Executive represents
and warrants to Employer that he shall maintain in good standing such licenses
as may be required pursuant to the Nation-State Gaming Compact between the
Nation and the State of New York (the “Compact”) and/or the Nation’s or
Employer’s gaming ordinances as in effect from time to time, as may be necessary
to enable Executive to engage in his employment hereunder.

 

5.                                       Termination.

 

(a)                                  Executive’s employment hereunder may be
terminated by Parent immediately under the following circumstances and such
termination by Parent shall be a termination with respect to Parent and each of
the Subsidiaries:

 

(i)                                     upon revocation or disapproval of the
license required pursuant to the Compact, or upon disapproval by the National
Indian Gaming Commission of the issuance of any license by the Nation pursuant
to its own gaming ordinances, if either such action renders it unlawful for
Executive to perform as Senior Vice President or General Counsel of Parent or
any of the Subsidiaries, or if any event renders it unlawful for the Nation
and/or Employer to continue to conduct casino gaming on Nation Territory.  For
purposes of this Agreement, “Nation Territory” shall include current or future
Nation territory where Employer conducts or will conduct its gaming operations
as of the date Executive’s employment is terminated.

 

(ii)                                  upon revocation or disapproval of such
licenses for Executive as are required pursuant to the Compact and/or by the
Nation’s or Employer’s gaming ordinances, provided that, in the event Executive
appeals the grounds for such revocation, disapproval or suspension, Employer
shall suspend Executive without compensation during the pendency of such appeal,
with reinstatement of Executive and reimbursement of such compensation by
Employer in the event such appeal is successful;

 

(iii)                               Executive shall commit an act constituting
“Cause,” which is defined to mean (A) an act of dishonesty by Executive intended
to result in gain or personal enrichment of Executive or others at Employer’s
expense, (B) the deliberate and intentional refusal by Executive (except by
reason of disability) to perform his duties hereunder, (C) by acts constituting
gross negligence in the performance of such duties, or (D) the failure to
perform any material term or condition of this Agreement after written notice
thereof from Company and the Executive’s failure to cure such failure within 15
days of the written notice (as determined by Company and specified in the notice
of breach and other than by reason of disability);

 

(iv)                              upon Executive’s death or disability; or

 

(v)                                 if Employer shall for any reason within
Employer’s or the Nation’s control permanently cease to conduct casino gaming on
Nation Territory.

 

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(b)                                 If Executive’s employment should be
terminated under Section 5(a) above (or any subsection thereof) then Employer
shall at that time pay Executive (or his estate, as applicable) Base
Compensation earned through the date Executive is terminated, whereupon Employer
shall have no further liability or obligation to Executive under this Agreement
or otherwise, except as contemplated by Section 3(f) if Executive is terminated
by reason of his disability.

 

(c)                                  If Executive’s employment should be
terminated by Parent for any reason other than those specified in Sections
5(a) above (it being understood that a purported termination for Cause which is
contested by Executive and finally determined not to have been proper shall be
treated as a termination under this Section 5(c)), then Employer shall:

 

(i)                                     pay Executive his Base Compensation
earned, but unpaid, through the date Executive is terminated;

 

(ii)                                  continue to pay Executive his Base
Compensation in effect as of the date of termination for a period following his
termination (the “Severance Period”) equal to the lesser of (A) nine months or
(B) the remainder of the period ending on the Termination Date, provided that in
no event shall the Severance Period be less than three months; and

 

(iii)                               to the extent elected by Executive, pay for
the cost of Executive’s premiums for continuation healthcare coverage under
COBRA, for the lesser of (1) the Severance Period, (2) until Executive is no
longer eligible for COBRA continuation coverage, or (3) until Executive obtains
comparable healthcare benefits from any other employer during the Severance
Period, whereupon Employer shall have no further liability or obligation to
Executive for healthcare coverage under this Agreement or otherwise.

 

Payments to Executive pursuant to Section 5(c)(ii) above shall commence on the
day following the effective date of Executive’s termination and shall continue
until the Severance Period ends; provided that if Executive has not delivered a
signed general release of claims against Employer related to Executive’s
employment (and termination of employment) with Employer in substantially the
form as attached hereto as Exhibit B (as may be modified by Employer in good
faith to reflect changes in law or its employment practices) within 30 days of
the effective date of termination, or any such release is later revoked by
Executive, the Employer shall be relieved of its obligation to make any payments
pursuant to Section 5(c)(ii).  Further, Executive’s receipt of compensation
under this Section 5(c) is subject to Executive’s duty to mitigate damages as
follows: during the Severance Period, Executive shall endeavor in good faith to
mitigate damages by seeking employment with duties and salary comparable to
those provided for herein (subject to the limitations of the covenant not to
compete set forth in Section 6(c) below), and if he shall obtain such
employment, he shall reimburse Employer the amount of the compensation he has
received from such other entity for such period, but not to exceed the amount of
the compensation Employer shall have paid him for such period.

 

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(d)                                 Executive may terminate his employment for
any reason upon 90 days written notice to Parent.  If Executive terminates his
employment pursuant to this Section 5(d), Employer shall pay Executive the Base
Compensation earned through the date of termination, whereupon Employer shall
have no further liability or obligation to Executive under this Agreement or
otherwise.

 

(e)                                  Executive acknowledges and agrees that the
payments for termination of his employment during the employment term set forth
in this Section 5 or for the election by the Employer not to renew the Agreement
under Section 2 constitute liquidated damages for termination of his employment
during the employment term and such liquidated damages shall be his only remedy
with respect to any claim, including, without limitation, breach of contract, he
may have under this Agreement.  Notwithstanding any other provision of this
Agreement to the contrary, Executive acknowledges and agrees that other than any
claim for the liquidated damages contemplated hereunder, he waives any rights to
be awarded any other damages with respect to any claim he may have under this
Agreement, including, without limitation, compensatory or punitive damages.

 

6.                                       Restrictive Covenants.

 

(a)                                  Executive acknowledges that:  (i) as a
result of Executive’s employment with Employer, he will obtain secret,
proprietary and confidential information concerning the business of Employer,
including, without limitation, business and marketing plans, strategies,
employee lists, patron lists, operating procedures, business relationships
(including persons, corporations or other entities performing services on behalf
of or otherwise engaged in business transactions with Employer), accounts,
financial data, know-how, computer software and related documentation, trade
secrets, processes, policies and/or personnel, and other information relating to
Employer (“Confidential Information”); (ii) the Confidential Information has
been developed and created by Employer at substantial expense and the
Confidential Information constitutes valuable proprietary assets and Employer
will suffer substantial damage and irreparable harm which will be difficult to
compute if, during the Restricted Period (as defined in Section 6(c) below),
Executive should enter a Competitive Business (as defined herein) in violation
of the provisions of this Agreement; (iii) Employer will suffer substantial
damage which will be difficult to compute if, during the Restricted Period,
Executive should solicit or interfere with Employer’s employees or patrons, or
should divulge Confidential Information relating to the business of Employer;
(iv) the provisions of this Section 6 are reasonable and necessary for the
protection of the business of Employer; (v) Employer would not have hired or
employed Executive unless he signed this Agreement; and (vi) the provisions of
this Agreement will not preclude Executive from other gainful employment. 
“Competitive Business” shall mean any gaming establishment which provides to its
patrons games of chance such as slot machines, card games, roulette, or similar
games in the State of New York or within a 250 mile radius of Nation Territory
and any other business in which the Company is then engaged as of the date of
termination of this Agreement.

 

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(b)                                 Executive acknowledges and agrees that the
unauthorized disclosure or misuse of Confidential Information will cause
substantial damage to Employer.  Therefore, Executive agrees not to, at any
time, either during the term of the Agreement or thereafter, divulge, use,
publish or in any other manner reveal, directly or indirectly, to any person,
firm or corporation any Confidential Information obtained or learned by
Executive during the course of his employment with Employer, with regard to the
operational, financial, business or other affairs and activities of Employer,
their officers, directors or employees and the entities with which they have
business relationships, except (i) as may be necessary to the performance of
Executive’s duties with Employer, (ii) with Parent’s express written consent,
(iii) to the extent that any such information is in the public domain other than
as a result of Executive’s breach of any of obligations hereunder, or (iv) where
required to be disclosed by court order, subpoena or other government process
and, in such event, Executive shall promptly notify Employer of the requirement
and cooperate with Employer in attempting to keep such information confidential.

 

(c)                                  During Executive’s employment with Employer
and for 12 months after his termination of employment for any reason (the
“Restricted Period”), Executive, without the prior written permission of Parent,
shall not, directly or indirectly, (i) enter into the employ of or render any
services to any person, engaged in a Competitive Business; or (ii) become
associated with or interested in any Competitive Business as an individual,
partner, shareholder, member, creditor, director, officer, principal, agent,
employee, trustee, consultant, advisor or in any other relationship or
capacity.   This Section 6(c) shall not prevent Executive from owning common
stock in a publicly traded corporation which owns or manages a casino provided
Executive does not take an active role in the ownership or management of such
corporation and his ownership interest represents less than 3% of the voting
securities and/or economic value of such corporation.  Furthermore, this
Section 6(c) shall not be interpreted or applied in a manner that would violate
Rule 5.6 of the New York Rules of Professional Conduct.

 

(d)                                 By executing this Agreement, Executive
acknowledges that he understands that Employer’s ability to operate its business
depends upon its ability to attract and retain skilled people and that Employer
has and will continue to invest substantial resources in training such
individuals.  Therefore, during the Restricted Period, Executive shall not,
without the prior written permission of Parent, directly or indirectly solicit,
employ or retain, or have or cause any other person or entity to solicit, employ
or retain, any person who is employed or is providing personal services to
Employer.

 

(e)                                  By executing this Agreement, Employee
acknowledges that Executive understands that Employer’s ability to operate its
business depends upon its ability to attract and retain vendors and patrons. 
Therefore, during the Restricted Period, Executive shall not, directly or
indirectly, solicit, contact, interfere with, or endeavor to entice away from
Employer any of its current or potential patrons or any such persons or entities
that were patrons of Employer within the one year period immediately prior to
Executive’s termination of employment.  Executive further agrees that, during
the Restricted Period, Executive shall not, directly or indirectly, endeavor to
entice away from Employer any of

 

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its current or potential vendors or any such persons or entities that were
vendors of Employer within the one year period immediately prior to Employee’s
termination of employment.

 

(f)                                    Executive acknowledges and agrees during
his employment and for all time thereafter that he will not defame or publicly
criticize the services, business, integrity, veracity or personal or
professional reputation of Employer and its officers, directors, employees,
affiliates, or agents thereof in either a professional or personal manner. 
Employer acknowledges and agrees that during Executive’s employment and for all
time thereafter, Employer will not defame or publicly criticize Executive either
in a professional or personal manner, except as may be necessary to defend
Employer from comments made by or on behalf of Executive.

 

(g)                                 Executive recognizes and agrees that any
works of authorship, databases, discoveries, developments, improvements,
computer programs, or any other intellectual property rights whatsoever that
Executive makes or conceives, or has made or conceived, solely or jointly,
during the period of Executive’s employment with Employer, whether or not
patentable or registerable under copyright, trademark or similar statutes, which
either (i) are related to or useful in the current or anticipated business or
activities of Employer; (ii) fall within Executive’s responsibilities as
employed by Employer; or (iii) are otherwise developed by Executive through the
use of Employer’s Confidential Information, equipment, software or other
facilities or resources or at times during which Executive is or has been an
employee (“Works”) constitute “work for hire” under the United States Copyright
Act, as amended.  If for any reason any portion of the Works shall be deemed not
to be a “work for hire,” then Executive hereby assigns to Employer all rights,
title and interest therein and shall cooperate to establish Employer’s ownership
rights, including the execution of all documents necessary to establish
Employer’s exclusive ownership rights.  Executive agrees to disclose to Employer
his entire right, title and interest in and to all Works.

 

(h)                                 If Executive commits a breach, or threatens
to commit a breach, of any of the provisions of this Section 6 of the Agreement,
Employer shall have the right and remedy to have the provisions specifically
enforced by any court having jurisdiction, it being acknowledged and agreed by
Executive that the services being rendered hereunder to Employer are of a
special, unique and extraordinary character and that any such breach or
threatened breach will cause irreparable injury to Employer and that money
damages will not provide an adequate remedy to Employer.  Such right and remedy
shall be in addition to, and not in lieu of, any other rights and remedies
available to Employer at law or in equity.  Accordingly, Executive consents to
the issuance of an injunction, whether preliminary or permanent, consistent with
the terms of this Agreement.

 

(i)                                     If, at any time, the provisions of this
Agreement shall be determined to be invalid or unenforceable under any
applicable law, by reason of being vague or unreasonable as to area, duration or
scope of activity, this Agreement shall be considered divisible and shall become
and be immediately amended to only such area, duration and scope of activity as
shall be determined to be reasonable and enforceable by the court or other body
having jurisdiction over the matter and Executive and Employer agree that

 

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this Agreement as so amended shall be valid and binding as though any invalid or
unenforceable provision had not been included herein.

 

7.                                       Compliance with Section 409A.

 

(a)                                  This Agreement shall be interpreted to
avoid any additional tax under Section 409A of the Internal Revenue Code of
1986, as amended (“Section 409A”).  If any payment or benefit cannot be provided
or made at the time specified herein without incurring sanctions under
Section 409A, then such benefit or payment shall be provided in full at the
earliest time thereafter when such sanctions will not be imposed.

 

(b)                                 Notwithstanding any provision of this
Agreement to the contrary, with respect to in-kind benefits provided or expenses
eligible for reimbursement under this Agreement that are subject to
Section 409A, (i) the benefits provided or the amount of expenses eligible for
reimbursement during any calendar year shall not affect the benefits provided or
expenses eligible for reimbursement in any other calendar year, except as
otherwise provided in U.S. Treasury Regulation §1.409A-3(i)(1)(iv)(B), and
(ii) the reimbursement of an eligible expense shall be made as soon as
practicable after the Executive requests such reimbursement, but not later than
the December 31 of the calendar year in which the expense was incurred.

 

8.                                       Miscellaneous.

 

(a)                                  Executive agrees that during the term of
this Agreement unless earlier terminated, he will commit his full time and
energies to the duties imposed hereby; provided, that, with the prior written
approval of the Board, Executive may expend as much of his personal time on his
own ventures or investments, so long as: (i) such time is not substantial and
does not interfere with his ability to perform his duties hereunder; (ii) such
activities do not compete or conflict with the business of Employer or create a
personal conflict of interest to Executive and (iii) such venture or investment
does not transact any business with Employer without prior disclosure to, and
approval by, the Board.

 

(b)                                 Executive represents to Employer that there
are no restrictions or agreements to which he is a party which would be violated
by his execution of this Agreement and his employment hereunder.

 

(c)                                  No provisions of this Agreement may be
amended, modified, or waived unless such amendment or modification is agreed to
in writing signed by Executive and by a duly authorized officer of Parent, and
such waiver is set forth in writing and signed by the party to be charged.  No
waiver by any party hereto at any time of any breach by the other party hereto
of any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time.  No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.  The respective rights and obligations of the
parties hereunder of this

 

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Agreement shall survive Executive’s termination of employment and the
termination of this Agreement to the extent necessary for the intended
preservation of such rights and obligations.

 

(d)                                 The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of
New York without regard to its conflicts of law principles.

 

(e)                                  Except as provided in Section 6(h) of this
Agreement, any dispute, controversy or claim arising out of or relating to this
Agreement shall be settled by binding arbitration in Niagara Falls, New York in
accordance with the Rules of the American Arbitration Association, and judgment
upon the award rendered by the arbitrator(s) may be entered in any court of
competent jurisdiction.  The parties agree that the only remedies available to
Executive under this Agreement are those that are set forth in Section 5 and the
arbitrator shall have no authority to award any other damages, including,
without limitation, punitive and/or compensatory damages.  The parties further
agree that they shall bear their own attorneys’ fees and related costs arising
out of any such dispute, controversy or claim under this Agreement.

 

(f)                                    For the purposes of this Agreement,
notices, demands and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
either personally or by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:

 

If to Executive:

 

Lee Shannon

P.O. Box 1834

Portland, Oregon 97207

 

If to Parent:

 

310 Fourth Street

Niagara Falls, New York (Seneca Nation Territory) 14303

Attn:  Board of Directors and Chief Executive Officer

 

or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.

 

(g)                                 The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in
full force and effect.

 

(h)                                 This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.

 

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(i)                                     Except as otherwise provided herein and
except with respect to terms regarding Executive’s relocation assistance, which
are set forth in the Conditional Offer of Employment letter from Parent to
Executive dated April 23, 2010, this Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of such
subject matter.  Except as otherwise provided herein, any other prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and cancelled.

 

(j)                                     All payments hereunder shall be subject
to any required withholding of federal, state and local taxes pursuant to any
applicable law or regulation.

 

(k)                                  The section headings in this Agreement are
for convenience of reference only, and they form no part of this Agreement and
shall not affect its interpretation.

 

(l)                                     Executive acknowledges that he has been
afforded an opportunity to consult with his counsel with respect to this
Agreement.

 

(m)                               Employer shall have the right at its own
expense to purchase insurance on the life of Executive, in such amounts as it
shall from time to time determine, of which Employer (or its designated
affiliate) shall be the beneficiary.  Executive shall submit to such physical
examinations as may reasonably be required and shall otherwise cooperate with
Employer in obtaining such insurance.

 

(n)                                 Employer shall indemnify, defend and hold
Executive harmless, including the payment of reasonable attorney’s fees, if the
Employer does not directly provide Executive’s defense, from and against any and
all claims made by anyone, including, but not limited to, a corporate entity,
company, other employee, agent, patron, tribal member, or any other person, with
respect to any claim that asserts as a basis, any acts, omissions, or other
circumstances involving the performance of the Executive of his duties as an
officer of Employer, except for actions of the Executive that are the basis for
termination pursuant to Section 5(a)(iii) of this Agreement or where
indemnification is prohibited by Employer’s Charter or By-laws, as are in effect
on the Commencement Date.

 

(o)                                 Employer shall include Executive in any
directors and officers liability insurance coverage it maintains, including
coverage for legal malpractice.

 

(p)                                 Executive shall become admitted to practice
law in the State of New York promptly following the Commencement Date, and shall
maintain his license to practice law in the State of New York and maintain his
status as a member of the bar in good standing.

 

9.                                       Waiver of Sovereign Immunity.

 

(a)                                  Parent grants a waiver of its sovereign
immunity from suit exclusively to Executive (and his estate in the event of his
death) for the purpose of enforcing this Agreement, or permitting or compelling
arbitration and other remedies as provided

 

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herein.  This waiver is solely for the benefit of the aforesaid parties and for
no other person or entity.  For this limited purpose, Parent consents to be sued
solely with respect to the enforcement of any decision by an arbitrator relating
to this Agreement as provided in Section 8 of this Agreement in the United
States District Court for the Western District of New York.

 

(b)                                 Parent hereby waives any requirement of
exhaustion of tribal remedies, and agrees that it will not present any
affirmative defense in any dispute based on any alleged failure to exhaust such
remedies.  Without in any way limiting the generality of the foregoing, Parent
expressly authorizes any governmental authorities who have the right and duty
under applicable law to take any action authorized or ordered by any court, to
take such action, including, without limitation, repossessing any property and
equipment subject to a security interest or otherwise giving effect to any
judgment entered; provided, however that Parent does not hereby waive the
defense of sovereign immunity with respect to any action by third parties.

 

(c)                                  Parent’s waiver of immunity from suit is
irrevocable and specifically limited to the remedies provided in Section 5 of
this Agreement regarding liquidated damages.  Any monetary award related to any
such action shall be satisfied solely from the net income of Parent.

 

(d)                                 Notwithstanding anything in this Agreement
to the contrary, this waiver is to be interpreted in a manner consistent with
Parent’s ability to enter into this Agreement, including, without limitation,
this Section 9, as provided in the Charter of Parent, as it may be amended from
time to time.  Accordingly, the Nation shall not be liable for the debts or
obligations of Parent, and Parent shall have no power to pledge or encumber the
assets of the Nation.  Furthermore, this Section 9 does not constitute a waiver
of any immunity of the Nation or a delegation to Parent of the power to make any
such waiver. This Section 9 shall be strictly construed with a view toward
protecting the Nation’s assets from the reach of creditors and others.

 

[Signature Page Follows]

 

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EXECUTED, as of the date first written above.

 

 

SENECA GAMING CORPORATION

 

 

 

 

By

/s/ Catherine Walker

 

Name: Catherine Walker

 

Title: President and CEO

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Lee K. Shannon

 

Name: Lee K. Shannon

 

 

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Exhibit A

 

Description of Duties

 

Seneca Gaming Corporation

JOB DESCRIPTION

FINAL DRAFT

 

POSITION:

 

Senior VP & General Counsel

DEPARTMENT:

 

Executive

REPORTS TO:

 

President/CEO and Board of Directors

GAMING LICENSE RANK:

 

Key

PROJECTED EMPLOYEES (FTE):

 

1

EFFECTIVE DATE:

 

8/1/04

REVISION DATE:

 

5/25/10

JOB SALARY GRADE:

 

S-43

 

JOB SUMMARY:

 

The Sr. Vice President & General Counsel of the Seneca Gaming Corporation
oversees and directs all of the legal activities of the Company and its
subsidiaries including coordinating and managing outside legal counsel.  All
duties are performed within the guidelines of Seneca Gaming Corporation’s
Policies and Procedures, Internal Control Standards, and objectives.

 

ESSENTIAL FUNCTIONS AND RESPONSIBILITIES:

 

1.               Develop, mentor and train enrolled Seneca Nation members for
future senior leadership positions with the legal department.

2.               Direct legal activities of the Company and its outside legal
counsel.

3.               Assist the Nation’s Department of Justice if needed with issues
concerning Federal Agencies, including the Department of Justice, the National
Indian Gaming Commission and the Department of the Interior and Bureau of Indian
Affairs.

4.               Provide counsel and direction to the Company and its Board of
Directors on all legal matters.

5.               Coordinate with the CFO pertaining to compliance by the Company
and its employees with the regulations of the Securities & Exchange Commission,
including Sarbanes-Oxley.

6.               Prepare and review leases and contracts.  If required,
coordinate outside legal counsel efforts regarding these matters.

7.               Maintain relationship with Nation’s Council and legal advisors,
and provide all requested information to Council, as requested by it from time
to time.

8.               Oversee the risk management function and all related insurance
and claims issues.

9.               Oversee the compliance department function and all related
regulatory issues.

10.         Study, interpret, and apply appropriate law, court decisions and
other appropriate legal alternatives in the preparation of cases, legal opinions
and litigation pleadings as necessary.

11.         Provide advice and guidance regarding lawsuits filed in Federal and
State Courts against or on behalf of SGC and its subsidiaries.  Prepare
necessary legal pleadings, or coordinate outside legal counsel efforts regarding
these matters.

 

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12.         Is directly responsible for the control of outside legal counsel
fees, including hours billed, hourly rates, level of attorney experience, and
retainers.

13.         Is responsible for the achievement of Legal Department’s operating
budget.

14.         Maintain positive working relationship with co-workers, outside
legal counsel, and government officials.

15.         Maintain an open relationship with the Nations Council and provide
all necessary information to the council as requested from time to time.

16.         Oversee the legal department’s counsel to the SARCS Committee,
providing guidance regarding the Company’s compliance with current termination
and suspicious transaction reporting.

17.         Other duties as assigned by the President/CEO and SGC Board of
Directors.

18.         Maintain a current understanding of all policy and guidelines
regarding information security including the Seneca Gaming Corporation
Acceptable Use Policy.  Understand and comply with all information security
policies and procedures at all times.

19.         Provide exceptional customer service to all patrons and communicate
in a pleasant, friendly and professional manner at all times.  Maintain a
professional work environment with supervisors, managers and staff.

20.         Meet the attendance guidelines of the job and adhere to regulatory,
departmental and company policies.

21.         Must complete all required SGC Training programs within nine
(9) months from commencement of employment.

22.         Attend all necessary meetings.

23.         Duties, responsibilities, requirements and expectations pertaining
to this job are subject to change as needed.  Hours are determined by a 24-hour
schedule.

24.         The department leadership position requires hours that can extend
from 45-50 hours per week, or more, and be inclusive of work weeks that consist
of 6 or 7 days.

 

QUALIFICATIONS/REQUIREMENTS:

 

To perform this job successfully, the incumbent must be able to perform each of
the essential duties and responsibilities satisfactorily. The requirements
listed below are representative of the knowledge, skill, and/or ability
required.

 

Education/Experience:

 

1.               Must be 18 years of age or older upon employment.

2.               A LLD or JD from a recognized law school.

3.               A minimum of seven (7) to ten (10) years of relevant experience
with a background in Indian/Native American law.

4.               Excellent oral, written, analytical, and organizational skills
are required.

5.               Successful candidate must be results oriented, and a hands-on
professional.

6.               Have the ability to read, analyze, and interpret complex
documents, and provide legal guidance regarding such matters.

7.               Must be capable of defining problems, collection of data,
establishing facts, and drawing valid conclusions and providing solutions.

8.               Must demonstrate leadership skills.

9.               Admission to New York Bar..

10.         Applicant must be able to substantiate a safe driving record within
the parameters acceptable to our liability insurance carrier.

 

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Language Skills and Reasoning Ability:

 

1.               Excellent communication skills required.

2.               Must be capable to write clearly about complex issues.

3.               Must be able to interact with a diverse group of people.

4.               Must be capable of dealing effectively with people.

 

Physical Requirements and Work Environment:

 

The physical demands described here are representative of those that must be met
by an employee to successfully perform the essential functions of this job. The
work environment characteristics described here are representative of those an
employee encounters while performing the essential functions of this job. 
Reasonable accommodations may be made to enable individuals with disabilities to
perform the essential functions.  The noise level in the work environment is
usually moderately loud. When on the casino floor, the noise levels increase to
loud.  Must be able to work in an environment where smoking is permitted.

 

1.               Must be able to stand, walk, and move through all areas of the
casino.

2.               Maintain physical stamina and proper mental attitude to work
under pressure in a fast-paced, casino environment and effectively deal with
customers, management, employees, and members of the business community in all
situations.

 

Other:

 

1.               Must be able to be approved for and maintain a valid Key
license.

2.               Must be able to read, write, speak and understand English. Must
be able to respond to visual and aural cues.

3.               Work nights, weekends and holidays as required.

4.               Employment is contingent upon a favorable outcome of a
background investigation and drug screening.

5.               Preference in filling vacancies is given to qualified members
of the Seneca Nation of Indians or qualified Native American candidates in
accordance with the Indian Preference Act (25 USC 472).  The Seneca Nation of
Indians and the Seneca Gaming Corporation are also committed to achieving full
equal opportunity without discrimination based on race, religion, color, gender,
national origin, politics, marital status, physical disability, age or sexual
orientation.

 

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Exhibit B

 

Form of Release

 

See Attached.

 

16

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RELEASE OF ALL CLAIMS

 

Release of Claims by Executive.

 

It is understood and agreed by the Seneca Gaming Corporation (the “Company”), a
governmental instrumentality of the Seneca Nation of Indians of New York, and
                     (“Executive”), that in consideration of the mutual promises
and covenants contained in this general release of all claims (the “Release
Agreement”), Executive, on behalf of Executive and Executive’s agents,
representatives, administrators, receivers, trustees, estates, heirs, devisees,
assignees, legal representatives, and attorneys, past or present (as the case
may be), hereby irrevocably and unconditionally releases, discharges, and
acquits all the Released Parties (as defined below) from any and all claims,
promises, demands, liabilities, contracts, debts, losses, damages, attorneys’
fees and causes of action of every kind and nature, known and unknown, up to and
including the Effective Date (as defined below), provided, however, that any
claims arising after the Effective Date from the then present effect of acts or
conduct occurring on or before the Effective Date shall be deemed released under
this agreement, including but not limited to causes of action, claims or rights
arising out of, or which might be considered to arise out of or to be connected
in any way with (i) Executive’s employment or service with the Company and, to
the extent applicable, a Released Party, or the termination thereof; (ii) the
Employment Agreement dated as of                            , 20     between the
Company and Executive, or the termination thereof; (iii) any treatment of
Executive by any of the Released Parties, which shall include, without
limitation, any treatment or decisions with respect to hiring, placement,
promotion, discipline, work hours, demotion, transfer, termination,
compensation, performance review, or training; (iv) any statements or alleged
statements by the Company or any of the Released Parties regarding Executive,
whether oral or in writing; (v) any damages or injury that Executive may have
suffered, including without limitation, emotional or physical injury,
compensatory damages, or lost wages; (vi) employment discrimination, which shall
include, without limitation, any individual or class claims of discrimination on
the basis of age, disability, sex, race, religion, national origin, citizenship
status, marital status, sexual preference, or any other basis whatsoever; or
(vii) all such other claims that Executive could assert against any, some, or
all of the Released Parties in any forum, whether such claims are known or
unknown, accrued or unaccrued, liquidated or contingent, direct or indirect.

 

Said release shall be construed as broadly as possible and shall also extend to
release the Released Parties, without limitation, from any and all claims that
Executive has alleged or could have alleged, whether known or unknown, accrued
or unaccrued, against any Released Party for violation(s) of any of the
following, to the extent applicable: the National Labor Relations Act, as
amended; Title VII of the Civil Rights Act of 1964, as amended; the Age
Discrimination in Employment Act; the Civil Rights Act of 1991; Sections
1981-1988 of Title 42 of the United States Code; the Equal Pay Act; the Employee
Retirement Income Security Act of 1974, as amended; the Immigration Reform
Control Act, as amended; the Americans with Disabilities Act of 1990, as
amended; the Fair Labor Standards Act, as amended; the Occupational Safety and
Health Act, as amended; the Older Workers Benefit Protection Act of 1990; the
Rehabilitation Act of 1973; the Consolidated Omnibus Budget Reconciliation Act
of 1985; the New York Human Rights Law; the New York City Human Rights Law; the
New York Labor Law; the New York Whistleblower Protection Law; the New York Wage
and Hour Laws; the New York City

 

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Administrative Code; any other tribal, federal, state, or local law or
ordinance; any public policy, whistleblower, contract, tort, or common law; and
any demand for costs or litigation expenses, including but not limited to
attorneys’ fees.

 

The term “Released Parties” or “Released Party” as used herein shall mean and
include: the Company and the Company’s parents, subsidiaries, affiliates, and
all of their predecessors and successors (collectively, the “Released
Entities”), and with respect to each such Released Entity, all of its former,
current, and future officers, directors, agents, representatives, employees,
servants, owners, shareholders, partners, joint venturers, attorneys, insurers,
administrators, and fiduciaries, and any other persons acting by, through,
under, or in concert with any of the persons or entities listed herein.

 

Pursuant to the Older Workers Benefit Protection Act of 1990, Executive
understands and acknowledges that by executing this Release Agreement and
releasing all claims against any of the Released Parties, Executive has waived
any and all rights or claims that Executive has or could have against any
Released Party under the Age Discrimination in Employment Act, which includes
any claim that any Released Party discriminated against Executive on account of
Executive’s age. Executive also acknowledges the following:

 

(a)                                  The Company, by this written Release
Agreement, has advised Executive to consult with an attorney prior to executing
this Release Agreement;

 

(b)                                 This Release Agreement does not include
claims arising after the Effective Date, provided, however, that any claims
arising after the Effective Date from the then present effect of acts or conduct
occurring on or before the Effective Date shall be deemed released under this
Release Agreement;

 

(c)                                  The Company has provided Executive the
opportunity to review and consider this Release Agreement for twenty-one (21)
days from the date Executive receives this Release Agreement. At Executive’s
option and sole discretion, Executive may waive the twenty-one (21) day review
period and execute this Release Agreement before the expiration of twenty-one
(21) days. If Executive elects to waive the twenty-one (21) day review period,
Executive acknowledges and admits that Executive was given a reasonable period
of time within which to consider this Release Agreement and Executive’s waiver
is made freely and voluntarily, without duress or any coercion by any other
person; and

 

(d)                                 Executive may revoke this Release Agreement
within a period of seven (7) days after execution of the agreement. Executive
agrees that any such revocation is not effective unless it is made in writing
and delivered to the Company, to the attention of the Chief Executive Officer of
the Seneca Gaming Corporation, 310 Fourth Street, Niagara Falls, New York
(Seneca Nation Territory) 14303, by the end of the seventh (7th) calendar day.
Under any such valid revocation, Executive shall not be entitled to any benefits
under this Release Agreement and this Release Agreement shall become null and
void. This Release Agreement becomes effective on the eighth (8th) calendar day
after it is executed by both parties (the

 

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“Effective Date”).

 

Executive confirms that no claim, charge, or complaint against any of the
Released Parties, brought by Executive, exists before any federal, state, or
local court or administrative agency. Executive hereby waives Executive’s right
to accept any relief or recovery, including costs and attorney’s fees, from any
charge or complaint before any federal, state, or local court or administrative
agency against any of the Released Parties, except as such waiver is prohibited
by law.

 

Executive agrees that Executive will not, unless otherwise prohibited by law, at
any time hereafter, participate in as a party, or permit to be filed by any
other person on Executive’s behalf or as a member of any alleged class of
persons, any action or proceeding of any kind, against the Released Parties or
any past, present or future employee benefit and/or pension plans or funds of
the Released Entities with respect to any act, omission, transaction or
occurrence up to and including the date of the execution of this Release
Agreement. Executive further agrees that Executive will not seek or accept any
award or settlement from any source or proceeding with respect to any claim or
right covered by this paragraph or by the Release Agreement and that this
Release Agreement shall act as a bar to recovery in any such proceedings.

 

Executive agrees that neither this Release Agreement nor the furnishing of the
consideration for the general release set forth in this Release Agreement shall
be deemed or construed at any time for any purpose as an admission by the
Released Parties of any liability or unlawful conduct of any kind. Executive
further acknowledges and agrees that the consideration provided for herein is
adequate consideration for Executive’s obligations under this Release Agreement.

 

Miscellaneous.

 

This Agreement and all questions relating to its validity, interpretation,
performance and enforcement shall be governed by and construed in accordance
with the laws of the State of New York without regard to its conflicts of law
principles. If any provision of the Release Agreement other than the general
release set forth above, is declared legally or factually invalid or
unenforceable by any court of competent jurisdiction and if such provision
cannot be modified to be enforceable to any extent or in any application, then
such provision immediately shall become null and void, leaving the remainder of
this Release Agreement in full force and effect. If any portion of the general
release set forth in this Release Agreement is declared to be unenforceable by a
court of competent jurisdiction in any action in which Executive participates or
joins, Executive agrees that all consideration paid to Executive under this
Release Agreement shall be offset against any monies that Executive may receive
in connection with any such action.

 

This Release Agreement sets forth the entire agreement between Executive and the
Released Parties and it supersedes any and all prior agreements or
understandings with respect to the subject matter hereof, whether written or
oral, between the parties, except as otherwise specified in this Release
Agreement. Executive acknowledges that Executive has not relied on any
representations, promises, or agreements of any kind made to him in connection
with Executive’s decision to sign this Release Agreement, except for those set
forth in this Release Agreement.

 

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This Release Agreement may not be amended except by a written agreement signed
by both parties, which specifically refers to this Release Agreement.

 

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE CAREFULLY HAS READ THIS RELEASE AGREEMENT;
THAT EXECUTIVE HAS HAD THE OPPORTUNITY TO THOROUGHLY DISCUSS ITS TERMS WITH
COUNSEL OF EXECUTIVE’S CHOOSING; THAT EXECUTIVE FULLY UNDERSTANDS ITS TERMS AND
ITS FINAL AND BINDING EFFECT; THAT THE ONLY PROMISES MADE TO SIGN THIS RELEASE
AGREEMENT ARE THOSE STATED AND CONTAINED IN THIS RELEASE AGREEMENT; AND THAT
EXECUTIVE IS SIGNING THIS RELEASE AGREEMENT KNOWINGLY AND VOLUNTARILY. EXECUTIVE
STATES THAT EXECUTIVE IS IN GOOD HEALTH AND IS FULLY COMPETENT TO MANAGE
EXECUTIVE’S BUSINESS AFFAIRS AND UNDERSTANDS THAT EXECUTIVE MAY BE WAIVING
SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS RELEASE AGREEMENT.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Executive has executed this Release Agreement as of the date
set forth below.

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Date:

 

 

 

 

 

 

 

 

 

Sworn to and subscribed before me

 

 

 

 

 

 

 

this     day of                         , 20     .

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notary Public

 

 

 

 

 

 

 

 

 

 

 

 

 

ACCEPTED AND ACKNOWLEDGED BY SENECA GAMING CORPORATION

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

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