**Exhibit 10.31**

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this **“Agreement”**)is effective as of this 26th day of June, 2008, by and between the SenecaGaming Corporation (“**Parent**”), agovernmental instrumentality of the Seneca Nation of Indians of New York (the “**Nation**”) and Robert Chamberlain (“**Executive**”).

 

WHEREAS, Parent desires that Executive serve as theSenior Vice President of Design and Construction of Parent and each of theSeneca Niagara Falls Gaming Corporation (“**SNFGC**”), theSeneca Territory Gaming Corporation (“**STGC**”), and theSeneca Erie Gaming Corporation (“**SEGC**”), each awholly-owned subsidiary of Parent and a governmental instrumentality of theNation (collectively, the “**Subsidiaries**”and together with Parent, “**Employer**”); and

 

WHEREAS, Executive desires to serve as Senior VicePresident of Design and Construction of Employer in accordance with the termsand conditions of this Agreement.

 

IT IS HEREBY AGREED AS FOLLOWS:

 

# 1.                                       Employment.Employer hereby employs Executive as its Senior Vice President of Design andConstruction.  Executive shall report andbe accountable to and work under the authority of the President and ChiefExecutive Officer and the Board of Directors of Parent (the “**Board**”). Executive shall perform such duties and have such responsibilities thatare customary for such position and including those that may be specified fromtime to time by the President and Chief Executive Officer and/or the Board thatare not inconsistent with such position.

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# 2.                                       Term.  The term of this Agreement shall commence asof June 26, 2008 (the “**Commencement Date**”)and terminate on June 25, 2011 (the “**TerminationDate**”), unless renewed by a subsequent written agreement of theparties.  The parties agree that theyshall enter into good faith discussions regarding renewal/non-renewal of thisAgreement no later than twelve (12) months prior to the Termination Date.  In the event such discussions are ongoing asof the Termination Date, this Agreement shall renew on a month-to-month basis,provided, that, under all circumstances, the other party shall be entitled tono less than one hundred eighty (180) days notice prior to the effectiveness ofthe other party’s non-renewal, if applicable.

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# 3.                                       Compensation.

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## (a)                                  Executive shall be paid anannual base salary (“**Base Compensation**”)of Five Hundred Fifty Thousand Dollars ($550,000.00) for Employer’s fiscal yearending September 30, 2008.  Employershall review said salary on an annual basis (prior to or in connection with theclose of its fiscal year) at which time Employer shall determine in its solediscretion whether or not said salary shall be increased and the timingthereof.  Said salary shall be payable inperiodic payments in accordance with Employer’s regular payroll practices.

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## (b)                                 Executive shall be providedwith coverage under Employer’s employee benefit insurance programs andretirement programs, if any, at least equal to the coverage provided to othersenior executive officers of Employer.

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## (c)                                  Executive shallalso be eligible to receive performance or incentive compensation, which isapproved by the Board in its sole discretion. Said additional performance or incentive compensation, if any, shall bein addition to and shall not lessen or reduce the Base Compensation.

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## (d)                                 ShouldExecutive become unable to perform the duties required under this Agreement asa result of temporary, documented medical disability, he shall be eligible tocontinue to receive his Base Compensation for a period of up to one hundred andeighty (180) days.

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# 4.                                       Licensing Issues.  Executive represents and warrants to Employerthat he shall maintain in good standing such licenses as may be requiredpursuant to the Nation-State Gaming Compact between the Nation and the State ofNew York (the “Compact”) and/or the Nation’s or Employer’s gaming ordinances asin effect on the date hereof, as may be necessary to enable him to engage inhis employment hereunder.

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# 5.                                       Termination.

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## (a)                                  Executive’semployment hereunder may be terminated by Parent only under the followingcircumstances and such termination by Parent shall be a termination withrespect to Parent and each of the Subsidiaries, unless otherwise determined bythe Board:

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### (i)                                     upon revocationor disapproval of such licenses for Executive as are required pursuant to theCompact and/or by the Nation’s or Employer’s gaming ordinances, provided, that,in the event Executive appeals the grounds for such revocation, disapproval orsuspension, Employer shall suspend Executive without compensation during thependency of such appeal, with reinstatement of Executive and reimbursement ofsuch compensation by Employer in the event such appeal is successful.  The foregoing shall not act as a limitationon the rights and/or obligations of the parties otherwise included in thisAgreement;

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### (ii)                                  Executive shallcommit an act constituting “Cause,” which is defined to mean an act ofdishonesty by Executive intended to result in gain or personal enrichment ofExecutive or others at Employer’s expense, or the deliberate and intentionalrefusal by Executive (except by reason of disability) to perform his dutieshereunder, or by acts constituting gross negligence in the performance of suchduties, or the failure to perform any material term or condition of thisAgreement after written notice thereof from Company and a reasonableopportunity to cure such failure (as determined by Company and specified in thenotice of breach); or

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### (iii)                               Executive shalldie or Employer shall for any reason within Employer’s or the Nation’s controlpermanently cease to conduct casino gaming on Nation Territory.  For purposes of this 

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### Agreement,“Nation Territory” shall include current or future Nation territory whereEmployer conducts or will conduct its gaming operations as of the dateExecutive’s employment is terminated.

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## (b)                                 If Executive’semployment should be terminated under Section 5(a) above (or anysubsection) then Employer shall at that time pay Executive (or his estate, asapplicable) Base Compensation earned through the date Executive is terminated,whereupon Employer shall have no further liability or obligation to Executiveunder this Agreement or otherwise.

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## (c)                                  If Executive’semployment should be terminated by Parent for any reason other than thosespecified in Section 5(a) above (it being understood that a purportedtermination for Cause which is contested by Executive and finally determinednot 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, butunpaid, through the date Executive is terminated, (ii)  continue to payExecutive his Base Compensation in effect as of the date of termination for aperiod following his termination (the “Severance Period”) equal to the lesserof (A) eighteen (18) months or (B) the remainder of the period endingon the Termination Date, and (iii) to the extent elected by Executive, payfor the cost of (A) Executive’s premiums for continuation healthcarecoverage under Section 4980B of the Internal Revenue Code of 1986, asamended (“COBRA”), and (B) the premiums for Exec-u-Care® or any similarexecutive medical reimbursement insurance plan maintained by Employer on thedate Executive’s employment is terminated, for the lesser of (1) theSeverance Period, (2) until Executive is no longer eligible for COBRAcontinuation coverage, or (3) until Executive obtains comparablehealthcare benefits from any other employer during the Severance Period,whereupon Employer shall have no further liability or obligation to Executiveunder this Agreement or otherwise; provided, however, thatExecutive shall have a duty to mitigate damages as follows: during theSeverance Period, Executive shall endeavor to mitigate damages by seekingemployment with duties and salary comparable to those provided for herein, andif he shall obtain such employment, he shall reimburse Employer the amount ofthe compensation he has received from such other entity for such period, butnot to exceed the amount of the compensation Employer shall have paid him forsuch period.

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## (d)                                 Executive mayterminate his employment for any reason upon one-hundred-twenty (120) dayswritten notice to Parent.  If Executiveterminates his employment pursuant to this paragraph 5(d), Employer shall payExecutive the Base Compensation earned through the date of termination,whereupon Employer shall have no further liability or obligation to Executiveunder this Agreement or otherwise.

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## (e)                                  Executiveacknowledges and agrees that the payments set forth in this section 5constitute liquidated damages for termination of his employment during theemployment term and such liquidated damages shall be his only remedy withrespect to any claim, including, without limitation, breach of contact, he mayhave under this Agreement and that prior to receiving any such payments under Section 

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## 5and as a material condition thereof, Executive shall sign and agree to be boundby a general release of claims against Employer related to Executive’semployment (and termination of employment) with Employer in substantially theform as attached hereto as Exhibit A as may be modified by Employerin good faith to reflect changes in law or its employment practices.  Notwithstanding any other provision of thisAgreement to the contrary, Executive acknowledges and agrees that other thanany claim for the liquidated damages contemplated hereunder, he waives anyrights to be awarded any other damages with respect to any claim he may haveunder this Agreement, including, without limitation, compensatory or punitivedamages.

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6.                                       RestrictiveCovenants.

 

(a)                                  Executiveacknowledges that:  (i) as a resultof Executive’s employment  with Employer,he will obtain secret, proprietary and confidential information concerning thebusiness of Employer, including, without limitation, business and marketingplans, strategies, employee lists, patron lists, operating procedures, businessrelationships (including persons, corporations or other entities performingservices on behalf of or otherwise engaged in business transactions withEmployer), accounts, financial data, know-how, computer software and relateddocumentation, trade secrets, processes, policies and/or personnel, and otherinformation relating to Employer (**“Confidential Information”**);(ii) the Confidential Information has been developed and created byEmployer at substantial expense and the Confidential Information constitutesvaluable proprietary assets and Employer will suffer substantial damage andirreparable harm which will be difficult to compute if, during the RestrictedPeriod, Executive should enter a Competitive Business (as defined herein) inviolation of the provisions of this Agreement; (iii) Employer will suffersubstantial damage which will be difficult to compute if, during the RestrictedPeriod, Executive should solicit or interfere with Employer’s employees orpatrons, or should divulge Confidential Information relating to the business ofEmployer; (iv) the provisions of this Section 6 are reasonable andnecessary for the protection of the business of Employer; (v) Employerwould not have hired or employed Executive unless he signed this Agreement; and(vi) the provisions of this Agreement will not preclude Executive from othergainful employment.  **“CompetitiveBusiness”** shall mean any gaming establishment which provides to itspatrons games of chance such as slot machines, card games, roulette, andsimilar games in the State of New York or within the 100 mile radius of NationTerritory.

 

(b)                                 Executiveacknowledges and agrees that the unauthorized disclosure or misuse ofConfidential Information will cause substantial damage to Employer.  Therefore, Executive agrees not to, at anytime, 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 byExecutive during the course of his employment with Employer, with regard to theoperational, financial, business or other affairs and activities of Employer,their officers, directors or employees and the entities with which they havebusiness relationships, except (i) as may be necessary to the 

 

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performance of Executive’s duties with Employer, (ii) with Parent’sexpress written consent, (iii) to the extent that any such information isin the public domain other than as a result of Executive’s breach of any ofobligations hereunder, or (iv) where required to be disclosed by courtorder, subpoena or other government process and, in such event, Executive shallcooperate with Employer in attempting to keep such information confidential.

 

(c)                                  DuringExecutive’s employment with Employer and for eighteen (18) months after histermination of employment for any reason (the **“RestrictedPeriod”**), Executive, without the prior written permission of Parent,shall not, directly or indirectly, (i) enter into the employ of or renderany services to any person, engaged in a Competitive Business; or (ii) becomeassociated 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 orcapacity.   This paragraph 6(c) shallnot prevent Executive from owning common stock in a publicly traded corporationwhich owns or manages a casino provided Executive does not take an active rolein the ownership or management of such corporation and his ownership interestrepresents less than 3% of the voting securities and/or economic value of suchcorporation.

 

(d)                                 Byexecuting this Agreement, Executive acknowledges that he understands thatEmployer’s ability to operate its business depends upon its ability to attractand retain skilled people and that Employer has and will continue to investsubstantial resources in training such individuals.  Therefore, during the Restricted Period, Executiveshall not, without the prior written permission of Parent, directly orindirectly solicit, employ or retain, or have or cause any other person orentity to solicit, employ or retain, any person who is employed or is providingpersonal services to Employer.

 

## (e)                                  By executingthis Agreement, Employee acknowledges that Executive understands that Employer’sability to operate its business depends upon its ability to attract and retainvendors and patrons.  Therefore, duringthe Restricted Period, Executive shall not, directly or indirectly, solicit,contact, interfere with, or endeavor to entice away from Employer any of itscurrent or potential patrons or any such persons or entities that were patronsof Employer within the one year period immediately prior to Executive’stermination of employment.  Executivefurther agrees that, during the Restricted Period, Executive shall not,directly or indirectly, endeavor to entice away from Employer any of itscurrent or potential vendors or any such persons or entities that were vendorsof Employer within the one year period immediately prior to Employee’stermination of employment.

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(f)                                    Executiveacknowledges and agrees during his employment and for all time thereafter thathe will not defame or publicly criticize the services, business, integrity, veracityor personal or professional reputation of Employer and its officers, directors,employees, affiliates, or agents thereof in either a professional or personalmanner.  Employer acknowledges and agreesthat during Executive’s employment and for all time thereafter, Employer willnot defame or publicly 

 

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criticize Executive either in a professional or personal manner, exceptas may be necessary to defend Employer from comments made by or on behalf of Executive.

 

(g)                                 IfExecutive commits a breach, or threatens to commit a breach, of any of theprovisions of this paragraph 6 of the Agreement, Employer shall have the rightand remedy to have the provisions specifically enforced by any court havingjurisdiction, it being acknowledged and agreed by Executive that the servicesbeing rendered hereunder to Employer are of a special, unique and extraordinarycharacter and that any such breach or threatened breach will cause irreparableinjury to Employer and that money damages will not provide an adequate remedyto Employer.  Such right and remedy shallbe in addition to, and not in lieu of, any other rights and remedies availableto 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.

 

(h)                                 If,at any time, the provisions of this Agreement shall be determined to be invalidor unenforceable under any applicable law, by reason of being vague or unreasonableas to area, duration or scope of activity, this Agreement shall be considereddivisible and shall become and be immediately amended to only such area,duration and scope of activity as shall be determined to be reasonable andenforceable by the court or other body having jurisdiction over the matter andExecutive and Employer agree that this Agreement as so amended shall be validand binding as though any invalid or unenforceable provision had not beenincluded herein.

 

# 7.                                       Miscellaneous.

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## (a)                                  Executiveagrees that during the term of thisAgreement**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 expendas much of his personal time on his own ventures or investments, so long as: (i) suchtime is not substantial and does not interfere with his ability to perform hisduties hereunder; (ii) such activities do not compete or conflict with thebusiness of Employer or create a personal conflict of interest to Executive and(iii) such venture or investment does not transact any business withEmployer without prior disclosure to, and approval by, the Board.

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## (b)                                 Executiverepresents to Employer that there are no restrictions or agreements to which heis a party which would be violated by his execution of this Agreement and hisemployment hereunder.

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# (c)                                  No provisions of this Agreement may be amended, modified, orwaived unless such amendment or modification is agreed to in writing signed byExecutive and by a duly authorized officer of Parent, and such waiver is setforth in writing and signed by the party to be charged.  No waiver by any party hereto at any time ofany breach by the other party hereto of any condition or provision of thisAgreement to be performed by such other party shall be deemed a waiver ofsimilar or dissimilar provisions or conditions at the same or at any prior or 

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# subsequenttime.  No agreements or representations,oral or otherwise, express or implied, with respect to the subject matterhereof have been made by either party which are not set forth expressly in thisAgreement.  The respective rights andobligations of the parties hereunder of this Agreement shall survive Executive’stermination of employment and the termination of this Agreement to the extentnecessary for the intended preservation of such rights and obligations.

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# (d)                                 The validity, interpretation, construction and performanceof this Agreement shall be governed by the laws of the State of New Yorkwithout regard to its conflicts of law principles.

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## (e)                                  Except asprovided in paragraph 6(g) of this Agreement, any dispute, controversy orclaim arising out of or relating to this Agreement shall be settled by bindingarbitration in Niagara Falls, New York in accordance with the Rules of theAmerican Arbitration Association, and judgment upon the award rendered by thearbitrator(s) may be entered in the United States District Court for theWestern District of New York.  Theparties agree that the only remedies available to Executive under thisAgreement are those that are set forth in paragraph 5 and the arbitrator shallhave no authority to award any other damages, including, without limitation,punitive and/or compensatory damages.

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# (f)                                    For the purposes of this Agreement, notices, demands and allother communications provided for in this Agreement shall be in writing andshall be deemed to have been duly given when delivered either personally or byUnited States certified or registered mail, return receipt requested, postageprepaid, addressed as follows:

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Ifto Executive:

 

 

 

 

If to Parent:

 

345 Third Street

Niagara Falls, New York (Seneca Nation Territory)14303

Attn:  GeneralCounsel

 

orto such other address as any party may have furnished to the others in writingin accordance herewith, except that notices of change of address shall beeffective only upon receipt.

 

# (g)                                 The invalidity or unenforceability of any provision orprovisions of this Agreement shall not affect the validity or enforceability ofany other provision of this Agreement, which shall remain in full force andeffect.

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# (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 willconstitute one and the same instrument.

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# (i)                                     Except as otherwise provided herein, this Agreement setsforth the entire agreement of the parties hereto in respect of the subject mattercontained herein and supersedes all prior agreements, promises, covenants,arrangements, communications, representations or warranties, whether oral orwritten, by any officer, employee or representative of any party hereto inrespect of such subject matter.  Exceptas otherwise provided herein, the Original Employment Agreement and any otherprior agreement of the parties hereto in respect of the subject mattercontained herein is hereby terminated and cancelled.

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# (j)                                     All payments hereunder shall be subject to any requiredwithholding of federal, state and local taxes pursuant to any applicable law orregulation.

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

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# 8.                                       Waiver of Sovereign Immunity.

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# (a)                                  Parent grants a waiver of its sovereign immunity from suitexclusively to Executive (and his estate in the event of his death) for thepurpose of enforcing this Agreement, or permitting or compelling arbitrationand other remedies as provided herein. This waiver is solely for the benefit of the aforesaid parties and forno other person or entity.  For thislimited purpose, Parent consents to be sued solely with respect to theenforcement of any decision by an arbitrator relating to this Agreement asprovided in paragraph 7(e) of this Agreement in the United States DistrictCourt for the Western District of New York.

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# (b)                                 Parent hereby waives any requirement of exhaustion of tribalremedies, and agrees that it will not present any affirmative defense in anydispute based on any alleged failure to exhaust such remedies.  Without in any way limiting the generality ofthe foregoing, Parent expressly authorizes any governmental authorities whohave the right and duty under applicable law to take any action authorized orordered by any court, to take such action, including, without limitation,repossessing any property and equipment subject to a security interest orotherwise giving effect to any judgment entered; provided, howeverthat Parent does not hereby waive the defense of sovereign immunity withrespect to any action by third parties.

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# (c)                                  Parent’s waiver of immunity from suit is irrevocable andspecifically limited to the remedies provided in paragraph 5 of this Agreementregarding liquidated damages.  Anymonetary award related to any such action shall be satisfied solely from thenet income of Parent.

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# (d)                                 Notwithstanding anything in this Agreement to the contrary,this waiver is to be interpreted in a manner consistent with Parent’s abilityto enter into this Agreement, including, without limitation, this paragraph 8,as provided in the 

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# Charter of Parent, as it may be amendedfrom time to time.  Accordingly, theNation shall not be liable for the debts or obligations of Parent, and Parentshall have no power to pledge or encumber the assets of the Nation.  Furthermore, this paragraph 8 does notconstitute a waiver of any immunity of the Nation or a delegation to Parent ofthe power to make any such waiver. This paragraph 8 shall be strictly construedwith a view toward protecting the Nation’s assets from the reach of creditorsand others.

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| EXECUTED, as of the date first written above. |   |
|-----------------------------------------------|--------|
|                                          |   |
|                                          |   |
| **SENECA GAMING CORPORATION**                 |   |
|                                          |   |
|                                          |   |
| By                                            |   |   |
| Name: E. Brian Hansberry                      |   |
| Title: President and CEO                      |   |
|                                          |   |
|                                          |   |
| **EXECUTIVE**                                 |   |
|                                          |   |
|                                          |   |
| Name: Robert Chamberlain                      |   |
|                                               |        |  |

 

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