**Exhibit 10.20**

 

EMPLOYMENT AGREEMENT

 

AGREEMENT, dated as of this28th day of April, 2005, by and between the Seneca Gaming Corporation (the “**Parent**”), a governmental instrumentality of the SenecaNation of Indians of New York (the “**Nation**”) withits principal place of business in the State of New York and Rajat R. Shah (“**Executive**”).

 

WHEREAS, the Parent desiresthat Executive serve as the Senior Vice President of Corporate Development andDeputy General Counsel of the Parent and each of the Seneca Niagara FallsGaming Corporation (“**SNFGC**”), theSeneca Territory Gaming Corporation (“**STGC**”), and theSeneca Erie Gaming Corporation (“**SEGC**”), each awholly-owned subsidiary of the Parent and a governmental instrumentality of theNation (collectively, the “**Subsidiaries**”and together with Parent, the “**Employer**”); and

 

WHEREAS, Executive shall serveas Senior Vice President of Corporate Development and Deputy General Counsel ofthe Parent and each of the Subsidiaries and the terms of this Agreement assumethat Executive shall serve in such positions until the Termination Date(defined below).

 

IT IS HEREBY AGREED AS FOLLOWS:

 

# 1.             Employment;Location of Employment.

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## (a)           Employer hereby employs Executive as its Senior Vice President ofCorporate Development and Deputy General Counsel.  Executive shall report and be accountable toand work under the authority of the President and Chief Executive Officer andthe Board of Directors of Parent (the “**Board**”).  Executive shall perform such duties and havesuch responsibilities that are customary for such position and including thosethat may be specified from time to time by the President and Chief ExecutiveOfficer and/or the Board that are not inconsistent with such position.

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## (b)           Executive and the Parent acknowledge that Executive currently resides inWashington D.C.; provided, however, Executive intends to relocateto the Buffalo, New York area.  Prior tohis relocation, Executive shall be responsible for all living expenses andtravel expenses between Executive’s home in the Washington D.C. metropolitanarea and the Parent’s principal executive offices in Niagara Falls, NewYork.  In connection with Executive’srelocation, the Parent shall reimburse Executive for customary and reasonablerelocation expenses.

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# 2.             Term.  The term of thisAgreement shall commence on May 2, 2005 (the “**Commencement Date**”) and terminate on September 30, 2008(the “**Termination Date**”), unlessrenewed by a subsequent written agreement of the parties.

 

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# 3.             Compensation.

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## (a)           For the period commencing on May 2, 2005 though September 30,2005, Executive shall be paid an aggregate of Two Hundred Ninety Five ThousandSix Hundred Twenty Five Dollars ($295,625), of which Thirty Thousand Dollars($30,000) shall be payable on the Commencement Date and of which Two HundredSixty Five Thousand Six Hundred Twenty Five Dollars shall be payableperiodically between May 2, 2005 and September 30, 2005 in accordancewith the Employer’s regular payroll practice.

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## (b)           Executive shall be paid an annual base salary (“**Base Compensation**”) of Seven Hundred Thousand Dollars($700,000) for Employer’s fiscal year ending September 30, 2006; an annualbase salary of Six Hundred Thirty Seven Thousand Five Hundred Dollars($637,500) for Employer’s fiscal year ending September 30, 2007; SevenHundred Twenty Five Thousand Dollars ($725,000) for Employer’s fiscal yearending September 30, 2008 with respect to his service for all of theEmployers, with a salary review by the Board each fiscal year thereafter atwhich time the Board shall determine whether, in its sole discretion, Executive’sBase Compensation shall be increased. Said salary shall be payable periodically in accordance with theEmployer’s regular payroll practice.

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## (c)           Executive shall be provided with coverage under the Employer’s employeebenefit insurance programs and retirement programs, if any, at least equal tothe coverage provided to other senior executive officers of the Employer.

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## (d)           The Parent shall pay (or reimburse Executive if paid by Executive) for (i) Executive’sattorney registration dues, (ii) the annual dues for membership inattorney bar associations, and (iii) the reasonable costs and expensesrelated to fulfilling Executive’s continuing legal education requirements.

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## (e)           Executive shall also be eligible to receive performance or incentivecompensation, which is approved by the Board in its sole discretion.  Said additional performance or incentivecompensation, if any, shall be in addition to and shall not lessen or reducethe Base Compensation.

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# 4.             LicensingIssues.  Executive represents to the Employer that heshall use his reasonable best efforts to obtain such licenses as may berequired pursuant to the Nation-State Gaming Compact between the Seneca Nationof Indians and the State of New York (the “Compact”) and/or the Nation’s or theEmployer’s gaming ordinances as in effect on the date hereof, as may benecessary to enable him to engage in his employment hereunder.  Once Executive obtains such necessarylicenses he shall maintain such licenses in good standing as a pre-condition ofhis employment by the Employer.

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# 5.             Termination.

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## (a)           Executive’s employment hereunder may be terminated by the Parent onlyunder the following circumstances and such termination by the Parent shall be atermination with respect to each Employer, unless otherwise determined by theBoard:

 

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### (i)            upon revocation or disapproval of the license required pursuant to theCompact, or upon disapproval by the National Indian Gaming Commission of theissuance of any license by the Nation pursuant to its own gaming ordinances, ifeither such action renders it unlawful for Executive to perform as Senior VicePresident of Corporate Development and Deputy General Counsel of each Employer,or if any event renders it unlawful for the Nation and/or the Employer tocontinue to conduct casino gaming on Nation Territory.  For purposes of this Agreement, “NationTerritory” shall include current or future Nation reservation territory wherethe Employer conducts or will conduct its gaming operations as of the dateExecutive’s employment is terminated.

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### (ii)           upon revocation or disapproval of such licenses for Executive as arerequired pursuant to the Compact and/or by the Nation’s or the Employer’s gamingordinances;

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### (iii)          Executive shall commit an act constituting “Cause,” which is defined tomean an act of dishonesty by Executive intended to result in gain or personalenrichment of Executive or others at the Employer’s expense, or the deliberateand intentional refusal by Executive (except by reason of disability) toperform his duties hereunder, or by acts constituting gross negligence in theperformance of such duties;

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### (iv)          Executive shall die or the Employer shall for any reason within theEmployer’s or the Nation’s control permanently cease to conduct casino gamingon Nation Territory; or

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### (v)           Executive shall become unable to perform the duties and responsibilitiesset forth in this Agreement for a period of 180 days in any 365 day period byreason of long-term physical or mental disability.

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## (b)           If Executive’s employment should be terminated under paragraphs 5(a)(i), (ii) or(iii) above, then the Employer shall at that time pay Executive the BaseCompensation earned through the date Executive is terminated, whereupon theEmployer shall have no further liability or obligation to Executive under thisAgreement or otherwise.

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## (c)           If Executive’s employment should be terminated under paragraph 5(a)(iv) or(v) above, then the Employer shall at that time pay Executive (or hisestate) his Base Compensation earned through the date Executive is terminated;whereupon the Employer shall have no further liability or obligation toExecutive under this Agreement or otherwise.

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## (d)           If Executive’s employment should be terminated by the Parent for anyreason other than those specified in paragraph 5(a) above (it beingunderstood that a purported termination for Cause which is contested byExecutive and finally

 

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## determinednot to have been proper shall be treated as a termination under this paragraph5(d)), then the Employer shall: (i) pay Executive his Base Compensationearned, but unpaid, through the date Executive is terminated, (ii) continue to pay Executive his Base Compensation in effect as of the date oftermination for a period following his termination (the “Severance Period”)equal to the lesser of (A) eighteen (18) months or (B) the remainderof the period ending on the Termination Date, and (iii) to the extentelected by Executive, pay for the cost of (A) Executive’s premiums forcontinuation healthcare coverage under Section 4980B of the InternalRevenue Code of 1986, as amended (“COBRA”), and (B) the premiums forExec-u-Care® or any similar executive medical reimbursement insurance planmaintained by the Employer on the date Executive’s employment is terminated,for the lesser of (1) the Severance Period, (2) until Executive is nolonger eligible for COBRA continuation coverage, or (3) until Executiveobtains comparable healthcare benefits from any other employer during theSeverance Period, whereupon the Employer shall have no further liability orobligation to Executive under this Agreement or otherwise; provided, however,that Executive 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 the Employer the amountof the compensation he has received from such other entity for such period, butnot to exceed the amount of the compensation the Employer shall have paid himfor such period.

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## (e)           Executive may terminate his employment for any reason uponone-hundred-twenty (120) days written notice to the Parent.  If Executive terminates his employmentpursuant to this paragraph 5(e), the Employer shall pay Executive the BaseCompensation earned through the date of termination, whereupon the Employershall have no further liability or obligation to Executive under this Agreementor otherwise.

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## (f)            Executive acknowledges and agrees that the payments set forth in this section 5constitute liquidated damages for termination of his employment during theemployment period 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 5and as a material condition thereof, Executive shall sign and agree to be boundby a general release of claims against the Employer related to Executive’semployment (and termination of employment) with the Employer in substantiallythe form as attached hereto as Exhibit A as may be modified by theEmployer in good faith to reflect changes in law or its employmentpractices.  Notwithstanding any otherprovision of this Agreement to the contrary, Executive acknowledges and agreesthat other than any claim for the liquidated damages contemplated hereunder, hewaives any rights to be awarded any other damages with respect to any claim hemay have under this Agreement, including, without limitation, compensatory orpunitive damages.

 

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6.             RestrictiveCovenants.

 

(a)           Executiveacknowledges that:  (i) as a resultof Executive’s employment with the Employer, he will obtain secret, proprietaryand confidential information concerning the business of the 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 onbehalf of or otherwise engaged in business transactions with the Employer),accounts, financial data, know-how, computer software and relateddocumentation, trade secrets, processes, policies and/or personnel, and otherinformation relating to the Employer (“Confidential Information”); (ii) theConfidential Information has been developed and created by the Employer atsubstantial expense and the Confidential Information constitutes valuableproprietary assets and the Employer will suffer substantial damage andirreparable harm which will be difficult to compute if, during the term of theAgreement and thereafter, Executive should enter a Competitive Business (asdefined herein) in violation of the provisions of this Agreement; (iii) theEmployer will suffer substantial damage which will be difficult to compute if,during the term of the Agreement or thereafter, Executive should solicit orinterfere with the Employer’s employees, patrons or vendors or should divulgeConfidential Information relating to the business of the Employer; (iv) theprovisions of this section 6 are reasonable and necessary for theprotection of the business of the Employer; (v) the Employer would nothave hired or employed Executive unless he signed this Agreement; and (vi) theprovisions of this Agreement will not preclude Executive from other gainfulemployment.  “Competitive Business” shallmean any gaming establishment which provides to its patrons games of chancesuch as slot machines, card games, roulette, and similar games in the State ofNew York or within the 100 mile radius of Nation Territory.

 

(b)           Executiveacknowledges and agrees that the unauthorized disclosure or misuse ofConfidential Information will cause substantial damage to the 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 the Employer, with regard tothe operational, financial, business or other affairs and activities of theEmployer, their officers, directors or employees and the entities with whichthey have business relationships, except (i) as may be necessary to theperformance of Executive’s duties with the Employer, (ii) with the 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 which is consistent with the termsand conditions of paragraphs 15(f) and 15(g) of the Compact and, insuch event, Executive shall cooperate with the Employer in attempting to keepsuch information confidential.

 

(c)           DuringExecutive’s employment with the Employer and for eighteen (18) months after histermination of employment for any reason (the “Restricted Period”),

 

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Executive, without the prior written permission of the Parent, shallnot, directly or indirectly, (i) enter into the employ of or render anyservices 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 that theEmployer’s ability to operate its business depends upon its ability to attractand retain skilled people and that the Employer has and will continue to investsubstantial resources in training such individuals.  Therefore, during the Restricted Period,Executive shall not, without the prior written permission of the Parent,directly or indirectly solicit, employ or retain, or have or cause any otherperson or entity to solicit, employ or retain, any person who is employed or isproviding personal services to the Employer.

 

(e)           Byexecuting this Agreement, Executive acknowledges that he understands that theEmployer’s ability to operate its business depends upon its ability to attractand retain vendors and patrons. Therefore, during the Restricted Period, Executive shall not, directlyor indirectly, solicit, contact, interfere with, or endeavor to entice awayfrom the Employer any of its current or potential vendors or patrons or anysuch persons or entities that were vendors or patrons of the Employer withinthe one year period immediately prior to Executive’s termination of employment.

 

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

 

(g)           IfExecutive commits a breach, or threatens to commit a breach, of any of theprovisions of this paragraph 6 of the Agreement, the Employer shall have theright and remedy to have the provisions specifically enforced by any courthaving jurisdiction, it being acknowledged and agreed by Executive that theservices being rendered hereunder to the Employer are of a special, unique andextraordinary character and that any such breach or threatened breach willcause irreparable injury to the Employer and that money damages will notprovide an adequate remedy to the Employer. Such right and remedy shall be in addition to, and not in lieu of, anyother rights and remedies available to the Employer at law

 

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or in equity.  Accordingly,Executive consents to the issuance of an injunction, whether preliminary orpermanent, 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 orunreasonable as to area, duration or scope of activity, this Agreement shall beconsidered divisible and shall become and be immediately amended to only sucharea, duration and scope of activity as shall be determined to be reasonableand enforceable by the court or other body having jurisdiction over the matterand Executive and the Employer agree that this Agreement as so amended shall bevalid and binding as though any invalid or unenforceable provision had not beenincluded herein.

 

# 7.             Miscellaneous.

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## (a)           Executive agrees that during the term of this Agreement**unless earlier terminated, hewill 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 as Senior Vice President of Corporate Development and Deputy GeneralCounsel of the Employer; (ii) such activities do not compete or conflictwith the business of the Employer or create a personal conflict of interest toExecutive and (iii) such venture or investment does not transact anybusiness with the Employer without prior disclosure to, and approval by, theBoard.

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## (b)           Executive represents to the Employer that there are no restrictions oragreements to which he is a party which would be violated by his execution ofthis Agreement and his employment hereunder.

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# (c)           Noprovisions of this Agreement may be amended, modified, or waived unless suchamendment or modification is agreed to in writing signed by Executive and by aduly authorized officer of the Parent, and such waiver is set forth in writingand signed by the party to be charged. No waiver by any party hereto at any time of any breach by the otherparty hereto of any condition or provision of this Agreement to be performed bysuch other party shall be deemed a waiver of similar or dissimilar provisionsor conditions at the same or at any prior or subsequent time.  No agreements or representations, oral orotherwise, express or implied, with respect to the subject matter hereof havebeen 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)           Thevalidity, interpretation, construction and performance of this Agreement shallbe governed by the laws of the State of New York without regard to itsconflicts of law principles.

 

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## (e)           Except as provided in paragraph 6(g) of this Agreement, any dispute,controversy or claim arising out of or relating to this Agreement shall besettled by binding arbitration in Niagara Falls, New York in accordance withthe Rules of the American Arbitration Association, and judgment upon theaward rendered by the arbitrator(s) may be entered in the United StatesDistrict Court for the Western District of New York.  The parties agree that the only remediesavailable to Executive under this Agreement are those that are set forth inparagraph 5 and the arbitrator shall have no authority to award any otherdamages, including, without limitation, punitive and/or compensatory damages.

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# (f)            Forthe purposes of this Agreement, notices, demands and all other communicationsprovided for in this Agreement shall be in writing and shall be deemed to havebeen duly given when delivered either personally or by United States certifiedor registered mail, return receipt requested, postage prepaid, addressed asfollows:

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If to Executive:

 

 

If to the Parent:

 

310 4th Street

P.O. Box 77

Niagara Falls, New York (Seneca Nation Territory) 14303

Attn:  Presidentand Chief Executive Officer of Seneca Gaming Corporation

 

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

 

# (g)           Theinvalidity or unenforceability of any provision or provisions of this Agreementshall not affect the validity or enforceability of any other provision of thisAgreement, which shall remain in full force and effect.

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# (h)           ThisAgreement may be executed in one or more counterparts, each of which shall bedeemed to be an original but all of which together will constitute one and thesame instrument.

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# (i)            Exceptas otherwise provided herein, this Agreement sets forth the entire agreement ofthe parties hereto in respect of the subject matter contained herein and supersedesall 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 subjectmatter.  Except as otherwise providedherein, any prior agreement of the parties hereto in respect of the subjectmatter contained herein is hereby terminated and cancelled.

 

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# (j)            Allpayments hereunder shall be subject to any required withholding of Federal,state and local taxes pursuant to any applicable law or regulation.

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

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# 8.             Waiverof Sovereign Immunity.

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# (a)           TheParent grants a waiver of its sovereign immunity from suit exclusively toExecutive (and his estate in the event of his death) for the purpose ofenforcing this Agreement, or permitting or compelling arbitration and otherremedies as provided herein.  This waiveris solely for the benefit of the aforesaid parties and for no other person orentity.  For this limited purpose, theParent consents to be sued solely with respect to the enforcement of anydecision by an arbitrator relating to this Agreement as provided in paragraph 7(e) ofthis Agreement in the United States District Court for the Western District ofNew York.

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# (b)           TheParent hereby waives any requirement of exhaustion of tribal remedies, andagrees that it will not present any affirmative defense in any dispute based onany alleged failure to exhaust such remedies. Without in any way limiting the generality of the foregoing, the Parentexpressly authorizes any governmental authorities who have the right and dutyunder applicable law to take any action authorized or ordered by any court, totake such action, including, without limitation, repossessing any property andequipment subject to a security interest or otherwise giving effect to anyjudgment entered; provided, however that the Parent does nothereby waive the defense of sovereign immunity with respect to any action bythird parties.

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# (c)           TheParent’s waiver of immunity from suit is irrevocable and specifically limitedto the remedies provided in paragraph 5 of this Agreement regarding liquidateddamages.  Any monetary award related toany such action shall be satisfied solely from the net income of the Parent.

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# (d)           Notwithstandinganything in this Agreement to the contrary, this waiver is to be interpreted ina manner consistent with the Parent’s ability to enter into this Agreement,including, without limitation, this paragraph 8, as provided in the Charter ofthe Parent, as it may be amended from time to time.  Accordingly, the Nation shall not be liablefor the debts or obligations of the Parent, and the Parent shall have no powerto pledge or encumber the assets of the Nation. Furthermore, this paragraph 8 does not constitute a waiver of anyimmunity of the Nation or a delegation to the Parent of the power to make anysuch waiver. This paragraph 8 shall be strictly construed with a view towardprotecting the Nation’s assets from the reach of creditors and others.

 

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| EXECUTED,  as of the date first written above. |
|------------------------------------------------|
|                                           |
|                                           |
| SENECA  GAMING CORPORATION                     |
|                                           |
|                                           |
| By                                             |   /s/ Barry  Snyder, Sr. |   |
| Name:                                          | Barry  Snyder, Sr. |
| Title:                                         | Chairman  of the Board of Directors |
|                                           |
|                                           |
| EXECUTIVE                                      |
|                                           |
|                                           |
| By                                             |  /s/ Rajat R. Shah |   |
|                                           |  Rajat R. Shah |
|                                                |  |  |  |

 

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