Exhibit 10.23


 


EMPLOYMENT AGREEMENT


 


THIS
EMPLOYMENT AGREEMENT (the “Agreement”)
is entered into on January 30, 2004, but effective as of March 1,
2003 (the “Effective Date”), by
and between John Hull (the “Executive”)
and HCS I, Inc., a Louisiana corporation (the “Company”).


 


WHEREAS,
the Company is a subsidiary of Hollywood Casino Corporation, a Delaware
corporation (“HCC”), and HCC is a
subsidiary of Penn National Gaming, Inc., a Pennsylvania corporation (“PNG”).


 


WHEREAS,
the Company desires to provide for the service and employment of the Executive
with the Company and the Executive wishes to perform services for the Company,
all in accordance with the terms and conditions provided herein.


 


NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth, the
Executive and the Company hereby agree as follows:


 


Section 1.                    EMPLOYMENT.  The Company does hereby employ the Executive
and the Executive does hereby accept employment as President of the
Company.  The Executive shall have all
the duties, responsibilities and authority normally performed by the President
and shall render services consistent with such position on the terms set forth
herein and shall report to the Board of Directors of the Company.  In addition, the Executive shall have such
other executive and managerial powers and duties with respect to the Company
and its subsidiaries as may reasonably be assigned to him by the Company, to
the extent consistent with his position and status as set forth above.  The Executive agrees to devote all of his
working time and efforts to the business and affairs of the Company and any
parent, subsidiary or affiliated corporation or other legal entity of the
Company (the “Company Affiliates”),
subject to periods of vacation or other leave to which he is entitled, and
shall not engage in activities that substantially interfere with such
performance.


 


Section 2.                    TERM OF AGREEMENT.  Subject to Section 5, the term (the “Term”) of this Agreement shall commence on
the Effective Date and shall continue through the earlier of (i) June 30,
2004 or (ii) the consummation of an agreement with the bondholders of Hollywood
Casino Shreveport (“HCS”) (whether
pursuant to a petition in bankruptcy or otherwise) that extinguishes or
restructures HCS’s indebtedness to the bondholders.  The Company may extend the Term of this Agreement for up to an
additional six months with thirty (30) days prior written notice to the
Executive of its desire to extend the Term.


 


Section 3.                    COMPENSATION.


 


(a)          BASE SALARY.  During the Term, the Company shall pay the
Executive an annual base salary (the “Base
Salary”) of $215,000, payable in accordance with the Company’s
policies relating to salaried employees.


 












(1)                                  Employee
will also be President and CFO of HCS II, Inc. and HWCC-Louisiana, Inc.


 

















 


(b)         ANNUAL BONUS.  In addition to the Base Salary, the Company
shall pay to the Executive an annual bonus of $80,000 (the “Bonus”), payable as soon as reasonably
practicable after the close of the calendar year.  The Bonus shall be prorated for the actual time the Executive is
employed by the Company under this Agreement.


 


(c)          EMPLOYEE
BENEFITS.  During the
Term, the Executive shall be entitled to participate in and receive the benefit
of any pension plans, retirement plans, life insurance plans, medical and/or
hospitalization plans and/or any and all other benefit plans of PNG that are
available from time to time for PNG’s employees.  To the extent that such benefits are not available for employees
of the Company, the Company shall provide reasonably equivalent benefits to the
Executive.


 


(d)         EXPENSE
REIMBURSEMENT.  During the
Term of this Agreement, the Company shall either pay directly or reimburse the
Executive for the Executive’s reasonable expenses incurred for the benefit of
the Company in accordance with the Company’s general policy regarding
reimbursement, as the same may be amended, modified or changed from time to
time.  Prior to reimbursement, the
Executive shall provide the Company with sufficient detailed invoices of such
expenses in accordance with the then applicable guidelines of the Internal
Revenue Service so as to permit the Company to claim a deduction of such
expense.


 


(e)          LICENSING
EXPENSES.  The
Company shall pay all licensing fees and expenses incurred by the Executive in
securing and maintaining such licenses and permits required of the Executive in
order to perform his duties under this Agreement.


 


(f)            VACATION.  Commencing as of the Effective Date, the
Executive shall be entitled to annual paid vacation leave in accordance with
the Company’s standard policy therefore, to be taken at such times as selected
by the Executive and approved by the Company.


 


Section 4.                    LICENSING REQUIREMENTS.


 


(i)                                     The Company and
Executive hereby covenant and agree that this Agreement may be subject to the
approval of the Louisiana Gaming Control Board and any other jurisdiction in
which the Company or the Company Affiliates conducts business (the “Gaming Authorities”) pursuant to the
provisions of the Louisiana Gaming Control Law and any other applicable law and
the regulations promulgated thereunder (the “Gaming
Acts”).  In the event this
Agreement is required to be approved by the Gaming Authorities and is not so
approved by the Gaming Authorities, this Agreement shall immediately terminate
and shall be null and void and of no further force or effect; provided,
however, should this Agreement not be approved by the Gaming Authorities, the
Company and Executive shall hereby covenant and agree that, with the exception
of the provisions of Section 3, this Agreement shall be deemed modified
and amended so as to receive the appropriate approval from the Gaming
Authorities.


 


(ii)                                  The Company and
Executive hereby covenant and agree that, in order for Executive to discharge
the duties required under this Agreement,


 


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Executive must continue to
hold key gaming employee licenses (the “Licenses”)
as issued by the Gaming Authorities pursuant to the terms of the Gaming Acts
and as otherwise required by this Agreement. 
In the event that any of the Gaming Authorities objects to the renewal
of Executive’s License, or either of the Gaming Authorities refuses to renew
Executive’s applicable License, the Company, at the Company’s sole cost and
expense, shall promptly defend such action and shall take such reasonable steps
as may be required to secure such Gaming Authority’s approval.  The foregoing notwithstanding, if such
Gaming Authority’s refusal to renew Executive’s License arises as a result of
any of the events described in Section 5(e), the Company’s obligations
under this Section 4 shall not be operative and Executive shall promptly
reimburse the Company upon demand for any expenses incurred by the Company
pursuant to this Section 4.


 


Section 5.                    TERMINATION.


 


(a)          NOTICE
OF TERMINATION.


 


(i)                                     “Notice of Termination” shall mean a notice
that shall indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under
the provisions so indicated.


 


(ii)                                  Any purported
termination of the Executive’s employment by the Company or by the Executive
shall be communicated by written Notice of Termination to the other party hereto
in accordance with Section 10.


 


(b)         DATE
OF TERMINATION.  “Date of
Termination” shall mean:


 


(i)                                     if the
Executive’s employment is terminated because of death, the date of the
Executive’s death,


 


(ii)                                  if the
Executive’s employment is terminated for any other reason, the date specified
in the Notice of Termination, which shall not be a date prior to the date such
Notice of Termination is given or the expiration of any required notice period,
or


 


(iii)                               if the
Executive’s employment is terminated by expiration of the Term.


 


(c)          ACCRUED
AND UNPAID BENEFITS.  Following the termination of the Executive’s
employment with the Company for any reason, the Executive shall receive:


 


(i)                                     any earned, but
unpaid, Base Salary;


 


(ii)                                  the Bonus,
prorated through the Date of Termination;


 


(iii)                               the cash
equivalent of any accrued, but unused, vacation;


 


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(iv)                              any accrued
employee benefits, subject to the terms of the applicable employee benefit
plans; and


 


(v)                                 an amount equal
to six (6) months of Base Salary.


 


The amounts payable under
subparagraphs 5(c)(i), (ii), (iii) and (iv) shall be paid within thirty (30)
days following the Date of Termination.


 


(d)         DEATH.  In the event that the
Executive’s employment hereunder is terminated by reason of the Executive’s
death, the Company shall pay the amounts described in Section 5(c) and all
benefits payable to the Executive, if any, under the terms of the Company’s
compensation and benefit plans, programs or arrangements.


 


(e)          TERMINATION
FOR CAUSE.  The Company may terminate the Executive’s
employment under this Agreement for Cause (as defined below) at any time, in
which event, any rights of the Executive to continued employment under the
Agreement shall thereupon cease.


 


(i)                                     As used herein,
“Cause” shall mean the occurrence
of any of the following:


 


(A)                              that Executive shall have been convicted of, or pleads guilty or
nolo contendere to, a felony;


 


(B)                                that the Executive shall have failed to perform his duties under
this Agreement with a reasonable degree of diligence, competence and
effectiveness;


 


(C)                                that Executive breaches or fails to perform under any of the
material terms and covenants of this Agreement;


 


(D)                               that Executive fails to maintain in force and in good standing any
and all licenses, permits and/or approvals required of Executive by the
relevant governmental authorities for the discharge of the obligations of
Executive under this Agreement;


 


(E)                                 that Executive shall have engaged in conduct that constitutes
gross neglect or willful misconduct (including misappropriation or embezzlement
of property of, or fraud with respect to, the Company or the Company
Affiliates) with respect to Executive’s employment duties that results in
material and demonstrable harm to the Company.


 


(ii)                                  For purposes of
this Agreement, “Cause” shall also
include circumstances beyond the control of the Company and without its fault
or negligence that materially and adversely affect the ability of the Company
to continue the Company’s business operations. 
Such circumstances may include, but are not limited to, acts of god or a
public enemy, acts of terrorism, acts of government in either its sovereign or


 


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contractual capacity, fires,
floods, natural disasters, epidemics, quarantine restrictions, strikes, riots,
embargoes, extended power outages or unusually severe weather conditions.


 


(iii)                               Termination of
Executive upon Disability shall not constitute Cause.  For this purpose, Executive’s “Disability”
shall mean, after giving to Executive ninety (90) days prior written notice of
its intention to terminate Executive therefor, Executive’s illness or injury
which substantially and materially limits the Executive from performing each of
the essential functions of the Executive’s job, even with reasonable
accommodation, and he becomes entitled to receive disability benefits under the
Company’s long-term disability plan for exempt employees.


 


(f)            TERMINATION
OTHER THAN FOR CAUSE.  The Company may terminate the Executive’s
employment under this Agreement without Cause at any time, in which event, any
rights of the Executive to continued employment under the Agreement shall
thereupon cease.  In the event of such a
termination, the Executive shall be entitled to the severance benefits as
provided in Section 5(c).


 


(g)         TERMINATION
BY THE EXECUTIVE.


 


(i)                                     For Good Reason.  The Executive may terminate his employment
hereunder for Good Reason (as defined below) upon at least thirty (30) days
prior written notice to the Company.


 


(ii)                                  Without Good
Reason.  The Executive may terminate
his employment hereunder voluntarily without Good Reason upon at least thirty
(30) days prior notice to the Company.


 


(iii)                               “Good Reason”.  The Executive shall have “Good Reason” to terminate his employment
hereunder upon any of the following:


 


(A)                              the assignment to Executive of any duties inconsistent in any
material respect with Executive’s position (including status, offices, titles
and reporting relationships), authority, duties or responsibilities as
contemplated hereunder, or any other action by the Company which results in a
significant diminution in such position, authority, duties or responsibilities,
excluding any inadvertent action not taken in bad faith and which is remedied
by the Company within fifteen (15) days after receipt of notice thereof given
by Executive; or/and


 


(B)                                any failure by the Company to comply with any of the material
provisions of this Agreement other than an inadvertent failure not committed in
bad faith and which is remedied by the Company within fifteen (15) days after
receipt of notice thereof given by Executive.


 


Section 6.                    SEVERANCE.


 


(a)          MITIGATION.  The Executive shall not
be required to mitigate damages with respect to any payments made pursuant to
this Agreement, and no compensation


 


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received by Executive from other
employment with respect to services rendered after the Date of Termination
shall reduce the obligations of the Company under this Agreement.


 


(b)         RELEASE
OF EMPLOYMENT CLAIMS.  The Executive agrees, as a condition to
receipt of the payments and benefits provided for in Section 5(c), that he
will execute a release agreement, in a form attached hereto as Exhibit A,
releasing any and all claims arising out of the Executive’s employment (other
than enforcement of this Agreement and claims for benefits under any incentive
compensation and employee benefit plans in which the Executive participates).


 


Section 7.                    CONFIDENTIALITY; NON-COMPETITION.


 


(a)          CONFIDENTIALITY.  “Confidential Information” shall mean
non-public information about the Company and Company Affiliates, and their
respective clients and customers that is not disclosed by the Company or its
subsidiaries for financial reporting purposes and that was learned by the
Executive in the course of his employment with the Company, including, without
limitation, any proprietary knowledge, trade secrets, data, formulae,
information and client and customer lists and all papers, resumes and records (including
computer records) of the documents containing such Confidential
Information.  Confidential Information
does not include information regarding the Executive’s own compensation and
benefits.


 


(i)                                     The Executive
acknowledges that in his employment with the Company, he will occupy a position
of trust and confidence.  The Executive
shall not, except as may be required to perform his duties hereunder or as
required by applicable law, without limitation in time or until such
information shall have become public other than by the Executive’s unauthorized
disclosure, disclose to others or use, whether directly or indirectly, any
Confidential Information.


 


(ii)                                  The Executive
acknowledges that all Confidential Information is specialized, unique in nature
and of great value to the Company and its subsidiaries, and that such
Confidential Information gives the Company and its subsidiaries a competitive
advantage.  The Executive agrees to
deliver or return to the Company, at the Company’s request at any time or upon
termination or expiration of his employment or as soon thereafter as possible,
all documents, computer tapes and disks, records, lists, data, drawings,
prints, notes and written information (and all copies thereof) furnished by or
on behalf of or for the benefit of the Company and Company Affiliates or
prepared by the Executive during the term of his employment by the Company, but
excluding documents relating to the Executive’s own compensation and benefits.


 


(b)         NON-COMPETITION.  During the Executive’s
employment with the Company, the Executive shall not, directly or indirectly,
whether as owner, consultant, employee, partner, venturer, agent, through stock
ownership, investment of capital, lending of money or property, rendering of
services, or otherwise, compete with the Company or Company Affiliates in any
business in which any of them is engaged while the Executive is employed with
Company (such businesses are hereinafter referred to as the “Business”), or assist, become


 


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interested in or be connected with any
corporation, firm, partnership, joint venture, sole proprietorship or other
entity which so competes with the Business.


 


(c)          NON-SOLICITATION
OF CUSTOMERS AND SUPPLIERS.  During the Executive’s employment with the
Company and during the one (1) year period commencing on the Date of
Termination, the Executive shall not, directly or indirectly, influence or
attempt to influence customers or suppliers of the Company or Company
Affiliates to divert their business to any business, individual, partner, firm,
corporation or other entity that is then a direct competitor of the Company or
Company Affiliates (each such competitor, a “Competitor”);
provided, however, that if the Executive is employed by customers
or suppliers of the Company following his termination of employment and such
employment does not violate Section 7(b), the normal execution of his
duties in connection with such employment shall not constitute a violation of
this Section 7(c).


 


(d)         NON-SOLICITATION
OF EMPLOYEES.


 


(i)                                     The Executive
recognizes that he will possess confidential information about other employees
of the Company and Company Affiliates relating to their education, experience,
skills, abilities, compensation and benefits, and interpersonal relationships
with customers of the Company and Company Affiliates.


 


(ii)                                  The Executive
recognizes that the information he will possess about these other employees is
not generally known, is of substantial value to the Company and its subsidiaries
in developing their business and in securing and retaining customers, and will
be acquired by him because of his business position with the Company and its
subsidiaries.


 


(iii)                               The Executive
agrees that, during the Executive’s employment with the Company and during the
one (1) year period commencing on the Date of Termination he will not, directly
or indirectly, solicit or recruit any employee of the Company or Company
Affiliates for the purpose of being employed by him or by any Competitor on
whose behalf he is acting as an agent, representative or employee and that he
will not convey any such confidential information or trade secrets about other
employees of the Company and Company Affiliates to any other person.


 


(e)          REMEDIES.  In the event of a breach
or threatened breach of this Section 7, the Executive agrees that the
Company shall be entitled to injunctive relief in a court of appropriate
jurisdiction to remedy any such breach or threatened breach, the Executive
acknowledging that damages would be inadequate and insufficient.


 


(f)            SURVIVAL
OF PROVISIONS.  The obligations contained in this
Section 7 shall, to the extent provided in this Section 7, survive
the termination or expiration of the Executive’s employment with the Company
and, as applicable, shall be fully enforceable thereafter in accordance with
the terms of this Agreement.  If it is
determined by a court of competent jurisdiction in any state that any
restriction in this Section 7 is excessive in duration or scope or is
unreasonable or unenforceable under the laws of that state, it is the intention
of the


 


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parties that such restriction may be
modified or amended by the court to render it enforceable to the maximum extent
permitted by the law of that state.


 


Section 8.                    INDEMNIFICATION.  The Executive shall be indemnified by the
Company against liability as an officer of the Company and Company’s Affiliates
to the maximum extent permitted by applicable law.  The Executive’s rights under this Section 8 shall continue
so long as he may be subject to such liability, whether or not his employment
may have terminated prior thereto.


 


Section 9.                    WITHHOLDING.  The Company shall make such deductions and
withhold such amounts from each payment made to the Executive hereunder as may
be required from time to time by law, governmental regulation or order.


 


Section 10.              NOTICES.  All notices and other communications under
this Agreement shall be in writing and shall be given by hand, facsimile or
first-class mail, certified or registered with return receipt requested, and
shall be deemed to have been duly given upon delivery or three (3) days after
mailing or twenty-four (24) hours after transmission of a facsimile to the
respective persons named below:


 


	
  (a)

  	
  If to the Company:

  
	
   

  	
   

  
	
   

  	
  HCS I, Inc.

  
	
   

  	
  c/o Penn National Gaming, Inc.

  
	
   

  	
  825 Berkshire Blvd., Suite 200

  
	
   

  	
  Wyomissing, PA 19610

  
	
   

  	
  Attn:  Jordan Savitch

  
	
   

  	
  Facsimile:  610-373-4710

  
	
   

  	
   

  
	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Rodrigo A. Guerra, Jr.

  
	
   

  	
  Skadden, Arps, Slate, Meagher & Flom LLP

  
	
   

  	
  300 South Grand Avenue, Suite 3400

  
	
   

  	
  Los Angeles, CA 90071

  
	
   

  	
  Facsimile:  213-687-5600

  
	
   

  	
   

  
	
  (b)

  	
  If to the Executive:

  
	
   

  	
   

  
	
   

  	
  John Hull

  
	
   

  	
  6753 East Park Drive

  
	
   

  	
  Fort Worth, Texas 76132

  
	
   

  	
  Facsimile:                             

  



 


Either
party may change such party’s address for notices by notice duly given pursuant
hereto.


 


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Section 11.              DISPUTE RESOLUTION.  The Company and the Executive agree that any
dispute arising as to the parties’ rights and obligations hereunder, other than
with respect to Section 7, shall be resolved by binding arbitration in
accordance with the rules of the American Arbitration Association for
resolution of employment disputes then in effect.


 


Section 12.              GOVERNING LAW.  This Agreement and the legal relations thus
created between the parties hereto shall be governed by and construed under and
in accordance with the laws of the State of Texas, without regard to its
conflicts of law principles.


 


Section 13.              TERMINATION OF PRIOR AGREEMENTS.  This Agreement terminates and supersedes any
and all prior agreements and understandings between the parties with respect to
the Executive’s employment and compensation by the Company or Company’s
Affiliates.  As of the Effective Date,
the Executive shall be employed by the Company under the terms and pursuant to
the conditions set forth in this Agreement.


 


Section 14.              WAIVER; MODIFICATION.  Failure to insist upon strict compliance
with any of the terms, covenants or conditions hereof shall not be deemed a
waiver of such term, covenant or condition, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right
or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.  This Agreement shall not be modified in any
respect except by a writing executed by each party hereto.


 


Section 15.              ASSIGNMENT; SUCCESSORS.  This Agreement is personal in its nature and
neither of the parties hereto shall, without the consent of the other, assign
or transfer this Agreement or any rights or obligations hereunder; provided
that, in the event of the merger, consolidation, transfer or sale of all or
substantially all of the assets of the Company with or to any other individual
or entity or any similar event, this Agreement shall, subject to the provisions
hereof, be binding upon and inure to the benefit of such successor and such
successor shall discharge and perform all the promises, covenants, duties and
obligations of the Company hereunder.


 


Section 16.              SEVERABILITY.  Except as provided in Section 7(f), in
the event that a court of competent jurisdiction determines that any portion of
this Agreement is in violation of any statute or public policy, only the portions
of this Agreement that violate such statute or public policy shall be
stricken.  All portions of this
Agreement that do not violate any statute or public policy shall continue in
full force and effect.  Furthermore, any
court order striking any portion of this Agreement shall modify the stricken
terms as little as possible to give as much effect as possible to the
intentions of the parties under this Agreement.


 


Section 17.              HEADINGS; INCONSISTENCY.  Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose. 
In the event of any inconsistency between the terms of this Agreement
and any form, award, plan or policy of the Company, the terms of this Agreement
shall control.


 


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Section 18.              COUNTERPARTS.  This Agreement may be executed in
counterparts (including counterparts delivered by facsimile), each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.


 


IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer and the Executive has hereunto signed this Agreement on
the date first above written.


 


	
   

  	
  HCS I, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kevin DeSanctis

  	
   

  
	
   

  	
  By:

  	
  Kevin DeSanctis

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John Hull

  	
   

  
	
   

  	
  John Hull

  
				



 


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