**Exhibit 10.1**

 

**EXECUTION VERSION**

 

**EMPLOYMENT AGREEMENT**

 

THISEMPLOYMENT AGREEMENT (this **“Agreement”**) isentered into as of this 23rd day of June, 2010, by and between the SenecaGaming Corporation (“**Parent**”), agovernmental instrumentality of the Seneca Nation of Indians of New York (the “**Nation**”) and Lee K. Shannon (“**Executive**”).  This Agreement shall become effective as ofthe 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 GeneralCounsel of Parent and each of the Seneca Niagara Falls Gaming Corporation, theSeneca Territory Gaming Corporation, the Seneca Erie Gaming Corporation, andthe Lewiston Golf Course Corporation, each a wholly-owned subsidiary of Parentand a governmental instrumentality of the Nation, and each of the wholly-ownedsubsidiaries of Parent formed or acquired in the future (unless otherwisedetermined 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 ofEmployer in accordance with the terms and conditions of this Agreement.

 

ITIS HEREBY AGREED AS FOLLOWS:

 

1.                                       Employment. Upon the CommencementDate, Employer hereby employs Executive as its Senior Vice President andGeneral Counsel.  Executive shall reportand be 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, including those set forth on **Exhibit A** hereto, and those thatmay be specified from time to time by the President and Chief Executive Officerand/or the Board.  Without limiting theforegoing, such duties shall further include an affirmative obligation tomentor and train enrolled Seneca Nation members and other Native Americanemployees of Employer in furtherance of the Nation’s efforts to promote thedevelopment and advancement of Native Americans.

 

2.                                       Term.  The term of this Agreement shall commence onthe date mutually agreed upon by Executive and Employer that is within 30 daysof the date hereof (the “**Commencement Date**”)and terminate on the day before the third anniversary of the Commencement Date(the “**Termination Date**”), unlessrenewed by a subsequent written agreement of the parties.  The parties shall enter into good faithdiscussions regarding the renewal/non-renewal of this Agreement no later than180 days prior to the Termination Date. If Employer elects not to renew the Agreement then, beginning on thefirst day following the Termination Date, Employer shall: (i) payExecutive his Base Compensation earned, but unpaid, through the TerminationDate; (ii) continue to pay Executive his Base Compensation in effect as ofthe 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 ofExecutive’s premiums for continuation healthcare coverage under Section 4980Bof the Internal Revenue Code of 1986, as amended 

 

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

 

3.                                       Compensation.

 

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

 

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

 

(c)                                  Executive shall be provided with three weekspaid vacation during each fiscal year (limited to five days for the remainderof the fiscal year ending September 30, 2010).  The vacation days shall accrue, expire andotherwise be administered in accordance with Employer’s vacation policy, as ineffect from time to time.

 

(d)                                 Executive shall be entitled to reimbursementof his business expenses, in accordance with Employer’s policies, as in effectfrom time to time.

 

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

 

(f)                                    Should Executive become unable to perform theduties required under this Agreement as a result of temporary, documentedmental or physical disability (such documentation to be delivered to Employerpromptly), Executive shall be eligible to continue to receive his BaseCompensation for the period during which the documented disability preventsperformance of his duties, provided that such Base Compensation shall only be payablefor a maximum period of up to 180 days following the first day of missedperformance as a result of the disability.

 

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

 

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Executive’s continuing legal educationrequirements.

 

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/orthe Nation’s or Employer’s gaming ordinances as in effect from time to time, asmay be necessary to enable Executive to engage in his employment hereunder.

 

5.                                       Termination.

 

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

 

(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 or General Counsel of Parent or any of the Subsidiaries, or if anyevent renders it unlawful for the Nation and/or Employer to continue to conductcasino gaming on Nation Territory.  Forpurposes of this Agreement, “**Nation Territory**”shall include current or future Nation territory where Employer conducts orwill conduct its gaming operations as of the date Executive’s employment isterminated.

 

(ii)                                  upon revocation or disapproval of such licenses for Executive as arerequired pursuant to the Compact and/or by the Nation’s or Employer’s gamingordinances, provided that, in the event Executive appeals the grounds for suchrevocation, disapproval or suspension, Employer shall suspend Executive withoutcompensation during the pendency of such appeal, with reinstatement ofExecutive and reimbursement of such compensation by Employer in the event suchappeal is successful;

 

(iii)                               Executive shall commit an act constituting “**Cause**,” which is defined to mean (A) an act of dishonestyby Executive intended to result in gain or personal enrichment of Executive orothers at Employer’s expense, (B) the deliberate and intentional refusalby Executive (except by reason of disability) to perform his duties hereunder, (C) byacts constituting gross negligence in the performance of such duties, or (D) thefailure to perform any material term or condition of this Agreement afterwritten notice thereof from Company and the Executive’s failure to cure suchfailure within 15 days of the written notice (as determined by Company andspecified 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’scontrol permanently cease to conduct casino gaming on Nation Territory.

 

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

 

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

 

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

 

(ii)                                  continue to pay Executive his Base Compensation in effect as of the dateof termination for a period following his termination (the “**Severance Period**”) equal to the lesser of (A) ninemonths 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’spremiums for continuation healthcare coverage under COBRA, 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 Executivefor healthcare coverage under this Agreement or otherwise.

 

Paymentsto Executive pursuant to Section 5(c)(ii) above shall commence on theday following the effective date of Executive’s termination and shall continueuntil the Severance Period ends; provided that if Executive has not delivered asigned general release of claims against Employer related to Executive’s employment(and termination of employment) with Employer in substantially the form asattached hereto as Exhibit B (as may be modified by Employer ingood faith to reflect changes in law or its employment practices) within 30days of the effective date of termination, or any such release is later revokedby Executive, the Employer shall be relieved of its obligation to make anypayments pursuant to Section 5(c)(ii). Further, Executive’s receipt of compensation under this Section 5(c) issubject to Executive’s duty to mitigate damages as follows: during theSeverance Period, Executive shall endeavor in good faith to mitigate damages byseeking employment with duties and salary comparable to those provided forherein (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 amountof the 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 may terminate his employment for anyreason 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 oftermination, whereupon Employer shall have no further liability or obligationto Executive under this Agreement or otherwise.

 

(e)                                  Executive acknowledges and agrees that thepayments for termination of his employment during the employment term set forthin this Section 5 or for the election by the Employer not to renew theAgreement under Section 2 constitute liquidated damages for termination ofhis employment during the employment term and such liquidated damages shall behis only remedy with respect to any claim, including, without limitation,breach of contract, he may have under this Agreement.  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.

 

6.                                       Restrictive Covenants.

 

(a)                                  Executive acknowledges that:  (i) as a result of Executive’semployment with Employer, he will obtain secret, proprietary and confidentialinformation concerning the business of Employer, including, without limitation,business and marketing plans, strategies, employee lists, patron lists,operating procedures, business relationships (including persons, corporationsor other entities performing services on behalf of or otherwise engaged in businesstransactions with Employer), accounts, financial data, know-how, computersoftware and related documentation, trade secrets, processes, policies and/orpersonnel, and other information relating to Employer (**“Confidential Information”**); (ii) theConfidential Information has been developed and created by Employer atsubstantial expense and the Confidential Information constitutes valuableproprietary assets and Employer will suffer substantial damage and irreparableharm which will be difficult to compute if, during the Restricted Period (asdefined in Section 6(c) below), Executive should enter a CompetitiveBusiness (as defined herein) in violation of the provisions of this Agreement; (iii) Employerwill suffer substantial damage which will be difficult to compute if, duringthe Restricted Period, Executive should solicit or interfere with Employer’semployees or patrons, or should divulge Confidential Information relating tothe business of Employer; (iv) the provisions of this Section 6 arereasonable and necessary 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 fromother gainful employment.  **“Competitive Business”** shall mean anygaming establishment which provides to its patrons games of chance such as slotmachines, card games, roulette, or similar games in the State of New York orwithin a 250 mile radius of Nation Territory and any other business in whichthe Company is then engaged as of the date of termination of this Agreement.

 

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(b)                                 Executive acknowledges and agrees that theunauthorized disclosure or misuse of Confidential Information will causesubstantial damage to Employer. Therefore, Executive agrees not to, at any time, either during the termof the Agreement or thereafter, divulge, use, publish or in any other mannerreveal, directly or indirectly, to any person, firm or corporation anyConfidential Information obtained or learned by Executive during the course ofhis employment with Employer, with regard to the operational, financial,business or other affairs and activities of Employer, their officers, directorsor employees and the entities with which they have business relationships,except (i) as may be necessary to the performance of Executive’s dutieswith Employer, (ii) with Parent’s express written consent, (iii) tothe extent that any such information is in the public domain other than as aresult of Executive’s breach of any of obligations hereunder, or (iv) whererequired to be disclosed by court order, subpoena or other government processand, in such event, Executive shall promptly notify Employer of the requirementand cooperate with Employer in attempting to keep such informationconfidential.

 

(c)                                  During Executive’s employment with Employerand for 12 months after his termination of employment for any reason (the **“Restricted Period”**), Executive, withoutthe prior written permission of Parent, shall not, directly or indirectly, (i) enterinto the employ of or render any services to any person, engaged in aCompetitive Business; or (ii) become associated with or interested in anyCompetitive Business as an individual, partner, shareholder, member, creditor,director, officer, principal, agent, employee, trustee, consultant, advisor orin any other relationship or capacity.  This Section 6(c) shall not prevent Executive from owningcommon stock in a publicly traded corporation which owns or manages a casinoprovided Executive does not take an active role in the ownership or managementof such corporation and his ownership interest represents less than 3% of thevoting securities and/or economic value of such corporation.  Furthermore, this Section 6(c) shallnot be interpreted or applied in a manner that would violate Rule 5.6 ofthe New York Rules of Professional Conduct.

 

(d)                                 By executing this Agreement, Executiveacknowledges that he understands that Employer’s ability to operate itsbusiness depends upon its ability to attract and retain skilled people and thatEmployer has and will continue to invest substantial resources in training suchindividuals.  Therefore, during theRestricted Period, Executive shall not, without the prior written permission ofParent, directly or indirectly solicit, employ or retain, or have or cause anyother person or entity to solicit, employ or retain, any person who is employedor is providing personal services to Employer.

 

(e)                                  By executing this Agreement, Employeeacknowledges that Executive understands that Employer’s ability to operate itsbusiness depends upon its ability to attract and retain vendors andpatrons.  Therefore, during theRestricted 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 

 

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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.

 

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

 

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

 

(h)                                 If Executive commits a breach, or threatens tocommit a breach, of any of the provisions of this Section 6 of theAgreement, Employer shall have the right and remedy to have the provisionsspecifically enforced by any court having jurisdiction, it being acknowledgedand agreed by Executive that the services being rendered hereunder to Employerare of a special, unique and extraordinary character and that any such breachor threatened breach will cause irreparable injury to Employer and that moneydamages will not provide an adequate remedy to Employer.  Such right and remedy shall be in additionto, and not in lieu of, any other rights and remedies available to Employer atlaw or in equity.  Accordingly, Executiveconsents 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 thisAgreement shall be determined to be invalid or unenforceable under anyapplicable law, by reason of being vague or unreasonable as to area, durationor scope of activity, this Agreement shall be considered divisible and shallbecome and be immediately amended to only such area, duration and scope of activityas shall be determined to be reasonable and enforceable by the court or otherbody having jurisdiction over the matter and Executive and Employer agree that 

 

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thisAgreement as so amended shall be valid and binding as though any invalid orunenforceable provision had not been included herein.

 

7.                                       Compliance with Section 409A.

 

(a)                                  This Agreement shall be interpreted to avoidany additional tax under Section 409A of the Internal Revenue Code of1986, as amended (“**Section 409A**”).  If any payment or benefit cannot be providedor 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 timethereafter when such sanctions will not be imposed.

 

(b)                                 Notwithstanding any provision of thisAgreement to the contrary, with respect to in-kind benefits provided orexpenses eligible for reimbursement under this Agreement that are subject to Section 409A,(i) the benefits provided or the amount of expenses eligible forreimbursement during any calendar year shall not affect the benefits providedor expenses eligible for reimbursement in any other calendar year, except asotherwise provided in U.S. Treasury Regulation §1.409A-3(i)(1)(iv)(B), and (ii) thereimbursement of an eligible expense shall be made as soon as practicable afterthe Executive requests such reimbursement, but not later than the December 31of 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 commithis full time and energies to the duties imposed hereby; provided, that,with the prior written approval of the Board, Executive may expend as much ofhis 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.

 

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

 

(c)                                  No provisions of this Agreement may beamended, modified, or waived unless such amendment or modification is agreed toin writing signed by Executive and by a duly authorized officer of Parent, andsuch waiver is set forth 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 orsubsequent time.  No agreements orrepresentations, oral or otherwise, express or implied, with respect to thesubject matter hereof have been made by either party which are not set forthexpressly in this Agreement.  Therespective rights and obligations of the parties hereunder of this 

 

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Agreementshall survive Executive’s termination of employment and the termination of thisAgreement to the extent necessary for the intended preservation of such rightsand obligations.

 

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

 

(e)                                  Except as provided in Section 6(h) ofthis Agreement, any dispute, controversy or claim arising out of or relating tothis Agreement shall be settled by binding arbitration in Niagara Falls, NewYork in accordance with the Rules of the American Arbitration Association,and judgment upon the award rendered by the arbitrator(s) may be enteredin any court of competent jurisdiction. The parties agree that the only remedies available to Executive underthis Agreement are those that are set forth in Section 5 and thearbitrator shall have no authority to award any other damages, including,without limitation, punitive and/or compensatory damages.  The parties further agree that they shallbear their own attorneys’ fees and related costs arising out of any suchdispute, 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 inwriting and shall be deemed to have been duly given when delivered eitherpersonally or by United States certified or registered mail, return receiptrequested, postage prepaid, addressed as follows:

 

Ifto Executive:

 

Lee Shannon

P.O. Box 1834

Portland, Oregon 97207

 

Ifto Parent:

 

310Fourth Street

NiagaraFalls, New York (Seneca Nation Territory) 14303

Attn:  Board of Directors and Chief ExecutiveOfficer

 

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 anyprovision or provisions of this Agreement shall not affect the validity or enforceabilityof any other provision of this Agreement, which shall remain in full force andeffect.

 

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

 

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

 

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

 

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

 

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

 

(m)                               Employer shall have the right at its ownexpense to purchase insurance on the life of Executive, in such amounts as itshall from time to time determine, of which Employer (or its designatedaffiliate) shall be the beneficiary. Executive shall submit to such physical examinations as may reasonablybe required and shall otherwise cooperate with Employer in obtaining suchinsurance.

 

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

 

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

 

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

 

9.                                       Waiver of Sovereign Immunity.

 

(a)                                  Parent grants a waiver of its sovereignimmunity from suit exclusively to Executive (and his estate in the event of hisdeath) for the purpose of enforcing this Agreement, or permitting or compellingarbitration and other remedies as provided 

 

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

 

(b)                                 Parent hereby waives any requirement ofexhaustion of tribal remedies, and agrees that it will not present anyaffirmative defense in any dispute based on any alleged failure to exhaust suchremedies.  Without in any way limitingthe generality of the foregoing, Parent expressly authorizes any governmentalauthorities who have the right and duty under applicable law to take any actionauthorized or ordered by any court, to take such action, including, withoutlimitation, repossessing any property and equipment subject to a securityinterest or otherwise 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.

 

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

 

(d)                                 Notwithstanding anything in this Agreement tothe contrary, this waiver is to be interpreted in a manner consistent withParent’s ability to enter into this Agreement, including, without limitation,this Section 9, as provided in the 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 Section 9 does notconstitute a waiver of any immunity of the Nation or a delegation to Parent ofthe power to make any such waiver. This Section 9 shall be strictlyconstrued with a view toward protecting the Nation’s assets from the reach ofcreditors and others.

 

[SignaturePage 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**:

 

TheSr. Vice President & General Counsel of the Seneca Gaming Corporationoversees and directs all of the legal activities of the Company and itssubsidiaries including coordinating and managing outside legal counsel.  All duties are performed within theguidelines of Seneca Gaming Corporation’s Policies and Procedures, InternalControl Standards, and objectives.

 

**ESSENTIAL FUNCTIONS AND RESPONSIBILITIES****:**

 

1.               Develop, mentor and trainenrolled Seneca Nation members for future senior leadership positions with thelegal department.

2.               Direct legal activities ofthe Company and its outside legal counsel.

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

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

5.               Coordinate with the CFOpertaining to compliance by the Company and its employees with the regulationsof the Securities & Exchange Commission, including Sarbanes-Oxley.

6.               Prepare and review leasesand contracts.  If required, coordinateoutside legal counsel efforts regarding these matters.

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

8.               Oversee the risk managementfunction and all related insurance and claims issues.

9.               Oversee the compliancedepartment function and all related regulatory issues.

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

11.         Provide advice and guidanceregarding lawsuits filed in Federal and State Courts against or on behalf ofSGC and its subsidiaries.  Preparenecessary legal pleadings, or coordinate outside legal counsel effortsregarding these matters.

 

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12.         Is directly responsible forthe control of outside legal counsel fees, including hours billed, hourlyrates, level of attorney experience, and retainers.

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

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

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

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

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

18.         Maintain a currentunderstanding of all policy and guidelines regarding information securityincluding the Seneca Gaming Corporation Acceptable Use Policy.  Understand and comply with all informationsecurity policies and procedures at all times.

19.         Provide exceptional customerservice to all patrons and communicate in a pleasant, friendly and professionalmanner at all times.  Maintain aprofessional work environment with supervisors, managers and staff.

20.         Meet the attendanceguidelines of the job and adhere to regulatory, departmental and companypolicies.

21.         Must complete all requiredSGC Training programs within nine (9) months from commencement ofemployment.

22.         Attend all necessarymeetings.

23.         Duties, responsibilities,requirements and expectations pertaining to this job are subject to change asneeded.  Hours are determined by a24-hour schedule.

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

 

**QUALIFICATIONS/REQUIREMENTS****:**

 

To perform this jobsuccessfully, the incumbent must be able to perform each of the essentialduties and responsibilities satisfactorily. The requirements listed below arerepresentative 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 arecognized law school.

3.               A minimum of seven (7) toten (10) years of relevant experience with a background in Indian/NativeAmerican law.

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

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

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

7.               Must be capable of definingproblems, collection of data, establishing facts, and drawing valid conclusionsand providing solutions.

8.               Must demonstrate leadershipskills.

9.               Admission to New York Bar..

10.         Applicant must be able tosubstantiate a safe driving record within the parameters acceptable to ourliability insurance carrier.

 

14

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**LanguageSkills and Reasoning Ability:**

 

1.               Excellent communicationskills required.

2.               Must be capable to writeclearly about complex issues.

3.               Must be able to interactwith a diverse group of people.

4.               Must be capable of dealingeffectively with people.

** **

**PhysicalRequirements and Work Environment:**

 

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

 

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

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

 

**Other:**

 

1.               Must be able to be approvedfor 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 andholidays as required.

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

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

 

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**Exhibit B**

 

**Form of Release**

 

See Attached.

 

16

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**RELEASE OF ALL CLAIMS**

 

**Release ofClaims by Executive**.

 

It is understood and agreedby the Seneca Gaming Corporation (the “**Company**”), agovernmental instrumentality of the Seneca Nation of Indians of New York, and                    (“**Executive**”), that in consideration ofthe mutual promises and covenants contained in this general release of allclaims (the “**Release Agreement**”), Executive, onbehalf of Executive and Executive’s agents, representatives, administrators,receivers, trustees, estates, heirs, devisees, assignees, legalrepresentatives, and attorneys, past or present (as the case may be), herebyirrevocably and unconditionally releases, discharges, and acquits all theReleased Parties (as defined below) from any and all claims, promises, demands,liabilities, contracts, debts, losses, damages, attorneys’ fees and causes ofaction of every kind and nature, known and unknown, up to and including the EffectiveDate (as defined below), provided, however, that any claims arising after theEffective Date from the then present effect of acts or conduct occurring on orbefore 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 extentapplicable, a Released Party, or the termination thereof; (ii) theEmployment Agreement dated as of                          , 20     between theCompany and Executive, or the termination thereof; (iii) any treatment ofExecutive 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 statementsby the Company or any of the Released Parties regarding Executive, whether oralor in writing; (v) any damages or injury that Executive may have suffered,including without limitation, emotional or physical injury, compensatorydamages, or lost wages; (vi) employment discrimination, which shallinclude, without limitation, any individual or class claims of discriminationon the basis of age, disability, sex, race, religion, national origin,citizenship status, marital status, sexual preference, or any other basiswhatsoever; or (vii) all such other claims that Executive could assertagainst any, some, or all of the Released Parties in any forum, whether suchclaims are known or unknown, accrued or unaccrued, liquidated or contingent,direct or indirect.

 

Said release shall beconstrued as broadly as possible and shall also extend to release the ReleasedParties, without limitation, from any and all claims that Executive has allegedor could have alleged, whether known or unknown, accrued or unaccrued, againstany Released Party for violation(s) of any of the following, to the extentapplicable: the National Labor Relations Act, as amended; Title VII of theCivil 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 UnitedStates Code; the Equal Pay Act; the Employee Retirement Income Security Act of1974, as amended; the Immigration Reform Control Act, as amended; the Americanswith Disabilities Act of 1990, as amended; the Fair Labor Standards Act, asamended; the Occupational Safety and Health Act, as amended; the Older WorkersBenefit Protection Act of 1990; the Rehabilitation Act of 1973; theConsolidated Omnibus Budget Reconciliation Act of 1985; the New York HumanRights Law; the New York City Human Rights Law; the New York Labor Law; the NewYork Whistleblower Protection Law; the New York Wage and Hour Laws; the NewYork City

 

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Administrative Code; anyother tribal, federal, state, or local law or ordinance; any public policy,whistleblower, contract, tort, or common law; and any demand for costs orlitigation 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, andfuture 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 OlderWorkers Benefit Protection Act of 1990, Executive understands and acknowledgesthat by executing this Release Agreement and releasing all claims against anyof the Released Parties, Executive has waived any and all rights or claims thatExecutive has or could have against any Released Party under the AgeDiscrimination in Employment Act, which includes any claim that any ReleasedParty discriminated against Executive on account of Executive’s age. Executivealso acknowledges the following:

 

(a)                                  The Company, bythis written Release Agreement, has advised Executive to consult with anattorney prior to executing this Release Agreement;

 

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

 

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

 

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

 

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“**EffectiveDate**”).

 

Executive confirms that noclaim, charge, or complaint against any of the Released Parties, brought byExecutive, exists before any federal, state, or local court or administrativeagency. Executive hereby waives Executive’s right to accept any relief orrecovery, including costs and attorney’s fees, from any charge or complaintbefore any federal, state, or local court or administrative agency against anyof the Released Parties, except as such waiver is prohibited by law.

 

Executive agrees thatExecutive 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 onExecutive’s behalf or as a member of any alleged class of persons, any actionor proceeding of any kind, against the Released Parties or any past, present orfuture employee benefit and/or pension plans or funds of the Released Entitieswith respect to any act, omission, transaction or occurrence up to andincluding the date of the execution of this Release Agreement. Executivefurther agrees that Executive will not seek or accept any award or settlementfrom any source or proceeding with respect to any claim or right covered bythis paragraph or by the Release Agreement and that this Release Agreementshall act as a bar to recovery in any such proceedings.

 

Executive agrees thatneither this Release Agreement nor the furnishing of the consideration for thegeneral release set forth in this Release Agreement shall be deemed orconstrued at any time for any purpose as an admission by the Released Partiesof any liability or unlawful conduct of any kind. Executive furtheracknowledges and agrees that the consideration provided for herein is adequateconsideration for Executive’s obligations under this Release Agreement.

 

**Miscellaneous**.

 

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

 

This Release Agreement setsforth the entire agreement between Executive and the Released Parties and itsupersedes any and all prior agreements or understandings with respect to thesubject matter hereof, whether written or oral, between the parties, except asotherwise specified in this Release Agreement. Executive acknowledges thatExecutive has not relied on any representations, promises, or agreements of anykind made to him in connection with Executive’s decision to sign this ReleaseAgreement, except for those set forth in this Release Agreement.

 

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This Release Agreement maynot be amended except by a written agreement signed by both parties, whichspecifically refers to this Release Agreement.

 

EXECUTIVE ACKNOWLEDGES THATEXECUTIVE CAREFULLY HAS READ THIS RELEASE AGREEMENT; THAT EXECUTIVE HAS HAD THEOPPORTUNITY TO THOROUGHLY DISCUSS ITS TERMS WITH COUNSEL OF EXECUTIVE’SCHOOSING; THAT EXECUTIVE FULLY UNDERSTANDS ITS TERMS AND ITS FINAL AND BINDINGEFFECT; THAT THE ONLY PROMISES MADE TO SIGN THIS RELEASE AGREEMENT ARE THOSESTATED AND CONTAINED IN THIS RELEASE AGREEMENT; AND THAT EXECUTIVE IS SIGNINGTHIS RELEASE AGREEMENT KNOWINGLY AND VOLUNTARILY. EXECUTIVE STATES THATEXECUTIVE IS IN GOOD HEALTH AND IS FULLY COMPETENT TO MANAGE EXECUTIVE’SBUSINESS AFFAIRS AND UNDERSTANDS THAT EXECUTIVE MAY BE WAIVING SIGNIFICANTLEGAL RIGHTS BY SIGNING THIS RELEASE AGREEMENT.

 

[SignaturePage Follows]

 

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

 
|                                                                                                                                                                                                                                |   | EXECUTIVE                                               |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|
|                                                                                                                                                                                                                                |   |                                                    |   |
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|                                                                                                                                                                                                                                |   | By:                                                     |   |
|                                                                                                                                                                                                                                |   | Name:                                                   |   |
|                                                                                                                                                                                                                                |   | Date:                                                   |   |
|                                                                                                                                                                                                                                |   |                                                    |   |
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| Sworn to and subscribed  before me                                                                                                                                                                                                  |   |                                                    |   |
|                                                                                                                                                                                                                                |   |                                                    |   |
| this     day  of                         ,  20     . |   |                                                    |   |
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| Notary  Public                                                                                                                                                                                                                      |   |                                                    |   |
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|                                                                                                                                                                                                                                |   |                                                    |   |
|                                                                                                                                                                                                                                |   | ACCEPTED AND ACKNOWLEDGED  BY SENECA GAMING CORPORATION |
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|                                                                                                                                                                                                                                |   | By:                                                     |   |
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|                                                                                                                                                                                                                                |   | Date:                                                   |   |

 

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