Exhibit 10.20


 


EMPLOYMENT AGREEMENT


 


AGREEMENT, dated as of this
28th day of April, 2005, by and between the Seneca Gaming Corporation (the “Parent”), a governmental instrumentality of the Seneca
Nation of Indians of New York (the “Nation”) with
its principal place of business in the State of New York and Rajat R. Shah (“Executive”).


 


WHEREAS, the Parent desires
that Executive serve as the Senior Vice President of Corporate Development and
Deputy General Counsel of the Parent and each of the Seneca Niagara Falls
Gaming Corporation (“SNFGC”), the
Seneca Territory Gaming Corporation (“STGC”), and the
Seneca Erie Gaming Corporation (“SEGC”), each a
wholly-owned subsidiary of the Parent and a governmental instrumentality of the
Nation (collectively, the “Subsidiaries”
and together with Parent, the “Employer”); and


 


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


 


IT IS HEREBY AGREED AS FOLLOWS:


 


1.             Employment;
Location of Employment.


 


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


 


(b)           Executive and the Parent acknowledge that Executive currently resides in
Washington D.C.; provided, however, Executive intends to relocate
to the Buffalo, New York area.  Prior to
his relocation, Executive shall be responsible for all living expenses and
travel expenses between Executive’s home in the Washington D.C. metropolitan
area and the Parent’s principal executive offices in Niagara Falls, New
York.  In connection with Executive’s
relocation, the Parent shall reimburse Executive for customary and reasonable
relocation expenses.


 


2.             Term.  The term of this
Agreement shall commence on May 2, 2005 (the “Commencement Date”) and terminate on September 30, 2008
(the “Termination Date”), unless
renewed by a subsequent written agreement of the parties.


 





















 


3.             Compensation.


 


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


 


(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 annual
base salary of Six Hundred Thirty Seven Thousand Five Hundred Dollars
($637,500) for Employer’s fiscal year ending September 30, 2007; Seven
Hundred Twenty Five Thousand Dollars ($725,000) for Employer’s fiscal year
ending September 30, 2008 with respect to his service for all of the
Employers, with a salary review by the Board each fiscal year thereafter at
which time the Board shall determine whether, in its sole discretion, Executive’s
Base Compensation shall be increased. 
Said salary shall be payable periodically in accordance with the
Employer’s regular payroll practice.


 


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


 


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


 


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


 


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


 


5.             Termination.


 


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


 


2





















 


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


 


(ii)           upon revocation or disapproval of such licenses for Executive as are
required pursuant to the Compact and/or by the Nation’s or the Employer’s gaming
ordinances;


 


(iii)          Executive shall commit an act constituting “Cause,” which is defined to
mean an act of dishonesty by Executive intended to result in gain or personal
enrichment of Executive or others at the Employer’s expense, or the deliberate
and intentional refusal by Executive (except by reason of disability) to
perform his duties hereunder, or by acts constituting gross negligence in the
performance of such duties;


 


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


 


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


 


(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 Base
Compensation earned through the date Executive is terminated, whereupon the
Employer shall have no further liability or obligation to Executive under this
Agreement or otherwise.


 


(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 his
estate) his Base Compensation earned through the date Executive is terminated;
whereupon the Employer shall have no further liability or obligation to
Executive under this Agreement or otherwise.


 


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


 


3





















 


determined
not to have been proper shall be treated as a termination under this paragraph
5(d)), then the Employer shall: (i) pay Executive his Base Compensation
earned, but unpaid, through the date Executive is terminated, (ii) 
continue to pay Executive his Base Compensation in effect as of the date of
termination for a period following his termination (the “Severance Period”)
equal to the lesser of (A) eighteen (18) months or (B) the remainder
of the period ending on the Termination Date, and (iii) to the extent
elected by Executive, pay for the cost of (A) Executive’s premiums for
continuation healthcare coverage under Section 4980B of the Internal
Revenue Code of 1986, as amended (“COBRA”), and (B) the premiums for
Exec-u-Care® or any similar executive medical reimbursement insurance plan
maintained by the Employer on the date Executive’s employment is terminated,
for the lesser of (1) the Severance Period, (2) until Executive is no
longer eligible for COBRA continuation coverage, or (3) until Executive
obtains comparable healthcare benefits from any other employer during the
Severance Period, whereupon the Employer shall have no further liability or
obligation to Executive under this Agreement or otherwise; provided, however,
that Executive shall have a duty to mitigate damages as follows: during the
Severance Period, Executive shall endeavor to mitigate damages by seeking
employment with duties and salary comparable to those provided for herein, and
if he shall obtain such employment, he shall reimburse the Employer the amount
of the compensation he has received from such other entity for such period, but
not to exceed the amount of the compensation the Employer shall have paid him
for such period.


 


(e)           Executive may terminate his employment for any reason upon
one-hundred-twenty (120) days written notice to the Parent.  If Executive terminates his employment
pursuant to this paragraph 5(e), the Employer shall pay Executive the Base
Compensation earned through the date of termination, whereupon the Employer
shall have no further liability or obligation to Executive under this Agreement
or otherwise.


 


(f)            Executive acknowledges and agrees that the payments set forth in this section 5
constitute liquidated damages for termination of his employment during the
employment period and such liquidated damages shall be his only remedy with
respect to any claim, including, without limitation, breach of contact, he may
have under this Agreement and that prior to receiving any such payments under section 5
and as a material condition thereof, Executive shall sign and agree to be bound
by a general release of claims against the Employer related to Executive’s
employment (and termination of employment) with the Employer in substantially
the form as attached hereto as Exhibit A as may be modified by the
Employer in good faith to reflect changes in law or its employment
practices.  Notwithstanding any other
provision of this Agreement to the contrary, Executive acknowledges and agrees
that other than any claim for the liquidated damages contemplated hereunder, he
waives any rights to be awarded any other damages with respect to any claim he
may have under this Agreement, including, without limitation, compensatory or
punitive damages.


 


4





















 


6.             Restrictive
Covenants.


 


(a)           Executive
acknowledges that:  (i) as a result
of Executive’s employment with the Employer, he will obtain secret, proprietary
and 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 on
behalf of or otherwise engaged in business transactions with the Employer),
accounts, financial data, know-how, computer software and related
documentation, trade secrets, processes, policies and/or personnel, and other
information relating to the Employer (“Confidential Information”); (ii) the
Confidential Information has been developed and created by the Employer at
substantial expense and the Confidential Information constitutes valuable
proprietary assets and the Employer will suffer substantial damage and
irreparable harm which will be difficult to compute if, during the term of the
Agreement and thereafter, Executive should enter a Competitive Business (as
defined herein) in violation of the provisions of this Agreement; (iii) the
Employer will suffer substantial damage which will be difficult to compute if,
during the term of the Agreement or thereafter, Executive should solicit or
interfere with the Employer’s employees, patrons or vendors or should divulge
Confidential Information relating to the business of the Employer; (iv) the
provisions of this section 6 are reasonable and necessary for the
protection of the business of the Employer; (v) the Employer would not
have hired or employed Executive unless he signed this Agreement; and (vi) the
provisions of this Agreement will not preclude Executive from other gainful
employment.  “Competitive Business” shall
mean any gaming establishment which provides to its patrons games of chance
such as slot machines, card games, roulette, and similar games in the State of
New York or within the 100 mile radius of Nation Territory.


 


(b)           Executive
acknowledges and agrees that the unauthorized disclosure or misuse of
Confidential Information will cause substantial damage to the Employer.  Therefore, Executive agrees not to, at any
time, either during the term of the Agreement or thereafter, divulge, use,
publish or in any other manner reveal, directly or indirectly, to any person,
firm or corporation any Confidential Information obtained or learned by
Executive during the course of his employment with the Employer, with regard to
the operational, financial, business or other affairs and activities of the
Employer, their officers, directors or employees and the entities with which
they have business relationships, except (i) as may be necessary to the
performance of Executive’s duties with the Employer, (ii) with the Parent’s
express written consent, (iii) to the extent that any such information is
in the public domain other than as a result of Executive’s breach of any of
obligations hereunder, or (iv) where required to be disclosed by court
order, subpoena or other government process which is consistent with the terms
and conditions of paragraphs 15(f) and 15(g) of the Compact and, in
such event, Executive shall cooperate with the Employer in attempting to keep
such information confidential.


 


(c)           During
Executive’s employment with the Employer and for eighteen (18) months after his
termination of employment for any reason (the “Restricted Period”),


 


5





















 


Executive, without the prior written permission of the Parent, shall
not, directly or indirectly, (i) enter into the employ of or render any
services to any person, engaged in a Competitive Business; or (ii) become
associated with or interested in any Competitive Business as an individual,
partner, shareholder, member, creditor, director, officer, principal, agent,
employee, trustee, consultant, advisor or in any other relationship or
capacity.   This paragraph 6(c) shall
not prevent Executive from owning common stock in a publicly traded corporation
which owns or manages a casino provided Executive does not take an active role
in the ownership or management of such corporation and his ownership interest
represents less than 3% of the voting securities and/or economic value of such
corporation.


 


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


 


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


 


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


 


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


 


6





















 


or in equity.  Accordingly,
Executive consents to the issuance of an injunction, whether preliminary or
permanent, consistent with the terms of this Agreement.


 


(h)           If,
at any time, the provisions of this Agreement shall be determined to be invalid
or unenforceable under any applicable law, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Agreement shall be
considered divisible and shall become and be immediately amended to only such
area, duration and scope of activity as shall be determined to be reasonable
and enforceable by the court or other body having jurisdiction over the matter
and Executive and the Employer agree that this Agreement as so amended shall be
valid and binding as though any invalid or unenforceable provision had not been
included herein.


 


7.             Miscellaneous.


 


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


 


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


 


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


 


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


 


7





















 


(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 be
settled by binding arbitration in Niagara Falls, New York in accordance with
the Rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitrator(s) may be entered in the United States
District Court for the Western District of New York.  The parties agree that the only remedies
available to Executive under this Agreement are those that are set forth in
paragraph 5 and the arbitrator shall have no authority to award any other
damages, including, without limitation, punitive and/or compensatory damages.


 


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


 


If to Executive:


 


 


If to the Parent:


 


310 4th Street


P.O. Box 77


Niagara Falls, New York (Seneca Nation Territory) 14303


Attn:  President
and Chief Executive Officer of Seneca Gaming Corporation


 


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


 


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


 


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


 


(i)            Except
as otherwise provided herein, this Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer,
employee or representative of any party hereto in respect of such subject
matter.  Except as otherwise provided
herein, any prior agreement of the parties hereto in respect of the subject
matter contained herein is hereby terminated and cancelled.


 


8





















 


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


 


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


 


8.             Waiver
of Sovereign Immunity.


 


(a)           The
Parent grants a waiver of its sovereign immunity from suit exclusively to
Executive (and his estate in the event of his death) for the purpose of
enforcing this Agreement, or permitting or compelling arbitration and other
remedies as provided herein.  This waiver
is solely for the benefit of the aforesaid parties and for no other person or
entity.  For this limited purpose, the
Parent consents to be sued solely with respect to the enforcement of any
decision by an arbitrator relating to this Agreement as provided in paragraph 7(e) of
this Agreement in the United States District Court for the Western District of
New York.


 


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


 


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


 


(d)           Notwithstanding
anything in this Agreement to the contrary, this waiver is to be interpreted in
a manner consistent with the Parent’s ability to enter into this Agreement,
including, without limitation, this paragraph 8, as provided in the Charter of
the Parent, as it may be amended from time to time.  Accordingly, the Nation shall not be liable
for the debts or obligations of the Parent, and the Parent shall have no power
to pledge or encumber the assets of the Nation. 
Furthermore, this paragraph 8 does not constitute a waiver of any
immunity of the Nation or a delegation to the Parent of the power to make any
such waiver. This paragraph 8 shall be strictly construed with a view toward
protecting the Nation’s assets from the reach of creditors and others.


 


9





















 


	
  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

  
				



 


10