**Exhibit 10.18**

 

**EMPLOYMENT AGREEMENT**

 

**by and between**

 

**TRANS WORLD CORPORATION**

 

**and**

 

**RAMI S. RAMADAN**

 

----

 

**DATED:   as of July 1, 2005**

 

----

 

----

 

**EMPLOYMENT AGREEMENT**

 

**THIS EMPLOYMENT AGREEMENT** (“**Agreement**”) is made and entered into as of the first day of July,2005, by and between **TRANS WORLD CORPORATION**(“**Employer**”) and **RAMI S.RAMADAN** (“**Employee**”).

 

**W I T N E S S E T H**

 

**WHEREAS**, Employer is a corporation dulyorganized and existing under the laws of the State of Nevada, maintains itsprincipal place of business at 545 Fifth Avenue, Suite 940, New York, NewYork 10017, and is engaged in the business of developing, constructing andoperating small to medium-sized casino and hotel properties around the world;and,

 

**WHEREAS**, in furtherance of its business,Employer has need of qualified, experienced executive management; and,

 

**WHEREAS**, Employee is an adult individual whohas acted as the Chief Executive Officer and Chief Financial Officer of theEmployer since July 12, 1999; and,

 

**WHEREAS**, Employee is currently employed byEmployer pursuant to an employment agreement dated as of July 12, 2002(the “**Prior Agreement**”), which will beterminated upon the execution of this Agreement; and,

 

**WHEREAS**, Employer is willing to employEmployee, and Employee is desirous of accepting employment from Employer, underthe terms and pursuant to the conditions set forth herein;

 

**NOW, THEREFORE**, for and in consideration ofthe foregoing recitals, and in consideration of the mutual covenants,agreements, understandings, undertakings, representations, warranties andpromises hereinafter set forth, and intending to be legally bound thereby,Employer and Employee hereby covenant and agree as follows:

 

1.                                       ***DEFINITIONS***.   As used inthis Agreement certain words and terms are defined in the body of thisAgreement. Other words and terms hereinafter defined have the respectivemeanings ascribed to them below, unless a different meaning clearly appearsfrom the context:

 

(a)                                  “**Affiliate**” – means with respect to a specified Person, anyother Person who or which is (i) directly or indirectly controlling,controlled by or under common control with the specified Person, or (ii) anymember, director, officer or manager of the specified Person. For purposes ofthis definition, only, “control,” “controlling” and “controlled” mean the rightto exercise, directly or indirectly, more than fifty percent (50%) of thevoting power of the stockholders, members or owners and, with respect to anyindividual, partnership, trust or other entity or association, the possession,directly or indirectly, of the power to direct or cause the direction of themanagement or policies of the controlled entity.

 

----

 

(b)                                 “**Anniversary**” – means each anniversary date of the EffectiveDate during the Term of this Agreement (as defined in Section 6 hereof).

 

(c)                                  “**Business Day**” – means any day other than a Saturday, Sundayor holiday observed by the Federal government of the United States of America.

 

(d)                                 “**Cause**” – means:

 

(i)                                     thewillful destruction by Employee of the property of Employer or an Affiliate ofEmployer having a material value to Employer or such Affiliate;

 

(ii)                                  fraud,embezzlement, theft, or comparable dishonest activity committed by Employee fromEmployer or an Affiliate of Employer having a material value to Employer or tosuch Affiliate;

 

(iii)                               Employee’sconviction of or entering a plea of guilty or *nolocontendere* to any crime constituting a felony or any misdemeanorinvolving fraud, dishonesty or moral turpitude (excluding acts involving a *de minimis* dollar value and not related to Employer or anAffiliate);

 

(iv)                              Employee’sbreach, neglect, refusal, or failure to materially discharge his duties (otherthan due to physical or mental illness) commensurate with his title andfunction, or Employee’s failure to comply with the lawful directions ofEmployer’s Board of Directors, that is not cured within fifteen (15) days afterEmployee has received written notice thereof from the Board;

 

(v)                                 awillful and knowing material misrepresentation to Employer’s Board ofDirectors;

 

(vi)                              awillful violation of a material policy of Employer, which does or could resultin material harm to Employer or to Employer’s Affiliates or to Employer’sreputation;

 

(vii)                           Employee’smaterial violation of applicable law or regulation relating to the Employee, Employeror the Employer’s Affiliates;

 

(viii)                        Employee’sfailure or inability to become Licensed (as defined in Section 9), or thedenial, suspension for a period of more than ninety (90) calendar days, orrevocation of a License, by any Gaming Authority requiring that Employee belicensed in order for Employer or Employee to operate in that jurisdiction; or

 

(ix)                                Employee’smaterial violation of a statutory or common law duty of loyalty or fiduciaryduty to Employer.

 

2

----

 

(e)                                  “**Change of Control**” – means the change in the ownership ofEmployer, a change in the effective control of Employer or a change in theownership of a substantial portion of the assets of Employer as provided under Section 409Aof the Code, as amended from time to time, and any Internal Revenue Serviceguidance, including Notice 2005-1, and regulations issued in connection with Section 409Aof the Code. For purposes of determining whether a Change of Control hasoccurred, the following Persons and Groups shall not be deemed to be “oneperson” or “more than one person acting as a group” as defined by Section 409Aof the Code: (A) Value Partners, Ltd., a Texas limited partnership (“**Value Partners**”) or any Affiliate thereof, (B) Timothy G.Ewing or any Affiliate thereof, (C) any Person or Group directly orindirectly having Beneficial Ownership of more than eighty percent (80%) of theissued and outstanding voting power of Employer’s voting securities immediatelybefore the transaction in question, (D) any Person or Group of whichEmployer has Beneficial Ownership of more than fifty percent (50%) of thevoting power of the issued and outstanding voting securities immediately beforethe transaction in question, and (E) any Person or Group of which morethan eighty percent (80%) of the voting power of the issued and outstandingvoting securities are owned, directly or indirectly, by Beneficial Owners ofmore than fifty percent (50%) of the issued and outstanding voting power ofEmployer’s voting securities immediately before the transaction in question.The terms “**Person**,” “**Group**,”“**Beneficial Owner**,” and “**Beneficial Ownership**” shall have the meanings used in theSecurities Exchange Act of 1934 and the rules and regulations promulgatedthereunder as amended (the “**Exchange Act**”).

 

(f)                                    “**Complete Disability**” – means the Employee is: (i) unableto engage in any substantial gainful activity by reason of any medicallydeterminable physical or mental impairment which can be expected to result indeath or can be expected to last for a continuous period of not less thantwelve (12) months, or (ii) is, by reason of any medically determinablephysical or mental impairment which can be expected to result in death or canbe expected to last for a continuous period of not less than twelve (12) months,receiving income replacement benefits for a period of not less than three (3) monthsunder an accident and health plan covering employees of the Employer.

 

(g)                                 “**Effective Date**” – means the effective date of this Agreement,as set forth in the first paragraph, above.

 

(h)                                 “**Good Reason**” – means the occurrence, on or after theoccurrence of a Change of Control, of any of the following (except withEmployee’s written consent or resulting from an isolated, insubstantial andinadvertent action not taken in bad faith and which is remedied by Employer orits Affiliate promptly after receipt of notice thereof from Employee):

 

(i)                                     Employeror its successor or an Affiliate reduces Employee’s Base Salary (as defined in Section 8(a) below);

 

(ii)                                  Employeror its successor discontinues its Profit Sharing Bonus Plan (as defined in Section 8(b))in which Employee participates as in effect immediately before the Change ofControl without immediately replacing such bonus plan with a plan that is thesubstantial economic equivalent of such bonus plan, or amends such bonus planso as to

 

3

----

 

materiallyreduce Employee’s potential bonus at any given level of economic performance ofEmployer or its successor entity;

 

(iii)                               Employeror its successor materially reduces the aggregate benefits and perquisites toEmployee from those being provided immediately before the Change of Control;

 

(iv)                              Employeror its successor or any of its Affiliates requires Employee to change thelocation of Employee’s job or office, so that Employee will be based at alocation more than 20 miles from the location of Employee’s job or officeimmediately before the Change of Control;

 

(v)                                 Employeror its successor or any of its Affiliates reduces Employee’s responsibilitiesor title or directs Employee to report to a person of lower rank orresponsibilities than the person to whom Employee reported immediately beforethe Change of Control; or

 

(vi)                              thesuccessor to Employer fails or refuses expressly to assume in writing theobligations of Employer under this Agreement.

 

For purposes of this Agreement, a determination by Employee thatEmployee has “Good Reason” shall be final and binding on Employer or itssuccessor and Employee absent a showing of bad faith on Employee’s part.

 

(i)            “**PriorEmployment**” – means any prior employment Employee has had witheither Employer or any Affiliate of Employer.

 

2.                                       ***PRIOR EMPLOYMENT***.   ThisAgreement supersedes and replaces any and all prior employment agreements,change of control agreements and severance plans or agreements, whether writtenor oral, by and between Employee, on the one hand, and Employer or any ofEmployer’s Affiliates, on the other hand, or under which Employee is a participant.From and after the Effective Date, Employee shall be the employee of Employerunder the terms and pursuant to the conditions set forth in this Agreement.

 

3.                                       ***BASIC EMPLOYMENT AGREEMENT***.   Subjectto the terms and pursuant to the conditions hereinafter set forth, Employerhereby employs Employee during the Term hereinafter specified to serve in amanagerial or executive capacity, under a title and with such duties notinconsistent with those set forth in Section 4 of this Agreement, as thesame may be modified and/or assigned to Employee by Employer from time totime; provided, however, that no change in Employee’s duties shall be permittedif it would result in a material reduction in the level of Employee’s duties asin effect prior to the change or as otherwise consented to in writing byEmployee.

 

4.                                       ***DUTIES OF EMPLOYEE***.   Employeeshall perform such duties assigned to Employee by Employer as aregenerally associated with the duties of **Chief Executive Officer** and **Chief Financial Officer**of Employer, including, (a) the efficient and continuous operation

 

4

----

 

of Employerand Employer’s Affiliates, (b) the preparation of relevant budgets,allocation of relevant funds and preparation of relevant financial statementsand reports, (c) the selection and delegation of duties andresponsibilities of subordinates, and (d) the direction, review andoversight of all programs and projects under Employee’s supervision. Employeeshall comply with all laws, rules and regulations that relate to theEmployer and Employee from time to time during the Term.

 

5.                                       ***ACCEPTANCE OF EMPLOYMENT***.   Employeehereby unconditionally accepts the employment set forth hereunder, under theterms and pursuant to the conditions set forth in this Agreement. Employeehereby covenants and agrees that, during the Term of this Agreement, Employeewill devote the whole of Employee’s normal and customary working time and bestefforts solely to the performance of Employee’s duties under this Agreement andthat, except upon Employer’s prior express written authorization to thateffect, Employee shall not perform any services for any casino, hotel,hotel/casino or other similar gaming or gambling, hospitality or resortoperation not owned by Employer or any of Employer’s Affiliates. The foregoingnotwithstanding, it shall not be a violation of this Agreement for Employee to (a) serveon corporate (upon the prior consent of the Board of Directors, which shall notbe unreasonably withheld), civic or charitable boards or committees, or (b) managepersonal investments, so long as such activities do not interfere with theperformance of Employee’s duties and obligations to Employer under thisAgreement.

 

6.                                       ***TERM****.   *Unlesssooner terminated as provided in this Agreement, the term of this Agreementcommences as of the Effective Date of this Agreement and terminates on December 31,2007 (the “**Term**”), provided, however, unlesseither Employer or Employee notifies the other of its intent not to extend theTerm on or prior to September 30, 2007 or on or prior to each September 30ththereafter (if such dates are Business Days, or if not a Business Day, thensuch notice shall be due on the next succeeding Business Day), then the Termshall be automatically extended for a period of one (1) year to the next December 31st(so, for example, the first extension period would terminate on December 31,2008) and each extension of the Term to be included in the definition of “Term”).

 

7.                                       ***SPECIAL TERMINATION PROVISIONS***.  Notwithstanding the provisions of Section 6of this Agreement, this Agreement, and Employee’s employment, shall terminateupon the occurrence of any of the following events:

 

(a)                                  automaticallyupon the death of Employee, the date of death being the effective date of termination(“Date of Termination”), provided, however, that, on the Company’s pay datewhich is the closest to the date which is within thirty (30) calendar daysafter the Date of Termination, Employer must tender to Employee any accrued butunpaid:  (i) Base Salary, (ii) sickpay and (iii) vacation pay to Employee’s estate;

 

(b)                                 thegiving of written notice from Employer to Employee of the termination of thisAgreement upon the Complete Disability of Employee, the date that the Board ofDirectors of Employer makes a determination of Complete Disability being theeffective Date of Termination, provided, however, that, on the Company’s paydate which is the closest to the date which is within thirty (30) calendar daysafter the Date of Termination, 

 

5

----

 

Employer musttender to Employee any accrued but unpaid: (i) Base Salary, (ii) sick pay, and (iii) vacation pay toEmployee;

 

(c)                                  thegiving of written notice by Employer to Employee of the termination of this Agreementupon the discharge of Employee for Cause, the date set forth in the noticebeing the effective Date of Termination, provided, however, that, on theCompany’s pay date which is the closest to the date which is within thirty (30)calendar days after the Date of Termination, Employer must tender any accruedbut unpaid: (i) Base Salary, (ii) sick pay and (iii) vacationpay to Employee;

 

(d)                                 thegiving of written notice by Employer to Employee of the termination of thisAgreement following a denial, suspension for more than ninety (90) calendardays or revocation of Employee’s License (as defined in Section 9(b) ofthis Agreement) or the failure of Employee to obtain such License as requiredby applicable Gaming Authorities as set forth in Section 9(b), the dateset forth in the notice being the effective Date of Termination, provided,however, that, on the Company’s pay date which is the closest to the date whichis within thirty (30) calendar days after the Date of Termination, Employermust tender to Employee any accrued but unpaid: (i) Base Salary, (ii) sick pay, and (iii) vacation pay toEmployee;

 

(e)                                  thegiving of written notice by Employer to Employee of the termination of thisAgreement without Cause, the date set forth in the notice being the effectiveDate of Termination, provided, however,**that, on theCompany’s pay date which is the closest to the date which is within thirty (30)calendar days after the Date of Termination, Employer must tender to Employeeany accrued but unpaid:  (i) BaseSalary, (ii) sick pay,  (iii) vacationpay, and, (iv) in twenty-four (24) equal monthly installments commencingon the Employee’s pay date which is the closest to the date which is notearlier than six (6) months after the Date of Termination and on each monthlyCompany pay date thereafter, an amount equal to Employee’s monthly Base Salaryas of the date of such notice (i.e., 1/12th of the Employee’s annualBase Salary then being paid to him as of the time such notice is given),provided, however, that the twenty-four (24) months of monthly Base Salarypayable shall be diminished by one (1) day for each day Employee worksafter the Effective Date for a period of one (1) year so that, as of July 2,2006, the number of months of Base Salary to be paid as a result of atermination of Employee’s employment without Cause shall be twelve (12), butshall not be diminished further. So, for example:  (i) if Employee is terminated on December 31,2005 without Cause, he would be entitled to 17.9 months of Base Salary (720 days(or 24 months) – 184 days (days worked from July 1, 2005 to December 31,2005) = 546 days divided by 30.4167 (average number of days in a month); or (ii) ifEmployee is terminated on September 30, 2006 without Cause, he would beentitled to 12 months Base Salary (720 days – 365 days = 365 days divided by 30.4167)(the amount, as adjusted in this Section 7(e), the “Severance Payments”).The parties agree to utilize the assumptions set forth in the above examples tocalculate all such payments. Employer also covenants and agrees to maintain andprovide, at no cost to Employee, for the earlier of: (x) same period of time asBase Salary payments shall continue as calculated above, or (y) the dateEmployee obtains subsequent employment where medical insurance coverage isavailable to him, Employee’s continued participation in all group health and/ormedical insurance in which the Employee participated immediately prior totermination of this Agreement as allowed under Section 409A of the Code (“HealthInsurance”). In the event Employee’s participation in such

 

6

----

 

HealthInsurance is discontinued or the benefits thereunder are materially reduced(other than as a result of a change that affects all senior managementsimilarly), Employer shall arrange to provide, at Employer’s sole expense,Employee with benefits substantially similar to those which Employee wasentitled to receive under such Health Insurance immediately prior to the Dateof Termination;

 

(f)                                    thegiving of written notice by Employee to Employer upon a material breach of thisAgreement by Employer, which material breach remains uncured for a period ofthirty (30) days after the giving of such notice, the date thirty (30) daysafter the date of such notice being the effective Date of Termination, provided,however, that, on the Company’s pay date which is the closest to the date whichis within thirty (30) days after the Date of Termination, Employer must tender toEmployee any accrued but unpaid:  (i) BaseSalary, (ii) sick pay, (iii) vacation pay, and (iv) theSeverance Payments as set forth in Section 7(e) (iv), above toEmployee. Employer shall also provide to Employee the Health Insurance benefitsdescribed in Section 7(e), above, for the period beginning on the Date ofTermination and ending on the earlier of: (x) the date Employee obtainssubsequent employment where medical insurance coverage is available to him, or(y) a period of one (1) year after the Date of Termination; or

 

(g)                                 atEmployee’s sole election in writing as provided in Section 17 of thisAgreement, after both a Change of Control and as a result of Good Reason, whichelection must be made within twenty four (24) months after the Change ofControl, the date of which being the effective Date of Termination, provided,however, that, on the Company’s pay date which is the closest to the date whichis within thirty (30) calendar days after the Date of Termination, Employermust tender to Employee any accrued but unpaid (i) Base Salary, (ii) sickpay, and (iii) vacation pay to Employee. Employer shall also provide toEmployee the Health Insurance benefits described in Section 7(e), above,for the period beginning on the Date of Termination and ending on the earlierof: (x) the date Employee obtains subsequent employment where medical insurancecoverage is available to him, or (y) a period of one (1) year after thedate of termination.

 

(h)                                 thedate which is not less than sixty (60) days after receipt by Employer ofwritten notice from Employee to terminate this Agreement for any or no reason,such date being the effective Date of Termination; provided, however, that, onthe Company’s pay date which is the closest to the date which is within thirty(30) calendar days after the Date of the Termination, Employer must tender toEmployee any accrued but unpaid (i) Base Salary, (ii) sick pay, and (iii) vacationpay.

 

(i)                                     Employeeshall promptly report to Employer the name and address of his new employer(s)after the Date of Termination and whether such employer(s) has medicalinsurance that is available to him. In the event Employee is required to makean election under Sections 601 through 607 of the Employee Retirement IncomeSecurity Act of 1974, as amended (commonly known as COBRA) to qualify for thehealth benefits provided thereunder, the obligations of Employer and itsAffiliates under COBRA shall be conditioned upon Employee’s timely making suchan election. All payments to be made hereunder shall commence on the effective Dateof Termination. All payments made under this Section 7 shall be deemed bythe

 

7

----

 

parties to beliquidated damages and Employer shall have no further obligation or liabilityto Employee thereafter. Employee will be entitled to receive such payments onlyupon the execution and delivery to Employer of a general release and covenantnot to sue satisfactory to the parties.

 

8.                                       ***COMPENSATION TO EMPLOYEE***.   Forand in complete consideration of Employee’s full and faithful performance ofEmployee’s duties under this Agreement, Employer hereby covenants and agrees topay to Employee, and Employee hereby covenants and agrees to accept fromEmployer, the following items of compensation:

 

(a)                                  ***Base Salary***.   Subject to Section 8(h),Employer hereby covenants and agrees to pay to Employee, and Employee herebycovenants and agrees to accept from Employer, a base salary at the rate of noless than Four Hundred Thousand Dollars (USD $400,000.00) per annum during theTerm (the “**Base Salary**”). Employee’s BaseSalary shall be payable in such weekly, bi-weekly or semi-monthly installmentsas shall be convenient to Employer. Employee’s Base Salary shall be exclusiveof and in addition to any other benefits which Employer, in its solediscretion, may make available to Employee, including, but not limited to,those benefits described in Sections 8(b) through (f) of thisAgreement. Employee’s Base Salary shall be subject to merit review by Employer’sBoard of Directors periodically and may be increased in the solediscretion of the independent Compensation Committee of the Board of Directorsand approved by the Board of Directors, but not decreased, as a result of anysuch review.

 

(b)                                 ***Bonus Compensation****.*  Employee also will be eligible to receive abonus pursuant to a new profit sharing bonus plan (the “**ProfitSharing Bonus Plan**”) to be established by October 1, 2006 bythe independent Compensation Committee of the Board of Directors, uponconsultation with the Employee, who will participate in the Profit SharingBonus Plan with other senior executive officers of the Employer. There will beno further “retirement accruals” taken by Employer and all prior accruals willbe used to charge the stock and option grants to senior executive officers aspermitted or required by  United States generallyaccepted accounting principals (“**GAAP**”). TheProfit Sharing Bonus Plan will be based on the Employer’s (fiscal) annual auditedconsolidated net income and return on shareholders’ equity, as adjusted forchanges in capital in accordance with then current GAAP. Awards will be basedon the terms and conditions of the Profit Sharing Bonus Plan, but will be madeat the sole and complete discretion of the Board’s independent CompensationCommittee. The Board of Directors will, subject to applicable law andregulation, by October 1, 2006, also establish a Deferred CompensationPlan to be administered by the Compensation Committee of the Board pursuant towhich a percentage of Employee’s bonus will be deferred, such percentage to befixed by the Board of Directors in the year prior to which the deferral is madeand which shall be at least 15% of the Employee’s bonus (if any) and will be investedin the voting common stock of Employer. Nothing in this Agreement shall limitthe Board’s discretion to adopt, amend or terminate any performance-based bonusplan at any time prior to a Change of Control. All bonuses shall be paid on adate that is not later than two and one half (2.5) months after the end of thecalendar year in which the bonus is earned, or if the bonus plan is amulti-year plan, any bonus must be paid not later than two and one half (2.5) monthsfollowing the end of the bonus plan cycle or December 31 of the year inwhich the cycle ends.

 

8

----

 

(c)                                  ***Employee Benefit Plans***.   (i) Employer hereby covenants and agrees that it shall include Employee, ifotherwise eligible, in any profit sharing plan, executive stock option plan,pension plan, retirement plan, disability and/or life insurance plan, medicaland/or hospitalization plan, and/or any and all other benefit plans currentlyin effect or which may be placed in effect by Employer or any of itsAffiliates for the benefit of Employer’s executives during the Term. Nothing inthis Agreement shall limit (A) Employer’s ability to exercise thediscretion provided to it under any such benefit plan, or (B) Employer’sor its Affiliates’ discretion to adopt, amend or terminate any such benefitplan, at any time prior to a Change of Control.

 

(ii)                                  Employeeagrees that Employer shall have the right during the Term to insure the life ofEmployee by a policy or policies of insurance in such amount or amounts as it may deemnecessary or desirable, and Employer shall be the beneficiary of any suchpolicy or policies and shall pay the premiums or other costs thereof. Employeeagrees, upon request, at any time or times during the Term to sign and deliverany and all documents and to submit to any physical or other reasonableexaminations which may be required in connection with any such policy orpolicies of insurance or modifications thereof.

 

(d)                                 ***Expense Reimbursement***.   Duringthe Term and provided the same are authorized by Employer, Employer shalleither pay directly or reimburse Employee for Employee’s reasonable anddocumented expenses incurred for the benefit of Employer in accordance withEmployer’s general policy regarding expense reimbursement, as the same may beamended, modified or changed from time to time. Such reimbursable expenses shallinclude, but are not limited to, (i) reasonable entertainment andpromotional expenses, (ii) travel expenses, and (iii) dues andexpenses of membership in professional societies. Prior to reimbursement,Employee shall provide Employer with sufficient detailed invoices of suchexpenses as may be required by Employer’s expense reimbursement policy.

 

(e)                                  ***Automobile**Expenses****.   * Employer shall lease for Employee anautomobile of his choice to be used by Employee for Employer’s business andshall pay for certain related costs of its operation, including gas, oil,repairs, maintenance and insurance, for which Employer shall pay no more than $1,800.00per month.

 

(f)                                    ***Option and Stock Grants.***

 

(i)                                     Asof the date of, but subject to, the execution of this Agreement, the Board ofDirectors has granted to Employee, pursuant to the Employer’s 2004 EquityIncentive Plan (the “**EIP**”), sevenyear options to purchase an aggregate of 175,000 shares of the Employer’svoting common stock at the following exercise prices:

 

9

----

 

| **At**                | ** ** | **Price**                         | ** ** |
|-----------------------|------------|-----------------------------------|------------|
|                  |       |                              |       |
| July 1,  2005    |       | $ 2.80 per share   |       |
|                  |       |                              |       |
| January 1,  2006 |       | 2.88 per share                    |       |
|                  |       |                              |       |
| July 1,  2006    |       | 2.97 per share                    |       |
|                  |       |                              |       |
| January 1,  2007 |       | 3.06 per share                    |       |
|                  |       |                              |       |
| July 1,  2007    |       | 3.15 per share                    |       |
|                  |       |                              |       |
| January 1,  2008 |       | 3.25 per share                    |       |
|                  |       |                              |       |
| July 1,  2008    |       | 3.34 per share                    |       |
|                  |       |                              |       |
| January 1,  2009 |       | 3.44 per share                    |       |
|                  |       |                              |       |
| July 1,  2009    |       | 3.55 per share                    |       |
|                  |       |                              |       |
| January 1,  2010 |       | 3.65 per share                    |       |
|                  |       |                              |       |
| July 1,  2010    |       | 3.76 per share                    |       |
|                  |       |                              |       |
| January 1,  2011 |       | 3.88 per share                    |       |
|                  |       |                              |       |
| July 1,  2011    |       | 3.99 per share                    |       |
|                  |       |                              |       |
| January 1,  2012 |       | 4.11 per share                    |       |

 

These options will vest cumulatively as follows, if Employee is, atsuch time, employed hereunder by Employer:

 
| **At**             | ** ** | **Number** | ** ** | **Cumulative  Vested** | ** ** |
|--------------------|------------|------------|------------|------------------------|------------|
| ** **         | ** ** | ** ** | ** ** | ** **             | ** ** |
| July 1,  2005 |       | 35,000     |       | 35,000                 |       |
|               |       |       |       |                   |       |
| July 1,  2006 |       | +35,000    |       | 70,000                 |       |
|               |       |       |       |                   |       |
| July 1,  2007 |       | +35,000    |       | 105,000                |       |
|               |       |       |       |                   |       |
| July 1,  2008 |       | +35,000    |       | 140,000                |       |
|               |       |       |       |                   |       |
| July 1,  2009 |       | +35,000    |       | 175,000                |       |

 

All such options are subject to the terms and conditions of the EIP. Ifthere is any conflict between this Agreement and the EIP relating to suchoptions, the EIP shall govern. All options will expire, if not previously exercised,on June 30, 2012.

 

(ii)                                  Asof the date of, but subject to, the execution of this Agreement, the Board ofDirectors has granted to Employee, pursuant to the EIP, 75,000 shares ofrestricted voting common stock of Employer that vest cumulatively as follows,beginning with the quarter ended September 30, 2005:

 

10

----

 
| **Number** | ** ** | **Cumulative Vested** | ** ** | **When  Vested**                                                                                                                                                                                                                                                                                                                  |
|------------|------------|----------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 25,000     |       | 25,000                     |       | When the  trailing twelve months (“TTM”) earnings per share (excluding extraordinary  and unusual items and calculated in accordance with GAAP) from Employer’s  continuing operations for any two (2) consecutive fiscal quarters (“**TTMEPS**”), is equal to or exceeds $0.45 for the first time. |
|       |       |                       |       |                                                                                                                                                                                                                                                                                                                              |
| 25,000     |       | 50,000                     |       | When TTMEPS  is equal to or exceeds $0.60 for any two (2) consecutive fiscal quarters  ended for the first time.                                                                                                                                                                                                             |
|       |       |                       |       |                                                                                                                                                                                                                                                                                                                              |
| 25,000     |       | 75,000                     |       | When TTMEPS  is equal to or exceeds $0.75 for any two (2) consecutive fiscal quarters  ended for the first time.                                                                                                                                                                                                             |

 

For purposes of this Section 8(f)(ii), the term TTMEPS shall becalculated as the sum of the unaudited earnings per share of Employer for theprior three fiscal quarters as reported pursuant to the Securities Exchange Actof 1934, as amended, plus the unaudited earnings per share for the most recentlycompleted quarter. So, for example, if the trailing twelve months earnings pershare for the quarter ended December 31, 2005 were $(0.03), $0.08 for June 30,2006, $0.12 for September 30, 2006 and $0.13 for December 31, 2006,the “TTMEPS” would be $0.30.

 

And, for example, if TTMEPS is calculated to be $0.30 as of the quarterended December 31, 2006 and $0.45 as of the quarter ended March 31, 2007,Employee shall not be vested in any shares of restricted stock as of March 31,2007. If TTMEPS is calculated to be $0.45 as of the quarter ended March 31,2007 and $0.61 for the quarter ended June 30, 2007, Employee shall be vestedin 25,000 shares of restricted stock as of June 30, 2007.

 

All restricted stock is subject to the terms and conditions of the EIP.If there is any conflict between this Agreement and the EIP relating to suchrestricted stock, the EIP shall govern.

 

(iii)                               Allunvested options and unvested restricted stock granted hereunder shall,automatically and without any further action on the part of any Person,terminate upon the effective date of the termination or expiration of thisAgreement, except that all unvested options and unvested restricted stockgranted hereunder shall, automatically and without any further action on the part ofany Person, vest in Employee upon the closing date of a Change of Control ofEmployer. All such vested options and restricted stock must be surrendered orotherwise converted into cash or securities of the acquiror or exercised asrequired or permitted by the terms and conditions of the Change of Controldocuments.

 

(iv)                              Anyextension of the Term of this Agreement beyond December 31, 2007 shall notresult in the extension of any option or stock grant vesting or exerciseperiods set forth above.

 

11

----

 

(g)                                 ***Vacations and Holidays***. Commencingas of the Effective Date of this Agreement, Employee shall be entitled to (i) annualpaid vacation leave in accordance with Employer’s standard policy, but in noevent more than four (4) weeks each year of the Term, to be taken at suchtimes as selected by Employee and approved by Employer, none of which may becarried over to the year after the year in which Employee is permitted toutilize such time, and (ii) paid holidays (or, at Employer’s option, anequivalent number of paid days off) in accordance with Employer’s standardpolicy.

 

(h)                                 ***Withholdings***. All compensation toEmployee identified in this Section 8 shall be subject to applicablewithholdings for federal, state or local income or other taxes, Social SecurityTax, Medicare Tax, State Unemployment Insurance and the like.

 

9.                                       ***LICENSING REQUIREMENTS***.

 

(a)                                  Employerand Employee hereby covenant and agree that this Agreement may be subjectto the approval of one or more gaming regulatory authorities (the “**Gaming Authorities**”) pursuant to the provisions of theapplicable gaming regulatory statutes and the regulations promulgatedthereunder (the “**Gaming Laws**”). Employer andEmployee hereby covenant and agree to use their best efforts, at Employer’ssole cost and expense, to obtain any and all approvals required by the GamingLaws. In the event that (i) an approval of this Agreement by the GamingAuthorities is required for Employee to carry out his duties andresponsibilities set forth in Section 4 of this Agreement, (ii) Employerand Employee have used their best efforts to obtain such approval, and (iii) thisAgreement is not so approved by the Gaming Authorities, then this Agreementshall be immediately terminable by Employer as set forth in Section 7(d).

 

(b)                                 Employerand Employee hereby covenant and agree that, in order for Employee to dischargethe duties required under this Agreement, Employee may be required toapply for or hold a license, registration, permit or other approval as issuedby the Gaming Authorities pursuant to the terms of the applicable Gaming Lawsand as otherwise required by this Agreement (the “**License**”).In the event Employee fails to apply for and secure, or the Gaming Authoritiesrefuse to issue or renew, or revoke or suspend any required License, thenEmployee, at Employer’s sole cost and expense, shall promptly defend such actionand shall take such reasonable steps as may be required to either removethe objections, secure the Gaming Authorities’ approval, or reinstate theLicense, respectively. If the applicable Gaming Authorities deny, revoke,suspend for more than ninety (90) calendar days or refuse to issue any requiredLicense, then this Agreement may be terminated by Employer for Cause underSection 7(d).

 

(c)                                  Employerand Employee hereby covenant and agree that the provisions of this Section 9shall apply in the event Employee’s duties require that Employee also belicensed by relevant governmental agencies other than the Gaming Authorities.

 

10.                                 ***CONFIDENTIALITY***.   Employeehereby warrants, covenants and agrees that, without the prior express writtenapproval of Employer or unless required by law or court order, during the Termand thereafter, Employee shall hold in the strictest confidence, and shall notdisclose to any Person and shall not use for the benefit of himself or anyother Person, any

 

12

----

 

and all ofEmployer’s confidential data, including but not limited to (a) information,drawings, sketches, plans or other documents concerning Employer’s business ordevelopment plans, customers or suppliers or those of Employer’s Affiliates, (b) Employer’sor its Affiliates’ development, design, construction or sales and marketingmethods or techniques, or (c) Employer’s trade secrets and other “know-how”or information not of a public nature, regardless of how such information cameto the custody of Employee. For purposes of this Agreement, such confidentialinformation shall include, but not be limited to, information, including aformula, pattern, compilation, program, device, method, technique or process,that (i) derives independent economic value, present or potential, fromnot being generally known to, and not being readily ascertainable by propermeans by, other persons who can obtain economic value from its disclosure oruse, and (ii) is the subject of efforts that are reasonable under thecircumstances to maintain its secrecy. Upon the expiration or termination ofthis Agreement, Employee shall return to Employer all Employer property,including but not limited to, all Employer confidential information, andEmployee shall not retain any such information, regardless of the media onwhich it is stored or resides.

 

11.                                 ***RESTRICTIVE COVENANT; NO SOLICITATION***.

 

(a)                                  Employeehereby covenants and agrees that, during the Term, and for a period oftwenty-four (24) months after any termination or expiration of this Agreementwithin the first twelve (12) months after the Effective Date and for a periodof twelve (12) months after any termination or expiration of this Agreementafter the first twelve (12) months after the Effective Date, Employee shall notdirectly or indirectly, either as a principal, agent, employee, employer,consultant, partner, member or manager of a limited liability company,shareholder of a closely held corporation, or shareholder in excess of twopercent (2%) of a publicly traded corporation, corporate officer or director,or in any other individual or representative capacity, engage or otherwiseparticipate in any manner or fashion in any gaming or hotel business that is incompetition in any manner whatsoever with the business activities of Employeror Employer’s Affiliates, in or within a one hundred (100) mile radius aroundany market in which Employer or Employer’s Affiliates have gaming and/or hotel operations.Employee hereby further covenants and agrees that the restrictive covenantcontained in this Section 11 is reasonable as to duration, terms andgeographical area and that the same protects the legitimate interests ofEmployer, imposes no undue hardship on Employee, and is not injurious to thepublic.

 

(b)                                 Employeehereby further covenants and agrees that, for the period described in Section 11(a),Employee, his Affiliates or other employer shall not directly solicit orattempt to solicit for employment, or hire or engage as an independentcontractor or otherwise obtain the services of any management level employee ofEmployer or Employer’s Affiliates on behalf of himself or any other Person.

 

(c)                                  Employeeacknowledges and agrees that, because of the unique and extraordinary nature ofhis services, any breach or threatened breach of the provisions of Sections 10or 11 hereof will cause irreparable injury and incalculable harm to Employerand Employer shall, accordingly, be entitled to injunctive and other equitablerelief for such breach or threatened breach and that resort by Employer to suchinjunctive or other equitable relief shall

 

13

----

 

not be deemedto waive or to limit in any respect any right or remedy which Employer may havewith respect to such breach or threatened breach.

 

12.                                 ***BEST EVIDENCE***.   ThisAgreement shall be executed in original and “Xerox” or photostatic copies andeach copy bearing original signatures in ink shall be deemed an original. ThisAgreement may be executed in counterparts.

 

13.                                 ***SUCCESSION***.   ThisAgreement shall be binding upon and inure to the benefit of Employer andEmployee and their respective successors and assigns.

 

14.                                 ***ASSIGNMENT***.   Neitherparty shall assign this Agreement or delegate his or its duties hereunderwithout the express written prior consent of the other party. Any purportedassignment violation of this Section 14 shall be null and void and of noforce or effect.

 

15.                                 ***AMENDMENT OR MODIFICATION***.   ThisAgreement may not be amended, modified, changed or altered except by awriting signed by both Employer and Employee. Notwithstanding the foregoing, inthe event that the Board of Directors of Employer determines, after a review ofSection 409A of the Code and all applicable Internal Revenue Serviceguidance, that this Agreement should be amended to comply with Section 409Aof the Code, then the Board of Directors of Employer may amend thisAgreement to make any changes required to comply with Section 409A of theCode.

 

16.                                 ***GOVERNING LAW***.   (a) This Agreement shall be governed by and construed in accordance with New Yorklaw, without regard to conflicts of law principles. Jurisdiction and venue forany claim or action arising out of or in any way connected to Sections 10 or 11of this Agreement shall be in the federal or state courts located in theborough of Manhattan, New York City, New York.

 

(b)                                 Exceptwith respect to any proceeding brought under Sections 10 or 11 hereof, anycontroversy, claim, or dispute between the parties, directly or indirectly,concerning this Agreement or the breach hereof, or the subject matter hereof,including questions concerning the scope and applicability of this arbitrationclause, shall be finally settled by arbitration in Washington, D.C. pursuant tothe rules then applying of the American Arbitration Association. Thearbitrators shall consist of one representative selected by Employer, onerepresentative selected by Employee and one representative selected by thefirst two arbitrators. The parties agree to expedite the arbitration proceedingin every way, so that the arbitration proceeding shall be commenced withinthirty (30) days after request therefore is made, and shall continuethereafter, without interruption, and that the decision of the arbitratorsshall be handed down within thirty (30) days after the hearings in thearbitration proceedings are closed. The arbitrators shall have the right andauthority to assess the cost of the arbitration proceedings and to determinehow their decision or determination as to each issue or matter in dispute may beimplemented or enforced. The decision in writing of any two (2) of thearbitrators shall be binding and conclusive on all of the parties to thisAgreement. Should either Employer or Employee fail to appoint an arbitrator asrequired by this Section 16(b) within thirty (30) days afterreceiving written notice from the other party to do so, the arbitratorappointed by the other party shall act for all of the parties and his decisionin writing shall be binding and conclusive on

 

14

----

 

all of theparties to this Agreement. Any decision or award of the arbitrators shall befinal and conclusive on the parties to this Agreement; judgment upon suchdecision or award may be entered in any competent Federal or state courtlocated in the United States of America; and the application may be madeto such court for confirmation of such decision or award for any order ofenforcement and for any other legal remedies that may be necessary toeffectuate such decision or award.

 

17.                                 ***NOTICES***.   Any and allnotices required under this Agreement shall be in writing and shall be eitherhand-delivered or mailed, certified mail, return receipt requested, addressedto:

 
| To Employer:                             |   | Trans World Corporation                        |
|------------------------------------------|--------|------------------------------------------------|
|                                     |   | 545 Fifth Avenue                               |
|                                     |   | Suite 940                                 |
|                                     |   | New York, New York 10017                       |
|                                     |   |                                           |
| With a copy that shall not be notice to: |   | Elias, Matz, Tiernan & Herrick L.L.P. |
|                                     |   | 734 15th Street, N.W.                          |
|                                     |   | 12th Floor                                     |
|                                     |   | Washington, DC 20005                           |
|                                     |   | Attn: Jeffrey A. Koeppel                       |
|                                     |   |                                           |
| To Employee:                             |   | Rami S. Ramadan                                |
|                                     |   | 65 Woodlawn Avenue                             |
|                                     |   | New Rochelle, New York 10804                   |
|                                     |   |                                           |
| With a copy that shall not be notice to: |   | Pietragallo, Bosick & Gordon, L.L.P.  |
|                                     |   | One Oxford Centre                              |
|                                     |   | 38th Floor                                     |
|                                     |   | Pittsburgh, PA 15219                           |
|                                     |   | Attn: George R. Fox                            |
|                                     |   |  Gavin O’Connor                      |

 

All notices hand-delivered shall be deemed delivered as of the dateactually delivered. All notices mailed shall be deemed delivered as of five (5) BusinessDays after the date postmarked. Any changes in any of the addresses listedherein shall be made by notice as provided in this Section 17.

 

18.                                 ***INTERPRETATION***.   Thepreamble recitals to this Agreement are incorporated into and made a part ofthis Agreement; titles of paragraphs are for convenience only and are not to beconsidered a part of this Agreement.

 

19.                                 ***SEVERABILITY***.   In theevent any one or more provisions of this Agreement is declared judicially voidor otherwise unenforceable, the remainder of this Agreement shall survive andsuch provision(s) shall be deemed modified or amended so as to fulfill the intentof the parties hereto.

 

15

----

 

20.                                 ***WAIVER***.   None of theterms of this Agreement, including this Section 20, or any term, right orremedy hereunder shall be deemed waived unless such waiver is in writing andsigned by the party to be charged therewith and in no event by reason of anyfailure to assert or delay in asserting any such term, right or remedy orsimilar term, right or remedy hereunder.

 

21.                                 ***PAROL***.   This Agreementconstitutes the entire agreement between Employer and Employee with respect tothe subject matter hereto and this Agreement supersedes any priorunderstandings, agreements (including the Prior Agreement, which shall beterminated on the Effective Date hereof), undertakings or severance policies orplans by and between Employer or Employer’s Affiliates, on the one hand, andEmployee, on the other hand, with respect to the subject matter hereof orEmployee’s employment with Employer or Employer’s Affiliates.

 

***IN WITNESS WHEREOF AND INTENDING TO BELEGALLY BOUND THEREBY***, the parties hereto haveexecuted and delivered this Agreement on the       day of October, 2005.

 

 
| ** ** | **TRANS  WORLD CORPORATION**  | **EMPLOYEE**           |
|------------|-------------------------------|------------------------|
| ** ** | ** **                    | ** **             |
| ** ** | ** **                    | ** **             |
|       | By:                           | /s/ Julio  Heurtematte |   | By: | /s/ Rami S.  Ramadan |
|       | Julio  Heurtematte, Chairman, |                   | Rami S.  Ramadan |
|       | Compensation Committee of the |                   |   |
|       | Board of Directors            |                   |   |
|            |                               |                        |  |  |  |

 

16

----