Exhibit 10.31


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT (this “Agreement”)
is effective as of this 26th day of June, 2008, by and between the Seneca
Gaming Corporation (“Parent”), a
governmental instrumentality of the Seneca Nation of Indians of New York (the “Nation”) and Robert Chamberlain (“Executive”).


 


WHEREAS, Parent desires that Executive serve as the
Senior Vice President of Design and Construction of 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 Parent and a governmental instrumentality of the
Nation (collectively, the “Subsidiaries”
and together with Parent, “Employer”); and


 


WHEREAS, Executive desires to serve as Senior Vice
President of Design and Construction of Employer in accordance with the terms
and conditions of this Agreement.


 


IT IS HEREBY AGREED AS FOLLOWS:


 


1.                                       Employment.
Employer hereby employs Executive as its Senior Vice President of Design and
Construction.  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.


 


2.                                       Term.  The term of this Agreement shall commence as
of June 26, 2008 (the “Commencement Date”)
and terminate on June 25, 2011 (the “Termination
Date”), unless renewed by a subsequent written agreement of the
parties.  The parties agree that they
shall enter into good faith discussions regarding renewal/non-renewal of this
Agreement no later than twelve (12) months prior to the Termination Date.  In the event such discussions are ongoing as
of the Termination Date, this Agreement shall renew on a month-to-month basis,
provided, that, under all circumstances, the other party shall be entitled to
no less than one hundred eighty (180) days notice prior to the effectiveness of
the other party’s non-renewal, if applicable.


 


3.                                       Compensation.


 


(a)                                  Executive shall be paid an
annual base salary (“Base Compensation”)
of Five Hundred Fifty Thousand Dollars ($550,000.00) for Employer’s fiscal year
ending September 30, 2008.  Employer
shall review said salary on an annual basis (prior to or in connection with the
close of its fiscal year) at which time Employer shall determine in its sole
discretion whether or not said salary shall be increased and the timing
thereof.  Said salary shall be payable in
periodic payments in accordance with Employer’s regular payroll practices.


 


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


 





















 


(c)                                  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.


 


(d)                                 Should
Executive become unable to perform the duties required under this Agreement as
a result of temporary, documented medical disability, he shall be eligible to
continue to receive his Base Compensation for a period of up to one hundred and
eighty (180) days.


 


4.                                       Licensing Issues.  Executive represents and warrants to Employer
that he shall maintain in good standing such licenses as may be required
pursuant to the Nation-State Gaming Compact between the Nation and the State of
New York (the “Compact”) and/or the Nation’s or Employer’s gaming ordinances as
in effect on the date hereof, as may be necessary to enable him to engage in
his employment hereunder.


 


5.                                       Termination.


 


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


 


(i)                                     upon revocation
or disapproval of such licenses for Executive as are required pursuant to the
Compact and/or by the Nation’s or Employer’s gaming ordinances, provided, that,
in the event Executive appeals the grounds for such revocation, disapproval or
suspension, Employer shall suspend Executive without compensation during the
pendency of such appeal, with reinstatement of Executive and reimbursement of
such compensation by Employer in the event such appeal is successful.  The foregoing shall not act as a limitation
on the rights and/or obligations of the parties otherwise included in this
Agreement;


 


(ii)                                  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 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, or the failure to perform any material term or condition of this
Agreement after written notice thereof from Company and a reasonable
opportunity to cure such failure (as determined by Company and specified in the
notice of breach); or


 


(iii)                               Executive shall
die or Employer shall for any reason within Employer’s or the Nation’s control
permanently cease to conduct casino gaming on Nation Territory.  For purposes of this 


 


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Agreement,
“Nation Territory” shall include current or future Nation territory where
Employer conducts or will conduct its gaming operations as of the date
Executive’s employment is terminated.


 


(b)                                 If Executive’s
employment should be terminated under Section 5(a) above (or any
subsection) then Employer shall at that time pay Executive (or his estate, as
applicable) Base Compensation earned through the date Executive is terminated,
whereupon Employer shall have no further liability or obligation to Executive
under this Agreement or otherwise.


 


(c)                                  If Executive’s
employment should be terminated by Parent for any reason other than those
specified in Section 5(a) above (it being understood that a purported
termination for Cause which is contested by Executive and finally determined
not to have been proper shall be treated as a termination under this Section 5(c)),
then 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 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 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 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 Employer shall have paid him for
such period.


 


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


 


(e)                                  Executive
acknowledges and agrees that the payments set forth in this section 5
constitute liquidated damages for termination of his employment during the
employment term 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 


 


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and as a material condition thereof, Executive shall sign and agree to be bound
by a general release of claims against Employer related to Executive’s
employment (and termination of employment) with Employer in substantially the
form as attached hereto as Exhibit A as may be modified by 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.


 


6.                                       Restrictive
Covenants.


 


(a)                                  Executive
acknowledges that:  (i) as a result
of Executive’s employment  with Employer,
he will obtain secret, proprietary and confidential information concerning the
business of 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
Employer), accounts, financial data, know-how, computer software and related
documentation, trade secrets, processes, policies and/or personnel, and other
information relating to Employer (“Confidential Information”);
(ii) the Confidential Information has been developed and created by
Employer at substantial expense and the Confidential Information constitutes
valuable proprietary assets and Employer will suffer substantial damage and
irreparable harm which will be difficult to compute if, during the Restricted
Period, Executive should enter a Competitive Business (as defined herein) in
violation of the provisions of this Agreement; (iii) Employer will suffer
substantial damage which will be difficult to compute if, during the Restricted
Period, Executive should solicit or interfere with Employer’s employees or
patrons, or should divulge Confidential Information relating to the business of
Employer; (iv) the provisions of this Section 6 are reasonable and
necessary for the protection of the business of Employer; (v) 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 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 Employer, with regard to the
operational, financial, business or other affairs and activities of Employer,
their officers, directors or employees and the entities with which they have
business relationships, except (i) as may be necessary to the 


 


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performance of Executive’s duties with Employer, (ii) with 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 and, in such event, Executive shall
cooperate with Employer in attempting to keep such information confidential.


 


(c)                                  During
Executive’s employment with Employer and for eighteen (18) months after his
termination of employment for any reason (the “Restricted
Period”), Executive, without the prior written permission of 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
Employer’s ability to operate its business depends upon its ability to attract
and retain skilled people and that 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 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 Employer.


 


(e)                                  By executing
this Agreement, Employee acknowledges that Executive understands that 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 Employer any of its
current or potential patrons or any such persons or entities that were patrons
of Employer within the one year period immediately prior to Executive’s
termination of employment.  Executive
further agrees that, during the Restricted Period, Executive shall not,
directly or indirectly, endeavor to entice away from Employer any of its
current or potential vendors or any such persons or entities that were vendors
of Employer within the one year period immediately prior to Employee’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 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 


 


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criticize Executive either in a professional or personal manner, except
as may be necessary to defend 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, 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 Employer are of a special, unique and extraordinary
character and that any such breach or threatened breach will cause irreparable
injury to Employer and that money damages will not provide an adequate remedy
to Employer.  Such right and remedy shall
be in addition to, and not in lieu of, any other rights and remedies available
to Employer at law 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 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 hereunder; (ii) such activities do not compete or conflict with the
business of Employer or create a personal conflict of interest to Executive and
(iii) such venture or investment does not transact any business with
Employer without prior disclosure to, and approval by, the Board.


 


(b)                                 Executive
represents to 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 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 


 


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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.


 


(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 Parent:


 


345 Third Street


Niagara Falls, New York (Seneca Nation Territory)
14303


Attn:  General
Counsel


 


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.


 


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(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, the Original Employment Agreement and any other
prior agreement of the parties hereto in respect of the subject matter
contained herein is hereby terminated and cancelled.


 


(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)                                  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, 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)                                 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, 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 Parent does not hereby waive the defense of sovereign immunity with
respect to any action by third parties.


 


(c)                                  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 Parent.


 


(d)                                 Notwithstanding anything in this Agreement to the contrary,
this waiver is to be interpreted in a manner consistent with Parent’s ability
to enter into this Agreement, including, without limitation, this paragraph 8,
as provided in the 


 


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Charter of Parent, as it may be amended
from time to time.  Accordingly, the
Nation shall not be liable for the debts or obligations of Parent, and 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 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.


 


 


	
  EXECUTED, as of the date first written above.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SENECA GAMING CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
  Name: E. Brian Hansberry

  	
   

  
	
  Title: President and CEO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  EXECUTIVE

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name: Robert Chamberlain

  	
   

  
			



 


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