Document:

Exhibit
10.22

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is
made and entered into this 1st day of July 2002, to be effective as
of the Effective Date (as hereafter defined), by and between HOLLYWOOD CASINO
SHREVEPORT (“Employer”) and TONYA TARRANT (“Employee”).

 

WITNESSETETH:

 

WHEREAS, Employer is a partnership, duly
formed and existing under the laws of the State of Louisiana, and owns the
Hollywood Casino in Shreveport, Louisiana (the “Casino”) and has need for
qualified, experienced personnel;

 

WHEREAS, Employee is an adult individual
currently residing at 9014 Aurora Lane, Shreveport, Louisiana 71115;

 

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

 

1.                                      DEFINITIONS.  As used in this Agreement, the words and
terms hereinafter defined have the respective meanings ascribed to them herein,
unless a different meaning clearly appears from the context:

 

 

(a)          “Cause” means any
of the following: (i) Employee’s failure (for any reason other than as the
result of a Complete Disability) to perform Employee’s duties under this
Agreement with a reasonable degree of diligence, competence and effectiveness;
(ii) Employee’s engagement in any personal misconduct involving dishonesty,
illegality, or moral turpitude which is materially detrimental or injurious to
the business interests, reputation or goodwill of Employer or dishonesty,
disloyalty, or infidelity against Employer or Employer’s Affiliates; (iv)
Employee’s breach of or other failure to perform under any of the material terms
and covenants of this Agreement; (v) Employee’s willful violation of any policy
established by Employer with respect to the operation of Employer’s business
and affairs, or the conduct of Employer’s employees; (vi) Employee’s
insubordination with respect to, or willful failure, in any material respect,
to carry out all reasonable and lawful instructions issued by the Vice
President and General Manager of the Casino; and (vii) Employee’s failure to
maintain in force and in good standing any and all licenses, permits and/or
approvals required of Employee by the relevant governmental authorities for the
discharge of the obligations of Employee under this Agreement.  All determinations of the existence of
“Cause,” including without limitation any determination with respect to
performance, reasonableness, effectiveness, materiality and injury, shall be
made in good faith by the Board of Directors of Employer’s Managing General
Partner and shall be conclusive as to all parties.

 

(b)         “Complete  Disability”
means the inability of Employee, due to illness or accident or other mental or
physical incapacity, to perform his obligations under this Agreement for a
period of one hundred eighty (180) calendar days in the aggregate over a period
of five hundred (500) consecutive calendar days, such “Complete Disability” to
become effective upon the expiration of such one hundred eightieth (180th) day.

 

(c)          “Effective  Date”
means July 1st, 2002.

 

(d)         “Employee” means
Employee as earlier defined in this Agreement.

 

(e)          “Employer” means
Employer as earlier defined in this Agreement.

 

(f)            “Employer’s  Affiliates”
means any parent, subsidiary or affiliated corporation or other legal entity of
Employer.

 

(g)         “Prior  Employment”
means any prior employment Employee has had with either Employer or Employer’s
Affiliates.

 

2.                                      PRIOR
EMPLOYMENT.  Employee
represents and warrants that, as of the

 

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Effective Date, other than this Agreement Employee is neither a party
to nor subject to any agreement governing or restricting his employment or in
any way limiting his ability to perform fully and completely his duties under,
and comply with the terms set forth in, this Agreement.  Employee further represents and warrants
that, in performing his employment duties under this Agreement, he will not
violate any agreement between him and any other employer, or any obligation
imposed upon him by any federal or state statute or common-law provision
relating to the disclosure of trade secrets and/or proprietary
information.  This Agreement supersedes
and replaces any and all prior employment agreements, whether written or oral,
by and between Employee, on the one side, and Employer or Employer’s
Affiliates, on the other side.  From and
after the Effective Date, Employee shall be the employee of Employer solely
under the terms of and pursuant to the conditions set forth in this Agreement.

 

3.                                      BASIC
EMPLOYMENT  AGREEMENT. 
Subject to the terms and conditions hereinafter set forth, Employer
hereby employs Employee during the Term hereinafter specified to serve under a
title and with such duties not inconsistent with those set forth in Paragraph 4
of this Agreement, as the same may be modified and/or assigned to Employee by
Employer from time to time.

 

4.                                      DUTIES
OF  EMPLOYEE.  Employee
shall perform such duties assigned to Employee by Employer as are generally
associated with the duties of Vice President of Finance and Chief Financial
Officer of the Casino, or such similar duties as may be assigned to Employee by
the Vice President and General Manager of the Casino, including but not limited
to (i) selection and delegation of duties and responsibilities of subordinates;
(ii) the direction, review and oversight of all programs under Employee’s
supervision; and (iii) such other and further duties specifically related to
such duties as assigned by Employer to Employee.

 

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5.                                      ACCEPTANCE
OF  EMPLOYMENT. 
Employee hereby unconditionally accepts the employment set forth hereunder,
under the terms and conditions set forth in this Agreement.  Employee hereby covenants and agrees that,
during the Term of this Agreement, Employee will devote the whole of his normal
and customary working time and best efforts solely to the performance of
Employee’s duties under this Agreement.

 

6.                                      TERM.  The term of this Agreement (the “Term”)
shall commence on the Effective Date and, unless sooner terminated as provided
herein, expire on July 1, 2004.

 

7.                                      SPECIAL
TERMINATION  PROVISIONS. 
Notwithstanding the provisions of Paragraph 6 above, this Agreement and
all parties’ rights and obligations hereunder shall terminate upon the
occurrence of any of the following events:

 

(a)          the death of Employee;

 

(b)         the giving of written
notice from Employer to Employee of the termination of this Agreement upon the
Complete Disability of Employee;

 

(c)          the giving of written
notice by Employer to Employee of the termination of this Agreement upon the
discharge of Employee for Cause;

 

(d)         the giving of written notice
by Employer to Employee of the termination of this Agreement without Cause;
provided, however, that such notice must be accompanied by Employer’s written
tender to Employee of Employer’s unconditional commitment to continue to pay to
Employee the compensation set forth in Paragraph 8(a) of this Agreement through
the date upon which this Agreement would have expired on its own terms but for
such termination;

 

(e)          cause beyond the control
of Employer and without its fault or negligence.  Such causes may include, but are not limited to, acts of god or a
public enemy, acts of government in either its sovereign or contractual
capacity, fires, floods, epidemics, quarantine restrictions, strikes, riots,
freight embargoes, power outages or unusually severe weather conditions.

 

8.                                      COMPENSATION
TO  EMPLOYEE.  For and
in complete consideration of Employee’s full and faithful performance of his
duties under this Agreement, Employer hereby

 

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covenants and agrees to pay to Employee, and Employee hereby covenants
and agrees to accept from Employer, the following items of compensation:

 

(a)                                  Base  Salary.  Employer hereby covenants and agrees to pay
to Employee, and Employee hereby covenants and agrees to accept from Employer,
an annual base salary of One Hundred Fifty Thousand and No/100 Dollars
($150,000), which salary may be increased by Employer during the Term, payable
in such equal regular installments as is Employer’s custom and usage.  Such base salary shall be exclusive of and
in addition to any other benefits which Employer, in its sole discretion, may
make available to Employee, including, but not limited to, bonus plans,
retirement plans, company life insurance plans or medical and/or
hospitalization plans.

 

(b)                                 Bonus;  Incentive
Compensation.  Employee shall
receive a bonus on or prior to July 1, 2003 in the amount of Twenty-Five
Thousand and No/100 Dollar ($25,000.00). 
Commencing with the second year of the Term, Employee also shall be
entitled to participate in the incentive compensation plan of the Employer as
and when implemented.  The incentive
compensation will be payable by Employer to Employee in accordance with the
terms of such incentive compensation plan, but in no event shall such incentive
compensation be in an amount less than $25,000.00.

 

(c)                                  Employee  Benefit
Plans.  Employer hereby covenants
and agrees that it shall include Employee, if otherwise eligible, in any
company life insurance plans, medical and/or hospitalization plans, and/or any
and all other benefit plans which may be placed in effect by Employer during
the Term of this Agreement, as such plans may be modified by Employer from time
to time in its sole discretion.  Nothing
in this Agreement shall require Employer to establish any employee benefit plan
or to maintain any such plan in existence.

 

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(d)                                 Expense  Reimbursement.  During the Term of this Agreement, Employer
shall either pay directly or reimburse Employee for Employee’s reasonable expenses
incurred for the benefit of Employer in accordance with Employer’s general
policy regarding reimbursement, as the same may be amended, modified or changed
from time to time, provided that Employee timely submits to Employer
appropriate documentation of such expenses.

 

(e)                                  Licensing  Expenses.  Employer hereby covenants and agrees that
Employer shall pay all licensing fees and expenses incurred by Employee in
securing and maintaining such licenses and permits required of Employee in
order to perform his duties under this Agreement.

 

(f)                                    Vacations  and
Holidays.  Commencing as of the
Effective Date of this Agreement, Employee shall be entitled to (i) annual paid
vacation leave in accordance with Employer’s standard policy therefore, as such
policy may be modified by Employer from time to time in its sole discretion, to
be taken at such times as selected by Employee and approved by Employer, and
(ii) the following paid holidays (or, at Employer’s option, an equivalent
number of paid days off): New Year’s Day, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, Christmas Day and up to three (3) additional floating
holidays which vary from year to year.

 

(g)                                 Payroll  Deductions;
Continued  Employment  Required.  All of the compensation provided to Employee under this Agreement
shall be subject to such payroll deductions as are required by law.  Except to the extent otherwise provided in
Paragraph 7(d) of this Agreement, Employee’s right to continue to receive the compensation
set forth in this Agreement shall be expressly conditioned on Employee’s
remaining employed by Employer under this Agreement.

 

9.                                      LICENSING
REQUIREMENTS.

 

(a)                                  Employer and Employee
hereby covenant and agree that this Agreement may be

 

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subject to the approval of the Louisiana Gaming Control Board and any
other jurisdiction in which Employer and Employer’s Affiliates conducts
business (the “Gaming Authorities”) pursuant to the provisions of the Louisiana
Riverboat Economic Development and Gaming Control Act and any other applicable
law and the regulations promulgated thereunder (collectively, the “Gaming
Acts”).  In the event this Agreement is
required to be approved by the Gaming Authorities and is not so approved by the
Gaming Authorities, this Agreement shall immediately terminate and shall be
null and void and of no further force or effect; provided, however, should this
Agreement not be approved by the Gaming Authorities, Employer and Employee
shall hereby covenant and agree that, with the exception of the provisions of
Paragraph 8 of this Agreement, this Agreement shall be deemed modified and
amended so as to receive the appropriate approval from the Gaming Authorities.

 

(b)                                 Employer and Employee
hereby covenant and agree that, in order for Employee to discharge the duties
required under this Agreement, Employee may be required to hold casino employee
casino licenses (the “Licenses”) as issued by one or more of the Gaming
Authorities pursuant to the terms of the Gaming Acts and as otherwise required
by this Agreement.  In the event that
any of the Gaming Authorities objects to the renewal of the Employee’s License,
or any of the Gaming Authorities refuses to renew Employee’s applicable
License, Employer, at Employer’s sole cost and expense, shall promptly defend
such action and shall take such reasonable steps as may be required to secure
such Gaming Authority’s approval.  The
foregoing notwithstanding, if such Gaming Authority’s refusal to renew
Employee’s License arises as a result of any of the events described in
Paragraph 1(a) of this Agreement, Employer’s obligations under this Paragraph 9
shall not be operative and Employee shall promptly reimburse Employer upon
demand for any expenses incurred by Employer pursuant to this Paragraph 9.

 

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10.                               CONFIDENTIALITY.  Employee hereby warrants, covenants and
agrees that, without the prior express written approval of Employer, Employee
shall hold in the strictest confidence and shall not disclose to any person,
firm, corporation or other entity, any and all of Employer’s confidential
information, including, but not limited to (i) information or other documents
concerning Employer’s business, customers or suppliers; (ii) Employer’s
marketing methods, files and credit and collection techniques and files; or
(iii) Employer’s trade secrets and other “know-how” or information not of a
public nature, regardless of how such information came into the custody of
Employee.  The warranty, covenant and agreement
set forth in this Paragraph 10 shall not expire, shall survive this Agreement
and shall be binding upon Employee without regard to the passage of time or
other events.

 

11.                               RESTRICTIVE
COVENANT.  Employee hereby
covenants and agrees that, during the Term of this Agreement and for so long
thereafter as Employer continues to pay any form of compensation to Employee
(e.g., in accordance with Paragraph 7(d)), Employee shall not directly or
indirectly, either as a principal, agent, employee, employer, consultant,
partner, shareholder of a closely held corporation or shareholder in excess of
five percent (5%) of a publicly traded corporation, corporate officer or
director, or in any other individual or representative capacity, engage or
otherwise participate in any manner or fashion in any business that is in
competition with the principal business activity of Employer or Employer’s
Affiliates in or about the Shreveport/Bossier City market.  Employee hereby further agrees and
acknowledges that the restrictive covenant contained in this Paragraph 11 is
reasonable as to duration, terms and geographical area and that the same
protects the legitimate interests of Employer and Employer’s Affiliates,
imposes no undue hardship on Employee and is not  injurious to the public.

 

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12.                               BEST
EVIDENCE.  This Agreement
shall be executed in original and “Xerox” or photostatic copies and each copy
bearing original signatures in ink shall be deemed an original.

 

13.                               SUCCESSION.  This Agreement shall be binding upon and
inure to the benefit of Employer and Employee and their respective successors
and assigns.

 

14.                               ASSIGNMENT.  Employee shall not assign this Agreement or
delegate his duties hereunder without the express written prior consent of
Employer thereto.  Any purported
assignment by Employee in violation of this Paragraph 14 shall be null and void
and of no force or effect.  Employer
shall have the right to assign this Agreement freely; provided, however, that
in the event of such an assignment by Employer and the assignee subsequently
defaults under the terms of this Agreement, Employer shall remain liable for
compliance with the terms of Paragraph 8 of this Agreement.

 

15.                               AMENDMENT
OR  MODIFICATION.  This
Agreement may not be amended, modified, changed or altered except by a writing
signed by both Employer and Employee.

 

16.                               GOVERNING
LAW.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Louisiana
in effect on the Effective Date of this Agreement.

 

17.                               NOTICES.  Any and all notices required under this
Agreement shall be in writing and shall either hand-delivered; mailed by
certified mail, return receipt requested; or sent via telecopier addressed to:

 

	
  TO EMPLOYER:

  	
  Hollywood Casino Shreveport

  
	
   

  	
  c/o HCSI, Inc.

  
	
   

  	
  Galleria Tower, Suite 2200

  
	
   

  	
  13455 Noel Road, LB 48

  
	
   

  	
  Dallas, Texas 75240

  

 

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  Attention: General Counsel

  
	
   

  	
   

  
	
  TO EMPLOYEE:

  	
  Tonya Tarrant

  
	
   

  	
  9014 Aurora Lane

  
	
   

  	
  Shreveport, LA  71115

  

 

All notices hand-delivered shall be deemed
delivered as of the date actually delivered. 
All notices mailed shall be deemed delivered as of the next business day
following the date of the confirmation of delivery.  Any changes in any of the addresses listed herein shall be made
by notice as provided in this Paragraph 17.

 

18.                               INTERPRETATION.  The preamble recitals to this Agreement are
incorporated into and made a part of this Agreement.  Titles of paragraphs are for convenience only and are not to be
considered a part of this Agreement.

 

19.                               SEVERABILITY.  In the event any one or more provisions of
this Agreement is declared judicially void or otherwise unenforceable, the
remainder of this Agreement shall survive and such provisions shall be deemed
modified and amended so as to fulfill the intent of the parties hereto.

 

20.                               DISPUTE
RESOLUTION.  Except for
equitable actions seeking to enforce any of the provisions of Paragraphs 10 and
11 of this Agreement, as to which the parties expressly agree that jurisdiction
shall lie solely with the 26th Judicial District Court of Bossier Parish,
Louisiana, and agree to submit to the personal jurisdiction of such court, any
and all claims, disputes or controversies between the parties hereto arising
from or otherwise relating to this Agreement or any alleged breach thereof, on
the written demand of either of the parties hereto, shall be submitted to and
be determined solely by final and binding arbitration held in Shreveport,
Louisiana in accordance with the Employment Dispute Resolution Rules of the

 

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American Arbitration Association. 
This Agreement to arbitrate shall be specifically enforceable in any
court of competent jurisdiction, and an arbitrator’s award in connection with
any such dispute may be enforced by any court with jurisdiction thereof.

 

21.                               WAIVER.  None of the terms of this Agreement,
including this Paragraph 21, or any term, right or remedy hereunder shall be
deemed waived unless such waiver is in writing and signed by the party to be
charged therewith and in no event by reason of any failure to assert or delay
in asserting any such term, right or remedy or similar term, right or remedy
hereunder.

 

22.                               PAROL.  This Agreement constitutes the entire
agreement between Employer and Employee with respect to the subject matter
hereto and this Agreement supersedes any prior or contemporaneous
understandings, agreements or undertakings by and between Employer and Employee
with respect to the subject matter hereof.

 

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IN WITNESS WHEREOF AND INTENDING TO BE
LEGALLY BOUND THEREBY, the parties hereto have executed and delivered this
Agreement as of the year and date first above written.

 

 

	
   

  	
  HOLLYWOOD CASINO SHREVEPORT

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  HCS I, Inc., its managing general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Edward T. Pratt III

  	
   

  
	
   

  	
   

  	
   

  	
  Edward T. Pratt III

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer and President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Tonya Tarrant

  	
   

  
	
   

  	
  Tonya Tarrant

  
							

 

12Exhibit 10.23

 

EMPLOYMENT AGREEMENT

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 3.                    COMPENSATION.

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

Section 4.                    LICENSING REQUIREMENTS.

 

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

 

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

 

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

 

Section 5.                    TERMINATION.

 

(a)          NOTICE
OF TERMINATION.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)         TERMINATION
BY THE EXECUTIVE.

 

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

 

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

 

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

 

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

 

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

 

Section 6.                    SEVERANCE.

 

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

 

5

 

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

 

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

 

Section 7.                    CONFIDENTIALITY; NON-COMPETITION.

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

(d)         NON-SOLICITATION
OF EMPLOYEES.

 

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

 

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

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

	
  (a)

  	
  If to the Company:

  
	
   

  	
   

  
	
   

  	
  HCS I, Inc.

  
	
   

  	
  c/o Penn National Gaming, Inc.

  
	
   

  	
  825 Berkshire Blvd., Suite 200

  
	
   

  	
  Wyomissing, PA 19610

  
	
   

  	
  Attn:  Jordan Savitch

  
	
   

  	
  Facsimile:  610-373-4710

  
	
   

  	
   

  
	
  With a copy to:

  
	
   

  	
   

  
	
   

  	
  Rodrigo A. Guerra, Jr.

  
	
   

  	
  Skadden, Arps, Slate, Meagher & Flom LLP

  
	
   

  	
  300 South Grand Avenue, Suite 3400

  
	
   

  	
  Los Angeles, CA 90071

  
	
   

  	
  Facsimile:  213-687-5600

  
	
   

  	
   

  
	
  (b)

  	
  If to the Executive:

  
	
   

  	
   

  
	
   

  	
  John Hull

  
	
   

  	
  6753 East Park Drive

  
	
   

  	
  Fort Worth, Texas 76132

  
	
   

  	
  Facsimile:                             

  

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

	
   

  	
  HCS I, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kevin DeSanctis

  	
   

  
	
   

  	
  By:

  	
  Kevin DeSanctis

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John Hull

  	
   

  
	
   

  	
  John Hull

  
				

 

10

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