Document:

EXHIBIT 10.1

 

EXECUTION COPY

 

EMPLOYMENT AGREEMENT

 

	
1.
  	
EMPLOYER:
  	
MTR Gaming Group, Inc. (the “Company”), having an address of State Route 2 South, Chester, W.V. 26034
  
	
 
  	
 
  	
 
  
	
2.
  	
EMPLOYEE:
  	
JEFFREY J. DAHL (the “Executive”)
  
	
 
  	
 
  	
 
  
	
3.
  	
PERIOD OF EMPLOYMENT:
  	
The Company hereby agrees to employ the Executive, and the Executive hereby agrees to work in the employ of the Company, subject to the terms and conditions of this Agreement, for the period commencing on January 10, 2011 (the “Employment Date”) and ending on the third anniversary of the Employment Date (such period, the “Agreement Term”); provided, however, such Agreement Term shall automatically be extended on the last day thereof for successive one (1) year periods unless either party provides to the other party a written notice of non-renewal (a “Non-Renewal Notice”) at least 90 days prior to the expiration date of the then applicable Agreement Term. The terms of this Agreement during any renewal of the Agreement Term shall be at least as favorable to Executive as those in effect during the Agreement Term that would have expired but for such renewal. The period of Executive’s employment under this Agreement shall be hereinafter referred to as the “Period of Employment.”
  
	
 
  	
 
  	
 
  
	
4.
  	
DUTIES:
  	
Effective as of the Employment Date, Executive shall serve, pursuant to the terms of this Agreement, as the Company’s President and Chief Executive Officer, and shall have such authority and perform such duties as are commensurate with such position and as reasonably assigned by the Company and consistent with such position. In addition, Executive shall hold such other office(s) with the Company (or any affiliates of the Company) to which he may be elected, appointed or assigned from time to time, and shall discharge the duties related to such offices. Executive shall devote all of his business time, energy and skill to the business and affairs of the Company and its affiliates and to the promotion of the Company’s interests. The foregoing shall not preclude Executive from devoting a reasonable amount of time to charitable and volunteer activities including, without limitation, serving on the Boards of Directors of charitable or volunteer organizations, so long as such activities do not materially interfere with the performance of the Executive’s responsibilities hereunder. Executive shall report directly to and shall be subject to the direction of the Board of Directors of the Company (the “Board”).
  

 

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5.
  	
COMPENSATION & BENEFITS:
  	
 
  
	
 
  	
 
  	
 
  
	
(a)
  	
Salary: During the Period of Employment, the Company shall pay Executive an annual base salary of $600,000, or such greater amount as may be approved from time to time by the Compensation Committee of the Board (the “Compensation Committee”) (the “Base Salary”). The Base Salary shall be paid in accordance with the normal payroll practices of the Company.
  
	
 
  	
 
  
	
(b)
  	
Annual Incentive Bonus: During the Period of Employment, Executive shall be eligible to participate in the Company’s annual incentive plan, as may be in effect from time to time, in the sole discretion of the Compensation Committee (“Incentive Plan”). Executive’s target bonus under the Incentive Plan shall be fifty percent (50%) of Base Salary (or such amount as may be determined by the Compensation Committee, in its discretion); actual awards may be earned above or below the targeted amount based on performance objectives, as may be established by the Compensation Committee, in its discretion.
  
	
 
  	
 
  
	
(c)
  	
Long Term Incentive Program: During the Period of Employment, Executive shall be eligible to participate in the Company’s Long Term Incentive Program, as may be in effect from time to time, and subject to the terms and conditions determined by the Compensation Committee, in its sole discretion. As a special, one-time grant, as soon as practicable after the Employment Date, the Company will grant to Executive a nonqualified stock option to purchase a total of 150,000 shares of the Company’s common stock. 1/3 of the option (i.e., 50,000 shares) will be vested and exercisable as of the date of grant, and 2/3 of the option (i.e., 100,000 shares) will become vested and exercisable in equal installments on the first and second anniversaries of the Employment Date, subject to Executive’s continued employment with the Company as of each applicable vesting date. The option will be subject to the terms and conditions of the Company’s 2010 Long Term Incentive Plan, as amended from time to time, and the award agreement issued to Executive in connection with the grant of the option.
  
	
 
  	
 
  
	
(d)
  	
Benefits: During the Period of Employment, Executive shall be eligible to participate in employee benefit plans made available by the Company from time to time to its executives, generally, as the Compensation Committee may periodically approve, in its sole discretion, including, without limitation, health insurance (including vision and dental), long and short term disability and 
  

 

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participation in the Company’s 401k Plan.
  
	
 
  	
 
  
	
(e)
  	
Life Insurance: During the Period of Employment, the Company will maintain, at its sole cost and expense, a term life insurance policy for Executive with a face value equal to Executive’s Base Salary. Executive shall have the right to name the beneficiary of such term life insurance policy. Notwithstanding the foregoing, the Company’s obligation to pay premiums for such term life insurance policy shall be limited to the rate charged for preferred non-smokers.
  
	
 
  	
 
  
	
(f)
  	
Automobile Allowance: During the Period of Employment, Executive shall be entitled to $800.00 per month toward the lease or purchase, insurance and maintenance of an automobile.
  
	
 
  	
 
  
	
(g)
  	
Vacation: During the Period of Employment, Executive shall be entitled to paid vacation, which shall accrue at the rate of four (4) weeks per year in accordance with Company policy, and which shall be taken at a time or times mutually satisfactory to Executive and the Company. Up to two (2) weeks of unused vacation at the end of a year may be carried forward to the next year, and any additional unused vacation days at the end of the year shall be forfeited. Executive shall not in any event utilize more than six (6) weeks of vacation in any year. Vacation accruals and forfeitures for a year shall be determined based on the applicable anniversary of Executive’s date of hire.   Upon Executive’s termination of employment for any reason, a maximum of six (6) weeks of unused vacation will be paid out to Executive, and any additional unused vacation days will be forfeited at such time without any payment.
  
	
 
  	
 
  
	
(h)
  	
Other Expenses: During the Period of Employment, the Company shall (i) reimburse Executive for reasonable travel and other expenses incident to the rendering of services by Executive hereunder, in accordance with Company policies, (ii) pay for expenses associated with Executive’s gaming licensure in each state in which Executive is directed by the Company or any of its affiliates to become licensed, and (iii) provide Executive a Company cellular telephone, or, at the Company’s election, reimburse Executive for the cost of a cellular phone and reasonable monthly service charges maintained by Executive, subject to documentation in accordance with the Company’s policy, as in effect from time to time. All payments and expense reimbursements under this Section 5(h) shall be subject to Executive’s submission of appropriate vouchers, bills and receipts in accordance with Company policies.
  

 

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(i)
  	
Working Facilities: During the Period of Employment, the Company shall provide Executive with an office, secretarial, administrative and other assistance, and such other facilities and services as shall be suitable to his position and appropriate for the performance of his duties.
  
	
 
  	
 
  
	
(j)
  	
Relocation: Within thirty (30) days of the Employment Date, the Company will pay Executive a lump sum cash amount of $75,000 for relocation expenses incurred or to be incurred by Executive (including moving and temporary living expenses) in connection with the relocation of Executive’s residence from Colleyville, Texas to Wexford, Pennsylvania (or within close proximity thereto). In the event Executive’s employment terminates for any reason prior to the first anniversary of the Employment Date, Executive shall repay to the Company 100% of the amount paid to Executive pursuant to this provision. In the event Executive’s employment terminates for any reason after the first anniversary, and prior to the second anniversary, of the Employment Date, Executive shall repay to the Company 50% of the amount paid to Executive pursuant to this provision. Executive shall be entitled to reasonable accommodations at the Company’s hotel in Mountaineer for up to sixty (60) days while Executive is looking for a permanent residence in Wexford, Pennsylvania (or within close proximity thereto).
  
	
 
  	
 
  
	
6.
  	
TERMINATION:
  	
Executive’s employment under this Agreement may be terminated by either party at any time and for any reason, subject to the consequences of termination as provided in this Section 6. Upon Executive’s termination of employment for any reason, the Period of Employment shall terminate and Executive shall be paid the Accrued Rights. For purposes of this Agreement, “Accrued Rights” shall include: (i) Executive’s earned but unpaid Base Salary as of the date of his termination of employment and his accrued and unused vacation pursuant to Section 5(g) hereof, which shall be paid within thirty (30) days of termination; (ii) reimbursement for reasonable business expenses and authorized travel expenses incurred but still outstanding under Section 5(h) hereof, which shall be paid within thirty (30) days of termination; (iii) any bonus under the Incentive Plan earned and approved to be paid by the Compensation Committee with respect to completed fiscal periods that precede Executive’s date of termination but have not been paid through the date of termination, which shall be paid within thirty (30) days of the Compensation Committee’s approval of such payment, but in no event later than March 15 following the calendar year to which the bonus relates, if so approved; and (iv) all payments, rights and benefits due as of the date of termination under the terms of the Company’s employee and fringe benefit 
  
			

 

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plans and programs in which Executive participated during the Period of Employment, the time and manner of payment of which shall be determined according to the terms and conditions of the applicable plans and programs.
  
	
 
  	
 
  
	
(a)
  	
Termination Without Cause: Subject to Section 6(f) hereof, in the event that the Company terminates Executive’s employment hereunder without Cause (as defined below) during the Agreement Term (which, for the avoidance of doubt, shall not include Executive’s death or Disability (as defined below)), or Executive terminates his employment with Good Reason (as defined below) during the Agreement Term, then, in addition to the Accrued Rights, Executive shall be entitled to receive the following severance payments and benefits (the “Severance Payments”):

 

(i) continued payment of the Base Salary for a period of twelve (12) months following the date of Executive’s termination of employment (the “Severance Period”), payable in accordance with the Company’s normal payroll practice; 

 

(ii) a bonus amount under the Incentive Plan, based on achievement of the applicable performance criteria for the Incentive Plan year in which Executive terminates employment, as determined at the Compensation Committee’s discretion, and adjusted on a pro rata basis based on the number of days Executive was actually employed during such year; provided, however, that Executive shall only be entitled to such payment if he is employed with the Company for a period of at least six (6) months during such Incentive Plan year. Such amount shall be paid in a lump sum within thirty (30) days of the Compensation Committee’s approval of such payment, but in no event later than March 15 following the calendar year to which the bonus relates, if so approved; and 

 

(iii) continued medical coverage under the Company’s group health plan for the Severance Period on the same terms and conditions that applied to Executive at the time of his termination of employment (including, without limitation, employee contribution rates, if applicable, and coverage); following the Severance Period, Executive shall be permitted to elect COBRA continuation coverage in accordance with applicable law.

 

The Severance Payments in item (i) above will begin on the 60th day following Executive’s termination of employment, with the first such payment to include any amounts attributable to payroll intervals occurring prior to such date.
  

 

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In addition to the Severance Payments, and subject to Section 6(f) hereof, in the event that the Company terminates Executive’s employment hereunder without Cause, or Executive terminates his employment with Good Reason, all of Executive’s then-outstanding and otherwise unvested restricted stock units shall immediately vest upon such termination and be paid out in accordance with the terms thereof.

 

“Good Reason” shall mean the occurrence of either of the following events without Executive’s consent: (i) a material diminution in Executive’s duties as contemplated herein, (ii) a material reduction in Executive’s Base Salary (iii) prior to a Change in Control, the relocation by the Company of Executive’s place of employment to more than fifty (50) miles from any then-current or future operating facilities of the Company, or (iv) following a Change in Control, the relocation by the Company of Executive’s place of employment to more than fifty (50) miles from the Company’s Corporate office, as it may be located from time to time (which location is currently Wexford, PA); provided, however, that Executive shall give written notice to the Company of the applicable event within ninety (90) days of the occurrence thereof, and the Company shall have a period of thirty (30) business days after receipt of such notice to cure the event, and in the event of cure, (or the commencement of steps reasonably designed to result in prompt cure), Executive’s assertion of Good Reason shall be null and void.
  
	
 
  	
 
  
	
(b)
  	
Termination For Cause; Termination by Executive: In the event that (i) the Company terminates Executive’s employment hereunder for Cause, or (ii) the Executive terminates his employment hereunder without Good Reason, Executive shall not be entitled to receive any payments or benefits under this Agreement other than the Accrued Rights. “Cause” shall mean (i) Executive’s conviction for a felony, crimen falsi or serious misdemeanor, (ii) Executive’s embezzlement or misappropriation of funds or property of the Company or any of its affiliates, (iii) Executive’s consistent refusal to substantially perform, or willful misconduct in the substantial performance of, his duties and obligations hereunder; (iv) Executive’s engaging in activity that the Board determines in its reasonable judgment would result in the suspension or revocation of any video lottery, pari-mutuel, or other gaming license or permit held by the Company or any of its subsidiaries; (v) a determination by any state gaming regulatory agency that Executive is not suitable to hold his position or otherwise to participate in a gaming enterprise in the state in question; or (vi) Executive’s violation of the provisions of Section 12(g) hereof. Notwithstanding the foregoing, in no event shall the
  

 

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Executive’s employment be considered to have been terminated for “Cause” for reasons specified in item (iii) above unless and until the Company provides Executive written notice setting forth in reasonable detail the facts and circumstances claimed to provide a basis of termination for Cause under such item and Executive is given an opportunity to cure any such acts or omissions within 15 days of the Executive’s receipt of such written notice.
  
	
 
  	
 
  
	
(c)
  	
Death or Disability: In the event of Executive’s death or Disability, the Period of Employment shall terminate and Executive shall not be entitled to receive any payments or benefits under this Agreement other than the Accrued Rights. For purposes of this Agreement, “Disability” shall mean the inability of Executive by reason of physical or mental disability to continue the proper performance of his duties hereunder for a period of 180 consecutive days. Notwithstanding the foregoing, in the event of Executive’s death, his estate or beneficiaries, as applicable, shall be entitled to receive the proceeds of the life insurance policy referred to in Section 5(e) hereof.
  
	
 
  	
 
  
	
(d)
  	
Expiration of Period of Employment. Subject to Section 6(f) hereof, in the event that Executive’s employment terminates upon expiration of the Agreement Term (including any renewal thereof) by reason of the Company’s provision of a Non-Renewal Notice, then Executive shall receive the Accrued Rights and the Severance Payments as set forth in Section 6(a) hereof.
  
	
 
  	
 
  
	
(e)
  	
Change in Control: Notwithstanding any other provision of this Agreement to the contrary, and subject to Section 6(f) hereof, if a Change in Control shall occur during the Period of Employment, and, prior to the first anniversary of the consummation date of the Change in Control, either (i) the Company terminates Executive’s employment without Cause or (ii) Executive terminates his employment for Good Reason, then the Executive shall receive the Accrued Rights and the Severance Payments as set forth in Section 6(a) hereof, except that the Severance Period shall be eighteen (18) months. For the avoidance of doubt, in the event of such a Change in Control, the Agreement Term shall continue in effect at least until the first anniversary of the Change in Control.

 

“Change in Control” shall mean the occurrence of either of the following:

 

(i) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (the “Act”) of beneficial ownership (within the meaning of Rule 13d-3 of the Act) of more than 50% of
  

 

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the (A) then outstanding voting stock of the Company; or (B) the combined voting power of the then outstanding securities of the Company entitled to vote;

 

(ii)  an ownership change in which the shareholders of the Company before such ownership change do not retain, directly or indirectly, at least a majority of the beneficial or legal interest in the voting stock of the Company after such transaction, or in which the Company is not the surviving company;

 

(iii) the direct or indirect sale or exchange by the beneficial owners (directly or indirectly) of the Company of all or substantially all of the assets of the Company; or

 

(iv) during any twenty-four (24) month period, individuals who, as of the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the beginning of such period whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director.
  
	
 
  	
 
  
	
(f)
  	
Release; Cessation of Severance Payments: Executive hereby agrees that Executive shall be entitled to the Severance Payments and other benefits provided for in Sections 6(a), 6(d) and 6(e) hereof (other than the Accrued Rights) (i) only if Executive timely executes and delivers to the Company a general release of claims specified by the Company and substantially in the form attached hereto as Exhibit A (which will be provided to Executive within seven (7) days of his termination of employment), and the general release of claims has become effective and irrevocable in accordance with its terms, and (ii) only so long as Executive does not breach any of the restrictive covenants in Section 7 hereof.
  

 

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7.
  	
RESTRICTIVE  COVENANTS:
  	
 
  
	
 
  	
 
  	
 
  
	
(a)
  	
Intellectual Property: All programs, ideas, strategies approaches, practices or inventions created, developed, obtained or conceived of by Executive during the term hereof by reason of his engagement by the Company, shall be owned by and belong exclusively to the Company, provided that they are related in any manner to the Company’s business or that of any of its Affiliates. Executive shall (i) promptly disclose all such programs, ideas, strategies, approaches, practices, inventions or business opportunities to the Company, and (ii) execute and deliver to the Company, without additional compensation, such instruments as the Company may require from time to time to evidence its ownership of any such items.
  
	
 
  	
 
  
	
(b)
  	
Confidentiality: Executive agrees that during the Period of Employment and at all times thereafter, he will not, directly or indirectly, (i) disclose to any other person or entity, either during or after his employment by the Company, or (ii) use, except during his employment by the Company in the business and for the benefit of the Company or any of its affiliates, any confidential information, proprietary information, competitive information and/or trade secrets (collectively, “Confidential Material”) relating to the business practices of the Company and/or its affiliates acquired by Executive during his employment by the Company, provided, however, that such Confidential Material shall not include any information that has become generally available to the public other than as a result of a disclosure by Executive. Nothing herein shall preclude Executive from disclosing Confidential Material to the extent such disclosure is required by law or court or administrative order, in which case Executive shall notify the Company in advance of any such disclosure (or if advance notice is not practicable, as soon as possible following such disclosure). Upon termination of his employment with the Company for any reason, Executive agrees to return to the Company all tangible manifestations of Confidential Materials and all copies thereof.
  
	
 
  	
 
  
	
(c)
  	
Non-Competition: Executive agrees that during the Restricted Period (as defined below), Executive will not become a stockholder, member, director, officer, employee or agent of or consultant to any corporation, partnership or other entity that is engaged in a Competing Business within the Restricted Area (as each term is defined below), or otherwise engage, directly or indirectly, in a Competing Business within the Restricted Area. “Competing Business” shall mean the business of competitive gaming (including, without limitation, casino operation and
  

 

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horseracing). “Restricted Area” shall mean one hundred (100) miles from any location in which the Company or any affiliate does business or in which Executive has knowledge that the Company or any of its affiliates reasonably contemplates doing business.

 

“Restricted Period” shall mean the Period of Employment and (i) if Executive’s employment terminates under the circumstances described in Section 6(a), (d), or (e) hereof, the applicable Severance Period provided for under such sections, or (ii) if Executive’s employment terminates under any other circumstances (including, without limitation, by the Company for Cause, or by Executive without Good Reason), the ninety (90) day period immediately following the Period of Employment.
  
	
 
  	
 
  
	
(d)
  	
Non-Solicitation: Executive agrees that during the Period of Employment and for the one (1) year period immediately following Executive’s termination of employment from the Company for any reason, Executive shall not, directly or indirectly, without the express written consent of the Company, solicit any person who is or shall be in the employ or service of the Company to leave such employ or service for any other employment opportunity.
  
	
 
  	
 
  
	
(e)
  	
Acknowledgement: Executive acknowledges and agrees that (A) the agreements and covenants contained in this Section 7 are (i) reasonable and valid in geographical and temporal scope and in all other respects and (ii) essential to protect the value of the business and assets of the Company, and (B) by his employment with the Company, Executive has obtained and will obtain knowledge, contacts, know-how, training, and experience, and there is a substantial probability that such knowledge, contacts, know-how, training, and experience could be used to the substantial advantage of a competitor of the Company and to the substantial detriment of the Company.
  
	
 
  	
 
  
	
8.
  	
 LIMITATION ON BENEFITS:
  	
Not withstanding anything contained in this Agreement to the contrary, to the extent that any payment, benefit or distribution of any type to or for the benefit of Executive by the Company or any of its affiliates, whether paid or payable, provided or to be provided or distributed or distributable pursuant to the terms of the Agreement or otherwise (including, without limitation, any accelerated vesting of restricted stock units, stock options or other equity-based awards) collectively, the “Total Payments”) would be subject to the excise tax imposed under Section 4999 of the Code, then the Total Payments shall be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause
  
			

 

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the Total Payments to be subject to the excise tax imposed by Section 4999 of the Code. The Company shall reduce or eliminate the Total Payments by first reducing or eliminating any cash severance benefits (with the payments to be made furthest in the future being first reduced), then by reducing or eliminating any accelerated vesting of stock options or similar awards, then by reducing or eliminating any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating any other remaining Total Payments. The preceding provisions of this section shall take precedence over the provisions of any other plan, arrangement or agreement governing Executive’s rights and entitlements to any benefits or compensation.

 

Any determination that the Total Payments to Executive must be reduced or eliminated in accordance with this section, and the assumptions to be utilized in arriving at such determination, shall be made by the Board, in its good faith discretion based upon the advice of such professional advisors it may deem appropriate in the circumstances. It is possible that the Total Payments to Executive which will not have been made by the Company should have been made (“Underpayment”) or that Total Payments to Executive which were made should not have been made (“Overpayment”). If an Underpayment has occurred, the amount of any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive. In the event of an Overpayment, then Executive shall promptly repay to the Company the amount of any such Overpayment together with interest on such amount (at the same rate as is applied to determine the present value of payments under Section 280G of the Code or any successor thereof), from the date the reimbursable payment was received by the Executive to the date the same is repaid to the Company.
  
	
 
  	
 
  	
 
  
	
9.
  	
 TAXES:
  	
The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income, employment, and social insurance taxes. Executive acknowledges and represents that the Company has not provided any tax advice to him in connection with this Agreement and that he has been advised by the Company to seek tax advice from his own tax advisors regarding this agreement and payments that may be made to Executive pursuant to this agreement, including specifically, the application of the provisions of Section 409A of the Code to such payments.
  
	
 
  	
 
  	
 
  
	
10.
  	
APPLICATION OF SECTION 409A OF THE CODE:
  	
To the extent applicable, it is intended that this Agreement comply with, or otherwise be exempt from, the provisions of Section 409A of the Code, so as to prevent inclusion in gross income of any amounts payable or benefits provided hereunder in a taxable year
  

 

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that is prior to the taxable year or years in which such amounts or benefits would otherwise actually be distributed, provided or otherwise made available to Executive.  This Agreement shall be construed, administered, and governed in a manner consistent with this intent.  If and to the extent that any payment or benefit under this Agreement is determined by the Company to constitute “non-qualified deferred compensation” subject to Section 409A of the Code and is payable to Executive by reason of Executive’s termination of employment, then such payment or benefit shall be made or provided to Executive only upon a “separation from service” as defined for purposes of Section 409A of the Code.  In no event will the reimbursements or in-kind benefits to be provided pursuant to this Agreement in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit. Each payment under this Agreement will be considered a “separate payment” and not one of a series of payments for purposes of Section 409A of the Code. Notwithstanding any provision of this Agreement to the contrary, if Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B) of the Code (as determined by the Company), any payment (or portion thereof) otherwise due Executive during the first six months following Executive’s termination of employment that is not exempt from Section 409A of the Code either as separation pay or as a short term deferral under applicable Treasury regulations will be held until and paid on the day following the expiration of such six-month period.  In no event shall the Company be liable for any additional tax, interest or penalties that may be imposed on Executive under Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.  
  
	
 
  	
 
  	
 
  
	
11.
  	
INDEMNIFICATION
  	
The Company shall indemnify and hold harmless Executive from and against any and all losses resulting from or arising out of the performance of Executive’s duties under this Agreement during the Period of Employment, in accordance with the Company’s indemnification policies for executives generally, as in effect from time to time, and provide Executive with coverage, at the Company’s expense, under the Company’s directors and officers insurance policy, as in effect from time to time for executive of the Company generally.  
  

 

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12.  GENERAL: 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
(a)
  	
Parties In Interest:  This Agreement shall be binding upon and inure to the benefit of Executive and his heirs and beneficiaries, and it shall be binding upon and inure to the benefit of the Company and its successors and assigns. 
  
	
 
  	
 
  	
 
  
	
 
  	
(b)
  	
Arbitration; Injunctive Relief:  Any disputes arising under the terms of this Agreement shall be settled by binding arbitration between the parties in the Wexford, Pennsylvania area in a proceeding held under the rules of the American Arbitration Association. The arbitrators shall have no authority to grant either party any consequential, incidental, punitive or special damages.  Notwithstanding the foregoing provisions of this Section 12(b), recognizing the irreparable damage will result to the Company in the event of the breach or threatened breach of any of the covenants in Section 7 hereof, and that the Company’s remedies at law for any such breach or threatened breach will be inadequate, the Company, in addition to such other remedies which may be available to it (including, without, limitation immediate cessation of the Severance Payments), shall be entitled to an injunction, including a mandatory injunction, to be issued by any court of competent jurisdiction ordering compliance with this Agreement or enjoining and restraining Executive from the continuation of such breach.  
  
	
 
  	
 
  	
 
  
	
 
  	
(c)
  	
Entire Agreement (Merger & Integration):  This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Executive by the Company, and contains all of the covenants and agreements between the parties with respect to such employment in any manner whatsoever. Any modification of this Agreement will be effective only if it is in writing signed by the parties. 
  
	
 
  	
 
  	
 
  
	
 
  	
(d)
  	
Governing Law:  Pennsylvania without giving effect to the choice of law or conflicts of law rules and laws of such jurisdiction. 
  
	
 
  	
 
  	
 
  
	
 
  	
(e)
  	
Severability:  In the event that any term or condition contained in this Agreement shall for any reason be held by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or condition of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable term or condition had never been contained herein. 
  

 

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(f)
  	
Counterparts:  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.
  
	
 
  	
 
  	
 
  
	
 
  	
(g)
  	
Code of Ethics: Executive acknowledges receipt of and agrees to comply with (i) MTR Gaming Group, Inc.’s Code of Ethics and Business Conduct, as well as the Conflicts of Interest Policies, copies of which are attached hereto as Exhibit B and incorporated by reference. Additionally, Executive acknowledges that the Company’s securities are publicly traded and agrees that due to his position he may be in possession of material non-public information. Accordingly, Executive warrants that he will neither (i) trade in the Company’s securities nor (ii) “tip” another person or entity, in each case, while Executive is in possession of material non-public information about the Company or its affiliates.
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
Conflict of Interest: During the Period of Employment, Executive shall not engage in a business endeavor, nor make or hold any investment, that may conflict in any way  with the interests of the Company or any of its affiliates, or that otherwise may interfere with Executive’s exercise of judgment in the best interests of the Company, as determined by the Board. Executive shall, immediately upon becoming aware of any facts that may involve such a conflict or interference, disclose to the Board such facts in writing. The parties hereto acknowledge and agree that Executive may passively manage personal investments of his choice, provided that such investment does not involve any such potential conflict or interference. The parties hereto further acknowledge and agree that nothing in this paragraph shall in any way be interpreted to limit or otherwise alter the duty of loyalty or other fiduciary duties Executive owes to the Company and its affiliates by reason of his position with the Company.
  
	
 
  	
 
  	
 
  
	
 
  	
(h)
  	
Notice: Any notice required or permitted to be given pursuant to this Agreement shall be sufficient only if in writing and sent by certified or registered mail, return receipt requested, (i) if the notice is to the Company, to the Chairman of the Board at the Company’s Corporate office, and (ii) if the notice is to Executive, at his address on record with the Company. Notice shall also be sufficient if delivered by hand to the persons specified in the preceding sentence, as applicable.
  
	
 
  	
 
  	
 
  
	
 
  	
(i)
  	
Board Approval: This Agreement shall neither be valid nor binding until such time that it is approved of and/or ratified by the Board.
  

 

14

 

	
 
  	
(j)
  	
Survival: For the avoidance of doubt, neither the termination of the Agreement Term nor the termination of the Period of Employment shall relieve the parties of those obligations that are intended to survive any such termination.
  

 

SIGNATURE PAGE FOLLOWS.

 

15

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this 6th day of January, 2011.

 

	
 
  	
MTR GAMING GROUP, INC.
  
	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
/S/ STEVEN M. BILLICK
  
	
 
  	
Name:
  	
STEVEN M. BILLICK
  
	
 
  	
 
  	
Chairman and Interim Chief Executive Officer
  
	
 
  	
 
  	
 
  
	
 
  	
 
  	
 
  
	
 
  	
Accepted by:
  	
/S/ JEFFREY J. DAHL
  
	
 
  	
 
  	
JEFFREY J. DAHL
  
				

 

16

 

Exhibit A

 

GENERAL RELEASE OF CLAIMS

 

This general release of claims (this “General Release”) is entered into by and between Jeffrey J. Dahl (“Executive”) and MTR Gaming Group, Inc. (the “Company”), as of the date hereof, pursuant to the terms of the Employment Agreement dated as of                  ,            by and between Executive and the Company (the “Employment Agreement”).

 

1.             Release.  In exchange for and in consideration of the severance payments, benefits and other payments and rights of Executive described in the Employment Agreement (the “Severance Payments and Benefits”) and for other good and valuable consideration, Executive, on behalf of himself, his agents, representatives, administrators, receivers, trustees, estates, spouse, heirs, devisees, assignees, transferees, legal representatives and attorneys, past or present (as the case may be), hereby irrevocably and unconditionally releases, discharges, and acquits all of the Released Parties (as defined below) from any and all claims, promises, demands, liabilities, contracts, debts, losses, damages, attorneys’ fees and causes of action of every kind and nature, known and unknown, which Executive may have against them up to the Effective Date (as defined below) of this General Release arising out of or related to Executive’s employment with the Company, or the termination thereof (the “Released Claims”), including but not limited to causes of action, claims or rights arising out of, or which might be considered to arise out of or to be connected in any way with: (i) any treatment of Executive by any of the Released Parties, which shall include, without limitation, any treatment or decisions with respect to hiring, placement, promotion, work hours, discipline, transfer, termination, compensation, performance review or training; (ii) any damages or injury that Executive may have suffered, including without limitation, emotional or physical injury, or compensatory damages; and (iii) employment discrimination, which shall include, without limitation, any individual or class claims of discrimination on the basis of age, disability, sex, race, religion, national origin, citizenship status, marital status, sexual preference, or any other basis whatsoever. This release shall be construed as broadly as possible and, without limiting the foregoing, the Released Claims shall include any and all claims that Executive has alleged or could have alleged arising out of or related to Executive’s employment with the Company, or termination thereof, whether known or unknown, accrued or unaccrued, based on acts, omissions, transactions or occurrences which occurred up to the Effective Date against any Released Party for violation(s) of any of the following, in each case, as amended: the National Labor Relations Act; Title VII of the Civil Rights Act of 1964; the Age Discrimination in Employment Act; the Older Workers Benefit Protection Act of 1990; the Civil Rights Act of 1991; Sections 1981-1988 of Title 42 of the United States Code; the Equal Pay Act; the Employee Retirement Income Security Act of 1974; the Immigration Reform Control Act; the Americans with Disabilities Act of 1990; the Fair Labor Standards Act; the Occupational Safety and Health Act; the Sarbanes-Oxley Act of 2002; any other federal, state, or local law or ordinance; any public policy, whistleblower, contract, tort, or common law; and any demand for costs or litigation expenses, including but not limited to attorneys’ fees.  In no event, however, shall any claims, causes of action, suits, demands or other obligations or liabilities be released pursuant to the foregoing if and to the extent they relate to (a) the Severance Payments and Benefits which Executive is entitled to receive pursuant to the provisions of the Employment Agreement; (b) any rights or benefits which Executive is

 

17

 

entitled to under the Company’s option, restricted stock or other equity incentive plans; (c) any vested benefits which Executive is entitled to under the Company’s pension, savings, retirement, 401K or other plans; or (d) any rights that Executive has or may have to be indemnified by the Company pursuant to any contract, statute, or common law principle including, without limitation, the Company’s Certificate of Incorporation, By-laws and directors and officers liability insurance policies.

 

2.  Released Parties.  The term “Released Parties” or “Released Party” as used herein shall mean and include: (i) the Company; (ii) the Company’s former, current and future parents, subsidiaries, affiliates, shareholders and lenders; (iii) any predecessor or successor of any person listed in clauses (i) an (ii); and (iv) each former, current, and future officer, director, agent, representative, employee, servant, owner, shareholder, partner, joint venturer, attorney, employee benefit plan, employee benefit plan administrator, insurer, administrator, and fiduciary of any of the persons listed in clauses (i) through (iii), and any other person acting by, through, under, or in concert with any of the persons or entities listed herein.

 

3.  OWBPA and ADEA Release.  Pursuant to the Older Workers Benefit Protection Act of 1990, Executive understands and acknowledges that by executing this General Release and releasing all claims against any of the Released Parties, he has waived any and all rights or claims that he has or could have against any Released Party under the Age Discrimination in Employment Act (“ADEA”), which includes any claim that any Released Party discriminated against Executive on account of his age.  Executive also acknowledges the following:

 

(a) The Company, by this General Release, has advised Executive to consult with an attorney prior to executing this General Release;

 

(b) Executive has had the opportunity to consult with his own attorney concerning this General Release;

 

(c) This General Release does not include claims arising from any act, omission, transaction or occurrence which happens on or after the Effective Date of this General Release, provided, however, that any claims arising after the Effective Date of this General Release from the then-present effect of acts or conduct occurring before the Effective Date of this General Release shall be deemed released under this General Release; and

 

(d) The Company has provided Executive the opportunity to review and consider this General Release for 21 days or, if Executive’s termination of employment is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in ADEA), 45 days from the date Executive receives this General Release (the “Review Period”).  At Executive’s option and sole discretion, Executive may waive the Review Period and execute this General Release before the expiration of 21 or 45 days, as applicable.  In electing to waive the Review Period, Executive acknowledges and admits that he was given a reasonable period of time within which to consider this General Release and his waiver is made freely and voluntarily, without duress or any coercion by any other person.

 

18

 

4.  ADEA Revocation Period. Executive may revoke this General Release within a period of seven days after execution of this General Release. Executive agrees that any such revocation is not effective unless it is made in writing and delivered to the attention of the Secretary of the Company by the end of the seventh calendar day. Under any such valid revocation, Executive shall not be entitled to any Severance Payment and Benefits under the Employment Agreement. This General Release becomes effective on the eighth calendar day after it is executed by both parties (the “Effective Date”).

 

5.  Representations by Executive.  Executive confirms that no claim, charge, or complaint against any of the Released Parties, brought by him, exists before any federal, state, or local court or administrative agency.  Executive represents and warrants that he has no knowledge of any improper or illegal actions or omissions by the Company, nor does he know of any basis on which any third party or governmental entity could reasonably assert such a claim, in each case which has not been disclosed to the Board of Directors of the Company. This expressly includes any and all conduct that potentially could give rise to claims under the Sarbanes-Oxley Act of 2002 (Public Law 107-204).

 

6.  No Right to File Claims.  Executive agrees that he will not, unless otherwise prohibited by law, at any time hereafter, voluntarily participate in as a party, or permit to be filed by any other person on his behalf or as a member of any alleged class of persons, any action or proceeding of any kind, against the Company, or its past, present, or future parents, subsidiaries, divisions, affiliates, successors and assigns and any of their past, present or future directors, officers, agents, trustees, administrators, attorneys, employees or assigns (whether acting as agents for the Company or in their individual capacities), with respect to any Released Claims; in addition, Executive agrees to have himself removed from any such action or proceeding with respect to which he has involuntarily become a party.  Executive further agrees that he will not seek or accept any award or settlement from any source or proceeding with respect to any claim or right covered by this General Release and that this General Release shall act as a bar to recovery in any such proceedings.

 

7.  No Admission of Liability.  Executive agrees that neither this General Release nor the furnishing of the consideration for the general release set forth in this General Release shall be deemed or construed at any time for any purpose as an admission by the Released Parties of any liability or unlawful conduct of any kind.  Executive further acknowledges and agrees that the consideration provided for herein is adequate consideration for Executive’s obligations under this General Release.

 

8.  Governing Law.  This General Release shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without regard to its conflict of laws provisions.  If any provision of the General Release other than the general release set forth above, is declared legally or factually invalid or unenforceable by any court of competent jurisdiction and if such provision cannot be modified to be enforceable to any extent or in any  application, then such provision immediately shall become null and void, leaving the remainder of this General Release in full force and affect.

 

19

 

9.  Prior Agreements.  This General Release sets forth the entire agreement between Executive and the Released Parties with respect to the matters set forth herein, and supersedes any and all prior agreements or understandings, whether written or oral, between the parties with respect to the matters set forth herein, except as otherwise specified in this General Release.  This General Release shall not affect the continuing obligations of Executive or the Company under the Employment Agreement. Executive acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in connection with his decision to sign this General Release, except for those set forth in this General Release.

 

10.  Amendment.  This General Release may not be amended except by a written agreement signed by both parties, which specifically refers to this General Release.

 

11.  Counterparts; Execution Signatures.  This General Release may be executed in any number of counterparts by the parties hereto and in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

 

EXECUTIVE ACKNOWLEDGES THAT HE CAREFULLY HAS READ THIS GENERAL RELEASE; THAT HE HAS HAD THE OPPORTUNITY TO THOROUGHLY DISCUSS ITS TERMS WITH COUNSEL OF HIS CHOOSING; THAT HE FULLY UNDERSTANDS ITS TERMS AND ITS FINAL AND BINDING EFFECT; THAT THE ONLY PROMISES MADE TO SIGN THIS GENERAL RELEASE ARE THOSE STATED AND CONTAINED IN THIS GENERAL RELEASE; AND THAT HE IS SIGNING THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY.  EXECUTIVE STATES THAT HE IS IN GOOD HEALTH AND IS FULLY COMPETENT TO MANAGE HIS BUSINESS AFFAIRS AND UNDERSTANDS THAT HE MAY BE WAIVING SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS GENERAL RELEASE.

 

(SIGNATURE PAGE TO FOLLOW)

 

20

 

IN WITNESS WHEREOF,  Executive has executed this General Release as of the         day of                  20    .

 

 

	
 
  	
EXECUTIVE
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
JEFFREY J. DAHL
  
	
 
  	
 

 
  
	
 
  	
ACCEPTED AND ACKNOWLEDGED BY
  
	
 
  	
 

 
  
	
 
  	
MTR GAMING GROUP, INC.
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
 
  
	
 
  	
Name:
  	
 
  
	
 
  	
Title:
  	
 
  

 

21Exhibit 10.1

 

SEPARATION AND RELEASE AGREEMENT

 

This Separation and Release Agreement (this “Agreement”) is made as of this 7th day of January, 2011, by and between Global Aviation Holdings Inc., a Delaware corporation (the “Employer”), and Jeffrey P. Sanborn, a resident of the State of Georgia (the “Executive”).

 

Introduction

 

Executive and Global Aero Logistics Inc., predecessor in interest to the Employer, previously entered into that certain Amended and Restated Employment Agreement effective as of January 1, 2009 (the “Employment Agreement”) and Executive continues to be employed by the Employer pursuant to the terms of the Employment Agreement.  Executive previously indicated a desire to retire voluntarily effective as of a date earlier in the 2010 calendar year but has extended his period of employment through the date hereof at the request of the Employer to work on strategic projects as well as to facilitate a transition of Executive’s duties and responsibilities to his successor.  The parties now mutually desire to enter into this Agreement for the purpose of terminating the Employment Agreement and the employment relationship between the parties on mutually satisfactory terms.

 

NOW, THEREFORE, in consideration of the premises and terms and conditions contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                       Termination of Employment Relationship.  The Employment Agreement and the employment relationship between the parties is hereby terminated effective as of the close of business on January 7, 2011 (the “Termination Date”).  The parties acknowledge that Executive’s termination from employment will result in a “separation from service” as defined in Section 409A of the Internal Revenue Code and further acknowledge that the circumstances of the termination of the employment relationship are not expressly contemplated by the terms of the Employment Agreement.  Executive further agrees that he has resigned as an officer of the Employer as of the Termination Date.

 

2.                                       Effective Date.  This Agreement shall be effective as of the Termination Date.

 

3.                                       Consideration.  In consideration of Executive’s accommodation to the Employer by extending his period of service and in exchange for the release of claims and other covenants provided herein, the Employer will provide Executive with:

 

a.                                       a lump sum cash payment of Two Hundred Seventy-Five Thousand Dollars ($275,000.00) to be paid within thirty (30) days following the Executive’s execution of this Agreement; and

 

b.                                      a lump sum cash payment equal to the amount of the annual bonus, if any, that would otherwise have been paid to the Executive pursuant to the terms of the Employer’s 2010 Short Term Incentive Plan with such amount to be paid at the same time as bonuses are generally paid under such plan but in no event later than December 31, 2011.

 

Whether or not Executive executes this Agreement, the Employer will pay Executive any and all wages for all hours worked up to and through the Termination Date within the appropriate time frame required by applicable law.  If Executive fails or refuses to execute this Agreement, or if

 

 

Executive revokes this Agreement as provided herein, Executive will not be entitled to the consideration set forth in this Section.

 

4.                                       Release.

 

a.                                       In consideration of the amounts being paid to the Executive in Section 3 above, Executive, for himself, his attorneys, heirs, executors, administrators, successors and assigns, fully, finally and forever releases and discharges the Employer, all parent, subsidiary and/or affiliated companies, as well as its and their successors, assigns, officers, owners, directors, agents, representatives, attorneys, and employees (all of whom are referred to throughout this Agreement as the “Employer” or the “Releasees”), of and from all claims, demands, actions, causes of action, suits, damages, losses, and expenses, of any and every nature whatsoever, as a result of actions or omissions occurring through the date Executive signs this Agreement.

 

Specifically included in this waiver and release are, among other things, any and all claims related to any severance pay plan, any and all claims related to Executive’s employment and separation from employment or otherwise, including without limitation:  (1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991; (2) the Americans with Disabilities Act, as amended; (3) 42 U.S.C. § 1981; (4) the Age Discrimination in Employment Act (29 U.S.C. §§ 621-624); (5) 29 U.S.C. § 206(d)(1); (6) Executive Order 11246; (7) Executive Order 11141; (8) Section 503 of the Rehabilitation Act of 1973; (9) Employee Retirement Income Security Act (ERISA); (10) the Occupational Safety and Health Act; (11) the Worker Adjustment and Retraining Notification (WARN) Act; (12) the Family and Medical Leave Act; (13) the Ledbetter Fair Pay Act; and (14) other federal, state and local discrimination laws, including those of the State of Georgia.

 

Executive further acknowledges that Executive is releasing, in addition to all other claims, any and all claims based on any tort, whistle-blower, personal injury, defamation, invasion of privacy or wrongful discharge theory; retaliatory discharge theory; any and all claims based on any oral, written or implied contract or on any contractual theory (including the Employment Agreement); any claims based on a severance pay plan; and all claims based on any other federal, state or local Constitution, regulation, law (statutory or common), or other legal theory, as well as any and all claims for punitive, compensatory, and/or other damages, back pay, front pay, fringe benefits and attorneys’ fees, costs or expenses.

 

b.                                      The release in this Agreement does not apply to (1) base salary accrued (whether or not paid) up to the Termination Date, (2) the Employer’s obligations in Section 9 of this Agreement, (3) subject to applicable law, all benefits and awards which pursuant to the terms of any employee benefit plans were earned on or before the Termination Date including the exercise or settlement, as applicable, of any vested equity incentives previously granted to Executive, and (4) unreimbursed business expenses incurred prior to the Termination Date for which Executive is entitled to reimbursement under the Employer’s policies.  Finally, the above release does not waive claims that Executive could make, if available, for unemployment or workers’ compensation or claims that cannot be released by private agreement.

 

5.                                       Advice of Counsel / Consideration and Revocation Periods.  Executive hereby acknowledges and agrees that this Agreement and the termination of Executive’s employment and all actions taken

 

2

 

in connection therewith are in compliance with the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act and that the releases set forth herein shall be applicable, without limitation, to any claims brought under these Acts.

 

Executive acknowledges that he has been and is hereby advised by the Employer to consult with an attorney in regard to this matter. Executive understands that Executive is responsible for the costs of any such legal services incurred in connection with such consultation.

 

Executive further acknowledges that Executive has been given more than twenty-one (21) days from the time that Executive receives this Agreement to consider whether to sign it.  Executive shall have seven (7) days from the date Executive signs this Agreement to revoke the Agreement.  To revoke, Executive must ensure that written notice is delivered to Mark M. McMillin, General Counsel, Global Aviation Holdings, Inc., 101 World Drive, Peachtree City, Georgia  30269 by the end of the day on the seventh calendar day after Executive signs this Agreement.  If Executive does not revoke this Agreement within seven (7) days of signing, this Agreement will become final and binding on the day following such seven (7) day period.

 

6.                                       Non-Admission.  This Agreement shall in no way be construed as an admission by the Employer that it has acted wrongfully with respect to Executive or any other person or that Executive has any rights whatsoever against the Employer.  The Employer specifically disclaims any liability to or wrongful acts against Executive or any other person on the part of itself, its employees or its agents.

 

7.                                       No Filing of Claims.  Executive represents and warrants that Executive has not filed, nor assigned to others the right to file, nor are there currently pending, any complaints, charges, claims, grievances, or lawsuits against Employer with any administrative, state, federal, or governmental entity or agency or with any court.  Nothing herein is intended to or shall preclude Executive from filing a complaint and/or charge with any appropriate federal, state, or local government agency or cooperating with said agency in its investigation.  Executive, however, shall not be entitled to receive any relief or recovery in connection with any complaint or charge brought against the Employer, without regard as to who brought said complaint or charge.

 

8.                                       Non-Disparagement.

 

a.                                       By the Executive.  Executive promises that Executive will not, from and after the date of execution of this Agreement, directly or indirectly, in any capacity or manner, make, cause, encourage or assist to be made any statements, comments, or remarks, whether oral, in writing, or electronically transmitted, which might reasonably be considered to be derogatory, defamatory or critical of, or negative towards, or to malign, harm, defame, disparage or damage the reputation of any of the Releasees.  Executive agrees not to make any statements about any of the Releasees to anyone (including without limitation the press, any newspaper, magazine, radio station, television station, website, blog, or chat room) without the prior written consent of the Employer.  Nothing contained in this Section is intended to prevent Executive from (1) complying with the requirements and policies of any federal or state agency, (2) cooperating with any investigation or request for information from any state or federal government agency, or (3) testifying truthfully in any legal or administrative proceeding.

 

b.                                      By the Employer.  The Employer promises that the members of its Board of Directors and all executive officers of the Employer (collectively, the “Persons to be Advised”) will not, directly or indirectly, in any capacity or manner, make, cause, encourage or assist to

 

3

 

be made any statements, comments or remarks, whether oral, verbal, in writing or electronically transmitted, which might reasonably be considered to be derogatory, defamatory or critical of, or negative towards, or to malign, harm, defame or damage the reputation and good name of the Executive, nor will they authorize, condone, or encourage any such disparagement from others. The Employer will advise the Persons to be Advised that a non-disparagement agreement is in effect, and will use reasonable efforts to enforce compliance with this agreement. The Employer shall also direct the Persons to be Advised not to make, cause, encourage or assist to be made any statements, comments, or remarks, whether oral, verbal, in writing or electronically transmitted, which might reasonably be considered to be derogatory, defamatory, or critical of, or negative towards, or to malign, harm, defame or damage the reputation and good name of the Executive. Notwithstanding the foregoing agreement, the parties hereto recognize and acknowledge that the Employer will not be liable for unauthorized remarks by individuals employed by or otherwise associated with the Employer, other than the Persons to be Advised and if the Persons to be Advised are required by any applicable law, regulation, statute, subpoena, court order, or other compulsory process to disclose information related to the Executive’s employment, such disclosure of truthful information shall not constitute a breach of this Agreement. Moreover, this Section 8.b. shall not apply to any communications (1) between the Employer and its independent public auditors; (2) necessary to comply fully with all applicable requirements and policies of federal and state laws; (3) necessary to cooperate fully with any investigation or request for information from any state or federal governmental agency, stock exchange, or regulatory organization; (4) necessary in the course of preparing and filing appropriate tax returns or dealing with federal or state taxing authorities; or (5) made in connection with any judicial or administrative proceeding or arbitration with respect to which such communications are relevant.

 

9.                                       Employer Acknowledgment.  The Employer acknowledges that, to the extent permitted by applicable law, the Executive shall continue to be entitled to indemnification by the Employer, and to receive reimbursements from the Employer for related legal expenses incurred, in connection with claims made by third parties that arise or have arisen over actions or inactions respecting the discharge of the Executive’s duties as the Senior Vice President, Corporate Strategy of the Employer.

 

10.                                 Executive Acknowledgments.

 

a.                                       Executive acknowledges and agrees and understands that the consideration described in Section 3 is not required by the Employer’s policies and procedures and that the consideration in Section 3 exceeds any and all pay and benefits to which Employee already may have been entitled by contract or law and constitutes good, valuable and sufficient consideration for Employee’s covenants and agreements contained in this Agreement.

 

b.                                      Except as contemplated by Sections 3 and 4.b. above, Executive acknowledges, understands and agrees that Executive has been paid in full for all hours that Executive has worked for the Employer and that Executive has been paid any and all compensation or bonuses which have been earned by Executive through the date of execution of this Agreement.

 

c.                                       Executive acknowledges and understands that, notwithstanding any provision of the Employment Agreement to the contrary, the covenants under Section 11 of the

 

4

 

Employment Agreement, as modified by Subsection a. of Section 8 of this Agreement, and the remedies provisions of Section 12 of the Employment Agreement shall remain in full force and effect.

 

d.                                      With respect to the indemnification obligations of the Employer set forth in Section 9 above, Executive hereby affirms that he believes that he, at all times as an officer of the Employer, conducted himself in good faith and reasonably believed his conduct was in the best interest of the Employer.  Executive hereby undertakes and agrees to repay to the Employer any and all such amounts, if and to the extent that it is determined that Executive is not entitled to be indemnified by the Employer.  Executive shall make any repayment due to the Employer promptly, and in any event within thirty (30) days, after (1) the disposition, including any appeals, of the proceedings on account of which payments were made and (2) notification of the determination by the Employer that he is not entitled to indemnification; provided, however, that if either the Employer or the Executive files suit seeking a judicial determination of Executive’s rights to indemnification, any obligation Executive may have to repay advancements shall be tolled until such suit is finally adjudicated, including all appeals.

 

e.                                       Executive acknowledges, understands and agrees that Executive has been notified of Executive’s rights under the Family and Medical Leave Act (FMLA) and state leave laws.  Executive further acknowledges, understands and agrees that Executive has not been denied any leave requested under the FMLA or applicable state leave laws and that, to the extent applicable, Executive has been returned to Executive’s job, or an equivalent position, following any FMLA or state leave taken pursuant to the FMLA or state laws.

 

f.                                         Executive acknowledges, understands and agrees that it is Executive’s obligation to make a timely report, in accordance with the Employer’s policy and procedures, of any work related injury or illness.  Executive further acknowledges, understands and agrees that Executive has reported to the Employer’s management personnel any work related injury or illness that occurred up to and including Executive’s last day of employment.

 

g.                                      Executive acknowledges, understands, and agrees that Executive has no knowledge of any actions or inactions by any of the Releasees or by Executive that Executive believes could possibly constitute a basis for a claimed violation of any federal, state, or local law, any common law or any rule promulgated by an administrative body..

 

11.                                 Cooperation.  Executive agrees that he will fully cooperate with the Employer and make himself available to assist the Employer in transitioning any duties or responsibilities to other employees or vendors, if necessary.  Executive further agrees that he will fully cooperate and consult with the Employer, answer questions for the Employer, and provide information as needed by the Employer from time to time on a reasonable basis, including but not limited to cooperation in connection with litigation, audits, investigations, claims, or personnel matters that arise or have arisen over actions or matters that occurred or failed to occur during Executive’s employment with the Employer.  Executive agrees to assist the Employer as a witness or during any audit, investigation, or litigation (including depositions, affidavits and trial) if requested by the Employer.  Executive agrees to meet at reasonable times and places with the Employer’s representatives, agents or attorneys for purposes of preparing for such activities. To the extent practicable and within the control of the Employer, the Employer will use reasonable efforts to schedule the timing of Executive’s participation in any such activities in a reasonable manner to take into account Executive’s then current employment, and will pay the reasonable documented

 

5

 

out-of-pocket expenses that the Employer pre-approves and that Executive incurs for travel required by the Employer with respect to those activities.

 

12.                                 Return of Property.  Executive acknowledges, understands, and agrees that Executive will turn over to Mark M. McMillin, General Counsel, all documents, files, memoranda, records, Employer confidential information, credit cards, records, books, manuals, computer equipment, computer software, pagers, cellular phones, facsimile machines, PDAs and any other equipment or documents, and all other physical or electronic property of similar type that Executive received from the Employer and/or that Executive used in the course of his employment with the Employer and that are the property of the Employer.  Executive agrees that Executive will not delete, destroy or erase any data stored on or associated with such property, including but not limited to data stored on computers, phones, or other electronic devices. Executive further agrees to return to Mr. McMillin, any and all hard copies of any documents which are the subject of a document preservation notice or other legal hold and to notify Mr. McMillin of the location of any electronic documents which are subject to a legal hold.

 

13.                                 Confidentiality of Agreement.  Executive acknowledges, understands and agrees that Executive will not hereafter disclose any information concerning this Agreement to anyone other than Executive’s immediate family, accountants, attorneys and other professional representatives who will be informed of and bound by this confidentiality clause.

 

14.                                 Agreement Binding; Governing Law; Severability.  The Employer and Executive agree that the terms of this Agreement shall be final and binding and that this Agreement shall be interpreted, enforced and governed under the laws of the State of Georgia.  The provisions of this Agreement can be severed, and if any part of this Agreement is found to be unenforceable, the remainder of this Agreement will continue to be valid and effective.

 

15.                                 Entire Agreement.  This Agreement sets forth the entire agreement between the Employer and Executive and fully supersedes any and all prior agreements or understandings, written and/or oral, between the Employer and Executive pertaining to the subject matter of this Agreement.  Notwithstanding the foregoing, this Agreement does not supersede the covenants under Section 11 of the Employment Agreement, as modified by Subsection a. of Section 8 of this Agreement and the remedies provisions of Section 12 of the Employment Agreement, which provisions shall remain in full force and effect, except as the parties may otherwise hereafter mutually agree in writing.

 

16.                                 Executive’s Attorneys Fees. Executive is solely responsible for the payment of any fees incurred as the result of an attorney reviewing this Agreement on behalf of Executive.

 

17.                                 Legally Binding Agreement.  Executive understands and acknowledges that this Agreement contains a full and final release of claims against the Employer; and that Executive has agreed to its terms knowingly, voluntarily, and without intimidation, coercion or pressure.

 

This Agreement includes a release of all known and unknown claims through the date of this Agreement.  Executive should carefully consider all of its provisions before signing it. Executive’s signature below indicates Executive’s understanding and agreement with all of the terms in this Agreement.

 

6

 

IN WITNESS WHEREOF, Executive and the Employer have executed this Agreement effective as of the Effective Date.

 

 

	
 
  	
THE EMPLOYER:
  
	
 
  	
 
  
	
 
  	
GLOBAL AVIATION HOLDINGS INC.
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
By:
  	
/S/ ROBERT R. BINNS
  
	
 
  	
Name:
  	
Robert R. Binns
  
	
 
  	
Title:
  	
Chief Executive Officer
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
EXECUTIVE:
  
	
 
  	
 
  
	
 
  	
 
  
	
 
  	
/S/ JEFFREY P. SANBORN
  
	
 
  	
Jeffrey P. Sanborn
  
	
 
  	
 
  
	
 
  	
JANUARY 7, 2011
  
	
 
  	
Date Signed
  

 

7

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