Document:

Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of this
26th day of May, 2004 (the “Commencement Date”) by and between Penn
National Gaming, Inc., a Pennsylvania corporation (the “Company”), and Kevin G.
DeSanctis, an individual residing in Pennsylvania (“Executive”).

 

WHEREAS, Executive and the Company are party to a certain Employment
Agreement, dated as of February 15, 2001 (as amended from time to time,
the “Initial Agreement”) which, by agreement among the parties has been
extended pending completion of this Agreement; and

 

WHEREAS, the parties now desire to terminate the Initial Agreement and
to enter into a new agreement reflecting, among other things, certain
additional covenants and consideration exchanged by the parties, all as more
specifically set forth herein.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

 

1.  Employment.  The Company hereby agrees to employ
Executive and Executive hereby accepts such employment, in accordance with the
terms, conditions and provisions hereinafter set forth.

 

1.1.                              Duties
and Responsibilities.  Executive
shall serve as President and Chief Operating Officer of the Company.  Executive shall perform all duties and
accept all responsibilities incident to such position as may be reasonably
assigned to him by the Chief Executive Officer and the Board of Directors of
the Company (the “Board”). Executive’s principal place of employment shall be
in Wyomissing, Pennsylvania.

 

1.2.                              Term.
The term of this Agreement shall begin on the date hereof and shall terminate
at the close of business on the third anniversary of the Commencement Date (the
“Initial Term”), unless earlier terminated in accordance with Section 3
hereof.  This Agreement shall
automatically renew for additional three-year periods (each, a “Renewal Term”
and, together with the Initial Term, the “Employment Term”) unless either party
has delivered written notice of non-renewal at least 60 days prior to the start
of a Renewal Term or unless earlier terminated in accordance with
Section 3 hereof.

 

1.3.                              Extent
of Service.  Executive agrees to use
Executive’s best efforts to carry out Executive’s duties and responsibilities
and, consistent with the other provisions of this Agreement, to devote
substantially all of Executive’s business time, attention and energy
thereto.  The foregoing shall not be
construed as preventing Executive from serving on the board of philanthropic
organizations, or providing oversight with respect to his personal investments,
so long as such service does not materially interfere with Executive’s duties
hereunder.

 

2.  Compensation.  For all services rendered by Executive to
the Company, the Company shall compensate Executive as set forth below.

 

2.1.                              Base
Salary.  The Company shall pay
Executive a base salary (“Base Salary”), commencing on the Commencement Date,
at the annual rate of seven hundred twenty-eight

 

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thousand ($728,000), payable in installments at such times as the
Company customarily pays its other senior executives (“Peer Executives”).  Executive’s performance and Base Salary
shall be reviewed annually.  Any increase
in Base Salary or other compensation shall be made at the discretion of the
compensation committee of the Board (the “Compensation Committee”).

 

2.2.                              Cash
Bonuses.  Executive shall
participate in the Company’s incentive compensation plan for senior management
as such may be adopted, amended and approved, from time to time, by the
Compensation Committee.

 

2.3.                              Equity
Compensation.  The Company may grant
to Executive options or other equity compensation pursuant to, and subject to
the terms and conditions of, the then current equity compensation plan of Penn
National Gaming, Inc.  The Compensation
Committee shall set the amount and terms of such options or other equity
compensation.

 

2.4.                              Other
Benefits.  Executive shall be
entitled to participate in all other employee benefit plans and programs,
including, without limitation, health, vacation, retirement, deferred
compensation or SERP, made available to other Peer Executives, as such plans
and programs may be in effect from time to time and subject to the eligibility
requirements of the each plan.  Nothing
in this Agreement shall prevent the Company from amending or terminating any
retirement, welfare or other employee benefit plans or programs from time to
time, as the Company deems appropriate.

 

2.5.                              Vacation,
Sick Leave and Holidays.  Executive
shall be entitled in each calendar year to four (4) weeks of paid vacation
time.  Each vacation shall be taken by
Executive at such time or times as agreed upon by the Company and Executive,
and any portion of Executive’s allowable vacation time not used during the
calendar year shall be subject to the Company’s payroll policies regarding
carryover vacation.  Executive shall be
entitled to holiday and sick leave in accordance with the Company’s holiday and
other pay for time not worked policies.

 

2.6.                              Reimbursement
of Expenses.  Executive shall be
provided with reimbursement of reasonable expenses related to Executive’s
employment by the Company on a basis no less favorable than that authorized
from time to time for Peer Executives.

 

2.7.                              Automobile.  During the term of this Agreement, the Company
shall provide Executive with an automobile of such make and model consistent
with the Company’s policy for its provision of automobiles to Peer Executives.
The Company shall reimburse Executive for all expenses arising from or related
to the maintenance, repair and daily operation of such automobile in carrying
out Executive’s duties hereunder, including but not limited to, fuel, service
and insurance costs, provided that Executive presents vouchers evidencing such
expenses as required by the Company.

 

2.8.                              Perquisites.  The Company shall maintain life insurance on
the life of Executive in the amount of $5,000,000, to the extent it can be
issued at standard rates, and Executive may name the beneficiary of such
policy.

 

3.  Termination.  Executive’s employment may be terminated
prior to the end of the Employment Term in accordance with, and subject to the
terms and conditions, set forth below.

 

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3.1.                              Termination
by the Company.

 

(a)                                  Without
Cause.  The Company may terminate
Executive at any time without Cause (as such term is defined in
subsection (b) below) upon delivery of written notice to Executive, which
notice shall set forth the effective date of such termination.

 

(b)                                 With
Cause.  The Company may terminate
Executive at any time for Cause effective immediately upon delivery of written
notice to Executive.  As used herein,
the term “Cause” shall mean:

 

(i)                                     Executive
shall have been convicted of a felony or any misdemeanor involving allegations
of fraud, theft, perjury or conspiracy;

 

(ii)                                  Executive
is found disqualified or not suitable to hold a casino or other gaming license
by a governmental gaming authority in any jurisdiction where Executive is
required to be found qualified, suitable or licensed;

 

(iii)                               Executive
materially breaches any material Company policy or any material term hereof,
including, without limitation, Sections 4 through 7 and, in each case, fails to
cure such breach within 15 days after receipt of written notice thereof; or

 

(iv)                              Executive
misappropriates corporate funds as determined in good faith by the Board.

 

3.2.                              Termination
by the Executive.  Executive may
voluntarily terminate employment for any reason effective upon 60 days’ prior
written notice to the Company, unless the Company waives such notice
requirement (in which case the Company shall notify Executive in writing as to
the effective date of termination).  The
Company and Executive, however, recognize and agree that they mutually agreed
upon the term of this Agreement and that Executive is expected to complete
fully the Employment Term.

 

3.3.                              Termination
for Death or Disability.  In the
event of the death or total disability of Executive, this Agreement shall
terminate effective as of the date of Executive’s death or total
disability.  The term “total disability”
shall have the definition set forth in the Company’s Long Term Disability
Insurance Policy in effect at the time of such determination.

 

3.4.                              Payments
Due Upon Termination.

 

(a)                                  Generally.  Upon any termination described in Sections
3.1, 3.2 or 3.3 above, Executive shall be entitled to receive any amounts due
for Base Salary earned or expenses incurred through the effective date of
termination and any benefits accrued or earned on or prior to such date in accordance
with the terms of any applicable benefit plans and programs.

 

(b)                                 Certain
Circumstances.  In the event the
Company terminates Executive’s employment without Cause or due to a total
disability or in the event that the Company elects not to renew this Agreement,
and subject to Executive executing the release attached hereto as Exhibit A,
Executive shall be entitled to receive the following in lieu of any other
severance:

 

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(i)                                     Executive
shall receive a payment equal to Executive’s monthly Base Salary at the highest
rate in effect for Executive during the 24-month period immediately preceding
the effective date of termination and Executive’s monthly bonus value
(determined by dividing the highest amount of annual cash bonus compensation
paid to Executive in respect of either the first or second full calendar year
immediately preceding the effective date of termination by twelve) for a period
equal to the greater of (1) the number of months remaining in the Employment
Term or (2) 24 months (the “Severance Period”).

 

(ii)                                  Executive
shall continue to receive the health benefits coverage in effect on the
effective date of termination (or as the same may be changed from time to time
for Peer Executives) for Executive and, if any, Executive’s spouse and
dependents for the Severance Period.  At
the option of the Company, the Company may elect to pay Executive cash in lieu
of such coverage in an amount equal to Executive’s after-tax cost of obtaining
generally comparable coverage for such period.

 

(iii)                               Executive
shall continue to serve as a non-officer employee of the Company during the
Severance Period and, as such, all options granted to Executive shall continue
vesting for such period.

 

(c)                                  Payments.   Cash Payments due under this
Section 3.4 shall be made as follows: 75% shall be made within 15 days of
the effective date of termination and the balance shall be made in accordance
with the payroll practices in effect on the date of termination, unless, at the
Company’s sole option, the Company elects to make all such payments in a single
lump sum.  Except as otherwise provided
in this Section 3.4, Section 8 or Section 9, no other payments
or benefits shall be due under this Agreement to Executive.

 

3.5.                              Notice
of Termination.  Any termination of
Executive’s employment shall be communicated by a written notice of termination
delivered within the time period specified in this Section 3.  The notice of termination shall (i) indicate
the specific termination provision in this Agreement relied upon, (ii) briefly
summarize the facts and circumstances deemed to provide a basis for a
termination of employment and the applicable provision hereof, and (iii)
specify the termination date in accordance with the requirements of this
Agreement.

 

4.  No Conflicts
of Interest.  Executive agrees that
throughout the period of Executive’s employment hereunder or otherwise,
Executive will not perform any activities or services, or accept other
employment that would materially interfere with or present a conflict of
interest concerning Executive’s employment with the Company.  Executive agrees and acknowledges that
Executive’s employment by the Company is conditioned upon Executive adhering to
and complying with the business practices and requirements of ethical conduct
set forth in writing from time to time by the Company in its employee manual or
similar publication.  Executive
represents and warrants that no other contract, agreement or understanding to
which Executive is a party or may be subject will be violated by the execution
of this Agreement by Executive.

 

5.  Confidentiality.  Executive recognizes and acknowledges that
Executive will have access to certain confidential information of the Company
and that such information constitutes valuable, special and unique property of
the Company (including, but not limited to, information

 

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such as business strategies, identity of acquisition or growth targets,
marketing plans, customer lists, and other business related information for the
Company’s customers).  Executive agrees
that Executive will not, for any reason or purpose whatsoever, during or after
the term of employment, disclose any of such confidential information to any
party, and that Executive will keep inviolate and secret all confidential
information or knowledge which Executive has access to by virtue of Executive’s
employment with the Company, except as otherwise may be necessary in the
ordinary course of performing Executive’s duties with the Company.

 

6.  Non-Competition.

 

(a)                                  As
used herein, the term “Restriction Period” shall mean a period equal to the
greater of (i) the remainder of the Employment Term in effect on the effective
date of termination and (ii) the Severance Period, if applicable; provided,
however, that, if on or before the Trigger Date, Executive has been terminated
for one of the reasons contemplated by Section 3.4(b), Executive may elect
to terminate the Restriction Period at any time following the first anniversary
of the effective date of termination by delivering written notice to the
Company that Executive has made such election and that, in consideration
therefore, is waiving the right to receive any continued payments under
Section 3.4(b).

 

(b)                                 During
Executive’s employment by the Company and for the duration of the Restriction
Period thereafter, Executive shall not, except with the prior written consent
of the Company, directly or indirectly, own, manage, operate, join, control,
finance or participate in the ownership, management, operation, control or
financing of, or be connected as an officer, director, employee, partner,
principal, agent, representative, consultant or otherwise with, or use or
permit Executive’s name to be used in connection with, any business or
enterprise which owns or operates a gaming or pari-mutuel facility located
within 150 miles of any gaming or pari-mutuel facility owned or operated by the
Company or any of its affiliates.

 

(c)                                  The
foregoing restrictions shall not be construed to prohibit Executive’s ownership
of less than 5% of any class of securities of any corporation which is engaged
in any of the foregoing businesses and has a class of securities registered
pursuant to the Securities Exchange Act of 1934, provided that such ownership
represents a passive investment and that neither Executive nor any group of
persons including Executive in any way, either directly or indirectly, manages
or exercises control of any such corporation, guarantees any of its financial
obligations, otherwise takes any part in its business, other than exercising
Executive’s rights as a shareholder, or seeks to do any of the foregoing.

 

(d)                                 Executive acknowledges that the covenants
contained in Sections 5 through 7 hereof are reasonable and necessary to
protect the legitimate interests  of  the Company and its affiliates and,
in particular, that the duration and geographic scope of such covenants are reasonable given the nature of
this Agreement and the position that Executive  will hold within the Company.  Executive further agrees to disclose the
existence and terms of such covenants to any employer that Executive works for
during the Restriction Period.

 

7.  Non-Solicitation.  During Executive’s employment by the Company
and for a period equal to the greater of the Restriction Period or one year
after the effective date of termination, Executive will not, except with the
prior written consent of the Company, (i) directly or

 

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indirectly, solicit or hire, or encourage the solicitation or hiring
of, any person who is, or was within a six month period prior to such
solicitation or hiring, an executive or management employee of the Company or
any of its affiliates for any position as an employee, independent contractor,
consultant or otherwise or (ii) divert or attempt to divert any existing
business of the Company or any of its affiliates.

 

8.  Change of
Control.

 

8.1.                              Consideration

 

(a)                                  Change
of Control.  In the event of a
Change of Control (as defined below), Executive shall be entitled to receive a
cash payment in an amount equal to the product of three times the sum of (i)
the highest annual rate of Base Salary in effect for Executive during the
24-month period immediately preceding the effective date of the Change in
Control (the “Trigger Date”) and (ii) the highest amount of annual cash bonus
compensation paid to Executive in respect of either the first or second full
calendar year immediately preceding the Trigger Date.

 

(b)                                 Restrictive
Provisions.  As consideration for
the foregoing payments, Executive agrees not to challenge the enforceability of
any of the restrictions contained in Sections 5, 6 or 7 of this Agreement upon
or after the occurrence of a Change of Control. Executive and Company acknowledge
that, as additional consideration for the change of control payments, Executive
has also agreed to limit Executive’s ability to opt out of the Restriction
Period in Section 6(a) to periods prior to the Trigger Date.

 

8.2.                              Payment
Terms.  This change of control
payment shall be made in two lump sum payments as follows: (i) 75% to Executive
on the Trigger Date; and (ii) 25% into a mutually acceptable escrow account on
the Trigger Date, payable to Executive on the 90th day following the
Trigger Date.  Notwithstanding any of
the foregoing to the contrary, the payment contemplated by clause (ii) shall be
paid immediately upon the occurrence of any of the following: (a) Executive’s
employment is terminated by the Company; or (b) Executive terminates employment
for Good Reason (as defined below).

 

8.3.                              Certain
Other Terms.  In the event payments
are being made to Executive under this Section 8, no payments shall be due
under Section 3.4(b)(i) of this Agreement with respect to any termination
of Executive’s employment following a Change of Control.  At the option of the Company, the Company
may require Executive to execute the release attached hereto as Exhibit A;
provided, however, that this requirement shall not in any way alter the timing
of the payments to be made under Section 8.2.  The provisions of this Section 8 shall continue to apply to
Executive if, during the 24-month period immediately preceding the Trigger
Date, the Company terminates Executive’s employment without Cause or due to a
total disability or the Company elects not to renew this Agreement; provided,
however, that, in such event, any payments due under Section 8 shall be
reduced by any prior payments made under Section 3.4(b)(i).

 

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8.4.                              Defined
Terms.

 

(a)                                  Change
of Control.  The occurrence of one
or more of the following events:  (i)
any sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the Company;
(ii) the election of two (2) or more persons to the Board who do not constitute
Continuing Directors; or (iii) the ownership or acquisition by any Person or
Group of the power, directly or indirectly, to vote or direct the voting of
securities having more than forty percent (40%) of the ordinary voting power
for the election of directors of the Company.

 

(b)                                 Good
Reason.  The occurrence of any of
the following events that the Company fails to cure within 10 days after
receiving written notice thereof from Executive: (i) assignment to Executive of
any duties inconsistent in any material respect with Executive’s position
(including status, offices, titles and reporting requirements), authority,
duties or responsibilities or inconsistent with Executive’s legal or fiduciary
obligations; (ii) any reduction in Executive’s compensation or substantial
reduction in Executive’s benefits taken as a whole; (iii) any travel
requirements materially greater than Executive’s travel requirements prior to
the Change of Control; or (iv) breach of any material term of this Agreement by
the Company.

 

(c)                                  Continuing
Directors.  Any person who, as of
the date of determination, either (i) was a member of the Board as of the date
of this Agreement or (ii) was nominated for election or elected to the Board
with the affirmative vote of a majority of directors comprising the Board or,
if applicable, the Nominating Committee of the Board, who were Continuing
Directors immediately prior to such nomination or election.

 

(d)                                 Group.  Any group of related Persons for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended.

 

(e)                                  Person.  Any individual, partnership, joint venture,
trust, corporation, limited liability entity, unincorporated organization or
other entity (including a governmental entity).

 

9.  Certain Tax
Matters.

 

9.1.                              Generally.  In the event Executive becomes entitled to
receive the payments (the “Severance Payments”) provided under Section 3
or Section 8 hereof or under any other plan or arrangement providing for
payments under circumstances similar to those contemplated by such sections,
and if any of the Severance Payments will be subject to the tax (the “Excise
Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”), the Company shall pay to Executive at the time specified
for such payments, an additional amount (the “Gross-Up Payment”) such that the
net amount retained by Executive shall be equal to the amount of the Severance
Payments after deducting normal and ordinary taxes but not deducting
(a) the Excise Tax and (b) any federal, state and local income tax
and Excise Tax payable on the payment provided for by this Section 9.

 

9.2.                              Illustration.  For example, if the Severance Payments are
$1,000,000 and if Executive is subject to the Excise Tax, then the Gross-Up
Payment will be such that Executive will retain an amount of $1,000,000 less
only any normal and ordinary taxes on such amount.

 

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The Excise Tax and federal, state and local taxes and any Excise Tax on
the payment provided by this Section 9 will not be deemed normal and
ordinary taxes.

 

9.3.                              Certain
Terms.  For purposes of determining
whether any of the Severance Payments will be subject to the Excise Tax and the
amount of such Excise Tax, the following will apply:

 

(a)                                  Any
other payments or benefits received or to be received by Executive in
connection with a Change in Control of the Company or Executive’s termination
of employment (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company shall be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of the Code, and all
“excess parachute payments” within the meaning of Section 280G(b)(1) shall
be treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Company’s Compensation Committee and acceptable to Executive,
such other payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the base amount
within the meaning of Section 280G(b)(3) of the Code, or are otherwise not
subject to the Excise Tax;

 

(b)                                 The
amount of the Severance Payments which shall be treated as subject to the
Excise Tax shall be equal to the lesser of (y) the total amount of the
Severance Payments or (z) the amount of excess parachute payments within
the meaning of Section 280G(b)(1) (after applying clause (a), above);
and

 

(c)                                  The
value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company’s independent auditors in accordance with proposed,
temporary or final regulations under Sections 280G(d)(3) and (4) of the
Code or, in the absence of such regulations, in accordance with the principles
of Section 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, Executive shall be deemed to
pay Federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of Executive on the Trigger Date, net of the maximum
reduction in Federal income taxes which could be obtained from deduction of
such state and local taxes. In the event that the amount of Excise Tax
attributable to Severance Payments is subsequently determined to be less than
the amount taken into account hereunder at the time of determination then,
subject to applicable law, appropriate adjustments will be made with respect to
the payments hereunder.

 

9.4.                              Fees
and Expenses.  The Company shall reimburse
Executive for all reasonable legal fees and expenses incurred by Executive in
connection with any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Code or any regulations pertaining
thereto to any payment or benefit provided hereunder.

 

10.  Document
Surrender.  Upon the termination of
Executive’s employment for any reason, Executive shall immediately surrender
and deliver to the Company all documents, correspondence and any other
information, of any type whatsoever, from the Company or any of

 

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its agents, servants, employees, suppliers, and existing or potential
customers, that came into Executive’s possession by any means whatsoever,
during the course of employment.

 

11.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of conflicts)
of the Commonwealth of Pennsylvania.

 

12.  Jurisdiction.  The parties hereby irrevocably consent to the
jurisdiction of the courts of the Commonwealth of Pennsylvania for all purposes
in connection with any action or proceeding which arises out of or relates to
this Agreement and agree that any action instituted under this Agreement shall
be commenced, prosecuted and continued only in the state or federal courts
having jurisdiction for matters arising in Wyomissing, Pennsylvania, which
shall be the exclusive and only proper forum for adjudicating such a claim.

 

13.  Notices.  All notices and other communications
required or permitted under this Agreement or necessary or convenient in
connection herewith shall be in writing and shall be deemed to have been given
when hand delivered, delivered by guaranteed next-day delivery or sent by
facsimile (with confirmation of transmission) or shall be deemed given on the
third business day when mailed by registered or certified mail, as follows
(provided that notice of change of address shall be deemed given only when
received):

 

If to the Company, to:

 

Penn National Gaming, Inc.

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610

Fax: (610) 376-2842

Attention: Chairman

 

If to Executive, to:

 

Kevin G. DeSanctis

c/o Penn National Gaming, Inc.

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610

Fax: (610) 376-2842

 

or to such other names or addresses as the Company or Executive, as the
case may be, shall designate by notice to each other person entitled to receive
notices in the manner specified in this Section.

 

14.  Contents of
Agreement; Amendment and Assignment.

 

14.1.                        This
Agreement sets forth the entire understanding between the parties hereto with
respect to the subject matter hereof and supersedes all prior or
contemporaneous agreements or understandings with respect to thereto, including
without limitation, the Initial Agreement which is hereby terminated.  This Agreement cannot be changed, modified,
extended, waived or

 

9

 

terminated except upon a written instrument signed by the party against
which it is to be enforced.

 

14.2.                        Executive may not assign any of his
rights or obligations under this Agreement. 
The Company may assign its rights and obligations under
this Agreement to any successor to
all or substantially all of its assets or business by means of liquidation,
dissolution, merger, consolidation,
transfer
of assets or
otherwise.

 

15.  Severability.  If any provision of this Agreement or
application thereof to anyone or under any circumstances is adjudicated to be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect any other provision or application of this
Agreement which can be given effect without the invalid or unenforceable
provision or application and shall not invalidate or render unenforceable such
provision or application in any other jurisdiction.  If any provision is held void, invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances.  In addition, if any court determines
that any part of Sections 5, 6 or 7 hereof is unenforceable because of its
duration, geographical scope or otherwise, such court will have the power to
modify such provision and, in its modified form, such provision will then be
enforceable.

 

16.  Remedies.

 

16.1.                        No remedy
conferred upon a party by this Agreement is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and shall be
in addition to any other remedy given under this Agreement or now or hereafter
existing at law or in equity.

 

16.2.                        No delay
or omission by a party in exercising any right, remedy or power under this
Agreement or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by such party
from time to time and as often as may be deemed expedient or necessary by such
party in its sole discretion.

 

16.3.                        Executive
acknowledges that money damages would not be a sufficient remedy for any breach
of this Agreement by Executive and that the Company shall be entitled to
specific performance and injunctive relief as remedies for any such breach, in
addition to all other remedies available at law or equity to the Company.

 

17.  Construction. 
This Agreement is the result of thoughtful negotiations and reflects an
arms’ length bargain between two sophisticated parties, each represented by
counsel.  The parties agree that, if
this Agreement requires interpretation, neither party should be considered “the
drafter” nor be entitled to any presumption that ambiguities are to be resolved
in his or her favor.

 

18.  Beneficiaries/References.  Executive shall be entitled, to the extent
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive’s death by giving the Company written notice
thereof.  In the event of Executive’s
death or a judicial determination of Executive’s incompetence, reference in
this Agreement to Executive shall be deemed, where appropriate, to refer to
Executive’s beneficiary, estate or other legal representative.

 

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19.  Withholding.  All payments under this Agreement shall be
made subject to applicable tax withholding, and the Company shall withhold from
any payments under this Agreement all federal, state and local taxes, as the
Company is required to withhold pursuant to any law or governmental rule or
regulation.  Except as specifically
provided otherwise in this Agreement, Executive shall bear all expense of, and
be solely responsible for, all federal, state and local taxes due with respect
to any payment received under this Agreement.

 

20.  Regulatory
Compliance.  The terms and
provisions hereof shall be conditioned on and subject to compliance with all
laws, rules, and regulations of all jurisdictions, or agencies, boards or
commissions thereof, having regulatory jurisdiction over the employment or
activities of Executive hereunder.

 

IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first above written.

 

 

	
   

  	
  PENN NATIONAL GAMING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter M. Carlino

  
	
   

  	
  Name:

  	
  Peter M. Carlino

  
	
   

  	
  Title:

  	
  Chairman and
  Chief Executive

  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Kevin
  DeSanctis

  
	
   

  	
   

  	
  Kevin G.
  DeSanctis

  	
   

  
					

 

11Exhibit 10.3

 

AGREEMENT

 

For good and
valuable consideration, the LIVE RACING
AGREEMENT (the “Agreement”) effective March 23, 1999 through January
1, 2004 by and among PENN NATIONAL TURF CLUB,
INC., MOUNTAINVIEW THOROUGHBRED RACING ASSOCIATION, the PENNSLYVANIA HORSEMEN’S BENEVOLENT AND PROTECTIVE
ASSOCIATION, INC. (“Horsemen”), and all of its terms and conditions
are hereby extended by the mutual consent of all parties through 11:59 p.m. on
8/31/04.  In the interim, the parties
further agree to discuss in good faith the structure, quantity and repayment
terms for a proposed advance of purse money to the Horsemen, as well as all
other items pertaining to a new Live Racing Agreement.

 

To indicate
their acceptance of this extension of the Agreement, the duly authorized agents
of the parties have executed below.

 

 

	
  PENNSYLVANIA NATIONAL TURF CLUB, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Richard
  T. Schnaars

  	
   

  
	
  Name:

  	
  Richard T.
  Schnaars

  	
   

  
	
  Title:

  	
  Vice
  Pres./Gen. Mgr.

  	
   

  
	
  Dated:

  	
  7/30/04

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MOUNTAINVIEW THOROUGHBRED RACING ASSOCIATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Richard
  T. Schnaars

  	
   

  
	
  Name:

  	
  Richard T.
  Schnaars

  	
   

  
	
  Title:

  	
  Vice
  Pres./Gen. Mgr.

  	
   

  
	
  Dated:

  	
  7/30/04

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PENNSYLVANIA HORSEMEN’S BENEVOLENT AND PROTECTIVE ASSOCIATION, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John J.
  Wanes

  	
   

  
	
  Name:

  	
  John J.
  Wanes

  	
   

  
	
  Title:

  	
  President

  	
   

  
	
  Dated:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]