XML 28 R13.htm IDEA: XBRL DOCUMENT v3.7.0.1
Commitments and Contingencies
12 Months Ended
Dec. 31, 2016
Commitments and Contingencies  
Commitments and Contingencies

NOTE 6 - Commitments and Contingencies

Lease Obligations - The Company is obligated under several operating leases, excluding leased slot machines. Rent expense under these operating and financial leases, which include: (i) the ground lease at Hotel Freizeit Auefeld; (ii) the Company’s corporate office lease in New York City, the lease of which was renewed for another five years, through March 31, 2020, and (iii) the employee housing leases, which can be terminated anytime with a six-month prior notice, was approximately $175 and $164 for the years ended December 31, 2016 and 2015, respectively. Future aggregate minimum annual rental payments under all of these leases for the lesser of five years or until their expiration dates are as follows:

 

 

 

 

 

Twelve Months Ending December 31,

    

 

 

 

2017

 

$

175

 

2018

 

$

127

 

2019

 

$

129

 

2020

 

$

53

 

2021

 

$

27

 

The Company is also obligated under a number of five-year, slot equipment operating leases, the projected costs of which are not included in the table above due to fluctuating inventory, expiring over staggered years, which provide for a monthly fixed rental fee per slot machine, and an annual option for replacement with different/newer machines during the term of the lease.  For the years ended December 31, 2016 and 2015, the Company’s slot lease expense was $2,436 and $2,321, respectively.  All slot leases can be terminated at any time, subject to an early-termination penalty equal to three-month lease payments for each leased slot machine.

Employment Agreements - The Company’s employment agreement with its Chief Executive Officer (“CEO”), Mr. Rami S. Ramadan, absent the intervention of either party by September 30th of each year, renewed automatically for another calendar year, ending, as of February 28, 2017, on December 31, 2017.  In addition to a perpetually renewable employment term of one year absent the intervention of either party, the agreement provides for annual compensation, plus participation in the Company’s benefits programs and equity incentive plans.  Annual compensation of $450 will be paid in 2017, pursuant to the evergreen renewal terms of said employment agreement, excluding any bonus awards that were earned in 2016 but payable in 2017 or may be or have been granted in 2017 at the discretion of TWC’s Board of Directors (the “Board”).

On November 11, 2014, the Board of Director’s Compensation Committee approved an amendment (the “Amendment”) to the Amended and Restated Employment Agreement dated November 18, 2008 for Mr. Ramadan. The Amendment provides that if, within 120 days prior to, or twenty-four months after a Change of Control (as defined in the Employment Agreement), (i) Mr. Ramadan is terminated by the Company other than for cause (and not due to his death or disability), or (ii) he provides the Company with written notice of his Voluntary Termination for Good Reason (as defined in the Employment Agreement), or (iii) he is in the employ of the Company on the closing date of a Change in Control of the Company, then the Company will pay to him:  (A) an amount equal to two times his Base Salary (as defined in the Employment Agreement) as of the date of termination; and, (B) any accrued but unpaid (1) base salary; (2) sick pay; (3) vacation pay; and (4) health insurance benefits as described in the Employment Agreement for the period ending on the earlier of: (x) the date Mr. Ramadan obtains subsequent employment where medical insurance coverage is available to him, or (y) two years after the date of termination or Change in Control, as applicable. If the above benefits are paid to him as a result of (iii) above, they cannot be paid to him again as a result of either (i) or (ii), above, for the same Change in Control event. The Amendment also includes a description of what actions TWC and Mr. Ramadan will take in the event that the aggregate payment or benefits to be paid to him as described above are deemed by the Internal Revenue Service to be “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (“Internal Revenue Code”).

The Company has a 3-year evergreen employment agreement, dated June 1, 2005, with its Managing Director of Operations and Development, Mr. Paul Benkley. Unless communicated to Mr. Benkley within 60 days prior to the expiration of his employment agreement, which currently expires on December 31, 2019, it will renew automatically for another three-year term.  In the event of termination without cause, excluding disability and retirement, he will be entitled to one year of severance at the annual salary in effect at the time of termination.  In the event of non-renewal of this employment contract, he will receive severance equal to three months’ salary based on the salary in effect on the date of expiration of the contract. 

Change of control agreements - On October 3, 2014, the Company entered into severance agreements with four KMEs that provide for the lump sum payment of one year’s salary and up to one year’s health insurance coverage in the event of a change of control of the Company, or if the employee voluntarily leaves the Company for any reason (other than death or disability) within one year after such a change of control event.

Taxing Jurisdiction - The Czech Republic and Germany currently has a number of laws related to various taxes imposed by governmental authorities, including gaming tax (for the Czech casinos), VAT, and payroll (social) taxes and corporate income tax. Tax declarations, together with other legal compliance areas (for example, customs and currency control matters) are subject to review and investigation by a number of Czech and German governmental authorities, which are enabled by law to impose fines, penalties and interest charges, and, ultimately, create tax risks for the Company in these countries in which it operates.  Management believes that it has adequately provided for its tax liabilities.

Legal Matters - The Company may be, from time to time, a party to various legal proceedings and administrative actions, all arising from the ordinary course of business.  The Company was not, as of the date of this report, involved in any material legal proceeding nor was it involved in any material litigation during the year ended December 31, 2016 and through the date of this filing.