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EXHIBIT 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), effective July 1, 1998, by and
between LEISURE TIME CASINOS & RESORTS, INC., a Colorado corporation (the
"Company"), and XXXXXX X. XXXXX (the "Employee"). The Company hereby employs the
Employee and the Employee hereby accepts employment on the terms and conditions
hereinafter set forth.
1. TERM. Subject to the provisions for termination as provided in
Sections 4 and 5 of this Agreement, the term of this Agreement shall commence on
July 1, 1998, and shall terminate on June 30, 2001. Subject to the provisions
for termination as provided in Sections 4 and 5 of this Agreement, this
Agreement shall be renewed automatically after June 30, 2001, for succeeding one
year periods on the same terms and conditions as contained in this Agreement,
unless the Company or Employee shall, at least 180 days prior to the expiration
of any such renewal date, give written notice of nonrenewal of this Agreement.
2. NATURE OF EMPLOYMENT. The Company hereby employs the Employee as
the Vice President and Secretary of the Company to perform such duties and have
such powers as Employee substantially performed for the Company on the date of
this Agreement as well as those additional duties and powers as may be agreed
upon between the Company and the Employee. The Company may not materially change
the Employee's duties or positions without Employee's consent. The Employee
accepts such employment, agrees to abide by the Articles of Incorporation,
Bylaws, Company policies and the provisions of this Agreement, and agrees to
devote his time and best efforts to his employment under this Agreement as is
reasonably required. Employee may carry on outside activities so long as those
activities do not conflict with nor compete with Employee's job responsibilities
and corporate duties. The Employee shall, at all times, faithfully with due
diligence and to the best of Employee's ability, experience and talent, perform
all the duties hereunder. Unless otherwise agreed to in writing by the Employee,
those services shall be rendered in the Cleveland, Ohio, metropolitan area.
3. COMPENSATION, VACATIONS AND EXPENSES.
a. BASIC SALARY. The Company shall pay to the Employee a base
salary during the term of this Agreement in accordance with the amount
set forth on Schedule A hereof. This amount may be increased as
determined by the Company through an amendment to Schedule A.
b. BONUS. In addition to the basic salary, the Employee will
receive a bonus to be set at the discretion of the board of directors
of the Company. Nothing shall obligate the Company, in the future, to
pay any bonus or bonuses to the Employee.
c. VACATIONS, FRINGE BENEFITS, AND LEAVES OF ABSENCE. The
Employee shall be entitled to an annual vacation of at least that
specified on Schedule A, but in no event less than the minimum
vacation time established by the Company for its employees.
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The Employee shall further be entitled to participate in and receive
the benefits provided under any employee benefit program which may be
adopted and maintained by the Company (including, without limitation,
those described on Schedule A) and for which the Employee is eligible
by virtue of his employment hereunder, but only as and to the extent
the Employee would otherwise be eligible as provided in any said
program. The Employee shall also bc entitled to leaves of absence as
the Employee deems necessary and the Company, in its sole discretion,
deems reasonable.
d. REIMBURSEMENT OF EXPENSES. The Employee is authorized to incur
reasonable expenses while performing the Employee's duties under this
Agreement, including expenses for entertainment, travel, automobile,
and similar items incurred on behalf of the Company. The Company will
reimburse the Employee upon the presentation by the employee of
itemized accounts of such expenditures. Expenses over $5,000 in any
month must be approved in writing by the Company before being incurred
by the Employee.
4. TERMINATION OF AGREEMENT.
a. TERMINATION OF EMPLOYEE. The Employee may terminate this
Agreement without cause upon 120 days prior written notice to the
Company. In such event, the Employee shall continue to render the
services required under this Agreement and shall be paid on the
regular payment dates the compensation set forth in Schedule A up to
the date of termination.
b. TERMINATION BY THE COMPANY FOR CAUSE. In the event of
Employee's material failure or refusal to observe the provisions of
this Agreement or perform any of the duties required of Employee under
this Agreement, Employee's fraud, misappropriation or embezzlement of
funds, or conviction for any crime punishable as a felony, the Company
may terminate this Agreement upon written notice of such termination
to the Employee and upon payment by the Company to the Employee for
all compensation accrued under this Agreement to the date of
termination. In the event of a termination of Employee's employment
for cause in accordance with this Section 4.b, the Company shall have
no further obligation to the Employee. However, termination of the
Employee's employment for cause shall not terminate or extinguish the
Employee's obligation or liability to pay to the Company or any of its
affiliates any amount owed to them by the Employee, including, but not
limited to, any amounts misappropriated, embezzled or otherwise
obtained by the Employee by reason of any of the occurrences referred
in this Section 4.b without prejudice to any other rights or remedies
of the Company or it affiliates at law or in equity.
c. TERMINATION UPON DEATH OF EMPLOYEE. This Agreement shall
automatically terminate in the event of the Employee's death. In such
case, any accrued compensation or benefits shall inure to the estate
of the Employee, and the payment thereof shall be the only liability
the Company shall have to the Employee's estate.
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5. ILLNESS AND DISABILITY.
a. ILLNESS. If the Employee is unable to perform the services
required under this Agreement by reason of illness or physical injury
not amounting to disability as defined in Section 5.b, the
compensation otherwise payable to the Employee under this Agreement
shall be continued in full for a period of 60 days after the date
Employee is unable to perform such services.
b. DEFINITION OF DISABILITY. For purposes of this Agreement, the
terms "totally disabled," "disabled" and "disability" shall mean
continuous disability as defined in and for the period necessary to
qualify for benefits under any disability income insurance policies on
the Employee paid for by the Company. If no disability insurance is in
effect on the Employee, such terms shall mean continuous disability
which prevents the Employee from performing Employee's normal duties
pursuant to this Agreement. The Employee or agent of the Employee
shall notify the Company in writing as to the Employee's inability to
perform those duties or the Company shall so notify the Employee. If
they are not able to agree as to the existence of disability in 30
days after receipt of said notice, the determination shall be made by
medical doctors, licensed as such in the State of Ohio, one designated
by the Company and the other by the Employee. If these two physicians
cannot agree, they shall appoint a third licensed medical doctor and
the determination of the majority shall be conclusive and binding on
the Company and the Employee. The fees of all medical doctors shall be
paid by the Company and not by the Employee. For the purposes of this
Agreement, adjudicated mental incompetency shall also be a definition
of disability.
c. SALARY CONTINUATION. If the Employee becomes totally disabled
during the term of this Agreement, the Employee's full salary shall be
continued for a period not to exceed 24 consecutive months, for the
period during which the Employee remains totally disabled or until the
next termination date of the Agreement, whichever is shorter. If the
Company pays premiums on a disability income insurance policy on the
Employee, any proceeds paid to the Employee by reason of disability
under such policy shall be offset against salary continuation payments
due from the Company.
6. CHANGE IN CONTROL. A "change in control" of the Company shall be
deemed to have transpired upon the occurrence after the date hereof of any one
of the following events:
a. at any time any one person (other than Employee), or more than
one person acting as a group, acquires beneficial ownership of the
voting securities of the Company that together with voting securities
beneficially held by such person or group, constitute more than 20% of
the total voting power of the Company's outstanding voting securities;
b. the appointment or election of a majority of the members of
the Company's board of directors who are appointed or elected during
any 24 month period but are not
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endorsed in writing by a majority of those members of the Company's
board of directors who were directors prior to the date of the
appointment or election of the first such new director comprising the
majority; or
c. one person, or more than one person acting as a group,
acquires (or has acquired during the 12 month period ending on the
date of the most recent acquisition by such person or persons) assets
from the Company that have a total fair market value equal to or
greater than one third of the total fair market value of all of the
Company's assets immediately before the acquisition or acquisitions.
At any time after a "change in control" of the Company, the Employee,
at the option of the Employee, shall have the right, upon 30 days' prior written
notice by the Employee to the Company, to cause the Company to repurchase all or
any portion of the common stock of the Company then owned by the Employee at the
higher of (i) the book value thereof as determined by the independent certified
public accountants of the Company based upon the financial statements of the
Company as of the last day of the month prior to the date of such notice, (ii)
the last market value of a share of the Company's common stock established by
the board of directors, or the last price at which the common stock was sold be
the Company or by a shareholder of the Company to any person (other than the
Employee); provided, however, or if the common stock is listed on a national
securities exchange, is admitted to unlisted trading privileges on such an
exchange, or is listed for trading on a trading system of the National
Association of Securities Dealers, Inc., such as the Nasdaq National Market, the
Nasdaq SmallCap Market or the OTC Bulletin Board, then the value shall be the
last reported sale price of the common stock on such an exchange or system on
the last business day prior to the date of such notice or if no such sale is
made on such day, the average of the closing bid prices for the common stock for
such day on such exchange or such system shall be used. Within 30 days after
receipt of such notice, the Company shall pay the Employee the full amount for
such shares of common stock upon delivery of the stock certificates representing
such shares of common stock. The payment shall be in the form of a cashiers'
check or by wire transfer. Also, upon a "change in control" of the Company, the
Employee shall automatically be granted options to purchase the same number of
shares of the Company's common stock as then are issuable upon exercise of
options to purchase the Company's common stock then owned by the Employee. Such
new options shall be immediately exercisable and shall remain exercisable for
ten years. The exercise price thereof shall be $0.01 per share of common stock.
Such new options shall not replace any other options to purchase the Company's
remaining stock then owned by Employee.
7. EMPLOYEE ACTIONS.
a. EMPLOYEE SHALL NOT DISCLOSE INFORMATION. The Employee
recognizes and acknowledges that the list of the Company's and its
subsidiaries' and affiliates' customers, as it may exist from time to
time, and any proprietary or confidential information, including, but
not limited to financial information and information pertaining to the
Company's, its subsidiaries' and affiliates' manufacturing, marketing
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and sales operations, and potential acquisitions, used by the Company
in its business are valuable and unique assets of the Company. The
Employee will not during or after the term of his employment, disclose
the list of the Company's, its subsidiaries' or affiliates' customers
or any part thereof or any propriety or confidential information to
any person, firm, corporation, association, or other entity for any
reason or purpose whatsoever without the prior written consent or
authorization of the board of directors of the Company. Upon
termination of the Employee's employment by the Company, its
subsidiaries or its affiliates, the Employee shall neither take nor
retain any papers, customer lists, manuals, files, or other document
or copies thereof belonging to the Company, its subsidiaries or its
affiliates.
b. NON COMPETE. Employee hereby covenants and agrees that
Employee will not, without the prior written consent of the Company,
directly or indirectly, whether individually or through any entity
controlled by Employee, during the term of this Agreement and for a
period of 3 years from the termination of this Agreement, for any
reason, directly or indirectly, on his own behalf or in the service or
on behalf of others, whether or not for compensation, engage in any
business activity, or have any interest in any person, firm,
corporation or business, through a subsidiary or parent entity or
other entity (whether as a shareholder, agent, joint venturer,
security holder, trustee, partner, consultant, creditor lending credit
or money for the purpose of establishing or operating any such
business, partnership or otherwise) which is competitive with the then
existing business of the Company. Notwithstanding the foregoing,
Employee may own shares of competing companies whose securities are
publicly traded, so long as such securities do not constitute five
percent or more of the outstanding securities of any such company.
c. NON-SOLICITATION. Employee further agrees that as long as this
Agreement remains in effect and for a period of 2 years from its
termination, Employee will not divert any business of the Company
and/or its affiliates or any customers or suppliers of the Company
and/or the Company's and/or its affiliates' business to any other
person, entity or competitor, or induce or attempt to induce, directly
or indirectly, any person to leave his or her employment with the
Company.
d. INTELLECTUAL PROPERTY. Employee shall disclose to the Company
all ideas and business plans developed by the Employee during the term
of Employee's employment which relate to the business of the Company,
its subsidiaries or affiliates or any business conducted by the
Company, its subsidiaries or affiliates. All patents, patent
applications, patent licenses, formulas, inventions, processes,
copyrights, know-how, proprietary information, rights, trademarks, or
trade names, or future improvements thereto developed or conceived of
by the Employee during any period of employment with the Company shall
be promptly disclosed to, and all rights with respect thereto shall be
assigned by the Employee to the Company in consideration of the
remuneration paid or payable to the Employee hereunder.
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e. REMEDIES. Employee acknowledges and agrees that his
obligations provided in this Section 7 are necessary and reasonable in
order to protect Company and its affiliates and their respective
business and Employee expressly agrees that monetary damages would be
inadequate to compensate Company and/or its affiliates for any breach
by Executive of his covenants and agreements set forth herein.
Accordingly, Employee agrees and acknowledges that any such violation
or threatened violation of this Section 7 will cause irreparable
injury to Company and that, in addition to any other remedies that may
be available, in law, in equity or otherwise, Company and its
affiliates shall be entitled to obtain injunctive relief against the
prospective breach of this Section 7 or the continuation of any such
breach by Employee without the necessity of proving actual damages.
f. CONSTRUCTION. In the event that any provision of this Section
7 should ever be deemed to exceed the time, geographic, or other
limitations permitted by applicable law, then such provision shall be
reformed to the maximum time geographic, or other limitations
permitted by applicable law. The provisions of this Section 7 shall be
applicable for the period indicated and shall survive the termination
of this Agreement
8. GENERAL MATTERS.
a. GOVERNING LAW. This Agreement shall bc governed by the laws of
the State of Ohio and shall be construed in accordance therewith.
b. NO WAIVER. No provision of this Agreement may be waived except
by an Agreement in writing signed by the waiving party. A waiver of
any term or provision shall not be construed as a waiver of any other
term or provision.
c. AMENDMENT. This Agreement may be amended or altered at any
time, in whole or in part, by filing with this Agreement a written
instrument setting forth such changes, signed by all parties.
d. BINDING EFFECT. This Agreement shall be binding upon the
Employee, the Company, and their successors and assigns.
e. CONSTRUCTION. Throughout this Agreement the singular shall
include the plural, the plural shall include the singular, and the
masculine shall include the feminine wherever the context so requires.
f. TEXT TO CONTROL. The headings of Sections are included solely
for convenience of reference. If any conflict between any heading and
the text of this Agreement exists, the text shall control.
g. SEVERABILITY. If any provision of this Agreement is declared
by any court of competent jurisdiction to be invalid for any reason,
such invalidity shall not affect the
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remaining provisions which shall be fully severable, and the Agreement
shall be construed and enforced as if such invalid provision had never
been included.
h. ENTIRE AGREEMENT OF THE PARTIES. The parties agree that this
document contains the entire agreement and understanding between them
in relation to the subject matter hereof, and no representations,
warranties, covenants, understandings, or agreements in relation
thereto exist between the parties except as expressly set forth
herein.
i. NOTICES. Every notice or other communication to be given by
either party to the other party with respect to this Agreement, shall
be in writing and shall not be effective for any purpose unless the
same shall be served personally or by national air courier service, or
United States certified mail, return receipt requested, postage
prepaid, addressed, if to the Company at 0000 Xxxxxx Xxxx, Xxxx, Xxxx
00000, Attention, Secretary, and if to the Employee at 0000 Xxxxxx
Xxxx, Xxxx, Xxxx 00000, or such other address or addresses as the
Company or the Employee may from time to time designate by notice
given as above provided. Every notice or other communication hereunder
shall be deemed to have been given as of the third business day
following the date of such mailing (or as of any earlier date
evidenced by a receipt from such national air courier service or the
United States Postal Service) or immediately if personally delivered.
Notices not sent in accordance with the foregoing shall be of no force
and effect until received by the foregoing parties as such addresses
specified herein.
j. DUPLICATE ORIGINALS. This Agreement may be executed in several
counterparts, each of which shall be an original but all of which
together shall constitute one and the same instrument.
k. ARBITRATION. Any dispute or controversy of or relating to this
Agreement, or any breach of this Agreement, shall be settled by
arbitration to be held in Cleveland, Ohio, in accordance with the
rules then in effect of the American Arbitration Association or any
successor thereto. The decision of the arbitrator shall be final,
conclusive, and binding on the parties to the arbitration. Judgment
may be entered on the arbitrator's decision in any court having
jurisdiction, and the parties irrevocably consent to the jurisdiction
of the Ohio state courts for this purpose. The Company shall pay the
costs and expenses of such arbitration.
l. ATTORNEYS' FEES. In the event that the Company or the Employee
retains an attorney or attorneys to enforce performance of this
Agreement by the other party or to obtain damages or other relief
because of violation of the terms of this Agreement by the other
party, then all reasonable attorneys' fees and costs of arbitration or
litigation are to be borne and paid by the party determined to have
failed to perform this Agreement or to be liable for damages or
against which other relief is granted.
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m. SURVIVORSHIP. The respective rights and obligations of the
parties hereunder shall survive any termination of the Executive's
employment to the extent necessary to the intended preservation of
such rights and obligations.
n. REMEDIES CUMULATIVE; NO WAIVER. 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 hereunder or now or hereafter
existing at law or in equity. No delay or omission by a party in
exercising any right, remedy or power hereunder 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.
The parties have executed this Agreement to be effective as of the
date first above written.
LEISURE TIME CASINOS & RESORTS, INC.
By: /s/
-------------------------------------------
Xxxx X. Xxxxxxx, President
Attest:
/s/
-----------------------------------
Xxxxxxx X. Xxx, Assistant Secretary
EMPLOYEE:
/s/
-----------------------------------------------
Xxxxxx X. Xxxxx
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SCHEDULE A
DESCRIPTION OF DUTIES AND COMPENSATION
EMPLOYEE: Xxxxxx X. Xxxxx
POSITION WITH COMPANY: Vice President and Secretary
COMPENSATION:
o Base Salary: $165,000
o Bonus: Paid at the discretion of the board of
directors of the Company
BENEFITS:
o Insurance: Medical, dental, disability (long and short
term) and life to the extent available to
all employees of the Company and paid in
accordance with Company policy if elected by
Employee
o Automobile: The Company shall provide the employee with
such automobile as is approved by the
President of the Company. All expenses for
the operation (including insurance) and
maintenance of such automobile shall be
paid by the Company or reimbursed to the
Employee by the Company.
o Vacation: Four weeks (20 business days) each calendar
year commencing January 1, 1998. Such
vacation time is available upon approval by
the President of the Company. Such approval
will not be unreasonably withheld upon at
least two week notice by Employee. Vacation
time will not accrue from calendar year to
calendar year.
o 401(k) Plan: Available for Employee's election if
eligible.
o Medical Reimbursement: Available for Employee's election if
eligible.
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AMENDMENT
TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") effective
September 9, 1998, is by and between LEISURE TIME CASINOS & RESORTS, INC., a
Colorado corporation (the "Company"), and XXXXXX X. XXXXX (the "Employee"). The
Company and the Employee previously entered into an Employment Agreement that
was effective July 1, 1998. This Amendment amends the Employment Agreement as
hereinafter set forth.
1. AMENDMENT TO SECTION 7.a. Section 7.a. of the Agreement is
amended so as amended Section 7.a. reads as follows:
"a. EMPLOYEE SHALL NOT DISCLOSE INFORMATION. The Employee
recognizes and acknowledges that the list of the Company's and its
subsidiaries' and affiliates' customers, as it may exist from time to
time, and any proprietary or confidential information, including, but
not limited to financial information and information pertaining to the
Company's, its subsidiaries' and affiliates' manufacturing, marketing
and sales operations, and potential acquisitions, used by the Company
in its business are valuable and unique assets of the Company. Except
as permitted by the next sentence, the Employee will not during or
after the term of his employment, disclose the list of the Company's,
its subsidiaries' or affiliates' customers or any part thereof or any
propriety or confidential information to any person, firm, corporation,
association, or other entity for any reason or purpose whatsoever
without the prior written consent or authorization of the board of
directors of the Company. Notwithstanding the prohibitions contained in
the foregoing sentence, the Employee shall be permitted to disclose
such information during the term of his employment to other persons
employed by the Company or its subsidiaries who have a need to know
such information for a proper purpose related to the business of the
Company or its subsidiaries. Upon termination of the Employee's
employment by the Company, its subsidiaries or its affiliates, the
Employee shall neither take nor retain any papers, customer lists,
manuals, files, or other document or copies thereof belonging to the
Company, its subsidiaries or its affiliates."
2. AMENDMENT TO SECTION 7.b. Section 7.b. of the Agreement is amended
to delete the words "3 years" therefrom and substitute the words "2 years"
therefor.
3. AMENDMENT TO SECTION 7.e. Section 7.e. of the Agreement is amended
to delete the word "Executive" therefrom and substitute the word "Employee"
therefor.
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Except as amended herein, the Agreement shall remain in full force and
effect without change.
LEISURE TIME CASINOS & RESORTS, INC.
By: /s/
---------------------------------
Xxxx X. Xxxxxxx, President
Attest:
/s/
-----------------------------------
Xxxxxxx X. Xxx, Assistant Secretary
EMPLOYEE:
/s/
-------------------------------------
Xxxxxx X. Xxxxx
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