EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of the 10th day of September, 1996, between
American Bingo & Gaming Corp. (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the
"Employee").
1. Employee Duties. The Company hereby employs the Employee as its
---------------
Chief Executive Officer for the Term (as hereinafter defined), with such
responsibilities and duties as the Board of Directors may from time to time
determine consistent with such job titles. The Employee shall devote his full
working time to the performance of his responsibilities and duties hereunder
provided, however, that nothing herein contained shall restrict the Employee
from serving as a consultant to and/or acting as a director in other entities
not in competition with the Company provided that such services do not
materially interfere with the performance by the Employee of his duties
hereunder or detrimentally effect the Company or its business.
2. Term of Agreement. The term of employment (the "Term") shall
-----------------
commence on October 1, 1997, and end on September 30, 2002, unless renewed in
accordance with the terms hereof.
3. Compensation. Base Salary. Employee shall receive an aggregate
------------ -----------
base salary at the rate of $225,000 per annum during the first year of the
Employment Term. Thereafter, installments of base salary shall be paid not
less frequently than bi-weekly.
4. Cash Bonuses. Commencing with the Company's 1997 fiscal year and
------------
for each additional year of employment under this Agreement, an annual cash
bonus pool ("Bonus Pool") will be created for the benefit of all management
personnel of the Company who earn more than $60,000 per year. The Bonus Pool
shall be comprised of an amount which shall equal 2% of the net operating
income of the Company as reported on the Company's certified income of
$2,000,000 or greater in such year. The maximum Bonus Pool in any year shall
not exceed $400,000. The Employee shall be eligible to participate in the
Bonus Pool. The Board by unanimous vote may allow any other employee of the
Company to participate in the Bonus Pool The Bonus Pool will be distributed
30 days after the Company's receipt of its certified financial statements for
such year in accordance with the directions of the Board of Directors of the
Company. In the event the Board can not unanimously agree on the distribution
of the Bonus Pool, the Bonus Pool will be distributed as follows:
(i) If there are only two members of management eligible to participate
in the Bonus Pool, the Employee shall receive 75% of the Bonus Pool; or
(ii) If there are three or more members of management eligible to
participate in the Bonus Pool, the Employee shall receive 50% of the Bonus
Pool and the balance shall be distributed among the remaining members of
management eligible to participate in the Bonus Pool on a pro rata basis
relative to the dollar amount of their respective annual salaries.
5. Stock Options. Employee shall receive upon signing this contract
-------------
options to purchase 300,000 shares of the Company's common stock. The options
shall be exercisable at the purchase price of $0.95625 per share and shall
vest at the rate of 8,334 shares per month until fully vested. The options
shall be "statutory" options as described in the Company's 1996 Employee Stock
Option Plan, and shall be and remain subject to all of the terms and
conditions of such plan. The options will expire ten years from the date of
vesting. In the event of termination of Employee's employment, all unvested
options will become immediately vested.
6. Other Fringe Benefits. Employee shall receive the following
----------------------
benefits during the Term of Employment:
(i) Pension and profit sharing plan participation, comprehensive health,
accident, major medical, dental, disability and life insurance protection in
accordance with the general policies of the Company as in effect from time to
time; and
(ii) An automobile; and
(iii) A term life insurance policy in the amount of Five Million
Dollars ($5,000,000) to be owned by Company with beneficiaries designated by
Employee. Employee may at any time during the term of this Agreement or
within one year after its termination require Company to assign said policy to
Employee or Employee's designee.
7. Reimbursement of Expenses. The Company shall reimburse Employee
-------------------------
for all reasonable, ordinary and necessary expenses incurred by him in the
performance of his duties hereunder, provided that Employee accounts to the
Company therefore in the manner prescribed by the Company for reimbursement of
Employee's expenses.
8. Vacation. Employee shall be entitled to 30 business days paid
--------
vacation each year during the term hereof. Unused vacation days may be
accumulated from year to year.
9. Term of Employment. Term of Employment shall mean the period
------------------
commencing on the date provided in Section "2" and ending on the earliest to
occur of:
(i) The death of Employee;
(ii) The Termination Date or such later date as may be set by mutual
consent expressed in a writing signed by both parties hereto; or
(iii) Termination for cause pursuant to Article 10.1 of this
Employment Agreement.
10. Termination of Employment for Cause. The Employee's employment
-----------------------------------
hereunder may only be terminated for cause in the event that:
(i) The Employee willfully violates a material provision of this
Agreement, which violation materially and adversely affects the Company; or
(ii) The Employee is convicted of a felony (as determined by final
judgment of a court of competent jurisdiction) in connection with the
performance of his duties hereunder, which conduct materially and adversely
affects the Company.
11. Death of Employee. If Employee's employment hereunder shall
-----------------
terminate because of his death, this Agreement shall forthwith terminate,
except that Employee's personal representative shall be entitled to receive
all cash compensation accrued in favor of Employee under Sections 3 and 4 but
unpaid as of the date of death, and upon Employee's death all options
described in Section 5 shall vest and pass to said personal representative for
the benefit of Employee's estate.
12. Warranties and Representations of the Employee. The Employee
----------------------------------------------
warrants and represents that the Employee is not subject to any agreement,
contract, judgment, decree or limitation the effect of which would prohibit,
limit or otherwise restrict the employment of the Employee by the Company
pursuant to the terms of this Agreement.
13. Services on Behalf of Subsidiary Companies. The Employee's
-------------------------------------------
services hereunder shall be performed on behalf of the Company and on behalf
of each subsidiary of the Company whether now existing or hereafter formed.
For purposes of this Agreement, the "Company" shall refer to and include each
of the subsidiaries of the Company, which subsidiaries are jointly and
severally responsible for the performance of the Company's obligations
hereunder.
14. Notices All notices, requests, consents and other communications
-------
required or permitted to be given hereunder, shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by prepaid
telegram, or mailed first-class, postage prepaid, by registered mail (notices
sent by telegram or mailed shall be deemed to have been given on the date
sent), as follows (or to such other address as either party shall designate by
notice in writing to the other in accordance herewith):
If to the Employee:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to the Company:
American Bingo & Gaming Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
15. Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the local laws of the State of Texas
applicable to agreements made and to be performed entirely in such state.
16. Headings and Captions. The section headings contained herein are
---------------------
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
17. Entire Agreement. This Agreement sets forth the entire agreement
----------------
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements, and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for the alleged
representation, promise or inducement not so set forth.
18. Assignment. This Agreement, and the Employee's rights and
----------
obligations hereunder, may not be assigned by the Employee. The Company may
freely assign its rights, together with its obligations, hereunder with any
consent of the Employee in such an event the obligations of the Company
hereunder shall be binding on its successor or assigns, whether by merger,
consolidation, or acquisition of all or substantially all of its business or
assets, or otherwise.
19. Amendments: No Waivers. This Agreement may be amended,
--------------------------
modified, superseded, cancelled, renewed or extended and the terms or
covenants hereof may be waived only by a written instrument executed by both
of the parties hereto, or in the case of a waiver, by the party waiving
compliance. The failure of either party at any time or times to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same. No waiver by either party of the breach of
any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a waiver of the
breach of any other term or covenant contained in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BINGO & GAMING CORP.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:__________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
__________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made as of the 10th day of September,
1996, between American Bingo & Gaming Corp. (the "Company"), and ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇. (the "Employee").
1. Employee Duties. The Company hereby employs the Employee as its
---------------
Chairman of the Board, with such responsibilities and duties as the Board of
Directors may from time to time determine consistent with such job titles.
The Employee shall devote adequate time to the Company to accomplish the
assigned responsibilities.
2. Term of Agreement. Employment under this Agreement shall commence
-----------------
on the date first shown above and continue for three (3) years unless earlier
terminated at any time at the will of either Employer or Employee.
3. Compensation.
------------
Options. Employee shall receive as compensation for his services over
-------
the term of this Agreement options to purchase 325,000 shares of the Company's
common stock, exercisable at the price of $0.95625 per share. Said options
shall vest at the rate of 9,500 shares per month.
The options shall be "non-statutory" options as described in the Company's
1996 Employee Stock Option Plan and shall be and remain subject to all of the
terms and conditions of such plan as they pertain to "non-statutory options".
Upon termination of employment hereunder by either party all non-vested
options will be cancelled, except that Employee will receive options for a
minimum of 200,000 shares.
"Piggy-Back" Rights. Whenever, during the period commencing September 1,
-------------------
1996, and continuing until April 1, 2000, the Company proposes to file with
the Securities and Exchange Commission (the "Commission") a Registration
Statement (other than a Form S-4 or S-8, or an S-3 used in conjunction with
an S-8 (which S-3 is filed solely to facilitate resales by affiliates of the
Company, of shares issued under employee stock incentive plans, or comparable
registration statements) it shall, at least 30 days prior to such filing, give
written notice of such proposed filing to the Employee at his address
appearing on the record of the Company, and shall include in such filing all
or a portion of the registrable shares underlying Employee's vested options
upon receipt by the Company, no less than 10 days prior to the proposed filing
date, of a request therefor, subject to the right of the managing underwriter,
in any such offering that is underwritten, to limit or eliminate entirely the
number of securities that may be included in such offering on a pro rata basis
--------
with any other person on whose behalf securities are being registered.
Employee shall be free to simultaneously exercise vested options granted to
him hereunder, and promptly resell the shares of common stock underlying such
options, subject to the provisions of any underwriting agreement which may
then be binding upon the Company and/or its officers, directors or major
shareholders and subject to the provisions of applicable law.
4. Cash and Stock Bonuses. Any bonuses over and above the
-------------------------
compensation described above will be based on the Company's performance,
Employee's performance, and in the absolute discretion of the Board of
Directors.
5. Other Fringe Benefits. Employee shall receive the following
----------------------
benefits during the Term of Employment: comprehensive health, accident, major
medical, dental, disability and life insurance protection in accordance with
the general policies of the Company as in effect from time to time, and a
Company vehicle.
6. Reimbursement of Expenses. The Company shall reimburse Employee
-------------------------
for all reasonable, ordinary and necessary expenses incurred by him in the
performance of his duties hereunder, provided that Employee accounts to the
Company therefore in the manner prescribed by the Company for reimbursement of
Employee's expenses.
7. Vacation. Employee shall be entitled to 15 business days paid
--------
vacation each year during the term hereof.
8. Non-Disclosure and Non-Compete.
--------------------------------
8.1 Non-Disclosure. Employee agrees that all information pertaining to
--------------
the prior, current or contemplated business of the Company, its parent, its
subsidiaries, affiliates or its successors in interest (hereafter referred to
collectively in this Section 8 as the Company), excluding publicly available
information (in substantially the form in which it is publicly available)
unless such information is publicly available by reason of unauthorized
disclosure by Employee, constitutes valuable and confidential assets of the
Company. Such information includes, without limitation, information related
to trade secrets, customer and client lists, contract terms, legal and
accounting advice and opinions, supplier lists, methods of doing business,
financing techniques and sources and financial statements of the Company.
Such Information is sometimes hereinafter referred to as "Confidential
Information." Employee shall hold all such Confidential Information in trust
and confidence for the Company and shall not use or disclose any such
Confidential Information other than for the business of the Company or as
required by law, either during the Term of Employment or after his employment
terminates for whatever reason. Employee acknowledges that, prior to his
employment with the Company, Employee had no previous experience, as owner,
employee, or otherwise in the bingo or gaming business, and that Employee has
gained valuable knowledge and experience in such business through his
employment with Employer.
8.2 Non-Competition. As a material part of the consideration for
---------------
Employee's access to Confidential Information, and for the know-how and
training provided to Employee by Company in the business of operation of bingo
and gaming facilities, which Confidential Information, know-how and training
Employee would not have otherwise received, and in consideration for
renegotiated employee stock options being issued to Employee in connection
with this Agreement which are given upon terms more favorable to Employee than
options previously issued or promised to him, Employee covenants and agrees
that, during the term of Employee's employment with the Company, and for a
period of two years thereafter, Employee will not, within the Restricted
Territory (defined below), directly or indirectly, promote, operate, manage,
conduct, solicit, sell for, own, acquire any interest in, act as landlord to,
or as employee, director, agent or consultant for, do business with,
participate in, be connected with, or in any manner assist any other person,
partnership, limited partnership or other entity which is engaged in, the
business of operation of bingo games, video games, slot machines, or other
similar games or machines. The "Restricted Territory" is that area which
includes the states of Texas, South Carolina, Florida, Alabama, Mississippi,
Oklahoma, and Kentucky, and any other state in which Employer or any of its
affiliates is conducting the bingo or gaming business upon the date of
termination of Employee's employment with the Company. Employee will observe
and perform the provisions of this Article 8.2 in good faith, and will use no
means or measures to circumvent the intent of this Article 8.2.
8.3 Enforcement. In the event of a breach by Employee of the provisions
-----------
of this Article 8.3, Employer shall have, in addition to any other remedies it
may have at law or under this Agreement, the right to a temporary restraining
order, temporary injunction and permanent injunction restraining Employee from
violating or continuing a violation of the terms of this Article 8.3.
Employee agrees that in the event of such breach the amount of damages would
be difficult or impossible to determine, and agrees that a bond in the amount
of $1,000.00 would be appropriate in connection with a temporary restraining
order or temporary injunction.
8.4 Severance, Reformation. Should any court of competent jurisdiction
----------------------
hold any portion of this Article 8.4 to be unenforceable in whole or in part,
such court shall be authorized and requested to sever the offending provision
from this Article 8.4, and to reform this Article so as to comply as closely
as possible with the intentions of the parties as stated herein, so that it
will be enforceable by injunction.
8.5 Survival of Termination. The provisions of this Section 8 shall
-----------------------
survive termination of Employee's employment.
9. Warranties and Representations of the Employee. Employee warrants
----------------------------------------------
and represents that the Employee is not subject to any agreement, contract,
judgment, decree, or limitation the effect of which would prohibit, limit or
otherwise restrict the employment of the Employee by the Company pursuant to
the terms of this Agreement.
10. Services on Behalf of Subsidiary Companies. The Employee's services
------------------------------------------
hereunder shall be performed on behalf of the Company and on behalf of each
subsidiary of the Company whether now existing or hereafter formed. For
purposes of this Agreement, the "Company" shall refer to and include each of
the subsidiaries of the Company.
11. Indemnification. The Company agrees that it will indemnify and
---------------
hold harmless the Employee against any losses, claims, damages or liabilities
(including, but not limited to, all costs of defense and investigation and all
attorneys' fees) to which Employee may become subject, under the federal
securities laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in, or material omission from any registration statement or other document
filed with the Securities and Exchange Commission or otherwise made public,
where such untrue statement or material omission relates to matters outside of
Employee's direct knowledge and upon which Employee relied upon reasonably and
in good faith.
12. Notices. All notices, requests, consents and other
-------
communications, required or permitted to be given hereunder, shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by prepaid telegram, or mailed first-class, postage prepaid, by
registered mail (notices sent by telegram or mailed shall be deemed to have
been given on the date sent), as follows (or to such other address as either
party shall designate by notice in writing to the other in accordance
herewith):
If to the Employee:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to the Company:
American Bingo & Gaming Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
13. Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the local laws of the State of Texas
applicable to agreements made and to be performed entirely in such state. In
any litigation for enforcement or interpretation of this Agreement, the
prevailing party shall be entitled to recover his or its reasonable legal
fees, costs and expenses, in addition to any other remedies provided at law or
in equity.
14. Headings and Captions. The section headings contained herein are
---------------------
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
15. Entire Agreement. This Agreement sets forth the entire agreement
----------------
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
16. Assignment. This Agreement, and the Employee's rights and
----------
obligations hereunder, may not be assigned by the Employee. The Company may
freely assign its rights, together with its obligations, hereunder without
consent of the Employee. In such event the obligations of the Company
hereunder shall be binding on its successors or assigns, whether by merger,
consolidation, or acquisition of all or substantially all of its business or
assets, or otherwise.
17. Amendments: No Waiver. This Agreement may be amended, modified,
----------------------
superseded, cancelled, renewed or extended and the terms or covenants hereof
may be waived, only by a written instrument executed by both of the parties
hereto, or in the case of a waiver, by the party waiving compliance. The
failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to
enforce the same. No waiver by either party of the breach of any term or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BINGO & GAMING CORP.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:__________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made as of the 25th day of
October, 1996, between American Bingo & Gaming Corp. (the "Company"), and
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Employee").
1. Employee Duties. The Company hereby employs the Employee as Chief
---------------
Operations Officer, with such responsibilities and duties as may be directed
by the Company's President or Board of Directors from time to time. The
Employee shall devote his full working time to the performance of his
responsibilities and duties hereunder and shall not, directly or indirectly,
render services to any other person or organization for which he receives
compensation without the consent of the Company's Board of Directors or
otherwise engage in any activities which materially interfere with the
performance by the Employee of his duties hereunder or detrimentally affect
the Company or its business.
2. Term of Employment. The term of employment (the "Term") shall
------------------
commence on the date of this Agreement and continue for three (3) years unless
earlier terminated at any time at the will of either Employee or the Company.
3. Compensation.
------------
Base Salary. Employee shall receive an aggregate annual base salary at
------------
the rate of $70,000 per annum during the employment term. Installments of
base salary shall be paid not less frequently than bi-weekly. Annual salary
increases, if any, will be determined by the Company's President and the
Company's Board.
4. Bonuses. Commencing with the Company's 1996 fiscal year and for
-------
each additional year of employment under this Agreement, an annual cash bonus
pool ("Bonus Pool") will be created for the benefit of management personnel of
the Company who earn more than $60,000 per year. The Bonus Pool shall be
comprised of an amount which shall equal 2% of the net operating income of the
Company as reported on the Company's certified financial statements for the
year in question provided that the Company reported net operating income of
$2,000,000 or greater in such year. The maximum Bonus Pool in any year shall
not exceed $400,000. The Employee shall be eligible to participate in the
Bonus Pool. The Board by unanimous vote may allow any other employee of the
Company to participate in the Bonus Pool. The Bonus Pool will be distributed
30 days after the Company's receipt of its certified financial statements for
such year in accordance with the directives of the Board of Directors of the
Company. In the event the Board can not unanimously agree to the distribution
of the Bonus Pool, the Bonus Pool will be distributed as follows:
The Company's Chief Executive Officer shall receive 50% of the Bonus Pool and
the balance distributed among the remaining members of management, including
the Employee, on a pro rata basis relative to the dollar amount of their
respective annual salaries.
The Board may, in its sole discretion, award to the Employee additional
Bonuses beyond the Bonus Pool.
5. Employee Stock Options. The Company agrees to grant to the
------------------------
Employee options to purchase 150,000 shares of its common stock as outlined in
Attachment 1 hereto. The options will be subject to all terms and conditions
of the Company's 1994, 1995 and 1996 Stock Plans, and shall be "statutory"
options under said plans. The Company will take appropriate legal steps to
propose amendments to the 1996 Stock Option Plan which would increase the
number of authorized options so as to enable Employee to purchase a total of
150,000 shares to vest to Employee. The options shall vest according to the
schedule shown on Attachment 1.
In addition, all Options shall vest in favor of the Employee in the event
that a significant change in ownership of the Company occurs. A significant
change shall be deemed to occur for purposes of this Agreement only in the
event that shares owned by the Company's Chairman and members of his family
change by greater than 20% of the total amount of shares of the Company's
common stock outstanding. Prior to such event, a significant change in
ownership will not be created in the event the Company conducts a secondary
public offering, engages in a private placement of its securities or enters
into an acquisition agreement pursuant to which the Company is the survivor
and the Company controls the company acquired. Employee may sell the stock
represented by his vested and exercised options in any quarter after vesting
subject to Rule 144 restrictions. The number of shares and pricing thereof
for the option shares shall be proportionally adjusted for any and all stock
splits during the term of this Agreement. Any options not exercised five
years after vesting will be cancelled and will be of no force and effect.
6. Other Fringe Benefits. Employee shall receive the following
----------------------
benefits during the Term of Employment.
(a) Comprehensive family health and major medical coverage in
accordance with the general policies of the Company as in effect from time to
time; and
(b) Payment on behalf of the Employee of Oklahoma Bar Association
filing fees and continuing education fees.
(c) Use of a company vehicle without assessment.
7. Reimbursement of Expenses. The Company shall reimburse Employee
-------------------------
for all reasonable, ordinary and necessary expenses incurred by him in the
performance of his duties hereunder, provided that Employee accounts to the
Company therefore in the manner prescribed by the Company for reimbursement of
Employee's expenses.
8. Vacation. Employee shall be entitled to a three week paid
--------
vacation each year during the term hereof.
9. Effect of Termination of Employment. If Employee's employment
-----------------------------------
hereunder shall be unilaterally terminated by the Company without Employee's
consent, then the unvested options will vest proportionally based upon the
number of months of Employee's service to the Company under this Agreement.
If Employee's employment is terminated voluntarily by Employee or with
Employee's consent, all options which have not vested as of the termination
date will be cancelled and this Agreement shall forthwith terminate, provided,
that Employee's obligations under Section 11 shall continue unaffected.
10. Death of Employee. If Employee's employment hereunder shall
-----------------
terminate because of his death, this Agreement shall forthwith terminate,
except that Employee's personal representative shall be entitled to receive
all cash compensation accrued in favor of Employee but unpaid as of the date
of death, as well as all of Employee's vested stock options. All rights of
Employee's personal representative to receive any further compensation
hereunder or under any other plan, arrangement or procedure of the Company
shall terminate to the extent not theretofore vested, except for any rights
which arise by virtue of Employee's death under any such plan, arrangement or
procedure.
11. Non-Disclosure and Non-Compete.
--------------------------------
11.1 Non-Disclosure. Employee agrees that all information pertaining to
--------------
the prior, current or contemplated business of the Company, its parent, its
subsidiaries, affiliates or its successors in interest (hereafter referred to
collectively in this Section 11 as the Company), excluding publicly available
information (in substantially the form in which it is publicly available)
unless such information is publicly available by reason of unauthorized
disclosure by Employee, constitutes valuable and confidential assets of the
Company. Such information includes, without limitation, information related
to trade secrets, customer and client lists, contract terms, legal and
accounting advice and opinions, supplier lists, methods of doing business,
financing techniques and sources and financial statements of the Company.
Such Information is sometimes hereinafter referred to as "Confidential
Information." Employee shall hold all such Confidential Information in trust
and confidence for the Company and shall not use or disclose any such
Confidential Information other than for the business of the Company or as
required by law, either during the Term of Employment or after his employment
terminates for whatever reason. Employee acknowledges that, prior to his
employment with the Company, Employee had no previous experience, as owner,
employee, or otherwise in the bingo or gaming business, and that Employee has
gained valuable knowledge and experience in such business through his
employment with Employer.
11.2 Non-Competition. As a material part of the consideration for
---------------
Employee's access to Confidential Information, and for the know-how and
training provided to Employee by Company in the business of operation of bingo
and gaming facilities, which Confidential Information, know-how and training
Employee would not have otherwise received, and in consideration for
renegotiated employee stock options being issued to Employee in connection
with this Agreement which are given upon terms more favorable to Employee than
options previously issued or promised to him, Employee covenants and agrees
that, during the term of Employee's employment with the Company, and for a
period of two years thereafter, Employee will not, within the Restricted
Territory (defined below), directly or indirectly, promote, operate, manage,
conduct, solicit, sell for, own, acquire any interest in, act as landlord to,
or as employee, director, agent or consultant for, do business with,
participate in, be connected with, or in any manner assist any other person,
partnership, limited partnership or other entity which is engaged in, the
business of operation of bingo games, video games, slot machines, or other
similar games or machines. The Restricted Area is the geographical area
within fifty (50) miles of each and every bingo or gaming facility owned,
leased or operated by Company, except that after termination of Employee's
employment, the Restricted Area shall be limited to the geographical area
within fifty (50) miles of each such facility owned, leased or operated by
Company as of the date of termination of Employee's employment. Employee will
observe and perform the provisions of this Article 11.2 in good faith, and
will use no means or measures to circumvent the intent of this Article 11.2.
11.3 Enforcement. In the event of a breach by Employee of the
-----------
provisions of this Article 11.3, Employer shall have, in addition to any other
remedies it may have at law or under this Agreement, the right to a temporary
restraining order, temporary injunction and permanent injunction restraining
Employee from violating or continuing a violation of the terms of this Article
11.3. Employee agrees that in the event of such breach the amount of damages
would be difficult or impossible to determine, and agrees that a bond in the
amount of $1,000.00 would be appropriate in connection with a temporary
restraining order or temporary injunction.
11.4 Severance, Reformation. Should any court of competent
-----------------------
jurisdiction hold any portion of this Article 11 to be unenforceable in whole
or in part, such court shall be authorized and requested to sever the
offending provision from this Article 11, and to reform this Article so as to
comply as closely as possible with the intentions of the parties as stated
herein, so that it will be enforceable by injunction.
11.5 Breach of Article 11. Since a breach of the provisions of this
--------------------
Article 11 could not be adequately compensated by money damages, the Company
shall be entitled, in addition to any other right and remedy available to it,
to an injunction restraining such breach or threatened breach, and in either
case no bond or other security shall be required in connection therewith, and
Employee hereby consents to the issuance of such injunction. Employee agrees
that the provisions of this Article 11 are necessary and reasonable to protect
the Company in the conduct of its business. If any restriction contained in
this Article 11 shall be deemed to be invalid, illegal or unenforceable by
reason of the extent, duration, or geographical scope thereof, or otherwise,
then the court making such determination shall have the right to reduce such
extent, duration, geographical scope, or other provisions hereof, and in its
reduced form such restrictions shall then be enforceable in the manner
contemplated hereby.
12. Warranties and Representations of the Employee. The Employee
----------------------------------------------
warrants and represents that the Employee is not subject to any agreement,
contract, judgment, decree, or limitation the effect of which would prohibit,
limit or otherwise restrict the employment of the Employee by the Company
pursuant to the terms of this Agreement.
13. Services on Behalf of Subsidiary Companies. The Employee's services
------------------------------------------
hereunder shall be performed on behalf of the Company and on behalf of each
subsidiary of the Company whether now existing or hereafter formed. For
purposes of this Agreement, the words "Company" and "Employer" shall refer to
and include each of the subsidiaries of the Company.
14. Notices. All notices, requests, consents and other
-------
communications, required or permitted to be given hereunder, shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by prepaid telegram, or mailed first-class, postage prepaid, by
registered mail (notices sent by telegram or mailed shall be deemed to have
been given on the date sent), as follows (or to such other address as either
party shall designate by notice in writing to the other in accordance
herewith):
If to the Employee:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to the Company:
American Bingo & Gaming Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
15. Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the local laws of the State of Texas
applicable to agreements made and to be performed entirely in such state.
16. Headings and Captions. The section headings contained herein are
---------------------
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
17. Entire Agreement. This Agreement sets forth the entire agreement
----------------
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
18. Assignment. This Agreement, and the Employee's rights and
----------
obligations hereunder, may not be assigned by the Employee. The Company may
freely assign its rights, together with its obligations, hereunder without
consent of the Employee. In such event the obligations of the Company
hereunder shall be binding on its successors or assigns, whether by merger,
consolidation, or acquisition of all or substantially all of its business or
assets, or otherwise.
19. Amendments: No Waiver. This Agreement may be amended, modified,
----------------------
superseded, cancelled, renewed or extended and the terms or covenants hereof
may be waived, only by a written instrument executed by both of the parties
hereto, or in the case of a waiver, by the party waiving compliance. The
failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to
enforce the same. No waiver by either party of the breach of any term or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BINGO & GAMING CORP.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:__________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
________________________________
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made as of the 29th day of
October, 1996, between American Bingo & Gaming Corp. (the "Company"), and
▇▇▇▇ ▇. ▇▇▇▇▇ (the "Employee").
1. Employee Duties. The Company hereby employs the Employee as Chief
---------------
Financial Officer, with such responsibilities and duties as may be directed by
the Company's President or Board of Directors from time to time. The Employee
shall devote his full working time to the performance of his responsibilities
and duties hereunder and shall not, directly or indirectly, render services to
any other person or organization for which he receives compensation without
the consent of the Company's Board of Directors or otherwise engage in any
activities which materially interfere with the performance by the Employee of
his duties hereunder or detrimentally affect the Company or its business.
2. Term of Employment. The term of employment (the "Term") shall
------------------
commence on the date of this Agreement and continue for three (3) years unless
earlier terminated at any time at the will of either Employee or the Company.
3. Compensation.
------------
Base Salary. Employee shall receive an aggregate annual base salary at
------------
the rate of $70,000 per annum during the employment term. Installments of
base salary shall be paid not less frequently than bi-weekly. Annual salary
increases, if any, will be determined by the Company's President and the
Company's Board.
4. Bonuses. Commencing with the Company's 1996 fiscal year and for
-------
each additional year of employment under this Agreement, an annual cash bonus
pool ("Bonus Pool") will be created for the benefit of management personnel of
the Company who earn more than $60,000 per year. The Bonus Pool shall be
comprised of an amount which shall equal 2% of the net operating income of the
Company as reported on the Company's certified financial statements for the
year in question provided that the Company reported net operating income of
$2,000,000 or greater in such year. The maximum Bonus Pool in any year shall
not exceed $400,000. The Employee shall be eligible to participate in the
Bonus Pool. The Board by unanimous vote may allow any other employee of the
Company to participate in the Bonus Pool. The Bonus Pool will be distributed
30 days after the Company's receipt of its certified financial statements for
such year in accordance with the directives of the Board of Directors of the
Company. In the event the Board can not unanimously agree to the distribution
of the Bonus Pool, the Bonus Pool will be distributed as follows:
The Company's Chief Executive Officer shall receive 50% of the Bonus Pool and
the balance distributed among the remaining members of management, including
the Employee, on a pro rata basis relative to the dollar amount of their
respective annual salaries.
The Board may, in its sole discretion, award to the Employee additional
Bonuses beyond the Bonus Pool.
5. Employee Stock Options. The Company agrees to grant to the
------------------------
Employee options to purchase 150,000 shares of its common stock as outlined in
Attachment 1 hereto. The options will be subject to all terms and conditions
of the Company's 1994, 1995, and 1996 Stock Plans, and shall be "statutory"
options under said plans. The Company will take appropriate legal steps to
propose amendments to the 1996 Stock Option Plan which would increase the
number of authorized options so as to enable Employee to purchase a total of
150,000 shares to vest to Employee. The options shall vest proportionally
according to the schedule shown on Attachment 1.
In addition, all Options shall vest in favor of the Employee in the event
that a significant change in ownership of the Company occurs. A significant
change shall be deemed to occur for purposes of this Agreement only in the
event that shares owned by the Company's Chairman and members of his family
change by greater than 20% of the total amount of shares of the Company's
common stock outstanding. Prior to such event, a significant change in
ownership will not be created in the event the Company conducts a secondary
public offering, engages in a private placement of its securities or enters
into an acquisition agreement pursuant to which the Company is the survivor
and the Company controls the company acquired. Employee may sell the stock
represented by his vested and exercised options in any quarter after vesting
subject to Rule 144 restrictions. The number of shares and pricing thereof
for the option shares shall be proportionally adjusted for any and all stock
splits during the term of this Agreement. Any options not exercised five
years after vesting will be cancelled and will be of no force and effect.
6. Other Fringe Benefits. Employee shall receive the following
----------------------
benefits during the Term of Employment.
(a) Comprehensive family health and major medical coverage in
accordance with the general policies of the Company as in effect from time to
time; and
(b) Payment on behalf of the Employee of Certified Public Accountant
filing fees and continuing education fees.
7. Reimbursement of Expenses. The Company shall reimburse Employee
-------------------------
for all reasonable, ordinary and necessary expenses incurred by him in the
performance of his duties hereunder, provided that Employee accounts to the
Company therefore in the manner prescribed by the Company for reimbursement of
Employee's expenses.
8. Vacation. Employee shall be entitled to a two week paid vacation
--------
each year during the term hereof.
9. Effect of Termination of Employment. If Employee's employment
-----------------------------------
hereunder shall be unilaterally terminated by the Company without Employee's
consent, then the unvested options will vest proportionally based upon the
number of months of Employee's service to the Company under this Agreement.
If Employee's employment is terminated voluntarily by Employee or with
Employee's consent, all options which have not vested as of the termination
date will be cancelled and this Agreement shall forthwith terminate, provided,
that Employee's obligations under Section 11 shall continue unaffected.
10. Death of Employee. If Employee's employment hereunder shall
-----------------
terminate because of his death, this Agreement shall forthwith terminate,
except that Employee's personal representative shall be entitled to receive
all cash compensation accrued in favor of Employee but unpaid as of the date
of death as well as all of Employee's vested stock options. All rights of
Employee's personal representative to receive any further compensation
hereunder or under any other plan, arrangement or procedure of the Company
shall terminate to the extent not theretofore vested, except for any rights
which arise by virtue of Employee's death under any such plan, arrangement or
procedure.
11. Non-Disclosure and Non-Compete.
--------------------------------
11.1 Non-Disclosure. Employee agrees that all information pertaining to
--------------
the prior, current or contemplated business of the Company, its parent, its
subsidiaries, affiliates or its successors in interest (hereafter referred to
collectively in this Section 11 as the Company), excluding publicly available
information (in substantially the form in which it is publicly available)
unless such information is publicly available by reason of unauthorized
disclosure by Employee, constitutes valuable and confidential assets of the
Company. Such information includes, without limitation, information related
to trade secrets, customer and client lists, contract terms, legal and
accounting advice and opinions, supplier lists, methods of doing business,
financing techniques and sources and financial statements of the Company.
Such Information is sometimes hereinafter referred to as "Confidential
Information." Employee shall hold all such Confidential Information in trust
and confidence for the Company and shall not use or disclose any such
Confidential Information other than for the business of the Company or as
required by law, either during the Term of Employment or after his employment
terminates for whatever reason. Employee acknowledges that, prior to his
employment with the Company, Employee had no previous experience, as owner,
employee, or otherwise in the bingo or gaming business, and that Employee has
gained valuable knowledge and experience in such business through his
employment with Employer.
11.2 Non-Competition. As a material part of the consideration for
---------------
Employee's access to Confidential Information, and for the know-how and
training provided to Employee by Company in the business of operation of bingo
and gaming facilities, which Confidential Information, know-how and training
Employee would not have otherwise received, and in consideration for
renegotiated employee stock options being issued to Employee in connection
with this Agreement which are given upon terms more favorable to Employee than
options previously issued or promised to him, Employee covenants and agrees
that, during the term of Employee's employment with the Company, and for a
period of two years thereafter, Employee will not, within the Restricted
Territory (defined below), directly or indirectly, promote, operate, manage,
conduct, solicit, sell for, own, acquire any interest in, act as landlord to,
or as employee, director, agent or consultant for, do business with,
participate in, be connected with, or in any manner assist any other person,
partnership, limited partnership or other entity which is engaged in, the
business of operation of bingo games, video games, slot machines, or other
similar games or machines. The "Restricted Territory" is that area which
includes the states of Texas, South Carolina, Florida, Alabama, Mississippi,
Oklahoma, and Kentucky, and any other state in which Employer or any of its
affiliates is conducting the bingo or gaming business upon the date of
termination of Employee's employment with the Company. Employee will observe
and perform the provisions of this Article 11.2 in good faith, and will use no
means or measures to circumvent the intent of this Article 11.2.
11.3 Enforcement. In the event of a breach by Employee of the
-----------
provisions of this Article 11.3, Employer shall have, in addition to any other
remedies it may have at law or under this Agreement, the right to a temporary
restraining order, temporary injunction and permanent injunction restraining
Employee from violating or continuing a violation of the terms of this Article
11.3. Employee agrees that in the event of such breach the amount of damages
would be difficult or impossible to determine, and agrees that a bond in the
amount of $1,000.00 would be appropriate in connection with a temporary
restraining order or temporary injunction.
11.4 Severance, Reformation. Should any court of competent
-----------------------
jurisdiction hold any portion of this Article 11 to be unenforceable in whole
or in part, such court shall be authorized and requested to sever the
offending provision from this Article 11, and to reform this Article so as to
comply as closely as possible with the intentions of the parties as stated
herein, so that it will be enforceable by injunction.
11.5 Breach of Article 11. Since a breach of the provisions of this
--------------------
Article 11 could not be adequately compensated by money damages, the Company
shall be entitled, in addition to any other right and remedy available to it,
to an injunction restraining such breach or threatened breach, and in either
case no bond or other security shall be required in connection therewith, and
Employee hereby consents to the issuance of such injunction. Employee agrees
that the provisions of this Article 11 are necessary and reasonable to protect
the Company in the conduct of its business. If any restriction contained in
this Article 11 shall be deemed to be invalid, illegal or unenforceable by
reason of the extent, duration, or geographical scope thereof, or otherwise,
then the court making such determination shall have the right to reduce such
extent, duration, geographical scope, or other provisions hereof, and in its
reduced form such restrictions shall then be enforceable in the manner
contemplated hereby.
12. Warranties and Representations of the Employee. The Employee
----------------------------------------------
warrants and represents that the Employee is not subject to any agreement,
contract, judgment, decree, or limitation the effect of which would prohibit,
limit or otherwise restrict the employment of the Employee by the Company
pursuant to the terms of this Agreement.
13. Services on Behalf of Subsidiary Companies. The Employee's services
------------------------------------------
hereunder shall be performed on behalf of the Company and on behalf of each
subsidiary of the Company whether now existing or hereafter formed. For
purposes of this Agreement, the words "Company" and "Employer" shall refer to
and include each of the subsidiaries of the Company.
14. Notices. All notices, requests, consents and other
-------
communications, required or permitted to be given hereunder, shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by prepaid telegram, or mailed first-class, postage prepaid, by
registered mail (notices sent by telegram or mailed shall be deemed to have
been given on the date sent), as follows (or to such other address as either
party shall designate by notice in writing to the other in accordance
herewith):
If to the Employee:
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to the Company:
American Bingo & Gaming Corp.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇ ▇▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
15. Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the local laws of the State of Texas
applicable to agreements made and to be performed entirely in such state.
16. Headings and Captions. The section headings contained herein are
---------------------
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
17. Entire Agreement. This Agreement sets forth the entire agreement
----------------
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this
Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.
18. Assignment. This Agreement, and the Employee's rights and
----------
obligations hereunder, may not be assigned by the Employee. The Company may
freely assign its rights, together with its obligations, hereunder without
consent of the Employee. In such event the obligations of the Company
hereunder shall be binding on its successors or assigns, whether by merger,
consolidation, or acquisition of all or substantially all of its business or
assets, or otherwise.
19. Amendments: No Waiver. This Agreement may be amended, modified,
----------------------
superseded, cancelled, renewed or extended and the terms or covenants hereof
may be waived, only by a written instrument executed by both of the parties
hereto, or in the case of a waiver, by the party waiving compliance. The
failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to
enforce the same. No waiver by either party of the breach of any term or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AMERICAN BINGO & GAMING CORP.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:__________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
________________________________
▇▇▇▇ ▇. ▇▇▇▇▇
