Exhibit 10.81
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT dated as of January 19, 1998, by and between
ALLIANCE GAMING CORPORATION, a Nevada corporation, 0000 Xxxxx Xxxxxxx Xxxx, Xxx
Xxxxx, Xxxxxx 00000 (the "Company"), and XXXX XXXXXX, 000 Xxxx Xxxxxxxx Xxxx
#0-000, Xxx Xxxxx, Xxxxxx 00000 (the "Executive").
The parties agree as follows:
1. Employment. The Company employs the Executive, and the Executive accepts
employment by the Company, on the terms and conditions set forth in this
Agreement.
2. Term. The term of this Agreement shall begin on January 19, 1998, and,
unless terminated earlier pursuant to this Agreement, shall expire on
January 19, 2001.
3. Position and Duties. The Executive shall serve as Vice President of Human
Resources and shall report to the President. The Executive shall perform
the duties contemplated by such title and such other duties, consistent
with his experience and abilities, as may be assigned to the Executive by
the President. The Executive shall devote his full time and efforts to the
business and affairs of the Company, use his best efforts to further the
interests of the Company, and at all times conduct himself in a manner that
reflects credit on the Company. It is contemplated that the Executive shall
render services to the Company from the Company's principal place of
business; however, the parties acknowledge and agree that the Executive may
be required to travel from time to time in fulfilling his duties hereunder.
4. Compensation.
(a) Salary. The Company shall pay the Executive a base salary of
$190,000 a year in installments on the regularly recurring paydays in
accordance with the Company's practice. Increases in the base salary shall
be considered by the Company at least annually, beginning with the
completion of the first year of employment and will be based on criteria
applicable to other senior executives of the Company, provided, however,
that the award of any such increase shall be at the sole discretion of the
Company.
(b) Bonuses. The Executive shall be eligible to receive a cash bonus from
the Company each year, provided, however, that the Company shall not be
obligated to pay any bonus, and the payment, if any, and amount and timing
of any such bonus shall be solely within the discretion of the Company and
may be based on any criteria the Company deems relevant or pursuant to such
bonus plan as the Company may adopt.
(c) Options. The Executive shall be entitled to receive options (the
"Options") to acquire an aggregate of 100,000 shares of the publicly-traded
common stock of Alliance Gaming Corporation. The exercise price of the
Options shall be equal to the closing market price on the date the term of
this Agreement begins under paragraph. The Options shall "vest" (that is,
become exercisable by the Executive) in four installments of 25,000 shares
each, with the first installment vesting on the date the term of this
Agreement begins under paragraph , and with each successive installment
vesting after the Executive completes each successive year of employment,
provided, however, that except as expressly provided in this Agreement, no
Options shall vest after this Agreement expires or terminates for any
reason, and provided further that any vested Options that have not been
exercised within ten years after the date of this Agreement shall expire
without further action by the Company.
(d) Reimbursement of expenses. In accordance with established policies and
procedures of the Company as in effect from time to time, the Company shall
pay to or reimburse the Executive for all reasonable and actual
out-of-pocket expenses including but not limited to travel, hotel, and
similar expenses, incurred by the Executive from time to time in performing
his obligations under this Agreement. The Company shall also reimburse the
Executive for reasonable and actual out-of-pocket costs of moving and
interim housing.
(e) Vacation. The Executive shall be entitled to four weeks annual paid
vacation time, prorated for any partial employment year. The Executive may
accumulate and carry forward unused vacation days from year to year
consistent with the Company's policy for senior executives as in effect
from time to time. The Executive shall also be entitled to reasonable
periods of sick leave with compensation and all paid holidays given by the
Company to its senior executive officers.
(f) Other benefits. The Executive shall be entitled to other employment
benefits, including but not limited to life insurance, medical and
hospitalization, disability, and retirement benefits, consistent with the
benefits provided to other senior executives of the Company.
(g) No Reduction. There shall be no material reduction or diminution of the
benefits provided in this section during the term of this Agreement unless
(i) the Executive consents, (ii) an equitable arrangement (embodied in a
substitute or alternative benefit or plan) is made with respect to such
benefit or plan, or (iii) the reduction is part of a program of
across-the-board benefit reductions similarly affecting the senior
executive officers of the Company.
5. Termination.
(a) Disability. If the Executive, because of illness or incapacity, fails
to discharge his duties under this Agreement for six or more consecutive
months or for noncontinuous periods aggregating to twenty-two weeks in any
twelve-month period, the Company may terminate this Agreement on thirty
days' notice, whereupon the obligations of the Company and the rights of
the Executive under this Agreement shall terminate, except that:
(1) The Company shall pay the Executive's salary on a
pro-rata basis through the date of termination,
offset by any benefits payable to the Executive under
any disability insurance policy paid for by the
Company; and
(2) One-half of any unvested Options shall vest and
become exercisable by the Executive's estate for two
years after the date of termination; and
(3) The Executive shall have the right, at the
Executive's expense, to the assignment of any and all
insurance policies or health protection plans in
accordance with the terms and conditions of those
plans.
(b) Death. In the event of the Executive's death, this Agreement shall
terminate as of the date of his death, in which case the obligations of the
Company and the rights of the Executive under this Agreement shall
terminate except that:
(1)The Company shall continue to pay the Executive's
salary for twelve months after the date of death,
offset by any benefits payable to the Executive or
the Executive's estate under any life insurance
policy paid for by the Company; and
(2) The Company shall reimburse the Executive's
estate for all expenses incurred and reimbursable
under paragraph ; and
(3) One-half of any unvested Options shall vest and
become exercisable by the Executive's estate for two
years after the date of the Executive's death.
(c)Termination by Company for Cause.
(1)The Company may terminate this Agreement for cause at any time
immediately on notice to the Executive, in which case the Company's
obligations and the Executive's rights under this Agreement shall
terminate. For purposes of this provision, the term "cause" includes, but
is not limited to:
(i) The Executive's insubordination, fraud,
disloyalty, dishonesty, willful misconduct, or gross
negligence in the performance of the Executive's
duties under this Agreement, including willful
failure to perform such duties as may properly be
assigned to the Executive under this Agreement.
(ii) The Executive's material breach of any provision
of this Agreement.
(iii) The Executive's failure to qualify (or having
so qualified being thereafter disqualified) under any
suitability or licensing requirement of any
jurisdiction or regulatory authority to which the
Executive may be subject by reason of his position
with the Company and its affiliates or subsidiaries.
(iv) The Executive's commission of a crime against
the Company or violation of any law, order, rule, or
regulation pertaining to the Company's business.
(v) The Executive's inability (other than because of
death or disability under paragraphs and ) to perform
the job functions and responsibilities assigned in
accordance with standards established, whether or not
in writing, from time to time by the Company, in its
sole discretion.
(vi) The Company obtains from any source information
with respect to the Executive or this Agreement that
would, in the opinion of the Company, jeopardize the
gaming licenses, permits, or status of the Company or
any of its subsidiaries or affiliates with any gaming
commission, board, or similar regulatory or law
enforcement authority.
(2) Any termination by the Company for cause shall not be in limitation of
any other right or remedy the Company may have under this Agreement or
otherwise.
(d)Termination by Company without cause. The Company may terminate this
Agreement at any time without cause (as defined in paragraph ), whereupon
the Company's obligations and the Executive's rights under this Agreement
shall terminate, except that:
(1)The Company shall continue to pay the Executive's salary and
furnish the benefits described in paragraph for twelve months after
the date of termination, offset by any compensation and benefits
received by the Executive from other employment during that period;
and
(2) One-half of any unvested Options shall vest and become exercisable
by the Executive for two years after the date of termination.
(e) Termination by Executive with cause. If the Executive resigns with
cause, the Company's obligations and the Executive's rights under this
Agreement shall terminate, except that:
(1) The Company shall continue to pay the Executive's salary and
furnish the benefits described in paragraph for twelve months after
the date of termination, offset by any compensation and benefits
received by the Executive from other employment during that period;
and
(2)One-half of any unvested Options shall vest and become exercisable
by the Executive for two years after the date of termination.
As used in this provision, "cause" is limited to the Company's failure
to cure either of the following within thirty days after demand by the
Executive: (i) the Company's failure to pay any portion of the base
salary within thirty days after it is due, and (ii) the assignment to
the Executive of duties materially inconsistent with the duties and
position set forth in this Agreement.
(f) Termination by Executive without cause. If the Executive resigns
without cause (as defined in paragraph ), this Agreement shall terminate as
of the date of his resignation, and the Company's obligations and the
Executive's rights under this Agreement shall terminate.
(g) Survival of restrictive covenants. Notwithstanding the expiration or
termination of this Agreement for any reason, the Executive's covenants in
section and his obligations under that section shall survive the
termination of this Agreement as set forth in that section.
6. Restrictive covenants.
(a)Covenant not to compete.
(1) During the term of this Agreement and for twelve months after its
termination for any reason (other than its expiration at the end of its
term pursuant to paragraph , except as otherwise provided in paragraph ),
the Executive will not, directly or indirectly, whether as employee, owner,
partner, agent, employee, officer, consultant, advisor, stockholder (except
as the beneficial owner of not more than 5 percent of the outstanding
shares of a corporation, any of the capital stock of which is listed on any
national or regional securities exchange or quoted in the daily listing of
over-the-counter market securities and, in each case, in which the
Executive does not undertake any management or operational or advisory
role) or in any other capacity, for the Executive's own account or for the
benefit of any person or entity, establish, engage, or be connected with
any person or entity that is at the time engaged in a business then in
competition with the business of the Company (which, for purposes of this
paragraph, shall include any of the Company's subsidiaries or affiliates)
in any area where the Company is doing business at the time of termination.
The Company and the Executive acknowledge and agree that the Company's
market is unlimited geographically and that the scope and duration of the
covenant in this paragraph are reasonable and fair; however, if a court of
competent jurisdiction determines that this covenant is overbroad or
unenforceable in any respect, the Company and the Executive acknowledge and
agree that the covenant shall be enforced to the greatest extent any such
court deems appropriate, and such court may modify this covenant to that
extent.
(2)At the expiration of this Agreement at the end of its term under
paragraph , the Company may, in its sole and absolute discretion, continue
to pay the Executive the base salary set forth in paragraph and the other
benefits set forth in paragraph , in which case, and for so long as the
Company continues to do so, the Executive shall be bound by the covenant
set forth in paragraph .
(b)Covenant not to solicit customers, employees, or consultants. Executive
shall not, directly or indirectly, during the term of this Agreement and
for twelve months after its expiration or termination for any reason, (i)
solicit the trade or patronage of any of the customers or prospective
customers of the Company (which, for purposes of this paragraph, shall
include any of the Company's subsidiaries or affiliates) or of anyone who
has heretofore traded or dealt with the Company, regardless of the location
of such customers or prospective customers of the Company with respect to
any technologies, services, products, trade secrets, or other matters in
which the Company is active, or (ii) aid or endeavor to solicit or induce
any other employee or consultant of the Company to leave the Company to
accept employment of any kind with any other person or entity.
(c) Confidential Information and Non-Disparagement.
(1) In accordance with NRS 600A.010 et seq. (the so-called Uniform Trade
Secrets Act), the Executive shall hold in a fiduciary capacity for the
benefit of the Company and its stockholders all secret, confidential, and
proprietary information, knowledge, and data relating to the Company (and
any of its subsidiaries or affiliates), obtained by the Executive during or
by reason of the Executive's employment by the Company. During the term of
this Agreement and after its expiration or termination for any reason, the
Executive shall not, without the prior written consent of the Company or
except as may be required by law, communicate or divulge any such
information, knowledge, or data to any person or entity other than the
Company (or as applicable its subsidiaries or affiliates) and those
designated by them that would result in any misappropriation under and as
defined in such Act, except that, while employed by the Company, in
furtherance of the business and for the benefit of the Company, the
Executive may provide confidential information as appropriate to attorneys,
accountants, financial institutions, and other persons or entities engaged
in business with the Company from time to time.
(2)Each party agrees that, after the expiration or termination of this
Agreement for any reason, neither shall, publicly or privately, disparage
or make any statements (written or oral) that could impugn the integrity,
acumen (business or otherwise), ethics, or business practices of the other
(including, in the case of the Company, its affiliates and subsidiaries),
except, in each case, to the extent (but solely to the extent) necessary
(i) in any judicial or arbitration action to enforce the provisions of this
Agreement, or (ii) in connection with any judicial or administrative
proceeding to the extent required by applicable law.
(d) Standstill. During the term of this Agreement and for twelve months after
its expiration or termination for any reason, the Executive shall not,
singly or with any other person, directly or indirectly:
(1) Propose, enter into, agree to enter into, or encourage any other
person to propose, enter into, or agree to enter into (i) any form of
business combination, acquisition, or other transaction relating to
the Company or any of its subsidiaries or affiliates, or (ii) any form
of restructuring, recapitalization, or similar transaction with
respect to the Company or any of its subsidiaries or affiliates; or
(2) Acquire, or offer, propose, or agree to acquire, by tender offer,
purchase, or otherwise, any voting securities of the Company or of its
subsidiaries or affiliates, except through the exercise of options or
warrants beneficially owned as of the date of this Agreement; or
(3) Make or in any way participate in any solicitation of proxies or
written consents with respect to voting securities of the Company or
any of its affiliates or subsidiaries (it being understood that the
mere execution of a proxy or written consent for his own securities
beneficially owned shall not be treated as constituting participation
in such a solicitation); or
(4) Become a participant in any election contest with respect to the
Company or a nominee to or member of its board of directors or the
board of directors of any affiliate or subsidiary of the Company or
any of its affiliates or subsidiaries; or
(5) Seek to influence any person with respect to the voting or
disposition of any voting securities of the Company or any of its
affiliates or subsidiaries; or
(6) Demand a copy of the list of stockholders or other books and
records of the Company or any of its subsidiaries or affiliates; or
(7) Participate in or encourage the formation of any partnership,
syndicate, or other group that owns or seeks or offers to acquire
beneficial ownership of any voting securities of the Company or any of
its affiliates or subsidiaries or that seeks to affect control of the
Company or any of its affiliates or subsidiaries or for the purpose of
circumventing any provision of this Agreement; or
(8) Propose or support any director or slate of directors for
nomination, appointment, or election to the board of directors of the
Company or any of its affiliates or subsidiaries (it being understood
that the mere execution of a proxy or written shareholder consent for
his own securities beneficially owned shall not be treated as
constituting such support); or
(9) Otherwise act to seek or to offer to control or influence, in any
manner, the management, the board of directors, or the policies of the
Company or any of its affiliates or subsidiaries; or
(10) Seek to amend or change this provision.
(e) The Executive acknowledges that the Company will suffer irreparable
injury, not readily susceptible of valuation in monetary damages, if the
Executive breaches any of his obligations under this section. Accordingly,
the Executive agrees that the Company will be entitled, at the Company's
option, to injunctive relief against any breach or prospective breach by
the Executive of the Executive's obligations under this section in any
federal or state court of competent jurisdiction sitting in the State of
Nevada, in addition to monetary damages and any other remedies available at
law or in equity. The Executive hereby submits to the jurisdiction of such
courts for the purposes of any actions or proceedings instituted by the
Company to obtain such injunctive relief, and agrees that process may be
served on the Executive by registered mail, addressed to the last address
of the Executive known to the Company, or in any other manner authorized by
law.
(f) Material Inducements. The restrictive covenants and other provisions in
this section are material inducements to the Company entering into and
performing this Agreement. Accordingly, in the event of any breach of the
provisions of this section by the Executive, in addition to all other
remedies at law or in equity possessed by the Company, (i) the Company
shall have the right to terminate and not pay any amounts payable to the
Executive under this Agreement, (ii) all Options that are unexercised shall
be immediately forfeited and returned to the Company, and (iii) the
Executive shall immediately account to the Company and return to the
Company an amount in cash equal to all profits or benefits obtained or
realized by the Executive by virtue of the ownership or disposition of the
Options.
7. Indemnification and Liability Insurance. If the Executive is or during
the term of this Agreement becomes a director of or holds a corporate
office with the Company:
(a)Indemnification. The Company shall indemnify and hold the Executive
harmless, to the fullest extent legally permitted by Section 78.751 of the
Nevada Corporation Code (as amended and in effect from time to time)
against any and all expenses, liabilities, and losses (including without
limitation, reasonable attorneys' fees and disbursements of counsel
reasonably satisfactory to the Company), incurred or suffered by him in
connection with his service as a director or officer of the Company under
this Agreement, in each case, except to the extent of the Executive's
intentional misconduct, fraud, or knowing violation of law.
(b) Insurance. The Company shall maintain, for the benefit of the
Executive, a directors' and officers' liability insurance policy insuring
the Executive's service as a director or officer or both of the Company (or
any affiliate or subsidiary of the Company) during the term of this
Agreement in accordance with its customary practices as in effect from time
to time. The parties acknowledge and agree that the policy may cover other
officers and directors of the Company in addition to the Executive.
8. Licenses and approvals. This Agreement is contingent on any necessary
approvals and licenses from any regulatory authorities having jurisdiction over
the parties or the subject matter of this Agreement. Each party shall promptly
apply to the appropriate regulatory authorities for any licenses and approvals
necessary for that party to perform under this Agreement, shall diligently
pursue its applications and pay all associated costs and fees, and shall
otherwise cooperate with any requests, inquiries, or investigations of any
regulatory authorities or law enforcement agencies in connection with the
Company, its affiliates, or this Agreement. If any license or approval necessary
for either party to perform under this Agreement is denied, suspended, or
revoked, this Agreement shall be void, provided, however, that if the denial,
suspension, or revocation affects performance of the Agreement in part only, the
parties may be mutual agreement continue to perform under this Agreement to the
extent it is unaffected by the denial, suspension, or revocation.
9. Compliance program. The parties acknowledge that Alliance Gaming Corporation,
as a company that operates and as the parent of companies that operate under
privileged licenses in a highly regulated industry, maintains a compliance
program to protect and preserve the name, reputation, integrity, and good will
of Alliance and its subsidiaries and affiliates through a thorough review and
determination of the integrity and fitness, both initially and thereafter, of
any person or company that performs work for those companies or with which those
companies are otherwise associated, and to monitor compliance with the
requirements established by gaming regulatory authorities in various
jurisdictions around the world. This Agreement and the association of the
Company and its affiliates with the Executive are contingent on the continued
approval of Alliance and its compliance committee under the Alliance compliance
program. The parties shall cooperate with Alliance and its compliance committee
as reasonably requested by Alliance or the committee and shall provide the
committee with such information as it may request. If Alliance, acting on the
recommendation of the committee, withdraws its approval of this Agreement or one
or more of the other parties, then this Agreement shall be void and neither
party shall have any rights thereunder.
10. General Provisions.
(a) Arbitration. Any controversy or claim arising out of or relating to
this Agreement or its breach (except, at the option of the Company, a
controversy or claim arising out of or relating to section , which the
Company may choose to be adjudicated in a federal or state court sitting in
Las Vegas, Nevada), shall be settled by arbitration in Las Vegas, Nevada,
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment on the award rendered by the
arbitrator or arbitrators may be entered in any court having jurisdiction
thereof. If any arbitration or other legal or equitable action or
proceeding is instituted to enforce any provisions of this Agreement, the
prevailing party shall be entitled to recover as costs such amounts as the
court or arbitrator may judge to be reasonable, including costs and
attorneys' fees.
(b) Further assurances. Each party shall execute all documents and take all
other actions necessary to effect the provisions and purposes of this
Agreement.
(c) Entire agreement. This Agreement contains the entire agreement between the
parties and supersedes all other oral and written agreements previously entered
into by the parties concerning the same subject matter.
(d) Modification, rescission, and assignment. This Agreement may be
modified or rescinded only with the written consent of both parties.
Neither this Agreement nor any right or interest under this Agreement shall
be assignable by either party without the written consent of the other,
provided, that (i) if the Executive dies during the term of this Agreement,
the Executive's estate and his heirs, executors, administrators, legatees,
and distributees shall have the rights and obligations as provided in this
Agreement, and (ii) nothing contained in this Agreement shall limit or
restrict the Company's ability to merge or consolidate or effect any
similar transaction with any other entity, irrespective of whether the
Company is the surviving entity (including a split up, spin off, or similar
type transaction), provided that one or more of such surviving entities
continues to be bound by the provisions of this Agreement now binding on
the Company.
(e) Controlling law; severability. Nevada law shall govern this Agreement
and its interpretation. If any provision is unenforceable for any reason,
it shall be deemed stricken from the Agreement but shall not otherwise
affect the intention of the parties or the remaining provisions of the
Agreement.
(f) Binding effect. This Agreement shall bind and inure to the benefit of
each of the parties and their respective heirs, successors, administrators,
executors, and assigns.
(g) No third party benefits. This Agreement is for the benefit of the
parties and their permitted successors and assigns. The parties intend
neither to confer any benefit hereunder on any person, firm, or corporation
other than the parties hereto, nor that any such third party shall have any
rights under this Agreement.
(h) Indulgence. Neither the failure nor any delay on the part of either
party to exercise any right, remedy, power, or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power, or privilege preclude any
other or further exercise of the same or of any other right, remedy, power,
or privilege, nor shall any waiver of any right, remedy, power, or
privilege with respect to any occurrence be construed as a waiver of such
right, remedy, power, or privilege with respect to any other occurrence.
(i) Notices. All notices required by this Agreement must be in writing and
must be delivered, mailed, or telecopied to the addresses given above or
such other addresses as the parties may designate in writing.
(j) Counterparts; facsimiles. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which,
taken together, shall constitute one and the same instrument. This
Agreement may be executed and delivered by exchange of facsimile copies
showing the signatures of the parties, and those signatures need not be
affixed to the same copy. The facsimile copies so signed will constitute
originally signed copies of the same consent requiring no further
execution.
(k) Captions; construction; drafting ambiguities. The captions in this
Agreement are for convenience only and shall not be used in interpreting
it. In interpreting this Agreement any change in gender or number shall be
made as appropriate to fit the context. Each party has reviewed and revised
this Agreement with independent counsel or has had the opportunity to do
so. The rule of construction that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of
this Agreement or of any amendments or exhibits to this Agreement.
11. Condition precedent. This Agreement is subject to approval by the
Company's board of directors and shall be of no force and effect until that
approval is given and is evidenced by a written resolution of the board.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first set forth above.
ALLIANCE GAMING CORPORATION
By:
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Xxxxxx Xxxxxxxxx, President Xxxx Xxxxxx
