EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, effective as of December 31, 1999 by and among
Casino Resource Corporation, a Minnesota corporation ("CRC"),
XxxxxxXxxxXxxxx.xxx, Inc., a Nevada corporation and wholly owned subsidiary of
CRC (the "Company"), and Xxxxxxx Xxxxxxxx, an individual residing in the State
of California (the "Executive").
WHEREAS, the Company is engaged in the design, manufacture, marketing
and distribution of CD cards and related products; and
WHEREAS, the Company desires to employ Executive on the terms and
subject to the conditions set forth herein, and Executive is willing to accept
such employment on such terms and conditions;
NOW THEREFORE, the parties, intending to be legally bound, agree as
follows:
1. Position and Responsibilities. On the terms and subject to the
conditions set forth in this Agreement, the Company shall employ Executive to
serve as the Vice President of Technology of the Company. Executive shall
perform, and shall have the requisite authority to perform, all duties
customarily attendant to such position and shall use his best efforts, during
reasonable business hours, to meet the business requirements and goals set by
the Chief Executive Officer of the Company. Executive shall perform the services
hereunder at Company's offices, which shall be located in the Silicon Valley
region of California, and shall do such traveling as may be reasonably required
of him in the performance of his duties. Executive shall report directly to the
Chief Executive Officer of the Company.
2. Term. Executive shall be employed for a one-year term commencing on
_____________________ ("Commencement Date"), and ending on the first anniversary
of the Commencement Date, unless sooner terminated in accordance with the
provisions of Section 5 below.
3. Compensation.
3.1 As compensation for Executive's services rendered hereunder,
Company shall pay to Executive an annual base salary of eighty thousand dollars
($80,000) payable in accordance with the Company's regular payroll practices in
effect from time to time. If at any time hereafter the Company shall adopt a
bonus program, an option program or any other form of equity participation for
senior executives of the Company, Executive shall be eligible to participate in
such program in a manner and capacity commensurate with his position and duties.
3.2 As additional consideration for Executive's services
hereunder, Executive shall be entitled to participate in employee benefit plans
now or hereafter provided or made available to employees of the Company
generally, such as group medical, life and disability insurance.
3.3 Executive shall be entitled to vacation time and holidays as
are provided in general to executive employees of the Company.
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3.4 Each payment to Executive under this Agreement shall be
reduced by any amounts required to be withheld by Company from time to time
under applicable laws and regulations then in effect.
4. Expenses. The Company shall reimburse Executive or otherwise provide
for or pay for all reasonable expenses incurred by Executive in furtherance of
or in connection with the business of the Company, as pre-authorized by the
Chief Executive Officer of the Company or pre-approved budget line item.
Executive agrees that he will furnish the Company with adequate records and
other documents for the substantiation of each such business expense.
5. Termination.
5.1 Termination by the Company for Cause. Company shall have the
right to terminate this Agreement "for cause" by giving Executive written notice
to that effect, describing in reasonable detail the reasons for such
termination. For the purpose of this Agreement, "for cause" shall mean (i)
commission by Executive of a willful act of dishonesty in the course of his
duties hereunder, (ii) conviction of Executive of a felony or other serious
crime, (iii) Executive's continued, habitual intoxication or performance under
the influence of controlled substances during working hours; (iv) any fraud,
embezzlement or misappropriation by Executive of any of the assets of the
Company, including the Confidential Information (as defined below); or (v)
significant failure by Executive to perform duties and obligations under this
Agreement (except as a result of disability or death). Termination "for cause"
shall be effective on the date specified in the notice given by the Company,
provided that no termination hereunder shall be effective unless a reasonable
period (not to exceed 30 days) following receipt by Executive of such notice
shall have lapsed and the matters which constitute or give rise to such
termination shall not have been cured or eliminated by Executive. In the event
of termination for cause, the Company shall promptly pay to Executive all
amounts earned and payable as of the effective date of termination and
reimbursement of any unpaid business expenses accrued through that date (upon
presentation of adequate documentation), and the Company shall have no further
obligation hereunder.
5.2 Termination by the Company in the event of Disability or
Death. In the event that Executive is unable by reason of physical or mental
disability from substantially performing his duties hereunder for either one
continuous period of one month or a total of three months out of any twelve
consecutive months, the Company shall have the right to terminate this Agreement
by giving Executive 15 days written notice to that effect, with the effective
date of such termination being on the 15th day following receipt of such notice
by Executive. In the event of Executive's death, the Company shall have the
right to terminate this Agreement effective immediately as of the date of death.
In the event of termination for disability or death, the Company shall promptly
pay to Executive or his beneficiaries all amounts earned and payable as of the
effective date of termination and reimbursement of any unpaid business expenses
accrued through that date (upon presentation of adequate documentation), and the
Company shall have no further obligation hereunder.
5.3 Termination by the Company without Cause. The Company shall
have the right to terminate this Agreement for any reason effective upon the
60th day following delivery to Executive of notice of the Company's intent to
terminate. In the event the Company terminates this Agreement without cause, the
Company shall pay to Executive, within 60 days of the
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effective date of termination, all compensation and other benefits payable to
Executive under Section 3 above through the entire remaining term of this
Agreement, and shall reimburse Executive for any unpaid business expenses
accrued through the effective date of termination, (upon presentation of
adequate documentation), and the Company shall have no further obligation
hereunder.
6. Confidential Information.
6.1 Definition. Executive hereby agrees and acknowledges that all
information and materials directly relating to the business and finances of the
Company (collectively, the "Confidential Information"), in whatever form and
whether now existing or developed or created during the period of Executive's
employment with the Company, excepting information and materials already known
or possessed by Executive as of the date hereof or obtained by Executive from
general or public sources, are proprietary to the Company and are highly
confidential in nature. The Confidential Information includes, but is not
limited to, (i) marketing and development plans, forecasts, forecast
assumptions, forecast volumes, future plans and potential strategies of the
Company; (ii) cost objectives, pricing policies and procedures, quoting policies
and procedures, and unpublished price lists; (iii) licensing policies,
strategies and techniques; (iv) customer lists, names of past, present and
prospective customers and their representatives; (v) data and other business
information about or provided by past, present and prospective customers; (vi)
names of past, present and prospective vendors and their representatives, data
and other information about or provided by past, present and prospective
vendors; (vii) purchasing information, orders, invoices, xxxxxxxx, and payment
of xxxxxxxx; (viii) types of products, supplies, materials and services
purchased, leased, licensed and/or sold by the Company; (ix) past, present and
future research and development arrangements; (x) customer service information;
(xi) information pertaining to joint ventures, mergers and/or acquisitions;
(xii) the Company's personnel policies and procedures, the Company's personnel
files, and the compensation of officers, directors and employees of the Company;
(xiii) all other confidential business records and trade secrets of the Company;
(xiv) any and all Confidential Information not generally known to the public or
within the industries or trades in which the Company competes; and (xv) any and
all information and materials in the Company's possession or under its control
from any other person or entity which the Company is obligated to treat as
confidential or proprietary.
6.2 General Skills and Knowledge. The general skills and
experience gained by Executive during Executive's employment with the Company,
and information publicly available or generally known within the industries or
trades in which the Company competes, is not considered Confidential
Information.
6.3 Executive's Obligations as to Confidential Information.
Executive shall not at any time before or after termination of his employment
hereunder willfully use, disclose or divulge any Confidential Information or
data to any person, except (i) in connection with the discharge of Executive's
duties hereunder; (ii) with the prior written consent of the Company; or (iii)
to the extent necessary to comply with law or the valid order of a court of
competent jurisdiction, in which event Executive shall notify Company as
promptly as practicable (and, if possible, prior to making such disclosure).
Executive shall use his best efforts to prevent any such disclosure by others.
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7. Covenants not to Compete or Solicit. In consideration for the
compensation paid to Executive pursuant to Section 3 above, and as a condition
to the performance by the Company of all obligations under this Agreement,
Executive agrees that during the term of this Agreement and for the period of
one year following the date of termination of this Agreement, Executive shall
not (i) within the Territory (as defined below in this Section 7), directly or
indirectly through any other person, firm or corporation compete with or be
engaged in the same business or "participate in" any other business or
organization which during such period competes with or is engaged in the same
business as the Company; (ii) solicit (or attempt to solicit) the employment,
consulting or other services of any other employee of the Company or otherwise
induce (or attempt to induce) any of such employees to leave the Company's
employment or to breach an employment agreement or understanding with the
Company; or (iii) solicit (or attempt to solicit) business patronage from or
call on any existing or prospective customer of the Company or interfere (or
attempt to interfere) with any relationship between the Company and any of its
existing or prospective customers. For the purpose of this Section 7, "existing
or prospective customers" of the Company include all customers (A) who have
purchased, or have agreed to purchase, goods or services from the Company at any
time during the two years prior to the date of termination; or (B) with whom the
Company has had discussions regarding a prospective sale of goods and services
by the Company. For the purpose of this Section 7, the term "participate in"
shall mean: directly or indirectly, for Executive's own benefit or for, with, or
through any other person, firm, or corporation, own, manage, operate, control,
loan money to, or participate in the ownership, management, operation, or
control of, or be connected as a director, officer, employee, partner,
consultant, agent, independent contractor, or otherwise with, or acquiesce in
the use of Executive's name. Notwithstanding the foregoing, it shall not be a
breach of the provisions of this Section 7 if, during or after the term of this
Agreement, Executive is a passive investor in any publicly held entity and
Executive owns 1% or less of the equity interests therein. For the purpose of
this Section 7, the "Territory" means the geographic territory in which the
Company has customers or sales during the term of this Agreement.
7.1 Restrictive Covenants Necessary and Reasonable. Executive
agrees that the provisions of this Section 7 are necessary and reasonable to
protect the Company in the conduct of its business. If any restriction contained
in this Section 7 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 restriction shall then be enforceable in the manner contemplated hereby.
7.2 Injunctive Relief. Executive, recognizing that irreparable
injury shall result to the Company in the event of Executive 's breach of the
terms and conditions of this Agreement, agrees that in the event of his breach
or threatened breach, the Company shall be entitled to injunctive relief
restraining Executive, and any and all persons or entities acting for or with
him, from such breach or threatened breach. Nothing herein contained, however,
shall be construed as prohibiting the Company from pursuing any other remedies
available to it by reason of such breach or threatened breach.
8. Ideas and Inventions. Executive agrees that all right, title and
interest in or to any and all Inventions are the property of the Company. For
the purposes of this Agreement, "Inventions" shall mean all ideas, concepts,
know-how, techniques, processes, methods,
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inventions, discoveries, developments, innovations and improvements (i)
conceived or made by Executive, whether alone or with others, in the course of
Executive's employment by the Company, or (ii) conceived or made by Executive,
whether alone or with others, in the course of Executive's employment, but which
reach fruition within the period from the date of termination of Executive's
employment through the second anniversary of such date, and which either (A)
involve or are reasonably related to the business of the Company or to the
Company's actual or demonstrably anticipated research or development; or (B)
incorporate or are derived from, in whole or in part, any of the Confidential
Information. Executive agrees to promptly disclose all Inventions to the
Company, and to provide all assistance reasonably requested by the Company in
the preservation of its interests in the Inventions, such as by executing
documents, testifying, etc. Executive agrees to execute, acknowledge and deliver
any instruments confirming the complete ownership by the Company of such
Inventions. Such assistance shall be provided at the Company's expense without
any additional compensation to Executive.
9. Issuance of Options.
9.1 Issuance. For the purpose of inducing Executive to enter into
this Agreement, CRC agrees to issue to Executive options to purchase an
aggregate of 50,000 shares of CRC common stock at an exercise price of seventeen
cents per share (the "Options"). The Options shall vest and become exercisable
as follows: (i) if, as of January 1, 2001, the Company had revenues for the year
ending December 31, 2000 of at least $2,000,000, then one-third (and only
one-third) of the outstanding Options shall immediately vest and become
exercisable; and (ii) if, as of January 1, 2002, the Company had cumulative
revenues for the two years ending December 31, 2001 of at least $4,000,000, then
an additional one-third (and only one-third) of the outstanding Options shall
immediately vest and become exercisable. Notwithstanding anything herein to the
contrary, all unvested Options shall immediately vest and become exercisable in
the event that the Company achieves, at any time prior to December 31, 2002,
cumulative revenues of at least $8,000,000. Any unvested Options shall be
terminated and canceled upon such time that Executive ceases to be employed by
the Company. The Options shall be evidenced by separate Option Issuance
Agreements, in the form adopted for such purpose by the Company's board of
directors, which shall be executed and delivered by the Company as soon as
practicable following the date hereof.
9.2 Registration Rights. Within six months following the first
date on which any of the Options shall vest and become exercisable in accordance
with Section 9.1 above, CRC shall, at its own expense, file a registration
statement with the Securities and Exchange Commission (the "SEC") for the
purpose of registering under the Securties Act of 1933 all of the shares of CRC
common stock underlying the vested and unvested Options (the "Option Shares")
and shall use its best efforts to cause such registration statement to be
declared effective by the SEC. CRC's obligation to register the Option Shares
shall be subject to (i) a pending material financing, acquisition or disposition
transaction by CRC and (ii) any such reasonable requirements that CRC's
underwriter may make in connection with a public offering by CRC. The
registration rights described in this Section 9.2 shall be more fully set forth
in separate Registration Rights Agreements, in the form adopted for such purpose
by the Company's board of directors, which shall be executed and delivered by
the Company as soon as practicable following the date hereof.
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10. CRC Guarantee. CRC hereby guarantees the Company's performance
pursuant to this Agreement.
11. Miscellaneous.
11.1 Amendments. No amendment or modification of this Agreement
shall be valid or binding unless made in writing and signed by the party against
whom enforcement thereof is sought.
11.2 Notices. Any and all notices, demands, requests or other
communication required or permitted by this Agreement or by law to be served on,
given to, or delivered to any party hereto by any other party to this Agreement
shall be in writing and shall be deemed duly served, given, or delivered when
personally delivered to the party to be notified, or in lieu of such personal
delivery, when confirmed as received if delivered by United States registered or
certified mail, return receipt requested, or when confirmed as received if
delivered by a nationally-recognized overnight courier service, addressed to the
to the party to be notified, at the addresses set forth below. Either of the
parties hereto may at any time and from time to time change the address to which
notice shall be sent hereunder by notice to the other party given under this
Section.
If to Executive to: Mr. Xxxxxxx Xxxxxxxx
With a copy to:
If to the Company or
CRC to: 000 Xxxxxxxxx Xxxx.
Xxxxx Xxxxxxx, XX 00000
With a copy to : Xxxxxx X. Xxxxxx, Esquire
Mesirov Xxxxxx Xxxxx Xxxxxx & Xxxxxxxx, LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
11.3 Enforceability. If any provision of this Agreement shall be
invalid or unenforceable, in whole or in part, then such provision shall be
deemed to be modified or restricted to the extent and in the manner necessary to
render the same valid and enforceable, or shall be deemed excised from this
Agreement, as the case may require, and this Agreement shall be construed and
enforced to the maximum extent permitted by law, as if such provision had been
originally incorporated herein as so modified or restricted, or as if such
provision had not been originally incorporated herein, as the case may be.
11.4 Waivers. No waiver of any default or breach of this Agreement
shall be deemed a continuing waiver or a waiver of any other breach or default.
11.5 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada without regard to principles
of conflicts of law.
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11.6 Assignment. Executive may not assign any rights (other than the
right to receive income hereunder and upon death to his estate) under this
Agreement without the prior written consent of Company. If Company, or any
entity resulting from any merger or consolidation with or into Company, is
merged with or consolidated into or with any other entity or entities, or if
substantially all of the assets of any of the aforementioned entities is sold or
otherwise transferred to another entity, the provisions of this Agreement shall
be binding upon and shall inure to the benefit of the continuing entity in, or
the entity resulting from, such merger or consolidation, or the entity to which
such assets are sold or transferred.
11.7 Entire Agreement. This Agreement constitutes the sole and only
agreement of the parties hereto respecting the subject matter hereof. Any prior
agreements, promises, negotiations, or representations concerning its subject
matter not expressly set forth in this Agreement, are of no force or effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be duly executed as of the day and year first above written.
XxxxxxXxxxXxxxx.xxx, Inc. Executive
by: __________________________ __________________________
Xxxx X. Xxxxxx, President Xxxxxxx Xxxxxxxx
Casino Resource Corporation
by: __________________________
Xxxx X. Xxxxxx, President
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