1
EXHIBIT 10.12
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), effective April 20, 1999, by
and between LEISURE TIME CASINOS & RESORTS, INC., a Colorado corporation (the
"Company"), and XXXXXX X. XXXXXX (the "Employee"). The Company hereby continues
the employment of the Employee and the Employee hereby accepts continued
employment with the Company on the terms and conditions hereinafter set forth.
1. TERM. Subject to the provisions for termination as hereinafter
provided in this Agreement, the term of this Agreement shall commence effective
on April 20, 1999, and shall terminate on February 28, 2002.
2. NATURE OF EMPLOYMENT. The Company hereby continues the employment of
the Employee as the Vice President of Licensing and Compliance/General Counsel
of the Company to perform such duties as may be directed by the President or an
Executive Vice President of the Company. The Employee accepts such continuation
of employment, agrees to abide by the Articles of Incorporation, Bylaws, Company
policies and the provisions of this Agreement and agrees to devote his full time
and best efforts to his employment under this Agreement as is reasonably
required. The Employee may carry on outside activities so long as those
activities neither conflict nor compete with the Employee's job responsibilities
and corporate duties. The Employee shall at all times, faithfully with due
diligence and to the best of the Employee's ability, experience and talent,
perform all the duties hereunder.
3. COMPENSATION, VACATIONS AND EXPENSES.
a. SALARY. The Company shall pay to the Employee a salary
during the term of this Agreement in accordance with the amounts set
forth on Schedule A hereof. The amounts may be increased as determined
by the Company through an amendment to Schedule A.
b. VACATIONS AND FRINGE BENEFITS. The Employee shall be
entitled to an annual vacation of at least the minimum vacation time
established by the Company for its employees. The Employee shall
further be entitled to participate in and receive the benefits provided
under any employee benefit program which may be adopted and maintained
by the Company (including, without limitation, those described on
Schedule A) and for which the Employee is eligible by virtue
of Employee's employment hereunder, but only as and to the extent the
Employee would otherwise be eligible as provided in any said program.
c. REIMBURSEMENT OF EXPENSES. The Employee is authorized to
incur reasonable expenses while performing the Employee's duties under
this Agreement, including expenses for entertainment, travel,
automobile and similar items incurred on behalf of the Company in an
amount consistent with Company policies. The Company
2
will reimburse the Employee upon the presentation by the Employee of
itemized accounts of such reasonable and appropriate expenditures.
4. TERMINATION OF AGREEMENT.
a. TERMINATION BY EMPLOYEE. The Employee may terminate this
Agreement without cause upon 120 days prior written notice to the
Company. In such event, the Employee shall continue to render the
services required under this Agreement and shall be paid on the regular
payment dates the compensation set forth in Schedule A up to the date
of termination.
b. TERMINATION BY THE COMPANY. If the Employee materially
fails or refuses to observe the provisions of this Agreement or if the
Company determines in its sole discretion that the Employee is not
satisfactorily performing any of the duties required of the Employee
under this Agreement, the Company shall give the Employee written
notice of such failure or refusal and, if the Employee does not correct
such failure or refusal within five (5) days after the giving of such
notice, this Agreement may be terminated by the Company immediately
upon written notice of such termination to the Employee and upon
payment by the Company to the Employee for all compensation accrued
under this Agreement to the date of termination. In the event of the
Employee's fraud, misappropriation or embezzlement of funds or
conviction for any crime punishable as a felony, the Company may
terminate this Agreement immediately upon written notice of such
termination to the Employee and upon payment by the Company to the
Employee for all compensation accrued under this Agreement to the date
of termination. In the event of a termination of the Employee's
employment for cause in accordance with this Section 4.b, the Company
shall have no further obligation to the Employee. However, termination
of the Employee's employment for cause shall not terminate or
extinguish the Employee's obligation or liability to pay to the Company
or any of its affiliates any amount owed to them by the Employee,
including, but not limited to, any amounts misappropriated, embezzled
or otherwise obtained by the Employee by reason of any of the
occurrences referred to in this Section 4.b without prejudice to any
other rights or remedies of the Company or its affiliates at law or in
equity.
c. TERMINATION UPON DEATH OF EMPLOYEE. This Agreement shall
automatically terminate in the event of the Employee's death. In such
case, any accrued compensation or benefits shall inure to the estate of
the Employee and the payment thereof shall be the only liability the
Company shall have to the Employee's estate.
5. EMPLOYEE ACTIONS.
a. EMPLOYEE SHALL NOT DISCLOSE INFORMATION. The Employee
recognizes and acknowledges that the list of the customers, as it may
exist from time to time, of the Company (which for purposes of this
section 5 includes the Company's subsidiaries and affiliates) and any
other proprietary or confidential information, including, but not
limited to
2
3
financial information and information pertaining to the software,
manufacturing, marketing and sales operations, financing operations and
potential acquisitions (hereinafter "Confidential Information"), used
by the Company in its business are valuable and unique assets of the
Company. Except as permitted by the next sentence, the Employee will
not during or for a period of three years after the term of his
employment, disclose any Confidential Information to any person, firm,
corporation, association or other entity for any reason or purpose
whatsoever without the prior written consent or authorization of the
board of directors of the Company. Notwithstanding the prohibitions
contained in the foregoing sentence, the Employee shall be permitted to
disclose such information during the term of his employment to other
persons employed by the Company who have a need to know such
information for a proper purpose related to the business of the
Company. Upon termination of the Employee's employment by the Company,
the Employee shall neither take nor retain any papers, customer lists,
manuals, files or other documents or copies thereof belonging to the
Company. To the extent any items of Confidential Information constitute
trade secrets under Georgia law, Employee's obligations of
confidentiality and nondisclosure shall continue to survive after said
three year period to the greatest extent permitted by applicable law.
These rights of the Company are in addition to those the Company has
under the common law or applicable statutes for the protection of trade
secrets.
b. NON-COMPETE. The Employee hereby covenants and agrees that
the Employee will not, without the prior written consent of the
Company, directly or by assisting others, whether individually or
through any entity controlled by the Employee, during the term of this
Agreement and for a period of six months after the termination of this
Agreement for any reason (the "Restrictive Period"), on Employee's own
behalf or in the service or on behalf of others, whether or not for
compensation, engage in any activity that involves designing,
developing, manufacturing, leasing, selling or operating electronic
gaming machines in any state of the United States where the Company, as
of the effective date of this Employment Agreement, is engaged in the
business of designing, developing, manufacturing, leasing, selling or
operating electronic gaming machines or in any country outside of the
United States where the Company, as of the effective date of this
Employment Agreement, is engaged in the business of designing,
developing, manufacturing, leasing, selling or operating electronic
gaming machines. In addition, during the Restrictive Period, the
Employee shall not have any controlling interest in any person, firm,
corporation or business, through a subsidiary or parent entity or other
entity which engages in designing, developing, manufacturing, leasing,
selling or operating electronic gaming machines. Notwithstanding the
foregoing, the Employee may own shares of other competing companies the
securities of which are publicly traded, so long as such securities do
not constitute five percent or more of the outstanding securities of
any such company.
c. NON-SOLICITATION OF COMPANY EMPLOYEES. During the
Employee's employment with the Company and for six months thereafter,
Employee shall not solicit or in any manner encourage employees of the
Company to leave the employ of the Company. The foregoing prohibition
applies only to employees with whom the Employee had material contact
pursuant to Employee's duties during Employee's employment term.
"Material
3
4
contact" means interaction between the Employee and another employee of
the Company: (i) with whom Employee actually dealt; or (ii) whose
employment or dealings with the Company or services for the Company
were handled, coordinated or supervised by the Employee.
d. NON-SOLICITATION OF COMPANY CUSTOMERS. During the
Employee's employment with the Company and for six months immediately
following cessation of Employee's employment with the Company for any
reason, Employee shall not, on Employee's own behalf or on behalf of
any person, partnership, association, corporation or business
organization, entity or enterprise (except the Company), solicit any
customer of the Company or any representative of any such customer with
a view to selling or providing any product, equipment or service
competitive or potentially competitive with any product, equipment or
service sold or provided by the Company during the two year period
immediately preceding cessation of Employee's employment with the
Company, provided that the restrictions set forth herein shall apply
only to customers of the Company or representatives of such customers
with whom Employee had material contact during such two year period.
"Material contact" exists between Employee and each of the existing
customers of the Company: (i) with whom Employee actually dealt; or
(ii) whose dealings with the Company were handled, coordinated or
supervised by Employee.
e. INTELLECTUAL PROPERTY. The Employee shall disclose to the
Company all ideas and business plans developed by the Employee during
the term of the Employee's employment with the Company which relate to
the business conducted by the Company. All patents, patent
applications, patent licenses, formulas, inventions, improvements,
designs, discoveries, processes, software, copyrights, know-how,
proprietary information, rights, trademarks or trade names or future
improvements thereto developed or conceived of by the Employee during
any period of employment with the Company shall be promptly disclosed
to, and all rights with respect thereto shall be assigned by the
Employee to, the Company in consideration of the remuneration paid or
payable to the Employee hereunder and shall be considered work made for
hire for the Company within the meaning of Title 17 of the United
States Code. The Employee acknowledges that "software" as used in this
Section 5.e shall include without limitation all ideas, concepts,
know-how, methods, techniques, structures, information and materials
relating to the software including source code, object and load
modules, requirements specifications, design specifications, design
notes, flow charts, decoding sheets, annotations, documentation and the
structures, organization, sequence, designs, formulas and algorithms
which reside in the software and which are not generally known to the
public or within the industries or trades in which the Company
competes.
f. REMEDIES. The Employee acknowledges and agrees that
Employee's obligations provided in this Section 5 are necessary and
reasonable in order to protect the Company and its business and the
Employee expressly agrees that monetary damages would be inadequate to
compensate the Company for any breach by Employee of Employee's
covenants and agreements set forth herein. Accordingly, Employee agrees
and
4
5
acknowledges that any such violation or threatened violation of this
Section 5 will cause irreparable injury to the Company and that, in
addition to any other remedies that may be available, in law, in equity
or otherwise, the Company may be entitled to obtain injunctive relief
against the prospective breach of this Section 5 or the continuation of
any such breach by the Employee without the necessity of proving actual
damages.
g. CONSTRUCTION. In the event that any provision of this
Section 5 should ever be deemed to exceed the time, geographic, or
other limitations permitted by applicable law, then such provision
shall be reformed to the maximum time geographic, or other limitations
permitted by applicable law. The provisions of this Section 5 shall be
applicable for the period indicated and shall survive the termination
of this Agreement.
6. GENERAL MATTERS.
a. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Georgia and shall be construed in accordance therewith.
b. NO WAIVER. No provision of this Agreement may be waived
except by an Agreement in writing signed by the waiving party. A waiver
of any term or provision shall not be construed as a waiver of any
other term or provision.
c. AMENDMENT. This Agreement may be amended or altered at any
time, in whole or in part, by filing with this Agreement a written
instrument setting forth such changes, signed by all parties.
d. BINDING EFFECT. This Agreement shall be binding upon the
Employee, the Company and their successors and assigns.
e. CONSTRUCTION. Throughout this Agreement the singular shall
include the plural, the plural shall include the singular and the
masculine shall include the feminine wherever the context so requires.
f. TEXT TO CONTROL. The headings of Sections are included
solely for convenience of reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
g. SEVERABILITY. If any provision of this Agreement is
declared by any court of competent jurisdiction to be invalid for any
reason, such invalidity shall not affect the remaining provisions,
which shall be fully severable, and the Agreement shall be construed
and enforced as if such invalid provision had never been included.
h. ENTIRE AGREEMENT OF THE PARTIES. The parties agree that
this document contains the entire agreement and understanding between
them in relation to the subject
5
6
matter hereof and no representations, warranties, covenants,
understandings or agreements in relation thereto exist between the
parties except as expressly set forth herein.
i. NOTICES. Every notice or other communication to be given by
either party to the other party with respect to this Agreement shall be
in writing and shall not be effective for any purpose unless the same
shall be served personally or by national air courier service or United
States certified mail, return receipt requested, postage prepaid,
addressed, if to the Company at 0000 Xxxxxxxxxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxx 00000, Attention, President, and if to the Employee at 0000
Xxxxxxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000, or such other address or
addresses as the Company or the Employee may from time to time
designate by written notice given as above provided. Every notice or
other communication hereunder shall be deemed to have been given as of
the third business day following the date of such mailing (or as of any
earlier date evidenced by a receipt from such national air courier
service or the United States Postal Service) or immediately if
personally delivered. Notices not sent in accordance with the foregoing
shall be of no force and effect until received by the foregoing parties
as such addresses specified herein.
j. DUPLICATE ORIGINALS. This Agreement may be executed in
several counterparts, each of which shall be an original but all of
which together shall constitute one and the same instrument.
k. ARBITRATION. Any dispute or controversy of or relating to
this Agreement, or any breach of this Agreement, shall be settled by
arbitration to be held in Atlanta, Georgia, in accordance with the
rules then in effect of the American Arbitration Association or any
successor thereto. The decision of the arbitrator shall be final,
conclusive and binding on the parties to the arbitration. Judgment may
be entered on the arbitrator's decision in any court having
jurisdiction and the parties irrevocably consent to the jurisdiction of
the Georgia state courts for this purpose. The Company shall pay the
costs and expenses of such arbitration.
l. ATTORNEYS' FEES. In the event that the Company or the
Employee retains an attorney or attorneys to enforce performance of
this Agreement by the other party or to obtain damages or other relief
because of violation of the terms of this Agreement by the other party,
then all reasonable attorneys' fees and costs of arbitration or
litigation are to be borne and paid by the party determined to have
failed to perform this Agreement or to be liable for damages or against
which other relief is granted.
m. SURVIVORSHIP. The respective rights and obligations of the
parties hereunder shall survive any termination of the Employee's
employment to the extent necessary to the intended preservation of such
rights and obligations.
n. REMEDIES CUMULATIVE; NO WAIVER. No remedy conferred upon a
party by this Agreement is intended to be exclusive of any other remedy
and each and every such remedy shall be cumulative and shall be in
addition to any other remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by a party in
exercising
6
7
any right, remedy or power hereunder or existing at law or in equity
shall be construed as a waiver thereof and any such right, remedy or
power may be exercised by such party from time to time and as often as
may be deemed expedient or necessary by such party in such party's sole
discretion.
The parties have executed this Agreement to be effective as of the date
first above written.
LEISURE TIME CASINOS & RESORTS, INC.
By:
------------------------------------
Xxxx X. Xxxxxxx, President
Attest:
---------------------------------
Xxxxxx X. Xxxxx, Secretary
EMPLOYEE:
---------------------------------------
Xxxxxx X. Xxxxxx
7
8
SCHEDULE A
DESCRIPTION OF DUTIES AND COMPENSATION
EMPLOYEE: Xxxxxx X. Xxxxxx
POSITION WITH COMPANY: Vice President of Licensing and Compliance/General
Counsel
COMPENSATION:
Salary: Employee's salary shall be $100,000 per annum until
February 28, 2000. Commencing March 1, 2000,
Employee's salary shall increase to $110,000 per
annum and commencing March 1, 2001, Employee's
salary shall increase to $121,000 per annum. The
salary will be payable in accordance with Company
policy and shall be reduced by all required
withholdings and withholdings authorized by
Employee.
BENEFITS:
Insurance: Medical, dental, disability (long and short term)
and life to the extent available to all employees
of the Company and paid in accordance with Company
policy if elected by Employee.
Automobile
Allowance: The Company shall pay Employee an automobile
allowance of $600 per month. The cost of the
automobile and all expenses for the operation
(including insurance) and maintenance of the
automobile shall be paid by Employee.
401(k) Plan: Available for Employee's election if eligible.
Flexible Spending
Account: Available for Employee's election if eligible.
