EXHIBIT 99.8
EMPLOYMENT AGREEMENT
OF
XXXXXX X. XXXX
THIS EMPLOYMENT AGREEMENT ( this "Agreement"), is entered
into this 1st day of June, 1998, by and between CASINOVATIONS
INCORPORATED, a Washington corporation, authorized to do business
in Nevada (the "Company"), and XXXXXX X. XXXX (the "Employee").
The parties recite that:
(a) The Employee is currently the President
and Chief Executive Officer of the Company,
and the Company desires to retain the
services of said Employee under the terms and
conditions of this Agreement.
(b) The Employee and the Company will
receive benefits from this contract; and as
such, each agree to each be bound under the
terms and conditions of this Agreement,
including the non-compete and non-disclosure
provisions herein.
(c) The Company desires the knowledge,
skills and ability of the Employee for the
benefit of the Company.
(d) The Employee wishes to be retained by
the Company in accordance with the terms of
this agreement.
(e) The Employee recognizes the legitimate
need of the Company for protection of its
confidential information.
(f) The Company recognizes and acknowledges
the value of the Employee's services and
deems it necessary and desirable to retain
the Employee's services for the period herein
described.
NOW THEREFORE, in consideration of the mutual promises set
forth herein, the Company and the Employee agree as follows:
1. EMPLOYMENT
The Company hereby retains the Employee upon the terms and
conditions hereinafter set forth, and the Employee hereby accepts
said terms and conditions.
2. TERM AND RENEWAL
Except as otherwise provided, this Agreement shall commence
as of June 1, 1998, and continue for a term of eighteen (18)
months, subject to the early termination provisions of Article 8.
At the expiration date of this agreement, it shall be considered
renewed for regular successive periods of one (1) year terms
unless either party submits a notice of termination thirty (30)
days prior to the end of the preceding period.
3. DUTIES
The Company hereby retains the Employee as President and
Chief Executive, and the Employee hereby promises to perform the
duties related thereto and to perform such other duties as the
Company may from time to time assign. As directed by the
appropriate representative(s) of the Company, the Employee shall
also render services for and perform duties for entities related
to the Company and for persons or entities having a contractual
relationship with the Company requiring the Company to provide
such services. The Employee shall perform all of his duties at
such place or places and at such times as the Company shall in
good faith require and as the interest, needs, business or
opportunity of the Company shall require. The Company, through
its Board of Directors, retains the right to supervise the
Employee in the performance of his duties.
4. TIME AND EFFORTS OF EMPLOYEE
So long as this Agreement continues in effect, the Employee
promises to devote his exclusive time and energies to the
business affairs of the Company necessary to achieve the business
objectives of the Company; use his best efforts, skills, and
abilities to promote the Company's interest; perform the duties
described in Article 3 of this Agreement; and to perform such
other duties as may be assigned to him by the Company.
5. COMPENSATION AND BENEFITS
5.1 COMPENSATION. For all services rendered by the
Employee under this Agreement and the Employee's obligation under
Articles 6 and 7 herein, Employee will be compensated as follows:
(a) Base Salary. The Employee shall receive a "Base
Salary" for each calendar month under the term of this agreement
of Twelve Thousand Five Hundred Dollars ($12,500.00) through
December 31, 1998. From January 1, 1999 until December 31, 1999,
the
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Employee shall receive a Base Salary for each calendar month
under this Agreement of Eighteen Thousand Five Hundred Dollars
($18,500) until such time as a new Base Salary is negotiated.
The Base Salary shall be payable in equal semi-monthly
installments on the first and fifteenth of each month.
(b) Stock Options. In addition to the Base Salary,
Employee shall receive "Stock Options" to purchase up to two
hundred thousand (200,000) shares of the Company's common stock
("Shares") under the following terms and conditions:
(i) Upon execution of this Agreement, the
Employee shall have a vested right to acquire
up to one hundred thousand (100,000) Shares
at One Dollar and Fifty Cents ($1.50) per
Share. This option cannot be exercised until
after six months from the effective date of
the Agreement.
(ii) Upon the Employee fulfilling his
obligations and the Company reaching its
goals for 1998, as reasonably established by
the Board of Directors of the Company, the
Employee shall have the right to acquire up
to an additional one hundred thousand
(100,000) Shares at One Dollar and Fifty
Cents ($1.50) per Share. The determination
of whether the Employee has met his
obligations and the Company has reached its
goals shall be made at the discretion of the
Company's Board of Directors. The Employee
shall be entitled to a meeting with the Board
of Directors during January, 1999, to discuss
the option to be paid hereunder, if any.
The Stock Options to be issued under this
subparagraph shall be vested in the Employee
on January 31, 1999, subject to the
requirement that Employee continue to be
President and Chief Executive Officer of the
Company on January 31, 1999.
(iii) The Stock Options must be exercised
within five (5) years from the date the
Employee's rights are vested hereunder. The
Shares will be issued within Thirty (30) days
after the Employee notifies his intent to
exercise the options under this Agreement and
tenders the purchase price to the Company.
The Company offers no warranty as to the
tradability of the Shares or as to whether
such shares will be registered with the
Securities and Exchange Commission.
(iv) If the Company is to be sold, a portion
of the Stock Options granted pursuant to
paragraph 5.1(b)(i) not yet vested
hereinabove shall vest in the Employee thirty
(30) days prior to such sale. The number of
Stock Options to vest under this subparagraph
shall be determined pro rata based upon the
number of Stock Options that the Employee may
be entitled to for the year and the number of
months the Employee was retained under this
Agreement during
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this same year. For example, if the Company
was to be sold on August 31, 1998, the
Employee would have an additional forty-two
thousand, eight hundred and fifty-seven Stock
Options vest on August 1, 1999. [(100,000
stock options for 7 months of 1998) x (3
months of employment/ 7 months)].
(v) If the Company is sold, all of the
Options granted to Employee under paragraph
5(b)(ii) will be vested in full as of the
last business day prior to the sale of the
Company.
(vi) For purposes of paragraph 5(b)(iv) and
(v) hereof, the Company shall notify the
Employee in writing of (1) the impending
sale, (2) the right of the Employee to
exercise the Stock Options and (3) the terms
and conditions of the proposed sale of the
Company. For purposes herein, the Company
shall be deemed sold if substantially all of
its assets are sold, including patents and
goodwill, or the Company's stock is sold or
transferred causing a change in the person or
persons who currently have majority control
of the Company. This Paragraph does not
apply to transfers of stock of the Company,
(1) by an assignment to a revocable living
trust in which the holder is and remains a
trustee and a beneficiary, or (2) by reason
of death of the holder. It is the
Employee's discretion to exercise the Stock
Options prior to the proposed sale. Any
Stock Options vested in this subparagraph
shall remain vested in the Employee, whether
or not they are exercised before the sale,
under the terms of subparagraph (iii).
5.2 PAYMENT OF COMPENSATION. All payments made hereunder
shall be made to the Employee, unless the Employee notifies the
Company otherwise.
5.3 OTHER BENEFITS. The Employee shall be entitled to
participate on a reasonable basis in any deferred compensation,
medical reimbursement, pension, profit sharing, thrift, savings,
vacation, group insurance, or other plan or program, and to
receive any other benefits for which he is eligible and which the
Company may provide for him or for its Employees generally. The
Employee is entitled to a car allowance of Seven Hundred and
Fifty Dollars ($750.00) per month.
6. CONFIDENTIAL INFORMATION
6.1 DISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) Definition. "Confidential Information" shall
mean and include all records of the accounts of customers, route
books, customer lists, and any other records and books relating
in any manner to the customers and/or suppliers of the Company
(whether such records, books or lists are prepared by the
Employee or otherwise come into the possession or use of the
Employee). "Confidential Information" shall also mean and
include any product information,
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technical data, know-how, specifications, processes, drawings,
sketches, formulas, computations and any other information of any
kind whatsoever, whether written or not, concerning any process,
manufacture, composition of matter, plant, design, idea, method,
system or plan in which the Company has a possessory interest and
which becomes known to Employee. The Employee acknowledges that
the Company's primary assets consist of its gaming products or
accessories. Any unauthorized disclosure of the design or
marketing of such products by the Employee shall violate this
Article.
(b) "Confidential Information" shall also mean and
include any accounting, sales, advertising, marketing or
management information, methods or techniques, any business
plans, any computer programs and routines of the Company and any
other information of any kind whatsoever, whether written or not,
concerning, directly or indirectly, the Company, its plans,
programs or operations, which information is not generally known
in the businesses or industries in which the Company is or may
become engaged during Employee's term of this Agreement.
(c) Restriction on Use. Any Confidential Information
received or developed by Employee shall be used only in the
conduct by the Employee of the business of the Company. Such
Confidential Information shall not be used by Employee for any
other purpose unless otherwise directed or authorized in writing
by the Company.
(d) Protection of Confidential Information. The
Company and the Employee expressly recognize and acknowledge that
any Confidential Information disclosed to or developed by
Employee will not, at any time either during or after the term of
this agreement, in any manner, either directly or indirectly be
divulged, disclosed, or communicated to any person, firm or
corporation, or any other business entity by the Employee, nor
shall the Employee use for his own benefit or for any other
purpose than the exclusive benefit of the Company, its
subsidiaries, successors, or assigns, Confidential Information or
any information whatsoever concerning matters affecting or
relating to the business of the Company which the Employee knows
or has reason to know would be valuable to competitors or
potential competitors of the Company, including but not limited
to, Confidential Information or information relating to the
Company's relationships with actual or potential customers or
suppliers and to the needs and requirements of any such actual or
potential customers. Furthermore, but not by was of limitation
of the foregoing, the Employee shall not (i) make known to any
firm, person or corporation the names or addresses of any of the
customers of the Company or any other information pertaining to
them or (ii) call on, solicit, or take away or attempt to call
on, any of the customers of the Company on whom the Employee
called or with whom he became acquainted during his tenure with
the Company, either for himself or for any other person, firm or
corporation.
6.2 BOOKS AND RECORDS. The Employee promises further that
he shall not, without the prior written approval of the Company,
make copies of any books, drawings, documents, records or other
written or printed, photographic, encoded, taped,
electrostatically or electromagnetically encoded data or
information of whatever nature (the "Documents") of the Company;
that he shall not, without the prior written approval of the
Company, remove any of the foregoing from the premises of the
Company; and that he shall not, without the prior written
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approval of the Company, make available to third parties access
to said Documents of the Company. The Employee agrees that all
records and books relating in any manner whosoever to the
customers (whether actual or potential) of the Company, whether
prepared by the Employee or otherwise coming into his possession
shall be the exclusive property of the Company regardless of who
actually purchased the original book or record. All such books
and records shall be immediately returned to the Company by the
Employee upon any termination of this Agreement. If the
Employee purchases any original book or record, he shall
immediately inform the Company, which shall immediately reimburse
the Employee.
6.3 LIMITATION. Nothing contained in this Article or in
any other part of this Agreement shall restrict the ability of
the Employee to make, with the written consent of the Company and
in the ordinary course of his employment, such disclosures as may
be necessary or appropriate to the effective and efficient
discharge of his duties to the Company.
6.4 TERM. Notwithstanding any other provision of this
Agreement, the provisions of this Article 6 shall continue in
full force and effect for a period of Eighteen (18) months
following the expiration or other termination of this Agreement.
6.5 LIQUIDATED DAMAGES. In addition to an injunction
preventing the dissemination or unauthorized use of Confidential
Information as permitted by law, the parties agree that the
reasonable amount of damages the Company will suffer for a breach
of the provisions of Article 6 or Article 7 shall be One Hundred
Thousand Dollars ($100,000); provided, however, that a breach of
both Articles 6 and 7 shall total Two Hundred Thousand Dollars
($200,000) in damages.
7. EMPLOYEES COVENANT NOT TO COMPETE
7.1 COVENANT NOT TO COMPETE.
(a) General. The Company and the Employee expressly
recognize and acknowledge that the Company is engaged in a
business which is highly competitive; that any knowledge of the
Company's Confidential Information or business affairs would give
a competitor or potential competitor unfair competitive advantage
over the Company' that consulting or employment, directly or
indirectly, of the Employee anywhere in the area in which the
Company conducts its business would give to such competitor an
unfair competitive advantage and that the Employee possesses
valuable skills and knowledge. In recognition of the
aforementioned, the Employee and the Company hereby expressly
agree that the restrictions on competition by the Employee
contained in this Article 7 are reasonable, will not overburden
the Employee, and are in the best interest of both the Employee
and the Company.
(b) Time Period and Area Covered. The Employee
promises that, during the term of this Agreement, as set forth in
Article 2 hereof, and for a period of two (2) years after the
expiration or other termination of this Agreement, he shall not
either directly or indirectly engage in competition with the
Company, or with any subsidiary, successor or appointee of the
Company, as constituted during the term of this agreement as of
his resignation, departure, discharge or termination with the
Company in, Nevada, and within a fifty (50) mile radius of any
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Other place of business operated by the Company as of such date.
The Employee acknowledges that the Company's business is
international and that the solicitation of the Company's
international clients in competition of the Company is a
violation of this Agreement.
(c) Affiliations Covered. The Employee further
promises that, during the term of this Agreement, as set forth in
Article 2 hereof, and for a period of two (2) years after the
expiration or other termination of this Agreement, he shall not
engage directly or indirectly as a proprietor, partner,
shareholder, director, officer, employee, agent, or in any other
capacity or manner whatsoever, in any business activity
competitive with the business of the Company or of any
subsidiary, successor or appointee of the Company, as constituted
during his employment.
(d) Board of Directors Approval. Either or both of
the provisions contained in Subsections (b) and (c) above may be
waived at any time in writing by the Board of Directors of the
Company. Such waiver shall not be unreasonably withheld but no
such waiver shall be considered as a waiver of any other term,
covenant or provision of this agreement, nor shall it be
considered a waiver of any subsequent action by the Employee.
7.2 LIMITATION. Nothing contained in this Article 7 shall
prevent the Employee from purchasing or causing or permitting to
be purchased for his direct or indirect benefit securities of any
corporation whose securities are regularly traded on any national
or regional securities exchange; provided, however, that such
purchase must not result in the direct or indirect beneficial
ownership of more than one percent of any outstanding class of
equity securities of any corporation engaged directly or
indirectly in any trade or business activities competitive with
that carried on by the Company without the written approval of
the Company.
7.3 LIQUIDATED DAMAGES. In addition to an injunction
prevent the Employee from competing with the Company as allowed
by law, the parties agree that the reasonable amount of damages
the Company will suffer for a breach of the provisions of Article
6 or Article 7 shall be One Hundred Thousand Dollars ($100,000);
provided, however, that a breach of both Articles 6 and 7 shall
total Two Hundred Thousand Dollars ($200,000) in damages.
8. TERMINATION
8.1 GROUNDS FOR TERMINATION. This Agreement shall
terminate as it relates to the Employee upon the first to occur
of the following events:
(a) The death of the Employee;
(b) Immediately upon five (5) days written notice from
the Company to the Employee "for cause." "For cause" is defined
as:
(i) a breach of the terms and conditions of
this Agreement by the Employee (other than a
breach described in subparagraph 8.1(b)(ii)
herein below), including the performance of
the Employee's obligations and duties herein,
which remains uncured
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for a period of twenty (2) days after written
notice by the Company to the Employee of any
such breach;
(ii) a breach of the terms and conditions of
this Agreement by the Employee which breach
consists of dishonest or criminal conduct, or
such breach constitutes gross negligence by
the Employee in failing to perform his duties
and obligations under this agreement.
(c) Upon the passing of fifteen (15) days after notice
from the Company to the Employee of a bona fide decision by the
Company to terminate its business.
8.2 SEVERANCE PAY. If this Agreement is terminated for
any reason, other than for a reason under Section 8.1(b)(ii), the
Company shall pay the Employee, upon termination, severance pay
in a one time lump sum equal to nine (9) months of the Employee's
Base Salary in effect at the time of severance.
Under no circumstances shall the Employee be entitled to any
Stock Option, which has not vested or accrued prior to the
Employee's termination.
8.3 EFFECT OF TERMINATION ON ARTICLES 6 AND 7.
Notwithstanding the provisions of this Article, the provisions of
Articles 6 and 7 will not terminate upon the occurrence of an
event described above, but will continue in full force and effect
for the term described in those Articles. The severance pay
shall constitute additional consideration for the enforcement of
such provisions.
9. MISCELLANEOUS
9.1 ASSIGNMENT OF AGREEMENT. The knowledge and skills of
the Employee are unique and his services bargained for by this
Agreement may not be delegated by the Employee to any other
person. This Agreement shall inure to the benefit of and be
binding upon the Employee and his testate or intestate
distributes, and the Company, its successors and assigns
including, without limitation, any person, partnership, trust,
corporation or other legal entity which may acquire all or
substantially all of the Company's assets or which may acquire a
controlling interest, either direct or beneficial, in the Company
or with or into which the Company may be consolidated or merged.
As used in this Agreement, the term "Company" shall include any
such successor or assignee.
9.2 REMEDIES. It is agreed that any breach of Article 6
or 7 of this Agreement by the Employee will result in irreparable
injury to the Company and will authorize recourse by the Company
to equitable remedies, including, but not limited to, affirmative
or negative injunctive relief. It is further agreed that in the
event of such breach, violation, or evasion of any of the
Articles hereinbefore mentioned, or of any other Article herein,
the Company may forthwith terminate this Agreement and thereafter
be released from all claims of the Employee hereunder; provided,
however, that such a termination shall not release the Employee
from any warrant, covenant, term, or condition under Articles 6
or 7 of this Agreement. Nothing contained herein
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shall be deemed to obligate the Company to undertake such
termination and nothing contained herein shall be deemed to
preclude the Company from pursuing any remedy, whether legal or
equitable, which is available to it in the event of any breach,
violation or evasion of any Article of this Agreement.
9.3 ENFORCEMENT COSTS. The prevailing party shall be
entitled to all costs of enforcing this Agreement, regardless of
whether an action at law or in equity is commenced or maintained,
including but not limited to, court costs and reasonable
attorney's fees.
9.4 WAIVER OF BREACH. The waiver of the breach of any
term of condition of this Agreement shall not be deemed to
constitute the waiver of any other or subsequent breach of the
same or any other terms of condition.
9.5 SEVERABILITY. All terms and conditions contained in
this Agreement are severable, and in the event that any of them
shall be held or considered to be unenforceable by any court of
competent jurisdiction, this Agreement shall be interpreted as if
such unenforceable term or condition was not contained herein.
9.6 LAW TO APPLY. This Agreement shall be governed by and
interpreted according to the laws of the State of Nevada. Each
party submits to the personal jurisdiction of all courts, whether
Federal or State, within Nevada, and agrees that any action
pertaining to this Agreement shall be brought in a court in
Nevada.
9.7 NOTICE. Any notice required or permitted to be given
under this Agreement shall be sufficient if in writing, and if
sent by registered mail to his last residence as recorded on the
records of the Company in the case of the Employee, or to the
principal offices of the Company in the case of the Company.
9.8 MODIFICATION OF AGREEMENT. No waiver or modification
of this Agreement or of any term or condition herein contained
shall be valid unless in writing and duly executed, nor shall any
waiver or modification of this Agreement not duly executed as
provided herein be deemed to be a part of this Agreement under
any circumstances.
9.9 GENDER, NUMBER, ETC. Where applicable, the singular
includes the plural, the masculine includes the feminine, and
vice versa.,
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IN WITNESS WHEREOF, the parties have executed this
Agreement, delivery of which is hereby acknowledged, as of the
date first above written.
CASINOVATIONS INCORPORATED
By: ________________________________
Its: ________________________________
XXXXXX X. XXXX
______________________________
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