Exhibit 10.65
EXECUTIVE EMPLOYMENT AGREEMENT dated as of July 1, 1998, by and among ALLIANCE
GAMING CORPORATION, 0000 Xxxxx Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000 (with its
subsidiaries, "Alliance"); ALLIANCE XXXXXXXXX XxxX & XX. XX, Xxxxxxxxxxx 00X00,
00000 Xxxxxx, Xxxxxxx (with its subsidiaries, "Automaten", and together with
Alliance, the "Companies"); and XXXX XXXXX, Xxxxxxxxxxxxxxxxxx 00, 00000 Xxxxxx,
Xxxxxxx (the "Executive").
The parties agree as follows:
1. Employment. The Companies employ the Executive, and the Executive accepts
employment by the Companies, on the terms and conditions set forth in this
Agreement.
2. Term; Extension. The term of this Agreement shall begin on July 1, 1998,
and, unless terminated earlier pursuant to this Agreement, shall expire on
December 31, 2000. During the term of this Agreement the parties shall
negotiate in good faith for an agreement for Executive to serve as a
consultant to the Companies for two years or more beginning at the
expiration of this Agreement, which agreement shall include restrictive
covenants comparable to those contained in section 6 and such additional
terms and conditions as the parties may in good faith agree.
3. Position and Duties. The Executive shall report to the president of
Alliance. The Executive's duties and responsibilities shall be limited to:
serving as fully authorized General Representative
("Generalbevollmachtigter") of Automaten; serving as international
executive team member for Alliance and directing development in Europe,
Australia, South Africa, and such other jurisdictions as the president of
Alliance may designate from time to time; serving as new product
development team member for Alliance subsidiary Bally Gaming, Inc.
(including its Bally Systems division); assisting the managing directors of
Automaten in political and industry relations and undertaking special
assignments and such other duties as the managing directors may assign from
time to time; and undertaking special assignments and such other duties as
may be assigned from time to time by the president of Alliance. The
Executive shall perform the duties contemplated by the foregoing and such
other duties, consistent with his experience and abilities, as may be
assigned to the Executive by the president of Alliance. The Executive shall
use his best efforts to the business and affairs of and to further the
interests of the Companies, and at all times conduct himself in a manner
that reflects credit on the Companies, provided, however, that it is
contemplated that the Executive shall not be required to devote more than
one-half his normal working time to the business and affairs of the
Companies. It is contemplated that the Executive shall render services
under this Agreement from Berlin, Germany, to Automaten and KG only, but
outside of Germany to Alliance as required; however, the parties
acknowledge and agree that the Executive may be required to travel
extensively in fulfilling his duties hereunder.
4. Compensation.
(a) Salary. The Companies shall pay the Executive a base salary of
DM954,600 a year in installments on the regularly recurring
paydays in accordance with the Companies' practice, with a 4
percent increase at the end of each year of the Executive's
employment under this Agreement.
(b) Bonuses. The Executive shall not be eligible to receive any cash
or other bonuses from the Companies, except that the Executive
shall be eligible to receive a cash bonus with respect to and
after the close of the 1997/1998 business year in connection with
the Executive's employment with Bally Xxxxx during that time,
provided, that neither the Companies nor Bally Xxxxx shall 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 Companies and may be based on any criteria the Companies
deem relevant.
(c) Reimbursement of expenses. In accordance with established policies
and procedures of the Companies as in effect from time to time,
the Companies 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.
(d) Options. The Executive shall be eligible to receive options (the
Options) to acquire shares of the publicly-traded common stock of
Alliance, provided, however, that the Companies shall not be
obligated to award any Options and the award, if any, and amount,
timing, and terms of any such Options shall be solely within the
discretion of the Companies and may be based on any criteria the
Companies deem relevant.
(e) Vacation. The Executive shall be entitled to six 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 Companies 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 Companies to their
senior executive officers.
(f) Other benefits. The Executive shall be entitled to other
employment benefits, including but not limited to the Companies
existing life insurance, medical and hospitalization, disability,
and retirement benefits, consistent with the benefits provided to
other senior executives of the Companies.
(g) Car allowance. The Companies, at their expense, shall furnish the
Executive with a company car (in or comparable to a car in the
five-liter engine class) for business travel and personal use.
Without diminishing the Executive's responsibility for taxes on
other portions of his compensation under this Agreement, the
Executive shall be responsible for any taxes associated with his
receipt of this benefit.
(h) 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 Companies.
5. Termination. This Agreement cannot be terminated by either party before
the expiration of this Agreement pursuant to section 2, except as
follows:
(a) Disability. If the Executive, because of illness or incapacity,
fails to discharge his duties under this Agreement for nine or
more consecutive months or for noncontinuous periods aggregating
to twenty-two weeks in any twelve-month period, the Companies may
terminate this Agreement on thirty days notice, whereupon the
obligations of the Companies and the rights of the Executive under
this Agreement shall terminate, except that:
(1) The Companies shall pay the Executive's salary on a
pro-rata basis for six months after the date of
disability, offset by any benefits payable to the
Executive under any disability insurance policy paid
for by the Companies; and
(2) 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 Companies and the rights of the Executive under
this Agreement shall terminate except that:
(1) The Companies 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 Companies; and
(2) The Companies shall reimburse the Executive's estate
for all expenses incurred and reimbursable under to
section 4(c).
(c) Termination by either party with cause. Subject to the prerequisites of
applicable law, either party may terminate this Agreement at any time
without notice, with cause, including but not limited to, in the case of
the Companies termination of this Agreement, the Executives
insubordination, fraud, disloyalty, dishonesty, or willful misconduct, and,
in the case of either party's termination of this Agreement, the other
party's material breach of any provision of this Agreement. If either party
terminates this Agreement for cause, the Companies obligations and the
Executive's rights under this Agreement shall terminate, except that, if
the Executive terminates this Agreement for cause, the Companies shall
continue to pay the Executive's salary and furnish the benefits described
in paragraph 4(f) for twelve months after the date of termination, offset
by any compensation and benefits received by the Executive from other
employment during that period. Any termination for cause shall not limit
any other right or remedy the terminating party may have under this
Agreement or otherwise.
(d) Termination by Companies without cause. The Companies may
terminate this Agreement at any time without cause (as defined in
paragraph 5(c)), whereupon the Companies obligations and the
Executive's rights under this Agreement shall terminate, except
that the Companies shall continue to pay the Executive's salary
and furnish the benefits described in paragraph 4(f) for twelve
months after the date of termination, offset by any compensation
and benefits received by the Executive from other employment
during that period.
(1) Termination by Executive without cause. If the Executive
resigns without cause (as defined in paragraph 5(c)), this
Agreement shall terminate as of the date of his resignation,
and the Companies obligations and the Executive's rights under
this Agreement shall terminate.
(2) Survival of restrictive covenants. Notwithstanding the
expiration or termination of this Agreement for any reason,
the Executive's covenants in section 6 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 section 2, except as otherwise provided in paragraph
6(a)(2)), 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 Companies (which, for purposes of this
paragraph, shall include any of the Companies subsidiaries or affiliates)
in any area where the Companies are doing business at the time of
termination. The Companies and the Executive acknowledge and agree that the
Companies 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 Companies 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 section 2, until the parties enter into a
consulting agreement as contemplated under section 2,
the Companies may, in their sole and absolute
discretion, continue to pay the Executive the base
salary set forth in paragraph 4(a) and the other
benefits set forth in paragraph 4(f), in which case,
and for so long as the Companies continue to do so,
the Executive shall be bound by the covenant set
forth in paragraph 6(a)(1).
(3) Executive's ownership interest in the Beromat GmbH,
Berlin, shall not be deemed a violation of paragraph
6(a)(1) as long as Beromat devotes its services
exclusively to Automaten and its subsidiaries and
other affiliates.
(4) Executive shall keep detailed records of the work he
performs for Alliance and their subsidiaries,
supported by time reports, travel and expense
reports, diaries, and similar documentation showing
the time, work, and expenses attributable to each
company.
(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 Companies (which, for purposes of this paragraph, shall
include any of the Companies subsidiaries or affiliates) or of anyone who
has heretofore traded or dealt with the Companies, regardless of the
location of such customers or prospective customers of the Companies with
respect to any technologies, services, products, trade secrets, or other
matters in which the Companies are active, or (ii) aid or endeavor to
solicit or induce any other employee or consultant of the Companies to
leave the Companies 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 Companies and their stockholders all secret, confidential,
and proprietary information, knowledge, and data relating to the Companies
(and any of their subsidiaries or affiliates), obtained by the Executive
during or by reason of the Executive=s employment by the Companies. 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
Companies 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
Companies (or as applicable their 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 Companies, in
furtherance of the business and for the benefit of the Companies, the
Executive may provide confidential information as appropriate to attorneys,
accountants, financial institutions, and other persons or entities engaged
in business with the Companies from time to time. It shall not be a
violation of this provision for the Executive to take Companies documents
to his home in the course of and for the purpose of performing under this
Agreement, provided that the Executive shall maintain and keep such
documents confidential as required by this provision and shall promptly
return all such documents to the Companies at their request or on the
expiration or other termination of this Agreement.
(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 Companies, their 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 Companies or any of their
subsidiaries or affiliates, or (ii) any form of
restructuring, recapitalization, or similar
transaction with respect to the Companies or any of
their subsidiaries or affiliates; or
(2) Acquire, or offer, propose, or agree to acquire, by
tender offer, purchase, or otherwise, any voting
securities of the Companies or of their 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 Companies or any of their
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 Companies or a nominee to or member of
their board of directors or the board of directors of
any affiliate or subsidiary of the Companies or any
of their affiliates or subsidiaries; or
(5) Seek to influence any person with respect to the
voting or disposition of any voting securities of the
Companies or any of their affiliates or subsidiaries;
or
(6) Demand a copy of the list of stockholders or other books and records of the
Companies or any of their 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 Companies or any of
their affiliates or subsidiaries or that seeks to
affect control of the Companies or any of their
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 Companies or any of their
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 Companies or any
of their affiliates or subsidiaries; or
(10) Seek to amend or change this provision.
(e) Injunctive relief. The Executive acknowledges that the Companies
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 Companies will be entitled, at the Companies
option, to injunctive relief against any breach or prospective
breach by the Executive of the Executive's obligations under this
section, in addition to monetary damages and any other remedies
available at law or in equity.
(f) Material Inducements. The restrictive covenants and other provisions in
this section are material inducements to the Companies 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 Companies, (i) the Companies
shall have the right to terminate and not pay any amounts payable to the
Executive under this Agreement, (ii) any options held by the Executive,
however acquired, to purchase stock of the Companies or any of their
affiliates or subsidiaries that are unexercised shall be immediately
forfeited and returned to the Companies, and (iii) the Executive shall
immediately account to the Companies and return to the Companies an amount
in cash equal to all profits or benefits obtained or realized by the
Executive by virtue of the ownership or disposition of any such 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 Companies:
(a) Indemnification. The Companies 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 Companies), incurred or suffered by him in
connection with his service as a director or officer of the
Companies 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 Companies 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 Companies (or any affiliate or subsidiary of the Companies)
during the term of this Agreement in accordance with their
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 Companies 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 Companies, their 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 by 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, 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 Companies and their 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) Further assurances. Each party shall execute all documents and
take all other actions necessary to effect the provisions and
purposes of this Agreement.
(b) 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.
(c) 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 Companies ability to merge or consolidate or effect any
similar transaction with any other entity, irrespective of whether either
of the Companies 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 Companies.
(d) Severability. 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.
(e) 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.
(f) 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.
(g) 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.
(h) 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.
(i) 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.
(j) 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.
(k) Acknowledgment of Executive's service. The Companies and Alliance
acknowledge that the Executive has been employed by the Companies
or their affiliates or predecessors continuously since April 1970.
11. Conditions precedent. This Agreement is subject to approval by the
Companies 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. This Agreement is further subject to the Companies receipt of
the Executive's written resignation as co-managing director of Bally
Xxxxx and from all other offices and positions held in the Companies
and any of their subsidiaries, except offices and positions to which
the Executive is appointed under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.
ALLIANCE GAMING CORPORATION
By:
Xxxxxx Xxxxxxxxx, President Xxxx Xxxxx
ALLIANCE AUTOMATEN GmbH & CO. KG
By:
Print name, title
