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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
as of the 27th day of January, 1997, by and between Casino Data Systems, a
Nevada corporation ("CDS") and Xxxxxx X. Xxxxx ("Employee"). For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, CDS and Employee hereby agree as follows:
1. EMPLOYMENT; SERVICES.
1.1 CDS hereby hires and employs Employee and Employee hereby
accepts such hiring and employment for the position of
Chairman of the Board of Directors (the "Board") and for the
purpose of performing those services (the "Services") which
are usual and customary for a Chairman of the Board of
Directors. Employee shall use diligent efforts and shall
devote such time and energies as may be reasonably required to
perform the Services to the best of his ability.
1.2 During the term of this Agreement, Employee shall not (i) work
as an employee of or independent consultant or contractor for,
or provide any other services for hire or benefit to, any
third party that competes with CDS or its related entities, or
(ii) engage in any activity that in any way competes with the
interests of CDS, whether Employee is acting by himself or as
an officer, director, shareholder, partner, fiduciary, or
otherwise, unless Employee shall first receive the written
consent of a majority of the Board.
1.3 Employee shall report only to the Board. The Board shall at
all times during the term of this Agreement have final and
complete authority over Employee with respect to all decisions
related to the Services and the direction and control of
Employee. In all such cases, the Board shall act by majority
vote. In every case under this Agreement where a vote of the
Board is required, such vote shall not include Employee's vote
at any time that Employee is a member of the Board.
2. TERM.
2.1 The term of this Agreement shall commence on January 27, 1997
(the "Effective Date") and shall expire on December 31, 1998,
unless terminated earlier pursuant to one or more of the
following provisions:
2.1.1 CDS shall have the right to terminate this Agreement
and the Services by delivery of written notice to
Employee, provided that a majority of the Board has
voted to terminate this Agreement not less than
thirty (30) days prior to the delivery of such
notice. In such case, this Agreement shall terminate
thirty (30) days following the date of delivery of
such notice.
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2.1.2 Employee shall have the right to terminate this
Agreement and the Services by delivery of written
notice to CDS at any time. In such case, this
Agreement shall terminate thirty (30) days following
the date of delivery of such notice.
2.1.3 This Agreement shall terminate upon Employee's death.
2.2 In the event that any of the following events occurs:
(a) This Agreement is terminated by CDS without "Good
Cause" (defined below), or
(b) Employee resigns for "Good Reason" (defined below)
prior to the expiration of this Agreement's term,
then, in addition to all salary, prorated bonus, and benefits
due to the effective date of termination, CDS shall also pay
to Employee additional salary, prorated bonus and benefits
either for two additional years after the effective date of
termination or until the normal expiration date of this
Agreement, whichever time period is greater.
2.3 If this Agreement is terminated by CDS prior to the end of its
term for Good Cause or if Employee resigns for other than Good
Reason, then CDS shall pay Employee's salary, prorated, and
benefits only through the effective date of termination of
employment.
2.4 As used herein, "Good Cause" shall mean any of the following:
(a) Employee persists in taking actions reasonably
considered to be in material breach of this Agreement
by CDS after notice that such actions are a material
breach of her obligations hereunder; or
(b) Employee is guilty of any grave misconduct or willful
material neglect in any discharge of any of her
material duties hereunder to the serious detriment of
CDS; or
(c) Employee is convicted of any serious criminal offense
which, in the reasonable opinion of the Board,
affects her position as an employee of CDS; or
(d) Employee has engaged in any conduct or has engaged in
relationships with other persons that would, in the
reasonable opinion of the Board, jeopardize any
existing or future gaming licenses held or sought by
CDS.
2.5 As used herein, "Good Reason" shall mean that a "Change in
Control" as defined in Section 11.12 of the CDS 1993 Stock
Option and Compensation Plan, as amended (the "Plan") has
occurred and thereafter one or more of the following occurs:
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(a) Employee has been demoted; or
(b) Employee has incurred a substantial reduction in his
authority or responsibility; or
(c) There has been a material change in Employee's
working hours or working days to non-normal working
hours or non-normal working days; or
(d) Employee has incurred material reduction in his
remuneration either as base pay or benefits.
3. COMPENSATION.
3.1 From and after the Effective Date, CDS shall pay to Employee a
gross base salary (the "Base Salary") equal to Three Hundred
Thousand Dollars ($300,000.00) per annum, which Base Salary
shall be payable in twenty-six equal installment of Eleven
Thousand Five Hundred Thirty Eight and 46/100 Dollars
($11,538.46). Such installments shall be paid in arrears
every two (2) weeks. The Base Salary may be increased by the
Board.
3.2 In addition to his salary, Employee shall receive a car
allowance of Eight Hundred Dollars ($800.00) per month.
3.3 Employee shall be eligible for an annual or other bonus (the
"Bonus") as determined by a majority vote of the Board. The
Bonus, if any, may be paid in any time or manner designated by
the Board.
3.4 CDS shall withhold all relevant income taxes, unemployment
insurance, Social Security contributions, workers'
compensation insurance, and other customary amounts from
Employee's Base Salary and Bonus, if any, prior to
distribution of the net proceeds therefrom to Employee.
3.5 Employee shall be eligible for any other benefits as may be
provided by CDS from time to time for its executive employees,
pursuant to CDS' policies and eligibility requirements with
respect thereto. Such benefits may be amended, changed, or
terminated from time to time by the Board, in its sole and
absolute discretion, provided that CDS takes such action with
respect to all employees similarly situated as Employee and
does not discriminate against Employee in any such action.
3.6 CDS shall have the right to purchase "key man" insurance
covering Employee at any time. Any such policy and the
proceeds therefrom shall at all times remain the property of
CDS, which shall at all times be the designated beneficiary
thereunder and neither Employee nor his estate, heirs, or
beneficiaries shall have any right, title or interest therein
or thereto.
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4. NON-COMPETITION.
4.1 This non-competition provision shall remain in effect until:
(a) Employee dies; or
(b) Employee's employment with CDS is terminated without
Good Cause or is terminated by Employee for Good
Reason; or
(c) Two years after the date of the termination of
Employee's employment by CDS for Good Cause or the
termination of Employee's employment by Employee
without Good Reason; or
(d) Two years after the termination of Employee's
employment with CDS by reason of the expiration of
this Agreement and Employee's election not to renew
this Agreement for other than Good Reason.
The term of this non-competition provision shall expire as
specified in the applicable subparagraph above upon the
happening of the first of any of the above events to occur.
4.2 During the term of this non-competition provision, Employee
shall not, either directly or indirectly, for or by himself or
for or in conjunction with any other person, company, or other
entity, whether as an employee, independent contractor,
consultant, shareholder, owner, or otherwise, engage in any
activity in any location or place in the world if such
activity directly or indirectly competes with the business of
CDS. Without limiting the generality of the foregoing, during
the term of this non- competition provision, Employee shall
not call upon any customer or potential customer of CDS or any
related entity of CDS, perform any of the Services or other
activities which he performed while in the employ of CDS for a
competitor of CDS or its related entities, solicit orders for
any products or services similar to those products or services
offered by CDS, sell any products or services competing with
the products or services of CDS, divert or take away any
customer or business opportunity of CDS or any related entity
of CDS, entice or hire away any employee from CDS or any
related entity of CDS, or otherwise compete with CDS in any
manner during the term of this Agreement.
5. CONFIDENTIALITY; PROPRIETARY RIGHTS OF CDS; DISCLAIMER OF RIGHTS TO
TECHNOLOGY AND INTELLECTUAL PROPERTY.
5.1 At all times during the term of this Agreement and from and
after the termination of this Agreement, whether such
termination takes place in accordance with the provisions of
this Agreement or for any other reason, and whether this
Agreement is terminated for or without cause, Employee shall
keep strictly confidential and secret
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any and all proprietary or confidential information related to
CDS or CDS' business, whether such information is obtained by
Employee in the course of his employment or otherwise.
Without limiting the generality of the foregoing, Employee
shall not disclose to any other person, company, or entity
(except in connection with Employee's duties and obligations
consistent with the terms of this Agreement and the scope of
the Services) any aspect of CDS' business methods,
manufacturing processes, business secrets, business systems or
products, customer names, prospective customers, accounting
systems, computer software or hardware systems, or marketing
or business plans.
5.2 The foregoing notwithstanding, Confidential Information does
not include any of the following:
(a) information which through no wrongful act or failure
to act on the part of Employee becomes generally
known or available, or
(b) information which is furnished to others by CDS
without restriction on disclosure, or
(c) information which is hereafter furnished to Employee
by third parties as a matter of right and without
restriction on disclosure, or
(d) information which is known to others in the industry
or is ascertainable from other sources without a
breach by the other sources of any nondisclosure
agreement on their part.
5.3 At all times during the term of this Agreement and from and
after the termination of this Agreement, Employee shall hold
in a fiduciary capacity for the benefit of CDS and shall
disclose fully to CDS immediately upon origination, discovery,
invention or acquisition, any and all inventions, discoveries,
improvements, apparatus, processes, compounds, formulae,
computer programs, patents, licenses, copyrights and
trademarks made, invented, discovered, developed or secured by
Employee during his employment by CDS, solely or jointly with
others, or otherwise, and which may be directly or indirectly
useful in, or relate to, the manufacture, production, sale,
development, or use of any product or service of CDS, and all
of the foregoing shall be owned exclusively by CDS. Employee
agrees and acknowledges that the compensation paid to Employee
under this Agreement is full and adequate consideration for
Employee's covenants under this Section 5.2 and that Employee
shall not be entitled to receive any other compensation, fee,
commissions, royalty or other amount in connection therewith.
6. INDEMNITY; SURVIVAL.
6.1 Employee and CDS shall indemnify, defend, and hold harmless
the other from and against any and all loss, cost, damage,
liability, or expense, as a result of reckless or
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malicious conduct of the other, or a willful breach of a duty
of Good Faith. This indemnity shall only apply to Employee's
actions and duties as an employee of CDS. This indemnity is
not intended to nor shall it be interpreted to alter, amend or
in any way affect Employee's actions or duties as a member of
the Board, or the respective indemnification provisions
affecting or relating to all Directors of CDS.
6.2 The provisions of Articles 4, 5 and 6 of this Agreement shall
survive the termination of this Agreement.
7. MISCELLANEOUS PROVISIONS.
7.1 Files. All records contained in the files of CDS (other than
Employee's personal financial information) shall be the
property of CDS and Employee shall not remove such records
upon the termination of Employee's employment with CDS.
7.2 Entire Agreement; Amendments. This Agreement constitutes the
entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior agreements
between the parties with respect thereto. This Agreement may
not be altered, amended, changed, terminated or modified in
any respect or particular unless the same shall be in writing
and signed by the part to be charged.
7.3 Attorney's Fees. In the event of any action for breach of, to
enforce the provisions of, or otherwise arising out of or in
connection with this Agreement, the prevailing party in such
action, as determined by the court in such action, shall be
entitled to receive its reasonable attorneys' fees and costs
form the other party. If a party voluntarily dismisses an
action, a reasonable sum as attorneys' fees shall be awarded
to the other party.
7.4 Nevada Law; Jurisdiction and Venue. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Nevada. This parties hereby consent to the personal
jurisdiction of any court of competent jurisdiction with the
State of Nevada. The exclusive venue for any action or
proceeding relating to or arising out of this Agreement shall
be Xxxxx County, Nevada.
7.5 Binding Effect. Employee acknowledges that Employee's
obligations and duties under this Agreement are unique
personal services benefiting CDS and shall not be delegated in
any manner or respect nor shall this Agreement be assigned by
Employee. This Agreement may not be assigned by CDS without
Employee's prior consent, except in connection with any sale
or transfer of all or part of CDS' business, in which case no
consent of Employee shall be required. This Agreement shall
be binding upon and inure to the benefit of any permitted
heirs, successors, and assigns.
7.6 Validity. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be valid based
upon applicable law. But, if any provision or part of any
provision of this Agreement shall be held by a court of
competent jurisdiction
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to be invalid or prohibited thereunder, such provision or part
of any such provision shall be ineffective only to the extent
of such invalidity or prohibition, without invalidating the
remainder of such provision or the remaining provisions of
this Agreement.
7.7 Headings. The headings of the paragraphs of this Agreement
are inserted solely for convenience of reference and are not a
part of and are not intended to govern, limit or aid in the
construction of any term or provision of this Agreement.
7.8 Notices. Any notice required or permitted to be given under
this Agreement shall be in writing and delivered in person to
the other party, or sent by certified United States Mail, with
postage prepaid.
7.9 Waiver. The failure of either party to enforce any of its
rights or remedies in connection with a breach of this
Agreement by the other party or in any other case shall not be
deemed to be a waiver of said first party's rights or remedies
with respect thereto or with respect to any other breach of
this Agreement by the other party. No such waiver of rights
or remedies shall exist unless the same shall be in writing
and signed by the party to be charged.
7.10 Remedies. Employee acknowledges that CDS' remedy at law for
any breach or threatened breach by Employee of Articles 4 and
5 hereof will be inadequate. Therefore, CDS shall be entitled
to injunctive and other equitable relief restraining Employee
from violating those requirements, in addition to any other
remedies that may be available to CDS under this Agreement or
applicable law.
IN WITNESS WHEREOF, CDS and Employee have executed this Agreement as
of the date first set forth above.
CASINO DATA SYSTEMS,
a Nevada corporation
s/ Xxxxxx X. Xxxxx By: s/ Xxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxx Its: President/COO
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