EMPLOYMENT AGREEMENT
OF
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THIS EMPLOYMENT AGREEMENT of ▇▇▇▇▇▇ ▇. ▇▇▇▇ (this
"Agreement") is entered into this 10 of August 1999, and for all
intents and purposes is effective as of the 1st day of January,
2000 (the "Effective Date") by and between CASINOVATIONS
INCORPORATED, a Nevada corporation (the "Company") and
▇▇▇▇▇▇ ▇. ▇▇▇▇ (the "Employee").
The parties recite that:
(a) 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 Agreement, and as such, each agrees to be bound under the
terms and conditions of this Agreement, including the
non-competition and non-disclosure contained 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 January 1, 2000, and continue for a term of three (3)
years, subject to the early termination provisions of Article 8.
At the expiration date of this Agreement, it shall be considered
renewed for regular successive 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
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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 obligations
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 Twenty Three Thousand Five Hundred Dollars
($23,500.00) through December 31, 2000, or until such time as a
new Base Salary is negotiated. The Base Salary shall be reviewed
on an annual basis and 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 four
hundred thousand (400,000) shares of the Company's common stock
("Shares") under the following terms and conditions:
(i) Upon the Effective Date of this Agreement,
the Employee shall have a vested right to acquire up
to one hundred thousand (100,000) Shares at Two
Dollars and Fifty Cents ($2.50) per Share.
(ii) Upon the Employee fulfilling his
obligations and the Company reaching its goals for
2000, as 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 Two Dollars and Fifty Cents ($2.50) 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,
2001, 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, 2001, subject to the requirement that
Employee continue to be President and Chief Executive
Officer of the Company on January 31, 2001.
(iii) Upon the Employee fulfilling his
obligations and the Company reaching its goals for
2001, as 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 Two Dollars and Fifty Cents ($2.50) 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,
2002, 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, 2002, subject to the requirement that
Employee continue to be President and Chief Executive
Officer of the Company on January 31, 2002.
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(iv) Upon the Employee fulfilling his
obligations and the Company reaching its goals for
2002, as 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 Two Dollars and Fifty Cents ($2.50) 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 December,
2002, 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
December 31, 2002, subject to the requirement that
Employee continue to be President and Chief Executive
Officer of the Company on December 31, 2002.
(v) 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 the
Company of 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.
(vi) If the Company is to be sold, the
portion of the Stock Options granted pursuant to
paragraph 5.1 (b)(i)-(iv) of this Agreement which have
not yet vested shall vest in the Employee thirty (30)
days prior to such sale.
(vii) If the Company is sold, all of the Stock
Options granted to Employee by virtue of paragraph
(vi) must be exercised as of the last business day
prior to the sale of the Company, unless Employee and
the purchaser of the Company agree otherwise.
(viii) For purposes of paragraph 5(b)(vi)
hereof, the Board of Directors 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 of this Agreement, 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
the person or persons who currently have majority
control of the Company to be the beneficial owners of
less than twenty (20%) of the issued and outstanding
stock 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 within 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 (v).
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: (i) 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
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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); (ii) any product
information, 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; and (iii) 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 period of
employment with the Company or during the term of this
Agreement.
(b) Restriction on use. Any Confidential
Information received or developed by Employee shall be used
only in the Employee's conduct of Company's business. Such
Confidential Information shall not be used by Employee for any
other purpose unless otherwise directed or authorized in writing
by the Board of Directors. The Employee acknowledges that the
Company's primary assets consist of its gaming products and
accessories. Any unauthorized disclosure of the design or
marketing of such products by the Employee shall violate this
Article.
(c) 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 way
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, solicit, or take away 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 further promises 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 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 following the expiration or termination of
this Agreement.
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7. EMPLOYEE'S 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 an 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 (including, but not
limited to gaming and non-gaming security and productivity
equipment and products) 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 interests 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 six (6) years after the
expiration or 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
other:
(i) place of business operated by the
Company; or (ii) location, establishment or business where
the equipment, product, or technology of the Company is
operating as of such date. The Employee acknowledges that
the Company's business is national and international in
scope and that the solicitation of the Company's domestic
or international clients in competition with 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 six (6) 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, in its sole discretion. 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, without the written approval of the
Company, 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.
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:
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(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 hereunder, which remains
uncured for a period of twenty (20) 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, the Company
shall pay the Employee, upon termination, severance pay in a
one time lump sum equal to seven (7) months of the Employee's
Base Salary in effect at the time of severance.
8.3 Effect of Termination on Stock Options. Under no
circumstances shall the Employee be entitled to any Stock
Option, which has not vested or accrued prior to the Employee's
termination.
8.4 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 periods 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
distributees, 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 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 attorneys' fees.
9.4 Waiver of Breach. The waiver of the breach of any term
or 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.
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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 Applicable Law. 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.
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: /s/ ▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇
Its: Chairman
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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