EXHIBIT 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated September 1, 2003 and
effective on the same date (the "Starting Date") between VIRTGAME CORP., a
Delaware corporation (the "Company") and XXXXX X. XXXXXXXXX (the "Executive").
WHEREAS, the Company desires to provide for the services and employment
of the Executive with the Company and the Executive wishes to provide such
services and to become employed by the Company, all in accordance with the terms
and conditions provided herein.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties agree as follows:
1. Employment. The Company hereby agrees to employ the Executive, and
the Executive hereby agrees to become employed by and to serve the
Company, on the terms and conditions set forth herein.
2. Term. The initial term of employment (the "Term") of the Executive
by the Company hereunder will commence effective as of the
Starting Date, and such initial term will end twelve (12) months
thereafter unless further extended or sooner terminated as
hereinafter provided. Notwithstanding expiration of the Term, the
provisions of Sections 3(b) and 10 hereof shall continue in
effect.
3. Nature of Performance.
(a) Position and Duties. The Executive shall serve as President
and General Counsel of the Company and shall have such
responsibilities, duties and authority consistent with such
positions as may from time to time be determined by the Board
of Directors of the Company (the "Board). The Executive shall
report directly to the CEO.
(b) Indemnification. To the fullest extent permitted by law and
the Company's certificate of incorporation and by-laws, the
Company shall directly pay for all attorney's fees and costs
incurred and shall indemnify the Executive for all amounts
(including without limitation, judgments, fines, settlement
payments, losses, damages, costs and expenses) incurred or
paid by the Executive in connection with any action,
proceeding, suit or investigation arising out of or relating
to the performance by the Executive of services for, or
acting as a fiduciary of any employee benefit plans, programs
or arrangements of the Company or as a director, officer,
general counsel or employee of the Company or any subsidiary
thereof. Following the Term, the Company shall continue to
pay for all attorney's fees and indemnify the Executive with
respect to such services performed during the Term, to the
same extent as the Company indemnifies its officers,
directors, employees and fiduciaries, as applicable.
Executive shall be provided director and officer liability
insurance coverage by the Company on the same terms as that
being provided to any other director and officer of the
Company during the Term hereof.
(c) Place of Performance. In connection with the Executive's
employment by the Company, the Executive shall be primarily
based in Las Vegas, Nevada with routine travel to the
Company's principal offices located in San Diego, California,
and any required travel on the Company's business.
4. Compensation and Related Matters.
(a) Annual Compensation. During the period of the Executive's
employment hereunder, the Company shall pay to the Executive
an annual base salary at a rate not less than $120,000, such
salary to be paid in conformity with the Company's policies
relating to salaried employees.
(b) Annual Bonus. During the period of Executive's employment
hereunder, the Executive shall be entitled to a bonus of
$20,000 if Company generates profits of at least $400,000
during the term of this agreement from a slot business
operation that Company may license from Gamemasters or any of
its affiliates, or from approved casino acquisitions
introduced and effected by Executive in conjunction with the
Company.
(c) Stock Options. The Executive will be granted a time vested
Non-Qualified Stock Option to acquire one hundred thousand
(100,000) shares of the Company's common stock (the "Option
Shares") with an exercise price equal to the fair market
value as defined and determined as of the Starting Date of
sixty-six ($0.66) cents with a five (5) year term. These
option shares are exclusive of any stock options or stock
issuance to be effected by virtue of Executive's appointment
and participation as a member of the Company's Board of
Directors.
(d) Other Benefits. During the period of Executive's employment
hereunder, the Executive shall continue to be entitled to
participate in all other employee benefit plans, programs and
arrangements of the Company, as now or hereinafter in effect,
which are applicable to the Company's employees generally or
to its executive officers, as the case may be, subject to and
on a basis consistent with the terms, conditions and overall
administration of such plans, programs and arrangements. The
Company shall provide medical insurance to Executive under
its group plan of insurance effective ninety (90) days after
the Starting Date of employment and life insurance benefits
as may be standard under the policies of the Company.
(e) Vacations and Other Leaves. The Executive shall be entitled
to an aggregate paid vacation of two weeks for each twelve
(12) month period of the Term hereof. Payment for any accrued
and unused vacation time at the time of termination of this
Agreement shall be in accordance with the Company's policies
at the time of such termination. Any such vacation taken
shall be coordinated with the CEO so as not to adversely
impact the performance of the Company. The Executive shall be
entitled to paid holidays and personal leave days in
accordance with the Company policy covering executive
employees.
(f) Expenses. During the period of the Executive's employment
hereunder, the Executive shall be entitled to receive prompt
reimbursement for all reasonable and customary expenses
incurred by the Executive in performing services hereunder,
including all expenses of travel and accommodations while
away from home on business or at the request of and in the
service of the Company.
(g) Services Furnished. The Company shall furnish the Executive
with office space and such other facilities and services as
shall be suitable for Company operations in Las Vegas, Nevada
at a time, which is necessary and suitable for the Company at
the discretion of the Board of Directors.
5. Termination.
5.1 Termination by the Company. The Executive's employment
hereunder may be terminated immediately without breach of
this Agreement and without payment of any additional
compensation or benefits (other than accrued salary through
the date of termination and any unpaid expense reimbursement)
only under the following circumstances:
(a) Death. The Executive's employment hereunder shall terminate
in the event of his death.
(b) Disability. If, as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been
absent from his duties hereunder on a full time basis for the
entire period of four (4) consecutive months, and within
thirty (30) days after written Notice of Termination is given
thereafter, and shall have not returned to the performance of
his duties hereunder on a full time basis, the Executive's
employment hereunder shall terminate for "Disability."
(c) Cause. The Company may terminate the Executive's employment
hereunder for "Cause". For purposes of this Agreement the
Company shall have "Cause" to terminate the Executive's
employment hereunder upon (i) the Executive's conviction for
the commission of any act or acts constituting a felony under
the laws of the United States or any state hereof; (ii) the
Executive's refusal to abide by or follow written directions
of the Board; (iii) any willful failure of the Executive to
perform his duties hereunder, which failure continues uncured
for thirty (30) days after Executive receives notice thereof
from the Company; (iv) use of alcohol or drugs in a manner
than affects the performance of the Executive's duties and
responsibilities as an employee; (v) commission by Executive
of any other willful or intentional act that could reasonably
be expected to injure the reputation, business or business
relationships of the Company and/or Executive; or (vi) the
existence of any court order or settlement agreement
prohibiting Executive's continued employment with the
Company.
5.2 Termination by the Executive [OR TERMINATION WITHOUT CAUSE].
The Executive may terminate his employment hereunder for any
or no reason or for "Good Reason". The Executive will not be
entitled to any additional compensation or benefits other
than accrued salary through the date of termination and any
unpaid expense reimbursement if he terminates his employment
without Good Reason. If the Executive terminates his
employment for Good Reason [OR IF HE IS TERMINATED BY THE
COMPANY WITHOUT CAUSE], he will be entitled to receive a
continuation of his annual base salary in accordance with the
Company's regular payroll policies through the expiration of
the Term. In either event, the Executive shall remain fully
vested to exercise his stock options as is stipulated within
his compensation package as provided hereinabove by the
Company. For purposes of this Agreement, the Executive shall
have "Good Reason" to terminate his employment hereunder (i)
upon a failure of the Company to comply with any material
provision of this Agreement which has not been cured within
ten (10) business days after notice of such noncompliance has
been given by the Executive to the Company; or (ii) upon
action by the Company resulting in a diminution of the
Executive's title or authority, with the exception that a
change of title may be effected so long as necessary for
public company profiling and so long as said change of title
is reasonably acceptable to Executive and Company. The
Executive may terminate his employment voluntarily without
Good Cause upon at least one month's prior notice to the
Company.
6. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have
been duly given by certified mail, return receipt requested, to
the parties at the following addresses:
(i) If to Executive:
Xxxxx X. Xxxxxxxxx
0000 Xxxxx Xxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
(ii) If to Company:
VirtGame Corp.
0000 Xxxxx Xxxxx Xx, Xxxxx X
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxx, CEO/CFO
7. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the
meaning and interpretation of this Agreement.
8. Governing Law. This agreement shall be governed and construed in
accordance with the laws of the State of Nevada.
9. Binding Effect. This Agreement shall inure to the benefit of the
parties hereto and their respective successors and assigns and
shall be binding upon the Company, the Executive and their
respective successors, heirs and legal representatives.
10. Attorney's Fees and Costs. The prevailing party in any litigation
arising under the terms and conditions of this Agreement shall be
entitled to reasonable attorney's fees and related costs of suit.
11. Entire Agreement. This contract evidences the entire agreement
between the parties relating to the subject matter hereof, with
the exception that the parties have previously executed a
confidentiality agreement which shall be incorporated by reference
herein. Any modification of this Agreement must be made in writing
and executed by the respective parties hereto.
12. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first written above.
VIRTGAME CORP.
("Company")
By
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Its
EXECUTIVE
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
