EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of April 15, 1997 between
MULTIPLE APPLICATION TRACKING SYSTEMS, INC. (The "Company"), a Colorado
corporation with offices c/o Trans World Gaming Corp. ("TWG") at Xxx Xxxx
Xxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000-0000, and XXXXX X. XXXXXXX, XX.,
with an address at 00000 Xxxx 0xx Xxxxx, Xxxxxx, Xxxxxxxx 00000 (the
"Employee").
The Company desires to engage Employee to perform services on behalf of the
Company, and Employee desires to perform such services, on the terms and
conditions hereinafter set forth:
1. EMPLOYMENT PERIOD
The Company agrees to employ the Employee in the capacity of
President of the Company and Employee agrees to serve on the terms and
conditions of this Agreement for a period commencing on the date of this
Agreement first above written and ending five (5) years hereinafter (the
"Employment Period").
2. DUTIES & SERVICES
(a) During the Employment Period, Employee shall be employed in the
capacity of President of the Company. In performance of his duties, Employee
shall be subject to the direction of and report to the Board of Directors of
the Company. Employee agrees to devote full time to the affairs of the
Company, to discharge his duties hereunder to the best of his abilities and
to take no action outside of the ordinary course of business that he is not
specifically authorized to take by the Board of Directors of the Company.
The foregoing provisions of this Section 2 shall constitute material terms of
this Agreement. Employee's office shall be based in the Denver, Colorado
area, but Employee shall be available to travel as the needs of the business
and his obligations hereunder require. Employee shall not engage in any
other business, profession or occupation for compensation or otherwise
without the prior written consent of the Company's Board of Directors.
(b) The provisions of Section 2(a) above notwithstanding, the
parties agree that Employee owns the "Reserved Assets" set forth
in Exhibit 2(b) hereto and made a part hereof. Employee may
separately pursue the "Reserved Assets" so long as Employee does
not engage in any material sales, marketing, development, or
other substantive tasks, and so long as such matters do not
interfere with Employee's full-time duties under this Agreement.
In the event Employee believes a new idea, product, business or
other matter is worthwhile to pursue, Employee shall present same
to the Company for review. Should Company decide to pursue such
matter, it shall do so on terms it deems appropriate; if not,
Employee may not pursue any such matter independently.
3. COMPENSATION.
As full compensation for his services hereunder, the Company shall
pay Employee, during the Employment Period, as follows:
(a) A basic salary payment in semi-monthly installments at the annual
rate of one hundred thousand dollars ($100,000) for each year of the Employment
Agreement, such payments to be made in accordance with the Company's usual
payroll practices.
(b) Employee will be eligible for participation in Trans World Gaming
Corp.'s ("TWG's") November 1996 Management Incentive Plan and TWG's Incentive
Stock Plan, as these plans may be amended or replaced from time to time, or
equivalent plans of the Company as may be established from time to time
(collectively, the "Plans"). For purposes of the Plans, Employee shall be
entitled to benefits at the level of and deemed to be a "Vice President of
Operations" or "VP Operations".
(c) The Company has no current plan relative to cost of living
increases or salary increased, although the Company reserves the right, in its
sole discretion, in the future to grant such cost of living or salary increases.
(d) Employee shall further be entitled to participate in the present
or future employee benefit plans of the Company as may be established by the
Company from time to time subject to the approval of the Board of Directors if
Employee meets the eligibility requirements thereof.
4. EXPENSES.
Employee shall be entitled to reimbursement for reasonable travel
and out-of-Pocket expenses as are reasonable and necessarily incurred in the
performance of Employee's duties hereunder, upon submission of written
statements and/or bills in accordance with the then regular policies and
procedures of the Company then in effect.
5. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE
Employee represents and warrants to the Company that Employee is
under no Contractual or other restriction which is inconsistent with the
execution of this Agreement or performance of any of Employee's duties
hereunder.
6. INVENTIONS/NON-COMPETITION/CONFIDENTIAL INFORMATION.
(a) DEFINITIONS
(i) "Confidential Information" includes all past, current or
future business information and records which relate to the Company (for
purposes of this Section 6, "Company" shall include Company's parent
companies, subsidiaries or affiliates) and which are not known to the public
generally, including but not limited to technical notebook records,
copyrights, patent applications, machine equipment, processes and product
designs including any drawings and descriptions thereof; unwritten knowledge
and "know-how"; operating instructions; training manuals; production and
development processes; production schedules; customer lists; customer buying
and other customer related records; product sales records; territory
listings, market surveys' marketing plans; long-range plans, salary
information; contracts; supplier lists; and correspondence, and all
summaries, compilations, analyses and reproduction of the above in whatever
form or format.
(ii) "Invention" shall mean any discovery, invention,
improvement, trademark, design, logo, copyright, development, process, idea, or
other intellectual property right.
(b) INVENTIONS.
(i) Employee shall disclose promptly to the Company any
Invention, patentable or otherwise, which during the Employment Period has been
or may be hereafter conceived, developed or perfected by Employee, either alone
or jointly with another or others, and either during or outside the hours of
such employment, and which pertains to any activity, business, process,
equipment, material or product whether or not the company has a direct or
indirect interest therein except for the Reserved Assets only.
(ii) Employee hereby grants to the Company all his right,
title and and to any such Invention, together with all United States and
foreign Letters Patent Patent, any and all of which (whether made, held or
owned by Employee, directly or indirectly), and any and all other interests
or intellectual property rights shall be for the sole use and benefit of the
Company, which shall be at all times entitled thereto. At the request and
expense of the instrument (including descriptions, sketches, drawings and
other papers), and render all such other assistance as in the opinion of the
Company may be necessary or desirable to (a) vest full right and title to
each such Invention in the Company, (B) enable it lawfully to obtain and
maintain such full right and title in any country whatsoever, (C) prosecute
applications for and secure patents (including the reissue, renewal and
extension thereof), trademarks, copyrights and any other form of protection
with regard to such Invention, and (D) prosecute or defend any interference
or opposition which may be declared involving any such application or patent,
and any litigation in which the Company may be involved with respect to any
such Invention. The employment, and shall be binding on Employee's
executors, administrators or assigns, unless waived in writing by the Company.
(c) CONFIDENTIAL INFORMATION. Except in the event that (i) this
Agreement is Terminated for a reason other than for "Cause" by the Company,
and (ii) Company and/or TWG has not paid the "Copyright Transfer Payments"
(defined in the "License Agreement") as defined below) or otherwise exercised
its or their right to make such Copyright Transfer Payment upon termination
(in which event both Company (and/or TWG) and Employee may use such
Confidential Information), Employee will not, director or indirectly, during
or at any time after the Employment Period, use for himself or others, or
disclose to others, any Confidential Information, where or not conceived,
developed or perfected by Employee and no matter how it became known to
Employee, unless he first secures the written consent of the Company to such
disclosure or use, or until the same shall have lawfully become a matter of
public knowledge.
(d) RETURN OF RECORDS. Except in the event that (i) this Agreement
is terminated for a reason other than for "Cause" by the Company, and (ii)
Company and/or TWG has not paid the Copyright Transfer Payment in the License
Agreement or otherwise exercised its or their right to make the Copyright
Transfer Payment upon termination (in which event both Company and Employee may
use or maintain such records), upon termination of his employment for any
reason, or at any other time upon request by Company, Employee will promptly
deliver to the Company all Confidential Information and documents and records
which are in his possession or under his control and which pertain to the
Company, any of its activities or any of Employee's activities in the course of
his employment with Company. Such documents and records include but are not
limited to technical notebook records, technical reports, patent applications,
drawings, reproductions, and process or design disclosure information, models,
schedules, lists of customers
and sales, sales records, sales requests, lists of suppliers, plans,
correspondence and all copies and reproductions thereof. Employee will not
retain or deliver to any third person copies, analyses, compilations,
summaries or reproductions of any such documents or records.
(e) NON-COMPETITION. Except in the event that (i) this Agreement is
terminated for a reason other than for "Cause" by the Company, and (ii) Company
and/or TWG has not paid the Copyright Transfer Payment in the License Agreement
or otherwise exercised its or their right to make the Copyright Transfer Payment
upon termination, during the Employment Period and for the one (1) year period
which immediately follows the termination of employment, Employee will not,
without the written consent of the Company, either as principal, shareholder,
agent, consultant, employee, officer, director, partner, owner of equity
interest, or otherwise engage in any work or other activity (x) in or directly
related to the specific areas or subject matters to the specific areas or
subject matters in which Employee worked during the Employment Period or (y)
involving or directly related to specific areas or subject matters in which
Employee worked during the Employment Period or (z) involving or directly
related to Confidential Information of which Employee became aware or to which
Employee had access during the Employment Period. Employee shall consult the
Company before engaging in any activity which might violate the provisions of
this section, it being understood that his activities shall be limited hereby
only to the extent that such limitation is reasonably necessary for the
protection of the Company's interests for the period determined in accordance
with this section.
(f) NON-SOLICITATION. Except in the event that (i) this Agreement is
terminated for a reason other than for "Cause" by the Company, and (ii) Company
and/or TWG has not paid the Copyright Transfer Payment in the License Agreement
or otherwise exercised its or their right to make the Copyright Transfer Payment
upon termination, during the Employment Period and for the one (1) year period
which immediately follows the date of termination of employment, Employee shall
not, directly or indirectly, knowingly, or under circumstances in which he
reasonably should have known, induce any employee of the Company to engage in
any activity in which Employee is prohibited from engaging by Section 6(e) above
or to terminate his employment with the Company and shall not, directly or
indirectly, knowingly, or under circumstances in which Employee reasonably
should have known, employ or offer employment to any such person unless such
person shall have ceased to be employed by the Company and such cession of
employment shall have occurred at least twelve (12) months prior thereto.
(g) Nothing in this Section 6 shall limit Employee's obligations
under applicable law with respect to the subject matter hereof or Company's
rights and remedies under applicable law.
7. SPECIFIC PERFORMANCE AND OTHER REMEDIES
Employee acknowledges and agrees that the Company has no adequate
remedy at Law for a breach or threatened breach of any of the provisions of
Section 6, and, in recognition of this fact, Employee agrees that, in the
event of such a breach or threatened breach, in addition to any remedies at
law, the Company, without posting any bond and with written notice of two (2)
business days to the Employee, shall be entitled to obtain equitable relief
in the form of specific equitable remedy which may then be available.
Nothing in this Agreement shall be construed as prohibiting the Company from
pursuing any other remedies at law or in the equity that it may have or any
other rights that it may have under any other agreement.
8. KEY-MAN LIFE INSURANCE
If reasonably requested by the Company, Employee shall submit to
such reasonable physical examinations and otherwise take such actions and
deliver such documents as may be reasonably necessary to enable the Company
at its expense and for its own benefit, to obtain "key-man" life insurance or
similar insurance on the life of Employee.
9. TERMINATION
Upon a termination of Employment Period prior to the scheduled
expiration date, Employee shall be entitled to the payments described in this
Section 9.
(a) FOR CAUSE BY THE COMPANY; BY EMPLOYEE WITHOUT GOOD REASON.
The Employment Period may be terminated prior to its scheduled
expiration date by the Company, subject to the provisions of
this Section 9(a), "for Cause" (as defined below) or by
Employee "without Good Reason" (as defined below). If the
Employment Period is terminated by the Company for Cause or by
Employee with Good Reason, Employee shall be entitled to
receive his base salary through the date of termination, and
any unreimbursed business expenses, payable promptly following
the latter of the date of such termination and the date on
which the appropriate documentation is provided. All other
benefits following a termination of the Employment Period
pursuant to this Section 9(a) shall cease except for continued
medical benefits under COBRA, and vested benefits, if any,
under ERISA.
(b) DEATH DISABILITY; BY THE COMPANY WITHOUT CAUSE; BY EMPLOYEE
WITH GOOD REASON.
(i) Employment Period shall terminate effective upon the
death of the Employee.
(ii) If the Employee incurs a "Disability" (as defined in the
Management Incentive Plan), the Employment Period shall terminate pursuant to
the applicable provisions of the Management Incentive Plan.
(ii) The Employment Period may be terminated prior to the
scheduled expiration date by the Company without cause or
by the Employee with good reason. In such events,
Employee shall receive (A) continued payment of base
salary in a lump sum on the termination date for the
lesser or one (1) year or the remainder of the Employment
Period and benefits, if any, which may have accrued as of
the termination date under the Management Investment
Plan; and (B) any unreimbursed business expenses payable
promptly following the latter of the date of such
termination and the date upon which the appropriate
documentation is provided.
(c) DEFINITIONS. For purpose of this Section 9, the following
shall have the following meanings:
(i) "Cause" shall mean:
(A) Employee's willful or negligent failure to
substantially Perform his duties under the Agreement, or a breach of this
Agreement including, without limitation, the provisions of Section 6 hereof;
which failure or breach continues for more than sixty (60) days after receipt
by the Employee of written notice setting forth the facts and circumstances
identified by the Company as constituting adequate grounds for termination
under this clause (A),
(B) any willful or negligent act or omission by Employee
constituting dishonesty, fraud or other malfeasance, and any act or omission by
Employee constituting immoral conduct, which in any such case is injurious to
the financial condition or business reputation of the Company or any of its
affiliates;
(C) Employee's indictment for a felony under the laws of
the United States or any state thereof or any other jurisdiction in which the
Company conducts business,
(D) Employee's resignation, or
(E) Termination of the License Agreement (the "License
Agreement") of even date hereof between Employee (as Owner-licensor) and TWG
(as license) as a result of Employee's breach thereof.
(ii) "Good Reason" shall mean a material breach by the
Company of any of its obligations under the Agreement and the License Agreement
which continues for more than sixty (60) days after detailed notice to Company.
(d) In the event of (i) termination of this Agreement or the License
Agreement for any reason except as a result of a breach by Company hereunder or
by TWG under the License Agreement, and (ii) the "Copyright Transfer Payment"
(as defined in the License Agreement) has not already been paid by the Company
and/or TWG as of such termination date, the Company and/or TWG may, in its or
their sole discretion, pay the remaining balance of the Copyright Transfer
Payment to acquire full legal and equitable title to the Licensed Product,
Licensed Software and Copyrights (as those terms are defined in the License
Agreement (free of any encumbrances or restrictions pursuant to the provisions
of Section 12(e) of the License Agreement.
(e) Neither Employee nor Company and/or TWG may terminate this
Agreement or the License Agreement during the initial twenty-four (24) months of
the Employment Period as a result of levels of Company sales or funding and
marketing levels for Company products and services.
(f) NOTICE OF TERMINATION. Any purported termination of the
Employment Period prior to its scheduled expiration by the Company or by
Employee shall be communicated by written notice of termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable details the facts and
circumstances claimed to provide a basis for termination under the provision so
indicated. The written notice referred to in Section 9(a) shall satisfy the
requirements of this Section 9(f) if the determination of the Board of Directors
referred to in Section 9(a) is subsequently made in accordance with such Section
9(a), but the Employee's termination of employment shall not be
effective until the Board of Directors by majority vote has made such
determination in accordance with such Section 9(a).
Nothing contained in this Section 9 shall be deemed to limit any
other right the Company may have to terminate the Employee's employment
hereunder upon any ground permitted by law.
10. SURVIVAL
The convenants, agreements, representations and warranties
contained in or made Pursuant to this Agreement shall survive Employee's
rightful termination of employment. If any such termination is wrongful,
then, except, as provided in Section 6, such convenants, agreements,
representations and warranties shall not survive.
11. MODIFICATIONS/ENTIRE AGREEMENT
Except to the extent that the parties have certain obligations and
rights under the License Agreement, this Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof;
supersedes all existing agreements between the parties concerning such
subject matter, and may be modified only by a written instrument duly
executed by both of the parties hereto.
12. NOTICES
Any notice or other communication permitted or required to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested or delivered against receipt to the party to whom it is to
be given; if to Employee, at his address set forth in the preamble to this
Agreement (or to such other address as the party shall have furnished in
writing and in accordance with the provisions of this Section 12), and if to
the Company, as follows: Multiple Application Tracking System, Inc. c/o
Trans World Gaming Corp., at Xxx Xxxx Xxxxx, Xxxxx 0000, Xxx Xxxx, XX
00000-0000, Attn: Xx. Xxxxxxxx X. Xxxxxxxxx, with a copy to Xxxxxxxxxxx,
Xxxxx & Xxxxxxxx, One Citicorp Center, 153 East 53 Street, 26th Floor, New
York, New York 10022-4611, Attn: Xxxxxxx X. Xxxxxxx, Esq. Notice to the
estate of Employee shall be sufficient if addressed to Employee as provided
in this Section 12. Any notice of other communication given by certified
mail shall be deemed given at the time of certification thereof, except for a
notice changing a party's address which shall be deemed given at the time of
receipt thereof.
13. WAIVER/SEVERABILITY
(a) WAIVER. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed to be waiver
of any other breach of such provision or of any breach of any other provision
of this Agreement. The failure of a party to insist upon strict adherence to
any term of this Agreement on one or more occasions shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must
in writing.
(b) SEVERABILITY It is expressly understood and agreed that
although Employee and the Company consider the restrictions contained in Section
6 to be reasonable, if a final judicial determination is made by the court of
competent jurisdiction that the time or territory restriction in Section 6 or
any other restriction contained in Section 6 is an unenforceable
restriction against Employee, such provision shall not be rendered void, but
shall be deemed amended to apply to such maximum time and territory, if
applicable, or otherwise to such maximum extent as such court may judicially
determine or indicate to be enforceable. Alternatively, if any court of
competent jurisdiction finds that any restriction contained in Section 6 is
unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained therein. In the event that any one or more of
the other provisions of this Agreement shall be or become invalid, illegal or
unenforcable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby
14. BINDING EFFECT
Employee's rights and obligations under this Agreement shall not be
transferable Assignment or otherwise, such rights shall not be subject to
communications, encumbrances or other claims of Employee's creditors and any
attempt to do any of the foregoing shall be void. The Company's rights or
obligation under this Agreement shall not be transferable by assignment or
otherwise, unless Employee at his sole option, elects to accept and by bound
by such transfer or assignment, provided that, for purposes hereof, a change
in ownership or control, corporate restructuring, merger or the like, or
transfer to an affiliated entity of Company shall not be deemed a transfer or
assignment requiring Employee's approval. The provisions of this Agreement
shall be binding upon and inure to the benefit of Employee and his heirs and
personal representative and shall be binding upon and inure to the benefit of
the Company and its successors and assigns.
15. NO THIRD PARTY BENEFICIARIES
This Agreement does not create and shall not be construed as
creating any rights enforceable by any person not a party to this Agreement,
except as is provided in Sections 9 and 14 of this Agreement.
16. HEADING
The headings in this Agreement are solely for the convenience of
reference and shall be given no effect in the construction or interpretation
of this Agreement.
17. COUNTERPARTS, GOVERNING LAW
This Agreement may be executed in any number of counterparts, each
of which Shall be deemed an original, but all of which together shall
constitute one and the same instrument. It shall be governed and construed
in accordance with the laws of the State of Colorado without giving effect to
conflict of laws.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above-written.
COMPANY:
MULTIPLE APPLICATION
TRACKING SYSTEM, INC.
By:
--------------------------
Name: Xxxxxx Tottenham
Title: President
EMPLOYEE:
----------------------------
Xxxxx X. Xxxxxxx, Xx.
