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EXHIBIT 99.3
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement"), dated as of the
27th day of April, 2000, by and between Xxxxxxxxxx.xxx 2000 Ltd., a Nevada
corporation ("SEARCHOUND"), and Xxxxx Xxxxxxxx, an individual ("Executive");
W I T N E S S E T H:
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WHEREAS, SEARCHOUND desires to retain the services of Executive and
Executive desires to be retained by SEARCHOUND; and
WHEREAS, as an inducement to SEARCHOUND to enter into this Agreement,
Executive has agreed to be employed and not to compete with SEARCHOUND to the
extent set forth below;
AGREEMENT:
NOW, THEREFORE, in consideration of the premises, covenants and
agreements contained herein and the payments by SEARCHOUND to Executive required
below, the parties hereto agree as follows:
1. Employment. Subject to the termination provisions of Sections 6, 7
and 8, SEARCHOUND shall employ Executive as President and CEO, or such other or
different position as may be designated by the Board of Directors of SEARCHOUND
from time-to-time and consented to by Executive (which consent will not
unreasonably be withheld or delayed). Executive shall be employed for an initial
period of 24 months from the date hereof (the "Commencement Date") ("Initial
Period") and shall continue thereafter ("Term") unless and until terminated as
provided herein. Executive shall perform such duties and responsibilities as the
Board of SEARCHOUND may request from time-to-time. Executive shall diligently,
faithfully and competently perform all duties required hereunder and shall not
have any other employment.
2. Base Salary. During the Term, SEARCHOUND will pay Executive a salary
at a rate of Two Hundred Thousand Dollars ($200,000) per annum until April 30,
2001 and Two Hundred Fifty Thousand Dollars ($250,000) per annum thereafter
unless and until increased by the Board of Directors ("Base Salary"), payable in
substantially equal semi-monthly installments. All compensation paid hereunder
is subject to all applicable withholding and other taxes.
3. Benefits. While Executive is employed by SEARCHOUND, SEARCHOUND will
provide for Executive's participation in benefit programs on the same basis as
other executive officers of SEARCHOUND, including health and dental insurance
for Executive and his family (up to $600 per month), life insurance and three
(3) weeks vacation. SEARCHOUND will provide indemnification to Executive in
connection with the services provided to or on behalf of SEARCHOUND as set forth
in SEARCHOUND's Articles of
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Incorporation and Bylaws. In addition, SEARCHOUND shall issue to Executive
100,000 shares of common stock of Pan International Gaming Inc. ("PANE").
4. Option. The parties acknowledge that SEARCHOUND has entered into an
Agreement and Plan of Business Combination (the "PANE Agreement") with PANE
whereby SEARCHOUND would become a subsidiary of PANE. PANE intends to implement
a Stock Option Plan (the "Plan"), which Plan must be approved by the Board and
the Shareholders of PANE. If the Plan is approved by the Board and Shareholders,
then it is the intention of SEARCHOUND and PANE that Executive shall receive an
option to purchase 500,000 shares of PANE common stock at an exercise price
equal to the fair market value on the date of grant. The Option is intended to
vest in accordance with the following schedule:
125,000 shares on each of October 31, 2000, April 30, 2001, October 31,
2001 and April 30, 2002 (provided Executive remains employed
hereunder) (the "Non-contingent Options").
In addition, PANE intends to grant Executive an additional option to
purchase 50,000 shares of PANE common stock at the fair market value on the date
of grant if PANE is able to obtain an equity financing of $5 million and
selected acquisitions on or prior to October 31, 2000 on terms and conditions
acceptable to the Board and Executive is employed hereunder on the date of
consummation of such financing. All of the options will be subject to the terms
of the Plan when adopted and all agreements required thereby. Upon a change of
control (to be defined in the Option Agreement) of PANE, all unvested,
Non-contingent Options shall be vested and exercisable for a period of ninety
(90) days after the change in control.
All of the above options are subject to the closing of the PANE Agreement.
5. Methods of Termination. This Agreement may be terminated as follows:
(a) By SEARCHOUND for "Cause," upon the delivery of written
notice thereof to Executive. For purposes of this Agreement, "Cause"
shall mean, without limitation, the occurrence of any of the following
on the part of Executive:
(i) Executive's conviction of or plea of guilty or nolo
contendere to a crime involving moral turpitude or providing for
a term of imprisonment;
(ii) Executive's engagement in willful misconduct
(including but not limited to employee discrimination or
harassment) materially injurious to SEARCHOUND or its reputation
which remains uncured for thirty (30) days after written notice
to Executive;
(iii) Executive's engagement in activities which
constitute a material breach of this Agreement or any other
agreement between Executive and SEARCHOUND which remains uncured
for thirty (30) days after written notice to Executive;
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(iv) Executive's gross negligence in the execution of,
or Executive's willful failure which remains uncured for thirty
(30) days after written notice to Executive (or continued
failure, which need not be willful) to carry out, his duties and
responsibilities hereunder up to the standards of performance
which could reasonably be expected from an employee in his
position; or
(v) An act or acts of fraud, embezzlement or dishonesty,
either: (A) taken by Executive to the detriment of SEARCHOUND;
or (B) by others in conspiracy or affiliation with Executive and
intended to result in enrichment or advantage to Executive at
the expense of SEARCHOUND or with use of SEARCHOUND's assets or
information.
Notwithstanding the foregoing, regarding (ii), (iii) and (iv) above,
SEARCHOUND will not be obligated to give Executive an opportunity to cure any
individual claim more than three (3) times in any twelve (12) month period.
(b) By SEARCHOUND without Cause upon two (2) weeks written
notice to Executive;
(c) By Executive upon two (2) weeks written notice to
SEARCHOUND;
(d) Upon the death or Disability of Executive. For purposes of
this Agreement, "Disability" means the inability of Executive to perform
his duties or services as provided in this Agreement because of mental,
physical or other illness, disease or injury, where such disability: (i)
shall have existed for an aggregate of 3 months in any 12 month period
and SEARCHOUND shall have so notified Executive, or any guardian or
representative of Executive, thereof; or (ii) has prevented Executive
from performing substantially all of his duties under this Agreement for
a period of 3 consecutive months; or
(e) By express mutual written agreement signed by Executive and
SEARCHOUND.
6. Termination. In the case of the termination or cancellation of this
Agreement by SEARCHOUND under Section 5(a) or Executive under Section 5(c) and
subject to Section 13, SEARCHOUND shall have no obligation to pay Executive any
further salary, commission payment or benefit under this Agreement and Executive
may not exercise the Options or any part thereof, and any unvested portion of
the Option shall be automatically terminated and canceled upon such termination.
If SEARCHOUND terminates Executive's employment without Cause, SEARCHOUND will
continue to pay the Base Salary ("Severance Pay") until the expiration of the
later of (i) the Initial Term or (ii) 12 months after termination; and, in
addition, all then unvested, Non-contingent Options will be immediately vested
and be exercisable for a period of ninety (90) days.
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7. Other Terminations. In the case of the termination or cancellation of
this Agreement pursuant to 5(d), Employee or Employee's heirs, executors or
administrators of his property or estate, as applicable, shall receive, subject
to Section 13, in full satisfaction of SEARCHOUND's obligations to Executive
hereunder all amounts due and payable on or prior to the date of such
termination under Sections 2 and 3 of this Agreement. In addition, any unvested
portion of the Option shall be automatically terminated and canceled and the
vested portion of the Option shall remain exercisable for a period of ninety
(90) days after termination subject to the provisions of this Agreement and the
Option Agreement.
8. Release. SEARCHOUND shall not be obligated to make any of the
payments referred to in Sections 6 or 7 unless and until SEARCHOUND has received
a Release of Claims executed by Executive or Executive's heirs, executors,
administrators, or guardian, as applicable, in a form satisfactory to SEARCHOUND
at its reasonable discretion.
9. Restrictive Covenants. During Executive's employment with SEARCHOUND
hereunder or otherwise and for a period equal to (i) 2 years after Executive is
no longer employed by SEARCHOUND, if Executive is terminated or terminates
pursuant to 5(a) or 5(c) or (ii) for as long as SEARCHOUND is paying the
Severance Pay if Executive is terminated pursuant to 5(b), Executive shall not:
(a) directly or indirectly, either individually or as a
principal, partner, agent, employee, employer, consultant, stockholder,
joint venturer, or investor, or as a director or officer of any
corporation or association, or in any other manner or capacity
whatsoever, engage in, assist or have any active interest in a business
located anywhere in the world that directly competes with the business
conducted by SEARCHOUND on the date hereof or at any time during the
term of this covenant. Notwithstanding the above, this paragraph shall
not be construed to prohibit Executive from owning less than 3% of the
outstanding securities of a corporation which is publicly traded on a
securities exchange or over-the-counter.
(b) directly or indirectly, either individually, or as a
principal, partner, agent, employee, employer, consultant, stockholder,
joint venturer, or investor, or as a director or officer of any
corporation or association, or in any other manner or capacity
whatsoever: (i) divert or attempt to divert from SEARCHOUND any business
with any strategic partner, customer or account of SEARCHOUND; (ii)
induce any salesperson, distributor, supplier, vendor, manufacturer,
representative, agent, jobber or other person transacting business with
SEARCHOUND to terminate their relationship or association with
SEARCHOUND, or to represent, distribute or sell services or products in
competition with services or products of SEARCHOUND; or (iii) induce or
cause any employee of SEARCHOUND to leave the employ of SEARCHOUND.
10. Non-Disclosure. Executive shall not at any time or in any manner
either during the Term or at any time thereafter, directly or indirectly, use or
disclose to any party other than SEARCHOUND any trade secrets or other
Confidential Information (as defined below)
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learned or obtained by him while a stockholder, officer or employee of
SEARCHOUND. As used herein, the term "Confidential Information" means
information disclosed to or known by Executive as a consequence of his position
with SEARCHOUND and not generally known in the industry in which SEARCHOUND is
engaged and that in any way relates to SEARCHOUND's products, processes,
services, inventions (whether patentable or not), formulas, software, programs,
algorithms, techniques or know-how, including, but not limited to, information
relating to distribution systems and methods, research, development, purchasing,
licensing, accounting, engineering, marketing, merchandising and selling.
11. Inventions. During the Term, Executive agrees that all inventions,
discoveries, written materials, brochures, training programs, training
materials, products, processes, services, inventions (whether patentable or
not), formulas, software, programs, algorithms, techniques or know-how,
including, but not limited to, information relating to distribution systems and
methods, research, development, purchasing, licensing, accounting, engineering,
marketing, merchandising and selling, conceived of or developed by Executive
during the Term or otherwise, whether alone or jointly with others and whether
during working hours or otherwise, which relate to any business of SEARCHOUND
shall be SEARCHOUND's exclusive property. Executive shall: (a) promptly disclose
in writing to SEARCHOUND each invention, written material, brochure, training
program, training material, product, process, service, invention (whether
patentable or not), formula, item of software, program, algorithm, technique or
item of know-how, including, but not limited to, information relating to
distribution systems and methods, research, development, purchasing, licensing,
accounting, engineering, marketing, merchandising and selling, conceived by or
developed by Executive during the Term or otherwise; (b) assign all rights to
the same to SEARCHOUND; and (c) assist SEARCHOUND, if requested, at SEARCHOUND's
expense to obtain and protect any patents, trademarks, copyrights or service
marks on the same.
12. Affiliate Transactions. For as long as Executive is employed by
SEARCHOUND or Executive or any member of his family is the beneficial owner of
any stock of SEARCHOUND, neither Executive, any member of her family nor any
affiliate (as such term is used in the Federal securities laws) of Executive
shall engage, directly or indirectly, in any business transaction with
SEARCHOUND without the express approval of 80% of the Board.
13. Effect of Breach. In addition to the consequences described in
Section 5(a), in the event Executive breaches his obligations under Sections 9,
10, 11, or 12 at any time, SEARCHOUND shall have no further obligation to pay
any amounts owed to Executive hereunder or otherwise and all such amounts shall
be forfeited to SEARCHOUND. Section 13 shall not, nor shall it be deemed, to
abrogate, limit or substitute for, any remedy available to SEARCHOUND, whether
in equity or at law, for such breach.
14. Specific Performance. The parties hereto agree that their rights
hereunder are special and unique and that any violation thereof would not be
adequately compensated by money damages, and each grants the other the right to
specifically enforce (including injunctive relief where appropriate) the terms
of this Agreement.
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15. Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors and permitted assigns, but neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by Executive,
except as otherwise provided herein.
16. Governing Law; Waiver of Jury Trial. This Agreement shall be
governed by the law of the State of Missouri as to all matters, including, but
not limited to, matters of validity, construction, effect and performance,
except that no doctrine of choice of law shall be used to apply any law other
than that of the State of Missouri. IN THE EVENT OF ANY LITIGATION WITH RESPECT
TO ANY MATTER CONNECTED WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREUNDER ALL OF THE PARTIES HERETO WAIVE ALL RIGHTS TO A TRIAL BY JURY AND THE
EXECUTIVE HEREBY CONSENTS TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS IN
THE STATE OF MISSOURI.
17. Severability. SEARCHOUND and Executive believe the covenants against
competition and relating to non-disclosure and inventions, contained in this
Agreement are reasonable and fair in all respects, and are necessary to protect
the interests of SEARCHOUND. However, in case any 1 or more of the provisions or
parts of a provision contained in this Agreement shall, for any reason, be held
to be invalid, illegal or unenforceable in any respect in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement or any other jurisdiction, but this
Agreement shall be reformed and construed in any such jurisdiction as if such
invalid or illegal or unenforceable provision or part of a provision had never
been contained herein and such provision or part shall be reformed so that it
would be valid, legal and enforceable to the maximum extent permitted in such
jurisdiction.
18. Miscellaneous. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The section headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. This Agreement
embodies the entire agreement and understanding of the parties hereto in respect
of the subject matter contained herein and may not be modified orally, but only
by a writing subscribed by the party charged therewith. There are no
restrictions, promises, representations, warranties, covenants or undertakings,
other than those expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings (whether oral or written)
between the parties with respect to such subject matter. This Agreement shall be
deemed drafted by both parties despite any legal presumptions to the contrary.
IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement the date first hereinabove set forth.
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XXXXXXXXXX.XXX 2000 LTD.
By: Xxx Xxxxxx
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Title: Director
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Xxxxx Xxxxxxxx, an individual
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