EMPLOYMENT AGREEMENT
EXHIBIT
10.22
THIS
EMPLOYMENT AGREEMENT (“Agreement") is entered into this 7th day of December,
2005, by and between XXXX X. XXXXXXXXXX (“Employee”) and NEVADA GOLD &
CASINOS, INC., a Nevada corporation with headquarters in Houston, Texas
(“Employer”).
WHEREAS,
Employer is in the business of developing, owning, and operating various gaming
facilities and lodging and entertainment facilities in different parts of the
United States; and
WHEREAS,
Employer desires to enter into an employment relationship with Employee and
Employee desires to enter into an employment relationship with Employer;
NOW,
THEREFORE, in consideration of the mutual covenants and promises contained
herein, the parties agree as follows:
1. EMPLOYMENT.
Employer hereby agrees to hire and employ Employee, and Employee hereby agrees
to accept such employment, to work for and on behalf of Employer (or any of
its
affiliates, subsidiaries, co-venturers or other business entities as Employer
shall from time to time determine), pursuant to the terms and conditions of
this
Agreement. The date Employee shall report for full-time duty with Employer
(the
"Employment Date") shall be on or before December 15, 2005.
2. TERM.
This
Agreement is effective immediately and shall continue until December 14, 2010,
unless terminated earlier as provided herein (the "Term").
3. DUTIES
AND TITLE.
Employee’s title shall be that of Senior Vice President and Chief Financial
Officer. Employee shall perform such duties as directed by the President and
Chief Operations Officer of Employer. Such duties shall include, but not be
limited to, overall responsibility for and authority over finance and
accounting, and serving as principal financial officer of the Company. Employee
shall perform his duties to the best of his abilities and shall devote
substantially all of his working time to such duties.
4. COMPENSATION.
Employer hereby agrees to provide Employee with the following compensation
package (the “Compensation Package”), which shall be reviewed annually by
Employer’s Compensation Committee:
(a) Salary.
Commencing on the Employment Date, Employer shall pay Employee an annual salary
in the amount of Two Hundred Twenty-five Thousand Dollars ($225,000.00), payable
in the same manner as Employer pays its other executive employees, less required
state and federal withholdings.
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(b) Auto
Allowance; Vacation and Fringe Benefits.
Commencing on the Employment Date, Employer shall provide Employee with a
monthly auto allowance of Seven Hundred Fifty Dollars ($750.00). Commencing
on
the Employment Date, Employee shall be entitled to four (4) weeks paid vacation
each year. In addition, and subject to the terms of any plans or policies
governing such matters, Employee shall be entitled to receive (i) contributions
to Employer’s 401(k) and other retirement plans at a rate at least as great as
Employer contributes for its other senior executive employees; (ii) major
medical and health insurance; and (iii) customary reimbursement for travel
and
entertainment. Employer shall reimburse Employee for the payment of premiums
for
COBRA insurance benefits for a period of ninety (90) days or until Employee
is
eligible to enroll in Employer's major medical and health insurance plan.
Employee shall permanently relocate his residence to Houston, Texas.
The
Employer will pay for (i) the consequential costs of Employee selling his home
in Rhode Island (“Current Home”) including brokers’ fees, closing costs, title
insurance, reasonable attorney's fees and other incidental customary closing
costs, (ii) reasonable moving expenses in connection with Employee's relocation
from his current home to his new home in Houston, Texas, specifically the cost
of movers for personal property, including packing, loading, transporting,
storing, delivering and unloading (collectively, the “Relocation Expenses”) .
Temporary housing shall be provided to Employee for a period of six (6) months.
The Company shall promptly reimburse for Relocation Expenses upon submission
of
documentation (including receipts and invoices) supporting the expenses for
which claims will be reimbursed. Employee agrees to cooperate with Employer
so
as to obtain favorable rates for the moving expenses. For
a
period of six (6) months following his Employment Date or until Employee's
family has relocated to Houston, whichever is shorter, Employee shall be
reimbursed the cost of airfare (in accordance with the Employer's travel policy)
for him to travel to and from Rhode Island one weekend per month. Employer
and
Employee will attempt to schedule these weekend trips in conjunction with
business trips to the East Coast. Employer agrees to pay as incurred (within
10
days following the Company’s receipt of an invoice from the Employee), all
reasonable legal fees and expenses that the Employee incurs in connection with
entering into this Agreement; provided, that in no event shall Employer pay
any
such legal fees and expenses in excess of $2,500.
(d) Performance
Bonuses.
Each
year the Chief Executive Officer, the President and Chief Operating Officer,
the
Senior Vice President and Chief Financial Officer, and Employer shall develop
and create a Target Plan for Employer’s upcoming fiscal year. The Target Plan
shall include both financial and strategic components. Once the proposed Target
Plan has been approved and accepted by Employer’s Board of Directors, the
President and Chief Operating Officer and the Senior Vice President and Chief
Financial Officer shall oversee its implementation, subject to Employer’s
general oversight by its Board of Directors. Following the end of each fiscal
year, the Board of Directors shall determine whether and to what extent the
Target Plan has been achieved. Employee shall be entitled to receive an annual
Performance Bonus in an amount equal to:
| · |
40%
of Employee’s then current annual salary if 95% of Target Plan
achieved;
|
| · |
50%
of Employee’s then current annual salary if 100% of Target Plan
achieved;
|
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| · |
75%
of Employee’s then current annual salary if 115% of Target Plan
achieved;
|
| · |
100%
of Employee’s then current annual salary if 125% of Target Plan
achieved.
|
(e) Stock
Options.
Simultaneously with the execution of this Agreement, Employee shall be awarded,
and immediately vested in, an option to purchase 10,000 thousand (10,000) shares
of stock in Employer with an exercise price equal to the fair market value
of
the stock determined as of the date of this Agreement, adjusted for future
stock
splits, stock dividends, etc. in accordance with the terms of any applicable
plan. In addition, Employee is also hereby granted an option to purchase an
additional forty thousand (40,000) shares of stock in Employer also with an
exercise price equal to the fair market value of the stock determined as of
the
date of this Agreement, adjusted if appropriate. The option on these forty
thousand (40,000) shares shall vest in Employee at the rate of ten thousand
(10,000) shares on each annual anniversary of this Agreement through the Term,
provided Employee is still employed by Employer on such date. All options
granted pursuant to this Agreement shall expire on the fifth anniversary date
of
the grant and are subject to the terms and conditions of Employer's stock option
plan and stock option agreement.
5. TERMINATION
AND COMPENSATION UPON TERMINATION.
(a) Employer
may terminate Employee's employment at any time without Cause (as defined in
Section 5(c) below) by giving prior, written notice to Employee. In such case,
Employer shall pay to Employee in a lump sum an amount equal to the unpaid
balance of Employee's salary, Performance Bonus, accrued vacation and fringe
benefits remaining during the Term of the Agreement. For purposes of calculating
the Performance Bonus, if any due to Employee in the event of such a
termination, Employer shall apply the Target Plan achievement as of the end
of
the fiscal year preceding the fiscal year during which the termination becomes
effective. All stock options granted but not vested at such time shall
immediately become fully vested in Employee. Otherwise, the stock options will
be treated as prescribed under Employer's Stock Option Plan and the Stock Option
Agreement.
(b) Employee
may terminate Employee's employment in the event of a "Change of Control"
defined as its sale, acquisition, merger or buyout to an unaffiliated person
that has significant effect or a reduction in the responsibilities, position
or
compensation of Employee or that requires Employee to move the location of
his
principal residence a distance of more than 35 miles prior to or during the
initial 12 months of the Change of Control. In the event of such a termination,
Employer shall pay to Employee in a lump sum an amount equal to the unpaid
balance of Employee's salary, Performance Bonus, accrued vacation, and fringe
benefits remaining during the Term of the Agreement. For purposes of calculating
the Performance Bonus, if any due to Employee in the event of such a
termination, Employer shall apply the Target Plan achievement as of the end
of
the fiscal year preceding the fiscal year during which the termination becomes
effective. All stock options granted but not vested at such time shall
immediately become fully vested in Employee. Otherwise, the stock options will
be treated as prescribed under Employer's Stock Option Plan and the Stock Option
Agreement. Employee must give notice of any termination under this subsection
within thirty (30) days of the occurrence of the event he believes gives rise
to
a Change of Control.
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(c) Employer
may terminate Employee's employment for "Cause" at any time. Such a termination
shall be effective as specified by Employer. In the event of a termination
by
Employer for "Cause," Employee shall be entitled only to his salary, accrued
vacation, and fringe benefits through the effective date of termination. Any
unvested stock options shall be forfeited. All stock options granted which
have
vested will be treated as prescribed under Employer’s Stock Option Plan and the
Stock Option Agreement. "Cause" means: (a) the Employee's conviction of, or
entry of a plea agreement or consent decree or similar arrangement with respect
to, a felony, other serious criminal offense or offense involving moral
turpitude, or any violation of federal or state securities laws, (b) Employee's
material violation of Employer's written policies; (c) Employee's material
breach of this Agreement, (d) the final revocation, suspension, or impairment
(after all applicable appeals) of Employee's gaming license in any jurisdiction
in which Employer is required to have a gaming license, or a finding (after
all
applicable appeals) by any authority in any such jurisdiction that Employee
is
unsuitable to hold a gaming license; or (e) Employee's gross misconduct in
the performance of Employee's duties hereunder. Any termination of the
Employee's employment by Employer pursuant to this Section 5(c) shall be
communicated by a notice of termination which shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of
the Employee's employment under the provision invoked. To exercise its right
to
terminate the Employee pursuant to provisions (b), (c) or (e) of the definition
of Cause, Employer must first provide the Employee with 30 days' time to correct
the circumstances or events that Employer contends give rise to the existence
of
Cause under those provisions. The 30-day time period shall not begin to run
until the Board of Directors of Employer has given the Employee the opportunity
to meet with the Board (at which meeting at least a quorum of the Board is
present either personally or telephonically) to hear a specific explanation
from
the Board of the circumstances or events the Board believes may fall within
provisions (b), (c) or (e) of the definition of Cause.
(d)
Employer may terminate Employee's employment if Employee becomes unable to
perform the essential functions of his position despite any reasonable
accommodation required by law. In the event of a termination under this
subsection, Employee shall be entitled only to his salary, accrued vacation,
and
fringe benefits for a period of one (1) year following the effective date of
termination. In the case of granted but unvested stock options, those unvested
stock options which would become vested within such one (1) year period shall
become vested and the remaining granted but unvested stock options shall be
forfeited. Otherwise, the stock options will be treated as prescribed under
Employer's Stock Option Plan and the Stock Option Agreement.
6. CONFIDENTIALITY,
PROPERTY, COMPETITION, SOLICITATION.
(a) Ownership.
Employee agrees that all inventions, copyrightable material, business and/or
technical information, marketing plans, customer lists and trade secrets which
arise out of the performance of this Agreement are the property of
Employer.
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(b) Confidentiality.
Except
as is consistent with Employee's duties and responsibilities within the scope
of
his employment with Employer, Employee agrees to keep confidential indefinitely,
and not to use or disclose to any unauthorized person, information which is
not
generally known and which is proprietary to Employer, including all information
that Employer treats as confidential, ("Confidential Information"). Upon
termination of Employee's employment, Employee will promptly turn over to
Employer all software, records, manuals, books, forms, documents, notes,
letters, memoranda, reports, data, tables, compositions, articles, devices,
apparatus, marketing plans, customer lists and other items that disclose,
describe or embody Confidential Information including all copies of the
Confidential Information in his possession, regardless of who prepared them.
In
exchange for Employee's agreement set out in this subsection, Employer hereby
promises to provide Employee with Confidential Information.
(c) Non-competition.
If
Employee’s employment hereunder is terminated as a result of the application of
paragraph 5(c), then for a period of one (1) year after the effective date
of
termination (or if Employee's employment is terminated as a result of the
application of paragraph 5(a) or 5(b), then for a period of the shorter of
(i)
one (1) year after the effective date of termination or (ii) the remainder
of
the 5-year term of the Agreement) Employee agrees not to compete, directly
or
indirectly (including as an officer, director, partner, employee, consultant,
independent contractor, or more than 5% equity holder of any equity) with
Employer in any way concerning the ownership, development or management of
any
gaming operation or facility within a 75-mile radius of any gaming operation
or
facility with respect to which Employer (or any of its affiliates) owns or
renders consulting or management services at the time of
termination.
(d) Non-solicitation.
Employee agrees not to solicit or recruit, directly or indirectly, any
management employee of Employer for employment during the one (1) year period
after termination of his employment relationship with Employer.
7. NOTICES. All
notices and communications shall be sent by certified mail, return receipt
requested, or by hand delivery, to the following parties:
If
to
Employee:
Xxxx
X.
Xxxxxxxxxx
c/o
Nevada Gold & Casinos, Inc.
0000
Xxxx
Xxx Xxxxxxxxx
Xxxxx
000
Xxxxxxx,
Xxxxx 00000
If
to
Employer:
Nevada
Gold & Casinos, Inc.
C/o
H.
Xxxxxx Xxxx
Chief
Executive Officer
0000
Xxxx
Xxx Xxxxxxxxx
Xxxxx
000
Xxxxxxx,
Xxxxx 00000
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8. COMPLIANCE
WITH CODE SECTION 409A.
Any
provision of this Agreement to the contrary notwithstanding, all compensation
payable pursuant to this Agreement that is determined by Employer in its sole
but reasonable judgment to be subject to Section 409A of the Code shall be
paid
in a manner that Employer in its sole but reasonable judgment determines meets
the requirements of Section 409A of the Code and any related rules, regulations
or other guidance, even if meeting such requirements would result in a delay
in
the time of payment of such compensation. Any payments pursuant to Section
4 and
Section 5(a) and (b) of this Agreement shall be made no later than two and
one-half months after the year in which the right to receive such amounts
vest.
9. GOVERNING
LAW AND VENUE.
This
Agreement herein shall be construed, regulated and administered under the laws
of the State of Texas and of the United States of America. Any lawsuit or other
civil action brought arising from or related to Employee's employment with
Employer or this Agreement shall be brought and maintained in a state or federal
court in Xxxxxx County, Texas, except that this provision does not preclude
Employer from removing to federal court any action filed by Employee and, to
the
extent permissible, Employee hereby consents to such removal.
10. BINDING
EFFECT AND ASSIGNMENT.
This
Agreement shall be binding on and inure to the benefit of the respective parties
hereto, their heirs, successors and assigns. Subject to the provisions of
Section 5(b), Employer may assign this Agreement in connection with a merger,
consolidation, assignment, sale or other disposition of substantially all of
its
assets or business. This Agreement may not be assigned by Employee.
11. REPRESENTATION.
Employee represents, and understands that Employer is relying on his
representation, that Employee's entering into or performance of this Agreement
is not in breach or violation of any other Agreement or obligation of
Employee.
12. MODIFICATION. This
Agreement may not be amended in any manner without the express, written consent
of the parties hereto.
13. ENTIRE
AGREEMENT.
This
Agreement supersedes all previous and contemporaneous oral negotiations,
commitments, writings and understandings between the parties concerning the
matters herein or therein.
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IN
WITNESS WHEREOF, the parties hereto have signed, sealed and delivered this
Agreement on this 7th day of December, 2005.
EMPLOYEE
_________________________
Xxxx
X.
Xxxxxxxxxx
EMPLOYER
NEVADA
GOLD & CASINOS, INC.
By:
_________________________
H.
Xxxxxx
Xxxx, CEO
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