Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXXX
EXECUTIVE EMPLOYMENT AGREEMENT
("AGREEMENT")
EXECUTIVE EMPLOYMENT AGREEMENT, effective February 22, 2002 ("Effective
Date"), by and between Gameco, Inc., a Delaware corporation (the "Company"), and
Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company desires to employ the Executive and the Executive
desires to be so employed by the Company from and after the date of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
ARTICLE I
EMPLOYMENT DUTIES AND BENEFITS
SECTION 1.1 EMPLOYMENT. The Company hereby employs the Executive as a
Director of the Company. The Executive accepts such employment and agrees to
perform the duties and responsibilities assigned to him under this Agreement.
SECTION 1.2 DUTIES AND RESPONSIBILITIES. During the period of employment,
the Executive agrees to serve the Company as Director of the Company and in such
other offices and directorships of the Company and of its subsidiaries and
related companies (collectively, "Affiliates") to which he may be elected or
appointed, and to perform the duties commensurate with such positions and such
other reasonable and appropriate duties as may be requested of him by the board
of directors of the Company (the "Board of Directors") and of the Affiliates, as
applicable, in accordance with this Agreement and in compliance with all
applicable laws and regulations. Excluding periods of vacation and sick leave to
which the Executive is entitled, the Executive shall devote such time, energy,
and skill to the business and affairs of the Company and its Affiliates and to
the promotion of their interests as is necessary to perform the duties required
of him by this Agreement.
SECTION 1.3 WORKING FACILITIES. The Executive shall be furnished with
facilities and services suitable to his position and adequate for the
performance oIf his duties under this Agreement.
SECTION 1.4 VACATIONS. The Executive shall be entitled each year during the
Term, as defined below, to a vacation with full salary and benefits, for the
number of weeks established by the Board of Directors.
SECTION 1.5 EXPENSES. The Executive is authorized to incur reasonable
expenses for promoting the business of the Company, including expenses for
entertainment, travel and
similar items. The Company will promptly reimburse the Executive for all such
expenses upon the presentation by the Executive, from time to time, of an
itemized account of such expenditures.
SECTION 1.6 BENEFIT PLANS. From the effective date of this Agreement, the
Executive shall be entitled to participate in benefit plans provided to
employees of the Company. Such participation shall be based upon the policies
established by the Board of Directors.
ARTICLE II
COMPENSATION
SECTION 2.1 BASE SALARY. During the Term, the Company shall pay to the
Executive a base salary at the rate of $250,000 per year.
SECTION 2.2 BONUS AND BONUS PLAN PARTICIPATION. The Executive will be
entitled to an annual bonus for each year ended December 31 during the Term of
up to 33% of the Executive's base salary. The amount of the percentage within
that limit shall be determined in the sole discretion of the Board of Directors
and shall be based on written objectives defined by the Board of Directors.
ARTICLE III
TERM OF EMPLOYNMENT AND TERMINATION
SECTION 3.1 TERM. This Agreement shall be for a period of three years
commencing on February 22, 2002; subject, however, to termination during such
period as provided in this Article (the "Term").
SECTION 3.2 TERMINATION BY THE COMPANY WITH CAUSE. The Company may
terminate the Executive's employment, at any time, for cause upon ten days'
written notice and opportunity for the Executive to remedy any non-compliance
with the terms of this Agreement (if such non-compliance can be remedied).
Grounds for termination "for cause" shall be any of the following: (i)
intentional and material breach of his duty of loyalty or care to the Company,
(ii) gross negligence or willful misconduct in performance of his duties during
the course of his employment, (iii) persistent failure to abide by the corporate
policies and procedures established by the Board of Directors; (iv) persistent
failure to execute the reasonable and lawful instructions of the Board of
Directors relating to the operation of the Company's business, and (v)
conviction of any felony or loss of the Executive's necessary gaming licenses or
other regulatory approval. Upon the date of termination of the Executive's
employment pursuant to this Section 3.2, the Company's obligation to pay any
compensation (including bonuses) shall terminate, at which time the Company
shall be responsible for compensating the Executive for any unpaid salary and
vacation time not taken. Subject to this exception and the obligation of the
Company to compensate the Executive through the notice period, no other
compensation shall be payable to the Executive should this Agreement be
terminated pursuant to this Section 3.2.
SECTION 3.3 TERMINATION OR CESSATION OF EMPLOYMENT WITHOUT CAUSE. If the
Executive's employment is terminated or ceased without cause, all compensation
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shall cease, but the Company shall be obligated to compensate the Executive with
a lump sum severance payment equal to the present value of his salary otherwise
payable during the remaining Term of this Agreement. In the event the
Executive's employment is terminated pursuant to this Section 3.3, the Executive
shall be entitled to participate in the bonus payable pursuant to Section 2.2,
with respect to the year in which his employment is terminated, prorated for the
year based on the number of full months employed during such year compared to
12. In addition, the covenant in Section 4.1(b) below shall be automatically
terminated on the effective date of any termination of Executive's employment
without cause.
SECTION 3.4 TERMINATION UPON DEATH OF THE EXECUTIVE. In addition to any
other provision relating to termination, this Agreement shall terminate upon the
Executive's death. In such event, all earned and unpaid compensation,
compensation for vacation time not taken by the Executive and all expense
reimbursements due to the Executive shall be paid to the Executive's estate. In
the event the Executive's employment is terminated pursuant to this Section 3.4,
the Executive's estate also shall be entitled to a death benefit equal to six
months' salary and to participate in the bonus payable pursuant to Section 2.2
with respect to the year in which his employment is terminated, prorated for the
year based on the number of full months worked during such year compared to 12.
SECTION 3.5 TERMINATION UPON SALE. (a) If during the Term, the Company:
(i) is merged into another company;
(ii) sells all or substantially all of its assets to another
company or person;
(iii) experiences a change in ownership of 50% or more of its
common stock; or
(iv) issues shares in excess of 50% of its then outstanding
stock to another company or person
and the Executive is not offered, by the acquiring company or person, an
employment position, or not offered an employment position satisfactory to
him (in his sole discretion), he shall be deemed Terminated Without Cause
and shall be entitled to a severance payment in an amount equal to one
year's Base Salary, which shall be in addition to amounts payable to the
Executive under Section 3.3 above.
(b) The foregoing subsection 3.5(a) shall not apply if the Executive
is an equity participant in any of the transactions described in subsection
3.5(a)(i)-(iv) above.
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ARTICLE IV
CONFIDENTIALITY AND COMPETITION
SECTION 4.1 FURTHER OBLIGATIONS OF THE EXECUTIVE DURING AND AFTER EMPLOYMENT.
(a) The Executive realizes that during the course of his employment, the
Executive will have produced and/or have access to confidential plans,
information, business opportunity records, notebooks, data, specifications,
trade secrets, customer lists and account lists of the Company and its
affiliates ("Confidential Information"). Therefore, during and subsequent to his
employment by the Company, or by an affiliate, the Executive agrees to hold in
confidence and not to directly or indirectly disclose or use or copy or make
lists of any such Confidential Information, except on behalf of the Company or
to the extent authorized by the Company in writing. All records, files, business
plans, documents, equipment and the like, or copies thereof, relating to
Company's business, or the business of any Affiliate, which the Executive shall
prepare, or use, or come into contact with, shall remain the sole property of
the Company, or of any Affiliate, and shall not be removed from the Company's or
the Affiliate's premises without its written consent, and shall be promptly
returned to the Company upon termination or resignation of employment with the
Company or Affiliates.
(b) Because of his employment by the Company, the Executive will have
access to trade secrets and confidential information about the Company, its
business plans, its business accounts, its business opportunities, its expansion
plans into other geographic areas and its methods of doing business. The
Executive agrees that for the Term of this Agreement and an additional period of
one year he will not take any actions which are calculated to persuade any
employee, vendor or supplier of the Company to terminate or modify in any
adverse manner their association with the Company.
(c) In the event a court of competent jurisdiction finds any provision of
this Section 4.1 to be so overbroad as to be unenforceable, then such provision
shall be reduced in scope by the court, to the extent deemed necessary by the
court to render the provision reasonable and enforceable. The Executive
acknowledges and agrees that any breach of this Agreement by the Executive would
cause immediate irreparable harm to the Company. The Executive agrees that
should he violate any of the terms and conditions of this Article IV, the
Company, in its sole discretion, shall be entitled to seek and obtain immediate
injunctive relief and enjoin further and future violations of this Article IV.
ARTICLE V
DISABILITY AND ILLNESS
SECTION 5.1 DISABILITY AND SALARY CONTINUATION.
(a) Definition of Total Disability. For purposes of this Agreement, the
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terms "totally disabled" and "total disability" shall mean disability as defined
in any total
disability insurance policy or policies, if any, in effect with respect to
the Executive. If no insurance policy is in effect, "total disability"
shall mean a medically determinable physical or mental condition which, in
the opinion of two physicians chosen by the mutual consent of the parties,
renders the Executive unable to perform substantially all of the duties
required pursuant to this Agreement. Total disability shall be deemed to
have occurred on the date of the disabling injury or onset of the disabling
illness, as determined by the two independent physicians. In the event that
the two independent physicians are unable to agree as to the date of the
disabling injury or onset of the disabling illness, such date shall be
deemed to be the later of the two dates determined by the physicians chosen
pursuant to this Section 5.1(a).
(b) Salary Continuation. If the Executive becomes totally disabled
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during the term of this Agreement, his full salary shall be continued for
90 days from the date of the disabling injury or onset of the disabling
illness as determined in accordance with the provisions of Section 5.1(a)
above, and thereafter the Executive's employment may be terminated in
accordance with the provisions of Section 3.3.
SECTION 5.2 ILLNESS. If the Executive is unable to perform the services
required under this Agreement by reason of illness or physical injury not
amounting to total disability, also as determined in this Article, the
compensation otherwise payable to the Executive under this Agreement shall be
continued for a period of six months and he shall be entitled to participate in
the bonus payable in Section 2.2 with respect to the year in which the illness
occurred, prorated for the year based on the number of months worked during such
year compared to 12, after which the Executive's employment may be terminated
and the Company shall have no further obligation to the Executive.
ARTICLE VI
GENERAL MATTERS
SECTION 6.1 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Ohio and shall be construed in accordance therewith.
SECTION 6.2 NO WAIVER. No provision of this Agreement may be waived except
by an agreement in writing signed by the waiving party. A waiver of any term or
provision shall not be construed as a waiver of any other term or provision.
SECTION 6.3 AMENDMENT. This Agreement may be amended, altered or revoked at
any time, in whole or in part, by filing with this Agreement a written
instrument setting forth such changes, signed by each of the parties.
SECTION 6.4 BENEFIT. This Agreement shall be binding upon the Executive and
the Company, and shall not be assignable by either party without the other
party's written consent.
SECTION 6.5 SEVERABILITY. If any provision of this Agreement is declared by
any court of competent jurisdiction to be invalid for any reason, such
invalidity shall not affect the remaining provisions. On the contrary, such
remaining provisions shall be fully severable, and
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this Agreement shall be construed and enforced as if such invalid provisions had
not been included in the Agreement.
SECTION 6.6 EFFECTIVE DATE. The effective date of this Agreement shall be
February 22, 2002.
SECTION 6.7 ARBITRATION. The Company and the Executive expressly agree that
all disputes arising out of this Agreement shall be resolved by arbitration in
accordance with the following provisions. Either party must demand in writing
such arbitration within ten days after the controversy arises by sending a
notice to arbitrate to both the other party and to the American Arbitration
Association (hereinafter referred to as "AAA"). The controversy shall then be
arbitrated pursuant to the rules promulgated by the AAA at the AAA's offices
located in Cuyahoga County, Ohio. The parties will select by mutual agreement
the arbitrator or arbitrators (hereinafter collectively referred to as
"arbitrator") to hear and resolve the controversy. The arbitrator shall be
governed by the express terms of this Agreement and the laws of the State of
Ohio. The arbitrator's decision shall be final and binding on the parties and
shall bar any suit, action, or proceeding instituted in any federal, state, or
local court or administrative tribunal. Notwithstanding the preceding sentence,
the arbitrator's judgment may be entered in any court of competent jurisdiction.
These arbitration provisions shall survive the termination of this Agreement.
GAMECO, INC.
By: ____________________________________
Xxxxxxx X. Xxxxxx, Chief Executive
Officer
EXECUTIVE:
____________________________________
Xxxxxxx X. Xxxxxx
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