EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 9th day of March, 1999, by and between PDS FINANCIAL CORPORATION a
Minnesota Corporation, ("Employer"), and Xxx X. Xxxxxxx, XX ("Employee"),
and shall become effective on the 29th day of March, 1999.
WITNESSETH:
WHEREAS, Employer is in the business of providing equipment financing
and related financial advisory services to gaming and gaming related
businesses throughout the United States and Internationally, and
reconditioning and buying and selling used slot machines; and
WHEREAS, Employer desires to secure the benefits of Employee's
continued services as well as the benefits of Employee's background,
knowledge, experience, ability, and expertise to promote and maintain
Employer's growth, viability and profitability; and
WHEREAS, Employee is desirous of being employed by Employer in
accordance with the terms and conditions set forth herein;
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties do hereby agree as
follows:
I. NATURE OF EMPLOYMENT AND DUTIES OF EMPLOYEE
1.01 Employee is hired and shall serve as Vice President and General
Counsel with duties, powers and responsibilities consistent with
such position, as set forth on EXHIBIT 1 attached hereto and
incorporated herein by this reference. Employee shall do and
perform all services, acts or things necessary or advisable to
manage and conduct the business of Employer, as set forth in
EXHIBIT 1. Employee agrees to devote substantially his full
energies, abilities and productive time to the Employer's business
and to the performance of his assigned duties, to discharge those
duties in a diligent and professional manner, and not to engage in
any other activities that would materially interfere with the
performance of his duties under this Agreement or engage in any
activity competitive with or adverse to the Employer's business or
welfare.
Employer may assign Employee to another position commensurate with
Employee's training, skills or experience so long as the position
is acceptable to both parties and compensation paid to Employee is
equal to or greater than the compensation provided in this
Agreement.
II. TERM OF EMPLOYMENT
2.01 Employer hereby employs the Employee and Employee hereby agrees to
his employment with the Employer for a period of three (3) years
commencing as of the Date of this Agreement.
2.02 As used herein, the phrase "Employment Term" refers to the entire
period of employment, including the Initial Employment Term and
any extensions agreed to by the mutual consent of Employer and
Employee.
2.03 Renewal of Employment Term - The Employment Term shall
automatically renew for consecutive additional periods of one (1)
year unless at least thirty (30) days prior to the expiration of
the Initial Employment Term or any extension thereof either party
shall notify the other in writing of its decision to not renew the
Agreement.
III. TERMINATION
3.01 Notwithstanding the specific provisions of Section II above, the
Employment Term may be terminated as set forth herein:
3.02 Termination for Cause - Employer may terminate the Employment Term
at any time without notice upon the occurrence of any of the
following events:
(i) Death of Employee; or
(ii) The conviction of Employee in a court of law of any offense
involving money or other property or of any crime that
constitutes a felony, or any misdemeanor involving moral
turpitude; or
(iii) A determination by a licensed physician of the state of
which Employee maintains his permanent residence that
Employee is mentally incompetent or chemically dependent;
or
(iv) Employee's repeated and/or willful violation of specific
written directions of the Board of Directors, or the
President of Employee, or policies set forth in Employer's
Employee Handbook, or other policies of the Employer; or
(v) Employee's repeated and/or willful failure to perform his
job duties after written notice by the Employer's CEO,
President or Board of Directors; or
(vi) A determination that any statement, representation or
warranty made to Employer by Employee shall be false or
misleading; or
(vii) Employee's inability to perform a substantial portion of
his usual and customary duties, because of illness or
sickness for a total of 45 days within any period of 12
consecutive months; or
(viii) A determination by Employer's President or Board of
Directors that Employee has engaged in any conduct which
jeopardizes Employer's federal, state, sovereign, or local
governing authority licensing or other approvals deemed
material by Employer.
(ix) inability or failure to obtain and/or retain requisite
licenses, permits and authorizations required by the
various gaming jurisdictions of individuals for the
position of Vice President/General Counsel.
3.03 Termination by Employee - Employee shall have the right to
terminate the Employment Agreement upon the insolvency or
bankruptcy of Employer. Employee may terminate this Agreement
with a thirty (30) days notice in the event that any person, group
of entity acquires a 50% or more equity position, proxy control or
management control that in fact results in a material diminution
or loss of Employee's authority or management prerogatives. If
employee terminates this Agreement because of such action,
Employee shall be entitled to one (1) years Base Compensation in
effect at the time of said action. The amount shall be payable in
a single payment due within 30 days of completion of the sale.
3.04 Termination Without Cause - Employer shall have the right to
terminate the Employment Term at any time and for any reason with
or without cause upon Thirty (30) days written notice to Employee.
In the event of such termination without cause, and only under
these circumstances, Employer shall pay to Employee a Severance
Benefit equal to one (1) years Base Compensation to be paid on the
last day of the notice period.
3.05 Termination by Mutual Consent - The Employment Term may be
terminated at any time with the mutual consent of Employer and
Employee, and upon mutually acceptable terms.
IV. COMPENSATION
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4.01 Base Salary - Employee shall receive a Base Salary equal to
$10,416.00 per month, payable in equal installments on the
fifteenth and last day of each month or more often at the election
of Employer. Increases in the base salary for subsequent years
will be based on performance evaluation, profitability, and
according to percentages to be determined by the Employer's CEO or
Board of Directors.
4.02 If PDS Financial Corporation's annual net income exceeds the
amount approved by the Board of Directors and President, the
Employer agrees to pay Employee a performance bonus of not less
than 10% of his annualized Base Compensation. For purposes of
calculating any performance bonuses referred to herein, Net Income
shall be determined by the unaudited internal financial statements
of Employer. Net Income shall be the net profit after taxes but
before any distribution to shareholders. Performance bonuses
shall be paid by Employer within ten (10) business days after the
preparation of financial statements of Employer for the periods to
which such bonuses relate.
4.03 Employee shall receive a monthly automobile allowance of $400.00
which will be added to the Base Compensation
4.04 Employee shall receive a signing bonus of $5,000 payable on his
first paycheck as a full-time employee.
4.05 Expenses - Upon submission of proper vouchers or receipts,
Employer will pay or reimburse Employee for authorized travel or
entertainment expenses relating to Employer's customers and other
employees as are reasonably incurred by him in accordance with
Employer's entertainment expense policies and in connection with
the business of Employer, during the Term of Employment. Upon
submission of proper documentation Employer will pay or reimburse
Employee for the following employee's fees: Nevada and Xxxxx
County Bar Association, International Association of Gaming
Attorneys (IAGA) and Continuing Legal Education (CLE) not to
exceed $3,000.00 per year.
4.05 Stock Options - Upon the date of hire Employer will grant to
Employee options to purchase 40,000 shares of the Employer's
common stock which shall vest over a Five (5) year period.
Employee's stock option rights will be more fully defined in a
separate agreement.
4.06 Benefits - Employee will be reimbursed for the cost of
continuation of the employee's coverage under his current medical
plan until entitled to Employer's medical coverage. Thereafter,
employee will be entitled to all benefits as outlined in the
Employee Handbook which includes insurance, retirement and other
benefits as are generally available to salaried employees of
Employer, subject to any limitations on such benefits to officers,
directors or highly paid employees in order that such benefit
programs qualify under Federal or State law for favored tax or
other treatment. Such benefits may be changed from time to time
by Employer.
V. NONDISCLOSURE OF CONFIDENTIAL INFORMATION
During the course of his employment, Employee will have knowledge of
Employer's process, data, techniques, computer software or hardware,
trade secrets, clients, plans for marketing and expansion, and other
information that is proprietary in nature with respect to Employer, its
personnel and the conduct of Employer's business (collectively
"Confidential Information"). During the Employment Term and following
the termination of this employment, for whatever reason, Employee agrees
not to disclose, divulge, make public, or use to the detriment of
Employer, whether for the benefit of herself or others, any Confidential
Information except as is permitted or required in the performance of
Employee's duties for Employer or as is authorized in writing by
Employer. Upon termination of Employee's employment, he shall return to
Employer all Confidential Information in whatever format and including
any and all copies. The covenants provided in this Section shall survive
the termination of Employee's employment and this Agreement.
VI. COVENANT NOT TO COMPETE
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6.01 During the Employment Term and for a period of six (6) months
following the termination of the employment, for whatever reason,
Employee agrees not, directly or indirectly, to engage in any
business which is in competition with that of Employer within the
United States of America or Canada (including federally recognized
Indian reservations) (the "Territory"). For purposes of this
provision, Employee will be deemed to engage in a business by
accepting employment with, rendering service to, or participating
as a shareholder, director, officer, employee, consultant,
independent contractor, sales representative or serving in any
capacity similar to the foregoing on behalf of said business. A
business shall be deemed to be in competition with Employer if
it's primary business is leasing, financing, reconditioning or
selling used gaming or gambling equipment, or furniture, fixtures
or equipment designated for use or installation in gambling
facilities, and/or it engages in origination or securitization of
leases involving gaming equipment and/or gaming related equipment.
6.02 During the Employment Term and for a period of six (6) months
following the termination of the employment, for whatever reason,
Employee agrees not, directly or indirectly, on his own account or
for another, to either solicit any customer or business of
Employer nor to divert any customer or business from Employer.
6.03 During the Employment Term and for a period of six (6) months
following the termination of the employment, for whatever reason,
Employee agrees not, directly or indirectly, to solicit for
employment or employ any employee or independent contractor of
Employer.
VII. MISCELLANEOUS PROVISIONS
7.01 Governing Law - This Agreement shall in all respects be subject
to, and governed by, the laws of the State of Nevada
7.02 Severability - The invalidity or unenforceability of any provision
in the Agreement shall not in any way affect the validity or
enforceability or any other provision and this Agreement shall be
construed in all respects as if such invalid or unenforceable
provision had never been in the Agreement.
7.03 Waiver - A party's failure to insist on compliance or enforcement
of any provision of this Agreement, shall not affect the validity
or enforceability or constitute a waiver of future enforcement of
that provision or of any other provision of this Agreement by the
party or any other party.
7.04 If Employer requests that Employee assist in litigation or
administrative proceedings in which Employee has knowledge or had
involvement during Employee's term of Employment, Employer shall
reimburse Employee within 30 days for all documented and submitted
expenses incurred in providing such services.
7.05 Notice - Notices to or for the respective parties shall be given
in writing and delivered in person or mailed by certified or
registered mail, return receipt requested, addressed to the
respective party at the address set out below, or at such other
address as either party may elect to provide in advance in writing
to the other party:
EMPLOYEE: Xxx X. Xxxxxxx, XX
0000 Xxxxxxxx Xxx Xxxxxx
Xxx Xxxxx, XX 00000
EMPLOYER: PDS Financial Corporation
c/o Xxxxx Xxxx, Human Resources Manager
0000 XxXxxx Xx.
Xxx Xxxxx, XX 00000-0000
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7.06 Assignment - This Agreement, together with any amendments hereto,
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, assigns, heirs and
personal representatives, except that the rights and benefits of
either of the parties under this Agreement May not be assigned
without the prior written consent of the other party.
7.07 Amendments - This Agreement may be amended at any time by mutual
consent of the parties hereto, with any such amendment to be
invalid unless in writing, signed by the Company and the Employee.
7.08 Entire Agreement - Except for the separate documents referenced
above, this Agreement contains the entire agreement and
understanding by and between Employer and Employee with respect to
the employment of Employee, and no representations, promises,
agreements, or understandings, written or oral, relating to the
employment of the Employee by Employer not contained herein shall
be of any force or effect.
7.09 Binding Arbitration; Injunctive Relief - Any controversy, dispute,
or claim arising under this Agreement which cannot be resolved to
the mutual satisfaction of the parties hereto shall be determined
by arbitration in the City of Las Vegas, Nevada, pursuant to the
provisions of the Nevada Uniform Arbitration Act. If the parties
can agree on the selection of an arbitrator, then the decision or
award of that arbitrator shall be final and binding on the
parties. If they are unable to agree on the arbitrator, each
party shall select one arbitrator within fifteen (15) days after
demand for arbitration, and the two arbitrators so selected shall
select a third arbitrator within fifteen (15) days following their
initial selection. Any decision by two of the three arbitrators
shall be final and binding on the parties. Any decision or award
under this Section 7.09 may be entered and a judgment obtained
thereon in the Eighth Judicial District Court of the State of
Nevada. The non-prevailing party shall reimburse the prevailing
party for its reasonable attorneys' fees and costs incurred in
connection with the arbitration and/or court action. In the event
that a violation of this Agreement warrants injunctive relief,
including a violation of Sections 6.01, 6.02 or 6.03, the party
who desires such relief shall be entitled to seek such relief in
the Eighth Judicial District Court of the State of Nevada.
7.10 References to Gender and Number Terms - In construing this
Agreement, feminine or neuter pronouns shall be substituted for
those masculine in form and vice versa, and plural terms shall be
substituted for singular and singular for plural in any place in
which the context so requires.
7.11 Headings - The various headings in this Agreement are inserted for
convenience only and are not part of this Agreement.
EMPLOYEE:
___________________________
Xxx X. Xxxxxxx, XX
EMPLOYER:
PDS FINANCIAL CORPORATION
___________________________
Its: _______________________
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