EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 16th day of November,1998, by and between PDS FINANCIAL CORPORATION a
Minnesota Corporation, ("Employer"), and XXXXXX X. DES CHAMPS ("Employee"),
and shall become effective on the 16th day of November, 1998.
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 Canada, 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 Chief Financial Officer 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 two (2) 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 Chief Financial
Officer.
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 nine (9) months of
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 nine (9) months 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
4.01 Base Salary - Employee shall receive a Base Salary equal to
$10,000 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 no 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 At the discretion of the CEO of Employer, Employee may be paid up
to an additional 10% of his base salary earned as a discretionary
bonus to recognize outstanding performance. Employer may also
grant to Employee options to purchase additional shares of
Employer's stock. Employee's stock options rights will be more
fully defined in a separate agreement.
4.04 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.
4.05 Stock Options - Upon the date of hire Employer will grant to
Employee options to purchase 50,000 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
6.01 During the Employment Term and for a period of one (1) year
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 one (1) year
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 one (1) year
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.
Should the Employer terminate this Agreement without cause, the time period
of the Non-Compete Items referenced above will be reduced to a period of
nine (9) months instead of the one-year period indicated herein.
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: Xxxxxx Des Champs
0000 Xxx Xxxxxxx Xxxx
Xxx Xxxxx, XX 00000
EMPLOYER: PDS Financial Corporation
c/o Xxxxx Xxxxx, Human Resources Manager
0000 XxXxxx Xx.
Xxx Xxxxx, XX 00000-0000
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:
/s/ Xxxxxx X. Des Champs
___________________________
Xxxxxx X. Des Champs
EMPLOYER:
PDS FINANCIAL CORPORATION
/s/ Xxxxx Xxxxxx
___________________________
Its: President
_______________________
EXHIBIT 1
CHIEF FINANCIAL OFFICER
DUTIES AND RESPONSIBILITIES
SUMMARY
Typical CFO duties and responsibilities, including directing the organization's
financial planning and reporting, supervising the Accounting Department and
overseeing the implementation of new information systems as well as the
organization's relationship with lending institutions, shareholders, and the
financial community either personally or through subordinate managers.
ESSENTIAL DUTIES AND RESPONSIBILITIES include the following. Other duties may
be assigned.
Oversees and directs treasury, budgeting, audit, tax, accounting, long range
forecasting activities for the organization.
Directs the controller(s) in providing and directing procedures and computer
application systems necessary to maintain proper records and to afford
adequate accounting controls and services.
Responsible for treasurer functions, such as, custodian of funds, securities,
and assets of the organization.
Appraises the organization's financial position and issues periodic reports
on organization's financial stability, liquidity, and growth.
Directs, oversees and coordinates the establishment of and adherence to
budget programs.
Coordinates tax reporting programs and investor relation activities.
Oversees and directs the preparation and issuance of the corporation's annual
report.
Oversees and directs the preparation and issuance of the corporation's
regulatory filings with the SEC (10-Q's and 10-K's) and the IRS and any other
financial reporting.
Oversees the implementation of company's information systems.
Analyzes operational issues impacting the company, determines their financial
impact, and makes recommendations.
Provides input into the structure of transactions to maximize profitability
and cash flows.
Increases the Company's capital structure.
Evaluates and recommends business partnering, alliances or acquisition
opportunities.
Establishes and maintains contacts with stockholders, financial institutions,
and the investment community.
Serves as a member of the Executive Committee
Works with Human Resources Department to review and improve the
organization's compensation structure, including the possible implementation
of an Employee Profit Sharing or Bonus Program.