EMPLOYMENT AGREEMENT
OF
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THIS EMPLOYMENT AGREEMENT of ____________________ (this "Agreement") is
entered into this 20th day of July 2001, and for all intents and purposes is
effective as of the 20th day of July 2001, (the "Effective Date") by and between
VENDINGDATA CORPORATION, a Nevada corporation (the "Company") and
____________________ (the "Employee").
RECITALS
WHEREAS, the Employee is currently the Company's
_________________________________________, and the Company desires to retain the
services of the Employee under the terms and conditions of this Agreement;
WHEREAS, the Employee and the Company will receive benefits from this
Agreement, and as such, each agrees to be bound under the terms and conditions
of this Agreement, including the non-competition and non-disclosure provisions
contained herein;
WHEREAS, the Company desires the knowledge, skills and ability of the
Employee for the benefit of the Company;
WHEREAS, the Employee wishes to be retained by the Company in
accordance with the terms of this Agreement;
WHEREAS, the Employee recognizes the legitimate need of the Company for
protection of its confidential information; and
WHEREAS, the Company recognizes and acknowledges the value of the
Employee's services and deems it necessary and desirable to retain the
Employee's services for the period herein described.
NOW THEREFORE, in consideration of the mutual promises set forth
herein, the Company and the Employee agree as follows:
1. EMPLOYMENT. The Company hereby retains the Employee upon the terms
and conditions hereinafter set forth, and the Employee hereby accepts said terms
and conditions.
2. TERM AND RENEWAL. Except as otherwise provided, this Agreement shall
commence as of July 20, 2001, and continue for a term of two (2) years, subject
to the early termination provisions of Article 8. Upon the expiration of this
Agreement, this Agreement shall be considered renewed for regular successive one
(1) year terms unless either party submits a notice of termination not less than
thirty (30) days prior to the end of the preceding period.
3. DUTIES. The Company hereby retains the Employee as
__________________________________, and the Employee hereby promises to perform
the duties related thereto and to perform such other duties as the Company may,
from time to time, assign. As directed by the appropriate representative(s) of
the Company, the Employee shall also render services for and perform duties for
entities related to the Company and for persons or entities having a contractual
relationship with the Company requiring the Company to provide such services.
The Employee shall perform all of these duties at such place or places and at
such times as the Company shall in good faith require and as the interest,
needs, business, or opportunity of the Company shall require. The Company
retains the right to supervise the Employee in the performance of his duties.
4. TIME AND EFFORTS OF EMPLOYEE. So long as this Agreement continues in
effect, the Employee promises to devote his time and energies to the business
affairs of the Company as necessary to achieve the business objectives of the
Company, to use his best efforts, skills, and abilities to promote the Company's
interest, to perform the duties described in Article 3 of this Agreement, and to
perform such other duties as may be assigned to him by the Company.
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5. COMPENSATION AND BENEFITS.
5.1 COMPENSATION. For all services rendered by the Employee under this
Agreement and the Employee's obligations under Articles 6 and 7 herein, the
Employee shall be compensated as follows:
(a) BASE SALARY. From the Effective Date through August 31,
2001, the Employee shall receive the salary in effect as of the Effective Date.
Beginning September 1, 2001, the Employee shall receive a "Base Salary" of not
less than ____________________ Dollars ($_______) for each calendar year during
the term of this Agreement, or until such time as a new Base Salary is
negotiated. The Base Salary shall be reviewed and increased at least on an
annual basis, or more frequently, and shall be payable in equal semi-monthly
installments.
(b) STOCK OPTIONS. In addition to the Base Salary, the
Employee shall receive "Stock Options" to purchase ___________________________
(_______) shares of the Company's $.001 par value common stock ("Shares") under
the following terms and conditions:
(i) Upon the Effective Date of this Agreement, the Employee
shall have a vested right to acquire ______________ (______) Shares at
Two Dollars and Sixty Cents ($2.60) per Share and ______________
(______) Shares at Thirty-Five Cents ($.35) per Share.
(ii) Upon the Employee fulfilling his obligations through the
first year of the term of this Agreement, the Employee shall have the
right to acquire up to an additional ______________ (______) Shares at
Thirty-Five Cents ($.35) per Share. The Stock Options to be issued
under this subparagraph shall be vested in the Employee on the one year
anniversary of this Agreement, subject to the requirement that Employee
continue to be employed by the Company on the one year anniversary of
this Agreement.
(iii) Upon the Employee fulfilling his obligations, though the
second year of the term of this Agreement, the Employee shall have the
right to acquire up to an additional ______________ (______) Shares at
Thirty-Five Cents ($.35) per Share. The Stock Options to be issued
under this subparagraph shall be vested in the Employee on the second
year anniversary of this Agreement, subject to the requirement that
Employee continue to be employed by the Company on the second year
anniversary of this Agreement.
(iv)The Stock Options must be exercised within five (5) years
from the date the Employee's rights are vested hereunder. The Shares
will be issued within thirty (30) days after the Employee notifies the
Company of his intent to exercise the options under this Agreement and
tenders the purchase price to the Company. The Company offers no
warranty as to the tradability of the Shares or as to whether such
Shares will be registered with the Securities and Exchange Commission.
(v) If the Company is to be sold, the portion of the Stock
Options granted pursuant to paragraph 5.1(b)(i-iii) of this Agreement
that have not yet vested shall vest in the Employee thirty (30) days
prior to such sale.
(vi)If the Company is sold, all of the Stock Options granted
to the Employee by virtue of paragraph 5.1(b) must be exercised as of
the last business day prior to the sale of the Company, unless the
Employee and the purchaser of the Company agree otherwise.
(vii) For purposes of paragraph 5(b)(v) hereof, the Company
shall notify the Employee in writing of (1) the impending sale, (2) the
right of the Employee to exercise the Stock Options, and (3) the terms
and conditions of the proposed sale of the Company. For purposes of
this Agreement, the Company shall be deemed sold if substantially all
of its assets are sold, including patents and goodwill, or the
Company's stock is sold or transferred causing the person or persons
who currently have majority control of the Company to be the beneficial
owners of less than twenty (20%) of the issued and outstanding stock of
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the Company. This paragraph does not apply to transfers of stock of the
Company: (1) by an assignment to a revocable living trust in which the
holder is and remains a trustee and a beneficiary, or (2) by reason of
death of the holder. It is within the Employee's discretion to exercise
the Stock Options prior to the proposed sale. Any Stock Options vested
in this subparagraph shall remain vested in the Employee, whether or
not they are exercised before the sale, under the terms of subparagraph
(iv).
5.2 PAYMENT OF COMPENSATION. All payments made hereunder shall be made
to the Employee, unless the Employee notifies the Company otherwise.
5.3 OTHER BENEFITS. The Employee shall be entitled to participate on a
reasonable basis in any deferred compensation, medical reimbursement, pension,
profit sharing, thrift, savings, vacation, group insurance, or other plan or
program, and to receive any other benefits for which he is eligible and which
the Company may provide for him or for its employees generally.
6. CONFIDENTIAL INFORMATION
6.1 DISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) DEFINITION. "Confidential Information" shall mean and
include: (i) all records of the accounts of customers, route books, customer
lists, and any other records and books relating in any matter to the customers
and/or suppliers of the Company (whether such records, books, or lists are
prepared by the Employee or otherwise come into the possession or use of the
Employee); (ii) any product information, technical data, know-how,
specifications, processes, drawing, sketches, formulas, computations, and any
other information of any kind whatsoever, whether written or not, concerning any
process, manufacture, composition of matter, plant, design, idea, method,
system, or plan in which the Company has a possessory interest and which becomes
known to Employee; and (iii) any accounting, sales, advertising, marketing or
management information, methods or techniques, any business plans, any computer
programs and routines of the Company and any other information of any kind
whatsoever, whether written or not, concerning, directly or indirectly, the
Company, its plans, programs or operations, which information is not generally
known in the businesses or industries in which the Company is or may become
engaged during Employee's period of employment with the Company or during the
term of this Agreement.
(b) RESTRICTION ON USE. Any Confidential Information received
or developed by the Employee shall be used only in the Employee's conduct of the
Company's business. The Confidential Information shall not be used by the
Employee for any other purpose unless otherwise directed or authorized in
writing by the Board of Directors. The Employee acknowledges that the Company's
primary assets consist of its gaming products and accessories. Any unauthorized
disclosure of the design or marketing of these products by the Employee shall
violate this Agreement.
(c) PROTECTION OF CONFIDENTIAL INFORMATION. The Company and
the Employee expressly recognize and acknowledge that any Confidential
Information disclosed to or developed by Employee will not, at any time either
during or after the term of this Agreement, in any manner, either directly or
indirectly, be divulged, disclosed, or communicated to any person, firm or
corporation, or any other business entity by the Employee, nor shall the
Employee use for his own benefit for any purpose other than the exclusive
benefit of the Company, its subsidiaries, successors, or assigns, Confidential
Information or any information whatsoever concerning matters effecting or
relating to the business of the Company which the Employee knows or has reason
to know would be valuable to competitors or potential competitors of the
Company, including, but not limited to, Confidential Information or information
relating to the Company's relationships with actual or potential customers or
suppliers and to the needs and requirements of any such actual or potential
customers. Furthermore, but not by way of limitation of the foregoing, the
Employee shall not: (i) make known to any firm, person or corporation the names
or addresses of any of the customers of the Company or any other information
pertaining to them; or (ii) call on, solicit, or take away or attempt to call
on, solicit, or take away any of the customers of the Company on whom the
Employee called or with whom he became acquainted during his tenure with the
Company, either for himself or for any other person, firm or corporation.
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6.2 BOOKS AND RECORDS. The Employee further promises that he shall not,
without the prior written approval of the Company, make copies of any books,
drawings, documents, records, or other written or printed, photographic,
encoded, taped, electrostatically or electromagnetically encoded data or
information of whatever nature (the "Documents") of the Company; that he shall
not, without the prior written approval of the Company, remove any of the
foregoing from the premises of the Company, and that he shall not, without the
prior written approval of the Company, make available to third parties access to
the Documents of the Company. The Employee agrees that all records and books
relating in any manner whatsoever to the customers (whether actual or potential)
of the Company, whether prepared by the Employee or otherwise coming into his
possession, shall be the exclusive property of the Company regardless of who
actually purchased or created the original book or record. All such books and
records shall be immediately returned to the Company by the Employee upon any
termination of this Agreement. If the Employee purchases an original book or
record, he shall immediately inform the Company, which shall immediately
reimburse the Employee.
6.3 LIMITATION. Nothing contained in this Article or in any other part
of this Agreement shall restrict the ability of the Employee to make, with the
written consent of the Company and in the ordinary course of his employment,
such disclosures as may be necessary or appropriate for the effective and
efficient discharge of his duties to the Company.
6.4 TERM. Notwithstanding any other provision of this Agreement, the
provisions of this Article 6 shall continue in full force and effect following
the expiration or termination of this Agreement.
7. EMPLOYEE'S COVENANT NOT TO COMPETE
7.1 COVENANT NOT TO COMPETE.
(a) GENERAL. The Company and the Employee expressly recognize
and acknowledge that the Company is engaged in a business which is highly
competitive, that any knowledge of the Company's Confidential Information or
business affairs would give a competitor or potential competitor an unfair
competitive advantage over the Company, that consulting or employment, directly
or indirectly, of the Employee anywhere in the area in which the Company
conducts its business (including, but not limited to gaming and non-gaming,
security and productivity equipment and products) would give to such competitor
an unfair competitive advantage, and that the Employee possesses valuable skills
and knowledge. In recognition of the aforementioned, the Employee and the
Company hereby expressly agree that the restrictions on competition by the
Employee contained in this Article 7 are reasonable, will not overburden the
Employee, and are in the best interests of both the Employee and the Company.
(b) TIME PERIOD AND AREA COVERED. The Employee promises that,
during the term of this Agreement, as set forth in Article 2 hereof, and for a
period of one (1) year after the expiration or termination of this Agreement, he
shall not, either directly or indirectly, engage in competition with the
Company, or with any subsidiary, successor or appointee of the Company, as
constituted during the term of this Agreement as of his resignation, departure,
discharge or termination with the Company in Nevada, and within a fifty (50)
mile radius of any other: (i) place of business operated by the Company or (ii)
location, establishment or business where the equipment, product, or technology
of the Company is operating as of such date. The Employee acknowledges that the
Company's business is national and international in scope and that the
solicitation of the Company's domestic or international clients in competition
with the Company is a violation of this Agreement.
(c) AFFILIATIONS COVERED. The Employee further promises that,
during the term of this Agreement, as set forth in Article 2 hereof and for a
period of one (1) year after the expiration or other termination of this
Agreement, he shall not engage, directly or indirectly, as a proprietor,
partner, shareholder, director, officer, employee, agent, or in any other
capacity or manner whatsoever, in any business activity competitive with the
business of the Company or of any subsidiary, successor or appointee of the
Company, as constituted during his employment.
(d) BOARD OF DIRECTORS APPROVAL. Either or both of the
provisions contained in Subsections (b) and (c) above may be waived at any time
in writing by the Board of Directors of the Company, in its sole discretion. No
such waiver shall be considered as a waiver of any other term, covenant or
provision of this Agreement, nor shall it be considered a waiver of any
subsequent action by the Employee.
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7.2 LIMITATION. Nothing contained in this Article 7 shall prevent the
Employee from purchasing or causing or permitting to be purchased for his direct
or indirect benefit, securities of any corporation whose securities are
regularly traded on any national or regional securities exchange; provided,
however, that such purchase must not, without the written approval of the
Company, result in the direct or indirect beneficial ownership of more than one
percent of any outstanding class of equity securities of any corporation engaged
directly or indirectly in any trade or business activities competitive with that
carried on by the Company.
8. TERMINATION
8.1 GROUNDS FOR TERMINATION. This Agreement shall terminate as it
relates to the Employee upon the first to occur of the following events:
(a) The death of the Employee;
(b) Immediately upon five (5) days written notice from the
Company to the Employee "for cause". "For cause" is defined as:
(i) a breach of the terms and conditions of this Agreement by
the Employee (other than a breach described in subparagraph 8.1(b)(ii)
herein below), including the performance of the Employee's obligations
and duties hereunder, which remains uncured for a period of twenty (20)
days after written notice by the Company to the Employee of any such
breach; or
(ii) a breach of the terms and conditions of this Agreement by
the Employee, which consists of dishonest or criminal conduct, or which
constitutes gross negligence by the Employee in failing to perform his
duties and obligations under this Agreement.
(c) Upon the passing of fifteen (15) days after notice from
the Company to the Employee of a bona fide decision by the Company to terminate
its business.
8.2 SEVERANCE PAY. If this Agreement is terminated for any reason,
other than for a reason under Section 8.1, the Company shall pay the Employee,
upon termination, severance pay in a one time lump sum equal to seven (7) months
of the Employee's Base Salary in effect at the time of severance.
8.3 EFFECT OF TERMINATION ON STOCK OPTIONS. Under no circumstances
shall the Employee be entitled to any Stock Option that has not vested or
accrued prior to the Employee's termination.
8.4 EFFECT OF TERMINATION ON ARTICLES 6 AND 7. Notwithstanding the
provisions of this Article, the provisions of Articles 6 and 7 will not
terminate upon the occurrence of an event described above, but will continue in
full force and effect for the periods described in those Articles. The severance
pay shall constitute additional consideration for the enforcement of such
provisions.
9. MISCELLANEOUS
9.1 ASSIGNMENT OF AGREEMENT. The knowledge and skills of the Employee
are unique, and his services bargained for by this Agreement may not be
delegated by the Employee to any other person. This Agreement shall inure to the
benefit of and be binding upon the Employee and his testate or intestate
distributees, and the Company, its successors and assigns including, without
limitation, any person, partnership, trust, corporation or other legal entity
which may acquire all or substantially all of the Company's assets or which may
acquire a controlling interest, either direct or beneficial, in the Company or
with or into which the Company may be consolidated or merged. As used in this
Agreement, the term "Company", shall include any such successors or assignees.
9.2 REMEDIES. It is agreed that any breach of Article 6 or 7 of this
Agreement by the Employee will result in irreparable injury to the Company and
will authorize recourse by the Company to equitable remedies, including, but not
limited to, affirmative or negative injunctive relief. It is further agreed that
in the event of such breach, violation, or evasion of any of the Articles
hereinbefore mentioned, or of any other Article herein, the Company may
forthwith terminate this Agreement and thereafter be released from all claims of
the Employee hereunder, provided, however, that such a termination shall not
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release the Employee from any warrant, covenant, term, or condition under
Articles 6 or 7 of this Agreement. Nothing contained herein shall be deemed to
obligate the Company to undertake such termination, and nothing contained herein
shall be deemed to preclude the Company from pursuing any remedy, whether legal
or equitable, which is available to it in the event of any breach, violation or
evasion of any Article of this Agreement.
9.3 ENFORCEMENT COSTS. The prevailing party shall be entitled to all
costs of enforcing this Agreement, regardless of whether an action at law or in
equity is commenced or maintained, including but not limited to, court costs and
reasonable attorneys' fees.
9.4 WAIVER OF BREACH. The waiver of the breach of any term or condition
of this Agreement shall not be deemed to constitute the waiver of any other or
subsequent breach of the same or any other terms or conditions.
9.5 SEVERABILITY. All terms and conditions contained in this Agreement
are severable, and in the event that any of them shall be held or considered to
be unenforceable by any court of competent jurisdiction, this Agreement shall be
interpreted as if such unenforceable term or condition was not contained herein.
9.6 APPLICABLE LAW. This Agreement shall be governed by and interpreted
according to the laws of the State of Nevada. Each party submits to the personal
jurisdiction of all courts, whether Federal or State, within Nevada, and agrees
that any action pertaining to this Agreement shall be brought in a court in
Xxxxx County, Nevada.
9.7 NOTICE. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by registered mail to
his last residence as recorded on the records of the Company in the case of the
Employee, or to the principal office of the Company, in the case of the Company.
9.8 MODIFICATION OF AGREEMENT. No waiver or modification of this
Agreement or of any terms or conditions contained herein shall be valid unless
in writing and signed by the parties hereto.
9.9 GENDER, NUMBER, ETC. Where applicable, the singular includes the
plural, the masculine includes the feminine, and vice versa.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
VENDINGDATA CORPORATION
BY:___________________________________
Xxxxxx X. Xxxx
Its: President & Chief Executive Officer
EMPLOYEE
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