Employment Agreement
This
employment agreement (the "Agreement") is made and entered into as of February
8, 2008, by and between Galaxy Gaming, Inc., a Nevada corporation (the
"Company") and Xxxxxxx X.
X'Xxxx (the "Employee").
Recitals
A. The
Company is engaged in the business of developing, distributing and otherwise
commercializing gaming equipment, games, operating systems for gaming equipment
and related products and services throughout the United States, Canada and other
countries.
B. Employee
understands that Employee will be employed in a sensitive position with access
to, and requiring knowledge of confidential and commercially valuable
information of the Company and its subsidiaries and affiliates, the unauthorized
use or disclosure of which, during and following Employee's separation of
employment, could cause the Company and its subsidiaries serious and irreparable
injury,
C. Employee
also acknowledges that, by virtue of Employee's position with the Company,
Employee will have dealings with customers who have close and ongoing
relationships with the Company and that Employee's competition for or
solicitation of such customers following Employee's separation of employment
would cause the Company serious and irreparable injury.
D. Employee
acknowledges that the Company would not have entered into this Agreement without
Employee's express understanding of and agreement with the confidentiality,
non-competition and non-solicitation provisions set forth in this
Agreement.
E. The
Company desires to employ Employee, and Employee desires to serve as an employee
of the Company, on the terms and conditions set forth in this
Agreement.
In
consideration of the mutual covenants and promises of the parties, the Company
and Employee agree as follows:
1. Duties
During
the Term of this Agreement, Employee will be employed by the Company to serve as
Operations Manager of the Company and its subsidiaries and affiliates. If the
Company achieves public company status during the Term, Employee's title will be
Chief Operating Officer but all other terms and conditions of this Agreement
shall continue in effect unchanged. Employee shall devote
substantially all of Employee's business time, attention, energy, knowledge, and
skill solely and exclusively to the conduct of the business of the Company as
may be reasonably necessary to effectively discharge Employee's duties under
this Agreement and, subject to the supervision and direction of the Chief
Executive Officer of the Company, will perform those duties and have such
authority and powers as are customarily associated with the offices of a Chief
Operating Officer of a company engaged in a business that is similar to the
business of the Company and/or assigned to him by the President, including
(Without limitation): (a) the authority to direct and manage the day-to-day
operations and affairs of the Company and (b) the authority to hire and
discharge employees of the Company. Unless the parties agree otherwise in
writing, during the term of this Agreement, Employee will not be required to
perform services under this Agreement other than at Company's principal place of
business in Xxxxx County, Nevada; provided, however, that Company may, from time
to time, require Employee to travel temporarily to other locations
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on the
Company’s business. Prior written consent of Company shall be
required before Employee may undertake to perform any services whether as an
employee, consultant officer, director, etc, of a business, commercial or
professional nature, whether for compensation or otherwise, Although Company's
consent may not be unreasonably withheld, it shall hereby be" deemed reasonable
for Company to deny its consent with respect to any and all outside gaming
activities.
2.
Term of Employment
2.1
Definitions
For
purposes of this Agreement the following terms have the following
meanings:
(a) 'Severance
Period" means that period of time commencing on the date that a Termination
Other than for Cause is effected and continuing for twelve (12) months if the
Termination Other than for Cause is effected during the first twelve (12) months
of the contract, nine (9) months if the Termination Other than for Cause is
effected during the second twelve (12) months of the contract and six (6) months
if the Termination other than for Cause is effected at any time
thereafter.
(b) “Termination
for Cause" means termination by Company of Employee's employment by reason of:
(i) Employee's material fraud, dishonesty, willful misconduct or gross
negligence in the performance of Employee's duties hereunder, including willful
failure to perform such duties as may be properly assigned him hereunder; (ii)
Employee's breach of the Confidentiality or Non-competition provisions of this
Agreement at Sections 5.1 and 5.2; (iii) Employee's material breach of any
provision of this Agreement; (iv) Employee's willful or habitual failure to
abide by the policies established by the Company; (v) by reason of Employee's
gross negligence or intentional misconduct with respect to the performance of
Employee's duties under this Agreement (Vi) conviction of or a guilty or nolo
contendre plea to a felony or misdemeanor involving moral turpitude; or (vii)
Employee's failure to qualify (or, having so qualified, being thereafter
disqualified or suspended) or Company’s reasonable determination that Employee
would not qualify or would not continue to be qualified under any suitability or
licensing requirements to which Employee may be subject by reason of Employee's
position with the Company or any of its subsidiaries or affiliates, under the
laws of any applicable gaming jurisdiction, except that any such failure to
qualify or disqualification or suspension resulting from Employee's corporate
conduct, rather than individual conduct, shall not constitute Termination for
Cause hereunder; provided however that unless such cause constitutes a crime or
jeopardizes the safety or welfare of the Company's property, licenses,
employees, or customers (in which case no cure period shall apply) no such
termination will be deemed a Termination for Cause under subsections 2.1
(a)(iii),(iv) or (v) unless the Company has provided Employee with written
notice of what it reasonably believes are the grounds for any Termination for
Cause and Employee fails to cure such grounds to the Company's reasonable
satisfaction during the 30 day period following receipt of such written
notice.
(c) “Termination
Other than for Cause” means termination by Company of Employee's employment at
any time in the Company's sole discretion for reasons other than those which
constitute Termination for Cause.
(d) “Voluntary
Termination” means termination by the Employee of the Employee's employment with
the Company, excluding termination by reason of Employee's death or disability
as described In Sections 2.5 and 2.6.
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2.2 Basic
Term
The Term
of employment of employee by the company will commence on February 18, 2008 and
will extend through the period ending on February 28, 2011 (the "Termination
Date"). Company and Employee may extend the term of this Agreement by mutual
written agreement.
2.3 Termination
for Cause
Termination
for Cause may be effected by Company at any time during the term of this
Agreement and may be effected by written notification to Employee; provided,
however, that no Termination for Cause will be effective unless Employee has
been provided with the prior written notice and opportunity for remedial action
described in Section 2.1 (a). If the Company believes Employee has engaged in
conduct that would constitute Termination for Cause, the Company may suspend
Employee with pay until such time as Company has made a decision whether to
terminate Employee for cause. Upon Termination for Cause, Employee is to be
immediately paid all accrued salary, incentive compensation to the extent
earned, vested deferred compensation (other than stock, pension or profit
sharing plan benefits, which will be paid in accordance with the applicable
plan), accrued vacation pay and reimbursable business expenses, all to the date
of termination, but Employee will not be paid any severance compensation. All
the provisions and obligations of Employee under Sections 51 and 5.2 will
survive Termination for Cause.
2.4 Termination
Other Than for Cause
Notwithstanding
anything else in this Agreement, Company may effect a Termination Other Than for
Cause at any time upon giving notice to Employee of such Termination Other Than
for Cause. Upon any Termination Other Than for Cause, Employee will immediately
be paid all accrued salary, all incentive compensation to the extent earned,
severance compensation as provided in Section 4, vested deferred compensation
(other than stock, pension or profit sharing plan benefits, which will be paid
in accordance with the applicable plan), accrued vacation pay and reimbursable
business expenses, all to the date of termination. All the provisions and
obligations of Employee under Sections 5.1 and 5.2 will survive Termination
Other Than for Cause.
2.5 Termination
Due to-Disability
In the
event that, during the term of this Agreement, Employee should, in the
reasonable judgment of the Company, fail after reasonable accommodation by
Company to perform Employee’s duties under this Agreement because of illness or
physical or mental incapacity ("Disability ") for more than 30 days in the
aggregate in any 12-month period, Company will have the right to terminate
Employee's employment under this Agreement by 30 day written notification to
Employee and payment to Employee of all accrued salary and incentive
compensation to the extent earned, vested deferred compensation (other than
stock, pension or profit sharing plan benefits, which will be paid in accordance
with the applicable plan), all accrued vacation pay, and reimbursable business
expenses all to the date of termination. All the provisions and obligations of
Employee under Sections 5.1 and 5.2 will survive Termination Due to
Disability.
2.6 Death
In the
event of Employee's death during the term of this Agreement, Employee’s
employment is to be deemed to have terminated as of date of death, and Company
will pay to Employee's estate accrued
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salary,
incentive compensation to the extent earned, vested deferred compensation (other
than pension plan or profit sharing plan benefits, which will be paid in
accordance with the applicable plan), accrued vacation pay, and reimbursable
business expenses, all to the date of termination. Company shall,
make the payments to Employee's estate or beneficiary as applicable. If Employee
dies during the Severance Period, the remaining Severance due will be paid in a
lump sum to the Employee's estate and Employee's estate and/or
beneficiary(ies).
2.7 Voluntary
Termination
Employee
may voluntarily terminate Employee's employment with the Company by providing
the Company with 30-day notice. in the event of a Voluntary Termination, Company
will immediately pay to Employee all accrued salary, all incentive compensation
to the extent earned, vested deferred compensation (other than pension plan or
profit sharing plan benefits, which will be paid in accordance with the
applicable plan), accrued vacation pay, and reimbursable business expenses, all
to the date of termination, but Employee will not be paid any severance
compensation, All the provisions and obligations of Employee under Sections 5.1
and 5.2 will survive Voluntary Termination.
3. Salary,
Benefits and Other Compensation
3.1 Base
Salary
As
payment for the services to be rendered by Employee as provided in Section 1 and
subject to the terms and conditions of Section 2, Company agrees to pay to
Employee a "Base Salary," in equal bi-monthly installments The Base Salary will
be as follows:
Month
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Monthly
Salary
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February
2008
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$8000.00
pro-rata
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March
2008
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$8,000.00
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April
2008
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$8,500.00
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May
2008
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$9,000.00
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June
2008
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$9,500.00
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July
2008
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$10,000.00
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August
2008
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$10,500.00
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September
2008
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$11,000.00
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October
2008
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$11,500.00
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November
2008 and thereafter
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$12,000.00
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3.2 Revenue
Growth Incentive
Company
agrees to also pay to Employee a Monthly Gross Recurring Revenue Increase
Incentive on the 20th of each month based on the prior month's increase over the
highest monthly gross recurring revenue during the Term. Increased revenue
arising from acquisitions, mergers; joint ventures and the like shall not be
included. The Monthly Gross Recurring Revenue Increase Incentive will be as
follows:
Month
Payable
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Monthly
Gross Recurring Revenue Increase Incentive
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February
and March 2008
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No
Incentive payable
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April
2008 based on increase inMarch 2008
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15%
of Monthly Gross Recurring Revenue Increase
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May
2008 based on increase in April 2008
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15%
of Monthly Gross Recurring Revenue Increase
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June
2008 based on increase in May
2008
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15%
of Monthly Gross Recurring Revenue Increase
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July
2008 based on increase inJune 2008
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12.5%
of Monthly Gross Recurring Revenue Increase
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August
2008 based on increase in July 2008
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12.5%
of Monthly Gross Recurring Revenue Increase
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September
2008 based on increase in August 2008
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12.5%
of Monthly Gross Recurring Revenue Increase
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October
2008 based on increase in September 2008
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10%
of Monthly Gross Recurring Revenue Increase
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November
2008 based on increase in October 2008
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1
0% of Monthly Gross Recurring Revenue Increase
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December
2008 based on increase in November 2008
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1
0% of Monthly Gross Recurring Revenue Increase
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January
2008 and thereafter
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10%
of Monthly Gross Recurring Revenue
Increase
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The
Monthly Gross Recurring Revenue Increase shall mean that month's increase in
gross recurring revenue over the highest monthly gross recurring revenue
occurring at any time during the Term. For example:
(a)
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If
the Company's monthly gross recurring revenue in March 2008 is $100,000
and in April 2008 is $110,000, Company would pay to Employee on May
20,2008 a Revenue Growth Incentive of $10,000.00 x 15% 0=
5;1500.00
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(b)
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If
the Company's monthly gross recurring revenue history is as
follows:
|
Month
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Gross
Monthly Recurring Revenue
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March
2008
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$100,000
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April
2008
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$110,000
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May
2008
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$105,000
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June
2008
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$108,000
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July
2008
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$112,000
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Employee
would receive Revenue Growth incentives as follows:
Date
|
Revenue
Growth Incentive
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May
20,
2008
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$10,000
(increase in April) x 15% = $1500
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June 20, 2008
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$0
monthly gross recurring revenue decreased in May
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July
20, 2008
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$0
monthly gross recurring revenue increased in June over May
but not over highest previous point which occurred in
April
|
August
20, 2008
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$2,000
(increase in July over previous high in April) x 12.5% =
$250
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3.3 Section
125 Plan Benefits
As
Employee becomes eligible per Company's policy, Employee will receive Section
125 Plan Benefits as a level 4 employee pursuant to Appendix B attached hereto
as may be amended from time to time by Company.
3.4 Incentive
Bonus Plans
If
Company becomes a public company and if there is a public offering, to the
extent allowed by Securities and Exchange regulations and other applicable laws
and regulations. Employee shall be eligible for pre-public offering stock
purchase and to participate in any Company stock option programs on the same
basis as an employee of comparable position and compensation as Employee,
provided however: (i) Company is not obligated to and there is no guaranty that
it will become a public company; (ii) Company is making no representation and is
not obligated to provide any stock options to its employees or Employee at all;
(iii) Company may structure its stock option plan(s), if any, in its sole
discretion in accord with its business plans and purposes; and (iv) the
Company's Board of Director(s) shall have sole discretion in determining who may
or may not be entitled to stock options under the plan. As Employee
becomes eligible, Employee shall be entitled to participate in all bonus,
incentive, stock option, savings, and retirement plans, policies, and programs
made available by the Company to other peer employees of the
Company.
3.5 Benefit
Plans
During
the term of Employee's employment under this Agreement, the Employee is eligible
to participate in all employee benefit plans to the extent maintained by the
Company, including (without limitation) any life, disability, health, accident
and other insurance programs, paid time off, and similar plans or programs,
subject in each case to the generally applicable terms and conditions of the
plan or program in question and to the determinations of any committee
administering such plan or program. On termination of the Employee for any
reason, the Employee will retain all of Employee's rights to benefits that have
vested under such plans, but the Employee's rights to participate in these plans
will cease on the Employee's termination (unless contrary to law, e.g., COBRA
rights) unless the termination is a Termination Other Than for Cause, in which
case Employee's rights of participation will continue for a period of six (6)
months following Employee's termination,
3.6 Withholding
of Taxes
The
Employee understands that the services to be rendered by Employee under this
Agreement will cause the Employee to recognize taxable income, which is
considered under the Internal Revenue Code of 1986, as amended, and applicable
regulations thereunder as compensation income subject to the Withholding of
income tax (and Social Security or other employment taxes). The Employee hereby
consents to the withholding of such taxes as are required by the
Company.
3.7 Paid
Time Off
As
Employee becomes eligible per Company's policy, Employee will receive paid time
off to be used for vacation, sick and/or personal days as a level 4 employee
pursuant to Appendix B attached hereto as may be amended from time to time by
Company.
3.7 Expenses
During
the term of this Agreement, Company will reimburse Employee for employee's
reasonable out-of-pocket expenses incurred in connection with Company’s
business, Including travel expenses, food and lodging while away from home,
subject to such policies as Company may from time to time reasonably
establish for its employees.
3.8 Changes
by Company
The
Company reserves the right to modify, suspend, not implement or discontinue any
and all of the above-mentioned plans, practices, policies, benefits, and
programs at any time as long as such action is taken generally with respect to
other similarly situated peer employees of the Company and may structure the
plan, practices, policies, benefits and programs, if any, in its sole discretion
in accord with its business plans and purposes.
4. Severance
Compensation
4.1 Termination Other
Than for Cause
In the
event Employee's employment is terminated in a Termination Other Than for Cause,
Employee will be paid as severance pay Employee's Base Salary at that time plus
Section 125 plan benefits during the Severance Period, on the dates specified in
Section 3.1 for payment of Employee's Base Salary, provided, however, that
Employee's entitlement to any such payments or benefits shall be expressly
Subject to, contingent upon, and in consideration of (i) the continued validity
and enforceability of Sections 5.1 and 5.2 hereunder, and (ii) the Company
receiving a release prepared by the Company and executed by Employee, waiving
and releasing the Company, its subsidiaries and affiliates, and their officers,
directors, agents, benefit plan trustees and employees from any and all claims,
whether known or unknown, and regardless of type, cause or nature, including but
not limited to claims arising under all salary, bonus, stock, paid time off,
insurance and other benefit plans and all state and federal anti-discrimination,
civil rights and human rights laws, ordinances and statutes, including Title VII
of the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment
Act as amended by the Older Workers Benefit Protection Act of 1990, and the
American's with Disabilities Act covering Employee's employment with the
Company, its subsidiaries and affiliates, and the cessation of that
employment.
During
the Severance Period, Employee shall remain an employee of the Company solely
for group health and life insurance purposes and for the ability to exercise
stock options, and shall receive service credit therefore during that period.
Employee will be responsible for the employee portion of the cost of such
insurance during the Severance Period similar to other employees.
Notwithstanding
anything to the contrary in this Section 4.1, the Company's obligations under
this Section 4.1 shall cease (except for obligations pursuant to the terms of
any benefit plan or law, e.g., COBRA) and Employee shall immediately return all
severance payments previously) received during the Severance Period if Employee
breaches in any material respect any of the covenants set forth in Sections 5.1
or 5.2 of this Agreement and such breach is not cured to the Company's
satisfaction within ten days from the date written notice thereof is given to
Employee by the Company. Employee understands that the Company additionally
shall have the right to seek enforcement of Employee's obligations under
Sections 5.1 and 5.2
4.2 Other
Termination
In the
event of " Voluntary Termination, Termination for Cause, Termination for Death,
or Termination Due to Disability, Employee or Employee's estate will not be
entitled to any severance pay.
5. Confidentiality
and Non-competition
5.1
Confidentiality
(a) Employee's
position with the Company will or has resulted in exposure and access to
confidential and proprietary information which Employee did not have access to
prior to holding the position, which information is of great value to the
Company and the disclosure of which, directly or indirectly, would be
irreparably injurious and detrimental to the Company, Employee agrees to use
best efforts and to observe the utmost diligence to guard and protect all
confidential or proprietary information relating to the Company from disclosure
to third parties, Employee shall not at any time use or make available, either
directly or indirectly, to any competitor or potential competitor of the Company
or any of its subsidiaries, or their affiliates or divulge, disclose,
communicate to any firm corporation or other business entity in any manner
whatsoever, any confidential or proprietary information covered or contemplated
by this Agreement unless expressly authorized to do so by the Company in
writing.
(b) For the
purpose of this Agreement, “Confidential Information” shall mean all information
of the Company, its subsidiaries and affiliates, relating to or useful in
connection with the business of the Company, its subsidiaries or affiliates,
whether or not a "trade secret" within the meaning of applicable law, which is
not generally known to the general public and which has been or is from time to
time disclosed to, developed by or learned by Employee as a result of employment
with the Company, Confidential Information includes, but is not limited to the
Company's product development and marketing programs, data, future plans,
formulas, finances, profits, sales, net income, indebtedness, financial
management systems, pricing systems, methods of operation and determination of
prices, processes, trade secrets, client and customer lists, suppliers,
organizational charts, salary and benefit programs, training programs, computer
software, development or experimental work, business records, files, drawings,
prints, prototyping models, letters, notes, notebooks, reports, and copies
thereof, whether prepared by him or others, and any other information or
documents which Employee is told or reasonably ought to know that the Company
regards as confidential. Confidential information is not information which is or
becomes generally known other than through Employee's acts in violation of this
Agreement Disclosures made by the Company to governmental authorities, to its
customers or potential customers, to its suppliers or potential suppliers; to
its employees or potential employees, to its consultants or potential
consultants or disclosures made by the Company in any litigation or
administrative or governmental proceedings shall not mean that the matters so
disclosed are available to the general public.
(c) Employee
agrees that all records, reports, notes, compilations, or other recorded matter,
and copies or reproductions thereof, relating to the Confidential Information or
any other aspect of the Company's operations, activities or business, made or
received by Employee during any period of employment with the Company whether or
not Confidential Information (including but not limited to, documents, reports,
correspondences, computer printouts, work papers, files, computer lists,
telephone and address books, rolodex cards, computer tapes, disks, and any and
all records in Employee's possession (and all copies thereof) containing any
such information created in whole or in part by Employee within the scope of
Employee's employment, even if the items do not contain Confidential
information) are and shall be the Company's exclusive property, and Employee
will keep the same at all
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times in
the Company's custody and subject to its control, and will promptly deliver the
same to Company upon termination of Employment for any reason whatsoever (or at
any prior time at the request of the Company).
(e) This
paragraph and any of its provisions will survive Employee's separation of
employment for any reason, provided that Employee shall continue to be bound by
the confidentiality obligations contained in this Agreement for two (2) years
after the termination of employment, except that confidentiality obligations
with respect to any information that constitutes a trade secret and has been
designated in Writing as such shall continue in effect for so long as the
information remains a trade secret.
5.2 Non-competition
Employee
shall execute simultaneously with this Agreement the Employee Non-Competition
and Non-Solicitation Agreement attached as Appendix A.
5.3 Injunctive
Relief
Employee
acknowledges and agrees that the terms provided in Sections 5.1 and 5.2 are the
minimum necessary to protect the Company, its affiliates and Subsidiaries, its
successors and assigns in the use and enjoyment of the confidential information
and the good will of the business of the Company. Employee further
agrees that damages cannot fully and adequately compensate the Company in the
event of a breach or violation of the restrictive covenants (Confidential
Information and non-competition) and that without limiting the right of the
Company to pursue all other legal and equitable remedies available to it, that
the Company shall be entitled to injunctive relief, including but not limited to
a temporary restraining order, temporary injunction and permanent injunction
against Employee and every other person or entity concerned thereby, to prevent
any such violations or any continuation of such violations for the protection of
the Company. The granting of injunctive relief will not act as a
waiver by the Company to pursue any and all additional remedies. EMPLOYEE AGREES
TO PAY THE COSTS, EXPENSES AND REASONABLE ATTORNJEY FEES INCURRED BY THE COMPANY
IN PURSUING ANY OF ITS RIGHTS WITH RESPECT TO SUCH VIOLATIONSS, IN ADDITION TO
THE ACTUAL DAMAGES SUSTAINED BY THE COMPANY AS A RESULT THEREOF
6. Assignment
of Inventions
All
processes, discoveries, developments, designs, ideas, innovations, improvements,
formulas, processes, techniques, know-how,
data, inventions, patents, copyrights, trademarks, and other intangible rights
(collectively the "Inventions") that may be made, conceived, reduced to
practice, developed or learned by Employee, either alone or with others, during
the term of Employee's employment, whether or not conceived or developed during
Employee's working hours, that relate at the time of conception or reduction to
practice of the Invention to the business of the Company or to Company's actual
or demonstrably anticipated research and development, or that result from any
work performed by Employee for Company, will be the sole property of Company,
and Employee hereby assigns to the Company all of Employee's right, title and
interest in and to such Inventions. Employee must disclose to Company all
inventions conceived during the term of employment, whether or not the invention
constitutes property of Company under the terms of this Section, but such
disclosure, will be received by Company in confidence. Employee must
execute all documents, including applications, assignments, etc., required by
Company to establish Company's rights under this Section. If Company is unable
for any reason whatsoever, including Employee's mental or physical incapacity,
to secure
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Employee's
signature to apply for or to pursue any application for any United States or
foreign letters patent or copyright registrations (or on any document
transferring ownership thereof) covering inventions or original works of
authorship assigned to Company under this Agreement, the Employee hereby
irrevocably designates and appoints Company and its duly authorized officers and
agents as Ernployee's agent and attorney in fact, to act for and in Employee's
behalf and stead to execute and file any such applications and documents and to
do all other lawfully permitted acts to further the prosecution and issuance of
letters patent or copyright registrations or transfers thereof with the same
legal force and effect as if executed by the Employee. This appointment is
coupled with an interest in and to the inventions and works of authorship and
shall survive Employee's death or disability. Employee hereby waives and
quitclaims to Company any and all claims, of any nature whatsoever, which
Employee now or may hereafter have for infringement of any patents or copyright
resulting from or relating to any such application for letters patent or
copyright registrations assigned hereunder to Company.
7. Miscellaneous
7.1 Waiver
The
waiver of any breach of any provision of this Agreement will not operate or be
construed as a waiver of any subsequent breach of the same or other provision of
this Agreement.
7.2 Notice
All
notices and other communications under this Agreement must be in writing and
must be given by personal delivery, telecopy, or first class mail, certified or
registered with return receipt requested, and will be deemed to have been duly
given upon actual receipt or refusal of receipt if personally delivered; five
(5) days after mailing, if mailed or 48 hours after transmission, if delivered
by telecopy, to the respective persons named below. Mailed notices
shall be addressed to parties at the addresses set forth below, but each party
may change its address by written notice duly given pursuant to this Section
7.2.
If
to Employees:
|
Xxxxxxx
X X'Xxxx
000
Xxxxx Xxxxx Xxxxx
Xxxxxxxxx,
Xxxxxx 00000
|
If
to Company:
|
Xxxxxx
Xxxxxxx President
Galaxy
Gaming, Inc.
0000
X'Xxxxxx Xxxxx
Xxx
Xxxxx, Xxxxxx 00000
|
With
a copy to:
|
Xxxxxxx
Xxxxxxxx
General
Counsel
Galaxy
Gaming, Inc. 00000'Xxxxxx Xxxxx
Xxx
Xxxxx, Xxxxxx 00000
|
7.3
Arbitration
(a) Any
controversy or claim arising out of or relating to this Agreement shall be
settled by binding arbitration administered by the American Arbitration
Association under its National Rules, for the
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Resolution
of Employment Disputes (including the Optional Rules for Emergency Measures Of
Protection) and judgment on the award entered in any Court having
jurisdiction.
(b) The
arbitration proceedings shall be conducted before a panel of three neutral
arbitrators, all of whom shall be members of the bar of the state of Nevada,
actively engaged in the practice of employment law for at least ten
years.
(c) Either
party may apply to the arbitrator seeking injunctive relief until the
arbitration award is rendered or the controversy otherwise
resolved. Either party also may without waiving any remedy under this
Agreement, seek from any court having jurisdiction any interim or provisional
relief that is necessary to protect the rights or property of that party,
pending the arbitral tribunal's determination of the merits of the
controversy.
(d) Each
party shall bear its own costs, expenses and attorneys fees and an equal share
of the arbitrators'
and administrative fees of arbitration.
(e) Except as
may be required by law, neither a party nor an arbitrator may disclose the
existence, content or results of any arbitration hereunder without the prior
written consent of both parties. All documents, testimony and records shall be
received, heard and maintained by the arbitrators in secrecy, available for the
inspection only of the Company or Employee and their respective attomeys and
their respective experts who shall agree in advance and in writing to receive
all such information confidentially and to maintain such information in secrecy
until such information shall become generally known.
(f) The
place of arbitration shall be Xxxxx County, Nevada.
(g) In
consideration for and as a material condition of employee's employment with the
Company Employee agrees that final and binding arbitration is the exclusive
means for resolving any claim or controversy arising out of or related to this
Agreement. This Agreement is a waiver of all rights Employee may have to a civil
court action. Accordingly, only an arbitrator, not a judge or jury, will decide
the dispute, although the arbitrator has the authority to award any type of
relief that could otherwise be awarded by a judge or jury.
7.4 Governing
Law; Partial Invalidity; Jurisdiction and Venue
(a) This
Agreement shall be governed by and construed in accordance with the laws of the
State of Nevada without regard to principles of conflict law applicable to
contracts made and to be performed with
such
state.
(b) The
Agreement shall be liberally construed to maximize protection of the Company's
rights in confidential information and customer relations. If any provision of
this Agreement is held to be overly broad, invalid or otherwise unenforceable
under the applicable law and circumstances by the reviewing
court, Employee agrees to modification or reduction of the scope of
such provision as such court deems necessary and appropriate to permit its
enforcement is modified. The invalidity or unenforceability in whole or part, of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision unless otherwise indicated in this
Agreement.
(c) Any
judicial proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement or any agreement identified herein may be brought
the in state or federal courts in Xxxxx County, Nevada and by the execution and
delivery of this Agreement, each of the parties hereto accepts
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for itself
the jurisdiction of the aforesaid courts and irrevocably consents to the
jurisdiction of such courts (and the appropriate appellate courts) in any such
proceedings, and waives any objection to venue laid therein.
7.5 Assignment
This
Agreement and the rights, interests and benefits hereunder are personal to the
Employee and shall not be assigned, transferred or pledged in any manner by
Employee or any personal representatives, heirs, administrators, distributees or
any other person claiming under Employee by virtue of this Agreement. This
Agreement and all of the Company's rights and obligations hereunder may be
assigned, without Employee's consent to any entity which acquires substantially
all of the assets of the Company or which merges with the Company and which
agrees to be bound hereby.
7.6 No
Conflicting Agreement
By
signing this Agreement, Employee warrants that Employee is not a party to any
restrictive covenant agreement or contract which limits the performance of
Employee's duties and responsibilities under this Agreement or under which such
performance would constitute a breach.
7.7 Indemnification
The
Company agrees that it will indemnify and hold the Employee harmless to the
fullest extent permitted by applicable law from and against any loss, cost,
expense or liability resulting from or by reason of the fact of the Employee's
employment hereunder, whether as an officer, employee, agent, fiduciary,
director or other official of the Company, except to the extent of any expenses,
costs, judgments, fines or settlement amounts which result from Employee's
conduct which is determined by a court of competent jurisdiction to be knowingly
fraudulent or deliberately dishonest or to constitute some other type of willful
misconduct.
7.8 Survival
of Provisions
The
provisions of this Agreement shall survive any separation of Employee if so
provided herein and if necessary or desirable fully to accomplish the purpose of
such provisions, including without limitation the rights and obligations of the
Employee under Paragraphs Separation of Employment, Confidentiality, Assignment
hereof.
7.9 Miscellaneous
The
Section headings herein are for convenience only and shall not affect the
meaning or interpretation of the contents hereof. This Agreement and
referenced Appendixes contain the entire agreement between the parties hereto
with respect to the subject matter of this Agreement and supersedes all prior
agreements, understandings, plans and negotiations, whether written or oral,
between the parties with respect to the subject matter hereof including but not
limited to any past or future compensation, bonuses, reimbursements, or other
payments to Employee from Company. In entering this Agreement, neither party
relies on any inducements, promises or representations of the other that do not
appear herein. No supplement or modification of this Agreement shall be binding
unless in writing and signed by both parties. This Agreement may be executed in
multiple counterparts; each of which shall be deemed an original and all of
which together shall constitute one instrument. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
personal representative
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successors
and permitted assigns.
EMPLOYEE
ACKNOWLEDGES THAT EMPLOYEE HAS HAD SUFFICIENT OPPORTUNITY TO REVIEW THIS
AGREEMENT WITH EMPLOYEE'S ATTORNEY. IF EMPLOYEE DID NOT DO SO, IT IS BECAUSE
EMPLOYEE READ AND UNDERSTOOD THE ENTIRE AGREEMENT AND VOLUNTARILY CHOSE NOT TO
OBTAIN LEGAL ADVICE. EMPLOYEE AGREES THAT THE RESTRICTIONS CONTAINED IN THIS
AGREEMENT ARE FAIR AND APPROPRIATE UNDER THE CIRCUMSTANCES.
IN
WITNESS WHEREOF, the parties hereto have knowingly and voluntarily executed the
Agreement as of the day and year first written above.
XXXXXXX
X. X’XXXX
|
GALAXY
GAMING, INC.
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/s/Xxxxxxx X.
X’Xxxx
|
/s/Xxxxxx
Xxxxxxx
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Signature
|
Xxxxxx
Xxxxxxx, President
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APPENDIX
A OF XXXXXXX X. X'XXXX EMPLOYMENT AGREEMENT
Employee
Non-competition and Non-solicitation Agreement
THIS
AGREEMENT is made and entered into this 8th day of February, 2008, by and
between Galaxy Gaming, Inc., a Nevada corporation ("Company") and Xxxxxxx X.
X'Xxxx ("Employee")
WHEREAS,
the Company desires to employ Employee or to continue to employ Employee, and
Employee desires to perform services for the Company in a position which will
allow Employee access to various trade secrets and confidential information
belonging to the Company and which will require Employee to perform services of
a' unique and special nature;
WHEREAS,
in the case of a new employee, as a condition of Employee's employment, or in
the case of an existing Employee, as a condition of Employee's continued
employment, raise or promotion, the Company desires to receive from Employee
covenants (a) not to engage, directly or indirectly, in competition with the
Company; (b) not to solicit any employee of the Company to terminate his or her
employment with the Company; and (c) not to solicit any customer of the Company
to terminate her or his relationship with the Company; and
WHEREAS,
the Company and Employee desire to set forth in writing the terms and conditions
of their agreements and understandings with respect to these covenants against
competition, disclosure of confidential information, solicitation of employees,
and solicitation of customers, as this Agreement is a condition of Employee's
employment or continued employment and ancillary thereto, and does not purport
to set forth all the terms of such employment.
NOW,
THEREFORE, in consideration of the foregoing, of the mutual promises herein
contained, and as a condition of Employee's hiring or continued employment by
the Company, and the compensation now and hereafter paid to Employee, Employee
hereby acknowledges and agrees with the Company as follows:
1.
Acknowledgments
The
Company is engaged in the business of developing, distributing and otherwise
commercializing table games and side bets relate to table games for casino
customers and is currently developing other table game related gaming equipment,
including games, operating systems for game tracking, wagering, accounting and
bonus systems, for distribution to casino customers (the Company's "Business
Activities"). Employee acknowledges that the Company's business and services are
highly specialized, the identity and particular needs of the Company's customers
and suppliers are not generally known, and the documents and information
regarding the Company's customers, suppliers, services, methods of operation,
sales, pricing, costs, methods of determination of prices, financial condition,
profits, sales, net income, and indebtedness are highly confidential and
constitute trade secrets, Employee further acknowledges that the services
rendered to the Company by Employee have been or will be of a special and
unusual character which have a unique value to the Company and that Employee has
had or will have access to trade secrets and confidential information belonging
to the Company, the loss of which cannot adequately be compensated by damages in
an action at law.
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2. Covenant
Against Competition
2.1 Employee
acknowledges that the services to be performed under this Agreement are of a
special, unique, unusual, extraordinary and intellectual character, that the
business of the Company is national in scope, that its products are marketed
throughout the United States, Canada 'and internationally (the "Market Area"),
and that the Company competes with other organizations that are or could be
located in any part of the Market Area As an inducement for Company to enter
into the Employment Agreement and in consideration of the employment of Employee
and the severance pay, benefits and in consideration of continued employment by
the Company. Employee hereby covenants and agrees that Employee shall
not during the Employment Period, except in the course of Employee's employment
hereunder, and for a period of twelve (12) months thereafter, directly or
indirectly engage or invest in, own, manage, operate, control or participate in
the ownership, management, operation or control of, be employed, associated or
in any manner connected with or render services or advice to, any business whose
products or activities compete In whole or in part with the Business Activities
of the Company within the Geographic Territories within the Market Area in which
the Company at any time during the Employment Period conducts its Business
Activities; provided, however. that Employee may invest in up to (but not more
than) four percent of any class of securities of any enterprise (but Without
otherwise participating in the activities of such enterprise) if such securities
are listed on any national or regional securities exchange or have been
registered under Section 12(g) of the Securities Exchange Act of 1934.) If the
location where the Company has engaged in Business Activities or provided
services to customers is within an area in which gaming activities are regulated
by a governmental (state, county, provincial, tribal, country, etc.) body the
term "Geographic Territories" shall be all of the geographic area over which the
applicable governmental body has jurisdiction.
2.2 During a
period twelve (12) months immediately following the termination of Employee's
employment, whether with or without cause, Employee shall notify Company in
writing by U.S. Mail return receipt requested, within five days of, accepting
employment with any other employer (including self-employment) or otherwise
participating in any activities prohibited by Section 2.1 above said notice
shall include the name, address, and telephone number of the new employer(s),
the date employment began, and the duties to be performed by
Employee.
2.3 Employee
further agrees that upon termination employment, whether with or without cause,
Employee will notify any new employer, partner, associate or any other person,
firm or corporation with whom Employee becomes associated in any capacity
Whatever, of the provisions of this Agreement and that Company may give similar
notice of it.
3. Non-solicitation of
Employees
During
the term of Employee's employment with the Company and for a period of twelve
(12) months from the voluntary or involuntary termination of Employee's
employment with the Company for any reason whatsoever, Employee shall not either
on her or his own account or for any person, firm, partnership, corporation, or
other entity (a) solicit, interfere with, or endeavor to cause any employee of
the Company to leave his or her employment or (b) induce or attempt to induce
any such employee to breach her or his employment agreement with the
Company.
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4. Non-solicitation
of Customers, Suppliers, etc.
During
the term of Employee's employment with the Company and for a period of twelve
(12) years from the voluntary or involuntary termination of Employee's
employment with the Company for any reason whatsoever, Employee shall not,
either on her or his own account or for any person, firm partnership,
corporation, or other entity take any action or perform any services which are
similar to the actions taken or services performed by Employee for the Company
during said time which actions or services are designed to, or in fact call
upon, compete for, solicit, divert, or take away, or attempt to divert or take
away, any of the customers, suppliers, endorsers or advertisers at the
Corporation.
5. Remedies
If
Employee breaches this Agreement, any stock options (Whether unvested or vested)
received, under any Company plan by Employee shall be immediately terminated end
cancelled. In addition to all of the remedies otherwise available to the
Company, including, but not limited to, recovery from Employee of damages and
reasonable attorneys fees incurred in the enforcement of this Agreement, the
Company shall have the right to injunctive relief to restrain and enjoin any
actual or threatened breach of the provisions of this Agreement. All of the
Company's remedies for breach of this Agreement shall be cumulative and the
pursuit of one remedy shall not be deemed to exclude any other remedies. If
either party to this Agreement shall bring any action for any relief against the
other, declaratory or otherwise, arising out of this Agreement, the losing party
shall pay to the prevailing party a reasonable sum for attorney fees and costs
incurred in bringing such suit and/or enforcing any judgment granted
therein.
6. Reasonableness
of Restrictions
Employee
has carefully read and considered the provisions hereof and, having done so,
EMPLOYEE ACKNOWLEDGES AND AGREES THAT THE RESTRICTIONS SET FORTH IN 2, 3 AND 4
OF THIS AGREEMENT ARE FAIR AND REASONABLE BOTH AS TO TIME AND GEOGRAPHIC
LIMITATION IN LIGHT OF THE FACT THE COMPANY, ITS AFFLIATES AND SUBSIDIARIES,
SOLICIT CUSTOMERS THROUGHOUT THESE GEOGRAPHIC TERRITORIES AND ARE REASONABLY
REQUIRED FOR THE PROTECTION OF THE INTERESTS OF THE COMPANY.
7. Separate
Covenants
This
Agreement shall be deemed to consist of a series of separate covenants. Should a
determination be made by a court of competent jurisdiction that the character,
duration, or geographical scope of any provision of this Agreement is
unreasonable in light of the circumstances as they then exist, then it is the
intention and the agreement of the Company and Employee that this Agreement
shall be construed by the court in such a manner as to impose only those
restrictions on the conduct of Employee which are reasonable in light of the
circumstances as they then exist and as are necessary to assure the Company of
the intended benefit of this Agreement. If, in any judicial proceeding, a court
shall refuse to enforce all of the separate covenants deemed included herein
because, taken together, they are more extensive than necessary to assure the
Company of the intended benefit of this Agreement then it is
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expressly
understood and agreed by the Company and Employee that those of such covenants
which, If eliminated, would permit the remaining separate covenants to be
enforced in such proceeding, shall, for the purpose of such proceeding, be
deemed eliminated from the provisions hereof.
8. Burden
and Benefit
This
Agreement shall be binding upon, and shall inure to the benefit of, the Company
and Employee, and their respective successors and assigns. The Company shall
have this right to assign its rights hereunder to any successor in interest,
whether by merger, consolidation, sale of assets, or otherwise.
9. Arbitration
9.1 Any
controversy or claim arising out of or relating to this Agreement shall be
settled by binding arbitration administered by the American Arbitration
Association under its National Rules for the Resolution of Employment Disputes
(including the Optional Rules for Emergency Measures Of Protection) and judgment
on the award entered in any court having jurisdiction,
9.2 The
arbitration proceedings shall be conducted before a panel of three neutral
arbitrators, all of whom shall be members of the bar of the state of Nevada,
actively engaged in the practice of employment law for at least ten
years.
9.3 Either
party may apply to the arbitrator seeking injunctive relief until the
arbitration award is rendered or the controversy otherwise resolved. Either
party also may, without waiving any remedy under this Agreement, seek from any
court having jurisdiction any interim or provisional relief that is necessary to
protect the rights or property of that party, pending the arbitral tribunal's
determination of the merits of the controversy.
9.5 Each
party shall bear its own costs, expenses and attorneys fees and an equal share
of
the
arbitrators' and administrative fees of arbitration.
9.6 Except
as may be required by law, neither a party nor an arbitrator may disclose the
existence, content or results of any arbitration hereunder without the prior
written consent of both parties. All documents, testimony and records shall be
received, heard and maintained by the arbitrators in secrecy, available for the
inspection only of the Company or Employee and their respective attorneys and
their respective experts who shall agree in advance and in writing to receive
all such information confidentially and to maintain such information in secrecy
until such information shall become generally known.
9.7 The
place of arbitration shall be Xxxxx County, Nevada,
9.8 In
consideration for and as a material condition of Employee's employment with the
Company, Employee agrees that final and binding arbitration is the exclusive
means for resolving any claim or controversy arising out of or related to this
Agreement. This Agreement is a waiver of all rights Employee may have to a civil
court action. Accordingly, only an arbitrator, not a judge or jury, will decide
the dispute, although the arbitrator has the authority to award any type of
relief that could otherwise be awarded by a judge or jury.
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10. Governing
Law; Partial Invalidity; Jurisdiction and Venue
10.1 This
Agreement shall be governed by and construed in accordance with the laws of the
State of
Nevada
without regard to principles of conflict law applicable to contracts made and to
be performed with such state.
10.2 The
Agreement shall be liberally construed to maximize protection of the Company's
rights in confidential information and customer relations. If any provision of
this Agreement is held to be overly broad, invalid or otherwise unenforceable
under the applicable law and circumstances by the reviewing court, Employee
agrees to modification or reduction of the scope of such provision as such court
deems necessary and appropriate to permit its enforcement as modified. The
invalidity or enforceability in whole or part, of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
unless otherwise indicated in this Agreement
10.3 Any
judicial proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement or any agreement identified herein may be brought
the in state or federal courts in Xxxxx County, Nevada and by the execution and
delivery of this Agreement, each of the parties hereto accepts for itself the
jurisdiction of the aforesaid courts and irrevocably consents to the
jurisdiction of such courts (and the appropriate appellate courts) in any such
proceedings, and waives any objection to venue laid therein.
11. Severability
The
provisions of this Agreement (including in particular, but not limited to, the
provisions of Paragraphs 2, 3, and 4 hereof) shall be deemed severable, and the
invalidity or unenforceability of anyone or more of the provisions hereof shall
not affect the validity or enforceability of any one or more of the other
provisions hereof.
12. Entire
Agreement and Amendments
This
Agreement contains the entire agreement and understanding by and between the
Company and Employee with respect to the covenants contained herein, and no
representations, promises, agreements, or understandings, written or oral, not
herein contained shall be of any force or effect. No change or modification
hereof shall be valid or binding unless the same is in writing and signed by the
party against whom such waiver is sought to be enforced. No valid
waiver of any provision of this Agreement at any time shall be deemed a waiver
of any other provision of this Agreement at such time or will be deemed a valid
waiver of such provision at any other time.
13. Notices
All
notices, requests, consents, and other communications required or permitted to
be given hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or mailed first-class, postage prepaid, certified
mail, return receipt requested, to Company, by personal notice to its President
whose current address is:
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Xxxxxx
X. Xxxxxxx
Galaxy
Gaming, Inc.
0000
X'Xxxxxx Xxxxx
Xxx
Xxxxx, Xxxxxx 00000
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and
to Employee at
|
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Xxxxxxx
X. X'Xxxx
000
Xxxxx Xxxxx Xxxxx
Xxxxxxxxx,
Xxxxxx 00000
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or to
such other addresses as either party may specify by written notice to the
other.
EMPLOYEE
ACKNOWLEDGES THAT EMPLOYEE HAS HAD SUFFICIENT OPPORTUNITY TO REVIEW THIS
AGREEMENT WITH AN ATTORNEY. IF EMPLOYEE DID NOT DO SO, IT IS BECAUSE EMPLOYEE
READ AND UNDERSTOOD THE ENTIRE AGREEMENT AND VOLUNTARILY CHOSE NOT TO OBTAIN
LEGAL ADVICE. EMPLOYEE AGREES THAT THE RESTRICTIONS CONTAINED IN THIS AGREEMENT
ARE FAIR AND APPROPRIATE UNDER THE CIRCUMSTANCES
IN
WITNESS WHEREOF, the parties hereto have knowingly and voluntarily executed the
Agreement as of the day and year first written above.
XXXXXXX
X. X’XXXX
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GALAXY
GAMING, INC.
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/s/Xxxxxxx X.
X’Xxxx
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/s/Xxxxxx
Xxxxxxx
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Signature
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Xxxxxx
Xxxxxxx, President
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APPENDIX
B OF XXXXXXX E, X'XXXX EMPLOYMENT AGREEMENT
Personal
Time Off
|
Section
125 Benefit Credit
|
|||||||
Hours
per Pay Period
|
Year
1
|
Year
2
|
Year
3
|
Year
1
|
Year
2
|
Year3
|
||
Xxxxx
0
|
Xxxxxx
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Xxxxx
4
|
Sr.
Manager
|
5
|
6
|
7
|
8%
|
9%
|
10%
|
|
Level
3
|
Manager
|
4
|
5
|
6
|
7%
|
8%
|
9%
|
|
Xxxxx
0
|
Sr.
Administrative
|
3
|
4
|
5
|
6%
|
7%
|
8%
|
|
Xxxxx
0
|
Xxxxxxxxxxxxxx
|
0
|
0
|
0
|
5%
|
6%
|
7%
|
|
|
|
|
||||||
Annual
Days
|
15
|
18
|
21
|
|||||
12
|
15
|
18
|
||||||
9
|
12
|
15
|
||||||
6
|
9
|
12
|