EXHIBIT B
EMPLOYMENT AGREEMENT
BY AND BETWEEN
CASINO RESOURCE CORPORATION
AND
XXXX X. XXXXXX
THIS AGREEMENT, entered into on May 20, 1996, is made by and between Casino
Resource Corporation ("CRC") and Xxxx X. Xxxxxx ("Pilger").
WHEREAS, CRC and Pilger have been parties to a written employment agreement
which has governed the parties' relationship; and
WHEREAS, CRC desires the services of Pilger to assist CRC in its operations
as provided herein, and Pilger has agreed to provide such services;
NOW, THEREFORE, CRC and Pilger, in consideration of the mutual promises and
covenants contained herein, agree as follows:
I. EMPLOYMENT. CRC agrees to employ Pilger as its Chairman of the
Board and Chief Executive Officer. Pilger hereby accepts such employment.
Pilger will serve CRC under the direction of its Board of Directors. During the
term of this Agreement, Pilger agrees to devote a majority of his business time,
skill, energy and attention to the services and business of CRC, and shall
perform such services in a diligent, trustworthy, loyal and business-like
manner, all for the purpose of advancing the business of CRC.
II. NON-EXCLUSIVITY OF SERVICES. Pilger will devote his best efforts to
the performance of his duties hereunder. Pilger will not, without the written
consent of the Board of Directors of CRC, engage in any activity which conflicts
with the performance of his duties hereunder during the term of this Employment
Agreement. Pilger warrants that there exist no undisclosed written or oral
arrangements preventing his service to CRC, and that he has not made any
undisclosed commitment or performed any undisclosed act, and will not make any
commitment or perform any act, in conflict with his duties to CRC.
III. TERM. This Employment Agreement shall have a term of three years
and two months ("Initial Term"), beginning on May 20, 1996 and expiring on July
19, 1999. This Employment Agreement will, after expiration of the Initial Term,
automatically extend for consecutive additional one year terms ("Succeeding
Terms") absent sixty (60) days of written notice from either party to the other,
prior to the expiration of either the Initial Term or any Succeeding Term, of
the party's intent not to renew the
Employment Agreement. Both the Initial Term and any Succeeding Terms shall be
subject to termination before expiration under Section VII hereof.
EXHIBIT B
IV. COMPENSATION. In consideration of Pilger's acceptance of continued
employment and performance of duties under this Employment Agreement, including
but not limited to the provisions of Sections V and VI, CRC shall pay to Pilger
the following:
A. Salary. Pilger shall be paid a salary at an annual rate of Two
Hundred Twenty-five Thousand and no/100 ($225,000.00) Dollars ("Base
Salary"). Base Salary payments hereunder shall be made in the same manner
and number as are the salary payments of other CRC employees. Pilger's base
salary shall increase each year as determined by an increase in the
consumer price index between January 1st of the prior year and January 1st
of the current year.
B. Bonus Compensation. In addition to Base Salary, Pilger shall be
entitled to receive a cash bonus for each fiscal year in which CRC
generates net income in excess of One Million and no/100 ($1,000,000.00)
Dollars, as set forth in CRC's audited consolidated financial statements.
The amount of such bonus, if payable, shall be Twenty-five Thousand and
no/100 ($25,000.00) Dollars per One Million and no/100 ($1,000,000.00)
Dollars in earnings per fiscal year, unless Pilger was not employed by CRC
for the full fiscal year, in which case the bonus amount shall be prorated
for that portion of the fiscal year Pilger was so employed. The foregoing
bonus shall be in addition to any bonus which may be granted to Pilger by
the compensation committee of the Board of Directors pursuant to Section
VIII of the Agreement.
C. BENEFITS.
1. For such time as Pilger is employed under this Employment
Agreement, CRC shall provide for Pilger, at its own expense, life insurance
policies providing coverage in the amount of One Million and no/100
($1,000,000.00) Dollars, subject to availability of such coverage. Pilger
may name the beneficiaries of these policies.
2. For such time as Pilger is employed under this Employment
Agreement, CRC shall provide for Pilger, at its own expense, a long-term
disability policy providing replacement income coverage in the amount of at
least One Hundred Thousand and no/100 ($100,000.00) Dollars per year,
subject to availability of such coverage.
3. Pilger shall be entitled to four (4) weeks of paid vacation per
calendar year, which vacation shall accrue on January 1st of each year. In
lieu of any vacation time not taken, Pilger shall receive cash compensation
for any vacation which is not used in the calendar year it is accrued.
EXHIBIT B
4. Pilger shall, for each fiscal year this Employment Agreement
remains effective, be entitled to benefits under health plans, pension
plans, stock purchase plans, and any other benefit plans, on the same terms
as such benefits are available generally to other senior executives of CRC,
as well as any benefits which are expressly granted to Pilger by the Board
of Directors of CRC.
5. Pilger shall receive an automobile allowance not to exceed Seven
Hundred Fifty and no/100 ($750.00) Dollars per month.
D. EXPENSE REIMBURSEMENT.
6. CRC will pay or reimburse Pilger for all reasonable and necessary
out-of-pocket expenses incurred by him in the performance of his duties
under this Employment Agreement, subject to the presentation of appropriate
vouchers in accordance with CRC's normal policies for expense verification.
7. The parties acknowledge that under certain circumstances it shall
be to CRC's advantage that Pilger's spouse or significant other accompany
him to out-of-town meetings or functions which involve or affect the
business of CRC. Accordingly, the parties agree that Pilger's spouse or
significant other shall be allowed to accompany him to up to four (4) such
functions per year, and CRC shall reimburse Pilger for all reasonable and
necessary expenses arising from her travel.
V. COVENANT NOT TO SOLICIT. In partial consideration of the
compensation paid under this Employment Agreement, including but not limited to
the company-sponsored insurance policies set forth in Paragraph IV C above,
Pilger agrees that during the term of this Employment Agreement and for one year
following the termination of his employment, whether voluntary or involuntary,
provided that any involuntary termination is in compliance with this Employment
Agreement, including the provisions of Section VII B, he shall not, either
personally, or through an employer, firm, agent, servant, employee, partner,
shareholder, representative, affiliate, or any other entity:
A. Deliver products or services, or attempt to deliver products or
services, which are of the same nature and type as those which Pilger
provided or
offered during his employment under this Employment Agreement, to any
customer of CRC, as of the date of Pilger's termination and the twelve
(12) months immediately preceding such termination, without the prior
written consent of CRC.
EXHIBIT B
E. Employ or offer to employ any individual employed by CRC within the
four (4) months preceding the termination of Pilger's employment, Of
request, advise or entice any such individual to leave the employment of
CRC, without the prior written consent of CRC, with the exception of
Pilger's personal assistant.
Pilger further agrees that in the event he breaches any of the covenants
contained in this Section V of this Employment Agreement, irreparable injury
will result to CRC, that CRC's remedy at law will be inadequate, and that CRC
will be entitled to an injunction to restrain the continuing breach of this
Employment Agreement by Pilger, his partners, agents, Servants, employees, or
representatives, or any other persons or entities acting for or with him. CRC
shall, without limitation, be entitled to damages, reasonable attorneys' fees,
and all other costs and expenses incurred in connection with the enforcement of
this Section V, in addition to any other rights or remedies which CRC may have
at law or in equity.
VI. NONDISCLOSURE OF INFORMATION.
X. Xxxxxx agrees that any information related to the business of CRC, or
any of its clients or customers, which is acquired by Pilger during his
employment by CRC shall be regarded as confidential and solely for the
benefit of CRC. Pilger shall not, except as is necessary in the ordinary
course of conducting business for CRC, use such information himself or
disclose such information to any other person or entity, directly or
indirectly, either during the term of this Employment Agreement or at any
time thereafter, without the prior written consent of CRC.
X. Xxxxxx shall not remove any records or documents from the premises of
CRC or its clients in original, duplicate, or copied form, except as is
necessary in the ordinary course of conducting business for CRC and subject
to the approval of the CRC management person with authority to act on such
matters. Pilger shall immediate deliver to CRC, upon termination of
employment with CRC, or at any other time upon CRC's request, any and all
such records or documents in Pilger's possession or control.
VII. TERMINATION.
X. Xxxxxx'x employment shall be terminated under any of the following
circumstances:
8. By mutual agreement of Pilger and CRC;
9. Immediately, upon the death of Pilger;
EXHIBIT B
10. CRC may terminate Pilger's employment hereunder, for Cause, at
any time upon written notice to Pilger. For the purposes of this Agreement,
CRC shall have "Cause" to terminate Pilger's employment hereunder in cases
of gross dereliction of duty or other grave misconduct on the part of
Pilger, which is substantially injurious to CRC; or
11. Voluntary termination by Pilger other than for Good Reason or
upon change of control.
I. In the event that Pilger's employment is terminated under this
Paragraph A1 or A2, Pilger's entitlement to compensation under Section IV
hereof shall immediately cease. In termination under A3 Pilger's right to
compensation under the terms of the Agreement shall continue until (i) both
parties agree to cease payments under this Agreement, or (ii) a Court of
competent jurisdiction renders a decision as to the Company's
determinations.
J. In the event that Pilger's employment is terminated by CRC other than
for Cause or by Pilger for Good Reason, Pilger shall be entitled to receive
from CRC a lump-sum payment equal to all compensation payable to him under
Section IV hereof through the end of the Initial Term, or if the Initial
Term has expired, the end of the current one-year term. The foregoing lump-
sum payment shall be made within 10 days of termination. For purposes of
this Agreement, "Good Reason" means (i) the assignment of Pilger of any
duties or responsibilities which in the reasonable judgment of Pilger are
inconsistent in any respect with Pilger's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities, or any other action by the Company which in the reasonable
judgment of Pilger results in a substantial diminishment in such position,
authority, duties or responsibilities; (ii) the Company's requiring
relocation of Pilger, without his prior written consent, to a place of
employment other than Biloxi, Mississippi, except for travel reasonably
required in the performance of Pilger's responsibilities; or (iii) the
Company's failure to comply substantially with the provisions of Section IV
of this Agreement.
K. In the event of a Change of Control of CRC, Pilger may elect to
terminate his employment hereunder and receive from CRC the lump-sum
payment set forth in Paragraph C. For purposes of this Agreement, "Change
of Control" shall mean the dissolution or liquidation of CRC, the
reorganization, merger or consolidation of CRC with one or more
corporations as a result of which CRC is not the surviving corporation, the
sale of substantially all the assets of CRC to another corporation or
entity, or the acquisition by any person or entity of more than (25%) or
the total voting power of CRC's outstanding capital stock.
VIII. BONUS. The compensation committee of the Board of Directors
will determine whether Pilger will receive a bonus in any given year, aside
from the bonus discussed in section IV.
IX. CONSENT TO VENUE AND JURISDICTION. Pilger consents to venue
and jurisdiction in the District Court of Hennepin County, State of
Minnesota, and in the United States District Court for the District of
Minnesota, and to service of process under Minnesota law, in any action
commenced to enforce this Employment Agreement.
X. ENTIRE AGREEMENT. This Employment Agreement constitutes the
entire agreement between the parties, and may not be amended or modified
except by mutual written agreement of CRC and Pilger.
XI. SUCCESSORS AND ASSIGNS. Subject to the provisions herein, the
benefits and obligations of this Employment Agreement shall be binding upon
and inure to the Successors and assigns of CRC.
XII. GOVERNING LAW. This Employment Agreement shall be construed
under, and governed by, the laws of the State of Minnesota.
XIII. NOTICE. Any notice or other communications required or
permitted to be given to the parties hereto shall be deemed to have been
given on the third (3rd) day following deposit in the United States mail,
postage prepaid, and addressed to the appropriate party at the address of
such party as may be, from time to time, provided in writing to the other.
XIV. SEVERABILITY. If any provisions of this Employment Agreement
shall, for any reason, be adjudged to be void, invalid or unenforceable by
a court of law, the remainder of this Employment Agreement shall
nonetheless continue and remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement.
CASINO RESOURCE CORPORATION
Dated: By
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Its
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Dated:
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Xxxx X. Xxxxxx
