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ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
EXIBIT 10.74
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of June 24, 1996, by and between ALLIANCE
GAMING CORPORATION, a Nevada corporation (the "Company"), and XXXXX X.
XXXXXXXXXXXX, an individual (the "Executive").
R E C I T A L S :
A. The Company considers it important and in its best interest and the
best interest of its stockholders to xxxxxx the employment of key management
personnel, and desires to retain the services of the Executive, on the terms and
subject to the conditions provided in this Agreement.
B. The Executive desires to accept employment by the Company and to
render services to the Company, on the terms and subject to the conditions
provided in this Agreement.
A G R E E M E N T :
The parties hereto agree as follows:
1. Employment. The Company hereby agrees to employ and retain
the Executive, and the Executive agrees to be employed and retained by the
Company, to render services to the Company for the period, at the rate of
compensation and upon the other terms and conditions set forth in this
Agreement.
2. Term. The term of the Executive's employment under this
Agreement (the "Term") shall commence on the date hereof and shall continue
through and including June 30, 1999, unless earlier terminated as provided in
this Agreement (the date of any termination of this Agreement or the expiration
of the Term, as provided herein, the "Termination Date").
3. Position and Duties. The Executive shall serve as the
Senior Vice President, Chief Financial Officer and Treasurer of the Company.
During his employment hereunder, it is the intent of the parties that the
Executive shall report to the executive primarily responsible for day-to-day
decision-making for the Company, which executive may be titled as the Chief
Executive Officer ("CEO") or the Chief Operating Officer ("COO") of the Company.
The Executive shall report to such executive and the Board of Directors of the
Company (the "Board"). During the Term, the Executive shall have the full power,
authority and responsibility of the Senior Vice President, Chief Financial
Officer and Treasurer of the Company. During the Term, the Executive shall
perform the duties contemplated by such title and such other duties, consistent
with his experience and abilities, as may be assigned to the Executive by the
Chief Executive Officer or the Board. The Executive shall devote his full time
and efforts to the business and affairs of the Company, use his best efforts to
further the interests of the Company and at all times conduct himself in a
manner which reflects credit upon the Company. It is contemplated that the
Executive shall render services to the Company from the Company's principal
place of business; however, the parties acknowledge and agree that the Executive
may be required to travel during the Term in fulfilling his duties hereunder.
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ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
4. Compensation and Reimbursement of Expenses.
(a) Salary. For purposes of this Agreement, each consecutive
12-month period ending on each June 30 during the Term shall be referred to as
an "Employment Year." For services rendered by the Executive under this
Agreement, the Company shall pay to the Executive as compensation during each
Employment Year during the Term, a base salary (the "Base Salary") at an annual
rate of $235,000.00 per year (prorated for any partial Employment Years).
Increases in the Base Salary shall be considered by the Company no less
frequently than annually, commencing at the end of the first Employment Year
hereunder and will be based upon criteria applicable to other senior executives
of the Company; it being understood, however, that the award of any such
increase shall be in the sole discretion of the Company. The Base Salary shall
be payable in equal bi-weekly installments, commencing with the end of the pay
period which next follows the commencement of the Term, and shall be subject to
customary payroll deductions (i.e., for social security, federal, state and
local taxes and other amounts customarily withheld from the salaries of
employees of the Company).
(b) Bonus. For the period from January 1, 1996, through
December 31, 1996, the Executive shall be eligible to receive from the Company,
on or before March 31, 1997, a cash bonus in respect of such period of time (the
"Cash Bonus"). The Executive shall be eligible to receive from the Company,
within 120 days of the end of each Employment Year, a cash bonus in respect of
such Employment Year (the "Annual Bonus") (provided, however, that the Annual
Bonus for the Employment Year ending June 30, 1997, shall be prorated and cover
only the period from January 1, 1997, through June 30, 1997, and not the period
covered by the Cash Bonus). The Cash Bonus and the Annual Bonus shall be based
upon all relevant criteria, including without limitation, (i) the performance of
the Company during such Employment Year (or portion thereof as to the Employment
Year through June 30, 1997) based upon customary financial and other criteria
such as but not limited to, return on the Company's consolidated stockholders'
equity and total capital (i.e., stockholders' equity and total debt),
performance of the Company's Common Stock, par value $.10 per share (the "Common
Stock"), and the Company's absolute and relative amounts of consolidated cash
flow, operating income and net income, and the comparison of such results with
the Company's budgets and projections therefor, and (ii) the performance of the
Executive in rendering services to the Company. It is contemplated but not
certain that the Annual Bonus shall be between 30% and 50% of the Base Salary
for each applicable Employment Year; it being understood, however, that the
Company shall not be obligated to pay to the Executive any Annual Bonus and the
payment, if any, and amount thereof shall be solely within the discretion of the
Company. It is also contemplated that the Compensation Committee of the Board
shall formulate specific criteria and performance targets for the determination
of the Executive's Annual Bonus, if any. The Annual Bonus shall be subject to
customary payroll deductions (i.e., for social security, federal, state and
local taxes and other amounts customarily withheld from the salaries of
employees of the Company).
(c) Options. The Company and Executive acknowledge and agree
that, as a consequence of Executive's initial employment arrangement with the
Company, he is entitled to receive Executive options (to be issued pursuant to
the Company's 1991 Incentive Stock Option Plan and/or the proposed 1996
Incentive Stock Option Plan (the "Plans")) to acquire 120,000 shares of Common
Stock of the Company, 60,000 of which were granted on August 29, 1996 (the
"August Options"), and 60,000 of which were granted on October 3, 1996 (the
"October Options"). For any such options to be issued under the proposed 1996
Incentive Stock Option Plan, Executive will be granted, under a plan subject to
the approval of the Board of Directors but not of stockholders, stock
appreciation rights entitling Executive to receive a cash payment equal to the
appreciation in price of
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ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
Alliance Common Stock from the date of grant to the date of exercise, in the
event that the Company's stockholders do not approve the 1996 Incentive Stock
Option Plan. The August Options, the October Options, any stock appreciation
rights granted in lieu of any such options in the event that the Company's
stockholders do not approve the 1996 Incentive Stock Option Plan and any other
options which may be granted to the Executive during the Term hereof are
collectively referred to herein as the "Employment Options".
Of this total number, Employment Options to acquire 15,000 shares under
the August Options and Employment Options to acquire 15,000 shares under the
October Options have vested and become exercisable as of the dates the August
Options and the October Options were granted. The Company shall issue to the
Executive additional Employment Options to acquire another 45,000 shares of
common stock of the Company under the August Options and another 45,000 shares
of common stock of the Company under the October Options, for a total of 60,000
Employment Options under the August Options and 60,000 shares under the October
Options (Employment Options for 15,000 shares under the August Options and
15,000 shares under the October Options, as stated above, have already vested
and become exercisable). The Employment Options shall have an exercise price of
$3.4375 per share and vest and become exercisable as follows:
August 29, 1997 - 15,000 shares under the August Options;
October 3, 1997 - 15,000 shares under the October Options;
August 29, 1998 - 15,000 shares under the August Options;
October 3, 1998 - 15,000 shares under the October Options;
June 30, 1999 - 15,000 shares under the August Options;
June 30, 1999 - 15,000 shares under the October Options.
Prior to each such applicable date, such Employment Options
shall not be vested or exercisable, save for the Employment Options for 15,000
shares under the August Options and 15,000 shares under the October Options
which, as stated above, have already vested and become exercisable by Executive.
(d) Reimbursement of Expenses. Consistent with established
policies of the Company as in effect from time to time, the Company shall pay to
or reimburse the Executive for all reasonable and actual out-of-pocket expenses,
including without limitation, travel, hotel and similar expenses, incurred by
the Executive from time to time in performing his obligations under this
Agreement.
5. Benefits. "Employee Benefits" shall mean those benefits
under employee benefit plans or programs, or company policies, described in
Sections 5(a), (b) and (c), below, but shall not mean the salary, bonus, options
and reimbursement of expenses set forth in Section 4, above.
(a) Benefit Plans. The payments provided in Section 4 above
are in addition to any Employee Benefits to which the Executive may be, or may
become, entitled under any of the Company's employee benefit plans or programs
for which key executives are or shall become eligible, including without
limitation, retirement, life, health and disability benefits. In addition, the
Executive shall be eligible to receive, during the Term, Employee Benefits which
are consistent with the Employee Benefits provided to all senior officers or
executives of the Company.
(b) Vacation. The Executive shall be entitled to annual paid
vacation time, for three weeks
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ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
per year during the Term hereof in accord with the Company's policy, accruing at
the beginning of each Employment Year and prorated for any partial Employment
Year. In the event any of such vacation days are not used by the Executive in
any Employment Year, the Executive shall have the right to accumulate and carry
forward such number of days from year to year as shall be consistent with the
Company's policy therefor for senior executives, as in effect from time to time.
The Executive shall also be entitled to reasonable periods of sick leave with
compensation and all paid holidays given by the Company to its senior executive
officers.
(c) No Reduction. There shall be no material reduction or
diminution of the benefits provided in this Section 5 during the Term unless (i)
the Executive shall have provided his consent to such reduction or diminution,
(ii) an equitable arrangement (embodied in an ongoing substitute or alternative
benefit or plan) has been made with respect to such benefit or plan or (iii)
such reduction is part of a program of across-the-board benefit reductions
similarly affecting the senior executive officers of the Company.
6. Benefits Payable Upon Disability.
(a) Disability Benefits. During any period of Disability (as
defined below) occurring during the Term, the Company shall continue to pay to
the Executive the Base Salary as provided herein and continue to extend to him
the benefits described in Sections 4 and 5 hereof; it being understood that if
disability benefits are provided under any disability insurance or similar
policy maintained by the Company (or maintained by the Executive, the cost of
which is reimbursed or paid by the Company), payments under such policy shall be
considered as payments by the Company and shall offset any Base Salary payable
to the Executive under this Agreement. As used in this Agreement, "Disability"
shall mean the inability of the Executive to render services to the Company, as
provided herein, as a result of physical or mental infirmity or disability.
(b) Services During Disability. During the Term,
notwithstanding any Disability, the Executive shall, to the extent that he is
physically and mentally able to do so, furnish information, assistance and
services to the Company, and, upon the reasonable request in writing on behalf
of the Company from time to time, he shall make himself available to the Company
to undertake reasonable assignments and fulfill his duties hereunder, consistent
with his current position with the Company and his physical and mental health.
7. Termination. This Agreement shall be terminated in
accordance with the provisions of this Section 7, in which case the provisions
of Section 8 below shall be applicable.
(a) Upon Expiration of the Term. This Agreement shall
terminate in accordance with Section 2 above.
(b) By The Company. In addition to the provisions of Section
7(a) above, this Agreement is subject to earlier termination by the Company, as
follows:
(i) Death of Executive. If the Executive dies, this
Agreement shall terminate, the Termination Date being the date of the
Executive's death.
(ii) Disability. If the Executive has been absent
from service to the Company, as required in this Agreement, for a
period of 90 days or more as a result of Disability during any
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ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
consecutive 180-day period during the Term, the Company shall have the
right to terminate this Agreement, the Termination Date being 15 days
after notice thereof is provided to the Executive.
(iii) Termination by Company for Cause. The Company
shall have the right to terminate the Executive's employment under this
Agreement for Cause (as defined below), such termination to be
effective immediately upon notice thereof from the Company to the
Executive. For purposes of this Agreement, "Cause" shall mean the
Executive's (A) conviction of any misdemeanor involving moral
turpitude, or any felony, (B) misappropriation or embezzlement from the
Company, (C) denial or rejection of any gaming license or permit or
commission of any act which could reasonably be expected to result in
such denial or rejection, (D) any breach during the Term of Sections 10
or 11 below or (E) the persistent failure or refusal after notice to
comply with the Executive's duties or obligations hereunder.
(iv) Termination by the Company Without Cause. The
Company shall have the right to terminate the Executive's employment
hereunder for any other reason not set forth in clauses (i), (ii) or
(iii) of this Section 7(b), the Termination Date being 15 days after
notice from the Company to the Executive.
(c) By The Executive. In addition to the provisions of Section
7(a) above, this Agreement is subject to earlier termination by the Executive,
as follows:
(i) Termination by the Executive for Just Cause. The
Executive shall have the right to terminate his employment under this
Agreement upon the occurrence of a material breach of this Agreement by
the Company, which the parties agree shall be limited to (A) a
reduction by the Company in the Base Salary below the minimum Base
Salary specified in Section 4(a) above or the failure of the Company to
pay to the Executive any portion of the Base Salary within 30 days of
the time that any such amount is due and payable hereunder or (B) the
assignment to the Executive of duties and responsibilities that are
materially inconsistent with those of the Senior Vice President, Chief
Financial Officer and Treasurer of the Company, in each case of clauses
(A) and (B) which has not been cured by the Company after 30 days'
written notice from the Executive to the Company; provided, that in the
case of three such material breaches (and notice thereof), the
Executive shall thereafter have the right to terminate this Agreement
immediately upon notice to the Company in the case of a subsequent
material breach. In the event that the Executive elects to terminate
this Agreement as a result of the events described in clauses (A) or
(B) above, the Executive shall exercise such right within 10 days after
the lapsing of the 30-day period referred to above in this clause (i)
(assuming that the Company shall have failed to cure such material
breach within such period), or, as applicable, within 10 days of any
additional material breach giving rise to an immediate right of
termination; thereafter, such right to terminate shall no longer be
exercisable. The Termination Date shall be a date specified by the
Executive, which shall be between 30 and 45 days after the date of the
default notice by the Executive giving rise to a right of termination.
(ii) Termination by the Executive Without Just Cause.
The Executive shall have the right to terminate the Executive's
employment under this Agreement for any other reason not set forth in
clause (i) of this Section 7(c), the Termination Date being 15 days
after notice thereof from the Executive to the Company.
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ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
8. Effect of Termination. The following provisions
shall be applicable in the event of the termination of this Agreement as
provided in Section 7 above.
(a) Expiration of Term. Upon termination of this
Agreement as provided in Section 7(a) above, this Agreement shall terminate and
be of no further force and effect, except as provided in Sections 11, 12 and
13(b) below, which shall survive such termination, and no additional payments,
liabilities or obligations shall be due and owing from either party to the
other.
(b) Death. Upon the termination of this Agreement as
provided in Section 7(b)(i) above, the Company shall pay to the Executive's
estate (i) an amount equal to the sum of (A) the Base Salary then in effect
which would otherwise be payable for the six months following the Termination
Date (but not earlier than any recovery of insurance proceeds (if any) in
respect thereof, as provided below), and (B) any Annual Bonus for the Employment
Year in which the Termination Date occurs that the Company determines would
otherwise have been payable had the Executive not died, which Annual Bonus shall
be reduced by prorating it through the Termination Date, payable, in each case,
at the time such payment would otherwise be due and payable hereunder, and (ii)
expense reimbursement amounts accrued through the Termination Date, at the time
such payment would otherwise be due and payable thereunder, and neither party
shall have any further liability or obligation to the other, except as provided
in Section 12 below, which shall survive the Termination Date. Notwithstanding
the provisions of clause (i) above, the Company shall have the right to provide
for either or both of the payments described therein by purchasing life
insurance on the Executive's life itself or reimbursing to the Executive the
cost of the premiums in respect of such life insurance which shall be purchased
directly by the Executive; in the event that either or both of such insurance
coverages is obtained, such payments shall be made solely from such insurance
coverages and not from the Company and shall constitute the Executive's estate's
or heirs' sole remedy in respect of such payments.
An amount equal to 50% of any unvested Employment Options as
of the Termination Date shall vest and become exercisable by virtue of any
termination under Section 7(b)(i) and, notwithstanding the provisions of the
Company's Stock Option Plan pursuant to which the Employment Options may have
been granted, the Executive's estate shall have a period of two years from the
Termination Date to exercise the Employment Options.
(c) Disability. Upon the termination of this Agreement
as provided in Section 7(b)(ii) above, the Company shall pay to the Executive
the sum of (i) an amount equal to the Base Salary then in effect which would
otherwise be payable for the six months following the Termination Date (but not
earlier than any recovery of insurance proceeds in respect thereof, as provided
below), and (ii) any Annual Bonus for the Employment Year in which the
Termination Date occurs that the Board determines would otherwise have been
payable had the Executive not become Disabled, which Annual Bonus shall be
reduced by prorating it through the Termination Date, in each case, payable at
the times such payments would otherwise be due and payable hereunder; provided,
in the case of clauses (i) and (ii) above, that the Executive continues to
comply with his covenants in Sections 10 (during the Term had such termination
under Section 7(b)(ii) above not occurred) and 11 below, as provided therein,
and (iii) expense reimbursement amounts accrued through the Termination Date, at
the time such payment would otherwise be due and payable thereunder, and neither
party shall have any further liability or obligation to the other, except that
the provisions of Sections 10, 11, 12 and 13(b) below shall survive
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ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
the Termination Date, to the extent provided therein, with the provisions of
Section 10 surviving only until such time as the Term would have otherwise
expired if not for a termination under Section 7(b)(ii). Notwithstanding the
provisions of clauses (i) and (ii) above, the Company shall have the right to
provide for either or both of such payments by either purchasing disability
insurance itself in respect of the Executive or reimbursing to the Executive the
cost of the premiums in respect of such disability insurance which shall be
purchased directly by the Executive; in the event that either or both of such
insurance coverages is obtained, such payments shall be made solely from such
insurance coverages and not from the Company and shall constitute the
Executive's sole remedy in respect of such payments.
An amount equal to 50% of any unvested Employment Options as
of the Termination Date shall vest and become exercisable by virtue of any
termination under Section 7(b)(ii) and, notwithstanding the provisions of the
Company's Stock Option Plan pursuant to which the Employment Options may have
been granted, the Executive shall have a period of two years from the
Termination Date to exercise such options.
(d) Termination by the Company For Cause. Upon the
termination of this Agreement as provided in Section 7(b)(iii) above, the
Company shall pay to the Executive (i) the accrued and unpaid Base Salary then
in effect, if any, through the Termination Date and (ii) expense reimbursement
amounts accrued through the Termination Date, at the time such payments are
otherwise due and payable thereunder, and neither party shall have any further
liability or obligation to the other, except that the provisions of Sections 10,
11, 12 and 13(b) below shall survive the Termination Date, to the extent
provided therein, with the provisions of Section 10 surviving for the shorter of
(A) 12 months from the Termination Date and (B) the remainder of the Term had
such termination not occurred. No unvested Employment Options shall vest or
become exercisable by virtue of any termination under Section 7(b)(iii) and any
and all rights thereto then possessed by the Executive shall be terminated and
of no further force and effect.
(e) Termination by the Company Without Cause. Upon
termination of this Agreement as provided in Section 7(b)(iv) above, the Company
shall pay to the Executive the sum of (i) the greater of (1) the Base Salary
then in effect which would otherwise be payable hereunder for a period of twelve
(12) months, or (2) the base compensation which the Executive would have
received upon termination as of that date under his employment agreement with
Bally Gaming International, Inc. (the "BGII Employment Agreement"), in effect
prior to the date of this Employment Agreement, for the period such base
compensation would have been payable under the BGII Employment Agreement;
provided, that the Executive continues to comply with the covenants in Section
11 below, as provided therein, and (ii) expense reimbursement amounts accrued
through the Termination Date; in each case of clauses (i) and (ii) above, at the
time such payments are otherwise due and payable thereunder, and neither party
shall have any further liability or obligation to the other, except that the
provisions of Sections 10, 11, 12 and 13(b) below shall survive the Termination
Date, to the extent provided therein, with the provisions of such Section 10
surviving for 12 months from the Termination Date. During such period that the
provisions of Section 10 are in effect, the Executive shall continue to be
eligible to receive the benefits provided in Section 5 above. Any unvested
Employment Options otherwise provided in this Agreement to vest or become
exercisable within the 364-day period following the Termination Date shall vest
and become exercisable on the Termination Date by virtue of any termination
under Section 7(b)(iv) above.
(f) Termination by the Executive for Just Cause. Upon
termination of this Agreement as provided in Section 7(c)(i) above, the Company
shall pay to the Executive the sum of (i) the greater of (1) the Base
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ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
Salary then in effect which would otherwise be payable hereunder for a period of
twelve (12) months, or (2) the base compensation which the Executive would have
received upon termination as of that date under his employment agreement with
Bally Gaming International, Inc. (the "BGII Employment Agreement"), in effect
prior to the date of this Employment Agreement, for the period such base
compensation would have been payable under the BGII Employment Agreement;
provided, that the Executive continues to comply with the covenants in Section
11 below, as provided therein, and (ii) expense reimbursement amounts accrued
through the Termination Date, in each case of clauses (i) and (ii) above, at the
time such payments are otherwise due and payable thereunder, and neither party
shall have any further liability or obligation to the other, except that the
provisions of Sections 11, 12 and 13(b) below shall survive the Termination
Date, to the extent provided therein; it being understood that the covenants in
Section 10 below shall be of no further force and effect following the
Termination Date. During the period that the provisions of Section 10 are in
effect, the Executive shall continue to be eligible to receive the benefits
provided in Section 5 above. Any unvested Employment Options otherwise provided
in this Agreement to vest and become exercisable within the 364-day period
following the Termination Date shall vest and become exercisable on the
Termination Date by virtue of any termination under Section 7(c)(i) above.
(g) Termination by the Executive Without Just Cause.
Upon the termination of this Agreement as provided in Section 7(c)(ii) above,
the Company shall pay to the Executive (i) the accrued and unpaid Base Salary
then in effect, if any, through the Termination Date, and (ii) expense
reimbursement amounts accrued through the Termination Date, at the time such
payments are otherwise due and payable thereunder, and neither party shall have
any further liability or obligation to the other, except that the provisions of
Sections 10, 11, 12 and 13(b) below shall survive the Termination Date, to the
extent provided therein. During such period that the provisions of Section 10
are in effect, the Executive shall continue to be eligible to receive the
benefits provided in Section 5 above. No unvested Employment Options shall vest
or become exercisable by virtue of any termination under Section 7(c)(ii) and
any and all rights thereto then possessed by the Executive shall be terminated
and of no further force and effect.
9. Federal Income Tax and Other Withholdings. The
Company shall withhold from any benefits payable pursuant to this Agreement such
Federal, State, City or other taxes and other amounts as may be required to be
withheld pursuant to any applicable law or governmental regulations or ruling
and shall timely pay over to the appropriate governmental or other authorities
the amount withheld, together with any additional amounts required to be paid by
the Company in respect thereof.
10. Non-Competition. The Executive covenants and agrees
that he will not at any time during the term and, to the extent provided for in
the applicable subsections of Section 8 above, for a period of 12 months
thereafter as provided in such subsections of Section 8 above, directly or
indirectly, whether as employee, owner, partner, agent, director, officer,
consultant, advisor, stockholder (except as the beneficial owner of not more
than 5% of the outstanding shares of a corporation, any of the capital stock of
which is listed on any national or regional securities exchange or quoted in the
daily listing of over-the-counter market securities and, in each case, in which
the Executive does not undertake any management or operational or advisory role)
or in any other capacity, for his own account or for the benefit of any person
or entity, establish, engage or be connected with or in any manner any person or
entity which is at the time engaged in a business which (on the Termination
Date) is then in competition with the business of the Company or any of its
subsidiaries or affiliates.
11. Confidential Information and Non-Disparagement.
(a) In accordance with NRS
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FORM 10-Q
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600A.010 et seq. (the so-called Uniform Trade Secrets Act), the Executive shall
hold in a fiduciary capacity for the benefit of the Company and its stockholders
all secret, confidential or proprietary information, knowledge or data relating
to the Company (and any of its subsidiaries or affiliates), which shall have
been obtained by the Executive during or by reason of his employment by the
Company. During and after the Termination Date, the Executive shall not, without
the prior written consent of the Company, communicate or divulge any such
information, knowledge or data to any person or entity other than the Company
(or such applicable subsidiaries or affiliates) and those designated by them
which would result in any misappropriation under and as defined in such Act,
except that, while employed by the Company, in furtherance of the business and
for the benefit of the Company, the Executive may provide confidential
information as appropriate to attorneys, accountants, financial institutions or
other persons or entities engaged in business with the Company from time to
time.
(b) Each of the parties agrees that from and after any
Termination Date or expiration of the Term, neither shall, publicly or
privately, disparage or make any statements (written or oral) that could impugn
the integrity, acumen (business or otherwise), ethics or business practices, of
the other, except, in each case, to the extent (but solely to the extent)
necessary (i) in any judicial or arbitral action to enforce the provisions of
this Agreement or (ii) in connection with any judicial or administrative
proceeding to the extent required by applicable law.
12. Indemnification and Liability Insurance.
(a) Indemnification. The Company shall indemnify and hold
the Executive harmless, to the fullest extent legally permitted by Section
78.751 of the Nevada Corporation Code (as amended and in effect from time to
time) against any and all expenses, liabilities and losses (including without
limitation, reasonable attorneys' fees and disbursements of counsel reasonably
satisfactory to the Company), incurred or suffered by him in connection with his
service as a director or officer of the Company during the Term, in each case,
except to the extent of the Executive's negligence or willful misconduct.
(b) Insurance. The Company shall maintain, for the
benefit of the Executive, a directors' and officers' liability insurance policy
insuring the Executive's service as a director and/or officer of the Company (or
any subsidiary of the Company) during the Term in accordance with its customary
practices as in effect from time to time during the Term. The parties
acknowledge and agree that such policy may cover other officers and directors of
the Company in addition to the Executive.
13. General Provisions.
a) Assignment. Neither this Agreement nor any right or
interest hereunder shall be assignable by the Executive or the Company without
the prior written consent of the other; provided, that (i) in the event of the
Executive's Death during the Term, the Executive's estate and his heirs,
executors, administrators, legatees and distributees shall have the rights and
obligations set forth herein, as provided herein, and (ii) nothing contained in
this Agreement shall limit or restrict the Company's ability to merge or
consolidate or effect any similar transaction with any other entity,
irrespective of whether the Company is the surviving entity (including a split
up, spin off or similar type transaction); provided, that one or more of such
surviving entities shall continue to be bound by the provisions hereof binding
upon the Company.
b) Material Inducements. The provisions of Sections 10 and 11
above are material
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ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
inducements to the Company entering into and performing this Agreement;
accordingly, in the event of any breach of the provisions of Sections 10 or
11(a) by the Executive, in addition to all other remedies at law or in equity
possessed by the Company, (i) the Company shall have the right to terminate and
not pay any amounts payable to the Executive hereunder, (ii) all Incentive
Warrants and Employment Options that are unexercised shall be immediately
forfeited and returned to the Company and (iii) the Executive shall immediately
account to the Company and return to the Company an amount in cash equal to all
profits or benefits obtained or realized by the Executive by virtue of the
ownership or disposition of the Incentive Warrants and Employment Options (from
and after the Termination Date).
c) Binding Agreement. This Agreement shall be binding
upon, and inure to the benefit of, the Executive and the Company and their
respective heirs, executors, administrators, legatees and distributees,
successors and permitted assigns.
d) Amendment of Agreement. This Agreement may not be
modified or amended except by an instrument in writing signed by the parties
hereto.
e) Severability. If, for any reason, any provision of
this Agreement is determined to be invalid or unenforceable, such invalidity or
lack of enforceability shall not affect any other provision of this Agreement
not so determined to be invalid or unenforceable, and each such other provision
shall, to the full extent consistent with applicable law, continue in full force
and effect, irrespective of such invalid or unenforceable provision.
f) Effect of Prior Agreements. This Agreement contains
the entire understanding between the parties hereto respecting the Executive's
employment by the Company, and supersedes any prior employment agreement between
the Company and the Executive.
g) Notices. For the purpose of this Agreement, notices
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given (i) when delivered, if sent by
telecopy or by hand, (ii) one business day after sending, if sent by reputable
overnight courier service, such as Federal Express, or (iii) three business days
after being mailed, if sent by United States certified or registered mail,
return receipt requested, postage prepaid. Notices shall be sent by one of the
methods described above; provided, that any notice sent by telecopy shall also
be sent by any other method permitted above. Notices shall be sent, if to the
Executive, to 0000 Xxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000 and if to the Company,
to Alliance Gaming Corporation, 0000 X. Xxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000,
directed to the attention of the Board with copies to the Chief Executive
Officer and the General Counsel of the Company; or to such other address as
either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
h) Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
(i) Arbitration. In the event of a dispute or controversy
arising under or in connection with this Agreement (except, at the option of the
Company, Sections 10 and 11 above, which may be adjudicated in a federal or
state court sitting in Las Vegas, Nevada), the Executive shall give the Company
or the Company shall
11
ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
give the Executive, as applicable, a written demand for relief. If the dispute
or controversy is not resolved, it shall be settled exclusively by arbitration,
conducted in Las Vegas, Nevada, in accordance with the rules of the American
Arbitration Association (or if the such association does not then conduct
business in such city, another arbitral panel reasonably satisfactory to each
party) then in effect. Judgment may be entered on the arbitrator's award in any
court having jurisdiction over the parties hereto.
(j) Indulgences, Etc. Neither the failure nor any delay
on the part of either party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence.
(k) Headings. The headings of sections and paragraphs
herein are included solely for convenience of reference and shall not control
the meaning or interpretation of any of the provisions of this Agreement.
(l) Governing Law. This Agreement has been executed and
delivered in the State of Nevada, and its validity, interpretation, performance,
and enforcement shall be governed by the laws of such State, without regard to
principles of conflicts of laws.
12
ALLIANCE GAMING CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and the Executive has signed this
Agreement, all as of the date first set forth above.
ALLIANCE GAMING CORPORATION
By: /s/ Xxxxx Xxxxxxxxxx
--------------------------------
Xxxxx Xxxxxxxxxx
President, Chairman of the Board and
Chief Executive Officer
By: /s/ Xxxxx X. Xxxxxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxxxxx
