1
EXHIBIT 10.7
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), effective July 1, 1998, by and
between LEISURE TIME CASINOS & RESORTS, INC., a Colorado corporation (the
"Company"), and XXXXX X. XXXXX (the "Employee"). The Company hereby employs the
Employee and the Employee hereby accepts employment on the terms and conditions
hereinafter set forth.
1. TERM. Subject to the provisions for termination as provided in
Sections 4 and 5 of this Agreement, the term of this Agreement shall commence on
July 1, 1998, and shall terminate on June 30, 2001. Subject to the provisions
for termination as provided in Sections 4 and 5 of this Agreement, this
Agreement shall be renewed automatically after June 30, 2001, for succeeding one
year periods on the same terms and conditions as contained in this Agreement,
unless the Company or Employee shall, at least 180 days prior to the expiration
of any such renewal date, give written notice of nonrenewal of this Agreement.
2. NATURE OF EMPLOYMENT. The Company hereby employs the Employee as the
Executive Vice President Operations, Chief Financial Officer and Treasurer of
the Company to perform such duties and have such powers as Employee
substantially performed for the Company on the date of this Agreement as well as
those additional duties and powers as may be agreed upon between the Company and
the Employee. The Company may not materially change the Employee's duties or
positions without Employee's consent. The Employee accepts such employment,
agrees to abide by the Articles of Incorporation, Bylaws, Company policies and
the provisions of this Agreement, and agrees to devote his time and best efforts
to his employment under this Agreement as is reasonably required. Employee may
carry on outside activities so long as those activities do not conflict with nor
compete with Employee's job responsibilities and corporate duties. The Employee
shall, at all times, faithfully with due diligence and to the best of Employee's
ability, experience and talent, perform all the duties hereunder. Unless
otherwise agreed to in writing by the Employee, those services shall be rendered
in the Atlanta, Georgia, metropolitan area.
3. COMPENSATION, VACATIONS AND EXPENSES.
a. BASIC SALARY. The Company shall pay to the Employee a base
salary during the term of this Agreement in accordance with the amount
set forth on Schedule A hereof. This amount may be increased as
determined by the Company through an amendment to Schedule A.
b. BONUS. In addition to the basic salary, the Employee will
receive a bonus to be set at the discretion of the board of directors
of the Company. Nothing shall obligate the Company, in the future, to
pay any bonus or bonuses to the Employee.
c. VACATIONS, FRINGE BENEFITS, AND LEAVES OF ABSENCE. The
Employee shall be entitled to an annual vacation of at least that
specified on Schedule A, but in no event
2
less than the minimum vacation time established by the Company for its
employees. The Employee shall further be entitled to participate in and
receive the benefits provided under any employee benefit program which
may be adopted and maintained by the Company (including, without
limitation, those described on Schedule A) and for which the Employee
is eligible by virtue of his employment hereunder, but only as and to
the extent the Employee would otherwise be eligible as provided in any
said program. The Employee shall also bc entitled to leaves of absence
as the Employee deems necessary and the Company, in its sole
discretion, deems reasonable.
d. REIMBURSEMENT OF EXPENSES. The Employee is authorized to
incur reasonable expenses while performing the Employee's duties under
this Agreement, including expenses for entertainment, travel,
automobile, and similar items incurred on behalf of the Company. The
Company will reimburse the Employee upon the presentation by the
employee of itemized accounts of such expenditures. Expenses over
$5,000 in any month must be approved in writing by the Company before
being incurred by the Employee.
4. TERMINATION OF AGREEMENT.
a. TERMINATION OF EMPLOYEE. The Employee may terminate this
Agreement without cause upon 120 days prior written notice to the
Company. In such event, the Employee shall continue to render the
services required under this Agreement and shall be paid on the regular
payment dates the compensation set forth in Schedule A up to the date
of termination.
b. TERMINATION BY THE COMPANY FOR CAUSE. In the event of
Employee's material failure or refusal to observe the provisions of
this Agreement or perform any of the duties required of Employee under
this Agreement, Employee's fraud, misappropriation or embezzlement of
funds, or conviction for any crime punishable as a felony, the Company
may terminate this Agreement upon written notice of such termination to
the Employee and upon payment by the Company to the Employee for all
compensation accrued under this Agreement to the date of termination.
In the event of a termination of Employee's employment for cause in
accordance with this Section 4.b, the Company shall have no further
obligation to the Employee. However, termination of the Employee's
employment for cause shall not terminate or extinguish the Employee's
obligation or liability to pay to the Company or any of its affiliates
any amount owed to them by the Employee, including, but not limited to,
any amounts misappropriated, embezzled or otherwise obtained by the
Employee by reason of any of the occurrences referred in this Section
4.b without prejudice to any other rights or remedies of the Company or
it affiliates at law or in equity.
c. TERMINATION UPON DEATH OF EMPLOYEE. This Agreement shall
automatically terminate in the event of the Employee's death. In such
case, any accrued compensation or benefits shall inure to the estate of
the Employee, and the payment thereof shall be the only liability the
Company shall have to the Employee's estate.
2
3
5. ILLNESS AND DISABILITY.
a. ILLNESS. If the Employee is unable to perform the services
required under this Agreement by reason of illness or physical injury
not amounting to disability as defined in Section 5.b, the compensation
otherwise payable to the Employee under this Agreement shall be
continued in full for a period of 60 days after the date Employee is
unable to perform such services.
b. DEFINITION OF DISABILITY. For purposes of this Agreement,
the terms "totally disabled," "disabled" and "disability" shall mean
continuous disability as defined in and for the period necessary to
qualify for benefits under any disability income insurance policies on
the Employee paid for by the Company. If no disability insurance is in
effect on the Employee, such terms shall mean continuous disability
which prevents the Employee from performing Employee's normal duties
pursuant to this Agreement. The Employee or agent of the Employee shall
notify the Company in writing as to the Employee's inability to perform
those duties or the Company shall so notify the Employee. If they are
not able to agree as to the existence of disability in 30 days after
receipt of said notice, the determination shall be made by medical
doctors, licensed as such in the State of Georgia, one designated by
the Company and the other by the Employee. If these two physicians
cannot agree, they shall appoint a third licensed medical doctor and
the determination of the majority shall be conclusive and binding on
the Company and the Employee. The fees of all medical doctors shall be
paid by the Company and not by the Employee. For the purposes of this
Agreement, adjudicated mental incompetency shall also be a definition
of disability.
c. SALARY CONTINUATION. If the Employee becomes totally
disabled during the term of this Agreement, the Employee's full salary
shall be continued for a period not to exceed 24 consecutive months,
for the period during which the Employee remains totally disabled or
until the next termination date of the Agreement, whichever is shorter.
If the Company pays premiums on a disability income insurance policy on
the Employee, any proceeds paid to the Employee by reason of disability
under such policy shall be offset against salary continuation payments
due from the Company.
6. CHANGE IN CONTROL. A "change in control" of the Company shall be
deemed to have transpired upon the occurrence after the date hereof of any one
of the following events:
a. at any time any one person (other than Employee), or more
than one person acting as a group, acquires beneficial ownership of the
voting securities of the Company that together with voting securities
beneficially held by such person or group, constitute more than 20% of
the total voting power of the Company's outstanding voting securities;
3
4
b. the appointment or election of a majority of the members of
the Company's board of directors who are appointed or elected during
any 24 month period but are not endorsed in writing by a majority of
those members of the Company's board of directors who were directors
prior to the date of the appointment or election of the first such new
director comprising the majority; or
c. one person, or more than one person acting as a group,
acquires (or has acquired during the 12 month period ending on the date
of the most recent acquisition by such person or persons) assets from
the Company that have a total fair market value equal to or greater
than one third of the total fair market value of all of the Company's
assets immediately before the acquisition or acquisitions.
At any time after a "change in control" of the Company, the Employee,
at the option of the Employee, shall have the right, upon 30 days' prior written
notice by the Employee to the Company, to cause the Company to repurchase all or
any portion of the common stock of the Company then owned by the Employee at the
higher of (i) the book value thereof as determined by the independent certified
public accountants of the Company based upon the financial statements of the
Company as of the last day of the month prior to the date of such notice, (ii)
the last market value of a share of the Company's common stock established by
the board of directors, or the last price at which the common stock was sold be
the Company or by a shareholder of the Company to any person (other than the
Employee); provided, however, or if the common stock is listed on a national
securities exchange, is admitted to unlisted trading privileges on such an
exchange, or is listed for trading on a trading system of the National
Association of Securities Dealers, Inc., such as the Nasdaq National Market, the
Nasdaq SmallCap Market or the OTC Bulletin Board, then the value shall be the
last reported sale price of the common stock on such an exchange or system on
the last business day prior to the date of such notice or if no such sale is
made on such day, the average of the closing bid prices for the common stock for
such day on such exchange or such system shall be used. Within 30 days after
receipt of such notice, the Company shall pay the Employee the full amount for
such shares of common stock upon delivery of the stock certificates representing
such shares of common stock. The payment shall be in the form of a cashiers'
check or by wire transfer. Also, upon a "change in control" of the Company, the
Employee shall automatically be granted options to purchase the same number of
shares of the Company's common stock as then are issuable upon exercise of
options to purchase the Company's common stock then owned by the Employee. Such
new options shall be immediately exercisable and shall remain exercisable for
ten years. The exercise price thereof shall be $0.01 per share of common stock.
Such new options shall not replace any other options to purchase the Company's
remaining stock then owned by Employee.
7. EMPLOYEE ACTIONS.
a. EMPLOYEE SHALL NOT DISCLOSE INFORMATION. The Employee
recognizes and acknowledges that the list of the Company's and its
subsidiaries' and affiliates' customers, as it may exist from time to
time, and any proprietary or confidential
4
5
information, including, but not limited to financial information and
information pertaining to the Company's, its subsidiaries' and
affiliates' manufacturing, marketing and sales operations, and
potential acquisitions, used by the Company in its business are
valuable and unique assets of the Company. The Employee will not during
or after the term of his employment, disclose the list of the
Company's, its subsidiaries' or affiliates' customers or any part
thereof or any propriety or confidential information to any person,
firm, corporation, association, or other entity for any reason or
purpose whatsoever without the prior written consent or authorization
of the board of directors of the Company. Upon termination of the
Employee's employment by the Company, its subsidiaries or its
affiliates, the Employee shall neither take nor retain any papers,
customer lists, manuals, files, or other document or copies thereof
belonging to the Company, its subsidiaries or its affiliates.
b. NON COMPETE. Employee hereby covenants and agrees that
Employee will not, without the prior written consent of the Company,
directly or indirectly, whether individually or through any entity
controlled by Employee, during the term of this Agreement and for a
period of 3 years from the termination of this Agreement, for any
reason, directly or indirectly, on his own behalf or in the service or
on behalf of others, whether or not for compensation, engage in any
business activity, or have any interest in any person, firm,
corporation or business, through a subsidiary or parent entity or other
entity (whether as a shareholder, agent, joint venturer, security
holder, trustee, partner, consultant, creditor lending credit or money
for the purpose of establishing or operating any such business,
partnership or otherwise) which is competitive with the then existing
business of the Company. Notwithstanding the foregoing, Employee may
own shares of competing companies whose securities are publicly traded,
so long as such securities do not constitute five percent or more of
the outstanding securities of any such company.
c. NON-SOLICITATION. Employee further agrees that as long as
this Agreement remains in effect and for a period of 2 years from its
termination, Employee will not divert any business of the Company
and/or its affiliates or any customers or suppliers of the Company
and/or the Company's and/or its affiliates' business to any other
person, entity or competitor, or induce or attempt to induce, directly
or indirectly, any person to leave his or her employment with the
Company.
d. INTELLECTUAL PROPERTY. Employee shall disclose to the
Company all ideas and business plans developed by the Employee during
the term of Employee's employment which relate to the business of the
Company, its subsidiaries or affiliates or any business conducted by
the Company, its subsidiaries or affiliates. All patents, patent
applications, patent licenses, formulas, inventions, processes,
copyrights, know-how, proprietary information, rights, trademarks, or
trade names, or future improvements thereto developed or conceived of
by the Employee during any period of employment with the Company shall
be promptly disclosed to, and all rights with respect thereto shall be
assigned by the Employee to the Company in consideration of the
remuneration paid or payable to the Employee hereunder.
5
6
e. REMEDIES. Employee acknowledges and agrees that his
obligations provided in this Section 7 are necessary and reasonable in
order to protect Company and its affiliates and their respective
business and Employee expressly agrees that monetary damages would be
inadequate to compensate Company and/or its affiliates for any breach
by Executive of his covenants and agreements set forth herein.
Accordingly, Employee agrees and acknowledges that any such violation
or threatened violation of this Section 7 will cause irreparable injury
to Company and that, in addition to any other remedies that may be
available, in law, in equity or otherwise, Company and its affiliates
shall be entitled to obtain injunctive relief against the prospective
breach of this Section 7 or the continuation of any such breach by
Employee without the necessity of proving actual damages.
f. CONSTRUCTION. In the event that any provision of this
Section 7 should ever be deemed to exceed the time, geographic, or
other limitations permitted by applicable law, then such provision
shall be reformed to the maximum time geographic, or other limitations
permitted by applicable law. The provisions of this Section 7 shall be
applicable for the period indicated and shall survive the termination
of this Agreement
8. GENERAL MATTERS.
a. GOVERNING LAW. This Agreement shall bc governed by the laws
of the State of Ohio and shall be construed in accordance therewith.
b. NO WAIVER. No provision of this Agreement may be waived
except by an Agreement in writing signed by the waiving party. A waiver
of any term or provision shall not be construed as a waiver of any
other term or provision.
c. AMENDMENT. This Agreement may be amended or altered at any
time, in whole or in part, by filing with this Agreement a written
instrument setting forth such changes, signed by all parties.
d. BINDING EFFECT. This Agreement shall be binding upon the
Employee, the Company, and their successors and assigns.
e. CONSTRUCTION. Throughout this Agreement the singular shall
include the plural, the plural shall include the singular, and the
masculine shall include the feminine wherever the context so requires.
f. TEXT TO CONTROL. The headings of Sections are included
solely for convenience of reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
6
7
g. SEVERABILITY. If any provision of this Agreement is
declared by any court of competent jurisdiction to be invalid for any
reason, such invalidity shall not affect the remaining provisions which
shall be fully severable, and the Agreement shall be construed and
enforced as if such invalid provision had never been included.
h. ENTIRE AGREEMENT OF THE PARTIES. The parties agree that
this document contains the entire agreement and understanding between
them in relation to the subject matter hereof, and no representations,
warranties, covenants, understandings, or agreements in relation
thereto exist between the parties except as expressly set forth herein.
i. NOTICES. Every notice or other communication to be given by
either party to the other party with respect to this Agreement, shall
be in writing and shall not be effective for any purpose unless the
same shall be served personally or by national air courier service, or
United States certified mail, return receipt requested, postage
prepaid, addressed, if to the Company at 0000 Xxxxxx Xxxx, Xxxx, Xxxx
00000, Attention, Secretary, and if to the Employee at 0000
Xxxxxxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxx 00000, or such other address or
addresses as the Company or the Employee may from time to time
designate by notice given as above provided. Every notice or other
communication hereunder shall be deemed to have been given as of the
third business day following the date of such mailing (or as of any
earlier date evidenced by a receipt from such national air courier
service or the United States Postal Service) or immediately if
personally delivered. Notices not sent in accordance with the foregoing
shall be of no force and effect until received by the foregoing parties
as such addresses specified herein.
j. DUPLICATE ORIGINALS. This Agreement may be executed in
several counterparts, each of which shall be an original but all of
which together shall constitute one and the same instrument.
k. ARBITRATION. Any dispute or controversy of or relating to
this Agreement, or any breach of this Agreement, shall be settled by
arbitration to be held in Norcross, Georgia, in accordance with the
rules then in effect of the American Arbitration Association or any
successor thereto. The decision of the arbitrator shall be final,
conclusive, and binding on the parties to the arbitration. Judgment may
be entered on the arbitrator's decision in any court having
jurisdiction, and the parties irrevocably consent to the jurisdiction
of the Georgia state courts for this purpose. The Company shall pay the
costs and expenses of such arbitration.
l. ATTORNEYS' FEES. In the event that the Company or the
Employee retains an attorney or attorneys to enforce performance of
this Agreement by the other party or to obtain damages or other relief
because of violation of the terms of this Agreement by the other party,
then all reasonable attorneys' fees and costs of arbitration or
litigation are to be borne and paid by the party determined to have
failed to perform this Agreement or to be liable for damages or against
which other relief is granted.
7
8
m. SURVIVORSHIP. The respective rights and obligations of the
parties hereunder shall survive any termination of the Executive's
employment to the extent necessary to the intended preservation of such
rights and obligations.
n. REMEDIES CUMULATIVE; NO WAIVER. No remedy conferred upon a
party by this Agreement is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be
in addition to any other remedy given hereunder or now or hereafter
existing at law or in equity. No delay or omission by a party in
exercising any right, remedy or power hereunder or existing at law or
in equity shall be construed as a waiver thereof, and any such right,
remedy or power may be exercised by such party from time to time and as
often as may be deemed expedient or necessary by such party in its sole
discretion.
The parties have executed this Agreement to be effective as of the date
first above written.
LEISURE TIME CASINOS & RESORTS, INC.
By:/s/
------------------------------------------
Xxxx X. Xxxxxxx, President
Attest:
/s/
----------------------------------
Xxxxxx X. Xxxxx, Secretary
EMPLOYEE:
/s/
---------------------------------------------
Xxxxx X. Xxxxx
8
9
SCHEDULE A
DESCRIPTION OF DUTIES AND COMPENSATION
EMPLOYEE: Xxxxx X. Xxxxx
POSITION WITH COMPANY: Executive Vice President Operations, Chief Financial
Officer and Treasurer
COMPENSATION:
Base Salary: $200,000
Bonus: Paid at the discretion of the board of
directors of the Company
BENEFITS:
Insurance: Medical, dental, disability (long and short
term) and life to the extent available to
all employees of the Company and paid in
accordance with Company policy if elected by
Employee
Automobile: The Company shall provide the employee with
such automobile as is approved by the
President of the Company. All expenses for
the operation (including insurance) and
maintenance of such automobile shall be paid
by the Company or reimbursed to the Employee
by the Company.
Vacation: Four weeks (20 business days) each calendar
year commencing January 1, 1998. Such
vacation time is available upon approval by
the President of the Company. Such approval
will not be unreasonably withheld upon at
least two week notice by Employee. Vacation
time will not accrue from calendar year to
calendar year.
401(k) Plan: Available for Employee's election if
eligible.
Medical Reimbursement: Available for Employee's election if
eligible.
10
2
AMENDMENT
TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") effective
September 9, 1998, is by and between LEISURE TIME CASINOS & RESORTS, INC., a
Colorado corporation (the "Company"), and XXXXX X. XXXXX (the "Employee"). The
Company and the Employee previously entered into an Employment Agreement that
was effective July 1, 1998. This Amendment amends the Employment Agreement as
hereinafter set forth.
1. AMENDMENT TO SECTION 7.a. Section 7.a. of the Agreement is amended
so as amended Section 7.a. reads as follows:
"a. EMPLOYEE SHALL NOT DISCLOSE INFORMATION. The Employee
recognizes and acknowledges that the list of the Company's and its
subsidiaries' and affiliates' customers, as it may exist from time to
time, and any proprietary or confidential information, including, but
not limited to financial information and information pertaining to the
Company's, its subsidiaries' and affiliates' manufacturing, marketing
and sales operations, and potential acquisitions, used by the Company
in its business are valuable and unique assets of the Company. Except
as permitted by the next sentence, the Employee will not during or
after the term of his employment, disclose the list of the Company's,
its subsidiaries' or affiliates' customers or any part thereof or any
propriety or confidential information to any person, firm, corporation,
association, or other entity for any reason or purpose whatsoever
without the prior written consent or authorization of the board of
directors of the Company. Notwithstanding the prohibitions contained in
the foregoing sentence, the Employee shall be permitted to disclose
such information during the term of his employment to other persons
employed by the Company or its subsidiaries who have a need to know
such information for a proper purpose related to the business of the
Company or its subsidiaries. Upon termination of the Employee's
employment by the Company, its subsidiaries or its affiliates, the
Employee shall neither take nor retain any papers, customer lists,
manuals, files, or other document or copies thereof belonging to the
Company, its subsidiaries or its affiliates."
2. AMENDMENT TO SECTION 2. The last sentence of the Agreement is
amended so as amended the last sentence of Section 2 reads as follows:
"Unless otherwise agreed to in writing by the Employee, those services
shall be rendered in the Sarasota, Florida, metropolitan area."
3. AMENDMENT TO SECTION 7.b. Section 7.b. of the Agreement is amended
to delete the words "3 years" therefrom and substitute the words "2 years"
therefor.
11
4. AMENDMENT TO SECTION 7.e. Section 7.e. of the Agreement is amended
to delete the word "Executive" therefrom and substitute the word "Employee"
therefor.
5. AMENDMENT TO SECTION 8.i. The address to which notices to the
Employee should be sent as set forth in Section 8.i is changed to 00 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000.
Except as amended herein, the Agreement shall remain in full force and
effect without change.
LEISURE TIME CASINOS & RESORTS, INC.
By: /s/
--------------------------------------------
Xxxx X. Xxxxxxx, President
Attest:
/s/
----------------------------------
Xxxxxx X. Xxxxx, Secretary
EMPLOYEE:
/s/
-------------------------------------------------
Xxxxx X. Xxxxx
2
12
AMENDMENT
TO
EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement (the "Amendment") effective
February 22, 1999, is by and between LEISURE TIME CASINOS & RESORTS, INC., a
Colorado corporation (the "Company"), and XXXXX X. XXXXX (the "Employee"). The
Company and the Employee previously entered into an Employment Agreement that
was effective July 1, 1998, and that was amended September 9, 1998. This
Amendment amends the Employment Agreement as hereinafter set forth.
Schedule A to the Agreement is deleted and Schedule A that is attached
hereto as Exhibit A and hereby incorporated herein by this reference is
substituted therefor.
Except as amended herein, the Agreement shall remain in full force and
effect without change.
LEISURE TIME CASINOS & RESORTS, INC.
By: /s/
------------------------------------------
Xxxx X. Xxxxxxx, President
Attest:
/s/
-----------------------------------
Xxxxxx X. Xxxxx, Secretary
EMPLOYEE:
/s/
--------------------------------------------
Xxxxx X. Xxxxx
13
EXHIBIT A
SCHEDULE A
(AS AMENDED FEBRUARY 22, 1999)
DESCRIPTION OF DUTIES AND COMPENSATION
EMPLOYEE: Xxxxx X. Xxxxx
POSITION WITH COMPANY: Executive Vice President, Chief Financial Officer and
Treasurer
COMPENSATION:
o Base Salary: $300,000 per annum (payable in accordance
with Company policy and reduced by all
required withholdings and withholdings
authorized by Employee).
o Bonus: Paid at the discretion of the board of
directors of the Company
BENEFITS:
o Insurance: Medical, dental, disability (long and short
term) and life to the extent available to
all of the employees of the Company and paid
in accordance with Company policy if elected
by Employee
o Automobile: The Company shall provide the employee with
such automobile as is approved by the Board
of Directors of the Company. All expenses
for the operation (including insurance) and
maintenance of such automobile shall be paid
by the Company or reimbursed to the Employee
by the Company.
o Vacation: Four weeks (20 business days) each calendar
year. Such vacation time is available upon
approval by the President of the Company.
Such approval will not be unreasonably
withheld upon at least two week notice by
Employee. Vacation time will not accrue from
calendar year to calendar year.
o 401(k) Plan: Available for Employee's election if
eligible.
o Flexible Spending
Account: Available for Employee's election if
eligible.
2
