EMPLOYMENT AGREEMENT
This Employment Agreement, herein referred to as "Agreement", is entered
into as of January 2, 1996 by and between Joseph A. Huseonica of 1976
Palisades Terrace Drive, Lake Oswego, OR, herein referred to as Employee, and
Acres Gaming, Inc., a Nevada corporation whose principal place of business is
located at 815 NW 9th Street, Corvallis Oregon, herein referred to as
Employer.
RECITALS:
WHEREAS Employer is engaged in the development, manufacture, and
marketing of electronic casino, accounting, game monitoring and game
promotion systems; and
WHEREAS Employee is willing to be employed by Employer and Employer is
willing to employ Employee on the terms, conditions and agreements
hereinafter set forth.
For the reasons set forth above, and in consideration of the mutual
promises and agreements hereinafter set forth, Employer and Employee hereby
agrees as follows:
SECTION ONE
EMPLOYMENT
Employer hereby employs, engages and hires Employee as its President and
Chief Operating Officer and Employee, hereby accepts and agrees to such
hiring, engagement and employment subject to the advice, direction,
regulations and supervision of Employer. Employee shall, subject to
Employer's instructions and guidelines, perform such management,
administrative and operational duties on behalf of Employer, as are
customarily performed by one holding a comparable position as a chief
operating officer in other businesses or enterprises as that engaged in by
Employer.
Employee shall also render such other and related services and duties as
may be assigned to Employee from time to time by Employer's Board of
Directors. Employer's Board of Directors shall have the absolute right to
determine not only what specific duties shall be performed by the Employee
but also the means and the manner by which those duties shall be performed.
Employee agrees to fully and faithfully observe and comply with all of the
rules, regulations, policies and procedures which may, from time to time, be
issued by the Employer's Board of Directors; provided, however that in the
event of an irreconcilable conflict between any such rule, regulation, policy
or procedure and any term or provision of this Agreement, the terms and
provisions of this Agreement shall govern.
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SECTION TWO
BEST EFFORTS OF EMPLOYEE
Employee agrees that he will, at all times, faithfully, industriously,
and to the best of his ability, experience and talents, perform all of the
duties that may be required of and from him pursuant to the express and
implied terms hereof, to the full and complete satisfaction of Employer's
Board of Directors. Such duties shall be rendered in Benton County, Oregon
and Clark County, Nevada, and at such other place or places as Employer's
Board of Directors shall in good faith require or as the interests, needs,
business or opportunities of the Employer shall require. Employee shall
conduct himself at all times so as not to detract from, or reflect adversely
upon, the reputation of the Employer. Employee shall also, at all times
during and after the term of this Agreement, neither criticize nor negatively
comment upon the Employer or the Employer's business.
SECTION THREE
TERMS OF EMPLOYMENT
The term of this Agreement shall be for an initial period of three
years, commencing on January 2, 1996, and terminating on December 31, 1998,
subject, however, to prior termination as hereinafter provided. This
Agreement and the employment provided for hereunder shall automatically
renewed for successive two (2) year terms, unless and until either party
gives the other at least ninety (90) days written notice before the end of
the then-current term of his intent not to renew.
SECTION FOUR
COMPENSATION OF EMPLOYEE
Employer shall pay Employee, and Employee shall accept from Employer, in
full payment for all of the Employee's services hereunder, an annual base
salary of one hundred and seventy-five thousand dollars ($175,000). Such
salary shall be payable at the same intervals as the other hourly and
salaried employees of the Employer are paid and shall be subject to customary
withholding taxes and other employment taxes as required by law. Employee
acknowledges and agrees that he is an "exempt" employee under federal
employment laws and that to the extent he is required to devote more than
forty (40) hours per week or eight (8) hours per day to the performance of
his duties hereunder, additional "overtime" compensation shall not be paid by
the Employer and Employee shall have no right to same. Any increase or
decrease in the annual salary specified herein must be approved in writing by
Employer's Board of Directors and Employee.
In addition to the aforementioned base salary, the Employer shall pay
the Employee a performance bonus targeted at fifty thousand dollars ($50,000)
per year, payable semi-annually in twenty-five thousand dollar ($25,000)
increments. The payment of the bonus shall be based on the Employee's
successful completion of certain objectives to be defined and mutually agreed
to in writing by the Employee and the Board of Directors.
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SECTION FIVE
FACILITIES AND EXPENSES/ADDITIONAL BENEFITS
(a) FACILITIES AND EXPENSES. The Employee shall be provided with an
office, secretarial and technical help, and such other facilities and
services as may be suitable to his position and adequate for the performance
of his duties. The Employee is encouraged and expected, from time to time,
to incur reasonable expenses for promoting the business of the Employer,
including expenses for civic club membership and participation,
entertainment, travel, and similar items. The cost of such activities, shall
be at the expense of the Employer unless, because of unusual circumstances,
the Board of Directors of the Employer shall determine that such activities
of the Employee should not be authorized as an expense of the Employer.
(b) ADDITIONAL BENEFITS. The Employee shall have the right to receive
and participate in any additional "fringe benefits", which may from time to
time be made available by the Board of Directors to the Employer's executive
officers, including, but not limited to, health and accident insurance,
disability insurance or other insurance programs for the Employer's executive
officers and their families and any pension or profit-sharing plans and stock
option plans.
SECTION SIX
VACATION/SICK LEAVE
(a) VACATION. Employee shall accrue paid vacation days during each
full month of employment at the rate of one and onequarter (1.25) days for
each month worked. In addition, the Employee shall be entitled to such paid
holidays as Employer may approve. Upon the termination of this Agreement and
Employee's employment hereunder, Employee shall receive payment for any
vacation days earned during the year of termination which had not been used
by the Employee; provided, however, that unused days of vacation may not be
carried over and accumulated from one year to another.
(b) SICK. The Employee shall be entitled to ninety (90) calendar
day(s) of paid sick leave because of sickness or accident (not otherwise
resulting in the Employee's becoming "permanently disabled" as that term is
defined in Section Twelve below) without any adjustment in his salary. Upon
request of Employer, Employee will provide written doctor certification to
substantiate sick leave days used. Unused sick leave may neither be carried
over from one year to another nor used for additional vacation.
SECTION SEVEN
OTHER EMPLOYMENT
Employee shall devote his full and undivided time, attention, knowledge
and skills solely to the Employer's business-during such hours as may be
designated by Employer from time to time during the term of this Agreement.
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SECTION EIGHT
RECOMMENDATIONS FOR IMPROVING OPERATIONS
Employee shall make available to Employer all information, suggestions,
and recommendations which Employee may have that may benefit Employer in the
conduct of its business.
SECTION NINE
TRADE SECRETS/COVENANT NOT TO COMPETE
(a) Employee acknowledges that the business of Employer is a unique and
unusual business consisting of the development, manufacture, and marketing of
electronic casino, accounting, game monitoring and game promotion systems;
that the information which Employer has developed and will develop in its
business is not readily accessible to the public or its competitors and the
disclosure thereof would be harmful to Employer, and that the Employee in the
performance of his duties will have available to him all of Employer's
confidential information and if any such information is disclosed, such
disclosure would be extremely harmful to Employer and give an advantage to
its competitors.
Employee acknowledges that Employee will come into contact with and have
access to confidential matters and confidential information and "know-how"
pertaining to Employer's methods of operation, future products, formulations,
product research, product tests, marketing and development in its business.
Employee acknowledges that the formulas, documents and other information
disclosing the confidential information are not under lock and key during
regular business hours because of extensive use by Employer and its
employees, including the Employee, and that because of such access, Employer
is relying upon the Employee's good faith in the use and handling of such
documents to insure that they are not used improperly or to the disadvantage
of Employer.
Employee shall not, during the term of this Agreement or at any time
thereafter, divulge, furnish or make accessible to anyone (other than in the
regular course of Employer's business) any knowledge or information with
respect to any confidential information concerning the business, methods of
operation, products and other aspects of the business of Employer as now or
hereafter conducted.
All inventions, work products notebooks, ideas and other matters created
by Employee in the performance of his duties hereunder, whether or not the
same are capable of being patented or copyrighted, shall be the exclusive
property of Employer, and Employee shall have no rights of any nature
thereto. Employee agrees to execute whatever documents Employer may
reasonably require to confirm the foregoing.
(b) Employee may not, during the term hereof, be engaged or interested
in any manner, directly or indirectly, as a partner, owner, officer,
director, stockholder, advisor,
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employee, agent or in any other capacity, in any other activity, business or
entity which, in whole or in part, is competitive with or substantially
similar to Employer's business. Furthermore, for a period of one (1) year
from the date of the termination of this Agreement, Employee may not be
engaged or interested in any manner, directly or indirectly, as a partner,
owner, officer, director, stockholder, advisor, employee, agent or in any
other capacity, in any business, firm, corporation, association, partnership
or other entity, which, in whole or in part, is competitive with or
substantially similar to Employer's business in any state in which the
Employer's sale of merchandise or services, or both, generated at least ten
percent (10%) of the Employer's gross revenue for the twelve month period
ending at the end of the month immediately preceding the date of such
termination. For example, if this agreement were terminated as of the date
hereof, the territorial scope of the one year non-competition covenant would,
be as follows: Nevada, Colorado, and Wisconsin. In the event the provisions
of this section 9(b) should be deemed to exceed the time or geographic
limitations permitted by applicable law, then such provisions shall be
reformed to the maximum time or geographic limitation permitted by applicable
law.
(c) Employee will not employ or associate in a business relationship
with (i) any other employee of Employer, or (ii) any person who shall have
been an employee of Employer within the six (6) month period prior to the
date of expiration or termination of this Agreement or who shall have been in
the employ of Employer six (6) months after the date of the expiration or
termination of this agreement.
SECTION TEN
EMPLOYEE'S OBLIGATION AFTER TERMINATION OF THIS AGREEMENT
All of the Employee's obligations and liabilities under Sections Two,
Nine (a), and Fourteen through Twenty-Seven of this Agreement shall survive
the expiration or termination of this Agreement and shall remain in full
force and effect even after the termination of Employee's employment.
SECTION ELEVEN
INJUNCTIVE RELIEF
Employer shall be entitled to injunctive and/or other equitable relief
to prevent or remedy a breach of any of the provisions of this Agreement
(including any of the provisions of Section Nine hereof) and to secure their
enforcement, in addition to all other remedies or damages as may be available
to Employer at law or in equity; all of which shall be deemed to be
cumulative as provided in Section Twenty-Four below.
SECTION TWELVE
TERMINATION
(a) The Employer, at any time, may terminate this Agreement, WITHOUT
CAUSE, upon One Hundred Eighty (180) days' written notice to the Employee, and
the Employer shall only be obligated to continue to pay the Employee the base
salary compensation due him and a
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pro-rated portion of any bonuses in effect under this Agreement up to the
date of termination together with such amount as may be due under Section Six
hereof.
(b) The Employee, at any time, may terminate this Agreement WITHOUT
CAUSE, upon Sixty (60) days' written notice to the Employer, and Employer
shall be obligated only to continue to pay the Employee the compensation due
him under this Agreement up to the date of termination together with such
amount as may be due under Section Six hereof.
(c) Employer shall have the right to immediately and without notice
terminate this Agreement and Employee's employment hereunder in the event of
any fraud, embezzlement, dishonesty or other illegal act by Employee which
adversely effects Employer or in the event Employee is deemed unsuitable by
any governmental licensing authority having jurisdiction over the Employer
and shall be entitled to such further remedies and damages as may be
available at law or in equity.
(d) In the event of a breach or evasion by either party of any of the
terms of this Agreement, which has not been cured within thirty (30) days
after written notice specifying such breach or evasion has been given by the
non-breaching party, the non-breaching party thereupon may immediately and
without further notice, terminate this Agreement and shall be entitled to
such further remedies or damages as may be available at law or in equity.
(e) If the event of the Employee's death during the term of this
Agreement, this Agreement shall terminate immediately and without notice, and
the Employee's estate shall be entitled to receive only the compensation due
the Employee under this Agreement up to the date of termination together with
such amount as may be due under Section Six hereof.
(f) This Agreement shall also terminate after 90 days notification to
the Employee by the Employer, unless otherwise agreed by the Employer's Board
of Directors, in the event the Employee shall become permanently disabled
(i.e. shall have been continuously unable or unwilling to perform his
material duties hereunder for at least seventy-five percent (75%) of the time
during any consecutive six (6) month period, because of ill health, physical
or mental disability or for any cause beyond his control).
SECTION THIRTEEN
(THIS SECTION NOT USED.)
SECTION FOURTEEN
HOLD HARMLESS
(a) Employee shall indemnify, defend and hold Employer harmless from and
against any and all claims, damages, losses, liabilities, actions, expenses
and other obligations and responsibilities of whatsoever kind or nature,
including, without limitation, all legal fees and costs, arising out of or
connected with, directly or indirectly, (i) Employee's breach or evasion of
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any of his obligations under this Agreement or (ii) Employee's negligence or
willful misconduct in the performance of any of his Employee minimum duties
and responsibilities hereunder.
(b) Employer shall indemnify, defend and hold Employee harmless from and
against any and all claims, damages, losses, liabilities, actions, expenses
and other obligations and responsibilities of whatsoever kind or nature,
including, without limitation, all legal fees and costs, arising out of or
connected with, directly or indirectly, Employer's breach or evasion of any
of its obligations under this Agreement.
SECTION FIFTEEN
ENTIRE AGREEMENT
This Agreement contains the complete agreement concerning the employment
arrangement between the parties and shall as of the effective date hereof,
supersede all other prior agreements between the parties. Neither party has
relied on any prior representations in entering into this Agreement.
SECTION SIXTEEN
MODIFICATION OF CONTRACT
No cancellation, waiver, alteration or modification of this Agreement or
of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith, and
no evidence of any cancellation, waiver, alteration or modification shall be
offered or received in evidence in any proceeding, arbitration, or litigation
between the parties hereto arising out of or affecting this Agreement, or the
rights or obligations of the parties hereunder, unless such cancellation,
waiver, alteration or modification is in writing, duly executed as aforesaid.
The parties further agree that the provisions of this Section may not be
waived except as herein set forth and that any oral or implied agreement
which conflicts with any of the foregoing shall be void, unenforceable and of
no force and effect.
SECTION SEVENTEEN
SEVERABILITY OF TERMS
If any term or provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
terms, covenants, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect, provided that the invalidity,
illegality or unenforceability of such term or provision does not materially
impair either (i) the parties' ability to consummate, or (ii) the economic
substance of, the transaction contemplated hereby. If the invalidity,
illegality or unenforceability of any term or other provision materially
impairs either (i) the parties' ability to consummate the transaction in
the manner contemplated hereby, or (ii) the economic substance of the
transaction and the parties hereto shall, if at all possible, amend this
Agreement so as to effect the original intention of the parties to the
fullest extent.
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SECTION EIGHTEEN
ASSIGNMENT
The parties agree that the services covered by this Agreement are
strictly personal and that this Agreement is not assignable or transferable
by Employee or Employer either voluntarily or by operation of law without the
prior written consent of the other party.
SECTION NINETEEN
NOTICES
All notices, requests, approvals, demands or other communication of any
kind which any party may be required or may desire to serve on the other in
connection with this Agreement shall be in writing and shall be deemed to
have been duly and sufficiently given if:
(a) personally delivered with proof of delivery thereof (any notice so
delivered shall be deemed to have been received at the time so delivered),
(b) sent by Federal Express (or other similar overnight courier)
designating early morning delivery (any notice so delivered shall be
deemed to have been received on the next Business Day following receipt by
the courier),
(c) sent by United States registered or certified mail, return receipt
requested, postage prepaid, at a post office regularly maintained by the
United States Postal Service (any notice so sent shall be deemed to have
been received two (2) Business Days after mailing in the United States),
or,
(d) sent by telecopier or facsimile machine which automatically
generates a transmission report that states the date and time of the
transmission, the length of the document transmitted and the telephone
number of the recipient's telecopier of facsimile machine (with a copy
thereof sent in accordance with subparagraphs (a),(b),(c) above) (any
notice so delivered shall be deemed to have been received (i) on the date
of transmission, if so transmitted before 5:30 p.m. (local time of the
recipient) on a Business Day, or (ii) on the next Business Day, if so
transmitted on or after 5:30 p.m. (local time of the recipient) on a
Business Day or if transmitted on a day other than a Business Day),
addressed to the parties at their respective addresses designated below.
All notices shall be addressed to the parties at the addresses as set
forth below. Either party may, by notice given pursuant to this Section,
change the person or persons and/or address or addresses, or designate an
additional person or persons or an additional address or addresses, for its
notices, but notice of a change of address shall only be effective upon
receipt.
If to Employer:
Acres Gaming, Inc
815 N.W. 9th Street
Corvallis, OR 97330
If to Employee:
Joseph A. Huseonica
1976 Palisades Terrace Drive
Lake Oswego, OR 97034
SECTION TWENTY
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JURISDICTION/ATTORNEY'S FEES
If legal action is initiated relative to this Agreement or the rights or
obligations of any party hereunders, the parties hereto stipulate and agree
that such action must seek only the remedies available to the parties
hereunder and must be initiated, maintained and continued in Clark County,
Nevada. The nonprevailing parties in such action shall pay reasonable
attorneys' fees to the prevailing parties, with the amounts to be determined
by the court, or the arbitrators, in said action.
SECTION TWENTY-ONE
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BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of
Employee and Employer and their respective heirs, executors, administrators,
successors and permitted assigns (if any).
SECTION TWENTY-TWO
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CAPTIONS
Captions of the Sections of this Agreement are for convenience of
reference only, and the words contained therein shall in no way be held to
explain, modify, amplify, or aid in the interpretation, construction or
meaning of the provisions of this Agreement.
SECTION TWENTY-THREE
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WAIVER OF BREACH
No waiver of any breach of any of the terms Of provisions of this
Agreement shall be, or be construed to be, a waiver of any preceding or
succeeding breach of the same or any other provision hereof.
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SECTION TWENTY-FOUR
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CUMULATIVE RIGHTS
No failure on the part of the Employer to exercise, and no delay in
exercising, any right, power, privilege or remedy granted herein shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right power or privilege preclude any other or further exercise thereof
or the exercise of any other right. The rights and remedies provided herein
are cumulative and not exclusive of any other rights or remedies which
Employer shall otherwise have at law or equity.
SECTION TWENTY-FIVE
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CHOICE OF LAW
It is the intention of the parties hereto that this Agreement and the
performance hereunder and all suits and special proceedings hereunder be
governed by and construed in accordance with and pursuant to the laws of the
State of Nevada and that in any action, special proceeding or other
proceeding that may be brought arising our of, in connection with, or by
reason of this Agreement, the laws of the State of Nevada shall be a
applicable and shall govern to the exclusion of the law of any other forum,
without regard to the jurisdiction in which any action or special proceeding
may be instituted.
SECTION TWENTY-SIX
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GENDER, NUMBER, DISCRETION
Masculine, feminine and neuter pronouns shall be substituted freely for
each other, and the plural and singular forms of pronouns shall be
substituted freely for each other in any provision of this Agreement in which
the context appropriately requires such substitution. All article, sections,
paragraph and exhibit references used in this Agreement are to this Agreement
unless otherwise specified. Any reference herein to time of day refers to
local time in Las Vegas, Nevada. Unless the context of this Agreement clearly
requires otherwise, (i) the words "includes" or "including" shall mean
"including without limitation," and (ii) the words "hereof", "herein",
"hereunder", and similar terms in this Agreement shall refer to this
Agreement as a whole and not any particular section or article in which such
words appear. Currency amounts referenced herein are in United States Dollars.
Reference in this Agreement to the "discretion" of a party means the party's
sole and absolute discretion and shall not be subject to any external
standards, including but not limited to, any standard of custom, "good faith"
or reasonableness.
SECTION TWENTY-SEVEN
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ARBITRATION
All claims, disputes and questions whatsoever except those requiring an
equitable remedy (e.g. an injunction against a breach of any restrictive
covenant in Section Nine hereof), which shall arise either during the term of
this Agreement or afterward between the parties hereto or their respective
representatives, relating to this Agreement, or the construction or
application
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hereof, or any other matter in any way relating to the rights, duties, and
liabilities of either party hereunder, shall be referred to a board of
arbitration as follows: Each party shall select one arbitrator, within ten
(10) calendar days of its receipt of a written demand therefor, and these
two arbitrators so chosen shall within ten (10) calendar days of their
appointment, appoint a third arbitrator, and said arbitrators shall, by
majority decision within sixty (60) calendar days thereafter, determine the
matter in dispute. Said arbitrators shall be bound by the terms of this
Agreement and such arbitration shall, be conducted in accordance with the
Uniform Arbitration Act as has been adopted in Chapter 38 of the Nevada
Revised Statutes and as may be amended from time to time. Such determination
shall be final and binding upon the parties. Judgment may be entered upon
such determination and may be specifically enforced in accordance with
applicable law in any court having jurisdiction thereof. The expenses of the
arbitration shall be borne equally by the parties to the arbitration,
provided that each party shall pay for and bear the cost of its own experts,
witness and counsels fees and provided further that any award shall include a
prevailing party's costs, including a reasonable counsel's fee.
THE UNDERSIGNED EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THE FOREGOING
AGREEMENT AND FULLY UNDERSTANDS THE MEANING AND CONSEQUENCES OF EACH AND
EVERY TERM CONTAINED HEREIN. THE UNDERSIGNED EMPLOYEE FURTHER ACKNOWLEDGES
THAT, TO THE EXTENT DEEMED APPROPRIATE, HE HAS EMPLOYED AND CONSULTED WITH
HIS OWN COUNSEL CONCERNING THIS AGREEMENT AND HAVING CONSIDERED SUCH LEGAL
ADVICE, HE HAS EXECUTED IT AS HIS FREE AND VOLUNTARY ACT AND DEED.
IN WITNESS WHEREOF, the parties have executed this Agreement at
Corvallis, Oregon, as of the date above written.
"EMPLOYEE" "EMPLOYER"
Acres Gaming, Inc., a Nevada Corporation
/s/ JOSEPH A. HUSEONICA By: JOHN F. ACRES
- ----------------------------- ------------------------------
Joseph A. Huseonica John F. Acres
Its: Director
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