EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), dated as of April 15, 1997 between
MULTIPLE APPLICATION TRACKING SYSTEM, INC. (The "Company"), a Colorado
corporation with offices c/o Trans World Gaming Corp. ("TWG") at One Penn Plaza,
Suite 1503, New York, New York 10119-0002, and JAMES R. HARDMAN, JR., with an
address at 14114 West 1st Drive, Golden, Colorado 80401 (the "Employee").
The Company desires to engage Employee to perform services on behalf of the
Company, and Employee desires to perform such services, on the terms and
conditions hereinafter set forth:
1. EMPLOYMENT PERIOD
The Company agrees to employ the Employee in the capacity of President
of the Company and Employee agrees to serve on the terms and conditions of this
Agreement for a period commencing on the date of this Agreement first above
written and ending five (5) years hereafter (the "Employment Period").
2. DUTIES & SERVICES
(a) During the Employment Period, Employee shall be employed in the
capacity of President of the Company. In performance of his duties, Employee
shall be subject to the direction of and report to the Board of Directors of the
Company. Employee agrees to devote full time to the affairs of the Company, to
discharge his duties hereunder to the best of his abilities and to take no
action outside of the ordinary course of business that he is not specifically
authorized to take by the Board of Directors of the Company. The foregoing
provisions of this Section 2 shall constitute material terms of this Agreement.
Employee's office shall be based in the Denver, Colorado area, but Employee
shall be available to travel as the needs of the business and his obligations
hereunder require. Employee shall not engage in any other business, profession
or occupation for compensation or otherwise without the prior written consent of
the Company's Board of Directors.
(b) The provisions of Section 2(a) above notwithstanding, the parties
agree that Employee owns the "Reserved Assets" set forth in Exhibit 2(b) hereto
and made a part hereof. Employee may separately pursue the "Reserved Assets" so
long as Employee does not engage in any material sales, marketing, development,
or other substantive tasks, and so long as such matters do not interfere with
Employee's full-time duties under this Agreement. In the event Employee
believes a new idea, product, business or other matter is worthwhile to pursue,
Employee shall present same to the Company for review. Should Company decide to
pursue such matter, it shall do so on terms it deems appropriate; if not,
Employee may not pursue any such matter independently.
3. COMPENSATION.
As full compensation for his services hereunder, the Company shall pay
Employee, during the Employment Period, as follows:
(a) A basic salary payable in semi-monthly installments at the annual
rate of one hundred thousand dollars ($100,000) for each year of the Employment
Agreement, such payments to be made in accordance with the Company's usual
payroll practices.
(b) Employee will be eligible for participation in Trans World Gaming
Corp.'s ("TWG's") November 1996 Management Incentive Plan and TWG's Incentive
Stock Plan, as these plans may be amended or replaced from time to time, or
equivalent plans of the Company as may be established from time to time
(collectively, the "Plans"). For purposes of the Plans, Employee shall be
entitled to benefits at the level of and deemed to be a "Vice President of
Operations" or "VP Operations".
(c) The Company has no current plan relative to cost of living
increases or salary increases, although the Company reserves the right, in its
sole discretion, in the future to grant such cost of living or salary increases.
(d) Employee shall further be entitled to participate in the present
or future employee benefit plans of the Company as may be established by the
Company from time to time subject to the approval of the Board of Directors if
Employee meets the eligibility requirements therefor.
4. EXPENSES.
Employee shall be entitled to reimbursement for reasonable travel and
out-of-pocket expenses as are reasonably and necessarily incurred in the
performance of Employee's duties hereunder, upon submission of written
statements and/or bills in accordance with the then regular policies and
procedures of the Company then in effect.
5. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE.
Employee represents and warrants to the Company that Employee is under
no contractual or other restriction which is inconsistent with the execution of
this Agreement or performance of any of Employee's duties hereunder.
6. INVENTIONS/NON-COMPETITION/CONFIDENTIAL INFORMATION.
(a) DEFINITIONS
(i) "Confidential Information" includes all past, current or
future business information and records which relate to the Company (for
purposes of this Section 6, "Company" shall include Company's parent companies,
subsidiaries or affiliates) and which are not known to the public generally,
including but not limited to technical notebook records, copyrights, patent
applications, machine equipment, processes and product designs including any
drawings and descriptions thereof; unwritten knowledge and "know-how"; operating
instructions; training manuals; production and development processes; production
schedules; customer lists; customer buying and other customer related records;
product sales records; territory listings, market surveys; marketing plans;
long-range plans, salary information;
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contracts; supplier lists; and correspondence, and all summaries,
compilations, analyses and reproductions of the above in whatever form or
format.
(ii) "Invention" shall mean any discovery, invention,
improvement, trademark, design, logo, copyright, development, process, idea, or
other intellectual property right.
(b) INVENTIONS.
(i) Employee shall disclose promptly to the Company any
Invention, patentable or otherwise, which during the Employment Period has been
or may be hereafter conceived, developed or perfected by Employee, either alone
or jointly with another or others, and either during or outside the hours of
such employment, and which pertains to any activity, business, process,
equipment, material or product whether or not the Company has a direct or
indirect interest therein except for the Reserved Assets only.
(ii) Employee hereby grants to the Company all his right, title
and interest in and to any such Invention, together with all United States and
foreign Letters Patent that may at any time be granted therefor and all
reissues, renewals and extension of such Letters Patent, any and all of which
(whether made, held or owned by Employee, directly or indirectly), and any and
all other interests or intellectual property rights shall be for the sole use
and benefit of the Company, which shall be at all times entitled thereto. At
the request and expense of the Company, Employee will perform any act, and
prepare, execute and deliver any written instrument (including descriptions,
sketches, drawings and other papers), and render all such other assistance as in
the opinion of the Company may be necessary or desirable to (A) vest full right
and title to each such Invention in the Company, (B) enable it lawfully to
obtain and maintain such full right and title in any country whatsoever,
(C) prosecute applications for and secure patents (including the reissue,
renewal and extension thereof), trademarks, copyrights and any other form of
protection with regard to such Invention, and (D) prosecute or defend any
interference or opposition which may be declared involving any such application
or patent, and any litigation in which the Company may be involved with respect
to any such Invention. The grant and the obligation set forth in this paragraph
shall survive the termination of Employee's employment, and shall be binding on
Employee's executors, administrators or assigns, unless waived in writing by the
Company.
(c) CONFIDENTIAL INFORMATION. Except in the event that (i) this
Agreement is terminated for a reason other than for "Cause" by the Company, and
(ii) Company and/or TWG has not paid the "Copyright Transfer Payment" (defined
in the "License Agreement" as defined below) or otherwise exercised its or their
right to make such Copyright Transfer Payment upon termination (in which event
both Company (and/or TWG) and Employee may use such Confidential Information),
Employee will not, directly or indirectly, during or at any time after the
Employment Period, use for himself or others, or disclose to others, any
Confidential Information, whether or not conceived, developed or perfected by
Employee and no matter how it became known to Employee, unless he first secures
the written consent of the Company to such disclosure or use, or until the same
shall have lawfully become a matter of public knowledge.
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(d) RETURN OF RECORDS. Except in the event that (i) this Agreement
is terminated for a reason other than for "Cause" by the Company, and
(ii) Company and/or TWG has not paid the Copyright Transfer Payment in the
License Agreement or otherwise exercised its or their right to make the
Copyright Transfer Payment upon termination (in which event both Company and
Employee may use or maintain such records), upon termination of his employment
for any reason, or at any other time upon request by Company, Employee will
promptly deliver to the Company all Confidential Information and documents and
records which are in his possession or under his control and which pertain to
the Company, any of its activities or any of Employee's activities in the course
of his employment with Company. Such documents and records include but are not
limited to technical notebook records, technical reports, patent applications,
drawings, reproductions, and process or design disclosure information, models,
schedules, lists of customers and sales, sales records, sales requests, lists of
suppliers, plans, correspondence and all copies and reproductions thereof.
Employee will not retain or deliver to any third person copies, analyses,
compilations, summaries or reproductions of any such documents or records.
(e) NON-COMPETITION. Except in the event that (i) this Agreement is
terminated for a reason other than for "Cause" by the Company, and (ii) Company
and/or TWG has not paid the Copyright Transfer Payment in the License Agreement
or otherwise exercised its or their right to make the Copyright Transfer Payment
upon termination, during the Employment Period and for the one (1) year period
which immediately follows the termination of employment, Employee will not,
without the written consent of the Company, either as principal, shareholder,
agent, consultant, employee, officer, director, partner, owner of equity
interest, or otherwise, engage in any work or other activity (x) in or directly
related to the specific areas or subject matters in which Employee worked during
the Employment Period or (y) involving or directly related to the specific areas
or subject matters in which Employee worked during the Employment Period or
(z) involving or directly related to Confidential Information of which Employee
became aware or to which Employee had access during the Employment Period.
Employee shall consult the Company before engaging in any activity which might
violate the provisions of this section, it being understood that his activities
shall be limited hereby only to the extent that such limitation is reasonably
necessary for the protection of the Company's interests for the period
determined in accordance with this section.
(f) NON-SOLICITATION. Except in the event that (i) this Agreement is
terminated for a reason other than for "Cause" by the Company, and (ii) Company
and/or TWG has not paid the Copyright Transfer Payment in the License Agreement
or otherwise exercised its or their right to make the Copyright Transfer Payment
upon termination, during the Employment Period and for the one (1) year period
which immediately follows the date of termination of employment, Employee shall
not, directly or indirectly, knowingly, or under circumstances in which he
reasonably should have known, induce any employee of the Company to engage in
any activity in which Employee is prohibited from engaging by Section 6(e) above
or to terminate his employment with the Company and shall not, directly or
indirectly, knowingly, or under circumstances in which Employee reasonably
should have known, employ or offer employment to any such person unless such
person shall have ceased to be employed by the Company and such cession of
employment shall have occurred at least twelve (12) months prior thereto.
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(g) Nothing in this Section 6 shall limit Employee's obligations
under applicable law with respect to the subject matter hereof or Company's
rights and remedies under applicable law.
7. SPECIFIC PERFORMANCE AND OTHER REMEDIES.
Employee acknowledges and agrees that the Company has no adequate
remedy at law for a breach or threatened breach of any of the provisions of
Section 6 and, in recognition of this fact, Employee agrees that, in the event
of such a breach or threatened breach, in addition to any remedies at law, the
Company, without posting any bond and with written notice of two (2) business
days to the Employee, shall be entitled to obtain equitable relief in the form
of specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available. Nothing
in this Agreement shall be construed as prohibiting the Company from pursuing
any other remedies at law or in equity that it may have or any other rights that
it may have under any other agreement.
8. KEY-MAN LIFE INSURANCE.
If reasonably requested by the Company, Employee shall submit to such
reasonable physical examinations and otherwise take such actions and deliver
such documents as may be reasonably necessary to enable the Company at its
expense and for its own benefit, to obtain "key-man" life insurance or similar
insurance on the life of Employee.
9. TERMINATION.
Upon a termination of the Employment Period prior to the scheduled
expiration date, Employee shall be entitled to the payments described in this
Section 9.
(a) FOR CAUSE BY THE COMPANY; BY EMPLOYEE WITHOUT GOOD REASON. The
Employment Period may be terminated prior to its scheduled expiration date by
the Company, subject to the provisions of this Section 9(a), "for Cause" (as
defined below) or by Employee "without Good Reason" (as defined below). If the
Employment Period is terminated by the Company for Cause or by Employee without
Good Reason, Employee shall be entitled to receive his base salary through the
date of termination, and any unreimbursed business expenses, payable promptly
following the latter of the date of such termination and the date on which the
appropriate documentation is provided. All other benefits following a
termination of the Employment Period pursuant to this Section 9(a) shall cease
except for continued medical benefits under COBRA, and vested benefits, if any,
under ERISA.
(b) DEATH; DISABILITY; BY THE COMPANY WITHOUT CAUSE; BY EMPLOYEE WITH
GOOD REASON.
(i) Employment Period shall terminate effective upon the death
of the Employee.
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(ii) If the Employee incurs a "Disability" (as defined in the
Management Incentive Plan), the Employment Period shall terminate pursuant to
the applicable provisions of the Management Incentive Plan.
(iii) The Employment Period may be terminated prior to the
scheduled expiration date by the Company without cause or by the Employee with
good reason. In such event, Employee shall receive (A) continued payment of
base salary in a lump sum on the termination date for the lesser of one (1) year
or the remainder of the Employment Period and benefits, if any, which may have
accrued as of the termination date under the Management Investment Plan; and
(B) any unreimbursed business expenses payable promptly following the latter of
the date of such termination and the date upon which the appropriate
documentation is provided.
(c) DEFINITIONS. For purpose of this Section 9, the following terms
shall have the following meanings:
(i) "Cause" shall mean:
(A) Employee's willful or negligent failure to
substantially perform his duties under the Agreement, or a breach of this
Agreement including, without limitation, the provisions of Section 6 hereof,
which failure or breach continues for more than sixty (60) days after receipt by
the Employee of written notice setting forth the facts and circumstances
identified by the Company as constituting adequate grounds for termination under
this clause (A),
(B) any willful or negligent act or omission by Employee
constituting dishonesty, fraud or other malfeasance, and any act or omission by
Employee constituting immoral conduct, which in any such case is injurious to
the financial condition or business reputation of the Company or any of its
affiliates,
(C) Employee's indictment for a felony under the laws of
the United States or any state thereof or any other jurisdiction in which the
Company conducts business,
(D) Employee's resignation, or
(E) Termination of the License Agreement (the "License
Agreement") of even date hereof between Employee (as Owner-licensor) and TWG (as
licensee) as a result of Employee's breach thereof.
(ii) "Good Reason" shall mean a material breach by the Company of
any of its obligations under the Agreement and the License Agreement which
continues for more than sixty (60) days after detailed notice to Company.
(d) In the event of (i) termination of this Agreement or the License
Agreement for any reason except as a result of a breach by Company hereunder or
by TWG under the License Agreement, and (ii) the "Copyright Transfer Payment"
(as defined in the License
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Agreement) has not already been paid by Company and/or TWG as of such
termination date, the Company and/or TWG may, in its or their sole
discretion, pay the remaining balance of the Copyright Transfer Payment to
acquire full legal and equitable title to the Licensed Product, Licensed
Software and Copyrights (as those terms are defined in the License Agreement)
free of any encumbrances or restrictions pursuant to the provisions of
Section 12(e) of the License Agreement.
(e) Neither Employee nor Company and/or TWG may terminate this
Agreement or the License Agreement during the initial twenty-four (24) months of
the Employment Period as a result of levels of Company sales or funding and
marketing levels for Company products and services.
(f) NOTICE OF TERMINATION. Any purported termination of the
Employment Period prior to its scheduled expiration by the Company or by
Employee shall be communicated by written notice of termination to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so
indicated. The written notice referred to in Section 9(a) shall satisfy the
requirements of this Section 9(f) if the determination of the Board of Directors
referred to in Section 9(a) is subsequently made in accordance with such
Section 9(a), but the Employee's termination of employment shall not be
effective until the Board of Directors by majority vote has made such
determination in accordance with such Section 9(a).
Nothing contained in this Section 9 shall be deemed to limit any other
right the Company may have to terminate the Employee's employment hereunder upon
any ground permitted by law.
10. SURVIVAL.
The convenants, agreements, representations and warranties contained
in or made pursuant to this Agreement shall survive Employee's rightful
termination of employment. If any such termination is wrongful, then, except,
as provided in Section 6, such convenants, agreements, representations and
warranties shall not survive.
11. MODIFICATIONS/ENTIRE AGREEMENT.
Except to the extent that the parties have certain obligations and
rights under the License Agreement, this Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between the parties concerning such subject
matter, and may be modified only by a written instrument duly executed by both
of the parties hereto.
12. NOTICES.
Any notice or other communication permitted or required to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested or delivered
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against receipt to the party to whom it is to be given; if to Employee, at
his address set forth in the preamble to this Agreement (or to such other
address as the party shall have furnished in writing and in accordance with
the provisions of this Section 12), and if to the Company, as follows:
Multiple Application Tracking System, Inc. c/o Trans World Gaming Corp., at
One Penn Plaza, Suite 1503, New York, NY 10119-0002 , Attn: Mr. Dominick
Valenzano, with a copy to Oppenheimer Wolff & Donnelly, One Citicorp Center,
153 East 53rd Street, 26th Floor, New York, New York 10022-4611, Attn:
Richard P. Altieri, Esq. Notice to the estate of Employee shall be
sufficient if addressed to Employee as provided in this Section 12. Any
notice of other communication given by certified mail shall be deemed given
at the time of certification thereof, except for a notice changing a party's
address which shall be deemed given at the time of receipt thereof.
13. WAIVER/SEVERABILITY.
(a) WAIVER. Any waiver by either party of a breach of any provision
of this Agreement shall not operate as or be construed to be waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term
of this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must in writing.
(b) SEVERABILITY. It is expressly understood and agreed that
although Employee and the Company consider the restrictions contained in
Section 6 to be reasonable, if a final judicial determination is made by the
court of competent jurisdiction that the time or territory restriction in
Section 6 or any other restriction contained in Section 6 is an unenforceable
restriction against Employee, such provision shall not be rendered void but
shall be deemed amended to apply to such maximum time and territory, if
applicable, or otherwise to such maximum extent as such court may judicially
determine or indicate to be enforceable. Alternatively, if any court of
competent jurisdiction finds that any restriction contained in Section 6 is
unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained therein. In the event that any one or more of the
other provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
14. BINDING EFFECT.
Employee's rights and obligations under this Agreement shall not be
transferable by assignment or otherwise, such rights shall not be subject to
communications, encumbrance or other claims of Employee's creditors and any
attempt to do any of the foregoing shall be void. The Company's rights or
obligation under this Agreement shall not be transferable by assignment or
otherwise, unless Employee at his sole option, elects to accept and be bound by
such transfer or assignment, provided that, for purposes hereof, a change in
ownership or control, corporate restructuring, merger and the like; or transfer
to an affiliated entity of Company shall not be deemed a transfer or assignment
requiring Employee's approval. The provisions of this Agreement shall be
binding upon and inure to the benefit of Employee and his heirs and personal
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representative and shall be binding upon and inure to the benefit of the Company
and its successors and assigns.
15. NO THIRD PARTY BENEFICIARIES.
This Agreement does not create and shall not be construed as creating
any rights enforceable by any person not a party to this Agreement, except as is
provided in Sections 9 and 14 of this Agreement.
16. HEADINGS.
The headings in this Agreement are solely for the convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
17. COUNTERPARTS, GOVERNING LAW
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. It shall be governed and construed in accordance
with the laws of the State of Colorado without giving effect to conflict of
laws.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above-written.
COMPANY:
MULTIPLE APPLICATION
TRACKING SYSTEM, INC.
By: /s/ Andrew Tottenham
------------------------------------
Name: Andrew Tottenham
Title: President
EMPLOYEE:
/s/ James R. Hardman, Jr.
------------------------------------
James R. Hardman, Jr.
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