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Employment Agreement

Employee Retention Agreement

Employment Agreement | Document Parties: SECURED DIVERSIFIED INVESTMENT LTD | Galaxy Gaming, Inc You are currently viewing:
This Employee Retention Agreement involves

SECURED DIVERSIFIED INVESTMENT LTD | Galaxy Gaming, Inc

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Title: Employment Agreement
Governing Law: Nevada     Date: 2/13/2009

Employment Agreement, Parties: secured diversified investment ltd , galaxy gaming  inc
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Employment Agreement

 

This employment agreement (the "Agreement") is made and entered into as of February 8, 2008, by and between Galaxy Gaming, Inc., a Nevada corporation (the "Company") and William E. O'Hara (the "Employee").

 

Recitals

 

A.           The Company is engaged in the business of developing, distributing and otherwise commercializing gaming equipment, games, operating systems for gaming equipment and related products and services throughout the United States, Canada and other countries.

 

B.           Employee understands that Employee will be employed in a sensitive position with access to, and requiring knowledge of confidential and commercially valuable information of the Company and its subsidiaries and affiliates, the unauthorized use or disclosure of which, during and following Employee's separation of employment, could cause the Company and its subsidiaries serious and irreparable injury,

 

C.           Employee also acknowledges that, by virtue of Employee's position with the Company, Employee will have dealings with customers who have close and ongoing relationships with the Company and that Employee's competition for or solicitation of such customers following Employee's separation of employment would cause the Company serious and irreparable injury.

 

D.           Employee acknowledges that the Company would not have entered into this Agreement without Employee's express understanding of and agreement with the confidentiality, non-competition and non-solicitation provisions set forth in this Agreement.

 

E.           The Company desires to employ Employee, and Employee desires to serve as an employee of the Company, on the terms and conditions set forth in this Agreement.

 

In consideration of the mutual covenants and promises of the parties, the Company and Employee agree as follows:

 

1.      Duties

 

During the Term of this Agreement, Employee will be employed by the Company to serve as Operations Manager of the Company and its subsidiaries and affiliates. If the Company achieves public company status during the Term, Employee's title will be Chief Operating Officer but all other terms and conditions of this Agreement shall continue in effect unchanged.  Employee shall devote substantially all of Employee's business time, attention, energy, knowledge, and skill solely and exclusively to the conduct of the business of the Company as may be reasonably necessary to effectively discharge Employee's duties under this Agreement and, subject to the supervision and direction of the Chief Executive Officer of the Company, will perform those duties and have such authority and powers as are customarily associated with the offices of a Chief Operating Officer of a company engaged in a business that is similar to the business of the Company and/or assigned to him by the President, including (Without limitation): (a) the authority to direct and manage the day-to-day operations and affairs of the Company and (b) the authority to hire and discharge employees of the Company. Unless the parties agree otherwise in writing, during the term of this Agreement, Employee will not be required to perform services under this Agreement other than at Company's principal place of business in Clark County, Nevada; provided, however, that Company may, from time to time, require Employee to travel temporarily to other locations

 

 

O'Hara Employment Agreement 

 

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Employee Initial 

 

 

 


 

 

on the Company’s business.  Prior written consent of Company shall be required before Employee may undertake to perform any services whether as an employee, consultant officer, director, etc, of a business, commercial or professional nature, whether for compensation or otherwise, Although Company's consent may not be unreasonably withheld, it shall hereby be" deemed reasonable for Company to deny its consent with respect to any and all outside gaming activities.

 

2. Term of Employment

 

2.1 Definitions

 

For purposes of this Agreement the following terms have the following meanings:

 

(a)           'Severance Period" means that period of time commencing on the date that a Termination Other than for Cause is effected and continuing for twelve (12) months if the Termination Other than for Cause is effected during the first twelve (12) months of the contract, nine (9) months if the Termination Other than for Cause is effected during the second twelve (12) months of the contract and six (6) months if the Termination other than for Cause is effected at any time thereafter.

 

(b)           “Termination for Cause" means termination by Company of Employee's employment by reason of: (i) Employee's material fraud, dishonesty, willful misconduct or gross negligence in the performance of Employee's duties hereunder, including willful failure to perform such duties as may be properly assigned him hereunder; (ii) Employee's breach of the Confidentiality or Non-competition provisions of this Agreement at Sections 5.1 and 5.2; (iii) Employee's material breach of any provision of this Agreement; (iv) Employee's willful or habitual failure to abide by the policies established by the Company; (v) by reason of Employee's gross negligence or intentional misconduct with respect to the performance of Employee's duties under this Agreement (Vi) conviction of or a guilty or nolo contendre plea to a felony or misdemeanor involving moral turpitude; or (vii) Employee's failure to qualify (or, having so qualified, being thereafter disqualified or suspended) or Company’s reasonable determination that Employee would not qualify or would not continue to be qualified under any suitability or licensing requirements to which Employee may be subject by reason of Employee's position with the Company or any of its subsidiaries or affiliates, under the laws of any applicable gaming jurisdiction, except that any such failure to qualify or disqualification or suspension resulting from Employee's corporate conduct, rather than individual conduct, shall not constitute Termination for Cause hereunder; provided however that unless such cause constitutes a crime or jeopardizes the safety or welfare of the Company's property, licenses, employees, or customers (in which case no cure period shall apply) no such termination will be deemed a Termination for Cause under subsections 2.1 (a)(iii),(iv) or (v) unless the Company has provided Employee with written notice of what it reasonably believes are the grounds for any Termination for Cause and Employee fails to cure such grounds to the Company's reasonable satisfaction during the 30 day period following receipt of such written notice.

 

(c)      “Termination Other than for Cause” means termination by Company of Employee's employment at any time in the Company's sole discretion for reasons other than those which constitute Termination for Cause.

 

(d)      “Voluntary Termination” means termination by the Employee of the Employee's employment with the Company, excluding termination by reason of Employee's death or disability as described In Sections 2.5 and 2.6.

 

 

O'Hara Employment Agreement 

 

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Employee Initial 

 

 

 


 

 

2.2           Basic Term

 

The Term of employment of employee by the company will commence on February 18, 2008 and will extend through the period ending on February 28, 2011 (the "Termination Date"). Company and Employee may extend the term of this Agreement by mutual written agreement.

 

2.3           Termination for Cause

 

Termination for Cause may be effected by Company at any time during the term of this Agreement and may be effected by written notification to Employee; provided, however, that no Termination for Cause will be effective unless Employee has been provided with the prior written notice and opportunity for remedial action described in Section 2.1 (a). If the Company believes Employee has engaged in conduct that would constitute Termination for Cause, the Company may suspend Employee with pay until such time as Company has made a decision whether to terminate Employee for cause. Upon Termination for Cause, Employee is to be immediately paid all accrued salary, incentive compensation to the extent earned, vested deferred compensation (other than stock, pension or profit sharing plan benefits, which will be paid in accordance with the applicable plan), accrued vacation pay and reimbursable business expenses, all to the date of termination, but Employee will not be paid any severance compensation. All the provisions and obligations of Employee under Sections 51 and 5.2 will survive Termination for Cause.

 

2.4           Termination Other Than for Cause

 

Notwithstanding anything else in this Agreement, Company may effect a Termination Other Than for Cause at any time upon giving notice to Employee of such Termination Other Than for Cause. Upon any Termination Other Than for Cause, Employee will immediately be paid all accrued salary, all incentive compensation to the extent earned, severance compensation as provided in Section 4, vested deferred compensation (other than stock, pension or profit sharing plan benefits, which will be paid in accordance with the applicable plan), accrued vacation pay and reimbursable business expenses, all to the date of termination. All the provisions and obligations of Employee under Sections 5.1 and 5.2 will survive Termination Other Than for Cause.

 

2.5           Termination Due to-Disability

 

In the event that, during the term of this Agreement, Employee should, in the reasonable judgment of the Company, fail after reasonable accommodation by Company to perform Employee’s duties under this Agreement because of illness or physical or mental incapacity ("Disability ") for more than 30 days in the aggregate in any 12-month period, Company will have the right to terminate Employee's employment under this Agreement by 30 day written notification to Employee and payment to Employee of  all accrued salary and incentive compensation to the extent earned, vested deferred compensation (other than stock, pension or profit sharing plan benefits, which will be paid in accordance with the applicable plan), all accrued vacation pay, and reimbursable business expenses all to the date of termination. All the provisions and obligations of Employee under Sections 5.1 and 5.2 will survive Termination Due to Disability.

 

2.6      Death

 

In the event of Employee's death during the term of this Agreement, Employee’s employment is to be deemed to have terminated as of date of death, and Company will pay to Employee's estate accrued

 

 

 

O'Hara Employment Agreement 

 

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Employee Initial 

 

 

 


 

 

salary, incentive compensation to the extent earned, vested deferred compensation (other than pension plan or profit sharing plan benefits, which will be paid in accordance with the applicable plan), accrued vacation pay, and reimbursable business expenses, all to the date of termination.  Company shall, make the payments to Employee's estate or beneficiary as applicable. If Employee dies during the Severance Period, the remaining Severance due will be paid in a lump sum to the Employee's estate and Employee's estate and/or beneficiary(ies).

 

2.7           Voluntary Termination

 

Employee may voluntarily terminate Employee's employment with the Company by providing the Company with 30-day notice. in the event of a Voluntary Termination, Company will immediately pay to Employee all accrued salary, all incentive compensation to the extent earned, vested deferred compensation (other than pension plan or profit sharing plan benefits, which will be paid in accordance with the applicable plan), accrued vacation pay, and reimbursable business expenses, all to the date of termination, but Employee will not be paid any severance compensation, All the provisions and obligations of Employee under Sections 5.1 and 5.2 will survive Voluntary Termination.

 

3.           Salary, Benefits and Other Compensation

 

3.1           Base Salary

 

As payment for the services to be rendered by Employee as provided in Section 1 and subject to the terms and conditions of Section 2, Company agrees to pay to Employee a "Base Salary," in equal bi-monthly installments The Base Salary will be as follows:

 

Month

Monthly Salary

February 2008

$8000.00 pro-rata

March 2008

$8,000.00

April 2008

$8,500.00

May 2008

$9,000.00

June 2008

$9,500.00

July 2008

$10,000.00

August 2008

$10,500.00

September 2008

$11,000.00

October 2008

$11,500.00

November 2008 and thereafter

$12,000.00


 

3.2           Revenue Growth Incentive

 

Company agrees to also pay to Employee a Monthly Gross Recurring Revenue Increase Incentive on the 20th of each month based on the prior month's increase over the highest monthly gross recurring revenue during the Term. Increased revenue arising from acquisitions, mergers; joint ventures and the like shall not be included. The Monthly Gross Recurring Revenue Increase Incentive will be as follows:

 

 

 

O'Hara Employment Agreement 

 

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Employee Initial 

 

 

 


 

 

Month Payable

Monthly Gross Recurring Revenue Increase Incentive

February and March 2008

No Incentive payable

 

 

April 2008 based on increase inMarch 2008

15% of Monthly Gross Recurring Revenue Increase

 

 

May 2008 based on increase in April 2008

15% of Monthly Gross Recurring Revenue Increase

 

 

June 2008 based on increase in May 2008

15% of Monthly Gross Recurring Revenue Increase

 

 

July 2008 based on increase inJune 2008

12.5% of Monthly Gross Recurring Revenue Increase

 

 

August 2008 based on increase in July 2008

12.5% of Monthly Gross Recurring Revenue Increase

 

 

September 2008 based on increase in August 2008

12.5% of Monthly Gross Recurring Revenue Increase

 

 

October 2008 based on increase in September 2008

10% of Monthly Gross Recurring Revenue Increase

 

 

November 2008 based on increase in October 2008

1 0% of Monthly Gross Recurring Revenue Increase

 

 

December 2008 based on increase in November 2008

1 0% of Monthly Gross Recurring Revenue Increase

 

 

January 2008 and thereafter

10% of Monthly Gross Recurring Revenue Increase

 

The Monthly Gross Recurring Revenue Increase shall mean that month's increase in gross recurring revenue over the highest monthly gross recurring revenue occurring at any time during the Term. For example:

 

(a)  

If the Company's monthly gross recurring revenue in March 2008 is $100,000 and in April 2008 is $110,000, Company would pay to Employee on May 20,2008 a Revenue Growth Incentive of $10,000.00 x 15% 0= 5;1500.00

 

(b)  

If the Company's monthly gross recurring revenue history is as follows:

 

Month

Gross Monthly Recurring Revenue

March 2008

$100,000

April 2008

$110,000

May 2008

$105,000

June 2008

$108,000

July 2008

$112,000

 

Employee would receive Revenue Growth incentives as follows:

 

Date

Revenue Growth Incentive

May 20, 2008                    

$10,000 (increase in April) x 15%  = $1500

June 20, 2008                    

$0 monthly gross recurring revenue decreased in May

July 20, 2008

$0 monthly gross recurring revenue increased in June over May but  not over highest previous point which occurred in April

August 20, 2008

$2,000 (increase in July over previous high in April) x 12.5% = $250

 

 

 

O'Hara Employment Agreement 

 

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Employee Initial 

 

 

 


 

 

3.3           Section 125 Plan Benefits

 

As Employee becomes eligible per Company's policy, Employee will receive Section 125 Plan Benefits as a level 4 employee pursuant to Appendix B attached hereto as may be amended from time to time by Company.

 

3.4           Incentive Bonus Plans

 

If Company becomes a public company and if there is a public offering, to the extent allowed by Securities and Exchange regulations and other applicable laws and regulations. Employee shall be eligible for pre-public offering stock purchase and to participate in any Company stock option programs on the same basis as an employee of comparable position and compensation as Employee, provided however: (i) Company is not obligated to and there is no guaranty that it will become a public company; (ii) Company is making no representation and is not obligated to provide any stock options to its employees or Employee at all; (iii) Company may structure its stock option plan(s), if any, in its sole discretion in accord with its business plans and purposes; and (iv) the Company's Board of Director(s) shall have sole discretion in determining who may or may not be entitled to stock options under the plan.  As Employee becomes eligible, Employee shall be entitled to participate in all bonus, incentive, stock option, savings, and retirement plans, policies, and programs made available by the Company to other peer  employees of the Company.

 

3.5           Benefit Plans

 

During the term of Employee's employment under this Agreement, the Employee is eligible to participate in all employee benefit plans to the extent maintained by the Company, including (without limitation) any life, disability, health, accident and other insurance programs, paid time off, and similar plans or programs, subject in each case to the generally applicable terms and conditions of the plan or program in question and to the determinations of any committee administering such plan or program. On termination of the Employee for any reason, the Employee will retain all of Employee's rights to benefits that have vested under such plans, but the Employee's rights to participate in these plans will cease on the Employee's termination (unless contrary to law, e.g., COBRA rights) unless the termination is a Termination Other Than for Cause, in which case Employee's rights of participation will continue for a period of six (6) months following Employee's termination,

 

3.6           Withholding of Taxes

 

The Employee understands that the services to be rendered by Employee under this Agreement will cause the Employee to recognize taxable income, which is considered under the Internal Revenue Code of 1986, as amended, and applicable regulations thereunder as compensation income subject to the Withholding of income tax (and Social Security or other employment taxes). The Employee hereby consents to the withholding of such taxes as are required by the Company.

 

3.7           Paid Time Off

 

As Employee becomes eligible per Company's policy, Employee will receive paid time off to be used for vacation, sick and/or personal days as a level 4 employee pursuant to Appendix B attached hereto as may be amended from time to time by Company.

 

 

O'Hara Employment Agreement 

 

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Employee Initial 

 

 

 


 

 

3.7           Expenses

 

During the term of this Agreement, Company will reimburse Employee for employee's reasonable out-of-pocket expenses incurred in connection with Company’s business, Including travel expenses, food and lodging while away from home, subject to such  policies as Company may from time to time reasonably establish for its employees.

 

3.8           Changes by Company

 

The Company reserves the right to modify, suspend, not implement or discontinue any and all of the above-mentioned plans, practices, policies, benefits, and programs at any time as long as such action is taken generally with respect to other similarly situated peer employees of the Company and may structure the plan, practices, policies, benefits and programs, if any, in its sole discretion in accord with its business plans and purposes.

 

4.      Severance Compensation

 

4.1     Termination Other Than for Cause

 

In the event Employee's employment is terminated in a Termination Other Than for Cause, Employee will be paid as severance pay Employee's Base Salary at that time plus Section 125 plan benefits during the Severance Period, on the dates specified in Section 3.1 for payment of Employee's Base Salary, provided, however, that Employee's entitlement to any such payments or benefits shall be expressly Subject to, contingent upon, and in consideration of (i) the continued validity and enforceability of Sections 5.1 and 5.2 hereunder, and (ii) the Company receiving a release prepared by the Company and executed by Employee, waiving and releasing the Company, its subsidiaries and affiliates, and their officers, directors, agents, benefit plan trustees and employees from any and all claims, whether known or unknown, and regardless of type, cause or nature, including but not limited to claims arising under all salary, bonus, stock, paid time off, insurance and other benefit plans and all state and federal anti-discrimination, civil rights and human rights laws, ordinances and statutes, including Title VII of the Civil Rights Act of 1964 and 1991, the Age Discrimination in Employment Act as amended by the Older Workers Benefit Protection Act of 1990, and the American's with Disabilities Act covering Employee's employment with the Company, its subsidiaries and affiliates, and the cessation of that employment.

 

During the Severance Period, Employee shall remain an employee of the Company solely for group health and life insurance purposes and for the ability to exercise stock options, and shall receive service credit therefore during that period. Employee will be responsible for the employee portion of the cost of such insurance during the Severance Period similar to other employees.

 

Notwithstanding anything to the contrary in this Section 4.1, the Company's obligations under this Section 4.1 shall cease (except for obligations pursuant to the terms of any benefit plan or law, e.g., COBRA) and Employee shall immediately return all severance payments previously) received during the Severance Period if Employee breaches in any material respect any of the covenants set forth in Sections 5.1 or 5.2 of this Agreement and such breach is not cured to the Company's satisfaction within ten days from the date written notice thereof is given to Employee by the Company. Employee understands that the Company additionally shall have the right to seek enforcement of Employee's obligations under Sections 5.1 and 5.2

 

 

 

O'Hara Employment Agreement 

 

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Employee Initial 

 

 

 


 

 

4.2           Other Termination

 

In the event of " Voluntary Termination, Termination for Cause, Termination for Death, or Termination Due to Disability, Employee or Employee's estate will not be entitled to any severance pay.

 

5.           Confidentiality and Non-competition

 

5.1         Confidentiality

 

(a)      Employee's position with the Company will or has resulted in exposure and access to confidential and proprietary information which Employee did not have access to prior to holding the position, which information is of great value to the Company and the disclosure of which, directly or indirectly, would be irreparably injurious and detrimental to the Company, Employee agrees to use best efforts and to observe the utmost diligence to guard and protect all confidential or proprietary information relating to the Company from disclosure to third parties, Employee shall not at any time use or make available, either directly or indirectly, to any competitor or potential competitor of the Company or any of its subsidiaries, or their affiliates or divulge, disclose, communicate to any firm corporation or other business entity in any manner whatsoever, any confidential or proprietary information covered or contemplated by this Agreement unless exp


 
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