Sample Business Contracts

Employment Agreement - Autotote Corp. and Michael D. Harris

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  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
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  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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                             AUTOTOTE CORPORATION
                              888 Seventh Avenue
                                  Suite 1808
                           New York, New York 10106

                             As of April 24, 1995

Mr. Michael D. Harris
4120 Paran Pointe Drive
Atlanta, GA 30327-3127

Dear Mr. Harris:

        Autotote Corporation (the "Company") wishes to retain your services upon
the following terms and conditions:

        1. Employment and Offices. You will serve as a Vice President of the
Company and as the President of its principal operating subsidiary, Autotote
Systems, Inc. You will have direct reporting responsibility for all North
American operations of the Company providing technology based wagering products,
systems and services to institutional customers, including state and national
lotteries and parimutuel networks in North America, South America and Asia and
will report to the Company's Chief Executive Officer.

        2. Term. The term of this Agreement shall commence on April 24, 1995
(the "Effective Date") and shall end eighteen (18) months thereafter (the
"Initial Term"); provided however, that the term of this Agreement shall be
                 -------- -------
automatically extended thereafter from time to time so that twelve months shall
remain until the end of the term (the "Additional Term").

        3. Services. You agree to accept employment on a full time basis and to
perform, to the best of your ability, the duties, undertake the responsibilities
and exercise the authority contemplated by the positions set forth in Section 1
hereof, without commitment to other business endeavors.

Mr. Michael D. Harris                 -2-                   As of April 24, 1995

     4. Compensation

          (a) Base Salary. As base salary for your services as described in
     Section 3 above, and for the covenants set forth in Section 7 hereof, the
     Company will pay you a base salary of $250,000 per year ("Base Salary"),
     payable according to the Company's regular pay practices, subject to
     increase based upon annual written appraisals of your performance

          (b) Performance Bonus. In addition to the amount payable as provided
     in Section 4(a) hereof, you shall be eligible to receive, in respect of the
     fiscal year ending October 31, 1996 and each subsequent fiscal year during
     the term of this Agreement, an annual performance bonus of up to 45% of
     Base Salary (the "Bonus") based on the formula applicable to Group A
     operating executives as set forth in the Company's executive incentive
     compensation plan as in effect from time to time.

          (c) Guaranteed Bonus. You will receive bonus payments of $50,000 on
     October 31, 1995 and of $50,000 on May 31, 1996. The May 31, 1996 payment
     shall be credited against any Bonus payable under Section 4(b) in respect
     of the fiscal year ended October 31, 1996.

          (d) You will be granted a ten-year option (the "Option") to purchase
     150,000 shares of the Company's Class A Common Stock, $.01 par value per
     share (the "Common Stock"), which shall become exercisable in three equal
     installments, on each of the first, second and third anniversaries of the
     Effective Date. The exercise price of the Option shall be the lower of the
     closing price of the Common Stock on the NASDAQ National Market System on
     (x) the trading day immediately preceding the Effective Date, or (y) the
     date of the announcement by the Company of your employment.

          (e) For the period beginning on the Effective Date and ending on the
     date of your permanent relocation to the area where you perform your duties
     hereunder (the "Interim Period"), the Company will reimburse you for all
     reasonable costs of interim housing, including meals, rental and other
     related expenses, incurred by you. In addition, during the Interim Period,
     the Company agrees to pay for round-trip air travel between the location
     where you perform your duties hereunder and Atlanta, Georgia, for either
     you or your wife once each week.

          (f) The Company agrees to promptly reimburse you for all moving
     expenses and transaction costs associated with the sale of your current
     home in Atlanta, Georgia (the "Atlanta Home") and the purchase of your new
     home in the location where you

Mr. Micheal D. Harris               -3-                     As of April 24, 1995

perform your duties hereunder, including the excess, if and, of (x) $313,500
over (y) the gross sale price of the Atlanta Home (collectively, "Relocation
Expenses"). All expense reimbursements for Relocation Expenses shall be
tax-effected such that the amount of reimbursement received by you net of any
taxes and withholdings (including such amounts in respect of payments pursuant
to this sentence) equals the expense incurred.

      (g)  The Company agrees to pay you a signing bonus of $25,000 within 30
days of the Effective Date.

5.  Termination of Employment.

      (a)  Notice: Termination Without Cause.  Either the Company or you may
terminate this Agreement upon thirty (30) days' prior written notice to the
other; provided, however, that if the Company terminates this Agreement during
the Initial Term or the Additional Term other than for Cause (as defined in
Section 5(d)), you shall be entitled to collect from the Company a lump-sum
payment equal to (x) your Base Salary for the remainder of the Initial Term or
the Additional Term then in effect, as the case may be, plus (y) any Bonus
payable under Section 4(b) hereof in respect of periods prior to termination,
and your health and medical benefits shall continue until the conclusion of the
Initial Term or the Additional Term or until you obtain new employment,
whichever is sooner. The Company may terminate your employment hereunder for
Cause, as defined in Section 5(d), at any time upon notice to you. Additionally,
if the Company terminates this Agreement other than for Cause prior to the first
anniversary of the Effective Date, options for 50,000 shares of Common Stock
under the Option shall be immediately exercisable. No payments or benefits shall
be due under this Section 5(a) if a payment is due under Section 5(b) hereof.

      (b)  Payments Due and Vesting of Options Upon a Change of Control.  If
during the Initial Term or the Additional Term a Change of Control, as defined
in Section 5(e) occurs, you shall be entitled:

           (i)   to collect from the Company a lump-sum payment equal to Base
                 Salary plus the full amount of all Bonuses potentially payable
                 under Section 4(b) hereof for the remainder of the Initial
                 Term, or the Additional Term, as the case may be;

           (ii)  to the continuation of your health and medical benefits until
                 the conclusion of the Initial Term or the Additional Term or
                 until you obtain new employment, whichever is sooner, and

Mr. Michael D. Harris                 -4-                   As of April 24, 1995

          (iii)  the Option shall be accelerated to become fully vested and
                 exercisable in full 10 days prior to the anticipated effective
                 date of the Change of Control and will terminate as of the
                 effective date of the Change of Control.

     (c)  Constructive Termination.  A termination nominally at your initiative
          but in fact induced without Cause by the Company shall be deemed a
          "Constructive Termination" by the Company. Without limiting generality
          of the foregoing sentence, a Constructive Termination shall include
          (i) a material diminution in your employment responsibilities or
          authority, as the same may be increased from time to time; (ii) the
          assignment to you of duties inconsistent with your status as the Vice
          President of the Company and the President of its principal operating
          subsidiary; (iii) a material diminution in your job description, title
          or reporting responsibilities; (iv) any reduction in your Base Salary
          as in effect on the date hereof or as the same may be increased from
          time to time; (v) any reduction in the practical bonus potential to
          less than 45% of your Base Salary as in effect on the date hereof or
          as the same may be increased from time to time; (vi) any failure by
          the Company to pay any amounts payable to you hereunder when due;
          (vii) the assignment to you of, or any requirement that you perform,
          any duties that are illegal or that you determine, in good faith, are
          immoral or unethical; or (viii) any material breach by the Company of
          this Agreement. In the event of a Constructive Termination by the
          Company, you shall be entitled to the same payments and other rights
          inuring to your benefit under Section 5(b).
     (d)  Voluntary Termination or Termination by the Company for Cause.  If
during the Initial Term or the Additional Term your employment should terminate
by reason of your voluntary act (other than as provided in Section 5(b)), or if
the Company shall terminate your employment for Cause, you shall not be entitled
to any compensation after such termination.

     (e)  Definitions.  For purposes of this Agreement.

          (i)    "Cause" shall mean the following: (A) a willful failure to
                 carry out a reasonable, legal directive of the Board of
                 Directors or the Chief Executive Officer; (B) disloyalty, bad
                 faith or embezzlement of funds of the Company; or (C) gross
                 negligence or willful misconduct that is materially harmful to
                 the Company. "Cause" shall also mean conviction of fraud or any
                 other crime


Mr. Michael D. Harris                 -5-                   As of April 24, 1995

                       that would materially and adversely affect the Company's
                       reputation or ability to conduct its business. Cause
                       shall be established by the good faith determination of
                       the Board of Directors; and

                 (ii)  "Change of Control" means the acquisition of
                       substantially all the Company's outstanding stock by a
                       single person or entity or by a group of persons and/or
                       entities acting in concert or the sale or transfer of
                       substantially all the Company's assets.

          (f)  Death.  Upon your death this Agreement shall terminate.  The
     Company shall be obligated to make all Base Salary payments to you or your
     legal representative accrued up to the date of death.

          (g)  Disability.  In the event of your disability (whether total or
     partial, and whether temporary or permanent) which prevents your
     performing your duties hereunder, you shall be entitled to receive your
     Base Salary hereunder pursuant to Section 5(a) for the period of
     disability; provided, however, that if at any time after six months of
     disability your disability is total and permanent, or your are, as a result
     thereof, incapable of performing your duties under this Agreement, the
     obligation of the Company to make payments to you pursuant to this
     paragraph shall terminate from and after such date and this Agreement
     shall terminate. Disability shall be determined by a physician selected by
     mutual agreement of you or your personal representative and the Company.

          (h)  Limitations.  Notwithstanding anything in this Agreement to the
     contrary, the maximum amount of cash and other benefits payable (whether on
     a current or deferred basis and whether or not includible in income for
     income tax purposes) under this Agreement (the "Contract Benefits") shall
     be limited to the extent necessary to avoid causing any portion of such
     Contract Benefits, or any other payment in the nature of compensation to
     you, to be treated as a "parachute payment" with the meaning of Section
     280G(b)(2) of the Internal Revenue Code of 1986, as amended. Any adjustment
     required to satisfy the limitation described in the preceding sentence
     shall be accomplished first by reducing any cash payments that would
     otherwise be made to you and then, if further reductions are necessary, by
     adjusting other benefits as determined by the Company.

     6.  Insurance for the Benefit of the Company.  You agree that the Company
may at any time or times and for the Company's own benefit (or for a lender to
the Company) apply for and take out life, health, accident and other insurance
covering you, either independently or together with other, in any amount which
the Company may deem to be in its best interests.


Mr. Michael D. Harris                 -6-                   As of April 24, 1995

The Company shall own all rights in such insurance and proceeds thereof and you
shall not have any right, title or interest therein. You agree to assist the
Company at the Company's expense in obtaining any such insurance by, among other
things, submitting to the customary examinations and correctly preparing,
signing and delivering such applications and other documents as reasonably may
be required.

     7. Restrictive Covenants.

          (a) You agree that you will not, during your employment with the
     Company and for a period of twelve (12) months after termination thereof,
     engage (whether for compensation or without compensation) in any business
     activity, either as principal, proprietor, consultant, partner, officer,
     director, employee, agent or in any other capacity, which competes with any
     business then being conducted or planned (at the time of such termination)
     by the Company, its subsidiaries or affiliates in any geographic area in
     which the Company, its subsidiaries or affiliates are then engaged in such
     business. For purposes of this Section 7(a), the term "business activity"
     shall mean any activity whether conducted for profit or not for profit by
     an individual, partnership, firm, corporation, government or any other
     entity which competes with the Company. For purposes of this Section 7(a)
     "planned" shall refer to any business which has been actively discussed as
     a potential new business for the Company during the twelve (12) months
     prior to such termination.

          (b) You agree that, except as required in the performance of your
     duties hereunder, you will not at any time disclose to any person or entity
     any trade secrets, secret processes or any other confidential information
     belonging or relating to the Company, its business practices, personnel or
     those of its subsidiaries or affiliates; provided, however, this
     prohibition shall not apply to any such secret or confidential data which
     becomes generally publicly known or is publicly disclosed through or by
     persons other than you or is developed or otherwise lawfully acquired by
     you prior to the date of this Agreement or without the aid or benefit of
     any information obtained from the Company or is or later becomes lawfully
     available from another source on a non-confidential basis. This Section
     7(b) shall survive the termination of this Agreement.

          (c) During your employment with the Company and for a period of twelve
     (12) months after termination of your employment with the Company, you will
     not, directly or indirectly, recruit or otherwise solicit employees of the
     Company, its subsidiaries or affiliates or otherwise induce such employees
     to leave the Company, its subsidiaries or affiliates and to join or
     otherwise become employed by or associated with you or any company or
     organization with which you may then be employed or associated.


Mr. Michael D. Harris                -7-                    As of April 24, 1995

          (d)  Upon the termination of this Agreement, all documents, records,
     notebooks, computer programs, data systems and similar repositories
     containing trade secrets or other confidential information, whether
     prepared by you or others, will be left with the Company.

          (e)  You agree that any violation of the covenants in this Section 7
     will cause the Company irreparable injury and agree that the Company may
     enforce said covenants by seeking injunctive or other equitable relief (in
     addition to any other remedies the Company may have at law for damages or
     otherwise) from a court of competent jurisdiction. In the event such court
     declares these covenants to be too broad to be specifically enforced, the
     covenants shall be enforced to the largest extent for the Company's
     protection as may be allowed by such court. You agree that to perform, any
     of the covenants and obligations of the Company under this Agreement shall
     relieve you of any of your obligations under this Section 7, and that in
     the event of any such breach or failure of performance, you will seek no
     remedy other than damages at law.

     8.  Other Benefits.  You shall be eligible for four weeks of paid vacation
for each year of service under this Agreement. Upon termination of your
employment by the Company, you shall receive payment for any unused vacation
time.  The Company will also provide you with all fringe benefits routinely
furnished to senior executives of the company at the date hereof and at any
time hereafter.

     9.  Representation by Employee.  You represent and warrant that your
execution, delivery and performance of this Agreement will not violate, result
in a breach of or constitute a default under any agreement, understanding or
instrument to which you are a party or by which you are bound.

     10.  Miscellaneous.

          (a) This Agreement shall be binding on and inure to the benefit
     of the parties hereto and their respective heirs, legal representatives,
     successors and assigns. You may not assign this Agreement to any person or
     entity. In the event that the Company[ consolidates with or merges into
     another corporation and the Company is not the surviving corporation, or
     substantially all of the assets of the Company are sold to another
     corporation, this Agreement and the obligations of the parties shall
     survive such consolidation, merger or sale and shall bind the Company
     and/or successor in interest of the Company, This Agreement may be modified
     or amended only by a written agreement signed by the parties hereto.

Mr. Michael D. Harris                 -8-                   As of April 24, 1995

          (b) Each party hereby consents and submits to the jurisdiction of the
     federal and state courts in and of the State of Delaware and will accept
     service of process by registered or certified mail or the equivalent
     directed to the addresses set forth herein or such other addresses as shall
     have been furnished for this purpose by the parties or by whatever other
     means are permitted by such court.

          (c) This Agreement shall be governed by and construed in accordance
     with the laws of the State of Delaware (other than internal conflict of
     law rules).

          (d) The waiver of any breach of any term or condition of this
     Agreement shall not be deemed to constitute a waiver of any other term or
     condition hereof. If any term or provision of this Agreement or the
     application thereof to any person or circumstance shall to any extent be
     invalid or unenforceable, the remainder of this Agreement or the
     application of such term or provision to persons or circumstances other
     than those as to which it is held invalid or unenforceable shall not be
     affected thereby, and each term and provision of this Agreement shall be
     valid and enforceable to the fullest extent permitted by law.

          (c) All notices pursuant to this Agreement shall be in writing and
     shall be given by depositing said notices in the United States registered
     or certified mails, return receipt requested, addressed to the parties
     hereto at the addresses set froth below, or to such other addresses as may
     hereafter be specified by notice in writing given in the same manner by any
     party. Notice shall be deemed to have been given on the fifth (5th) day
     after deposit in the United States mail as set forth above.

     Notice to the Company:

          Autotote Corporation
          888Seventh Avenue
          Suite 1808
          New York, New York 10106
                 Attention: Chief Executive Officer

     Notice to Employee:

          Michael D. Harris
          4120 Paran Pointe Drive
          Atlanta, GA 30327-3127

Mr. Michael D. Harris                 -9-                   As of April 24, 1995

                (f) This Agreement constitutes the entire Agreement between the
        parties and supersedes all prior communications, agreements and
        understandings, written or oral, with respect to the terms of your
        employment with the Company.

        If you accept and agree to the foregoing, please so signify by signing
and returning a counterpart of this letter, whereupon this letter will become a
binding agreement between you and the Company as of the date first Written

                               Very truly yours,

                               AUTOTOTE CORPORATION

                               By:/s/Larry J. Lawrence
                                  Larry J. Lawrence
                                  Chairman, Executive Committee
                                      of the Board of Directors

Accepted and Agreed to:

/s/Michael D. Harris
Michael D. Harris