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EXHIBIT 99.5
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is entered into by Stanley
E. Fulton ("Fulton"), an individual, and Anchor Gaming, a Nevada corporation
(the "Company").
In consideration of the mutual promises and covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency
of which are mutually acknowledged, the Company and Fulton agree as follows:
1. EFFECTIVE DATE. Effective ____________ (the "Effective Date"),
Fulton's employment with the Company shall be converted into a consulting
relationship. As of the Effective Date, and to the extent he has not already
done so, Fulton hereby resigns all of his positions with the Company, and any
subsidiary of the Company, including any position as an officer, director or
executive employee of the Company and the Company accepts his resignation.
2. CONSULTING SERVICES. Subject to the terms and conditions set
forth in this Agreement, the Company hereby agrees to engage Fulton as a
business consultant for the Term (as defined in Section 3). Fulton shall make
himself reasonably available for consulting with the Company at such times
during normal business hours as the Company may reasonably require, subject
to Fulton's prior business and professional commitments, vacation plans and
absences due to illness or injury. Fulton shall provide consulting services
to the Company by telephone, or in Fulton's sole discretion, in person at the
Company offices or other locations as reasonably requested by the Company
based on the urgency of the matter(s) on which Fulton's services are sought.
Nothing contained herein shall prevent Fulton from seeking or accepting other
employment after the Effective Date, except as provided in Section 8.
3. TERM AND TERMINATION.
(a) The term of Fulton's engagement under this Agreement ("the
Term") will commence on the Effective Date and continue until the tenth
anniversary of the Effective Date.
(b) Fulton may terminate his obligations to consult under Section
2 of this Agreement with thirty days written notice to the Company.
(c) The Company may terminate its obligations under Section 4 of
this Agreement in the event Fulton shall fail to comply with Sections 2, 8
and 9 of this Agreement; provided, however, that no such termination shall
occur unless the Company first provides Fulton with written notice to cure.
The notice to cure shall specify the acts or omissions that allegedly
constitute Fulton's failure or refusal to perform his duties under Sections
2, 8 and 9 of this Agreement. Fulton shall have a reasonable opportunity (not
to exceed 30 days after Fulton receives the notice to cure) to correct any
failure or refusal to perform his duties under Section 2, 8 and 9 of
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this Agreement. If Fulton does not correct such failure or refusal to perform
such duties within the 30 day period, termination shall become effective as
of the end of such period.
(d) Upon such termination becoming effective, no further payments
will be made or benefits provided to Fulton or on his behalf pursuant to
Section 4 (other than to pay for any consulting services already provided),
and the parties shall have no further rights or obligations under this
Agreement, except as explicitly provided herein including Section 8, and
except for Fulton's obligations pursuant to Section 9.
4. COMPENSATION. As compensation for the performance of Fulton's
services under this Agreement, the Company will provide as follows:
(a) The Company will pay Fulton his present salary of Two Hundred
Forty Five Thousand Dollars ($245,000), payable no less than bimonthly and in
accordance with the Company's regular payroll practices;
(b) The Company shall not reduce the compensation paid to Fulton
hereunder by any federal, state or local taxes, or withholding, unless
otherwise required by law and only after consultation with Fulton;
(c) Fulton shall receive all Company benefit plans, medical,
dental, vision, long- term disability, and short-term disability benefits or
insurance programs, if any, on the same basis as are generally available to
senior executives of the Company;
(d) Fulton shall receive the privileges and perquisites that
Fulton received prior to the Effective Date in his capacity as a senior
executive level employee of the Company, but such privileges and perquisites
shall not include those privileges and perquisites that Fulton enjoyed solely
as an officer or director (including access to confidential information); and
(e) The Company will provide Fulton with the same office, the
same secretary (or another chosen by Fulton), the same supplies, equipment
and services, all on a full time basis, as were provided to Fulton by the
Company prior to the Effective Date.
5. REIMBURSEMENT OF EXPENSES. The Company will reimburse Fulton for
all his travel and entertainment expenses incurred in connection with
authorized Company business, including, without limitation all first class
airfare and hotels in Fulton's discretion. Fulton will provide the Company
with the appropriate documentation to support each expense.
6. AGE DISCRIMINATION IN EMPLOYMENT ACT WAIVER. Fulton hereby waives
(a) any and all claims under the Age Discrimination in Employment Act of
1967, 29 U.S.C. ss. 621 ET SEq (the "ADEA Claims") Fulton has against the
Company (and its related individuals and entities) as of the date of his
execution of this Agreement; and (b) any and all such ADEA Claims in exchange
for consideration. Fulton acknowledges and agrees that (i) he has been, and
is hereby, advised to consult with an attorney concerning his waiver of his
ADEA Claims prior to executing it, and he has retained
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an attorney to provide him legal advice concerning his waiver of his ADEA
Claims; (ii) he has been, and is hereby, advised that he has a period of
twenty-one days to consider his waiver of his ADEA Claims; and (iii) he may
revoke such waiver of his ADEA Claims at any time during the seven days
following the date of his execution of this Agreement, and this Agreement
shall not become effective or enforceable until such revocation period has
expired. The seven-day period of revocation shall commence upon the date of
the Fulton's execution of this Agreement. In order to revoke his waiver of
his ADEA Claims, Fulton shall deliver to the Company's counsel, prior to the
expiration of said seven-day period, a written notice of cancellation. If
Fulton does revoke his waiver of his ADEA Claims, the amounts to be paid to
Fulton under Section 4(a) shall be reduced by ten-percent.
7. COOPERATION AND INDEMNIFICATION. Fulton agrees to cooperate with
the Company in connection with any future, potential or currently pending
litigation, including without limitation, by providing information within
Fulton's knowledge to the Company and by making himself reasonably available
to testify in any action as reasonably requested by the Company. With respect
to any such litigation, in the event Fulton is named as a defendant by any
party thereto, the Company shall be responsible for providing a defense to,
and indemnifying, Fulton, to the same extent and under the same conditions as
if he were an officer or director of the Company, with respect to any
litigation including any third party litigation or other proceeding arising
from his lawful activities on behalf of the Company and the discharge of his
duties as an employee or consultant to the Company. In the event that the
interests of Fulton and the Company in litigation should become adverse,
Fulton shall be entitled to select his own counsel, and the costs of Fulton's
defense, including attorney's fees and any cost of settlement, shall be paid
by the Company in full, as they are incurred and in advance of the final
disposition of the litigation or proceeding.
8. RESTRICTIVE COVENANT. For a period ending on the later of (a) the
second (2nd) anniversary of this Agreement, or (b) one (1) year after any
termination of this Agreement prior to the end of the Term, but in no event
any longer than the Term of this Agreement, Fulton will not
a) enter into any competitive bidding process in any jurisdiction
(x) in which the Company or its subsidiaries has submitted a bid
or (y) for on-line lottery contracts;
b) actively induce any employee or consultant of Anchor or its
subsidiaries to enter any employment or consulting arrangement
with any entity in which Fulton owns more than a 10% equity
interest and which is in a business competitive with that of
Anchor or its subsidiaries;
c) have or beneficially own any security (or similar participation
in the profits) issued by any entity that develops, manufactures
or distributes gaming machines, except
(i) Fulton may beneficially own an equity interest not to
exceed 10% of the total equity interests of such an entity and
its consolidated affiliates, provided that such equity interest
will not involve funds being contributed to or for the benefit of
such entity; and
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(ii) Fulton may beneficially own any amount of equity in an
entity engaged in the slot distribution business (but that does
not develop or manufacture gaming machines), if such entity's
slot distribution business is less than ten percent (10%) of its
total revenues and its slot distribution revenues are less than
$10,000,000.
Notwithstanding anything to the contrary in this Agreement, nothing in
this Section 8 shall prohibit Fulton from owning any security (or
similar participation in the profits) issued by Station Casinos.
9. ACKNOWLEDGMENT OF INTELLECTUAL PROPERTY. Fulton acknowledges and
covenants not to challenge the validity of all patents, copyrights,
trademarks, trade secrets, and mask works owned by the Company and currently
existing at the time of the execution of this Agreement.
10. INJUNCTIVE RELIEF. Each party acknowledges that a remedy at law
for any breach or attempted breach of this Agreement will be inadequate,
agrees that each party will be entitled to specific performance and
injunctive and other equitable relief in case of any breach or attempted
breach, and agrees not to use as a defense that any party has an adequate
remedy at law. This Agreement shall be enforceable in a court of equity, or
other tribunal with jurisdiction, by a decree of specific performance, and
appropriate injunctive relief may be applied for and granted in connection
herewith. Such remedy shall not be exclusive and shall be in addition to any
other remedies now or hereafter existing at law or in equity, by statute or
otherwise. No delay or omission in exercising any right or remedy set forth
in this Agreement shall operate as a waiver thereof or of any other right or
remedy and no single or partial exercise thereof shall preclude any other or
further exercise thereof or the exercise of any other right or remedy.
11. ARBITRATION. In the event that the there is any dispute between
the parties under this Agreement, within three (3) days after receipt by a
party of a request to do so from the other party, or a person authorized to
act on behalf of such party, the parties shall meet in Las Vegas, Nevada and
attempt to resolve the dispute. If they are unable to do so within ten (10)
days after receipt of the first request for a meeting, the dispute shall be
settled by arbitration as herein provided.
Arbitration shall be initiated and required by giving notice
specifying the matter to be arbitrated. Except as provided to the contrary in
these provisions on arbitration, the arbitration shall be in conformity with
and subject to applicable rules and procedures of the American Arbitration
Association. If the American Arbitration Association is not then in existence
or for any reason fails or refuses to act, the arbitration shall be in
conformity with and subject to the provisions of the Nevada Uniform
Arbitration Act as then in effect. The arbitrators shall be persons
experienced in the subject matter of the arbitration and they shall be bound
by this Agreement. All arbitrators shall be impartial and unrelated, directly
or indirectly, so far as employment of services is concerned, to the parties
to the arbitration.
There shall be three (3) arbitrators appointed as follows:
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(a) Within seven (7) days after notice requiring arbitration, each
party shall appoint one arbitrator and give notice of the appointment to the
other party.
(b) The two arbitrators shall choose a third arbitrator within three
(3) days after appointment of the second.
(c) If either party fails to appoint an arbitrator, or if the two
arbitrators fail to choose a third, the appointment shall be made by the
American Arbitration Association.
(d) Either party may, by notice given before commencement of the
arbitration hearing, consent to arbitration by the arbitrator appointed by
the other party. In that event, no further appointments of arbitrators shall
be made and any other arbitrators previously appointed shall be dismissed.
All arbitration proceedings shall be held in Las Vegas, Nevada. The
arbitrator(s) shall investigate the facts and shall hold hearings at which
the parties may present evidence and arguments, be represented by counsel and
conduct cross-examination. The arbitrator(s) shall render their written
decision upon the matter presented to them by majority vote within thirty
(30) days after the date upon which the last arbitrator is appointed. The
arbitrator(s) shall apply Nevada substantive law and Nevada evidentiary law
to the proceeding. The arbitrator(s) shall have the power to grant all legal
and equitable remedies and award compensatory damages provided by Nevada law.
Punitive or exemplary damages shall not be awarded for any breach or alleged
breach of this Agreement and the parties waive any right to seek, claim or
receive such punitive or exemplary damages. The arbitrator(s) shall be bound
by the terms of this Agreement. The arbitrator(s) shall not be empowered or
authorized to add to, subtract from, delete or in any other way modify, the
terms of this Agreement. The arbitrator(s) shall prepare in writing and
provide to the parties an award including factual findings and the reasons on
which the decision is based. The decision of the arbitrator(s) shall be final
and binding on the parties and judgment thereon may be entered by any court
having jurisdiction. Each party shall bear its own expenses of the
arbitration including without limitation attorney fees and the parties shall
divide the arbitration expenses and fees equally. The parties waive any right
they may have to a trial de novo regarding the subject matter of the dispute
resolved by such arbitration.
12. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier postage prepaid, or by facsimile, and shall be deemed given on the
first business day delivery is attempted or upon receipt, whichever is sooner
(or upon facsimile confirmation) and shall be delivered as follows:
if to the Company, to:
Anchor Gaming
815 Pilot Road, Suite B
Las Vegas, Nevada 89119
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Attention: David D. Johnson, Esq.
with a copy so mailed to:
Irell & Manella LLP 1800 Avenue of the Stars, Suite
900 Los Angeles, CA 90067 Attention: Kevin McGeehan,
Esq.
if to Fulton, to:
Stanley E. Fulton
815 Pilot Road, Suite B
Las Vegas, Nevada 89119
with a copy so mailed to:
Lionel Sawyer & Collins 300 South Fourth Street,
Suite 1700
Las Vegas, Nevada 89101
Attention: Anthony Cabot, Esq.
13. ASSIGNABILITY AND ENFORCEABILITY. This Agreement shall be
binding on and enforceable by the parties and their respective successors and
permitted assigns. No party may assign or delegate any of its rights,
benefits, duties or obligations under this Agreement to any person or entity
without the prior written consent of the other party hereto. No such
assignment or delegation shall relieve the Company or Fulton, as the case may
be, of its obligations or duties under this Agreement.
14. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement shall be binding on any party unless consented to in
writing by such party. No waiver of any provision of this Agreement shall be
construed as a waiver of any other provision nor shall any waiver constitute
a continuing waiver unless otherwise expressly provided. No provision of this
Agreement shall be deemed waived by a course of conduct, unless such waiver
is in writing signed by all parties and stating specifically that it was
intended to modify this Agreement.
15. ENTIRE AGREEMENT. This Agreement, the Stock Purchase Agreement
of even date herewith among the Company, Fulton and other parties thereto,
and the agreements referenced therein, constitute the entire agreement among
the parties with respect to the subject matter hereof and supersedes all
prior written agreements, understandings, negotiations and discussions and
all prior and contemporaneous oral agreements, understandings, negotiations
and discussions. There are no conditions, covenants, agreements,
representations, warranties or other provisions, express or implied,
collateral or otherwise, relating to the subject matter hereof except as
herein provided.
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16. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed
to be part of this Agreement.
17. SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby.
18. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Nevada, without regard to the
choice of law provisions thereof. 19. CONSTRUCTION. The parties hereto agree
that this Agreement is the product of negotiation between sophisticated
parties and individuals, all of whom were represented by counsel, and each of
whom had an opportunity to participate in and did participate in, the
drafting of each provision hereof. Accordingly, ambiguities in this
Agreement, if any, shall not be construed strictly or in favor of or against
any party hereto but rather shall be given a fair and reasonable construction
without regard to the rule of construction that any ambiguity shall be
resolved against the drafting party.
20. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives as of the day and year
first above written.
ANCHOR GAMING
By:
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Name:
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Title:
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STANLEY E. FULTON
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