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EXHIBIT 10.35    
  


 
 

EXECUTIVE EMPLOYMENT AGREEMENT    
  


    THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of the1st day of August, 2001, between Herbst Gaming, Inc., a Nevada corporation, and
E-T-T, Inc., a Nevada corporation (together with their successors or assigns as permitted under this Agreement, collectively, the "Company"), and Edward J. Herbst, an
individual (the "Executive"). 


    The
Company desires to employ the Executive and enter into this Agreement embodying the terms of such employment and the Executive desires to enter into this Agreement and to accept
such employment. 


    In
consideration of the mutual covenants and for other good and valuable consideration, the Company and the Executive (individually a "Party" and together the "Parties") agree as
follows: 


1.  DEFINITIONS  


    (a)
"Salary" shall mean the salary provided for in Section 4 below subject to such increases as may be made from time to time. 


    (b)
"Board" shall mean the Board of Directors of the Company. 



    (c)  "Business Day" shall mean any day other than a weekend, a federal or Nevada state holiday or a vacation day for the Executive. 


    (d)
"Cause" shall mean: 



    (i)
the conviction of (including any act as a result of pleading nolo contendere) or entry of judgment against the Executive by a civil or criminal court of competent jurisdiction of
a felony, or any other offense or wrongdoing involving embezzlement, fraud, misappropriation of funds, any act of moral turpitude or dishonesty; 



    (ii)
the indictment of the Executive by a state or federal grand jury or the filing of a criminal complaint or information for a felony, or any other offense involving embezzlement,
fraud, misappropriation of funds, any act of moral turpitude or dishonesty, unless such indictment or filing is dismissed within one hundred eighty (180) days from the date of such indictment
or filing. The Board may elect to suspend and extend the Term of Employment by such one hundred eighty (180) day period or the number of days actually taken by the Executive to dismiss such
indictment or filing, whichever is less; provided that the Executive notifies the Company in writing that the Executive intends to contest in good faith such indictment or filing and pursues the
dismissal of such indictment or filing with reasonable diligence. During such period of suspension, Executive may be relieved of duties, but shall be entitled to receive Salary; 


    (iii)
the written confession by the Executive of embezzlement, fraud, misappropriation of funds, any act of moral turpitude or dishonesty or acts constituting a felony; 


    (iv)
the finding by a court of competent jurisdiction in a criminal or civil action or by the U.S. Securities and Exchange Commission or state blue sky agency in an administrative
proceeding that the Executive has willfully violated any federal or state securities law; 


    (v)
the engagement by the Executive in willful and continued misconduct, or the Executive's willful and continued failure to substantially perform the Executive's obligations as a
director of the Company or as an employee of the Company, if, in the sole discretion of the Company, such failure or misconduct is materially damaging or materially detrimental to the business,
operations or reputation of the Company; 


    (vi)
the use by the Executive of alcohol or any controlled substance to an extent that it interferes, in the sole discretion of the Board, on a continuing and material basis with the
performance of the Executive's duties under the Agreement; 






 


    (vii) the willful, unauthorized disclosure by the Executive of Confidential Information concerning the Company, unless such disclosure was (A) believed in good faith by the
Executive to be appropriate in the course of properly carrying out duties under the Agreement, or (B) required by an order of a court having jurisdiction over the subject matter or a summons,
subpoena or order in the nature thereof of any legislative body (including any committee thereof) or any governmental or administrative agency; or 


    (viii)
the performance of services by the Executive, other than in the course of properly carrying out his duties under the Agreement and as otherwise provided herein, for any other
corporation or person that competes with the Company while the Executive is employed by the Company. 




    (e)
"Confidential Information" shall mean information in whatever form, including, without limitation, information that is written,
electronically stored, orally transmitted, or memorized, that is, in the Company's opinion, of commercial value to the Company and that is created, discovered, developed, or otherwise becomes known to
the Company, or in which property rights are held, assigned to, or otherwise acquired by or conveyed to the Company, including, without limitation, any idea, knowledge, know-how, process,
system, method, technique, research and development, technology, software, technical information, trade secret, trademark, copyrighted material, reports, records, documentation, data, customer or
supplier lists, tax or financial information, business or marketing plan, strategy, or forecast. Confidential information does not include information that is or becomes generally known within the
Company's industry through no act or omission by the Executive, provided, however, that the compilation, manipulation, or other exploitation of generally known information may constitute Confidential
Information. 


    (f)
"Disability" shall mean the Executive's inability, for a period of six (6) consecutive months, to render substantially the
services provided for in Section 3 below by reason of mental or physical disability, whether resulting from illness, accident or otherwise, where the existence of Disability shall be determined
in the sole and absolute discretion of the Company. 


    (g)
"Term of Employment" shall mean the initial five-year period specified in Section 2 below and if, but only if,
automatically renewed as provided in Section 2, shall include the period of such renewal. 


2.  TERM OF EMPLOYMENT  



    (a) The Company hereby employs the Executive, and the Executive hereby accepts employment with the Company, in the position and with the duties and
responsibilities as set forth in Section 3 below for the Term of Employment, subject to the terms and conditions of the Agreement. 


    (b)
The initial Term of Employment shall commence on July 1, 2001 and shall, unless sooner terminated as provided in Section 7, terminate at 11:59 p.m. (P.D.T.)
on July 1, 2006; provided that the Term of Employment shall automatically renew for successive one-year periods unless (i) it has sooner terminated as provided in
Section 7 or (ii) either Party has notified the other in writing at least sixty (60) days prior to the otherwise scheduled expiration of the Term of Employment that such Term of
Employment shall not so renew. 


3.  POSITION, DUTIES AND AUTHORITIES  


    (a)
During the Term of Employment, the Executive shall be employed as Chairman of the Board, Chief Executive Officer and President of the Company, with the duties, responsibilities
and authorities customarily associated with such positions for other businesses of the same size and in the same industry, together with any other duties of a senior executive nature as may be
reasonably requested by the Board from time to time, which may include duties for one or more subsidiaries or affiliates of the Company. In performing the Executive's duties under this Agreement, the
Executive shall perform such 


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duties subject to supervision and in accordance with the policies and directives established by the Board. 


    (b)
The Executive is permitted to engage in charitable, community and business affairs, managing personal investments and serving as a member of boards of directors of industry
associations or non-profit or for profit organizations and companies so long as such activities do not materially interfere, in the opinion and reasonable discretion of the Board, with the
Executive carrying out his duties and responsibilities under this Agreement. The Executive has advised the Company that he is also a director and an officer of Terrible Herbst, Inc. and its
affiliates and the Company consents to the continued provision of these services as long as Executive's duties to Terrible Herbst, Inc. do not materially impact Executive's
full-time duties and responsibilities to the Company. Thereafter, not less often than on January 1 of each year, the Executive shall disclose in writing to the Board any changes to
the information with respect to involvement in such entities or organizations. 



4.  SALARY  


    During the Term of Employment, the Executive shall be paid by the Company a Salary payable in accordance with the Company's payroll practices in effect from
time to time at an annualized rate of
Four Hundred Sixty Five Thousand Dollars and no/100th Dollars ($465,000); subject to a five percent (5%) increase on January 1 of each year following the commencement date of this Agreement. 


5.  EMPLOYEE BENEFIT PROGRAMS  


    During the Term of Employment, the Executive and his dependents shall be entitled to participate in, at the Company's expense, whatever employee benefit plans
the Company endorses to obtain, if the Company in its sole discretion elects to obtain, such as, but not in limitation, medical, surgical, hospitalization, dental and visual insurance coverage. If the
Company obtains an employee benefit plan, the Company will pay all expenses for these insurance program(s) or plan(s). 


6.  BUSINESS EXPENSE REIMBURSEMENT AND PREQUISITES  


    (a)
During the Term of Employment, the Executive shall be entitled to receive reimbursement by the Company, upon submission of adequate documentation, for all reasonable
out-of-pocket expenses incurred by the Executive in performing services under this Agreement. 


    (b)
During the Term of Employment, the Executive shall be entitled to all other perquisites and benefits provided to other senior level executives of the Company. 


7.  TERMINATION OF EMPLOYMENT  


    (a)
Termination Due to Death or Disability. In the event of the cessation of the Executive's employment under this
Agreement due to death or Disability, the Executive or the Executive's legal representatives, as the case may be, shall be entitled to: 



    (i)
(A) in the case of death, continued Salary at the rate in effect at the time of death for a period of twelve (12) months following the month in which such cessation of
employment due to death occurs, or (B) in the case of Disability, Salary at the rate in effect at the determination of Disability through the date of such determination of Disability; 


    (ii)
reimbursement for expenses incurred but not yet reimbursed by the Company; and 


    (iii)
any other compensation and benefits to which the Executive or legal representatives may be entitled to under the applicable plans, programs and agreements of the Company. 




    (b)  Termination by the Company for Cause. At any time after learning of an event constituting Cause, the Company may
elect to give the Executive written notice of its intention to terminate for 


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Cause, specifying in such notice the event forming the basis for Cause. Subject only to the following sentence, termination shall be effective immediately upon delivery of notice hereunder. If the
written notice is of an event constituting Cause under Section 1(d)(v) or 1(d)(viii), and if the event is capable of being cured, the Company may allow the Executive to have ten
(10) Business Days following actual receipt of the notice of termination in which to cure, so long as the Executive advises the Company in writing within forty-eight (48) hours of
receiving the notice of termination of the Executive's intention to attempt cure. In the event the Executive's employment is terminated by the Company for Cause, the Executive shall be entitled to: 



    (i)
Salary at the rate in effect at the time of termination through the date of termination of employment; 


    (ii)
reimbursement for expenses incurred but not yet reimbursed by the Company; and 


    (iii)
any other compensation and benefits to which the Executive may be entitled under applicable plans, programs and agreements of the Company. 




    The
Executive's entitlement to the foregoing shall be without prejudice to the right of the Company to claim or sue for any damages or other legal or equitable remedy to which the
Company may be entitled as a result of such Cause; provided, however, that offset shall not be available to the Company in any event. 


    (c)
Termination Without Cause. In the event the Executive's employment is terminated by the Company without Cause (which
shall not include a termination pursuant to Section 7(a)), the Executive shall be entitled to those items described in the subparagraphs (i) through (iii) below. Termination
Without Cause
shall be effective immediately, unless a later date is stated, upon delivery of a written notice of such termination from the Company to the Executive. 



    (i)
an amount equal to twelve (12) months of Salary (the "Salary Termination Payment"). The Executive may elect, at the Executive's option, to receive the Salary Termination
Payment either (A) in equal monthly installments over a one (1) year period commencing on the next regularly scheduled payday upon termination of the Executive's employment, or
(B) in a lump-sum payment within ten (10) Business Days following termination of the Executive's employment; 


    (ii)
reimbursement for expenses incurred but not yet reimbursed by the Company; and 


    (iii)
any other compensation and benefits to which the Executive may be entitled under applicable plans, programs and agreements of the Company. 




    (d)
Voluntary Termination. A "Voluntary Termination" shall mean a termination of employment by the Executive on his own
initiative. In the event of a Voluntary Termination, the Executive shall be entitled to: 



    (i)
Salary at the rate in effect at the time of termination through the date of termination of employment; 


    (ii)
reimbursement for expenses incurred but not yet reimbursed by the Company; and 


    (iii)
any other compensation and benefits to which the Executive may be entitled under applicable plans, programs and agreements of the Company. 




    A
Voluntary Termination shall not, solely due to a Voluntary Termination, be deemed a breach of this Agreement and shall be effective upon the expiration of sixty (60) days
after written notice is delivered to the Company, unless another period of time is agreed to in writing by the Parties. 


    (e)
No Mitigation; No Offset. In the event of any termination of the Executive's employment under the Agreement, the
Executive shall be under no obligation to seek other employment, and there shall 


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be no offset against amounts due the Executive under the Agreement on account of any remuneration attributable to any subsequent employment that the Executive may obtain. 


    (f)
Nature of Payments. Any amounts due the Executive under the Agreement in the event of any termination of employment
with the Company are in the nature of severance payments, or liquidated damages which contemplate both direct damages and consequential damages that the Executive may suffer as a result of the
termination of employment, or both, and are not in the nature of a penalty. 



8.  COVENANTS TO PROTECT CONFIDENTIAL INFORMATION  


    The Executive shall not, during the Term of Employment or anytime thereafter, without prior written consent of the Company, divulge, publish or otherwise
disclose to any other person any Confidential Information regarding the Company except in the course of carrying out the Executive's responsibilities on behalf of the Company (e.g., providing
information to the Company's attorneys, accountants, bankers, etc.) or if required to do so pursuant to the order of a court having jurisdiction over the subject matter or a summons, subpoena or order
in the nature thereof of any legislative body (including any committee thereof and any litigation or dispute resolution method against the Company related to or arising out of this Agreement) or any
governmental or administrative agency. 


9.  NON-SOLICITATION  


    Except with the prior written consent of the Board, the Executive shall not solicit customers, clients, or employees of the Company or any of its affiliates
for a period of twelve (12) months after the date of the expiration or termination of this Agreement. Without limiting the generality of the foregoing, the Executive will not, for a period of
twelve (12) months after the date of the expiration or termination of this Agreement, willfully canvas or solicit any such business in competition with the business of the Company from any
customers of the Company with whom the Executive had contact during, or of which the Executive had knowledge solely as a result of, his performance of services for the Company pursuant to this
Agreement. The Executive will not, for a period of twelve (12) months after the date of the expiration or termination of this Agreement, directly or indirectly request, induce or advise any
customers of the Company with whom the Executive had contact during the term of this Agreement to withdraw, curtail or cancel their business with the Company. The Executive will not, for a period of
twelve (12) months after the date of the expiration or termination of this Agreement, induce or attempt to induce any employee of the Company to terminate his or her employment with the
Company. 


10. REMEDIES  


    (a) The Executive acknowledges and agrees that immediate and irreparable harm, for which damages would be an inadequate remedy, would occur in the event any of
the provisions of Sections 8 or 9 of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the Executive agrees that the Company shall be
entitled to an injunction or injunctions to prevent breaches of such provisions of this Agreement and to enforce specifically the terms and provisions thereof without the necessity of proving actual
damages or securing or posting any bond or providing prior notice, in addition to any other remedy to which it may be entitled at law or equity. 



    (b)
Nothing herein contained is intended to waive or diminish any rights the Company may have at law or in equity at any time to protect and defend its legitimate property interests
(including its business relationship with third parties), the foregoing provisions being intended to be in addition to and not in derogation or limitation of any other rights the Company may have at
law or equity. 


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    (c) The Executive shall have no rights, remedies or claims for damages, at law, in equity or otherwise with respect to any termination of the Executive's employment by the Company
other than as set forth in Section 7 of this Agreement. 


11. INDEMNIFICATION  


    (a) The Company shall indemnify the Executive to the fullest extent permitted by Nevada law in effect as of the date hereof against all costs, expenses,
liabilities and losses (including, without limitation, attorneys' fees, judgments, fines, penalties, ERISA excise taxes and amounts paid in settlement) reasonably incurred by the Executive in
connection with a Proceeding. For the purposes of this Section 10, a "Proceeding" shall mean any action, suit or proceeding by reason of the fact that the Executive is or was an officer,
director or employee, trustee or agent of any other entity at the request of the Company. The indemnification allowed by this Section does not include suits initiated by the Executive against the
Company. 


    (b)
The Company shall advance to the Executive all reasonable costs and expenses incurred by the Executive in connection with a Proceeding within twenty (20) days after receipt
by the Company of a written request for such advance. Such request shall include an itemized list of the costs and expenses and an agreement by the Executive to repay the amount of such advance if it
is determined by a court of competent jurisdiction that he is not entitled to be indemnified by the Company against such costs and expenses. 


    (c)
The Executive shall not be entitled to indemnification under this Section 11 unless the Executive meets the standard of conduct specified in the Nevada Revised Statutes.
Actions that fail to meet the aforementioned standard of conduct shall include, but are not limited to, the failure to act in good faith, failure to act in the best interests of the Company, breach of
the duty of loyalty, misappropriation of business opportunities, violation of the provisions of the articles of incorporation or the bylaws of the Company, violation of state or federal securities
laws and violation of criminal law. Notwithstanding the foregoing, to the extent permitted by law neither Nevada Revised Statutes 78.751 nor any similar provision shall apply to indemnification under
this section, so that if the Executive in fact meets the applicable standard of conduct, the Executive shall be entitled to such indemnification whether or not the Company (whether by the board of
directors, the stockholders, independent legal counsel, or other party) determines that indemnification is proper because the Executive has met such applicable standard of conduct. Neither the failure
of the Company to have made such a determination prior to the commencement by the Executive of any suit or arbitration proceeding seeking indemnification, nor a determination by the Company that the
Executive has not met such applicable standard of conduct shall create a presumption that the Executive has not met the applicable standard of conduct. 


    (d)
The Company shall not settle any Proceeding or claim in any manner which would impose on the Executive any penalty or limitation without the Executive's prior written consent.
Neither the Company nor the Executive will unreasonably withhold its or the Executive's consent to any proposed settlement. 


12. ASSIGNABILITY; BINDING NATURE  


    This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors, heirs and assigns. No rights or obligations of
the Company under the Agreement may be assigned or transferred by the Executive or the Company except that (a) such rights or obligations of the Company may be assigned or transferred pursuant
to a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the Company, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the Company and such assignee or transferee assumes the liabilities, obligations and duties 


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of the Company, as contained in the Agreement, either contractually or as a matter of law, and (b) such obligations of the Company may be transferred by the Executive by will or pursuant to the
laws of descent or distribution. The Company shall take all reasonable legal action necessary to effect such assignment and assumption of the Company's liabilities, obligations and duties under the
Agreement in circumstances described in clause (a) of the preceding sentence. 


13. REPRESENTATION  


    The Company and the Executive respectively represent and warrant to each other that each respectively is fully authorized and empowered to enter into the
Agreement and that their entering into the Agreement and the performance of their respective obligations under the Agreement will not violate any agreement between the Company or the Executive
respectively and any other person, firm or organization or any law or governmental regulation. 


14. ENTIRE AGREEMENT  


    This Agreement contains the entire agreement between the Parties and supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between the Parties. 


15. AMENDMENT OR WAIVER  


    This Agreement cannot be changed, modified or amended without the consent in writing of both the Executive and the Company. No waiver by either Party at any
time of any breach by the other Party of any condition or provision of the Agreement shall be deemed a waiver of a similar or dissimilar condition or provision at the same or at any prior or
subsequent time. Any waiver must be in writing and signed by the Executive or an authorized officer of the Company, as the case may be. 


16. SEVERABILITY  


    The provisions of this Agreement shall be severable and the invalidity, illegality or unenforceability of any provision of this Agreement shall not affect,
impair or render unenforceable this Agreement or any other provision hereof, all of which shall remain in full force and effect. If any provision of this Agreement is adjudicated by a court of
competent jurisdiction as invalid, illegal or otherwise unenforceable, but such provision may be made enforceable by a limitation or reduction of its scope, the Parties agree to abide by such
limitation or reduction as may be necessary so that said provision shall be enforceable to the fullest extent permitted by law. The Parties further intend to and hereby confer jurisdiction to enforce
the covenants contained in Sections 8 and 9 (the "Restrictive Covenants") upon the courts of any jurisdiction within the geographical scope of such Restrictive Covenants. If the courts of any one or
more of such jurisdictions hold any Restrictive Covenant unenforceable by reason of the breadth of such scope or otherwise, it is the intention of the Company and Executive that such determination not
bar or in any way affect the right of the Company to the relief provided for in this section in the courts of any other jurisdiction within the geographical scope of such Restrictive Covenant as to
breaches of such Restrictive Covenant in such other respective jurisdictions (such Restrictive Covenant as it relates to each jurisdiction being, for this purpose, severable into diverse and
independent covenants). 


17. SURVIVAL  


    The respective rights and obligations of the Parties shall survive any termination of this Agreement to the extent necessary to the intended preservation of
such rights and obligations. 


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18. GOVERNING LAW  


    This Agreement shall be governed by and construed under the law of the State of Nevada, disregarding any principles of conflicts of law that would otherwise
provide for the application of the substantive law of another jurisdiction. The Parties each hereby consent to the jurisdiction and venue of the state courts of Clark County, Nevada and the United
States district courts with jurisdiction in Nevada with respect to any matter arising out of or relating to this Agreement other than matters that are subject to the arbitration provisions of
Section 18 of this Agreement. 


19. SETTLEMENT OF DISPUTES  


    Except for equitable actions seeking to enforce the provisions of Sections Error! Reference source not found.,
8 and 9 of this Agreement which may be brought by a court in any competent jurisdiction, in the event a dispute, claim or controversy arises between the Parties relating to the validity,
interpretation, performance, termination or breach of this Agreement, (collectively, a "Dispute"), the Parties agree to hold a meeting regarding the Dispute, attended by individuals with
decision-making authority, to attempt in good faith to negotiate a resolution of the Dispute prior to pursuing other available remedies. If, within thirty (30) days after such meeting or after
good faith attempts to schedule such a meeting have failed, the Parties have not succeeded in negotiating a resolution of the Dispute, the Dispute shall be resolved through final and binding
arbitration to be held in Nevada in accordance with the rules and procedures for employment disputes of the American Arbitration Association. The prevailing Party in such proceeding shall be entitled
to recover the costs of the arbitration from the other Party, including, without limitation, reasonable attorneys' fees. 


20. NOTICES  


    Any notice given to either Party shall be in writing and, except as provided in the third sentence of Section 7(b) above, shall be deemed to have been
given when delivered personally or sent by certified
or registered mail, postage prepaid, return receipt requested, duly addressed to the Party concerned at the address indicated below or to such changed address as such Party may subsequently give
notice of: 




    If
to the Company or the Board: 




Herbst
Gaming, Inc.

3440 West Russell Road

Las Vegas, Nevada 89118

Attn: President 





    If
to the Executive: 




Edward
J. Herbst

3440 West Russell Road

Las Vegas, Nevada 89118 







21. HEADINGS  


    The headings of the sections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of
any provision of this Agreement. 


22. COUNTERPARTS  



    This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument. 


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23. TAXES  


    The Compensation payable is stated in gross amounts and shall be subject to such withholding taxes and other taxes as may be required by law. 



24. ACKNOWLEDGMENT  


    The Executive acknowledges that he has been given a reasonable period of time to study this Agreement before signing it and has had an opportunity to secure
counsel of his own. The Executive certifies that he has fully read and completely understands the terms, nature, and effect of this Agreement. The Executive further acknowledges that he is executing
this Agreement freely, knowingly, and voluntarily and that the Executive's execution of this Agreement is not the result of any fraud, duress, mistake, or undue influence whatsoever. In executing this
Agreement, the Executive does not rely on any inducements, promises, or representations by the Company other than that which is stated in this Agreement. 



25. WAIVER OF JURY TRIAL  


    Each Party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any litigation arising out of or
relating to this Agreement and Executive's employment by the Company. Each Party (a) certifies that no representative, agent or attorney of the other Party has represented, expressly or
otherwise, that such other Party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it has been induced to enter into this Agreement by, among
other things, the mutual waivers and certifications set forth in this section. 


    IN
WITNESS WHEREOF, the undersigned have executed the Agreement as of the date first written above. 



	 	 	THE "COMPANY"	 	THE "EXECUTIVE"
	

 	
 	

HERBST GAMING, INC	
 	

 
	
By:	
 	

/s/ Troy D. Herbst	
 	

/s/ Edward J. Herbst
	 	 	
	 	

	 	 	 	 	Edward J. Herbst
	Its:	 	Secretary & Treasurer
	 	 
	

 	
 	

E-T-T, INC.	
 	

 
	

By:	
 	

/s/ Troy D. Herbst
	
 	

 
	

Its:	
 	

Secretary & Treasurer
	
 	

 




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EXHIBIT 10.35

EXECUTIVE EMPLOYMENT AGREEMENT