Unassociated Document


    

       

      EMPLOYMENT
        AGREEMENT

       

      THIS
        EMPLOYMENT AGREEMENT (“Agreement") is entered into this 31st day of August,
        2005, by and between JON A. ARNESEN (“Employee”) and NEVADA GOLD & CASINOS,
        INC., a Nevada corporation with headquarters in Houston, Texas
        (“Employer”).

      
      

       

      WHEREAS,
        Employer is in the business of developing, owning, and operating various
        gaming
        facilities and lodging and entertainment facilities in different parts of
        the
        United States; and

       

      WHEREAS,
        Employer desires to enter into an employment relationship with Employee and
        Employee desires to enter into an employment relationship with Employer;
        

       

      NOW,
        THEREFORE, in consideration of the mutual covenants and promises contained
        herein, the parties agree as follows:

       

      1. EMPLOYMENT.
        Employer hereby agrees to hire and employ Employee, and Employee hereby agrees
        to accept such employment, to work for and on behalf of Employer (or any
        of its
        affiliates, subsidiaries, co-venturers or other business entities as Employer
        shall from time to time determine), pursuant to the terms and conditions
        of this
        Agreement. The date Employee shall report for full-time duty with Employer
        (the
        "Employment Date") shall be on or before November 30, 2005. 

       

      2. TERM.
        This
        Agreement is effective immediately and shall continue until August 31, 2010,
        unless terminated earlier as provided herein (the "Initial Term"). Unless
        Employer gives written notice to Employee (on or before August 31, 2009)
        of its
        decision not
        to renew
        this Agreement for an additional five (5) year term, then this Agreement
        shall
        automatically renew for an additional five (5) year term (the "Second Term")
        under the same terms and conditions as set forth herein except that the salary
        at the beginning of the Second Term shall be the same as the ending salary
        at
        the conclusion of the Initial Term.

       

      
        
          
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      3. DUTIES
        AND TITLE.
        Employee’s title shall be that of President and Chief Operating Officer.
        Employee shall perform such duties as directed by the Chief Executive Officer
        of
        Employer. Such duties shall include, but not be limited to, overall
        responsibility for and authority over: casino, lodging, entertainment and
        other
        operations; finance and accounting; marketing and sales; human resources;
        supporting property acquisition and management; and implementation of Employer’s
        long range and strategic goals. Employee shall perform his duties to the
        best of
        his abilities and shall devote substantially all of his working time to such
        duties.

       

      
      

      4. COMPENSATION.
        Employer hereby agrees to provide Employee with the following compensation
        package (the “Compensation Package”), which shall be reviewed annually by
        Employer’s Compensation Committee:

      
      

      
      

       

      (a) Salary.
        Commencing on the Employment Date, Employer shall pay Employee an annual
        salary
        in the amount of Three Hundred Twenty-five Thousand Dollars ($325,000.00),
        payable in the same manner as Employer pays its other executive employees,
        less
        required state and federal withholdings.

       

      (b) Auto
        Allowance.
        Commencing on the Employment Date, Employer shall provide Employee with a
        monthly auto allowance of Seven Hundred Fifty Dollars ($750.00).

       

      (c) Vacation
        and Fringe Benefits.
        Commencing on the Employment Date, Employee shall be entitled to one (1)
        month
        paid vacation each year. In addition, and subject to the terms of any plans
        or
        policies governing such matters, Employee shall be entitled to receive (i)
        contributions to Employer’s 401(k) and other retirement plans at a rate at least
        as great as Employer contributes for its other senior executive employees;
        (ii)
        major medical and health insurance; (iii) customary reimbursement for travel
        and
        entertainment; and (iv) actual reimbursement for Employee’s moving and
        relocation expenses, to include temporary housing in Employer's corporate
        apartment in Houston and furniture storage.

       

      
        
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      (d) Performance
        Bonuses.
        Each
        year Employee and Employer shall develop and create a Target Plan for Employer’s
        upcoming fiscal year. The Target Plan shall include both financial and strategic
        components. Once the proposed Target Plan has been approved and accepted
        by
        Employer’s Board of Directors, Employee shall oversee its implementation,
        subject to Employer’s general oversight by its Board of Directors. Following the
        end of each fiscal year, the Board of Directors shall determine whether and
        to
        what extent the Target Plan has been achieved. Employee shall be entitled
        to
        receive an annual Performance Bonus in an amount equal to:

       

      
        	·  	
                40%
                  of Employee’s then current annual salary if 95% of Target Plan
                  achieved;

              


      

      
        
        

        
          	·  	
                  50%
                    of Employee’s then current annual salary if 100% of Target Plan
                    achieved;

                


        

      

      
        	·  	
                75%
                  of Employee’s then current annual salary if 115% of Target Plan
                  achieved;

              


      

      
        	·  	
                100%
                  of Employee’s then current annual salary if 125% of Target Plan
                  achieved.

              


      

       

      (e) Stock
        Options.
        Simultaneously with the execution of this Agreement, Employee shall be awarded,
        and immediately vested in, an option to purchase twenty thousand (20,000)
        shares
        of stock in Employer with an exercise price equal to the fair market value
        of
        the stock determined as of the date of this Agreement, adjusted for future
        stock
        splits, stock dividends, etc. in accordance with the terms of any applicable
        plan. In addition, Employee is also hereby granted an option to purchase
        an
        additional eighty thousand (80,000) shares of stock in Employer also with
        an
        exercise price equal to the fair market value of the stock determined as
        of the
        date of this Agreement, adjusted if appropriate. The option on these eighty
        thousand (80,000) shares shall vest in Employee at the rate of twenty thousand
        shares (20,000) on each annual anniversary of this Agreement through the
        Initial
        Term, provided Employee is still employed by Employer on such date. On the
        first
        day of the Second Term, if any, Employee shall be granted an option to purchase
        an additional one hundred thousand (100,000) shares of stock (adjusted for
        stock
        splits, stock dividends, etc. occurring after the date of this Agreement)
        with
        an exercise price equal to the fair market value of the stock determined
        as of
        the date of the grant. The option on these shares granted at the beginning
        of
        the Second Term shall vest in Employee at the rate of twenty percent (20%)
        on
        the date of grant and twenty percent (20%) on each annual anniversary of
        the
        Second Term, provided Employee is still employed by Employer on such date.
        All
        options granted pursuant to this Agreement are subject to the terms and
        conditions of Employer's stock option plan and stock option
        agreement.

       

      
        
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      5. TERMINATION
        AND COMPENSATION UPON TERMINATION.
        

       

      (a) Employer
        may terminate Employee's employment at any time without Cause (as defined
        in
        Section 5(c) below) by giving prior, written notice to Employee. In such
        case,
        Employer shall pay to Employee in a lump sum an amount equal to the unpaid
        balance of Employee's salary, Performance Bonus, accrued vacation and fringe
        benefits remaining during the Initial Term of the Agreement if the termination
        takes place during the Initial Term or during the Second Term if the termination
        takes place during the Second Term. For purposes of calculating the Performance
        Bonus, if any due to Employee in the event of such a termination, Employer
        shall
        apply the Target Plan achievement as of the end of the fiscal year preceding
        the
        fiscal year during which the termination becomes effective. All stock options
        granted but not vested at such time shall immediately become fully vested
        in
        Employee. Otherwise, the stock options will be treated as prescribed under
        Employer's Stock Option Plan and the Stock Option Agreement.

       

      (b) Employee
        may terminate Employee's employment in the event of a "Change of Control"
        defined as its sale, acquisition, merger or buyout to an unaffiliated person
        that has significant effect or a reduction in the responsibilities, position
        or
        compensation of Employee or that requires Employee to move the location of
        his
        principal residence a distance of more than 35 miles prior to or during the
        initial 12 months of the Change of Control. In the event of such a termination,
        Employer shall pay to Employee in a lump sum an amount equal to the unpaid
        balance of Employee's salary, Performance Bonus, accrued vacation, and fringe
        benefits remaining during the Initial Term of the Agreement if the Change
        of
        Control takes place during the Initial Term or during the Second Term if
        the
        Change of Control takes place during the Second Term. For purposes of
        calculating the Performance Bonus, if any due to Employee in the event of
        such a
        termination, Employer shall apply the Target Plan achievement as of the end
        of
        the fiscal year preceding the fiscal year during which the termination becomes
        effective. All stock options granted but not vested at such time shall
        immediately become fully vested in Employee. Otherwise, the stock options
        will
        be treated as prescribed under Employer's Stock Option Plan and the Stock
        Option
        Agreement. Employee must give notice of any termination under this subsection
        within thirty (30) days of the occurrence of the event he believes gives
        rise to
        a Change of Control.

       

      (c) Employer
        may terminate Employee's employment for "Cause" at any time. Such a termination
        shall be effective as specified by Employer. In the event of a termination
        by
        Employer for "Cause," Employee shall be entitled only to his salary, accrued
        vacation, and fringe benefits through the effective date of termination.
        Any
        unvested stock options shall be forfeited. All stock options granted which
        have
        vested will be treated as prescribed under Employer’s Stock Option Plan and the
        Stock Option Agreement. "Cause" means: (a) the Employee's conviction of,
        or
        entry of a plea agreement or consent decree or similar arrangement with respect
        to, a felony, other serious criminal offense or offense involving moral
        turpitude, or any violation of federal or state securities laws, (b) Employee's
        material violation of Employer's written policies; (c) Employee's material
        breach of this Agreement, (d) the final revocation, suspension, or impairment
        (after all applicable appeals) of Employee's gaming license in any jurisdiction
        in which Employer is required to have a gaming license, or a finding (after
        all
        applicable appeals) by any authority in any such jurisdiction that Employee
        is
        unsuitable to hold a gaming license; or (e) Employee's gross misconduct
        in
        the performance of Employee's duties hereunder. Any termination of the
        Employee's employment by Employer pursuant to this Section 5(c) shall be
        communicated by a notice of termination which shall set forth in reasonable
        detail the facts and circumstances claimed to provide a basis for termination
        of
        the Employee's employment under the provision invoked. To exercise its right
        to
        terminate the Employee pursuant to provisions (b), (c) or (e) of the definition
        of Cause, Employer must first provide the Employee with 30 days' time to
        correct
        the circumstances or events that Employer contends give rise to the existence
        of
        Cause under those provisions. The 30-day time period shall not begin to run
        until the Board of Directors of Employer has given the Employee the opportunity
        to meet with the Board (at which meeting at least a quorum of the Board is
        present either personally or telephonically) to hear a specific explanation
        from
        the Board of the circumstances or events the Board believes may fall within
        provisions (b), (c) or (e) of the definition of Cause. 

      
         

        
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      (d)
        Employer may terminate Employee's employment if Employee becomes unable to
        perform the essential functions of his position despite any reasonable
        accommodation required by law. In the event of a termination under this
        subsection, Employee shall be entitled only to his salary, accrued vacation,
        and
        fringe benefits for a period of one (1) year following the effective date
        of
        termination. In the case of granted but unvested stock options, those unvested
        stock options which would become vested within such one (1) year period shall
        become vested and the remaining granted but unvested stock options shall
        be
        forfeited. Otherwise, the stock options will be treated as prescribed under
        Employer's Stock Option Plan and the Stock Option Agreement. 

       

      6. CONFIDENTIALITY,
        PROPERTY, COMPETITION, SOLICITATION.
         

       

      (a) Ownership.
        Employee agrees that all inventions, copyrightable material, business and/or
        technical information, marketing plans, customer lists and trade secrets
        which
        arise out of the performance of this Agreement are the property of
        Employer.

       

      (b) Confidentiality.
        Except
        as is consistent with Employee's duties and responsibilities within the scope
        of
        his employment with Employer, Employee agrees to keep confidential indefinitely,
        and not to use or disclose to any unauthorized person, information which
        is not
        generally known and which is proprietary to Employer, including all information
        that Employer treats as confidential, ("Confidential Information"). Upon
        termination of Employee's employment, Employee will promptly turn over to
        Employer all software, records, manuals, books, forms, documents, notes,
        letters, memoranda, reports, data, tables, compositions, articles, devices,
        apparatus, marketing plans, customer lists and other items that disclose,
        describe or embody Confidential Information including all copies of the
        Confidential Information in his possession, regardless of who prepared them.
        In
        exchange for Employee's agreement set out in this subsection, Employer hereby
        promises to provide Employee with Confidential Information.

       

      (c) Non-competition.
        If
        Employee’s employment hereunder is terminated as a result of the application of
        paragraph 5(c), then for a period of one (1) year after the effective date
        of
        termination (or if Employee's employment is terminated as a result of the
        application of paragraph 5(a) or 5(b), then for a period of the shorter of
        (i)
        one (1) year after the effective date of termination or (ii) the remainder
        of
        the 5-year term of the Agreement) Employee agrees not to compete, directly
        or
        indirectly (including as an officer, director, partner, employee, consultant,
        independent contractor, or more than 5% equity holder of any equity) with
        Employer in any way concerning the ownership, development or management of
        any
        gaming operation or facility within a 75-mile radius of any gaming operation
        or
        facility with respect to which Employer (or any of its affiliates) owns or
        renders consulting or management services at the time of
        termination.

       

      (d) Non-solicitation.
        Employee agrees not to solicit or recruit, directly or indirectly, any
        management employee of Employer for employment during the one (1) year period
        after termination of his employment relationship with Employer.

       

      7. NOTICES. All
        notices and communications shall be sent by certified mail, return receipt
        requested, or by hand delivery, to the following parties

      
         

        
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                  If
                    to Employee:

                	
                  Jon
                    A. Arnesen

                
	 	
                  ________________________

                
	 	
                  ________________________

                
	 	 
	
                  With
                    a copy to:

                	
                  R.
                    Lawrence Heinkel, Esq.

                
	 	
                  111
                    - 2nd
                    Avenue N.E., Suite 510

                
	 	
                  St.
                    Petersburg, FL 33701

                
	 	 
	
                  If
                    to Employer:

                	
                  Nevada
                    Gold & Casinos, Inc.

                
	 	
                  C/o
                    H. Thomas Winn

                
	 	
                  Chief
                    Executive Officer

                
	
                   
                    

                	
                  3040
                    Post Oak Boulevard

                
	
                   
                    

                	
                  Suite
                    675

                
	
                   
                    

                	
                  Houston,
                    Texas  77056

                
	
                  With
                    a copy to:

                	 
	
                   
                    

                	
                  Nevada
                    Gold & Casinos, Inc.

                
	 	
                  C/o
                    Cathy Porter

                
	 	
                  General
                    Counsel

                
	 	
                  3040
                    Post Oak Boulevard

                
	 	
                  Suite
                    675

                
	 	
                  Houston,
                    Texas  77056

                


        

      

       

       

      8. COMPLIANCE
        WITH CODE SECTION 409A.
        Any
        provision of this Agreement to the contrary notwithstanding, all compensation
        payable pursuant to this Agreement that is determined by Employer in its
        sole
        but reasonable judgment to be subject to Section 409A of the Code shall be
        paid
        in a manner that Employer in its sole but reasonable judgment determines
        meets
        the requirements of Section 409A of the Code and any related rules, regulations
        or other guidance, even if meeting such requirements would result in a delay
        in
        the time of payment of such compensation. Any payments pursuant to Section
        4 and
        Section 5(a) and (b) of this Agreement shall be made no later than two and
        one-half months after the year in which the right to receive such amounts
        vest.

       

      9. GOVERNING
        LAW AND VENUE.
        This
        Agreement herein shall be construed, regulated and administered under the
        laws
        of the State of Texas and of the United States of America. Any lawsuit or
        other
        civil action brought arising from or related to Employee's employment with
        Employer or this Agreement shall be brought and maintained in a state or
        federal
        court in Harris County, Texas, except that this provision does not preclude
        Employer from removing to federal court any action filed by Employee and,
        to the
        extent permissible, Employee hereby consents to such removal. 

       

      
        
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      10. BINDING
        EFFECT AND ASSIGNMENT.
        This
        Agreement shall be binding on and inure to the benefit of the respective
        parties
        hereto, their heirs, successors and assigns. Subject to the provisions of
        Section 5(b), Employer may assign this Agreement in connection with a merger,
        consolidation, assignment, sale or other disposition of substantially all
        of its
        assets or business. This Agreement may not be assigned by Employee.

       

      11. REPRESENTATION.
        Employee represents, and understands that Employer is relying on his
        representation, that Employee's entering into or performance of this Agreement
        is not in breach or violation of any other Agreement or obligation of
        Employee.

       

      12. MODIFICATION. This
        Agreement may not be amended in any manner without the express, written consent
        of the parties hereto.

       

      13. ENTIRE
        AGREEMENT.
        This
        Agreement supersedes all previous and contemporaneous oral negotiations,
        commitments, writings and understandings between the parties concerning the
        matters herein or therein.

       

      
         

        
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      IN
        WITNESS WHEREOF, the parties hereto have signed, sealed and delivered this
        Agreement on this 31st day of August, 2005.

       

      
        
          
            	
                    Signed,
                      sealed and delivered in the presence of:

                  	
                    EMPLOYEE

                  
	 	 
	
                    _________________________

                  	
                    _________________________

                    Jon
                      A. Arnesen

                  
	
                    _________________________

                  	
                     

                  
	 	
                    EMPLOYER

                  
	 	 
	
                    _________________________

                  	
                    NEVADA
                      GOLD & CASINOS, INC

                  
	 	 
	
                    _________________________
                      

                  	
                    By:_________________________

                    H.
                      Thomas Winn, CEO

                  
	 	 


          

        

      

       

      
        
           

          
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