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Chief Financial Officer Employment Agreement

This is an actual contract by Anchor Gaming.

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Sectors: Leisure and Entertainment
Governing Law: Nevada, View Nevada State Laws
Effective Date: October 17, 2000
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EXHIBIT 10.35


EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made and entered into as of the 17th day of October, 2000, by and between Geoffrey A. Sage (the "EXECUTIVE") and Anchor Gaming ("ANCHOR" or "EMPLOYER"), a Nevada corporation.


BACKGROUND


Employer is presently completing a restructuring of its ownership (the "Transaction"), which will include changes in its executive management. Employer acknowledges that, following the Transaction, continued access to the experience, knowledge and expertise possessed by Executive will be critical to Employer's success. Employer wishes to ensure that it will retain the services of Executive for a period following the Transaction, and to memorialize the terms of said employment relationship in writing,


This agreement supercedes all previous employment agreements by and between the Company and the Executive. Termination under Executive's new employment agreement will constitute termination under his previous option agreements. Furthermore, a change in control under Executive's new employment agreement will constitute a change of control under his previous option agreements.


NOW THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, the parties agree as follows:


1. EMPLOYMENT. Subject to the terms and conditions set forth in this Agreement, Employer will employ Executive, and Executive hereby accepts such employment with Employer.


2. DUTIES OF EXECUTIVE.


(a) Executive will serve in the capacity of Chief Financial Officer and Treasurer of Anchor, as well as Secretary of the Board of Directors of Anchor (the "BOARD"), and will be subject to supervision by the Chief Executive Officer ("CEO") and/or the Board. In such capacity, Executive will have all necessary powers to discharge his duties and responsibilities, which will include oversight of all financial matters in which Anchor and its affiliated and/or subsidiaries are involved and consulting with other officers of Anchor, as needed; together with such other duties as the Board and/or CEO may reasonably assign, consistent with duties typically assigned to employees who hold positions similar to that of Executive.


(b) During the term of this Agreement and except as provided below, Executive will perform to the best of his abilities all duties assigned to him hereunder, will devote substantially all of his primary business time, attention and effort to the affairs of Anchor and will use his reasonable best efforts to promote the interests of


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Anchor. Notwithstanding the foregoing or anything else in this Agreement, Executive may engage in reasonable charitable, civic or community activities.


(c) Executive has obtained and possesses, or will obtain and possess, and will maintain throughout the Term of this Agreement, all licenses, approvals, permits, and authorization (the "LICENSES") necessary to perform Executive's duties hereunder, including without limitation, any licenses required by any agency of any state or county having jurisdiction to regulate gaming, liquor or the activities undertaken by Employer. Any costs, attorneys' fees, investigations fees or other expenses incurred in connection with obtaining such Licenses shall be borne by Employer. Executive warrants that he is fully eligible, under all standards and requirements, to obtain or possess such licenses and that Executive will commit no acts during the term hereof that would jeopardize or eliminate his ability to possess or maintain such Licenses.


(d) Executive agrees to submit to drug testing in accordance with the Company policy, and to execute a consent form attached as EXHIBIT A.


3. TERM. The term of this Agreement (the "TERM") will commence as of October 17, 2000 (the "EFFECTIVE DATE"), and will continue for a period of 4 years from the Effective Date, at which time this Agreement expires, unless earlier terminated by either party in accordance with the terms and conditions in this Agreement (the date on which Employee's employment with Employer terminates is referred to as the "SEPARATION DATE").


4. COMPENSATION.


(a) SALARY. Commencing on the Effective Date and during the Term of this Agreement, Employer will pay Executive a minimum base salary of two-hundred-and-fifty-thousand dollars ($250,000.00, or $20,833.33 per month), which will be payable in accordance with Employer's standard payroll practice, but in any event, not less frequently than monthly. Such base salary will not include any other benefits made available to Executive, or any contributions or payments made on his behalf pursuant to any employee benefit plan or program of Employer, including health, disability or life insurance plans or programs, 401(k) plans, cash bonus plans, stock option plans, retirement plans, severance plans or any similar plans or programs of any nature that may be offered at any time during the Term of this Agreement.


(b) BONUS COMPENSATION. In addition to the Salary set forth above, Employer will pay Executive an annual bonus in an amount to be determined by, and subject to the sole discretion of, the Board, up to a maximum of two-hundred thousand dollars ($200,000.00), such bonus to be paid at a time and in a manner consistent with payment of such bonuses to other of Employer's officers and/or executives.


(c) EMPLOYEE BENEFITS. During the term of this Agreement, Employer will provide Executive with all benefits made available from time to time by Employer to


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employees and/or officers generally and to employees who hold positions similar to that of Executive (including benefits granted to other officers and/or directors of Employer), as per company policy. Executive's benefits will include, without limit, participation in any and all Employer-sponsored medical, dental and/or vision plans or programs, which will include coverage for Executive's immediate family; disability insurance; life insurance payable to Executive's designated beneficiary; participation in any and all Employer-sponsored retirement plans and/or 401(k) plans; and paid vacation.


(d) EXPENSES. During the term of this Agreement, Executive be entitled to reimbursement for all reasonable and necessary expenses incurred on behalf of Employer, in accordance with the general policy of Employer.


5. RESTRICTED STOCK GRANT.


(a) GRANT. As additional consideration for the services provided by Executive pursuant to this Agreement, Employer will confer upon Executive a restricted stock grant in the amount of five-thousand (5,000) shares of common stock of Employer, which will vest 20% on the date on which the Transaction closes, and vest rateable over twelve successive calendar quarters in equal increments. The restricted stock grant will be subject to the terms and conditions of the Restricted Stock Agreement in substantially the form attached as EXHIBIT B.


6. STOCK OPTIONS. As additional consideration for the services provided by Executive pursuant to this Agreement, Employer will grant to Executive options to purchase thirty-five thousand (35,000) shares of Employer's Common Stock (the "OPTION GRANT") at an exercise price of seventy-one dollars and eighty-seven and one-half cents ($71.875), such grant to be governed by the existing Anchor Gaming 1995 Stock Option Plan and the 2000 Stock Incentive Plan, which is to be presented to shareholders at Employer's next annual meeting. The terms and conditions of this Option Grant shall be set forth in a separate Stock Option Agreement, which is attached hereto as EXHIBIT B.


7. SEVERANCE.


(a) In the event that Executive's employment is terminated by Employer for Cause (as defined below), Executive will receive no severance of any kind.


(b) In the event that Executive voluntarily terminates his employment with Employer, he will receive no severance payment of any kind.


(c) In the event that Employer chooses to terminate Executive's employment for other than Cause, Executive will receive a severance payment equal to one year's salary, as set forth in SECTION 4(A), less any and all applicable withholding.


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(d) "CAUSE" means that the Board reasonably finds that any one or more of the following events has occurred: (i) performance by Participant of illegal or fraudulent acts, criminal conduct, or willful misconduct relating to the activities of the Company, including, without limit, violation by Participant of any material gaming laws or regulations, which violation materially and adversely affects the ability of Participant to perform his duties to the Company or may subject the Company to liability; (ii) conviction of, or nolo contendere plea by Participant to, any criminal acts involving moral turpitude having a material adverse effect upon the Company, including, without limitation, upon its profitability, reputation, or goodwill; (iii) willful and material disregard of any reasonable directive(s) from the Board that are not inconsistent with the terms of any contract with the Company to which Participant is party, PROVIDED that the Board will provide Participant with written notice that such event has occurred ("NOTICE OF DISREGARD") and will further allow Participant 30 days in which to cure such disregard, and PROVIDED FURTHER that the Board will provide an opportunity for Participant to be heard if there is no cure within 30 days of the Notice of Disregard; (iv) breach of fiduciary duty, PROVIDED that the Board will provide Participant with written notice that such event has occurred ("NOTICE OF BREACH OF FIDUCIARY DUTY") and will further allow Participant 30 days in which to cure such breach of fiduciary duty, and PROVIDED FURTHER that the Board will allow an opportunity for Participant to be heard if there is no cure within 30 days of the Notice of Breach of Fiduciary Duty; (v) material violation, not cured in a reasonable time after notice from the Company, by Participant of any of the covenants and agreements contained in any agreement with the Company to which Participant is party; (vi) failure or inability of Participant to obtain or maintain required gaming licenses or approvals.


(e) "CHANGE OF CONTROL" means the occurrence of any of the following events, as a result of one transaction or a series of transactions: (i) any "person" (as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), but excluding the Company, its affiliates, and any qualified or non-qualified plan maintained by the Company or its affiliates) becomes the "beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Anchor Gaming representing more than 50% of the combined voting power of the Anchor Gaming's then outstanding securities; (ii) individuals who constitute a majority of the Board of Directors of the Company immediately prior to a contested election for positions on the Board cease to constitute a majority as a result of such contested election; (iii) Anchor Gaming is combined (by merger, share exchange, consolidation, or otherwise) with another entity and as a result of such combination, less than 50% of the outstanding securities of the surviving or resulting entity are owned in the aggregate by the former shareholders of Anchor Gaming; (iv) the Company sells, leases, or otherwise transfers all or a majority of all of its properties, assets or income or revenue generating capacity to another person or entity; (v) a dissolution or liquidation of Anchor Gaming or; (vi) any other transaction or series of transactions is consummated that result
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