AMENDED AND RESTATED EMPLOYMENT AGREEMENT David Lopez
EXHIBIT
10.6
AMENDED
AND RESTATED
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THIS AGREEMENT (the
“Agreement”) is made and entered into as of the 31st day of December, 2008, by
and between Shuffle Master, Inc., a Minnesota corporation (the “Company”), and
▇▇▇▇▇ ▇▇▇▇▇ (the “Employee”), a resident of the State of Nevada.
RECITALS:
A. The
Company is in the business of developing, manufacturing, distributing and
otherwise commercializing card shufflers and its proprietary table games (both
live and electronic) (the “Business”), throughout the world.
B. Company
and Employee want to create an at-will employment relationship that protects the
Company with appropriate confidentiality and non-compete covenants, and
compensates and rewards the Employee for performing his obligations for the full
term of this contract or such shorter term, as may be determined in accordance
with the terms and conditions of this Agreement.
C. The
Company and Employee desire that Employee be employed by the Company on the
terms and conditions of this Agreement.
D. On
or about June 10, 2008 (the “Execution Date”), the Employee and Company
previously entered into an employment agreement dated as of June 10, 2008 (the
“Previous Agreement”), as amended by that First Amendment dated November 16,
2008.
E. The
Company and the Employee desire to amend and restate the Previous Agreement
solely in order to make changes to comply with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”).
AGREEMENT
In consideration of the mutual promises
contained herein, Employee and the Company agree as follows:
1. Employment. The
Company hereby employs Employee as its Executive Vice President reporting to the
Chief Executive Officer of the Company or his designee. Employee
shall perform the normal duties of that position. Subject to the
other terms and conditions hereof, Employee’s employment under this Agreement
with the Company is for an initial term of three years and six months (the
“Term”), beginning May 1, 2008 (the “Commencement Date”), through October
31,
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2011. The
parties acknowledge that from the Commencement Date through November 16, 2008,
Employee was employed as the Company’s President – Shuffle Master
Americas.
2. Salary,
Bonus and Benefits.
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a.
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From
the Commencement Date and if employed through October 31, 2008, Employee
shall be paid an annual base salary of no less than Two Hundred Sixty
Thousand Dollars ($260,000.00), paid in the same intervals as other
employees of the Company; and if employed through October 31, 2008,
Employee will also be eligible to receive an executive bonus in accordance
with the terms and conditions of the executive bonus program authorized by
the Board of Directors of the Company (the “Board”) for other senior
management executives of the Company for fiscal year 2008, which, for
fiscal year 2008, shall have a target bonus of no less than 50% of
Employee’s base salary.
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b.
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For
any subsequent year after Fiscal Year 2008, Employee will receive an
annual base salary of no less than his annual base salary for the
immediately prior year of this Agreement, as adjusted upward by the
Company, and will also be eligible to participate in an executive bonus
program and/or in an individual performance bonus program as authorized by
the Board for said period.
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c.
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Stock
option, restricted shares or other equity grants (“Equity”), if any, will
be at the sole discretion of the
Board.
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d.
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Except
as modified herein, any Equity issued at any time to Employee shall vest
in accordance with the terms and conditions set forth in the applicable
grant by the Board and, as otherwise may be applicable, with any relevant
terms and conditions of Shuffle Master, Inc.’s 2004 Equity Incentive Plan
(the “Plan”) or any subsequent plan, except as modified by the terms and
conditions of the applicable grant by the
Board.
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e.
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During
the Term, the Company agrees to provide Employee with the same benefits it
provides all of the other senior management employees of the
Company. Employee will not, however, be eligible to participate
in the Company’s non-executive bonus
program.
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f.
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Except
as otherwise set forth herein, Employee’s salary is set in the expectation
that Employee’s full professional time during the Term will be devoted to
Employee’s duties hereunder.
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g.
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During
Employee’s employment with the Company, the Company will promptly pay or
reimburse Employee for reasonable travel and other expenses incurred by
Employee in the furtherance of or in connection with the performance of
Employee’s duties. Such reimbursement will be in accordance
with Company policies in existence from time to
time.
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3. Outside Services or
Consulting. Except as otherwise set forth herein, Employee,
during the Term, shall devote Employee’s full professional time and best
professional efforts to the Company. Employee may render other
professional or consulting services to other persons or businesses from time to
time during the Term, only if Employee meets all of the following
requirements:
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a.
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The
services do not interfere in any manner with the Employee’s ability to
fulfill all of his duties and obligations to the
Company.
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b.
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The
services are not rendered to any business which may compete with the
Company in any area of the Business or do not otherwise violate paragraph
4 hereof.
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c.
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The
services do not relate to any products or services, which form part of the
Business.
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d.
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Employee
informs and obtains the prior consent of the Chief Executive Officer of
the Company.
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4. Non-competition. In
consideration of the provisions of this Agreement, Employee hereby agrees that
he shall not, during the Term and for a period (the “Non-Compete Period”) of
twenty-four (24) months thereafter:
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a.
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Directly
or indirectly own, manage, operate, participate in, consult with or work
for any business, which is engaged in the Business anywhere in the
world. Notwithstanding the foregoing, it is understood and
agreed that Employee may hold up to one percent (1%) of the shares of any
publicly traded company.
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b.
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Either
alone or in conjunction with any other person, partnership or business,
directly or indirectly, solicit, hire, or divert or attempt to solicit,
hire or divert any of the employees, independent contractors, or agents of
the Company (or its affiliates or successors) to work for or represent any
competitor of the Company (or its affiliates or successors), or to call
upon, on behalf of a competitor of or to the Business, any of the
customers of the Company (or its affiliates or
successors).
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c.
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Directly
or indirectly provide any services to any person, company or entity, which
is engaged in the Business anywhere in the
world.
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5. Confidentiality;
Inventions.
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a.
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Employee
shall fully and promptly disclose to the Company all inventions,
discoveries, software and writings that Employee may make, conceive,
discover, develop or reduce to practice either solely or jointly with
others during Employee’s employment with the Company, whether or not
during usual work hours. Employee agrees that all such
inventions, discoveries, software and writing shall be and remain the sole
and exclusive property of the Company, and Employee hereby agrees to
assign, and hereby assigns all of Employee’s right, title and interest in
and to any such inventions, discoveries, software and writings to the
Company. Employee agrees to keep complete records of such
inventions, discoveries, software and writings, which records shall be and
remain the sole property of the Company, and to execute and deliver,
either during or after Employee’s employment with the Company, such
documents as the Company shall deem necessary or desirable to obtain such
letters patent, utility models, inventor’s certificates, copyrights,
trademarks or other appropriate legal rights of the United States and
foreign countries as the Company may, in its sole discretion, elect, and
to vest title thereto in the Company, its successors, assigns, or
nominees.
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b.
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c.
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“Inventions,”
as used herein, shall include inventions, discoveries, improvements, ideas
and conceptions, developments and designs, whether or not patentable,
tested, reduced to practice, subject to copyright or other rights or forms
of protection, or relating to data processing, communications, computer
software systems, programs and
procedures.
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d.
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Employee
understands that all copyrightable work that Employee may create while
employed by the Company is a “work made for hire,” and that the Company is
the owner of the copyright therein. Employee hereby assigns all
right, title and interest to the copyright therein to the
Company.
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e.
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Employee
has no inventions, improvements, discoveries, software or writings useful
to the Company or its subsidiaries or affiliates in the normal course of
business, which were conceived, made or written prior to the date of this
Agreement.
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f.
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Employee
will not publish or otherwise disclose, either during or after Employee’s
employment with the Company, any published or proprietary or confidential
information or secret relating to the Company, the Business, the Company’s
operations or the Company’s products or services. Employee will
not publish or otherwise disclose proprietary or confidential information
of others to which Employee has had access or obtained knowledge in the
course of Employee’s employment with the Company. Upon
termination of Employee’s employment with the Company, Employee will not,
without the prior written consent of the Company, retain or take with
Employee any drawing, writing or other record in any form or nature which
relates to any of the foregoing. Notwithstanding the foregoing,
Employee shall have the right, as reasonably necessary, to retain copies
of this Agreement, any employee stock option and restricted stock
agreements, any other documents, information or materials related to
Employee’s compensation or benefits from the Company (in order to
confidentially review such items with Employee’s professional advisors or
immediate family members), and any other documents which relate to
Employee’s duties or obligations (fiduciary, ethical or otherwise) to the
Board or the shareholders. In addition, and subject to the
provisions of paragraph 24 hereof, nothing in this paragraph 5(e) or in
paragraph 5(f) below shall be construed to prevent or preclude Employee
from responding to legal process or testifying
truthfully.
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g.
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With
respect to any confidential information, Employee understands that
Employee’s employment with the Company creates a relationship of trust and
confidence between Employee and the Company. Employee
understands that Employee may encounter information in the performance of
Employee’s duties that is confidential to the Company or its
customers. For the Term hereof, and until the information falls
into the public domain, Employee agrees to maintain in confidence all
information pertaining to the Business or the Company to which Employee
has access including, but not limited to, information relating to the
Company’s products, inventions, trade secrets, know how, systems,
formulas, processes, compositions, customer information and lists,
research projects, data processing and computer software techniques,
programs and systems, costs, sales volume or strategy, pricing,
profitability, plans, marketing strategy, expansion or acquisition or
divestiture plans or strategy and information of similar nature received
from others with whom the Company does business. Employee
agrees
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h.
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not
to use, communicate or disclose or authorize any other person to use,
communicate or disclose such information orally, in writing, or by
publication, either during Employee’s employment with the Company or
thereafter except as expressly authorized in writing by the Company unless
and until such information becomes generally known in the relevant trade
to which it relates without fault on Employee’s part, or as required by
law. Subject to the foregoing, Employee shall have the rights
set forth in the final two grammatical sentences of paragraph 5(e)
above. Confidential information shall not include any
information in the public domain or otherwise generally available to the
public.
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6. Termination
Without Just Cause or Non-Extension by Company.
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a.
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Employee’s
employment by the Company is “at will;” therefore, subject to the terms
and conditions hereof, the Company may terminate Employee’s full-time
employment at any time either with or without just cause. In
the event of any termination of Employee’s full-time employment with the
Company without just cause (including a termination without just cause
that qualifies as a “Company Termination Without Just Cause”, as defined
in paragraph 6(b) hereof), or in the event that Employee’s full-time
employment is not extended or renewed beyond the Term on terms at least as
favorable to Employee as Employee is receiving during the last year of the
Term, then Employee will remain bound to the covenants not to compete and
confidentiality obligations of paragraphs 4 and 5 of this Agreement,
according to their terms, and, subject to Section 26, each one of the
following shall apply:
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i. Employee
shall be paid a severance amount (the “Severance”) equal to twelve (12) months
of his then monthly base salary paid over a period of twenty-four (24) months
from Employee’s termination, except that, if the termination without just cause
qualifies as a Company Termination Without Just Cause as set forth in any of
paragraphs 6(b)(i), 6(b)(ii), 6(b)(iii) or 6(b) (iv), then the Severance amount
shall be equal to twenty-four (24) months of Employee’s then monthly base salary
paid over a period of twenty-four (24) months from Employee’s termination; and,
in any of said cases, in equal monthly installments and at the same intervals as
other employees of the Company are then being paid their base
salaries;
ii. Employee
shall continue to receive, during the 24 months from Employee’s termination, the
same medical and dental insurance, (including without limitation prescription
drugs), (collectively, “Health Insurance”), and any other benefits or insurance
coverages which Employee would have received had his employment not been so
terminated, or not extended, (but in no event less coverage than Employee is
receiving on the Execution Date, or that is at least equal to the coverage being
received by any senior management level employee); provided, however, if the
Employee is not eligible for said Health Insurance, the Company shall pay the
COBRA premiums for continuation coverage during the said 24-month period;
further provided that, at Employee’s sole option, during said 24-month period,
Employee can elect to also have his spouse covered under said Health Insurance,
with the Employee paying the Company the incremental monthly cost which the
Company incurs to so cover his spouse. (For the avoidance of doubt,
the Company and Employee agree that it is the intent of this language and of
this paragraph 6(a), and that this language means, among other
things,
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iii. that
Employee will continue to vest in all Equity awards and receive all benefits
during said 24-month period after Employee’s termination);
iv. Employee
shall receive, during the 24-month period from Employee’s termination,
additional compensation (the “Additional Compensation”) for his agreeing herein
to a covenant not to compete, equal to the amount of the average of all of the
annual bonuses which Employee has received over the last five (5) full fiscal
years while working full-time for the Company (the “5-year Bonus Average”), also
paid at the same intervals as Employee is then being paid his base salary,
except that if the termination without just cause qualifies as a Company
Termination Without Just Cause, then the Additional Compensation shall be equal
to the 5-year Bonus Average multiplied by two (2);
v. During
the 24-month period from Employee’s termination, Employee shall be available to
perform services on a part-time basis (on a guaranteed “no dismissal” basis and
not subject to any termination, other than for just cause) for the Company and,
subject to Employee’s other professional and/or personal duties or time
commitments, shall be reasonably available, by telephone or email, to the Chief
Executive Officer of the Company, but shall not be required to be physically in
the Company’s offices or to travel on behalf of the Company, provided, however,
that, for the avoidance of doubt, the Employee shall perform services during
such 24 month period at a level of no more than 20 percent of the average level
of bona fide services the Employee performed over the immediately preceding 36
month period such that the Employee shall have incurred a “separation from
service” within the meaning of Section 1.409A-1(h) of the Department of Treasury
Regulations on the date of the Employee’s termination of
employment.
vi. One (1)
business day before the expiration of the 24-month period from Employee’s
termination, any Equity which is or remains unvested as of said day shall
accelerate vest and be fully vested on such day.
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b.
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For
purposes hereof, any of the following acts or events shall, at Employee’s
sole option, and at any time after any such occurrence, constitute a
termination without just cause under this paragraph 6 (but the following
is not the entire list of reasons or event which may constitute a
“termination without just cause”):
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i. any
material diminution or reduction of Employee’s title, position, duties,
reporting relationships, or responsibilities, except as solely caused by the
acts or omissions of Employee;
ii. any
material breach by Company of this Agreement that is not cured within thirty
(30) days after written notice by Employee of such
breach;
iii. the
Company electing (other than for just cause) to end Employee’s full-time
employment, for any reason or no reason, after a new CEO is elected to succeed
▇▇▇▇ ▇▇▇▇▇▇▇▇;
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Employee’s
ending of his employment (whether intentionally or otherwise, or by retirement
or resignation, and irrespective of whether or not the Company is offering
Employee continuing employment), at any time after there is a Change of
Control;
iv. Employee’s
ending of his employment (whether intentionally or otherwise, or by retirement
or resignation, and irrespective of whether or not the Company is offering
Employee continuing employment), any time after October 31, 2011;
Provided,
however, that any of the events listed in paragraphs 6(b)(i), 6(b)(ii),
6(b)(iii), and 6(b)(iv) herein shall each qualify as a Company Termination
Without Just Cause; and if there are multiple reasons for Employee’s termination
without just cause, and one of them qualifies as a Company Termination Without
Just Cause, then said termination shall be deemed and treated as a Company
Termination Without Just Cause;
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c.
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In
the event that, at the end of the
Term:
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i) the
Company elects not to extend or renew Employee’s full-time employment beyond the
Term on terms at least as favorably to Employee as Employee is receiving during
the last fiscal year of the Term, then such non-extension or non-renewal shall
be deemed and treated as a Company Termination Without Just Cause.
ii)
irrespective of whether or not the Company offers Employee continued employment
or otherwise offers to extend this Agreement, Employee, intentionally or
otherwise, by retirement or resignation, ends his employment, then such
non-renewal, non-extension, or ending of his employment shall be deemed and
treated as a termination without just cause, and governed by the provisions of
paragraph 6(b)(v).
iii) in
either of such cases, each of the applicable provisions of paragraph 6(a) shall
apply and Employee shall be bound to the provisions of paragraphs 4 and 5 hereof
for the 24-month period of time during which Employee is being paid pursuant to
paragraph 6(a).
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d.
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Employee’s
termination of employment by reason of death or total “Disability” shall
not be a termination without just cause under paragraph 6; in either such
event, and notwithstanding any other provisions contained herein, however,
Employee shall still be entitled upon a termination of employment by
reason of death or Disability to receive: a lump sum payment of
6 months of his then base salary: the acceleration and immediate vesting
of all Equity; and any disability, life insurance, or other benefits to
which Employee is entitled. For purposes of this
Agreement, “Disability” shall mean the total disability as determined by
the Board in accordance with standards and procedures similar to those
under the Company’s long-term disability plan, or, if none, a physical or
mental infirmity which impairs Employee’s ability to perform substantially
his duties for a period of 180 consecutive days, provided, however, to the
extent required for purposes of compliance with Code Section 409A, a
disability shall not be deemed to have occurred unless the disability
constitutes a “Disability” within the meaning of Code Section
409A.
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7. Early Termination by Company for Just
Cause. The Company may terminate Employee for just
cause. In the event that the Company terminates the Employee for just
cause, the Employee will remain bound under the provisions of paragraphs 4 and
5, but will not be entitled to any compensation or benefits following his
termination of employment under this Agreement, other than any accrued but
unpaid salary or other benefits required by applicable
law. Termination for “just cause” shall only mean:
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a.
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material
dishonesty as to a matter which is materially injurious to the Company,
which act or omission is not remedied by the Employee within thirty (30)
days following the Board’s specific written notice stating such alleged
act or omission;
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b.
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the
commission of a willful act or omission intended to materially injure the
business of the Company, which act or omission is not remedied by the
Employee within thirty (30) days following the Board’s specific written
notice stating such alleged act or
omission;
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c.
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a
material violation of any of the material provisions of Sections 4 and/or
5 hereof, which violation is not remedied by the Employee within thirty
(30) days following the Board’s specific written notice stating such
alleged violation; or
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d.
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a
determination in writing and in good faith by the Board that the Employee
has failed to make a good faith effort to fully perform his duties as
assigned by either the CEO or the Board, which failure is not remedied by
the Employee within thirty (30) days following the CEO’s specific written
notice stating such alleged failure from the
Board;
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8. Voluntary
Termination by Employee.
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a.
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In
the event Employee “voluntarily quits” (as defined in and subject to
paragraph 8(b)) his employment with the Company, Employee will remain
bound under the provisions of paragraphs 4 and 5 hereof, for a period of
24 months from such voluntary quit, but will not be entitled to receive
any compensation and benefits following his termination of employment
except for (and which he shall receive): any accrued but unpaid
salary; any other benefits required by law; and any already vested
Equity.
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b.
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“Voluntary
Quit” means an intentional termination by the Employee without good reason
and without pressure by the Company; and further, provided that, at the
time of such “Voluntary Quit”, there was not a material breach of this
Agreement by the Company. Notwithstanding the foregoing,
“Voluntary Quit” shall not, in any event, mean and not be deemed to have
occurred if Employee, intentionally or otherwise, by resignation or
retirement, and irrespective of whether or not the Company is offering
Employee continuing employment, either ends his employment pursuant to or
under any of the provisions of paragraph 6(b) hereof, or if there is any
termination without just cause.
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9. Change in
Control. A Change in Control of the Company shall mean any of
the following:
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a.
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The
Company is no longer a U.S. listed public company for a period of 3
consecutive months;
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b.
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Fifty
percent (50%) or more of the Company’s Equity is acquired by or merged
with another entity or entities; or
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c.
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An
event defined as a Change in Control in any of the Company’s employee
stock plans occurs.
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After any
Change in Control, if Employee ends his employment pursuant to 6(b)(iv), then
Employee shall not be required to be physically present in the Company’s offices
or to travel on behalf of the Company during the applicable 24-month period, but
shall be allowed to perform any work required of him during the 24-month period
from a remote location, and by telephone or email, but, at all times, subject to
Employee’s other duties or time commitments; and, further, notwithstanding any
such Change in Control and the provisions of this paragraph 9, each of the
provisions of paragraphs 4, 5 and 6 shall continue to fully apply to
Employee.
10. No Conflicting
Agreements. Employee has the right to enter into this
Agreement, and hereby confirms Employee has no contractual or other impediments
to the performance of Employee’s obligations including, without limitation, any
non-competition or similar agreement in favor of any other person or
entity.
11. Company
Policies. Except as otherwise set forth herein, during the
Term, Employee shall engage in no activity or employment which may conflict with
the interest of the Company, and Employee shall comply with all policies and
procedures of the Company including, without limitation, all policies and
procedures pertaining to ethics; provided, however, this paragraph 11 shall not
apply in the event of a Change of Control.
12. Independent
Covenants. The covenants and agreements on the part of the
Employee contained in paragraphs 4 and 5 hereof shall be construed as agreements
independent of any other provision in this Agreement; thus, it is agreed that
the relief for any claim or cause of action of the Employee against the Company,
whether predicated on this Agreement or otherwise, shall be measured in damages
and shall not constitute a defense or bar to enforcement by the Company of those
covenants and agreements.
13. Injunctive
Relief. In recognition of the irreparable harm that a
violation by Employee of any of the covenants contained in either paragraphs 4
or 5 hereof would cause the Company, the Employee agrees that, in addition to
any other relief afforded by law, an injunction (both temporary and permanent)
against such violation or violations may be issued against him or her and every
other person and entity concerned thereby, it being the understanding of the
parties that both damages and an injunction shall be proper modes of relief and
are not to be considered alternative remedies; provided, however, that the issue
and amount, if any, of damages shall be litigated through arbitration as
required by paragraph 20 below. Employee consents to the issuance of
such injunctive relief without the posting of a bond or other
security. In the event any such alleged violation, THE LOSING PARTY
AGREES TO PAY THE COSTS, EXPENSES AND REASONABLE ATTORNEYS’ FEES INCURRED BY THE
PREVAILING PARTY IN PURSUING OR DEFENDING ANY OF ITS RIGHTS WITH RESPECT TO SUCH
ALLEGED
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VIOLATIONS,
IN ADDITION TO THE ACTUAL DAMAGES SUSTAINED BY THE PREVAILING PARTY AS A RESULT
THEREOF.
14. Notice. Any notice
sent by registered mail to the last known address of the party to whom such
notice is to be given shall satisfy the requirements of notice in this
Agreement.
15. Entire
Agreement. This Agreement is the entire agreement of the
parties hereto concerning the subject matter hereof and supersedes and replaces
in its entirety any oral or written existing agreements or understandings
between the Company and the Employee relating generally to the same subject
matter. Company and Employee hereby acknowledge that there are no
agreements, promises, representations or understandings of any nature, oral or
written, regarding Employee’s employment, apart from this Agreement, and
Employee acknowledges that no promises, representations or agreements not
contained in this Agreement have been made or offered by the
Company. This Agreement supersedes all previous employment agreements
between the Company and the Employee.
16. Severability. It is
agreed and understood by the parties hereto that if any provision of this
Agreement should be determined by an arbitrator or court to be unenforceable in
whole or in part, it shall be deemed modified to the minimum extent necessary to
make it reasonable and enforceable under the circumstances, and the court shall
be authorized by the parties to reform this Agreement in the least way necessary
in order to make it reasonable and enforceable.
17. Governing Law. This
Agreement shall be construed and enforced in accordance with the laws of the
State of Nevada, without giving effect to the principles of conflicts of laws
thereof.
18. Heirs, Successors and Assigns.
The terms, conditions, obligations, agreements and covenants hereof shall
extend to, be binding upon, and inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors, assigns, and/or
acquirers, including any entity which acquires, merges with, or obtain control
of the Company.
19. Waiver of
Breach. The waiver by either the Company or the Employee of
any breach of any provision of this Agreement shall not operate as or be deemed
a waiver of any subsequent breach by either the Company or the
Employee.
20. Dispute
Resolution. Except for the Company’s right (either pursuant to
paragraph 13 hereof or otherwise) to injunctive relief to enforce the provisions
of paragraphs 4 and 5 hereof, the exclusive forum for the resolution of any
dispute arising under this Agreement or any question of interpretation regarding
the provisions of this Agreement (other than disputes relative to paragraphs 4
or 5 hereof) shall be resolved by arbitration, to be held in ▇▇▇▇▇ County,
Nevada, in accordance with the rules of the American Arbitration Association
(“AAA”). Such arbitration shall be before an arbitrator, chosen in
accordance with the rules then in effect of the AAA. In the event the
Employee and Company fails within a reasonable period of time to agree on an
arbitrator, the arbitrator shall be chosen by the AAA. The decision
of the arbitrator shall be final, conclusive and binding upon the Company and
Employee.
21. Amendment. This
Agreement may be amended only by a document in writing signed by both the
Employee and a Corporate Officer (other than Employee) of the Company, and no
course of dealing or conduct of the Company shall constitute a waiver of any of
the provisions of this Agreement.
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22. Fees and Costs. In
any action bought by one party against the other pursuant to this Agreement or
in the event of any dispute over the meaning of this Agreement, the successful
party, in addition to recovering its awarded damages and other relief, shall be
entitled to recover its attorney’s fees and costs from the unsuccessful
party.
23. D & O
Policy. During the Term and for the five (5) year period
thereafter, the Company shall maintain director and officer liability insurance
which shall cover, among others, Employee, and, in connection therewith,
Employee shall be entitled to any applicable indemnification and defense cost
provisions, if any, as provided for in the Company’s By-Laws or under any
applicable director and officer liability insurance
policy. Employee’s coverage under any director and officer liability
insurance policy shall be no less than that of the most senior corporate officer
of the Company, or, in the event of a Change in Control, no less than that of
the most senior corporate officer of any acquiring entity.
24. Non-Disparagement
and Cooperation.
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a.
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During
any period of time wherein the Company is paying any base salary to
Employee, whether during the Term hereof or during any time after the
termination or expiration of this Agreement, and for a period of three (3)
years thereafter, Employee shall not disparage or otherwise make any
negative comments about the Company, its policies, products, employees or
management. The Company may enforce these non-disparagement
provisions by resort to injunctive relief as set forth in paragraph 13, in
addition to any other damages that it may be entitled to under this
Agreement or otherwise at law. Notwithstanding the foregoing,
nothing in this paragraph 24(a) shall preclude Employee from fully
pursuing any legitimate claims he may have or from testifying truthfully
in an arbitration or other legal
proceeding.
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b.
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Employee
agrees to fully cooperate with the Company and its affiliates during the
entire scope and duration of any litigation or administrative proceedings
involving any matters with which Employee was involved during Employee's
employment with the Company. Such cooperation shall be subject
to the reasonable demands of any subsequent employment undertaken by
Employee, and Company shall cover any reasonable out-of-pocket expenses of
Employee in so cooperating, excluding, any attorney’s fees incurred by
Employee, unless said attorney’s fees are expressly authorized, permitted,
or required under paragraph 23
hereof.
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c.
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In
the event Employee is contacted by parties or their legal counsel involved
in litigation adverse to the Company or its affiliates, Employee (i)
agrees to provide notice of such contact as soon as practicable; and (ii)
acknowledges that any communication with or in the presence of legal
counsel for the Company (including without limitation the Company's
outside legal counsel, the Company's inside legal counsel, and legal
counsel of each related or affiliated entity of the Company) shall be
privileged to the extent recognized by law and, further, will not do
anything to waive such privilege unless and until a court of competent
jurisdiction decides that the communication is not
privileged. In the event the existence or scope of the
privileged communication is subject to legal challenge, then the Company
must either waive the privilege or pursue litigation to protect the
privilege at the Company's sole
expense.
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11
25. Limitation
on Benefits.
If any
payment or benefit received or to be received by Employee (including any payment
or benefit received pursuant to any employee stock plan or otherwise) would be
(in whole or part) subject to the excise tax imposed by Section 4999 or Section
280G of the Internal Revenue Code, or any successor provision thereto, or any
similar tax imposed by state or local law, or any interest or penalties with
respect to such excise tax (such tax or taxes, together with any such interest
and penalties, are hereafter collectively referred to as the “Excise Tax”),
then, the payments and benefits provided hereunder shall be reduced to the
extent necessary to make such payments and benefits not subject to such Excise
Tax (with payments scheduled later in time being reduced first, and those
scheduled earlier in time being reduced last), but only if such reduction
results in a higher after-tax payment to Employee after taking into account the
Excise Tax and any additional taxes Employee would pay if such payments
and benefits were not reduced.
26. Section 409A
Compliance.
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a.
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This
Agreement is intended to comply with Section 409A of the Code (to the
extent applicable) and, to the extent it would not adversely impact the
Company, the Company agrees to interpret, apply and administer this
Agreement in a manner necessary to comply with such requirements and
without resulting in any diminution in the value of payments or benefits
to the Employee. Notwithstanding any other provisions of this Agreement,
the Company does not guarantee that payments will be exempt or comply with
Section 409A of the Code, nor will the Company indemnify, defend or hold
harmless Employee with respect to the tax consequences of any such
failure.
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b.
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It
is intended that (i) each installment of the payments provided under this
Agreement is a separate “payment” for purposes of Section 409A of the
Code, (ii) that the payments satisfy, to the greatest extent possible, the
exemptions from the application of Section 409A of the Code provided under
Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and
1.409A-1(b)(9)(v) and (iii) all amounts set forth in Section 6 shall be
payable only upon a termination of the Employee’s employment that
constitutes a “separation from service” within the meaning of Treasury
Regulation 1.409A-1(h).
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c.
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Notwithstanding
anything to the contrary in this Agreement, if the Company determines (i)
that on the date the Employee’s employment with the Company terminates,
the Employee is a “specified employee” (as such term is defined under
Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any
payments to be provided to the Employee pursuant to this Agreement are or
may become subject to the additional tax under Section 409A(a)(1)(B) of
the Code or any other taxes or penalties imposed under Section 409A of the
Code if provided at the time otherwise required under this Agreement then
such payments shall be delayed until the date that is six months after the
date of the Employee’s “separation from service” with the Company, or, if
earlier, the date of the Employee’s death. Any payments delayed
pursuant to this Section 26 shall be made in a lump sum on the first day
of the seventh month following the Employee’s “separation from service”
(as such term is defined under Treasury Regulation 1.409A-1(h)), or, if
earlier, the date of the Employee’s
death.
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d.
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To
the extent that any reimbursement, fringe benefit or other, similar plan
or arrangement in which the Employee participates during the term of
Employee’s employment under this Agreement or thereafter provides for a
"deferral of compensation" within the meaning
of
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12
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e.
|
Section
409A of the Code, (i) the amount eligible for reimbursement or payment
under such plan or arrangement in one calendar year may not affect the
amount eligible for reimbursement or payment in any other calendar year
(except that a plan providing medical or health benefits may impose a
generally applicable limit on the amount that may be reimbursed or paid),
and (ii) subject to any shorter time periods provided herein or the
applicable plans or arrangements, any reimbursement or payment of an
expense under such plan or arrangement must be made on or before the last
day of the calendar year following the calendar year in which the expense
was incurred.
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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the day, month and year first
above written.
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EMPLOYER:
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EMPLOYEE:
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SHUFFLE
MASTER, INC.
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▇▇▇▇▇
▇▇▇▇▇
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|
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BY: /s/ ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇
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BY: /s/ ▇▇▇▇▇
▇▇▇▇▇
|
|
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ITS: Chief Executive
Officer
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APPROVED:
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||
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COMPENSATION
COMMITTEE
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||
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BY: /s/ ▇▇▇
▇▇▇▇▇▇
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||
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ITS: Chairman
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13