EXHIBIT 10.6
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
David Lopez
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 David Lopez
(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,
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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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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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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Stock option,
restricted shares or other equity grants (“Equity”), if
any, will be at the sole discretion of the Board.
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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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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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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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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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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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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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The services do
not relate to any products or services, which form part of the
Business.
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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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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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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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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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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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“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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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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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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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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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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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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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,
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
no
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