Employment Agreement - Shuffle Master Inc. and Gary W. Griffin
Gary W. Griffin
THIS AGREEMENT is made and entered into effective as of the 22nd day of May 2002, by and between Shuffle Master, Inc., a Minnesota corporation (the "Company"), and Gary W. Griffin (the "Employee").
In consideration of the mutual promises contained herein, Employee and the Company agree as follows:
1. Employment. The Company hereby employs Employee from the effective date of this Agreement through September 30, 2003. This employment relationship may be terminated by Employee at any time subject to certain consequences as hereinafter set forth, and by the Company only for just cause as hereinafter set forth. Employee shall be employed as Executive Advisor initially to provide advice and assistance to the new Chief Financial Officer ("CFO") and the Chief Executive Officer ("CEO") and Chairman of the Board of Directors of the Company to help facilitate the transition to the new CFO. Employee shall be employed full-time by the Company through June 30, 2002; thereafter, Employee shall provide services part-time as reasonably requested by the CFO regarding financial, business or systems activities, corporate financial or business planning, investor relations, acquisitions, and matters of strategic significance, but without "line" responsibility.
2. Salary and Benefits. Employee will be paid as follows:
Employee's salary during the period from March 13, 2002 through June 30, 2002, is set on the expectation (except for vacation days and holidays) that Employee's time will be spent as reasonably
needed to perform his duties to assist the Company's CFO. Such expectation notwithstanding, Company will not require that Employee travel more than three (3) nights per month. The Company agrees to provide Employee with the general benefits it provides its executive team through June 30, 2002, and to provide Employee with the general benefits it provides its non-executive employees thereafter during the term of this Agreement. Employee will not, however, be eligible to participate in the Company's executive or non-executive bonus program at any time during the term of this Agreement and Employee acknowledges that Company has no obligation to issue additional stock option grants to Employee.
3. Outside Consulting and Other Part-time Employment. While employed full-time by the Company Employee may render consulting services to other businesses or institutions from time to time, and while employed part-time with the Company, Employee may render either consulting or part-time employment services to other businesses or institutions from time to time, providing that:
4. Non-competition. Employee shall not, for a period of three (3) years beginning on May 1, 2002:
The foregoing covenants shall benefit as well any successor to the Company.
5. Payment for Non-Compete Covenant. In consideration of only the covenants in Section 4 hereof, including the three (3) year period of non-competition, the Company agrees to compensate Employee as follows:
All such payments shall be subject to applicable withholding, and, to the extent permitted by law and the Company's plans, Employee may direct the Company to deduct from such payments amounts for contribution to Employee's 401(k) account sponsored by the Company.
6. Other Provisions:
The Company shall reimburse Employee for all reasonable business expenses Employee incurs directly for Company-related business purposes.
7. Confidentiality; Inventions.
Subdivision 1. Any provision in an employment agreement which provides that an employee shall assign or offer to assign any of the employee's rights in an invention to the employer shall not apply to an invention for which no equipment, supplies, facility or trade secret information of the employer was used and which was developed entirely on the employee's own time, and (1) which does not relate (a) directly to the business of the employer or (b) to the employer's actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by the employee for the employer. Any provision which purports to apply to such an invention is to that extent against the public policy of this state and is to that extent void and unenforceable.
Subdivision 2. No employer shall require a provision made void and unenforceable by subdivision 1 as a condition of employment or continuing employment.
Subdivision 3. IF AN EMPLOYMENT AGREEMENT ENTERED INTO AFTER AUGUST 1, 1997 CONTAINS A PROVISION REQUIRING THE EMPLOYEE TO ASSIGN OR OFFER TO ASSIGN ANY OF THE EMPLOYEE'S RIGHTS IN ANY INVENTION TO AN EMPLOYER, THE EMPLOYER MUST ALSO, AT THE TIME THE AGREEMENT
IS MADE, PROVIDE A WRITTEN NOTIFICATION TO THE EMPLOYEE THAT THE AGREEMENT DOES NOT APPLY TO AN INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR TRADE SECRET INFORMATION OF THE EMPLOYER WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON THE EMPLOYEE'S OWN TIME, AND (1) WHICH DOES NOT RELATE (A) DIRECTLY TO THE BUSINESS OF THE EMPLOYER OR (B) TO THE EMPLOYER'S ACTUAL OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR (2) WHICH DOES NOT RESULT FROM ANY WORK PERFORMED BY THE EMPLOYEE FOR THE EMPLOYER.
8. Termination Without Just Cause. In the event of the termination of Employee's employment by the Company without just cause, as defined in Section 9, the Employee will receive all compensation and benefits (excluding compensation under Section 5, which is addressed separately) that would be provided under this Agreement through September 30, 2003; in addition, any stock option previously granted to the Employee (not already exercisable and vested) will become exercisable and all stock options will become fully vested on the first day immediately following Employee's last day of employment. Employee will be entitled to exercise these and any other unexercised options in accordance with the terms of the Company's stock option plan as amended from time to time. In the event of a change in control Employee will reasonably cooperate with the Company, and exercise his stock options in a way as to not hinder the progress or closing of the sale or merger transaction, and in no event later than three (3) months following the closing.
9. Termination by Company for Just Cause. The Company may only terminate Employee for just cause. In the event the Company terminates the Employee for just cause, the Employee will remain bound under the covenant not to compete and confidentiality obligations contained in Sections 4 and 7 and will not be entitled to the remaining salary and general employment benefits (e.g. health insurance, dental, life) to be provided following the date of such termination. Notwithstanding any
termination for just cause, Employee is entitled to the accelerated non-compete payments provided for in Section 5 of this Agreement. Termination for "just cause" shall be limited to:
10. Termination by Employee. In the event Employee voluntarily terminates his employment with the Company (or its successor) prior to September 30, 2003, Employee will remain bound under the confidentiality and non-compete obligations of Sections 4 and 7 and will not be entitled to the remaining salary and general employment benefits (e.g. health insurance, dental, life) to be provided following the date of such voluntary termination. Notwithstanding any voluntary termination by employee, Employee is entitled to the accelerated non-compete payments provided for in Section 5 of this Agreement. Voluntary termination means an intentional termination by the Employee without good reason and without pressure by the Company. Voluntary termination does not mean a termination caused by the death or disability of the Employee. In the event a termination occurs due to the death or disability of Employee, Employee is entitled to and will receive the full benefits (including salary) remaining through September 30, 2003 under this Agreement at the time of such termination, but the vesting of Employee's unvested stock options shall not accelerate.
11. 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.
12. Company Policies. During the period of Employee's employment, Employee shall engage in no activity or employment, except as permitted under Section 3, that 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.
13. Independent Covenants. The covenants on the part of the Employee contained in Sections 4 and 7 hereof shall be construed as agreements independent of any other provision in this Agreement; 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 to enforcement by the Company of those covenants.
14. Injunctive Relief; Attorneys' Fees. In recognition of the irreparable harm that a violation by Employee of any of the covenants contained in Sections 4 and 7 hereof would cause the Company, the Employee agrees, notwithstanding the provisions of Section 18 hereof, 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. Employee consents to the issuance of such injunction relief without the posting of a bond or other security. In the event of any such violation, the successful party in any action for an injunction is entitled to recover from the unsuccessful party the successful party's costs, expenses and reasonable attorney's fees incurred in such injunction action, in addition to any other actual damages sustained by the successful party.
15. 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.
16. Entire Agreement. This Agreement is the entire agreement of the parties hereto concerning the subject matter hereof and supersedes and replaces any oral or written existing agreements between
the Company and the Employee relating generally to the same subject matter. Company and Employee hereby acknowledge that there are no agreements or understandings of any nature, oral or written, regarding Employee's employment, apart from this Agreement.
17. Severability. It is further agreed and understood by the parties hereto that if any provision of this Agreement should be determined by a 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.
18. Governing Law. This Agreement shall be construed and enforced in accordance with the laws of the State of Minnesota, without giving effect to the principles of conflicts of laws thereof. Except as provided in Section 14 hereof, any dispute relating hereto or arising hereunder shall be resolved by binding arbitration pursuant to the procedures of the American Arbitration Association held in Minneapolis, Minnesota. In the event that injunctive relief is sought, pursuant to Section 14 hereof or otherwise, said action shall be venued in the federal or state courts located in Minneapolis, Minnesota.
19. Heirs, Successors and Assigns. The terms, conditions, 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 and assigns.
20. Change in Control. For purposes of this Agreement, a "Change in Control" is defined as a completed transaction or series of transactions, regardless of form, by which any person, entity or group of persons and entities, acting together, obtain control, directly or indirectly, of more than 50% of the voting power of the Company and shall include, but not be limited to, mergers, tender offers, sales of assets, proxy contests involving a change in control of the Board, and the like.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day, month and year first above written.
|SHUFFLE MASTER, INC.|
|By:||/s/ MARK L. YOSELOFF ||/s/ GARY W. GRIFFIN |
|Name:||Mark L. Yoseloff||Gary W. Griffin|
|Its:||Chief Executive Officer|