POKERTEK INC. KEY EMPLOYEE AGREEMENT for Mr. Christopher Halligan
Exhibit
10.18
POKERTEK
INC.
for
Xx. Xxxxxxxxxxx Xxxxxxxx
THIS
KEY EMPLOYEE AGREEMENT
(“Agreement”)
is
entered into as of the 17th day of January, 2008, by and between Xxxxxxxxxxx
Xxxxxxxx
(“Executive”)
and
PokerTek,
inc.
(the
“Company”).
Executive
has been employed by the Company in his current capacity since on or about
September 24, 2007 on substantially the terms set forth in this Agreement.
Executive and the Company desire to execute and enter into this Agreement
setting forth the terms and conditions of Executive’s employment.
Accordingly,
in consideration of the mutual promises and covenants contained herein, the
parties agree to the following:
1. EMPLOYMENT
BY THE COMPANY.
1.1 Effective
Date. The
effective date of this Agreement shall be January 17, 2008. Unless terminated
sooner pursuant to Section 6, this Agreement shall end two (2) years from
the
effective date.
1.2 Position.
Subject
to terms set forth herein, the Company agrees to employ Executive in the
position of Chief Executive Officer and Executive hereby accepts such
employment. During the term of his employment with the Company, Executive
will
devote his best efforts to the business of the Company.
1.3 Duties.
Executive
shall serve in an executive capacity and shall perform such duties as are
customarily associated with his then current title and as assigned to the
Executive by the Company’s Board of Directors.
1.4 Other
Employment Policies. The
employment relationship between the parties shall also be governed by the
general employment policies and practices of the Company, including those
relating to protection of confidential information and assignment of inventions,
except that when the terms of this Agreement differ from or are in conflict
with
the Company’s general employment policies or practices, this Agreement shall
control.
2. COMPENSATION.
2.1 Salary.
(a) Executive
shall receive for services an annualized base salary of $160,000 per annum
(the
“Base
Salary”),
subject to standard federal and state withholding requirements, payable in
accordance with the Company’s standard payroll practices.
(b) The
Company may reduce the amount of the Base Salary in connection with a general
reduction of salary applicable to all employees of the Company that has been
approved by the Company’s Board of Directors (“General
Reduction”);
provided,
however,
that
(i) in no case shall the Base Salary be reduced in a single General Reduction
or
series of General Reductions by more than an aggregate of twenty percent
(20%)
of the Base Salary; (ii) in no case shall the Base Salary be reduced for
more
than six months; and (iii) any and all severance payments made to Executive
in
accordance with Sections 6 shall be based on the Executive’s original Base
Salary without giving effect to any General Reductions.
(c) In
connection with Executive’s promotion to Chief Executive Officer, Executive has
previously received a stock grant of 125,000 options at Fair Market Value
determined by the closing price on September 28, 2007, which vest 12.5% every
six months (together with an earlier grant of 150,000 options). In the event
Executive’s employment is terminated by the Company for any reason except Cause,
all stock options granted to Executive through the date of termination, will
vest immediately, provided that Executive executes the Release (as defined
below).
(d) Executive
shall receive all health insurance, dental, life, and 401K benefits paid
for by
the Company. Executive’s Family shall receive health and dental insurance
benefits paid for by the Company.
2.2 Company
Benefits.
Executive shall be entitled to all rights and benefits for which he is eligible
under the terms and conditions of the standard Company benefits and compensation
practices which may be in effect from time to time and provided by the Company
to its senior officers generally. Executive
shall be entitled to all holidays provided
by the Company to its senior officers generally
and
three
weeks (3) vacation
time provided
by the Company to its senior
officers generally. For purposes of this Section, “provided by the Company to
its senior officers generally” shall mean benefits provided as a policy to all
or most members of senior management and shall not include a specific benefit
negotiated by one or more executives as an inducement to join the Company
in a
senior officer position.
2.3 Expense
Reimbursement.
The
Company will reimburse Executive for reasonable business expenses in accordance
with the Company’s standard reimbursement policy.
3. PROPRIETARY
INFORMATION, INVENTIONS, AND NON-COMPETITION
OBLIGATIONS.
3.1 Agreement.
Executive agrees to execute and abide by the Proprietary Information,
Inventions, Non-Competition, and Non-Solicitation Agreement attached hereto
as
Exhibit
A
(the
“Proprietary
Information Agreement”).
4. OUTSIDE
ACTIVITIES.
4.1 Other
Employment/Enterprise.
Except
with the prior written consent of the Company’s Board of Directors, Executive
will not, while employed by the Company, undertake or engage in any other
employment, occupation or business enterprise, other than ones in which
Executive is a passive investor. Executive may engage in civic and
not-for-profit activities so long as such activities do not materially interfere
with the performance of
his
duties hereunder.
4.2 Conflicting
Interests.
Except
as permitted by Section 4.3, while employed by the Company, Executive
agrees
not to acquire, assume or participate in, directly or indirectly, any position,
investment or interest known by him to be adverse or antagonistic to the
Company, its business or prospects, financial or otherwise.
4.3 Competing
Enterprises.
While
employed by the Company, except on behalf of the Company, Executive will
not
directly or indirectly, whether as an employee, officer, director, stockholder,
partner, proprietor, associate, representative, consultant, or in any capacity
whatsoever engage in, become financially interested in, be employed by or
have
any business connection with any other person, corporation, firm, partnership
or
other entity whatsoever which compete directly with the Company, throughout
the
world, in any line of business engaged in (or planned to be engaged in) by
the
Company; provided, however, that anything above to the contrary notwithstanding,
he may own, as a passive investor, securities of any public competitor
corporation, so long as his direct holdings in any one such corporation shall
not in the aggregate constitute more than 1% of the voting stock of such
corporation.
5. FORMER EMPLOYMENT.
5.1 No
Conflict With Existing Obligations. Executive
represents that his performance of all the terms of this Agreement and as
an
employee of the Company does not and will not breach any agreement or obligation
of any kind made prior to his employment by the Company, including agreements
or
obligations he may have with prior employers or entities for which he has
provided services. Executive has not entered into, and agrees he will not
enter
into, any agreement or obligation either written or oral in conflict
herewith.
5.2 No
Disclosure of Confidential Information. If,
in
spite of the second sentence of Section 5.1, Executive should find that
confidential information belonging to any former employer might be usable
in
connection with the Company’s business, Executive will not intentionally
disclose to the Company or use on behalf of the Company any confidential
information belonging to any of Executive’s former employers (except in
accordance with agreements between the Company and any such former employer);
but during Executive’s employment by the Company he will use in the performance
of his duties all information which is generally known and used by persons
with
training and experience comparable to his own and all information which is
common knowledge in the industry or otherwise legally in the public
domain.
6. TERMINATION
OF EMPLOYMENT.
The
parties acknowledge that Executive’s employment with the Company is at-will. The
provisions of Sections 6.1 through 6.7 govern the amount of compensation,
if
any, to be provided to Executive upon termination of employment and do not
alter
this at-will status.
6.1 Termination
Without Cause.
The
Company shall have the right to terminate Executive’s employment with the
Company at any time without Cause by giving notice as described in Section
6.7
of this Agreement.
(a) In
the
event Executive’s employment is terminated by the Company without Cause for a
reason other than death, disability or cessation of the Company’s business
pursuant to Section 6.6 below, the Company shall continue to pay Executive
his
then-existing base salary, less applicable withholding and deductions for
three
(3) months as detailed herein from
the
effective date of.
(b) In
the
event the Executive is terminated within one year following a Change in Control
of the Company, Executive will receive three (3) months of the base salary
along
with fully paid benefits.
(c) “Change
of Control” shall
be
deemed to have occurred on the earliest of the following dates:
(i) The
date
any entity or person shall have become the beneficial owner of, or shall
have
obtained voting control over, fifty percent (50%) or
more
of the outstanding Common Stock of the Company;
(ii) The
date
the shareholders of the Company approve a definitive agreement (X) to merge
or
consolidate the Company with or into another corporation or other business
entity (each, a "corporation"), in which the Company is not the continuing
or
surviving corporation or pursuant to which any shares of Common Stock of
the
Company would be converted into cash, securities or other property of another
corporation, in each case other than a merger or consolidation of the Company
in
which the holders of Common Stock immediately prior to the merger or
consolidation continue to own immediately after the merger or consolidation
at
least fifty percent 50% of
Common
Stock, or, if the Company is not the surviving corporation, the common stock
(or
other voting securities) of the surviving corporation; provided, however,
that
if consummation of such merger or consolidation is subject to the approval
of
federal, state or other regulatory authorities, then, unless the Administrator
determines otherwise, a "Change in Control" shall not be deemed to occur
until
the later of the date of shareholder approval of such merger or consolidation
or
the date of final regulatory approval of such merger or consolidation; or
(Y) to
sell or otherwise dispose of all or substantially all the assets of the Company;
or
(iii) The
date
there shall have been a change in a majority of the Board of Directors of
the
Company within a 12-month period unless the nomination for election by the
Company's shareholders of each new Director was approved by the vote of
two-thirds of the members of the Board (or a committee of the Board, if
nominations are approved by a Board committee rather than the Board) then
still
in office who were in office at the beginning of the 12-month
period.
(iv) Notwithstanding
the foregoing, a Change in Control shall not be deemed to have occurred in
the
event the Company forms a holding company as a result of which the holders
of
the Company’s voting securities immediately prior to the transaction hold, in
approximately the same relative proportions as they hold prior to the
transaction, substantially all of the voting securities of a holding company
owning all of the Company’s voting securities after the completion of the
transaction.
(For
the
purposes herein, the term "person" shall mean any individual, corporation,
partnership, group, association or other person, as such term is defined
in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, other than the
Company, a subsidiary of the Company or any employee benefit plan(s) sponsored
or maintained by the Company or any subsidiary thereof, and the term "beneficial
owner" shall have the meaning given the term in Rule 13d-3 under the Exchange
Act.)
6.2 Termination
for Cause.
(a) The
Company shall have the right to terminate Executive’s employment with the
Company at any time for Cause by giving notice as described in Section 6.7
of
this Agreement.
(b) “Cause”
for
termination shall mean misconduct, including: (i) conviction of any felony
or
any crime involving moral turpitude or dishonesty; (ii) participation in
a fraud
or act of dishonesty against the Company; (iii) continued gross neglect by
Executive in fulfilling his duties as set forth in this Agreement that has
not
been cured within thirty (30) days after written notice from the Company
of such
gross neglect; (iv) intentional and material damage to the Company’s
property;(v) material breach of this Agreement that has not been cured within
thirty (30) days after written notice from the Company of such breach; provided
that in the case of breach that are incapable of being cured, no such cure
period shall apply, or (vi) material breach of the Proprietary Information
Agreement.
(c) In
the
event Executive’s employment is terminated at any time with Cause, he will not
receive severance pay or any other such compensation.
6.3 Resignation
by the Executive for Good Reason. Executive
may resign his employment for Good Reason (as defined below) by giving notice
as
described in Section 6.7 of this Agreement.
(a) “Good
Reason”
means
(i) a reduction in Executive’s current base salary without his consent (but
shall not include any reduction or non-payment of a bonus), unless such a
reduction occurs as part of a General Reduction; (ii) the Company's breach
of a
material term of this Agreement, or (iii) any relocation without Executive's
consent to an office of the Company located more than seventy-five (75) miles
from the city limits of Charlotte, North Carolina. Notwithstanding the above,
Executive must provide written notice to the Company of any event or act
that he
claims constitutes Good Reason within a period not to exceed ninety (90)
days
from the date of the initial existence of the Good Reason, and the Company
shall
have a period of thirty (30) days after provision of such notice to cure
the
basis for such Good Reason.
(b) In
the
event of Executive’s resignation for Good Reason, the Company shall continue to
pay Executive the Base Salary, less applicable deductions and withholdings,
for
a period of three (3) months from the effective date of termination as. Under
such circumstances, Company shall reimburse Executive the amount of any COBRA
payments during such period.
(c) If
Executive terminates employment for any reason other than those listed above,
the termination will not be for Good Reason and Executive will not be entitled
to severance pay or any other such compensation.
6.4 Voluntary
or Mutual Termination.
(a) Executive
may voluntarily terminate his employment with the Company at any time by
giving
notice as described in Section 6.7.
(b) In
the
event Executive voluntarily terminates his employment for other than a Good
Reason, he will not receive severance pay or any other such
compensation.
6.5 Termination
for Inability to Regularly Perform Duties.
(a) Company
may terminate Executive in the event of Executive’s death, or any illness,
disability or other incapacity in such a manner that Executive is physically
rendered unable regularly to perform his duties hereunder for a period in
excess
of one hundred twenty (120) consecutive days or more than one hundred eighty
(180) days in any consecutive twelve (12) month period.
(b) The
determination regarding whether Executive is physically unable regularly
to
perform his duties under (a) above shall be made by the Company. Executive’s
inability to be physically present on the Company’s premises shall not
constitute a presumption that Executive is unable to perform such
duties.
6.6 Dissolution,
Liquidation or Insolvency of the Company.
Notwithstanding
the above, in the event Executive’s employment is terminated by the Company in
connection with or as a result of the liquidation, dissolution, insolvency
or
other winding up of the affairs of the Company without the establishment
of a
successor entity to the Company, the Company shall have no obligation to
provide
severance or further financial consideration to Executive except for any
reasonable expense reimbursements or base salary that Executive has accrued
and
earned at the time of such termination.
6.7 Notice;
Effective Date of Termination. Termination
of Executive’s employment pursuant to this Agreement shall be effective on the
earliest of:
(a) thirty
(30) days after Executive, for any reason, gives written notice to the Company
of his termination;
(b) thirty
(30) days after the Company, for any reason other than Cause, gives written
notice to Executive of his termination;
(c) immediately
upon the Company giving written notice to Executive of his termination for
Cause
or as a result of an event listed in Section 6.6 above; and
(d) the
expiration of the term of this Agreement.
Executive
will receive compensation through the thirty (30) day notice period in the
event
of termination for any reason. However, the Company reserves the right to
require that Executive not perform any services or report to work during
the
thirty (30) day notice period.
7. RELEASE.Notwithstanding
anything to the contrary in this Agreement, executive shall not be entitled
to
any severance or reimbursement of COBRA payments under any provision in this
Agreement unless and until Executive has executed a general release
substantially in the form attached hereto as Exhibit B
and such
release has become effective and can no longer be revoked(the “Release”),
.
8. GENERAL
PROVISIONS.
8.1 Notices.
Any
notices provided hereunder must be in writing and shall be deemed effective
upon
the earlier of personal delivery (including personal delivery by hand,
telecopier, or telex) or the third day after mailing by first class mail,
to the
Company at its primary office location and to Executive at his address as
listed
on the Company payroll.
8.2 Severability.
Whenever
possible, each provision of this Agreement will be interpreted in such manner
as
to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule
in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained
herein.
8.3 Waiver.
If
either party should waive any breach of any provisions of this Agreement,
he or
it shall not thereby be deemed to have waived any preceding or succeeding
breach
of the same or any other provision of this Agreement.
8.4 Complete
Agreement.
This
Agreement and its Exhibit constitute the entire agreement between Executive
and
the Company. This Agreement is the complete,
final,
and exclusive embodiment of their agreement with regard to this subject matter
and supercedes any prior oral discussions or written communications and
agreements. This Agreement is entered into without reliance on any promise
or
representation other than those expressly contained herein, and it cannot
be
modified or amended except in writing signed by an authorized officer of
the
Company.
8.5 Counterparts.
This
Agreement may be executed in separate counterparts, any one of which need
not
contain signatures of more than one party, but all of which taken together
will
constitute one and the same Agreement.
8.6 Headings.
The
headings of the sections hereof are inserted for convenience only and shall
not
be deemed to constitute a part hereof nor to affect the meaning
thereof.
8.7 Successors
and Assigns.
This
Agreement is intended to bind and inure to the benefit of and be enforceable
by
Executive and the Company, and their respective successors, assigns, heirs,
executors and administrators, except that Executive may not assign any of
his
duties hereunder and he may not assign any of his rights hereunder without
the
written consent of the Company, which shall not be withheld
unreasonably.
8.8 Attorneys’
Fees.
If the
Company brings any action to enforce its rights hereunder, it shall be entitled
to recover its reasonable attorneys’ fees and costs incurred in connection with
such action should it prevail in the action.
8.9 Choice
of Law.
All
questions concerning the construction, validity and interpretation of this
Agreement will be governed by the law of the State of North Carolina. Executive
expressly consents to the jurisdiction of the state and federal courts for
Mecklenburg County, North Carolina, for all actions arising out of or relating
to this Agreement.
8.10 Right
to Counsel.
Executive acknowledges that he has had the opportunity to retain independent
legal counsel to represent the Executive in connection with the review and
preparation of this Agreement and that Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx,
PLLC, the Company’s outside special counsel, has not represented the Executive
in connection with the review and preparation of this Agreement.
IN
WITNESS WHEREOF,
the
parties have executed this Agreement on the day and year first above
written.
|
PokerTek
Inc.
|
||
| |
|
|
| /s/ Xxxxxx X. Xxxxxxx | ||
|
General Counsel |
||
| Date: January 17, 2008 | ||
Accepted
and agreed this
17th
day
of January 2008.
Executive
/s/
Xxxxxxxxxxx X.X. Xxxxxxxx
