Attached files
EXHIBIT
10.14
EXECUTIVE
EMPLOYMENT AGREEMENT
This
Employment Agreement (this “Agreement”)
is made and entered into as of August 16, 2008 (the “Effective
Date”), by and between Multimedia Games, Inc., a Delaware corporation
(the “Company”),
and Uri Clinton, an individual (“Executive”).
RECITALS
WHEREAS, the Company desires
to hire Executive and Executive desires to become employed by the Company;
and
WHEREAS, the Company and
Executive have determined that it is in their respective best interests to enter
into this Agreement to govern the employment relationship on the terms and
conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in
consideration of the premises and the mutual covenants and promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. EMPLOYMENT TERMS AND
DUTIES
1.1
Employment. The Company
hereby employs Executive, and Executive hereby accepts employment by the
Company, upon the terms and conditions set forth in this Agreement.
1.2
Duties. Executive shall
serve as General Counsel and Secretary and shall report directly to the
Company’s Chief Executive Officer. Executive shall have the
authority, and perform the duties customarily associated with his titles and
offices together with such additional duties as may from time to time be
assigned by the Chief Executive Officer. During the term of
Executive’s employment hereunder, Executive shall devote his full working time
and efforts to the performance of his duties and the furtherance of the
interests of the Company and shall not be otherwise employed or
engaged
1.3
Term. Subject to the
provisions of Section
1.6 below, the term of employment of Executive under this Agreement shall
commence on August 16, 2008 (the "Start Date"), and shall continue until
terminated by either party (the “Employment
Term”). Upon termination of this Agreement, this Agreement
shall expire and have no further effect, except as otherwise provided in Section 5.5
below.
1.4 Compensation and
Benefits.
1.4.1 Base
Salary. In consideration of the services rendered to the
Company hereunder by Executive and Executive’s covenants hereunder and in the
Company’s Agreement Regarding Proprietary Developments, Confidential Information
and Non-Solicitation attached hereto as Exhibit A (the “Proprietary
Agreement”), during the Employment Term, the Company shall pay Executive
a salary at the annual rate of $250,000.00 (the “Base
Salary”), less statutory and other authorized deductions and
withholdings, payable in accordance with the Company’s regular payroll
practices. The Chief Executive Officer will review the Base Salary
annually.
1.4.2 Bonus. Executive
shall receive an annual bonus equal to 60% of Executive’s then current Base
Salary (the “Target
Bonus”) upon achievement of bonus plan performance targets then in effect
as approved by the Chief Executive Officer, which bonus may be as much as 100%
of Executive’s then current Base Salary for overachievement against said
targets. Any bonus payment shall be less statutory and other
authorized deductions and withholdings and payable at the times when other
management bonuses are paid; provided, however, that such Target Bonus shall be
paid before the latter of: (i) the 15th day of the third calendar month
following the calendar year that the Target Bonus is earned; or (ii) the 15th
day of the third calendar month following the end of the fiscal year of the
Company that the Target Bonus is earned.
1
1.4.3 Benefits
Package; Vacation; Business Expenses. As an employee of
the Company, Executive will be eligible to enroll in the Company’s benefit
programs (including short and long term disability plans and reasonable
Directors’ and Officers’ coverage) as they are established from time to time for
senior-level executive employees. Executive shall be eligible for
Company holidays and paid vacation as set forth in the Company’s then current
policies for senior-level executive employees.
1.4.4 Temporary
Commuting; Relocation Expenses. For four (4) months following the
Effective Date of this Agreement, Executive may commute to Austin,
Texas. During such time, the Company will pay or reimburse Executive
for the reasonable costs of an apartment in Austin, Texas, car rental, travel to
and from Memphis, Tennessee, and other related and reasonable
expenses. When Executive relocates to Austin, Texas, the Company will
pay for the reasonable moving expenses of Executive. Executive shall only be
reimbursed for commuting and relocation expenses upon receipt from Executive of
supporting receipts in accordance with the Company’s reimbursement policies.
Once Executive and his family relocate to Austin, Texas, and/or at such later
time as Executive places his Cordova, Tennessee home on the market, which in any
event will occur within eighteen (18) months of the Effective Date of this
Agreement, the Company will reimburse Executive the expense of his mortgage
payment for his home in Cordova, Tennessee for a period of up to six (6) months
while the home is being sold, upon receipt from Executive of supporting receipts
in accordance with the Company's reimbursement policies.
1.4.5 Educational
Expense Reimbursement. To the extent that Executive's previous
employer requires Executive to repay the previous employer for the costs
associated with Executive acquiring his MBA (whether through payment to or set
off by Executive's former employer against payments owing to Executive), Company
shall reimburse Executive for the repayment of this expense in accordance to the
agreed upon payment or set off schedule with Executive's prior employer upon
presentation of reasonable documentation accounting for the repayment or set
off.
1.5
Stock
Grant and Stock Option. Upon the Start
Date, Executive will be granted one or more options (collectively, the “Option”) to purchase 250,000
shares of the Company’s Common Stock. Such Option will be granted
pursuant to the Company’s 2008 Employment Inducement Award Plan (the “Plan”).
The exercise price for the Option shall be equal to the fair market value of the
Company’s Common Stock on the date of grant of such Option. The Option will be
immediately exercisable, but the Option shares initially will be unvested and
will vest over four years in equal quarterly installments during each of the
four years. The Plan documents shall provide that, in the event that,
within one year after a Change of Control, either (i) Executive is terminated
Without Cause pursuant to Section 1.6.4, or (ii) Executive resigns for Good
Reason pursuant to Section 1.7.2, Executive shall acquire a vested interest in,
and the Company's repurchase rights shall terminate with respect to all unvested
Option shares covered by the Option. In the event Executive is
terminated for any reason, then such termination shall not affect in any manner
Executive's right to receive or exercise the options which have vested as of the
date of termination pursuant to the provisions of this Agreement. The
terms of the Option will be as set forth in the Plan documents. The
Company will promptly prepare and file a registration statement on Form S-8 with
respect to the Plan, and shall maintain the effectiveness of such registration
statement during the term of the Plan.
For purposes of this Agreement, a
“Change of
Control” shall mean: (a) the consummation of a merger, consolidation or
reorganization approved by the Company’s stockholders, unless securities
representing more than 50% of the total combined voting power of the
outstanding voting securities of the successor corporation are immediately
thereafter beneficially owned, directly or indirectly and in substantially the
same proportion, by the persons who beneficially owned the Company's outstanding
voting securities immediately prior to such transaction; or (b) the sale,
transfer or other disposition of all or substantially all of the Company's
assets as an entirety or substantially as an entirety to any person, entity or
group of persons acting in concert other than a sale, transfer or disposition to
an entity, at least 50% of the combined voting power of the voting securities of
which is owned by the Company or by stockholders of the Company in substantially
the same proportion as their ownership of the Company immediately prior to such
sale; or (c) any transaction or series of related transactions within a period
of 12 months pursuant to which any person or any group of persons comprising a
"group" within the meaning of Rule 13d-5(b)(1) under the Securities Exchange Act
of 1934, as amended (other than the Company or a person that, prior to such
transaction or series of related transactions, directly or indirectly controls,
is controlled by or is under common control with, the Company) acquires (other
than directly from the Company) beneficial ownership (within the meaning of Rule
l3d-3 of the Securities Exchange Act of 1934, as amended) of securities
possessing more than 35% of the total combined voting power of the Company's
securities outstanding immediately after the consummation of such transaction or
series of related transactions.
2
1.6
Termination. Executive’s
employment and this Agreement (except as otherwise provided hereunder) shall
terminate upon the occurrence of any of the following, at the time set forth
therefor (the time of any such termination being the “Termination
Date”):
1.6.1 Death or
Disability. Immediately upon
the death of Executive or in the event that Executive has ceased to be able to
perform the essential functions of his duties, with or without reasonable
accommodation, for a period of not less than 180 days, due to a mental or
physical illness or incapacity; as determined in the good faith judgment of the
Chief Executive Officer and confirmed by the opinion of an independent medical
physician (“Disability”)
(termination pursuant to this Section 1.6.1
being referred to herein as termination for “Death or
Disability”); or
1.6.2 Voluntary
Termination. Thirty days
following Executive’s written notice to the Company of termination of
employment; provided, however, that the
Company may waive all or a portion of the 30 days’ notice and accelerate the
effective date of such termination (and the Termination Date) (termination
pursuant to this Section 1.6.2 being referred to
herein as “Voluntary”
termination); or
1.6.3 Termination
For Cause. Immediately
following notice of termination for Cause given by the Company. As
used herein, “Cause”
means termination based on any one of the following, as determined in good faith
by the Chief Executive Officer: (i) any intentional act of misconduct or
dishonesty by Executive in the performance of his duties under the Agreement;
(ii) any willful failure or refusal by Executive to attend to his duties under
this Agreement; (iii) any material breach of this Agreement; (iv) Executive’s
conviction of or plea of “guilty” or “no contest” to any crime constituting a
felony or a misdemeanor involving theft, embezzlement, dishonesty, or moral
turpitude; or (v) Executive’s unsatisfactory performance of his duties as
determined by the Chief Executive Officer and failure of Executive to improve
such performance in the reasonable judgment of the Chief Executive Officer
following the 30-day period after Executive is provided written notice of such
unsatisfactory performance. In the event that the Chief Executive
Officer believes that an event has occurred that would constitute a termination
for Cause pursuant to clauses (i), (ii) or (iii), prior to terminating
Executive, the Chief Executive Officer will notify Executive of such belief in
writing, including an explanation of the concern, and Executive will have 30
days to address the concern to the Chief Executive Officer’s satisfaction prior
to the effectiveness of the termination; provided that the Chief Executive
Officer may instruct Executive to take a paid leave of absence during such
period.
1.6.4 Termination
Without Cause. Notwithstanding
any other provisions contained herein, including, but not limited to Section 1.3 above,
the Company may terminate Executive’s employment following a thirty (30) day
written notice of termination without Cause given by the Company as approved by
the Board of Directors (termination pursuant to this Section 1.6.4 being
referred to herein as termination “Without
Cause”).
1.6.5 Other
Remedies. Termination
pursuant to Section
1.6.3 above shall be in addition to and without prejudice to any other
right or remedy to which the Company may be entitled at law, in equity, or under
this Agreement.
1.7 Severance and
Termination.
1.7.1 Voluntary
Termination, Termination for Cause, Termination for Death or
Disability. In the case of a termination of Executive’s
employment hereunder for Death or Disability in accordance with Section 1.6.1 above,
or Executive’s Voluntary termination of employment hereunder in accordance with
Section 1.6.2
above, or a termination of Executive’s employment hereunder for Cause in
accordance with Section 1.6.3 above,
(i) Executive shall not be entitled to receive payment of, and the Company shall
have no obligation to pay, any severance or similar compensation attributable to
such termination, other than Base Salary earned but unpaid, accrued but unused
vacation to the extent required by the Company’s policies, vested benefits under
any employee benefit plan, and any unreimbursed expenses pursuant to Section 1.4.3 or
1.4.4 hereof incurred by Executive as of the Termination Date, and (ii)
the Company’s other obligations under this Agreement shall immediately
cease.
3
1.7.2 Termination
Without Cause; Resignation for Good Reason. Subject to the
provisions set forth in Section 1.7.3, in the
case of a termination of Executive’s employment hereunder Without Cause in
accordance with Section 1.6.4 above,
or Executive’s resignation with Good Reason, the Company (i) shall pay Executive
(A) in the event that the Termination takes place on or before August 16, 2009,
one year of Base Salary continuation (to be paid in accordance with the
Company’s normal payroll practices) and Target Bonus (Target Bonus to be paid at
the end of the fiscal year within the time set forth in Section 1.4.2), subject
to the tax withholding specified in Section 1.4.1 above
or (B) in the event that the Termination takes place after August 16, 2009, two
years of Base Salary continuation (to be paid in accordance with the Company’s
normal payroll practices) and two years of Target Bonus (Target Bonuses to be
paid at the end of each fiscal year within the time set forth in
Section 1.4.2); and (ii) if Executive elects to continue health coverage under
the Consolidated Omnibus Budget Reconciliation Act (“COBRA”),
for a period up to one year after the termination, the Company will pay
Executive’s premiums, in an amount sufficient to maintain the level of health
benefits in effect on Executive’s last day of employment. Further,
subject to the provisions set forth in Section 1.7.3, in the
event that there is a Change of Control and within one year after the closing of
the Change of Control, Executive is terminated Without Cause or resigns for Good
Reason, (i) the Company shall pay Executive a lump sum equal to two years of
Base Salary continuation (to be paid in accordance with the Company’s normal
payroll practices) and two years of Target Bonus; (ii) if Executive elects to
continue health coverage under the Consolidated Omnibus Budget Reconciliation
Act (“COBRA”),
for a period up to one year after the termination, the Company will pay
Executive’s premiums, in an amount sufficient to maintain the level of health
benefits in effect on Executive’s last day of employment; and (iii) the Option
will immediately vest as set forth in Section
1.5.
For
purposes of this Agreement, “Good
Reason“ means the occurrence of any of the following: (i) the assignment
to Executive of duties materially inconsistent with his status as General
Counsel and Secretary of the Company or a material adverse alteration in the
nature or status of his responsibilities, duties or authority; (ii) a material
reduction by the Company in Executive’s then Base Salary or Target Bonus, a
material reduction in other benefits, or the failure by the Company to pay
Executive any material portion of his current compensation when due; (iii) a
requirement that Executive report to a primary work location that is more than
50 miles from the Company’s current location in Austin, Texas; (iv) the Company
requiring Executive either (a) to be based anywhere other than the location of
the Company's principle offices in Austin (except for required travel in the
Company's business to an extent substantially consistent with Executive's
present business obligations); or (viii) the failure of the Executive and any
successor company following a Change of Control to reach a mutually agreeable
employment agreement. Notwithstanding the foregoing, Executive’s
resignation shall not be treated as a resignation for Good Reason unless (a)
Executive notifies the Company in writing of a condition constituting Good
Reason within 45 days following
Executive’s becoming aware of such condition; (b) the Company fails to remedy
such condition within 30 days following such written notice (the “Remedy
Period”); and (c) Executive resigns within 30 days following the
expiration of the Remedy Period. Further, in the event that Executive
resigns for Good Reason and within two years from such date accepts employment
with the Company, any acquirer or successor to the Company’s business or any
affiliate, parent, or subsidiary of either the Company or its successor, then
Executive will forfeit any right to severance payments hereunder and will
reimburse the Company for the full amount of such payments received by Executive
within 30 days of accepting such employment.
1.7.3 Severance
Conditioned on Release of Claims. The Company’s
obligation to provide Executive with the severance benefits set forth in Section 1.7.2 is
contingent upon Executive’s execution of a mutual release of claims satisfactory
to the Company. Such release will not contain any non-competition
period or otherwise restrict Executive's future employment opportunity and will
not affect Executive’s continuing obligations to the Company under the
Proprietary Agreement.
4
2. PROTECTION OF COMPANY’S
PROPRIETARY INFORMATION AND INVENTIONS;
NON-COMPETITION
2.1.1 Proprietary
Agreement. This Agreement, and Executive’s employment
hereunder, is contingent upon Executive’s execution of the Proprietary
Agreement, effective contemporaneously with the execution of this
Agreement. The Proprietary Agreement survives the termination of this
Agreement, the Employment Term and/or Executive’s employment with the
Company.
2.1.2 Consideration For Promise To
Refrain From Competing. Executive agrees that Executive’s
services are special and unique, that the Company’s disclosure of confidential,
proprietary information and specialized training and knowledge to Executive, and
that Executive’s level of compensation and benefits, including the amount of
severance as set forth in Section 1.7 hereof, are partly in consideration
of Executive not competing with the Company following the termination of his
employment. Also, the Company promises to provide Executive with
proprietary and confidential information to which Executive has not had access
(including without limitation information developed and presented in Board of
Director meetings). Executive acknowledges that such consideration
(including without limitation the Company’s promise to provide Executive access
to proprietary and confidential information made in this section) is adequate
for Executive’s promises contained within this Section 2.
2.1.3 Promise To Refrain From
Competing. Executive understands the Company’s need for
Executive’s promise not to compete with the Company is based on the
following: (i) the Company has expended, and will continue to
expend, substantial time, money and effort in developing its proprietary
information; (ii) Executive will in the course of Executive’s employment
develop, be personally entrusted with and exposed to the Company’s proprietary
information; (iii) the Company is engaged in the highly insular and
competitive gaming technology industry; (iv) the Company provides products
and services nationally and internationally; and (v) the Company will
suffer great loss and irreparable harm if Executive were to enter into
competition with the Company. Therefore, in exchange for the
consideration described in Section 2.12 above, Executive agrees that during
Executive’s employment with the Company, and for one (1) year following the
effective date of the termination of Executive’s employment with the Company for
any reason (such one (1) year period to be increased to two (2) years in the
event Executive becomes entitled to two year’s Base Salary and Target Bonus as
severance pursuant to Section 1.7.2(i)(B) hereof or otherwise) (the “Covenant
Period”), Executive will not either directly or indirectly, whether as an
owner, director, officer, manager, consultant, agent or
employee: (i) work for or provide services or assistance to a
competitor of the Company as of the date of termination of employment, which is
defined to include those entities or persons primarily engaged in the business
of developing, marketing, selling and supporting technology to or for gaming
businesses in which, as of the date of termination of employment, the Company
engages or in which the Company has an actual intention, as evidenced by the
Company’s written business plans to engage, in any country in which the Company
does business as of the date of termination of employment (the “Restricted
Business”); or (ii) make or hold any investment in any Restricted
Business, whether such investment be by way of loan, purchase of stock or
otherwise, provided that there shall be excluded from the foregoing the
ownership of not more than 1% of the listed or traded stock of any publicly held
corporation. For purposes of this Section 2, the term “Company”
shall mean and include the Company, any subsidiary or affiliate of the Company,
and any successor to the business of the Company (by merger, consolidation, sale
of assets or stock or otherwise). For purposes of clarification and
not limitation, casinos or gaming operations that are not primarily engaged in
the business of developing, marketing, selling and supporting technology to or
for gaming businesses shall not be Restricted Businesses hereunder.
2.1.4 Reasonableness of
Restrictions. Executive represents and agrees that the
restrictions on competition, as to time, geographic area, and scope of activity,
required by this Section 2 are reasonable, do not impose a greater
restraint than is necessary to protect the goodwill and business interests of
the Company, and are not unduly burdensome to Executive. Executive
expressly acknowledges that the Company competes on an international basis and
that the geographical scope of these limitations is reasonable and necessary for
the protection of the Company’s trade secrets and other confidential and
proprietary information. Executive further agrees that these
restrictions allow Executive an adequate number and variety of employment
alternatives, based on Executive’s varied skills and
abilities. Executive represents that Executive is willing and able to
compete in other employment not prohibited by this Agreement.
5
2.1.5 Reformation if
Necessary. In the event a court of competent jurisdiction
determines that the geographic area, duration, or scope of activity of any
restriction under this Section 2 and its subsections is unenforceable, the
restrictions under this section and its subsections shall not be terminated but
shall be reformed and modified to the extent required to render them valid and
enforceable.
2.1.6 Early Termination of
Covenant Period. Beginning six (6) months after the beginning
of the Covenant Period, Executive may, upon thirty (30) days’ written notice to
the Company, elect to forego and forfeit any claim to any unpaid severance
benefits pursuant to Section 1.7.2 above and, subject to and conditioned upon
such notice and written election by Executive, Executive will, effective upon
the date of such notice, be released from any remaining obligations under this
Section 2, and this Section shall be of no further force and
effect.
3. REPRESENTATIONS AND
WARRANTIES BY EXECUTIVE
Executive
represents and warrants to the Company that (i) this Agreement is valid and
binding upon and enforceable against him in accordance with its terms; (ii)
Executive is not bound by or subject to any contractual or other obligation that
would be violated by his execution or performance of this Agreement, including,
but not limited to, any non-competition agreement presently in effect; and (iii)
Executive is not subject to any pending or, to Executive’s knowledge, threatened
claim, action, judgment, order, or investigation that could adversely affect his
ability to perform his obligations under this Agreement or the business
reputation of the Company. Executive has not entered into, and agrees
that he will not enter into, any agreement either written or oral in conflict
herewith.
4. TAXES
4.1 Section
4999.
4.1.1 Gross-Up
Payment Amount. In the event it
shall be determined that any payment or distribution by the Company to or for
the benefit of Executive, whether paid, payable, distributed or distributable
pursuant to this Agreement (a “Payment”)
would be subject to the excise tax imposed by Section 4999 of the Code (or
any successor provision) or any interest or penalties with respect to such
excise tax (such excise tax, together with any such interest and penalties, are
collectively referred to in this Agreement as the “Excise
Tax”), then Executive shall be entitled to receive an additional payment
(a “Gross-Up
Payment”) in an amount such that after the payment by Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross-Up Payment, Executive retains
an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payment.
4.1.2 Determinations. Subject to the
provisions of Section
4.1.3, all determinations required to be made under this Section 4,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by an accounting firm reasonably selected by the
Company (the “Accounting
Firm”), which shall provide detailed supporting calculations to both the
Company and Executive within 45 days of the receipt of written notice from
Executive that there has been a Payment, or such earlier time as is requested by
the Company. Any Gross-Up Payment, as determined pursuant to this
Section 4,
shall be paid by the Company to Executive within 30 days of the receipt of the
Accounting Firm’s determination. Any determination by the Accounting
Firm shall be binding upon the Company and Executive. As a result of the
possible uncertainty in application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments will not have been made by the Company that should have
been made (“Underpayment”),
consistent with the calculations required to be made hereunder. In
the event that the Company exhausts its remedies pursuant to Section 4.1.3
and Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of Executive.
6
4.1.3 IRS
Claims. Executive shall
notify the Company in writing of any claim by the Internal Revenue Service (the
“IRS”)
that, if successful, would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as practicable but no later
than 30 days after Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such claim
is to be paid. Executive shall not pay such claim prior to the expiration of the
60-day period following the date on which Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall: (i) give the Company any information reasonably requested by
the Company relating to such claim; (ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company and reasonably
acceptable to Executive; (iii) cooperate with the Company in good faith in order
effectively to contest such claim; and (iv) permit the Company to participate in
any proceedings relating to such claim. The Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct Executive to pay the tax claimed and sue for a refund
or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts as the
Company shall determine.
4.1.4 Refunds. If, after receipt
by Executive of an amount advanced by the Company, Executive becomes entitled to
receive any refund with respect to such claim, Executive shall promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto).
4.2 Section 409A. Notwithstanding
any inconsistent provision of this Agreement, to the extent the Company
determines in good faith that (a) one or more of the payments or benefits
received or to be received by Executive pursuant to this Agreement in connection
with Executive’s termination of employment would constitute deferred
compensation subject to the rules of Section 409A of the Code, and
(b) Executive is a “specified employee” under Section 409A of the
Code, then only to the extent required to avoid Executive’s incurrence of any
additional tax or interest under Section 409A, such payment or benefit will
be delayed until the earliest date following Executive’s “separation from
service” within the meaning of Section 409A which will permit Executive to
avoid such additional tax or interest. The Company and Executive agree to
negotiate in good faith to reform any provisions of this Agreement to maintain
to the maximum extent practicable the original intent of the applicable
provisions without violating the provisions of Section 409A, if the Company
deems such reformation necessary or advisable pursuant to guidance under
Section 409A to avoid the incurrence of any such interest and penalties.
Such reformation shall not result in a reduction of the aggregate amount of
payments or benefits under this Agreement.
5. MISCELLANEOUS
5.1
Notices. All notices, requests, and
other communications hereunder must be in writing and will be deemed to have
been duly given only if delivered personally against written receipt or mailed
(postage prepaid by certified or registered mail, return receipt requested) or
by overnight courier to the parties at the following addresses:
If to
Executive, to:
Uri
Clinton
7
If to the
Company, to:
Multimedia Games, Inc.
206 Wild Basin Rd
Bldg B, Suite 400
Austin, Texas 78746
Attention: Chief Executive
Officer
All such
notices, requests and other communications will (i) if delivered personally to
the address as provided in this Section 5.1, be
deemed given upon delivery, and (ii) if delivered by mail or overnight courier
in the manner described above to the address as provided in this Section 5.1, be
deemed given upon receipt. Any party from time to time may change its
address or other information for the purpose of notices to that party by giving
written notice specifying such change to the other parties hereto.
5.2
Authorization
to be Employed.
This Agreement, and Executive’s employment hereunder, is subject to Executive
providing the Company with legally required proof of Executive’s authorization
to be employed in the United States of America.
5.3
Indemnification
Agreement. The Company and
Executive shall enter into an Indemnification Agreement in substantially the
form attached hereto as Exhibit
C.
5.4
Entire
Agreement. This Agreement,
and the documents referenced herein, supersede all prior discussions and
agreements among the parties with respect to the subject matter hereof, and
contains the sole and entire agreement between the parties hereto with respect
thereto.
5.5
Survival. The respective rights
and obligations of the parties that require performance following expiration or
termination of this Agreement, including but not limited to Sections 1.5,
1.7.2, 1.7.3, 2, 4 and 5, shall survive the
expiration or termination of this Agreement, the Employment Term and/or
Executive’s employment with the Company.
5.6
Waiver. Any term or
condition of this Agreement may be waived at any time by the party that is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party hereto of any
term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
5.7
Amendment. This Agreement
may be amended, supplemented, or modified only by a written instrument duly
executed by or on behalf of each party hereto.
5.8
Attorney’s
Fees. In the event of
any litigation arising from or relating to this Agreement, the prevailing party
in such litigation proceedings shall be entitled to recover from the
non-prevailing party the prevailing party’s reasonable costs and attorney’s
fees, in addition to all other legal or equitable remedies to which it may
otherwise be entitled. In addition, the Company shall pay Executive’s
reasonable attorneys’ fees, not to exceed $5,000.00, incurred in connection the
negotiation of this Agreement.
5.9
No Third
Party Beneficiary. The terms and
provisions of this Agreement are intended solely for the benefit of each party
hereto and the Company’s successors and assigns, and it is not the intention of
the parties to confer third-party beneficiary rights upon any other
person.
5.10
No
Assignment; Binding Effect. This Agreement
and its obligations may not be assigned by either the Company or
Executive.
5.11
Headings. The headings used
in this Agreement have been inserted for convenience of reference only and do
not define or limit the provisions hereof.
8
5.12
Severability. The Company and
Executive intend all provisions of this Agreement to be enforced to the fullest
extent permitted by law. Accordingly, if a court of competent jurisdiction
determines that the scope and/or operation of any provision of this Agreement is
too broad to be enforced as written, the Company and Executive intend that the
court should reform such provision to such narrower scope and/or operation as it
determines to be enforceable. If, however, any provision of this
Agreement is held to be illegal, invalid, or unenforceable under present or
future law, and not subject to reformation, then (i) such provision shall be
fully severable, (ii) this Agreement shall be construed and enforced as if such
provision was never a part of this Agreement, and (iii) the remaining provisions
of this Agreement shall remain in full force and effect and shall not be
affected by illegal, invalid, or unenforceable provisions or by their
severance.
5.13
Governing
Law; Arbitration. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS APPLICABLE TO CONTRACTS EXECUTED AND PERFORMED IN SUCH STATE WITHOUT
GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES. IN THE EVENT OF ANY
DISPUTE ARISING UNDER THIS AGREEMENT THAT CANNOT BE RESOLVED BETWEEN THE
PARTIES, THE SAME SHALL BE SUBMITTED TO FINAL AND BINDING ARBITRATION BEFORE A
SINGLE ARBITRATOR OF THE AMERICAN ARBITRATION ASSOCIATION'S PANEL OF COMMERCIAL
ARBITRATORS, WHO SHALL BE CHOSEN BY AGREEMENT OF THE PARTIES. IF THE
PARTIES CANNOT AGREE, THEN EACH PARTY SHALL NOMINATE AN ARBITRATOR AND EACH OF
THE TWO NOMINEES SHALL SELECT A THIRD ARBITRATOR TO SO SERVE. THE
COMPANY HEREBY AGREES TO BE FULLY RESPONSIBLE FOR ALL COSTS ASSOCIATED WITH THE
ADMINISTRATION OF THE ARBITRATION, INCLUDING ANY AND ALL FILING OR OTHER FEES
CHARGED BY THE AMERICAN ARBITRATION ASSOCIATION AND ANY FEES CHARGED BY THE
ARBITRATOR. THIS PROVISION AND ANY ARBITRATION AWARD ISSUED PURSUANT
TO THIS PROVISION MAY BE ENFORCED BY ANY COURT OF COMPETENT
JURISDICTION. THE ARBITRATION SHALL TAKE PLACE IN AUSTIN, TEXAS
UNLESS OTHERWISE MUTUALLY AGREED BY THE PARTIES.
5.14
Counterparts. This Agreement
may be executed in any number of counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.
[Signature Page To Employment
Agreement Follows]
9
IN WITNESS WHEREOF, the
parties hereto have caused this Employment Agreement to be executed as of the
date first written above.
|
“COMPANY”
MULTIMEDIA
GAMES, INC.
|
|||
|
|
By:
|
/s/ Anthony Sanfilippo | |
|
Anthony
Sanfilippo
Chief
Executive Officer
|
|||
|
“EXECUTIVE”
URI
CLINTON
|
|||
|
|
By:
|
/s/ Uri Clinton | |
|
Uri
Clinton
Executive’s
Signature
|
|||
10