Exhibit 10.12
 
POKERTEK INC.

KEY EMPLOYEE AGREEMENT
for
Mr. Mark Roberson
 
This Key Employee Agreement (“Agreement”) is entered into as of the 16th day of
July, 2009, by and between Mark Roberson (“Executive”) and PokerTek, inc. (the
“Company”).
 
Executive has been employed by the Company since October 18, 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 July
1, 2009. 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 Acting Chief Executive Officer, Chief
Financial Officer and Treasurer, 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.
 
 
1.

--------------------------------------------------------------------------------

 
 
(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)           Executive has previously received a stock grant of 75,000 options
at Fair Market Value determined by the closing price on December 31, 2007, which
vest 12.5% every six months. 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 and the
Executive will have one year from date of termination to exercise his options,
provided that Executive executes the Release (as defined below).
 
(d)           Executive has previously received a stock grant of 40,000 options
at Fair Market Value determined by the closing price on March 31, 2008, which
vest 12.5% every six months. 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 and the
Executive will have one year from date of termination to exercise his options,
provided that Executive executes the Release (as defined below).
 
(e)           Executive will be provided a stock grant of 137,500 options as
soon as practicable upon execution of this agreement at Fair Market Value
determined by the closing price on the date of grant, which shall vest
semi-annually over a three year period. 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 and the
Executive will have one year from date of termination to exercise his options,
provided that Executive executes the Release (as defined below).  In the event
the Executive is not appointed as Chief Executive Officer by May 29, 2010 (12
months from Executive’s appointment as Acting Chief Executive Officer), stock
options granted to Executive will vest immediately.
 
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.
 
 
2.

--------------------------------------------------------------------------------

 
 
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.
 
 
3.

--------------------------------------------------------------------------------

 
 
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, and continue to provide medical and dental coverage or pay Cobra
premiums for twelve (12) months.
 
(b)           In the event the Executive is terminated within one year following
a Change in Control of the Company, Executive will receive twelve (12) months of
the base salary along with twelve (12) months of medical and dental coverage or
Cobra premium payments.
 
(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
 
 
4.

--------------------------------------------------------------------------------

 
 
(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, (iii) a material
change in the duties or level of responsibility of the Executive or (iv) 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.
 
 
5.

--------------------------------------------------------------------------------

 
 
(b)           In the event of Executive’s resignation for Good Reason, the
Company shall continue to pay Executive the Base Salary, less applicable
withholding and deductions, and continue to provide medical and dental coverage
or pay Cobra premiums for twelve (12) months.
 
(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;
 
 
6.

--------------------------------------------------------------------------------

 
 
(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 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.
 
 
7.

--------------------------------------------------------------------------------

 
 
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.
 
In Witness Whereof, the parties have executed this Agreement on the day and year
first above written.
 

  Pokertek Inc.           /s/ James T Crawford III         James T Crawford III
      President       Date: July 16, 2009  

 

Accepted and agreed this       16th day of July, 2009.              
Executive
              /s/ Mark Roberson              

 
 
8.

--------------------------------------------------------------------------------

 
 
Exhibit A
 
Proprietary Information, Inventions, Non-Competition and Non-Solicitation
Agreement
 
 
9.

--------------------------------------------------------------------------------

 
 
Exhibit B

RELEASE
 
 
10.

--------------------------------------------------------------------------------

 
 
Release Agreement
 
I understand that my position with pokertek inc. (the “Company”) terminated
effective ___________, _____ (the “Separation Date”). The Company has agreed
that if I choose to sign this Release, the Company will extend to me certain
benefits (minus the standard withholdings and deductions, if applicable)
pursuant to the terms of the Key Employee Agreement (the “Agreement”) entered
into as of July 1, 2009, between myself and the Company, and any agreements
incorporated therein by reference. I understand that I am not entitled to such
severance benefits unless I sign this Release. I understand that, regardless of
whether I sign this Release, the Company will pay me all of my accrued salary
through the Separation Date, to which I am entitled by law.
 
In consideration for the severance benefits I am receiving under the Agreement,
I hereby release the Company and its officers, directors, agents, attorneys,
employees, shareholders, parents, subsidiaries, and affiliates from any and all
claims, liabilities, demands, causes of action, attorneys’ fees, damages, or
obligations of every kind and nature, whether they are now known or unknown,
arising at any time prior to the date I sign this Release. This general release
includes, but is not limited to: all federal and state statutory and common law
claims, claims related to my employment or the termination of my employment or
related to breach of contract, tort, wrongful termination, discrimination, wages
or benefits, or claims for any form of equity or compensation. Notwithstanding
the release in the preceding sentence, I am not releasing any right of
indemnification I may have for any liabilities arising from my actions within
the course and scope of my employment with the Company or within the course and
scope of my role as a Member of the Company.
 
I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS. In giving this release, which includes claims which may be unknown to me
at present, I hereby waive the benefit of any provision of North Carolina law,
and of any other jurisdiction, which is similar to Section 1542 of the
California Civil Code, which reads as follows: “A general release does not
extend to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.”
 
If I am forty (40) years of age or older as of the Separation Date, I
acknowledge that I am knowingly and voluntarily waiving and releasing any rights
I may have under the federal Age Discrimination in Employment Act of 1967, as
amended (“ADEA”). I also acknowledge that the consideration given for the waiver
in the above paragraph is in addition to anything of value to which I was
already entitled. I have been advised by this writing, as required by the ADEA
that: (a) my waiver and release do not apply to any claims that may arise after
my signing of this Release; (b) I should consult with an attorney prior to
executing this Release; (c) I have twenty-one (21) days within which to consider
this Release (although I may choose to voluntarily execute this Release
earlier); (d) I have seven (7) days following the execution of this release to
revoke the Release; and (e) this Release will not be effective until the eighth
day after this Release has been signed both by me and by the Company (“Effective
Date”).
 
[Signature Page Follows]
 
 
11.

--------------------------------------------------------------------------------

 
 
Agreed:
                            ________________       Date   Mark Roberson  
 
          PokerTek inc.                           By:         
Name:
       
Title:
    

 
 
12.

--------------------------------------------------------------------------------