Exhibit 10.2


 


COVENANT NOT TO COMPETE AGREEMENT


 


Mark L. Yoseloff


 


THIS AGREEMENT is made and entered into as
of February 23, 2004 by and between Shuffle Master, Inc., a Minnesota
corporation (the “Company”), and Mark L. Yoseloff (the “Employee”), a resident
of the State of Nevada.


 


RECITALS:


 


A.                                   The Company is
in the business of developing, manufacturing, distributing and otherwise
commercializing gaming equipment, games, and operating systems for gaming
equipment and related products and services throughout the United States and in
Canada and other countries (the “Business”).


 


B.                                     Employee is the
Company’s Chief Executive Officer and Chairman of the Company’s Board of
Directors.


 


C.                                     The Company and
Employee wish to provide for the orderly succession of Employee’s successor,
when Employee’s employment with the Company ends by providing a fixed period of
time during which Employee will not compete with the Company and be available
to provide counsel to Employee’s successor.


 


AGREEMENT


 


Now therefore Employee and
the Company agree as follows:


 


1. Non-competition. In consideration of the
provisions of this Agreement and in consideration of the provisions of
Employee’s Employment Agreement with the Company, Employee shall not, for a
period of three (3) years immediately following his last day of employment:


 


(a)                                  directly or
indirectly own, manage, operate, participate in, consult with or work for any
business which is engaged in the Business.


 


(b)                                 either alone or
in conjunction with any other person, partnership or business, directly or
indirectly, solicit or divert or attempt to solicit or divert any of the
employees or agents of the Company or its affiliates or successors to work for
or represent any competitor of


 

















 


the Company or its
affiliates or successors or to call upon any of the customers of the Company or
its affiliates or successors.


 


2. Non Compete Payments. In consideration of
the covenants contained herein, including the three (3) year period of
non-competition following Employee’s employment, the Company agrees that, in
the event Employee is terminated without just cause, Company will compensate
Employee as follows:


 


 


(a)                                  Employee’s annualized base
salary as of his last day of employment will be added to Employee’s average
annual bonus awarded under the annual executive bonus program over his last
three (3) years of employment, then multiplied by 2, and that product will be
paid to Employee in equal amounts at the same intervals as other employees of
the Company over the two and one-half (2 1/2) year period immediately following
his last day of employment..


 


(b)                                 During Employee’s three year
period of Non Competition, Company will provide Employee benefits it provides
its non executive Employees, provided however, Employee will not receive any
vacation\sick pay nor be eligible to participate in the Company’s bonus
programs and stock option plans


 


In the event Employee voluntarily terminates his employment after
February 23rd 2006 then Company will compensate Employee as set
forth in subparagraphs a and b above, except that the product determined under
subparagraph a will be determined by using a multiplier of 1 rather than a
multiplier of 2.


 


Notwithstanding the above, in the event of a Change of Control, if
Employee does not enter into a consulting or employment agreement with the
newly controlled entity, then Company will compensate Employee as set forth in
subparagraphs a and b above, except that the product determined under
subparagraph a will be determined using a multiplier of 2.5 rather than a multiplier
of 2 and this covenant not to compete will apply to and be for the benefit of
such newly controlled entity.


 


In the event, Employee is
terminated by the Company for just cause as defined in Employee’s February 23rd
Employment Agreement with the Company, then Employee will remain bound by this
Covenant Not to Compete, but Company will have


 

















 


no
obligation to make any of the payments or provide any of the other benefits to
be made to Employee under this Agreement.


 


3.               Consultation With
New C.E.O. Employee at the Company’s request will provide
consultation to the Company’s new Chief Executive Officer as reasonably needed
to effect a smooth transition.


 


4.               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.


 


5.               Independent
Covenants. The covenants on the part of the Employee contained
herein 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 these covenants.


 


6.               Injunctive
Relief; Attorneys’ Fees. In recognition of the irreparable harm that
a violation by Employee of any of the covenants contained herein would cause
the Company, the Employee agrees 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 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 EMPLOYEE AGREES TO PAY THE COSTS,


 

















 


EXPENSES AND REASONABLE ATTORNEYS’ FEES
INCURRED BY THE COMPANY IN PURSUING ANY OF ITS RIGHTS WITH RESPECT TO SUCH
VIOLATIONS, IN ADDITION TO THE ACTUAL DAMAGES SUSTAINED BY THE COMPANY AS A
RESULT THEREOF.


 


7.               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.


 


8.               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.


 


9.               Governing Law. This
Agreement shall be construed and enforced in accordance with the laws of the
State of Nevada, without giving effect to the principles of conflicts of laws
thereof.


 


10.             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.


 


11.             Entire Agreement. This Agreement is
the entire agreement of the parties hereto concerning the subject matter
hererof and supersedes and replaces any oral or written existing agreements
between the Company and the Employee relating to the same subject matter. The
Company and Employee hereby acknowledge that there are no agreements or
understandings of any nature, oral or written, regarding Employee’s non


 

















 


competition
apart from this Agreement and Employee’s Employment Agreement dated February 23rd
2004, which is not replaced by this Agreement.


 


IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day, month and year first above written.


 


 


	
  EMPLOYER:

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
  SHUFFLE
  MASTER, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Paul C. Meyer

  	
   

  	
  /s/ Mark L. Yoseloff

  	
   

  
	
  Its:

  	
  President and Chief
  Operating Officer

  	
   

  	
  Mark L. Yoseloff

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  APPROVED:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Garry Saunders

  	
   

  	
   

  
	
  Garry Saunders

  	
   

  
	
  Chairman

  	
   

  
	
  Shuffle Master
  Compensation Committee