ex104-01072009.htm


    
      

      

    

     

    
 

    EXHIBIT
10.4

     

    AMENDED
AND RESTATED

     

    COVENANT
NOT TO COMPETE AGREEMENT

     

    


     

    Mark
L. Yoseloff

     

    THIS AMENDED AND RESTATED AGREEMENT
(the “Agreement”) is made and entered into
as of the 31st day of December, 2008, 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 Company’s Chief Executive Officer and Chairman of Company’s Board of
      Directors.

            


    

     

    
      	
              C.  

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

            


    

     

    
      	
              D.  

            	
              The
      Company and Employee have previously entered into a Covenant Not to
      Compete Agreement dated May 1, 2002 (the “Previous
      Agreement”).

            


    

     

    
      	
              E.  

            	
              The
      Company and Employee desire to amend and restate the Previous Agreement
      solely in order to make changes to comply with Section 409A of the
      Internal Revenue Code of 1986, as amended (the
  “Code”).

            


    

     

    AGREEMENT

    


    Now
therefore Employee and the Company agree as follows:

    


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


    
      
         


      

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

    


    
      	
               
      

            	
              (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 (a) Employee is terminated
without just cause, (b) Employee voluntarily terminates his employment with
Company, or (c) Employee’s May 1st 2002
Employment Agreement is not renewed on terms at least as beneficial as those
received by Employee as of October 31st , 2004,
that Company will compensate Employee upon such “separation from service” as
defined in Code Section 409A as follows, but subject to Section 11
hereof:

     

    
      	
               
      

            	
              (a)

            	
              Employee’s
      annualized base salary as of his last day of employment will be added to
      Employee’s average annual bonus over his last three (3) years of
      employment, then multiplied by 2, and that product will be paid to
      Employee as follows: one third on the first January 5th
      following Employee’s last day of employment, one third on the second
      January 5th
      following Employee’s last day of employment, and one third on the third
      January 5th
      following Employee’s 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 is terminated by the Company for just cause as defined in
Employee’s May 1st
Employment Agreement with 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 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.


    
      
         


      

      
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    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.           Section
409A Compliance

     

    
      	
              a.  

            	
              This
      Agreement is intended to comply with Section 409A of the Code (to the
      extent applicable) and, to the extent it would not adversely impact the
      Company, the Company agrees to interpret, apply and administer this
      Agreement in a manner necessary to comply with such requirements and
      without resulting in any diminution in the value of payments or benefits
      to the Employee. Notwithstanding any other provisions of this Agreement,
      the Company does not guarantee that payments will be exempt or comply with
      Section 409A of the Code, nor will
the

            


    

     


    
      
         


      

      
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              b.  

            	
              Company
      indemnify, defend or hold harmless Employee with respect to the tax
      consequences of any such failure.

            


    

     

    
      	
              c.  

            	
              It
      is intended that (i) each installment of the payments provided under this
      Agreement is a separate “payment” for purposes of Section 409A of the
      Code, (ii) that the payments satisfy, to the greatest extent possible, the
      exemptions from the application of Section 409A of the Code provided under
      Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and
      1.409A-1(b)(9)(v) and (iii) all amounts set forth in Section 2 shall be
      payable only upon a termination of the Employee’s employment that
      constitutes a “separation from service” within the meaning of Treasury
      Regulation 1.409A-1(h).

            


    

     

    
      	
              d.  

            	
              Notwithstanding
      anything to the contrary in this Agreement, if the Company determines (i)
      that on the date the Employee’s employment with the Company terminates,
      the Employee is a “specified employee” (as such term is defined under
      Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any
      payments to be provided to the Employee pursuant to this Agreement are or
      may become subject to the additional tax under Section 409A(a)(1)(B) of
      the Code or any other taxes or penalties imposed under Section 409A of the
      Code if provided at the time otherwise required under this Agreement then
      such payments shall be delayed until the date that is six months after the
      date of the Employee’s “separation from service” with the Company, or, if
      earlier, the date of the Employee’s death.  Any payments delayed
      pursuant to this Section 11 shall be made in a lump sum on the first day
      of the seventh month following the Employee’s “separation from service”
      (as such term is defined under Treasury Regulation 1.409A-1(h)), or, if
      earlier, the date of the Employee’s
death.

            


    

     

    
      	
              e.  

            	
              To
      the extent that any reimbursement, fringe benefit or other, similar plan
      or arrangement in which the Employee participates during the term of
      Employee’s employment under this Agreement or thereafter provides for a
      "deferral of compensation" within the meaning of Section 409A of the Code,
      (i) the amount eligible for reimbursement or payment under such plan or
      arrangement in one calendar year may not affect the amount eligible for
      reimbursement or payment in any other calendar year (except that a plan
      providing medical or health benefits may impose a generally applicable
      limit on the amount that may be reimbursed or paid), and (ii) subject to
      any shorter time periods provided herein or the applicable plans or
      arrangements, any reimbursement or payment of an expense under such plan
      or arrangement must be made on or before the last day of the calendar year
      following the calendar year in which the expense was
    incurred.

            


    

     

    



    
      
         


      

      
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    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.

            	 
      	
               

              MARK
      YOSELOFF

            
	
               

               

              BY:   /s/ Jerry
      Smith

            	 
      	
               

               

              BY:   /s/ Mark L.
      Yoseloff

            
	
               

              ITS:  Executive Vice President, General
      Counsel and Corporate Secretary

            	 
      	 
      


    

    


    


    


    
      	
              APPROVED:

            	 
      	 
      
	
               

              COMPENSATION
      COMMITTEE

            	 
      	 
      
	
               

               

              BY:   /s/ Lou
      Castle

            	 
      	 
      
	
               

              ITS:  Chairman

            	 
      	 
      


    

    


    



    
      
         


      

      
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