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accelmmarinoemploymentag

                                                                   EXECUTIVE EMPLOYMENT AGREEMENT             This EXECUTIVE  EMPLOYMENT  AGREEMENT            (“Agreement”)  is  entered  into  as  of  March 8, 2020  (the  “Effective Date”),  by  Accel  Entertainment,  Inc.,  a  Delaware  corporation  (the “Company”), and Michael Marino (“Executive”).           WHEREAS,  the  Company  desires  to  employ  Executive  as  the  Company’s  Chief  Commercial  Officer, and Executive desires to serve in such capacity, pursuant to the terms and conditions set forth in  this Agreement.           NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein,  and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged  by the parties hereto, the parties hereto agree as follows:                                         ARTICLE I                                 CERTAIN DEFINITIONS           1.1 “Affiliate”  means  any  corporation,  partnership,  limited  liability  company,  limited  liability  partnership, association, trust or other organization that, directly or indirectly, controls, is controlled by, or  is under common control with, the Company.  For purposes of the preceding sentence, “control” (including,  with correlative meanings, the terms “controlled by” and “under common control with”), as used with  respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (i) to  vote more than 50% of the securities having ordinary voting power for the election of directors of the  controlled entity or organization or (ii) to direct or cause the direction of the management and policies of  the controlled entity or organization, whether through the ownership of voting securities, by contract, or  otherwise.      1.2 “Board” means the Board of Directors of the Company.      1.3 “Cause” means (a) Executive’s material breach of this Agreement or any other written agreement  between Executive and the Company or an Affiliate or Executive’s breach of any policy or code of conduct  established by the Company or an Affiliate and applicable to Executive; (b) commission of an act of gross  negligence,  willful  misconduct,  breach  of  fiduciary  duty,  fraud,  theft  or  embezzlement  on  the  part  of  Executive; (c) commission by Executive of, or conviction or indictment of Executive for, or plea of nolo  contendere by Executive to, any felony (or state law equivalent) or any crime involving moral turpitude;  (d) commission of any action that could cause Executive or the Company to be in violation of the Illinois  Video Gaming Act or rules established by the Illinois Gaming Board, or that could cause the revocation or  loss of any other material gaming license; or (e) Executive’s willful failure or refusal, other than due to  Disability, to perform Executive’s obligations pursuant to this Agreement or any other written agreement  with the Company or an Affiliate, as applicable, or to follow any lawful directive from the Company or any  Affiliate, as determined by the Company; provided, however, that if Executive’s actions or omissions as set  forth in clause (e) are of such a nature that the Company determines they are curable by Executive, such  actions or omissions must remain uncured 30 days after the Company has provided Executive written notice  of the obligation to cure such actions or omissions. 

 

   1.4 “Change in Control” means the occurrence of any of the following events:          (a) The consummation of an agreement to acquire or a tender offer for beneficial ownership (within  the  meaning  of  Rule 13d-3 promulgated  under  the  Securities  Exchange  Act  of  1934,  as  amended  (the  “Exchange Act”) by any “person” or “group” (as defined in the Exchange Act), of 50% or more of either  (i) the then outstanding shares of stock (the “Outstanding Stock”) or (ii) the combined voting power of the  then outstanding voting securities of the Company entitled to vote generally in the election of directors (the  “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a),  the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the  Company,  (B) any  acquisition  by  the  Company,  (C) any  acquisition  by  any  employee  benefit  plan  (or  related trust) sponsored or maintained by the Company or any entity controlled by the Company or (D) any  acquisition by any entity pursuant to a transaction that complies with clauses (A), (B) and (C) of Section  1.4(c) below;         (b) Individuals who constitute the Incumbent Board cease for any reason to constitute at least a  majority of the Board. For purposes of the foregoing “Incumbent Board” means the portion of the Board  whose election or appointment by the Board or nomination for election by the Company’s stockholders was  approved  by  a  vote  of  at  least  a  majority  of  the  directors  then  comprising  the  Incumbent  Board,  but  excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an  actual or threatened election contest with respect to the election or removal of directors or other actual or  threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board.         (c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all  or substantially all of the assets of the Company or an acquisition of assets of another entity (a “Business  Combination”), in each case, unless, following such Business Combination, (A) the Outstanding Stock and  Outstanding Company Voting Securities immediately prior to such Business Combination represent or are  converted  into  or  exchanged  for  securities  which  represent  or  are  convertible  into  more  than  50%  of,  respectively, the then outstanding shares of common stock or common equity interests and the combined  voting power of the then outstanding voting securities entitled to vote generally in the election of directors  or  other  governing  body,  as  the  case  may  be,  of  the  entity  resulting  from  such  Business  Combination  (including, without limitation, an entity which as a result of such transaction owns the Company, or all or  substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person  (excluding any employee benefit plan (or related trust) of the Company or the entity resulting from such  Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then  outstanding shares of common stock or common equity interests of the entity resulting from such Business  Combination  or  the  combined  voting  power  of  the  then  outstanding  voting  securities  entitled  to  vote  generally in the election of directors or other governing body of such entity to the extent that such ownership  results solely from ownership of the Company that existed prior to the Business Combination, and (C) at  least a majority of the members of the board of directors or similar governing body of the entity resulting  from such Business Combination were members of the Incumbent Board at the time of the execution of the  initial agreement, or of the action of the Board, providing for such Business Combination; or         (d) Approval by the stockholders of the Company of a complete liquidation or dissolution of the  Company.      1.5 “COBRA” means the Consolidated Omnibus Reconciliation Act of 1985, as amended.       1.6 “Code” means the Internal Revenue Code of 1986, as amended.      1.7 “Covered Termination” means (a) the termination of Executive’s employment by the Company  without Cause, or (b) Executive’s termination of employment with the Company for Good Reason.  A                                              2   

 

Covered Termination will not include a termination of Executive’s employment by reason of Executive’s  death or Disability, the termination of Executive’s employment for Cause or Executive’s termination of his  employment without Good Reason.      1.8 “Disability” means a physical or mental sickness or any injury which renders Executive incapable  of performing the services required of him as an Executive of the Company and which does or may be  expected to continue for more than six months during any 12-month period. In the event Executive shall be  able to perform his usual and customary duties on behalf of the Company following a period of disability,  and does so perform such duties or such other duties as are prescribed by the Board for a period of three  continuous months, any subsequent period of disability shall be regarded as a new period of disability for  purposes of this Agreement. The Company and Executive shall determine the existence of a Disability and  the date upon which it occurred. In the event of a dispute regarding whether or when a Disability occurred,  the matter shall be referred to a medical doctor selected by the Company and Executive. In the event of  their failure to agree upon such a medical doctor, the Company and Executive shall each select a medical  doctor  who  together  shall  select  a  third  medical  doctor  who  shall  make  the  determination.  Such  determination shall be conclusive and binding upon the parties hereto.      1.9 “Good Reason” means Executive’s resignation within 90 days after any of the following events,  unless Executive consents to the applicable event: (a) a material decrease in Executive’s base salary, other  than  a  reduction  in  annual  base  salary  of  less  than  10%  that  is  implemented  in  connection  with  a  contemporaneous reduction in annual base salaries affecting other senior executives of the Company; (b) a  material decrease in (i) Executive’s then-current title or position, or (ii) authority or areas of responsibility  as are commensurate with Executive’s then-current title or position; (c) a relocation of Executive’s principal  work  location  to  a  location  more  than  50  miles  from  Executive’s  then-current  principal  location  of  employment; or (d) a material breach by the Company or any Affiliate of this Agreement or any material  agreement  between  Executive  and the  Company  or  any  Affiliate.  Notwithstanding  the  foregoing,  any  assertion by Executive of a termination for Good Reason will not be effective unless and until Executive  has: (A) provided the Company or any Affiliate, within 60 days of Executive’s knowledge of the occurrence  of the facts and circumstances underlying the Good Reason event, written notice stating with specificity the  applicable facts and circumstances underlying such Good Reason event; and (B) provided the Company or  any Affiliate with an opportunity to cure the same within 30 days after the receipt of such notice.       1.10  “Person”  shall  mean  any  individual,  natural  person,  corporation  (including  any  non-profit  corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate,  trust,  company  (including  any company  limited  by  shares,  limited  liability  company  or  joint  stock  company),  incorporated  or  unincorporated  association,  governmental  authority,  firm,  society  or  other  enterprise, organization or other entity of any nature.                                        ARTICLE II                            EMPLOYMENT BY THE COMPANY     2.1   Position and Duties.  Subject to the terms set forth herein, Executive will be employed as the  Company’s  Chief  Commercial  Officer  and  will  report  to  the  Company’s  Chief  Executive  Officer.   Executive  will  perform  such  services  as  are  consistent  with  such  position  and  such  other duties  as  are  assigned  to  Executive  by  the  Company’s  Chief  Executive  Officer.   During  the  term  of  Executive’s  employment  with  the  Company,  Executive  will  devote  Executive’s best  efforts  and  substantially  all of  Executive’s business time and attention to the business of the Company.        2.2 Employment  Policies.  Executive’s  employment  relationship  with  the  Company  will  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                                              3   

 

Agreement differ from or are in conflict with the Company’s general employment policies or practices, this  Agreement will control.              2.3 Term. The  term  of  Executive’s  employment  hereunder  shall  commence  as of  the  later  of  the  Effective Date and the date of Executive’s commencement of employment with the Company and shall end  on  the  third  anniversary  of  the  Effective  Date; provided that  such  term  shall  earlier  terminate  upon  a  termination of Executive’s employment as set forth in Section 4.1.  Executive acknowledges and agrees  that there is no assurance that this Agreement will be renewed or extended beyond the third anniversary of  the Effective Date, and neither Executive nor the Company has any obligation to renew or extend this  Agreement or any right to require any such renewal or extension, and a failure to renew or extend this  Agreement shall not entitle Executive or the Company to any additional compensation.  Notwithstanding  the  foregoing,  Executive’s  employment  hereunder  is  contingent  upon  satisfactory  completion  of  all  background  checks,  successful  drug  screen  pursuant  to  Company  policy  and  licensing  requirements  as  defined and regulated by the Illinois Gaming Board.                                                ARTICLE III                                     COMPENSATION                                                  3.1 Base Salary.  As of the Effective Date, Executive will receive for services to be rendered hereunder  an annual base salary of $500,000, payable in accordance with the Company’s standard payroll practices.  Executive’s base salary will be subject to review from time to time in the sole discretion of the Board.               3.2 Annual Bonus.  Executive will be eligible to receive an annual performance bonus with a target  amount  of  50%  of  Executive’s  base  salary  (the  “Annual Bonus”).  Annual  Bonus  payments  will  be  determined in the discretion of the Board and will be subject to achievement of any applicable performance  milestones or other terms and conditions determined by the Board.  The Annual Bonus will be payable as  soon as practicable following the end of the calendar year to which the bonus relates, subject to Executive’s  continued employment on the payment date.             3.3 Long-Term Incentive Compensation. As soon as practicable following the Effective Date and  subject  to  the  approval  of  the  Board  or  the  compensation  committee  thereof,  the  Company  will  grant  Executive an option to purchase 320,297 shares of the Company’s common stock (the “Option”), pursuant  to the terms of the Company’s Long Term Incentive Plan (the “Plan”) and the stock option agreement  governing  the  Option.   The  Option  will  have  an  exercise  price  equal to the fair market value of the  Company’s common stock on the date of grant and will vest over a five-year period, with 25% of the total  number of shares subject to the Option vesting on the second anniversary of the grant date (the “First  Vesting Date”) and the remainder vesting in 12 equal quarterly installments on each 3-month anniversary  of the First Vesting Date thereafter.  Vesting will be contingent on the Executive’s continued service with  the Company on each applicable vesting date, except as otherwise set forth in the stock option agreement  governing the Option.          In addition, as soon as practicable following the Effective Date and subject to the approval of the Board  or  the  compensation  committee  thereof,  the  Company  will  grant  Executive  a  restricted  stock  unit  (the “RSU”)  representing  the  opportunity  to  acquire  320,297  shares  of  the  Company’s  common  stock,  pursuant to the terms of the Plan and the restricted stock unit agreement governing the RSU.  The RSU will  vest over a five-year period, with 25% of the total number of shares subject to the RSU vesting on the First  Vesting Date and the remainder vesting in 12 equal quarterly installments on each 3-month anniversary of  the First Vesting Date thereafter.  Vesting will be contingent on the Executive’s service with the Company  on  each  applicable  vesting  date,  except  as  otherwise  set  forth in  the  restricted  stock  unit  agreement  governing the RSU.                                                   4   

 

   Executive acknowledges that the foregoing grants of the Option and the RSU constitute and satisfy the  Company’s  obligations  in respect  of  the  “initial  equity  grant” contemplated  in  the  offer  letter  between  Executive and the Company dated as of February 8, 2020 (the “Offer Letter”).      In addition, Executive will be eligible to receive additional grants of stock options and/or RSUs on an  annual basis in accordance with the Company’s annual grants to similarly situated senior executives, if any,  with a target grant date value of 200% of Executive’s annual base salary.  Such grants, if any, will be made  in the Board’s sole discretion.             3.4 Company Benefits.  Executive will be eligible to continue to participate in the employee benefit  plans and arrangements established by the Company (“Employee Benefit Plans”), including a company  phone to use in the furtherance of Executive’s duties to the Company, each in accordance with the terms  and conditions of such plans as in effect from time to time. Executive will be eligible to accrue up to twenty- five days of paid time off (“PTO”) per calendar year, at a rate of 0.9615 days per pay period.  PTO will be  used  no  more  than  one  week  at  a  time  unless  otherwise  approved by  the  Company’s  Chief  Executive  Officer,  and  no  more  than  forty  hours  of  PTO  may  rollover  from any  calendar  year  to  the  next.  The  Company  reserves  the  right  to  amend  or  terminate  any  Employee  Benefit  Plan  at  any  time  in  its  sole  discretion, subject to the terms of such Employee Benefit Plan and applicable laws.              3.5 Expenses.  The  Company  will  reimburse  Executive  for  all  reasonable  and  necessary  expenses  incurred by Executive in connection with the Company’s business, provided that the expenses are properly  documented and accounted for in accordance with the Company’s policies as may be in effect from time to  time.                                                ARTICLE IV                                      TERMINATION       4.1   Termination of Employment.  Executive’s employment with the Company hereunder may be  terminated by the Company or Executive, as applicable, without any breach of this Agreement under the  following circumstances:  (a) the Company may terminate Executive’s employment with or without Cause  at  any  time;  (b)   Executive  may  resign  for  Good  Reason  or  without  Good  Reason  at  any  time;  and  (c) Executive’s  employment  shall terminate  automatically  upon  Executive’s  death  or,  subject  to  a  determination by the Board, upon Executive’s Disability.  Any termination of Executive’s employment by  the Company or by Executive under this Article 4 (other than in the case of Executive’s death) shall be  communicated by a written notice to the other party hereto and shall be effective on the date on which such  notice is given unless otherwise indicated (and subject to the notice and cure periods required in the event  a termination for Cause or a resignation for Good Reason).          4.2 Deemed Resignation.  Upon termination of Executive’s employment for any reason, Executive  shall be deemed to have resigned from all offices and directorships, if any, then held with the Company or  any of its Affiliates. Notwithstanding the foregoing, in the event that, following Executive’s termination of  employment, Executive continues to provide services to the Company as a consultant or member of the  Board, Executive may continue to serve in such offices and directorships as then mutually agreed upon  between Executive and the Company.                                                                                     ARTICLE V                         SEVERANCE PAYMENTS AND BENEFITS          5.1 General.  Upon a termination of Executive’s employment for any reason, Executive (or his estate)  shall be entitled to receive Executive’s accrued but unpaid base salary or wages, accrued vacation pay,  unreimbursed business expenses for which proper documentation is provided, and other vested amounts                                              5   

 

and benefits earned by (but not yet paid to) or owed to Executive under any applicable Employee Benefit  Plan  of  the  Company  through  and  including  the  date  of  termination  of  Executive’s  employment  (the “Accrued Benefits”).          5.2 Covered  Termination.   If  Executive  experiences  a  Covered  Termination,  Executive  will be  entitled to receive Executive’s Accrued Benefits and, subject to the requirements of Section 5.3, will be  entitled to receive the following payments and benefits:            (a)   Cash Severance.  Executive will be entitled to receive an amount equal to the sum of (i) the  aggregate base salary and (ii) the Annual Bonus payments, if any, received by Executive during the 12- month  period  ending  on  the  date  of  the  Covered  Termination,  payable  over  a  12-month  period  in  substantially equal installments in accordance with the Company’s normal payroll policies, less applicable  withholdings, with such installments to commence in the first payroll period immediately following the  date the Release (as defined below) becomes effective and non-revocable (so long as such Release becomes  effective on or before the 60th day following the date of such Covered Termination).                (b)  Continued Healthcare.  If Executive elects to receive continued healthcare coverage pursuant  to the provisions of COBRA, the Company will directly pay, or reimburse Executive for, the premium for  Executive and Executive’s covered dependents through the earliest to occur of (i) the 12-month anniversary  of the Covered Termination and (ii) the first date on which Executive and Executive’s covered dependents  become eligible for substantially comparable healthcare coverage under another employer’s plans; provided  that as soon as administratively practicable following the date the Release effective and non-revocable (so  long  as  such  Release  becomes  effective  on  or  before  the  60th  day  following  date  of  such  Covered  Termination), the Company will pay to Executive a cash lump-sum payment equal to the monthly premiums  that would have been paid on behalf of Executive had such payments commenced on the date of the Covered  Termination. Notwithstanding the foregoing, the Company may elect at any time that, in lieu of paying or  reimbursing such premiums, the Company will instead provide Executive with a monthly or lump sum cash  payment equal to the amount the Company would have otherwise paid pursuant to this Section 5.2(b), less  applicable tax withholdings.              5.3   Release.   Executive  will  not  be  eligible  for  the  severance  payment  and  benefits  described  in  Section 5.2 unless (i) Executive has executed and deliver to the Company a general release of all claims  that Executive may have against the Company (or its successor) or Persons affiliated with the Company (or  its successor) in a form acceptable to the Company (the “Release”), and such Release becomes effective on  or before the 60th day following date of the Covered Termination and (ii) Executive has not revoked or  breached the provisions of such Release or breached the provisions of Section 6. In the event that Executive  does not execute such deliver such Release, such Release does not become effective and irrevocable within  such period or Executive revokes or breaches the provisions of such Release or breaches the provisions of  Section 6, he (A) will be deemed to have voluntarily resigned his employment hereunder without Good  Reason and (B) will not be entitled to the payments or benefits described in Section 5.2.          5.4   Section 280G; Limitation on Payments.   Notwithstanding  anything  in  this  Agreement  to  the  contrary, if any payment or distribution to Executive pursuant to this Agreement or otherwise (“Payment”)  would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code and (b) but  for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then  such Payment will either be delivered in full or delivered as to such lesser extent as would result in no  portion of such Payment being subject to the Excise Tax, whichever of the foregoing amounts, after taking  into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt  by Executive on an after-tax basis of the largest payment, notwithstanding that all or some portion of the  Payment may be taxable under Section 4999 of the Code.  The accounting firm engaged by the Company  for general audit purposes as of the date prior to the effective date of the Change in Control, or such other                                              6   

 

Person  as  determined  in  good  faith  by  the  Company,  will  perform  the  foregoing  calculations  and  the  Company will bear all expenses with respect to the determinations by such accounting firm required to be  made hereunder.  Any good faith determinations of the accounting firm made pursuant to this Section 5.4  will be final, binding and conclusive upon all parties.  Any reduction in payments and/or benefits pursuant  to  the  foregoing  will  occur  in  the  following  order  (i) reduction  of  cash  payments;  (ii)  cancellation  of  accelerated vesting of equity awards other than stock options, if any; (iii) cancellation of accelerated vesting  of stock options, and (iv) reduction of other benefits payable to Executive.                                           ARTICLE VI                                       COVENANTS       6.1 Outside Activities.  During Executive’s term of employment, Executive will not engage in any  other  employment,  occupation  or  business  enterprise  without  the  prior  written  consent  of  the  Board;  provided that it is understood that Executive may serve as a member of the board of directors of one for- profit company, with the prior written consent of the Board.  Notwithstanding the foregoing, Executive may  engage in civil and not-for-profit activities, and/or maintain passive investments, in each case so long as  such activities do not materially interfere or conflict with the performance of Executive’s duties or the  Company’s gaming licenses, as determined in the sole discretion of the Board.          6.2 Conflict  of  Interest;  Non-Competition.  During  the  term  of  Executive’s  employment  by  the  Company  and  for  a  period  of  one-year  following  Executive’s  termination  of  service  for  any  reason,  Executive will not directly or indirectly, whether as an 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 known by Executive to 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  Executive may own, as a passive investor, securities  of any competitor corporation, so long as Executive’s direct holdings in any such corporation do not in the  aggregate constitute more than 1% of the voting stock of such corporation.             6.3 Non-Solicitation.   During  the  term  of  Executive’s  employment  and  for  a  period  of  one-year  following Executive’s termination of employment for any reason, Executive shall not (a) solicit, divert or  take away any of the Company’s customers, suppliers or accounts; or (b) divert, take away, hire, solicit or  seek to induce employment of any person who is then an employee of the Company; provided, however,  that a general advertisement to which an employee of the Company responds shall not on its own result in  a breach of this Section 6.3.                6.4 Confidential and Proprietary Information.  Except as Executive reasonably and in good faith  determines to be required in the faithful performance of Executive’s duties hereunder, Executive shall,  during the term of his employment and following his termination of service for any reason, maintain in  confidence and shall not directly or indirectly, use, disseminate, disclose or publish, for Executive’s benefit  or the benefit of any other Person, any confidential or proprietary information or trade secrets of or relating  to  the  Company,  including,  without  limitation,  information  with  respect  to  the  Company’s  operations,  processes,  protocols,  products,  inventions,  business  practices,  finances,  principals,  vendors,  suppliers,  customers,  potential  customers,  marketing  methods,  costs,  prices,  contractual  relationships,  regulatory  status, compensation paid to employees or other terms of employment (“Proprietary Information”), or  deliver  to  any  Person,  any  document,  record,  notebook,  computer  program  or  similar  repository  of  or  containing any such Proprietary Information. Executive’s obligation to maintain and not use, disseminate,  disclose or publish, for Executive’s benefit or the benefit of any other Person, any Proprietary Information  after Executive’s termination of service will continue so long as such Proprietary Information is not, or has  not  by  legitimate  means  become, generally  known  and  in  the  public  domain  (other  than  by  means  of  Executive’s direct or indirect disclosure of such Proprietary Information) and continues to be maintained                                              7   

 

as Proprietary Information by the Company.   For the avoidance of doubt, nothing in this Agreement will  be construed to prohibit Executive from filing a charge or complaint, participating or cooperating with, or  receiving an award for any information provided to any governmental agency or entity, including but not  limited to the Equal Employment Opportunity Commission, the Department of Justice, the Securities and  Exchange Commission, or any other federal, state or local government agency or commission.            6.5 Work Product.  Executive acknowledges and agrees that any copyrightable works prepared by  Executive within the scope of his employment will be “works made for hire” under the Copyright Act and  that the Company will be considered the author and owner of such copyrightable works.  Executive further  agrees  that  all  inventions,  improvements,  designs,  original  works  of  authorship,  formulas,  processes,  compositions of matter, computer software programs, databases, mask works, confidential information and  trade  secrets  (“Inventions”)  made,  created,  conceived  or  first  reduced  to  practice  during  the  period  of  Executive’s employment, whether or not in the course of Executive’s employment, and whether or not  patentable,  copyrightable  or  protectable  as  trade  secrets,  and that  (a) are  developed  using  equipment,  supplies, facilities or trade secrets of the Company; (b) result from work performed by Executive for the  Company;  or  (iii) relate  to  the  Company’s  business  or  actual  or  demonstrably  anticipated  research  or  development  (the  “Assigned Inventions”),  will  be  the  sole  and  exclusive  property  of  the  Company.  Executive  shall  execute  any  and  all  documents  and  shall  provide  such  assistance  necessary  either  to  evidence or register the assignment of these rights.      6.6 Cooperation. Executive agrees to reasonably cooperate with the Company during the term of his  employment hereunder and thereafter, at the Company sole expense relating to any travel or other out-of- pocket expenses incurred, in connection with any governmental, regulatory, commercial, private or other  investigations, arbitrations, litigations or similar matters that may arise during the term of his employment  hereunder, or in any way relate to events that occurred during term of his employment hereunder, until such  investigations, arbitrations, litigations or similar matters are completely resolved.                                                ARTICLE VII                                  GENERAL PROVISIONS          7.1 Indemnification. The Company shall indemnify and hold harmless Executive, to the maximum  extent permitted by applicable law, against all costs, charges, expenses, claims and judgments incurred or  sustained by Executive in connection with any action, suit or proceeding to which Executive may be made  a party by reason of being, or agreeing to be, an officer, director or employee of the Company or any  subsidiary or affiliate of the Company.  The Company shall provide directors and officers insurance for  Executive in reasonable amounts.  The Board shall determine, in its sole discretion, the availability of  insurance upon reasonable terms and the amount of such insurance coverage.      7.2 Tax Matters.              (a) Section 409A.  It  is  intended  that  any  right  to  receive  installment  payments  pursuant  to  this  Agreement will be treated as a right to receive a series of separate and distinct payments for purposes of  Section 409A of the Code.  It is further intended that all payments and benefits hereunder satisfy, to the  greatest extent possible, the exemption from the application of Section 409A of the Code (and any state law  of similar effect) provided under Treasury Regulation Section 1.409A-1(b)(4) (as a “short-term deferral”)  and are otherwise exempt from or comply with Section 409A of the Code.  Accordingly, to the maximum  extent permitted, this Agreement will be interpreted in accordance with such intent.  To the extent necessary  to comply with Section 409A of the Code, if the designated payment period for any payment under this  Agreement begins in one taxable year and ends in the next taxable year, the payment will commence or  otherwise be made in the later taxable year.  For purposes of Section 409A of the Code, if the Company  determines that Executive is a “specified employee” under Section 409A(a)(2)(B)(i) of the Code at the time                                              8   

 

of Executive’s separation from service, then to the extent delayed commencement of any portion of the  payments or benefits to which Executive is entitled pursuant to this Agreement is required in order to avoid  a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion will not be provided until  the earlier (i) the expiration of the six-month period measured from Executive’s separation from service or  (ii) the date of Executive’s death. As soon as administratively practicable following the expiration of the  applicable Section 409A(2)(B)(i) period, all payments deferred pursuant to the preceding sentence will be  paid in a lump-sum to Executive and any remaining payments due pursuant to this Agreement will be paid  as otherwise provided herein.                 (b) Expense Reimbursement.  To the extent that any reimbursements payable to Executive pursuant  to this Agreement are subject to the provisions of Section 409A of the Code, such reimbursement will be  paid to Executive no later than December 31st of the year following the year in which such expense was  incurred.   The  amount  of  expenses  reimbursed  in  one  year  will  not  affect  the  amount  eligible  for  reimbursement in any subsequent year and Executive’s right to reimbursement under this Agreement will  not be subject to liquidation or exchange for another benefit.                  (c) Withholding.  All amounts and benefits payable under this Agreement are subject to deduction  and withholding to the extent required by applicable law.              7.3 At-Will Employment.  Executive’s employment relationship with the Company is at-will.  Either  Executive or the Company may terminate Executive’s employment or service at any time for any or no  reason, with or without cause.           7.4 Compensation Recoupment. All amounts payable to Executive pursuant to this Agreement shall  be subject to recoupment pursuant to any compensation recoupment policy that is applicable generally to  executive officers of the Company and in effect from time to time.          7.5 Notice.  Any notices provided hereunder must be in writing and shall be deemed effective upon the  earlier of personal delivery (including personal delivery by facsimile) or the third day after mailing by first  class mail, to the Company at its primary office location and to Executive at Executive’s address as listed  on the Company payroll.          7.6 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  or  unenforceable  in  any  respect  under  any  applicable  law  or  rule  in  any  jurisdiction,  such  invalidity  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 or unenforceable  provisions had never been contained herein.          7.7 Choice  of  Law.  All  questions  concerning  the  construction,  validity  and  interpretation  of this  Agreement  will  be  governed  by  the  law  of  the  State  of  Illinois without  regard  to  the  conflicts  of  law  provisions.              7.8 Dispute  Resolution;  Arbitration.  Unless  otherwise  prohibited  by law  or  specified  below,  all  disputes, claims and causes of action, in law or equity, arising from or relating to this Agreement or its  enforcement, performance, breach, or interpretation will be resolved solely and exclusively by final and  binding arbitration in Cook County, Illinois through Judicial Arbitration and Mediation Services/Endispute  (“JAMS”) before a single neutral arbitrator, in accordance with the JAMS employment arbitration rules  then in effect.  THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY  JURY  IN  REGARD  TO  ARBITRABLE  CLAIMS.   The  JAMS  rules  may  be  found and reviewed at                                              9   

 

http://www.jamsadr.com/rules-employment-arbitration.  The arbitrator will issue a written decision that  contains the essential findings and conclusions on which the decision is based.               7.9 Entire Agreement.  This Agreement constitutes the entire agreement between Executive and the  Company with respect to the subject matter hereof, and supersedes all prior or contemporaneous offers,  negotiations and agreements, whether written or oral, relating to such subject matter, including the Offer  Letter.  This Agreement is entered into without reliance on any promise or representation other than those  expressly contained herein or therein and may not be modified or amended except in a writing signed by  an officer of the Company and Executive.                                    (Signature Page Follows)                                              10   

 

DerekHarmer GeneralCounselandSecretaryaccelrhammeremploymentag

                                                                   EXECUTIVE EMPLOYMENT AGREEMENT             This EXECUTIVE  EMPLOYMENT  AGREEMENT            (“Agreement”)  is  entered  into  as  of  March 6, 2020  (the  “Effective Date”),  by  Accel  Entertainment,  Inc.,  a  Delaware  corporation  (the “Company”), and Ryan Hammer (“Executive”).          WHEREAS,  the  Company  desires  to  employ  Executive  as  the  Company’s  President,  Gaming  Operations, and Executive desires to serve in such capacity, pursuant to the terms and conditions set forth  in this Agreement.           NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein,  and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged  by the parties hereto, the parties hereto agree as follows:                                         ARTICLE I                                 CERTAIN DEFINITIONS           1.1 “Affiliate”  means  any  corporation,  partnership,  limited  liability  company,  limited  liability  partnership, association, trust or other organization that, directly or indirectly, controls, is controlled by, or  is under common control with, the Company.  For purposes of the preceding sentence, “control” (including,  with correlative meanings, the terms “controlled by” and “under common control with”), as used with  respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (i) to  vote more than 50% of the securities having ordinary voting power for the election of directors of the  controlled entity or organization or (ii) to direct or cause the direction of the management and policies of  the controlled entity or organization, whether through the ownership of voting securities, by contract, or  otherwise.      1.2 “Board” means the Board of Directors of the Company.      1.3 “Cause” means (a) Executive’s material breach of this Agreement or any other written agreement  between Executive and the Company or an Affiliate or Executive’s breach of any policy or code of conduct  established by the Company or an Affiliate and applicable to Executive; (b) commission of an act of gross  negligence,  willful  misconduct,  breach  of  fiduciary  duty,  fraud,  theft  or  embezzlement  on  the  part  of  Executive; (c) commission by Executive of, or conviction or indictment of Executive for, or plea of nolo  contendere by Executive to, any felony (or state law equivalent) or any crime involving moral turpitude;  (d) commission of any action that could cause Executive or the Company to be in violation of the Illinois  Video Gaming Act or rules established by the Illinois Gaming Board, or that could cause the revocation or  loss of any other material gaming license; or (e) Executive’s willful failure or refusal, other than due to  Disability, to perform Executive’s obligations pursuant to this Agreement or any other written agreement  with the Company or an Affiliate, as applicable, or to follow any lawful directive from the Company or any  Affiliate, as determined by the Company; provided, however, that if Executive’s actions or omissions as set  forth in clause (e) are of such a nature that the Company determines they are curable by Executive, such  actions or omissions must remain uncured 30 days after the Company has provided Executive written notice  of the obligation to cure such actions or omissions. 

 

   1.4 “Change in Control” means the occurrence of any of the following events:          (a) The consummation of an agreement to acquire or a tender offer for beneficial ownership (within  the  meaning  of  Rule 13d-3 promulgated  under  the  Securities  Exchange  Act  of  1934,  as  amended  (the  “Exchange Act”) by any “person” or “group” (as defined in the Exchange Act), of 50% or more of either  (i) the then outstanding shares of stock (the “Outstanding Stock”) or (ii) the combined voting power of the  then outstanding voting securities of the Company entitled to vote generally in the election of directors (the  “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (a),  the following acquisitions shall not constitute a Change in Control: (A) any acquisition directly from the  Company,  (B) any  acquisition  by  the  Company,  (C) any  acquisition  by  any  employee  benefit  plan  (or  related trust) sponsored or maintained by the Company or any entity controlled by the Company or (D) any  acquisition by any entity pursuant to a transaction that complies with clauses (A), (B) and (C) of Section  1.4(c) below;         (b) Individuals who constitute the Incumbent Board cease for any reason to constitute at least a  majority of the Board. For purposes of the foregoing “Incumbent Board” means the portion of the Board  whose election or appointment by the Board or nomination for election by the Company’s stockholders was  approved  by  a  vote  of  at  least  a  majority  of  the  directors  then  comprising  the  Incumbent  Board,  but  excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an  actual or threatened election contest with respect to the election or removal of directors or other actual or  threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board.         (c) Consummation of a reorganization, merger or consolidation or sale or other disposition of all  or substantially all of the assets of the Company or an acquisition of assets of another entity (a “Business  Combination”), in each case, unless, following such Business Combination, (A) the Outstanding Stock and  Outstanding Company Voting Securities immediately prior to such Business Combination represent or are  converted  into  or  exchanged  for  securities  which  represent  or  are  convertible  into  more  than  50%  of,  respectively, the then outstanding shares of common stock or common equity interests and the combined  voting power of the then outstanding voting securities entitled to vote generally in the election of directors  or  other  governing  body,  as  the  case  may  be,  of  the  entity  resulting  from  such  Business  Combination  (including, without limitation, an entity which as a result of such transaction owns the Company, or all or  substantially all of the Company’s assets either directly or through one or more subsidiaries), (B) no Person  (excluding any employee benefit plan (or related trust) of the Company or the entity resulting from such  Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then  outstanding shares of common stock or common equity interests of the entity resulting from such Business  Combination  or  the  combined  voting  power  of  the  then  outstanding  voting  securities  entitled  to  vote  generally in the election of directors or other governing body of such entity to the extent that such ownership  results solely from ownership of the Company that existed prior to the Business Combination, and (C) at  least a majority of the members of the board of directors or similar governing body of the entity resulting  from such Business Combination were members of the Incumbent Board at the time of the execution of the  initial agreement, or of the action of the Board, providing for such Business Combination; or         (d) Approval by the stockholders of the Company of a complete liquidation or dissolution of the  Company.      1.5 “COBRA” means the Consolidated Omnibus Reconciliation Act of 1985, as amended.       1.6 “Code” means the Internal Revenue Code of 1986, as amended.      1.7 “Covered Termination” means (a) the termination of Executive’s employment by the Company  without Cause, or (b) Executive’s termination of employment with the Company for Good Reason.  A                                              2   

 

Covered Termination will not include a termination of Executive’s employment by reason of Executive’s  death or Disability, the termination of Executive’s employment for Cause or Executive’s termination of his  employment without Good Reason.      1.8 “Disability” means a physical or mental sickness or any injury which renders Executive incapable  of performing the services required of him as an Executive of the Company and which does or may be  expected to continue for more than six months during any 12-month period. In the event Executive shall be  able to perform his usual and customary duties on behalf of the Company following a period of disability,  and does so perform such duties or such other duties as are prescribed by the Board for a period of three  continuous months, any subsequent period of disability shall be regarded as a new period of disability for  purposes of this Agreement. The Company and Executive shall determine the existence of a Disability and  the date upon which it occurred. In the event of a dispute regarding whether or when a Disability occurred,  the matter shall be referred to a medical doctor selected by the Company and Executive. In the event of  their failure to agree upon such a medical doctor, the Company and Executive shall each select a medical  doctor  who  together  shall  select  a  third  medical  doctor  who  shall  make  the  determination.  Such  determination shall be conclusive and binding upon the parties hereto.      1.9 “Good Reason” means Executive’s resignation within 90 days after any of the following events,  unless Executive consents to the applicable event: (a) a material decrease in Executive’s base salary, other  than  a  reduction  in  annual  base  salary  of  less  than  10%  that  is  implemented  in  connection  with  a  contemporaneous reduction in annual base salaries affecting other senior executives of the Company; (b) a  material decrease in (i) Executive’s then-current title or position, or (ii) authority or areas of responsibility  as are commensurate with Executive’s then-current title or position; (c) a relocation of Executive’s principal  work  location  to  a  location  more  than  50  miles  from  Executive’s  then-current  principal  location  of  employment; or (d) a material breach by the Company or any Affiliate of this Agreement or any material  agreement  between  Executive  and the  Company  or  any  Affiliate.  Notwithstanding  the  foregoing,  any  assertion by Executive of a termination for Good Reason will not be effective unless and until Executive  has: (A) provided the Company or any Affiliate, within 60 days of Executive’s knowledge of the occurrence  of the facts and circumstances underlying the Good Reason event, written notice stating with specificity the  applicable facts and circumstances underlying such Good Reason event; and (B) provided the Company or  any Affiliate with an opportunity to cure the same within 30 days after the receipt of such notice.       1.10  “Person”  shall  mean  any  individual,  natural  person,  corporation  (including  any  non-profit  corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate,  trust,  company  (including  any company  limited  by  shares,  limited  liability  company  or  joint  stock  company),  incorporated  or  unincorporated  association,  governmental  authority,  firm,  society  or  other  enterprise, organization or other entity of any nature.                                        ARTICLE II                            EMPLOYMENT BY THE COMPANY     2.1   Position and Duties.  Subject to the terms set forth herein, Executive will be employed as the  Company’s  President,  Gaming  Operations  and  will  report  to  the  Company’s  Chief  Executive  Officer.   Executive  will  perform  such  services  as  are  consistent  with  such  position  and  such  other duties  as  are  assigned  to  Executive  by  the  Company’s  Chief  Executive  Officer.   During  the  term  of  Executive’s  employment  with  the  Company,  Executive  will  devote  Executive’s best  efforts  and  substantially  all of  Executive’s business time and attention to the business of the Company.        2.2 Employment  Policies.  Executive’s  employment  relationship  with  the  Company  will  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                                              3   

 

Agreement differ from or are in conflict with the Company’s general employment policies or practices, this  Agreement will control.              2.3 Term. The term of Executive’s employment hereunder shall commence as of the Effective Date  and  shall  end  on  the  third  anniversary  thereof; provided that  such  term  shall  earlier  terminate  upon  a  termination of Executive’s employment as set forth in Section 4.1.  Executive acknowledges and agrees  that there is no assurance that this Agreement will be renewed or extended beyond the third anniversary of  the Effective Date, and neither Executive nor the Company has any obligation to renew or extend this  Agreement or any right to require any such renewal or extension, and a failure to renew or extend this  Agreement shall not entitle Executive or the Company to any additional compensation.  Notwithstanding  the  foregoing,  Executive’s  employment  hereunder  is  contingent  upon  satisfactory  completion  of  all  background  checks,  successful  drug  screen  pursuant  to  Company  policy  and  licensing  requirements  as  defined and regulated by the Illinois Gaming Board.                                                ARTICLE III                                     COMPENSATION                                                  3.1 Base Salary.  As of the Effective Date, Executive will receive for services to be rendered hereunder  an annual base salary of $400,000, payable in accordance with the Company’s standard payroll practices.  Executive’s base salary will be subject to review from time to time in the sole discretion of the Board.               3.2 Annual Bonus.  Executive will be eligible to receive an annual performance bonus with a target  amount  of  50%  of  Executive’s  base  salary  (the  “Annual Bonus”).  Annual  Bonus  payments  will  be  determined in the discretion of the Board and will be subject to achievement of any applicable performance  milestones or other terms and conditions determined by the Board.  The Annual Bonus will be payable as  soon as practicable following the end of the calendar year to which the bonus relates, subject to Executive’s  continued employment on the payment date.             3.3 Long-Term Incentive Compensation. As soon as practicable following the Effective Date and  subject  to  the  approval  of  the  Board  or  the  compensation  committee  thereof,  the  Company  will  grant  Executive an option to purchase 266,982 shares of the Company’s common stock (the “Option”), pursuant  to the terms of the Company’s Long Term Incentive Plan (the “Plan”) and the stock option agreement  governing  the  Option.   The  Option  will  have  an  exercise  price  equal to the fair market value of the  Company’s common stock on the date of grant and will vest over a five-year period, with 25% of the total  number of shares subject to the Option vesting on the second anniversary of the grant date (the “First  Vesting Date”) and the remainder vesting in 12 equal quarterly installments on each 3-month anniversary  of the First Vesting Date thereafter.  Vesting will be contingent on the Executive’s continued service with  the Company on each applicable vesting date, except as otherwise set forth in the stock option agreement  governing the Option.          In addition, as soon as practicable following the Effective Date and subject to the approval of the Board  or  the  compensation  committee  thereof,  the  Company  will  grant  Executive  a  restricted  stock  unit  (the “RSU”)  representing  the  opportunity  to  acquire  177,990  shares  of  the  Company’s  common  stock,  pursuant to the terms of the Plan and the restricted stock unit agreement governing the RSU.  The RSU will  vest over a five-year period, with 25% of the total number of shares subject to the RSU vesting on the First  Vesting Date and the remainder vesting in 12 equal quarterly installments on each 3-month anniversary of  the First Vesting Date thereafter.  Vesting will be contingent on the Executive’s service with the Company  on  each  applicable  vesting  date,  except  as  otherwise  set  forth in  the  restricted  stock  unit  agreement  governing the RSU.                                                   4   

 

   Executive acknowledges that the foregoing grants of the Option and the RSU constitute and satisfy the  Company’s  obligations  in respect  of  the  “initial  equity  grant” contemplated  in  the  offer  letter  between  Executive and the Company dated as of January 29, 2020 (the “Offer Letter”).      In addition, Executive will be eligible to receive additional grants of stock options and/or RSUs on an  annual basis in accordance with the Company’s annual grants to similarly situated senior executives, if any,  with a target grant date value of 150% of Executive’s annual base salary.  Such grants, if any, will be made  in the Board’s sole discretion.             3.4 Company Benefits.  Executive will be eligible to continue to participate in the employee benefit  plans and arrangements established by the Company (“Employee Benefit Plans”), including a company  phone to use in the furtherance of Executive’s duties to the Company, each in accordance with the terms  and conditions of such plans as in effect from time to time. Executive will be eligible to accrue up to twenty- five days of paid time off (“PTO”) per calendar year, at a rate of 0.9615 days per pay period.  PTO will be  used  no  more  than  one  week  at  a  time  unless  otherwise  approved by  the  Company’s  Chief  Executive  Officer,  and  no  more  than  forty  hours  of  PTO  may  rollover  from any  calendar  year  to  the  next.  The  Company  reserves  the  right  to  amend  or  terminate  any  Employee  Benefit  Plan  at  any  time  in  its  sole  discretion, subject to the terms of such Employee Benefit Plan and applicable laws.              3.5 Expenses.  The  Company  will  reimburse  Executive  for  all  reasonable  and  necessary  expenses  incurred by Executive in connection with the Company’s business, provided that the expenses are properly  documented and accounted for in accordance with the Company’s policies as may be in effect from time to  time.              3.6 Relocation Assistance. The Company will reimburse Executive for the actual reasonable travel  and transitional housing expenses Executive incurs and submits in writing to the Company in connection  with the relocation of Executive and Executive’s family to St. Louis, Missouri.  In addition, the Company  will reimburse Executive up to an additional $75,000 for any other actual reasonable expenses Executive  incurs and submits in writing to the Company in connection with such relocation. All relocation expense  reimbursements pursuant to this Section 3.6 must be accompanied by a receipt and submitted in accordance  with the Company’s expense reimbursement policy.                                        ARTICLE IV                                      TERMINATION       4.1   Termination of Employment.  Executive’s employment with the Company hereunder may be  terminated by the Company or Executive, as applicable, without any breach of this Agreement under the  following circumstances:  (a) the Company may terminate Executive’s employment with or without Cause  at  any  time;  (b)   Executive  may  resign  for  Good  Reason  or  without  Good  Reason  at  any  time;  and  (c) Executive’s  employment  shall terminate  automatically  upon  Executive’s  death  or,  subject  to  a  determination by the Board, upon Executive’s Disability.  Any termination of Executive’s employment by  the Company or by Executive under this Article 4 (other than in the case of Executive’s death) shall be  communicated by a written notice to the other party hereto and shall be effective on the date on which such  notice is given unless otherwise indicated (and subject to the notice and cure periods required in the event  a termination for Cause or a resignation for Good Reason).          4.2 Deemed Resignation.  Upon termination of Executive’s employment for any reason, Executive  shall be deemed to have resigned from all offices and directorships, if any, then held with the Company or  any of its Affiliates. Notwithstanding the foregoing, in the event that, following Executive’s termination of  employment, Executive continues to provide services to the Company as a consultant or member of the                                              5   

 

Board, Executive may continue to serve in such offices and directorships as then mutually agreed upon  between Executive and the Company.                                                                                     ARTICLE V                         SEVERANCE PAYMENTS AND BENEFITS          5.1 General.  Upon a termination of Executive’s employment for any reason, Executive (or his estate)  shall be entitled to receive Executive’s accrued but unpaid base salary or wages, accrued vacation pay,  unreimbursed business expenses for which proper documentation is provided, and other vested amounts  and benefits earned by (but not yet paid to) or owed to Executive under any applicable Employee Benefit  Plan  of  the  Company  through  and  including  the  date  of  termination  of  Executive’s  employment  (the “Accrued Benefits”).          5.2 Covered  Termination.   If  Executive  experiences  a  Covered  Termination,  Executive  will be  entitled to receive Executive’s Accrued Benefits and, subject to the requirements of Section 5.3, will be  entitled to receive the following payments and benefits:            (a)   Cash Severance.  Executive will be entitled to receive an amount equal to the sum of (i) the  aggregate base salary and (ii) the Annual Bonus payments, if any, received by Executive during the 12- month  period  ending  on  the  date  of  the  Covered  Termination,  payable  over  a  12-month  period  in  substantially equal installments in accordance with the Company’s normal payroll policies, less applicable  withholdings, with such installments to commence in the first payroll period immediately following the  date the Release (as defined below) becomes effective and non-revocable (so long as such Release becomes  effective on or before the 60th day following the date of such Covered Termination).                (b)  Continued Healthcare.  If Executive elects to receive continued healthcare coverage pursuant  to the provisions of COBRA, the Company will directly pay, or reimburse Executive for, the premium for  Executive and Executive’s covered dependents through the earliest to occur of (i) the 12-month anniversary  of the Covered Termination and (ii) the first date on which Executive and Executive’s covered dependents  become eligible for substantially comparable healthcare coverage under another employer’s plans; provided  that as soon as administratively practicable following the date the Release effective and non-revocable (so  long  as  such  Release  becomes  effective  on  or  before  the  60th  day  following  date  of  such  Covered  Termination), the Company will pay to Executive a cash lump-sum payment equal to the monthly premiums  that would have been paid on behalf of Executive had such payments commenced on the date of the Covered  Termination. Notwithstanding the foregoing, the Company may elect at any time that, in lieu of paying or  reimbursing such premiums, the Company will instead provide Executive with a monthly or lump sum cash  payment equal to the amount the Company would have otherwise paid pursuant to this Section 5.2(b), less  applicable tax withholdings.              5.3   Release.   Executive  will  not  be  eligible  for  the  severance  payment  and  benefits  described  in  Section 5.2 unless (i) Executive has executed and deliver to the Company a general release of all claims  that Executive may have against the Company (or its successor) or Persons affiliated with the Company (or  its successor) in a form acceptable to the Company (the “Release”), and such Release becomes effective on  or before the 60th day following date of the Covered Termination and (ii) Executive has not revoked or  breached the provisions of such Release or breached the provisions of Section 6. In the event that Executive  does not execute such deliver such Release, such Release does not become effective and irrevocable within  such period or Executive revokes or breaches the provisions of such Release or breaches the provisions of  Section 6, he (A) will be deemed to have voluntarily resigned his employment hereunder without Good  Reason and (B) will not be entitled to the payments or benefits described in Section 5.2.                                                   6   

 

   5.4   Section 280G; Limitation on Payments.   Notwithstanding  anything  in  this  Agreement  to  the  contrary, if any payment or distribution to Executive pursuant to this Agreement or otherwise (“Payment”)  would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code and (b) but  for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then  such Payment will either be delivered in full or delivered as to such lesser extent as would result in no  portion of such Payment being subject to the Excise Tax, whichever of the foregoing amounts, after taking  into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt  by Executive on an after-tax basis of the largest payment, notwithstanding that all or some portion of the  Payment may be taxable under Section 4999 of the Code.  The accounting firm engaged by the Company  for general audit purposes as of the date prior to the effective date of the Change in Control, or such other  Person  as  determined  in  good  faith  by  the  Company,  will  perform  the  foregoing  calculations  and  the  Company will bear all expenses with respect to the determinations by such accounting firm required to be  made hereunder.  Any good faith determinations of the accounting firm made pursuant to this Section 5.4  will be final, binding and conclusive upon all parties.  Any reduction in payments and/or benefits pursuant  to  the  foregoing  will  occur  in  the  following  order  (i) reduction  of  cash  payments;  (ii)  cancellation  of  accelerated vesting of equity awards other than stock options, if any; (iii) cancellation of accelerated vesting  of stock options, and (iv) reduction of other benefits payable to Executive.                                           ARTICLE VI                                       COVENANTS       6.1 Outside Activities.  During Executive’s term of employment, Executive will not engage in any  other  employment,  occupation  or  business  enterprise  without  the  prior  written  consent  of  the  Board;  provided that it is understood that Executive may serve as a member of the board of directors of one for- profit company, with the prior written consent of the Board.  Notwithstanding the foregoing, Executive may  engage in civil and not-for-profit activities, and/or maintain passive investments, in each case so long as  such activities do not materially interfere or conflict with the performance of Executive’s duties or the  Company’s gaming licenses, as determined in the sole discretion of the Board.          6.2 Conflict  of  Interest;  Non-Competition.  During  the  term  of  Executive’s  employment  by  the  Company  and  for  a  period  of  one-year  following  Executive’s  termination  of  service  for  any  reason,  Executive will not directly or indirectly, whether as an 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 known by Executive to 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  Executive may own, as a passive investor, securities  of any competitor corporation, so long as Executive’s direct holdings in any such corporation do not in the  aggregate constitute more than 1% of the voting stock of such corporation.             6.3 Non-Solicitation.   During  the  term  of  Executive’s  employment  and  for  a  period  of  one-year  following Executive’s termination of employment for any reason, Executive shall not (a) solicit, divert or  take away any of the Company’s customers, suppliers or accounts; or (b) divert, take away, hire, solicit or  seek to induce employment of any person who is then an employee of the Company; provided, however,  that a general advertisement to which an employee of the Company responds shall not on its own result in  a breach of this Section 6.3.                6.4 Confidential and Proprietary Information.  Except as Executive reasonably and in good faith  determines to be required in the faithful performance of Executive’s duties hereunder, Executive shall,  during the term of his employment and following his termination of service for any reason, maintain in  confidence and shall not directly or indirectly, use, disseminate, disclose or publish, for Executive’s benefit  or the benefit of any other Person, any confidential or proprietary information or trade secrets of or relating                                              7   

 

to  the  Company,  including,  without  limitation,  information  with  respect  to  the  Company’s  operations,  processes,  protocols,  products,  inventions,  business  practices,  finances,  principals,  vendors,  suppliers,  customers,  potential  customers,  marketing  methods,  costs,  prices,  contractual  relationships,  regulatory  status, compensation paid to employees or other terms of employment (“Proprietary Information”), or  deliver  to  any  Person,  any  document,  record,  notebook,  computer  program  or  similar  repository  of  or  containing any such Proprietary Information. Executive’s obligation to maintain and not use, disseminate,  disclose or publish, for Executive’s benefit or the benefit of any other Person, any Proprietary Information  after Executive’s termination of service will continue so long as such Proprietary Information is not, or has  not  by  legitimate  means  become, generally  known  and  in  the  public  domain  (other  than  by  means  of  Executive’s direct or indirect disclosure of such Proprietary Information) and continues to be maintained  as Proprietary Information by the Company.   For the avoidance of doubt, nothing in this Agreement will  be construed to prohibit Executive from filing a charge or complaint, participating or cooperating with, or  receiving an award for any information provided to any governmental agency or entity, including but not  limited to the Equal Employment Opportunity Commission, the Department of Justice, the Securities and  Exchange Commission, or any other federal, state or local government agency or commission.            6.5 Work Product.  Executive acknowledges and agrees that any copyrightable works prepared by  Executive within the scope of his employment will be “works made for hire” under the Copyright Act and  that the Company will be considered the author and owner of such copyrightable works.  Executive further  agrees  that  all  inventions,  improvements,  designs,  original  works  of  authorship,  formulas,  processes,  compositions of matter, computer software programs, databases, mask works, confidential information and  trade  secrets  (“Inventions”)  made,  created,  conceived  or  first  reduced  to  practice  during  the  period  of  Executive’s employment, whether or not in the course of Executive’s employment, and whether or not  patentable,  copyrightable  or  protectable  as  trade  secrets,  and that  (a) are  developed  using  equipment,  supplies, facilities or trade secrets of the Company; (b) result from work performed by Executive for the  Company;  or  (iii) relate  to  the  Company’s  business  or  actual  or  demonstrably  anticipated  research  or  development  (the  “Assigned Inventions”),  will  be  the  sole  and  exclusive  property  of  the  Company.  Executive  shall  execute  any  and  all  documents  and  shall  provide  such  assistance  necessary  either  to  evidence or register the assignment of these rights.      6.6 Cooperation. Executive agrees to reasonably cooperate with the Company during the term of his  employment hereunder and thereafter, at the Company sole expense relating to any travel or other out-of- pocket expenses incurred, in connection with any governmental, regulatory, commercial, private or other  investigations, arbitrations, litigations or similar matters that may arise during the term of his employment  hereunder, or in any way relate to events that occurred during term of his employment hereunder, until such  investigations, arbitrations, litigations or similar matters are completely resolved.                                                ARTICLE VII                                  GENERAL PROVISIONS          7.1 Indemnification. The Company shall indemnify and hold harmless Executive, to the maximum  extent permitted by applicable law, against all costs, charges, expenses, claims and judgments incurred or  sustained by Executive in connection with any action, suit or proceeding to which Executive may be made  a party by reason of being, or agreeing to be, an officer, director or employee of the Company or any  subsidiary or affiliate of the Company.  The Company shall provide directors and officers insurance for  Executive in reasonable amounts.  The Board shall determine, in its sole discretion, the availability of  insurance upon reasonable terms and the amount of such insurance coverage.                                               8   

 

   7.2 Tax Matters.       (a) Section 409A.  It  is  intended  that  any  right  to  receive  installment  payments  pursuant  to  this  Agreement will be treated as a right to receive a series of separate and distinct payments for purposes of  Section 409A of the Code.  It is further intended that all payments and benefits hereunder satisfy, to the  greatest extent possible, the exemption from the application of Section 409A of the Code (and any state law  of similar effect) provided under Treasury Regulation Section 1.409A-1(b)(4) (as a “short-term deferral”)  and are otherwise exempt from or comply with Section 409A of the Code.  Accordingly, to the maximum  extent permitted, this Agreement will be interpreted in accordance with such intent.  To the extent necessary  to comply with Section 409A of the Code, if the designated payment period for any payment under this  Agreement begins in one taxable year and ends in the next taxable year, the payment will commence or  otherwise be made in the later taxable year.  For purposes of Section 409A of the Code, if the Company  determines that Executive is a “specified employee” under Section 409A(a)(2)(B)(i) of the Code at the time  of Executive’s separation from service, then to the extent delayed commencement of any portion of the  payments or benefits to which Executive is entitled pursuant to this Agreement is required in order to avoid  a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion will not be provided until  the earlier (i) the expiration of the six-month period measured from Executive’s separation from service or  (ii) the date of Executive’s death. As soon as administratively practicable following the expiration of the  applicable Section 409A(2)(B)(i) period, all payments deferred pursuant to the preceding sentence will be  paid in a lump-sum to Executive and any remaining payments due pursuant to this Agreement will be paid  as otherwise provided herein.                 (b) Expense Reimbursement.  To the extent that any reimbursements payable to Executive pursuant  to this Agreement are subject to the provisions of Section 409A of the Code, such reimbursement will be  paid to Executive no later than December 31st of the year following the year in which such expense was  incurred.   The  amount  of  expenses  reimbursed  in  one  year  will  not  affect  the  amount  eligible  for  reimbursement in any subsequent year and Executive’s right to reimbursement under this Agreement will  not be subject to liquidation or exchange for another benefit.                  (c) Withholding.  All amounts and benefits payable under this Agreement are subject to deduction  and withholding to the extent required by applicable law.              7.3 At-Will Employment.  Executive’s employment relationship with the Company is at-will.  Either  Executive or the Company may terminate Executive’s employment or service at any time for any or no  reason, with or without cause.           7.4 Compensation Recoupment. All amounts payable to Executive pursuant to this Agreement shall  be subject to recoupment pursuant to any compensation recoupment policy that is applicable generally to  executive officers of the Company and in effect from time to time.          7.5 Notice.  Any notices provided hereunder must be in writing and shall be deemed effective upon the  earlier of personal delivery (including personal delivery by facsimile) or the third day after mailing by first  class mail, to the Company at its primary office location and to Executive at Executive’s address as listed  on the Company payroll.          7.6 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  or  unenforceable  in  any  respect  under  any  applicable  law  or  rule  in  any  jurisdiction,  such  invalidity  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 or unenforceable  provisions had never been contained herein.                                              9   

 

        7.7 Choice  of  Law.  All  questions  concerning  the  construction,  validity  and  interpretation  of this  Agreement  will  be  governed  by  the  law  of  the  State  of  Illinois without  regard  to  the  conflicts  of  law  provisions.              7.8 Dispute  Resolution;  Arbitration.  Unless  otherwise  prohibited  by law  or  specified  below,  all  disputes, claims and causes of action, in law or equity, arising from or relating to this Agreement or its  enforcement, performance, breach, or interpretation will be resolved solely and exclusively by final and  binding arbitration in Cook County, Illinois through Judicial Arbitration and Mediation Services/Endispute  (“JAMS”) before a single neutral arbitrator, in accordance with the JAMS employment arbitration rules  then in effect.  THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY  JURY  IN  REGARD  TO  ARBITRABLE  CLAIMS.   The  JAMS  rules  may  be  found and reviewed at  http://www.jamsadr.com/rules-employment-arbitration.  The arbitrator will issue a written decision that  contains the essential findings and conclusions on which the decision is based.               7.9 Entire Agreement.  This Agreement constitutes the entire agreement between Executive and the  Company with respect to the subject matter hereof, and supersedes all prior or contemporaneous offers,  negotiations and agreements, whether written or oral, relating to such subject matter, including the Offer  Letter.  This Agreement is entered into without reliance on any promise or representation other than those  expressly contained herein or therein and may not be modified or amended except in a writing signed by  an officer of the Company and Executive.                                    (Signature Page Follows)                                              10   

 

DerekHarmer GeneralCounselandSecretary

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