Document:

gden-ex103_6.htm

Exhibit 10.3

EMPLOYMENT AGREEMENT

This Agreement (the “Agreement”) is made and entered into as of this 14th day of November, 2016 (the “Effective Date”), by and between Gary A. Vecchiarelli (the “Employee”), and Golden Entertainment, Inc., a Minnesota corporation, including its subsidiaries and Affiliates (as defined below) (collectively, the “Company”).

RECITALS

WHEREAS, the Employee will become employed at-will by the Company.

WHEREAS, the Board of Directors of the Company (including any duly authorized Committee thereof, the “Board”) has determined that it is in the best interests of the Company to offer employment to the Employee; and

WHEREAS, the Board and the Employee wish to enter into this Agreement to document the terms of the Employee’s employment with the Company.

NOW, THEREFORE, in consideration of the mutual promises and covenants and the respective undertakings of the Company and the Employee set forth below the Company and Employee agree as follows:

AGREEMENT

1.      Employment.  The Company hereby employs the Employee, and the Employee accepts such employment and agrees to perform services for the Company, for the period and upon the other terms and conditions set forth in this Agreement.  Employee’s date of commencement of employment with the Company (the “Commencement Date”) will be not later than January 3, 2017.

2.      Base Salary.  The Company shall pay the Employee an annual base salary in the amount of Two Hundred Fifty Thousand Dollars ($250,000) or such amount as may from time-to-time be determined by the Company as appropriate in its sole discretion (“Base Salary”).  Such salary shall be paid in equal installments in the manner and at the times as other employees of the Company are paid. 

3.      Incentive Compensation.  The Employee shall participate in the Company's incentive compensation program from time-to-time established by the Compensation Committee of the Company’s Board of Directors.  Commencing in calendar year 2017, the Employee’s target bonus under the Company’s annual incentive compensation plan shall be thirty-five percent (35%) of the Employee’s Base Salary.  Notwithstanding the foregoing, in light of the agreed upon Sign-On Bonuses described in Section 4 herein, Employee will not be eligible for any incentive compensation for calendar year 2016.  

4.      Sign-On Bonuses; Initial Stock Option Grant.

a.      Sign-On Bonuses. Within forty-five (45) calendar days after the Commencement Date, Employee will receive a lump-sum, sign-on bonus in the amount of 

 

 

 

 

 

Twenty-Five Thousand Dollars ($25,000) (the “2016 Sign-On Bonus”), less all required tax withholdings, but subject to Employee’s continued employment with the Company at such date.  On the first anniversary of the Commencement Date, Employee will receive a lump-sum, sign-on bonus in the amount of Twenty-Five Thousand Dollars ($25,000) (the “2017 Sign-On Bonus” and together with the 2016 Sign-On Bonus, the “Sign-On Bonuses”), less all required tax withholdings, but subject to Employee’s continued employment with the Company at such date.  If Employee voluntarily terminates his employment other than in a “Constructive Termination” (as defined below), or if Employee is terminated for “Cause” (as defined below), in each case prior to the first anniversary of the Commencement Date, Employee shall repay to the Company a pro rata portion of the 2016 Sign-On Bonus based on the number of days elapsed during the period commencing on the Commencement Date and ending on the first anniversary of the Commencement Date.  If Employee voluntarily terminates his employment other than in a “Constructive Termination” (as defined below), or if Employee is terminated for “Cause” (as defined below), in each case on or after the first anniversary of the Commencement Date but prior to the second anniversary of the Commencement Date, Employee shall repay to the Company a pro rata portion of the 2017 Sign-On Bonus based on the number of days elapsed during the period commencing on the first anniversary of the Commencement Date and ending on the second anniversary of the Commencement Date.  The Company will have the right to offset any such Sign-On Bonus amounts that are to be repaid by Employee to the Company against any compensation otherwise payable to Employee by the Company on the date of Employee’s termination of employment.

b.      Initial Stock Option Grant.  In addition to the aforementioned compensation and benefits contained herein, upon Employee’s Commencement Date, Employee shall receive non-qualified options to purchase 100,000 shares of the Company’s common stock, with an exercise price equal to the closing price per share of the Company’s common stock on the Commencement Date and with 25% of such options vesting on the first anniversary of the Commencement Date (assuming Employee is employed with the Company at that time) and 1/48th of such options vesting on the last day of each one-month period thereafter (assuming Employee is employed with the Company at that time).  The exercise of any stock options shall be subject to the terms and conditions of the Stock Option Grant Notice and Stock Option Agreement between Company and Employee (the “Option Agreement”) and the terms and conditions of the Company’s 2015 Incentive Award Plan, as the same may be amended or amended and restated from time to time, and/or, if applicable, the Company’s 2007 Stock Option and Compensation Plan, as the same may be amended or amended and restated from time to time.

5.      Benefits.  The Company shall provide to the Employee such benefits as are provided by the Company to other similarly-situated employees of the Company.  The Employee shall pay for the portion of the cost of such benefits as is from time-to-time established by the Company as the portion of such cost to be paid by similarly-situated employees of the Company. The Company shall have the right to amend or delete any such benefit plan or arrangement made available by the Company to its employees and not otherwise specifically provided for herein. The Employee shall be entitled to such periods of paid time off (“PTO”) each year as provided from time to time under the Company’s PTO policy.  In addition, the Employee shall be entitled to receive the additional benefits described on Exhibit A attached hereto.

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6.      Costs and Expenses. The Company shall reimburse the Employee for reasonable out-of-pocket business expenses incurred in connection with the performance of his duties hereunder, subject to such policies as the Company may from time to time establish, and the Employee furnishing the Company with evidence in the form of receipts satisfactory to the Company substantiating the claimed expenditures.

7.      Duties.  

a.      The Employee shall serve as Senior Vice President, Finance and Accounting of the Company.  In the performance of such duties, the Employee shall be the principal accounting officer of the Company and shall report directly to the Executive Vice President and Chief Financial Officer of the Company (the “CFO”) and shall be subject to the direction of the CFO and to such limits upon the Employee’s authority as the CFO may from time to time impose.  In the event of the CFO’s incapacity or unavailability, the Employee shall be subject to the direction of the Chief Executive Officer (the “CEO”).  The Employee hereby consents to serve as an officer and/or director of the Company or any subsidiary or Affiliate thereof without any additional salary or compensation, if so requested by the CEO or the CFO.  The Employee shall be employed by the Company on a full time basis.  The Employee’s primary place of work shall be the Company’s offices in Las Vegas, Nevada, or, with the Company's consent, at any other place at which the Company maintains an office; provided, however, that the Company may from time to time require the Employee to travel temporarily to other locations in connection with the Company's business.  The Employee shall be subject to and comply with the policies and procedures generally applicable to employees of the Company to the extent the same are not inconsistent with any term of this Agreement.

b.      The Employee shall at all times faithfully, industriously and to the best of his ability, experience and talent perform to the satisfaction of the Board, the CEO and the CFO all of the duties that may be assigned to the Employee hereunder. 

8.      Termination.

a.      At-Will Employment; Termination.  The Company and the Employee acknowledge that the Employee’s employment is and shall continue to be at-will, as defined under applicable law, and that the Employee’s employment with the Company may be terminated by either party at any time for any or no reason, with or without notice.  If the Employee’s employment terminates for any reason, the Employee shall not be entitled to any payments, benefits, damages, awards or compensation other than as provided in this Agreement.    

b.      Automatic Termination Due to Death or Disability.

(i)     Termination Due to Disability.  If the Employee suffers any “Disability” (as defined below), this Agreement and the Employee’s employment hereunder will automatically terminate.  “Disability” means the inability of the Employee to perform the essential functions of his position, with or without reasonable accommodation, because of physical or mental illness or incapacity, for a period of ninety (90) consecutive calendar days or for one hundred twenty (120) calendar days in any one hundred eighty (180) calendar day period.  

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The existence of the Employee’s Disability shall be determined by the Company on the advice of a physician chosen by the Company and reasonably acceptable to the Employee.    

(ii)    Termination Due to Death.  This Agreement will automatically terminate on the date of the Employee’s death.

(iii)   Accrued Obligations and Stock Award Acceleration and Extended Exercisability.  In the event of the Employee’s termination of employment by reason of his Disability or death, the Company will have no further obligation to the Employee under this Agreement, except the Company shall pay to the Employee his fully earned but unpaid Base Salary, when due, through the date of the Employee’s termination at the rate then in effect, accrued and unused PTO, plus all other benefits, if any, under any Company group retirement plan, nonqualified deferred compensation plan, equity award plan or agreement, health benefits plan or other Company group benefit plan to which the Employee may be entitled pursuant to the terms of such plans or agreements at the time of the Employee’s termination (the "Accrued Obligations"), and the vesting of any outstanding unvested portion of each of the Employee’s Stock Awards shall be automatically accelerated on the date of termination (provided that the exercise of such Stock Awards shall be subject to the terms and conditions of the equity plan and any Stock Award agreement pursuant to which the Employee’s Stock Awards were granted).  In addition, such Stock Awards may be exercised by the Employee or the Employee’s legal representative until the latest of (A) the date that is one (1) year after the date of the Employee’s termination of employment or (B) such longer period as may be specified in the applicable Stock Award agreement; provided, however, that in no event shall any Stock Award remain exercisable beyond the original outside expiration date of such Stock Award.

c.      Termination Without Cause or Constructive Termination.

The provisions of this Section 8(c) shall apply following any termination of the Employee which is either (i) without “Cause” (as defined below); or (ii) a “Constructive Termination” (as defined below).  Notwithstanding anything to the contrary in this Section 8(c), and subject to Sections 8(f) and 22 and the Employee's continued compliance with Sections 11 and 12, in the event that the Employee’s employment is terminated, at any time, and such termination is either (i) without Cause; or (ii) a Constructive Termination: 

(i)     Accrued Obligations.  The Company shall pay to the Employee the Accrued Obligations through the date of termination.

(ii)    Severance Payment. The Employee shall be entitled to receive severance benefits equal to an amount equal to one hundred thirty-five percent (135%) of his annual Base Salary (at the rate in effect immediately preceding his termination of employment), payable in a lump sum on the sixtieth (60th) day after the date of Employee’s termination of employment.

(iii)   Benefits.  For the period commencing on the date of the Employee’s termination of employment and continuing for twelve (12) months thereafter (or, if earlier, (A) the date on which the applicable continuation period under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) expires or (B) the date the Employee 

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becomes eligible to receive the equivalent or increased healthcare coverage by means of subsequent employment or self-employment) (such period, the “COBRA Coverage Period”), if the Employee and/or his eligible dependents who were covered under the Company’s health insurance plans as of the date of the Employee’s termination of employment elect to have COBRA coverage and are eligible for such coverage, the Company shall pay for or reimburse the Employee on a monthly basis for an amount equal to (1) the monthly premium the Employee and/or his covered dependents, as applicable, are required to pay for continuation coverage pursuant to COBRA for the Employee and/or his eligible dependents, as applicable, who were covered under the Company’s health plans as of the date of the Employee’s termination of employment (calculated by reference to the premium as of the date of the Employee’s termination of employment) less (2) the amount the Employee would have had to pay to receive group health coverage for the Employee and/or his or her covered dependents, as applicable, based on the cost sharing levels in effect on the date of the Employee’s termination of employment (the “Monthly Premium Amount”).  If any of the Company’s health benefits are self-funded as of the date of the Employee’s termination of employment, or if the Company cannot provide the foregoing benefits in a manner that is exempt from Section 409A (as defined below) or that is otherwise compliant with applicable law (including, without limitation, Section 2716 of the Public Health Service Act), instead of providing the payments or reimbursements as set forth above, the Company shall instead pay to the Employee the foregoing monthly amount as a taxable monthly payment for the COBRA Coverage Period (or any remaining portion thereof).  The Employee shall be solely responsible for all matters relating to continuation of coverage pursuant to COBRA, including, without limitation, the election of such coverage and the timely payment of premiums.  The Employee shall notify the Company immediately if the Employee becomes eligible to receive the equivalent or increased healthcare coverage by means of subsequent employment or self-employment.  

(iv)     Stock Award Acceleration and Extended Exercisability. The vesting of any outstanding unvested portion of each of the Employee’s Stock Awards shall be automatically accelerated on the date of termination (provided that the exercise of such Stock Awards shall be subject to the terms and conditions of the equity plan and any Stock Award agreement pursuant to which the Employee’s Stock Awards were granted).  In addition, such Stock Awards may be exercised by the Employee or the Employee’s legal representative until the latest of (A) the date that is one (1) year after the date of the Employee’s termination of employment or (B) such longer period as may be specified in the applicable Stock Award agreement; provided, however, that in no event shall any Stock Award remain exercisable beyond the original outside expiration date of such Stock Award.

(v)     Conversion of Insurance Policies.  In addition, the Company shall also use its best efforts to convert any then-existing life insurance and accidental death and disability insurance policies to individual policies in the name of the Employee.  

d.      Termination by the Employee.

The Employee may terminate this Agreement and his employment hereunder at any time by providing the Company written notice of his intent to terminate at least sixty (60) days prior to the effective date of his termination.  During this sixty-day period, the Employee must execute his duties and responsibilities in accordance with the terms of this Agreement.  If 

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the Employee resigns his employment, other than in a Constructive Termination, the Employee will only be entitled to receive the Accrued Obligations through the date of termination.

e.      Termination by the Company for Cause. 

The Company will have the right to immediately terminate this Agreement and the Employee’s employment hereunder for “Cause” (as defined below).  In the event of such termination for Cause, the Employee will only be entitled to receive the Accrued Obligations through the date of termination. 

f.      Waiver of Claims.

The Company’s obligations to provide severance benefits in Section 8(c) above are conditioned on the Employee signing and not revoking a general release of legal claims and covenant not to sue (the “Release”) in form and content satisfactory to the Company.  In the event the Release does not become effective within the fifty-five (55) day period following the date of the Employee’s termination of employment, the Employee shall not be entitled to the aforesaid severance benefits.  

g.      Exclusive Remedy.  

Except as otherwise expressly required by law (e.g., COBRA) or as specifically provided herein, all of the Employee’s rights to salary, severance, benefits, bonuses and other amounts hereunder (if any) accruing after the termination of the Employee’s employment shall cease upon such termination.  In the event of the Employee’s termination of employment with the Company, the Employee’s sole remedy shall be to receive the payments and benefits described in this Section 8.  In addition, the Employee acknowledges and agrees that he or she is not entitled to any reimbursement by the Company for any taxes payable by the Employee as a result of the payments and benefits received by the Employee pursuant to this Section 8, including, without limitation, any excise tax imposed by Section 4999 of the Code.  Any payments made to the Employee under this Section 8 shall be inclusive of any amounts or benefits to which the Employee may be entitled pursuant to the Worker Adjustment and Retraining Notification Act, 29 U.S.C. Sections 2101 et seq., and the Department of Labor regulations thereunder, or any similar state statute.  For the avoidance of doubt, following the Employee’s termination of employment for any reason, the Company will have no further obligation to provide to the Employee the additional benefits described on Exhibit A attached hereto.

h.      Return of the Company’s Property.  

In the event of the Employee’s termination of employment for any reason, the Company shall have the right, at its option, to require the Employee to vacate his offices prior to or on the effective date of separation and to cease all activities on the Company’s behalf.  Upon the Employee’s termination of employment in any manner, as a condition to the Employee’s receipt of any severance benefits described in this Agreement, the Employee shall immediately surrender to the Company all lists, books and records of, or in connection with, the Company’s business, and all other property belonging to the Company, it being distinctly understood that all such lists, books and records, and other documents, are the property of the Company.  The 

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Employee shall deliver to the Company a signed statement certifying compliance with this Section 8(h) prior to the receipt of any severance benefits described in this Agreement.

i.      Deemed Resignation.

Upon termination of the Employee's employment for any reason, the Employee shall be deemed to have resigned from all offices and directorships, if any, then held with the Company or any of its Affiliates, and, at the Company's request, the Employee shall execute such documents as are necessary or desirable to effectuate such resignations. 

9.      Insurance; Indemnification.

a.      The Company shall have the right to take out life, health, accident, "key-man" or other insurance covering the Employee, in the name of the Company and at the Company's expense in any amount deemed appropriate by the Company.  The Employee shall assist the Company in obtaining such insurance, including, without limitation, submitting to any required examinations and providing information and data required by insurance companies.

b.      The Employee will be provided with indemnification against third party claims related to his or her work for the Company as required by Minnesota law.  The Company shall provide the Executive with directors and officers liability insurance coverage at least as favorable as that which the Company may maintain from time to time for members of the Board and other executive officers.

c.      Following a Change in Control and for a period of not less than three years after the effective date of the resignation or termination of the Employee, the Employee shall be entitled to indemnification and, to the extent available on commercially reasonable terms, insurance coverage therefor, with respect to the various liabilities as to which the Employee has been customarily indemnified prior to the Change in Control.  In the event of any discrepancies between the provisions of this paragraph and the terms of any Company insurance policy covering executive or any indemnification contract by and between the Company and the Employee, such insurance policy or indemnification contract shall control.

10.    Certain Definitions.

a.      Affiliate.

For purposes of this Agreement, “Affiliate” shall mean a person or entity controlling, controlled by or under common control with the Company.

b.      Change in Control.

For the purposes of this Agreement, a “Change in Control” shall have the meaning given to such term in the Company’s 2015 Incentive Award Plan, as in effect on the date of this Agreement.

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c.      Cause.

For the purposes of this Agreement, “Cause” shall mean termination of the Employee by the Company for any of the following reasons:

(i)     the commission of a felony;

(ii)    the theft or embezzlement of property of the Company or the commission of any similar act involving moral turpitude;

(iii)   the failure of the Employee to substantially perform his material duties and responsibilities under this Agreement for any reason other than the Employee’s death or Disability, which failure if, in the opinion of the Company such failure is curable, is not cured within thirty (30) days after written notice of such failure from the Company specifying such failure;

(iv)    the Employee’s material violation of a significant Company policy, which violation the Employee fails to cure within thirty (30) days after written notice of such violation from the Company specifying such failure, or which violation the Company, in its opinion, deems noncurable, and which violation has a material adverse effect on the Company or its subsidiaries or Affiliates; 

(v)     the failure of the Employee to qualify (or having so qualified being thereafter disqualified) under any regulatory or licensing requirement of any jurisdiction or regulatory authority to which the Employee may be subject by reason of his position with the Company or its subsidiaries or Affiliates, unless waived by the Board or the Compensation Committee in its sole discretion; or

(vi)    the revocation of any gaming license issued by any governmental entity to the Company, as a result of any act or omission by the Employee, which revocation has an adverse effect on the Company or its subsidiaries or Affiliates.

d.      Constructive Termination.

(i)     For the purposes of this Agreement, “Constructive Termination” shall mean:

(A)    a material, adverse change of the Employee’s responsibilities, authority, status, position, offices, titles, duties or reporting requirements;

(B)    a reduction in the Employee’s Base Salary or a material adverse change in the Employee’s annual compensation or benefits;

(C)    a requirement to relocate in excess of fifty (50) miles from the Employee’s then current place of employment without the Employee’s consent; or

(D)    the breach by the Company of any material provision of this Agreement or failure to fulfill any other contractual duties owed to the Employee.

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For the purposes of this definition, the Employee’s responsibilities, authority, status, position, offices, titles, duties and reporting requirements are to be determined as of the date of this Agreement.  

(ii)     Notwithstanding the provisions of subsection (i) above, no termination by the Employee will constitute a Constructive Termination unless the Employee shall have provided written notice to the Company of his intention to so terminate this Agreement within ninety (90) days following the initial occurrence of the event or circumstances that the Employee believes to be the basis for the Constructive Termination, which notice sets forth in reasonable detail the conduct that the Employee believes to be the basis for the Constructive Termination, and the Company will thereafter have failed to correct such conduct (or commence action to correct such conduct and diligently pursue such correction to completion) within thirty (30) days following the Company’s receipt of such notice.  The Employee’s resignation by reason of Constructive Termination must occur within six (6) months following the initial occurrence of the event or circumstances that the Employee believes to be the basis for the Constructive Termination.

e.      Stock Awards.  

For purposes of this Agreement, “Stock Awards” means all stock options, restricted stock, restricted stock units and such other awards granted pursuant to the Company’s stock option and equity incentive award plans or agreements and any shares of stock issued upon exercise thereof.  

11.    Confidentiality.

Except to the extent required by law, the Employee shall keep confidential and shall not, without the Company’s prior, express written consent, disclose to any third party, other than as reasonably necessary or appropriate in connection with the Employee’s performance of his duties under this Agreement or any employment agreement, if any, the Company’s “Confidential Information.”  “Confidential Information” means any information that the Employee learns or develops during the course of employment that derives independent economic value from being not generally known or readily ascertainable by other persons who could obtain economic value from its disclosure or use, or any information that the Company reasonably believes to be Confidential Information.  It includes, but is not limited to, trade secrets, customer lists, financial information, business plans and may relate to such matters as research and development, operations, site selection/analysis processes, management systems and techniques, costs modeling or sales and marketing.  The provisions of this Section 11 shall remain in effect after the expiration or termination of this Agreement and the Employee’s employment hereunder.

12.    Agreement Not to Compete.

a.      The Employee acknowledges that by virtue of his position he will gain extensive knowledge of the business of the Company, and that the restrictive covenants contained herein (the "Restrictive Covenants") are necessary to protect the goodwill and other legitimate business interests of the Company, and further acknowledges that the Company would not have entered into this Agreement in the absence of the Restrictive Covenants. The Employee 

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acknowledges and agrees that the Restrictive Covenants are reasonable in duration, geographical scope, and in all other respects, and do not, and will not, unduly impair the Employee's ability to earn a living while the Restrictive Covenants are in effect. The Restrictive Covenants shall survive the expiration or sooner termination of this Agreement.

b.      The Employee covenants and agrees with the Company that from the Effective Date until the date which is twelve (12) months following the date of the Employee’s termination of employment with the Company, whether such termination is voluntary or involuntary (the "Restricted Period"), the Employee will not, except when acting on behalf of the Company or any Affiliate, within  any area in which the Company or any of its Affiliates are directly or indirectly conducting their business (the "Restricted Area"), engage in any of the following activities: (A) either directly or indirectly, solely or jointly with any person or persons, as an employee, consultant, or advisor (whether or not engaged in business for profit) or as an individual proprietor, owner, partner, stockholder, director, officer, joint venturer, investor or in any other capacity, compete with the Company; provided, however, the Employee may own up to five percent (5%) of the ownership interest of any publicly traded company which may be engaged in any gaming business;  or (B) directly or indirectly recruit or hire or attempt to recruit or hire any person known by the Employee to be an employee or contractor of the Company or any Affiliate or assist any person or persons in recruiting or hiring or soliciting any person known by the Employee to be an employee or contractor of the Company or any Affiliate.  

If the scope of the Employee’s agreement under this Section 12 is determined by any court of competent jurisdiction to be too broad to permit the enforcement of all of the provisions of this Section 12 to their fullest extent, then the provisions of this Section 12 shall be construed (and each of the parties hereto hereby confirm its intent is that such provisions be so construed) to be enforceable to the fullest extent permitted by applicable law.  To the maximum extent permitted by applicable law, the Employee hereby consents to the judicial modification of the provisions of this Section 12 in any proceeding brought to enforce such provisions in such a manner that renders such provisions enforceable to the maximum extent permitted by applicable law.

c.      The provisions of this Section 12 shall remain in full force and effect after the expiration or termination of this Agreement and the Employee’s employment hereunder.

13.    Acknowledgments; Irreparable Harm.

The Employee agrees that the restrictions on competition, solicitation and disclosure in this Agreement are fair, reasonable and necessary for the protection of the interests of the Company.  The Employee further agrees that a breach of any of the covenants set forth in Sections 11 and 12 of this Agreement will result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law, and the Employee further agrees that in the event of a breach, the Company will be entitled to an immediate restraining order and injunction to prevent such violation or continued violation, without having to prove damages, in addition to any other remedies to which the Company may be entitled to at law or in equity.

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14.    Notification to Subsequent Employers.

The Employee grants the Company the right to notify any future employer or prospective employer of the Employee concerning the existence of and terms of this Agreement and grants the Company the right to provide a copy of this Agreement to any such subsequent employer or prospective employer.

15.    Full Settlement.

The Company’s obligations to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Employee or others.  The Employee will not be obligated to seek other employment, and except as provided in Section 8(c)(iii) above, take any other action by way of mitigation of the amounts payable to the Employee under any of the provisions of this Agreement.  

16.    Resolution of Disputes.

Any controversy, claim or dispute arising out of or relating to this Agreement or the breach of this Agreement shall be settled by arbitration before a single neutral arbitrator in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (the “Rules”), and a judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction.  The Rules may be found online at www.adr.org.  The award rendered in any arbitration proceeding under this section will be final and binding.  Any demand for arbitration must be made and filed within sixty (60) days of the date the requesting party knew or reasonably should have known of the event giving rise to the controversy or claim.  Any claim or controversy not submitted to arbitration in accordance with this section will be considered waived, and therefore, no arbitration panel or court will have the power to rule or make any award on such claims or controversy.  Any such arbitration will be conducted in the Las Vegas, Nevada metropolitan area.  Both the Company and the Employee recognize that each would give up any right to a jury trial, but believe the benefits of arbitration significantly out-weigh any disadvantage.  Both further believe arbitration is likely to be both less expensive and less time-consuming than litigation of any dispute there might be. 

Each party shall pay the fees of its own attorneys, the expenses of its witnesses and all other expenses connected with presenting its case; however, Employee and the Company agree that, to the extent permitted by law, the arbitrator may, in his or her discretion, award reasonable attorneys’ fees and expenses to the prevailing party.  Other costs of the arbitration, including the cost of any record or transcripts of the arbitration, AAA’s administrative fees, the fee of the arbitrator, and other similar fees and costs, shall be borne by the Company.  This section is intended to be the exclusive method for resolving any and all claims by the parties against each other for payment of damages under this Agreement or relating to the Employee’s employment; provided, however, that the Employee shall retain the right to file administrative charges with or seek relief through any government agency of competent jurisdiction, and to participate in any government investigation, including but not limited to (a) claims for workers’ compensation, state disability insurance or unemployment insurance; (b) claims for unpaid wages or waiting time penalties brought before an appropriate state authority; provided, however, that any appeal 

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from an award or from denial of an award of wages and/or waiting time penalties shall be arbitrated pursuant to the terms of this Agreement; and (c) claims for administrative relief from the United States Equal Employment Opportunity Commission (or any similar state agency in any applicable jurisdiction); provided, further, that the Employee shall not be entitled to obtain any monetary relief through such agencies other than workers’ compensation benefits or unemployment insurance benefits.  This Agreement shall not limit either party’s right to obtain any provisional remedy, including, without limitation, injunctive or similar relief, from any court of competent jurisdiction as may be necessary to protect their rights and interests pending the outcome of arbitration, including without limitation injunctive relief, in any court of competent jurisdiction.  Seeking any such relief shall not be deemed to be a waiver of such party’s right to compel arbitration.  

If there shall be any dispute between the Company and the Employee (a) in the event of any termination of Employee’s employment by the Company, whether such termination was with or without Cause, or (b) in the event of a Constructive Termination of employment by the Company, then, unless and until there is a final award by an arbitrator, to the extent permitted by applicable law, the Company shall pay, and provide all benefits to the Employee and/or the Employee’s family or other beneficiaries, as the case may be, that the Company would be required to pay or provide pursuant to Section 8 hereof, as the case may be, as though such termination were by the Company without Cause or was a Constructive Termination by the Company; provided, however, that the Company shall not be required to pay any disputed amounts pursuant to this section except upon receipt of an undertaking by or on behalf of the Employee to repay all such amounts to which Employee is ultimately adjudged by such arbitrator not to be entitled.

17.    Withholding.

The Company may withhold from any amounts payable under this Agreement the minimum Federal, state and local taxes as shall be required to be withheld pursuant to any applicable law, statute or regulation.

18.    Successors and Assigns.

This Agreement is binding upon and shall inure to the benefit of all successors and assigns of the Company.  This Agreement shall be binding upon and inure to the benefit of the Employee and his heirs and personal representatives.  None of the rights of the Employee to receive any form of compensation payable pursuant to this Agreement shall be assignable or transferable except through a testamentary disposition or by the laws of descent and distribution upon the death of the Employee.  The rights of the Company under this Agreement may, without the consent of the Employee, be assigned by the Company, in its sole and unfettered discretion, to any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly, acquires all or substantially all of the assets or business of the Company.  The Company will require any successor (whether direct or indirect, by purchase, merger or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  Failure of the Company to obtain such agreement, prior to the effectiveness of any 

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such succession shall be a material breach of this Agreement.  As used in this Agreement, the “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

19.    Survival.  The covenants, agreements, representations and warranties contained in or made in Sections 8 through 23 of this Agreement shall survive any termination of the Employee’s employment.

20.    Miscellaneous.

a.      This Agreement shall be governed by, and construed in accordance with, the laws of the State of Nevada, without reference to principles of conflict of laws.  Except as provided in Sections 13 and 16, any suit brought hereon shall be brought in the state or federal courts sitting in Las Vegas, Nevada, the parties hereto hereby waiving any claim or defense that such forum is not convenient or proper.  Each party hereby agrees that any such court shall have in personam jurisdiction over it and consents to service of process in any manner authorized by Nevada law.

b.      All notices and other communications under this Agreement shall be in writing and shall be given by hand to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

IF TO THE EMPLOYEE:

Gary A. Vecchiarelli
c/o Golden Entertainment, Inc. 
6595 S. Jones Boulevard
Las Vegas, Nevada  89118

IF TO THE COMPANY:

Golden Entertainment, Inc.
Attn: Chief Executive Officer
6595 S. Jones Boulevard
Las Vegas, Nevada  89118

or to such other address as either party furnishes to the other in writing in accordance with this Section 20(b).  Notices and communications shall be effective when actually received by the addressee.

c.      The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.  If any provision of this Agreement shall be held invalid or unenforceable in part, the remaining portion of such provision, together with all other provisions of this Agreement, shall remain valid and enforceable and continue in full force and effect to the fullest extent consistent with the law.

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d.      Notwithstanding any other provision of this Agreement, the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations.

e.      The Employee's or the Company's failure to insist upon strict compliance with any provision of, or to assert any right under, this Agreement shall not be deemed to be a waiver of such provision or right or of any other provision of or right under this Agreement.

f.      This Agreement may be executed in several counterparts, each of which shall be deemed original, and said counterparts shall constitute but one and the same instrument.

g.      The language in all parts of this Agreement shall in all cases be construed simply, according to its fair meaning, and not strictly for or against any of the parties hereto.  Without limitation, there shall be no presumption against any party on the ground that such party was responsible for drafting this Agreement or any part thereof.  Where the context so requires, the use of the masculine gender shall include the feminine and/or neuter genders and the singular shall include the plural, and vice versa, and the word “person” shall include any corporation, firm, partnership or other form of association. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.  

h.      This Agreement does not create, and shall not be construed as creating, any rights enforceable by any person not a party to this Agreement.

21.    Entire Agreement.

This Agreement and the other documents referenced herein constitute the entire agreement between the parties, and supersede all prior agreements and understandings between the parties with respect to the subject matter hereof, including but not limited to any prior employment agreement or offer letter with the Company or any subsidiary or Affiliate.  No modification, termination or attempted waiver of this Agreement shall be valid unless in writing and signed by the party against whom the same is sought to be enforced.

22.    Code Section 409A.

a.      It is intended that the severance payments and benefits to be provided under this Agreement will be exempt from or comply with Section 409A of the Code and any ambiguities herein will be interpreted to ensure that such payments and benefits be so exempt or, if not so exempt, comply with Section 409A of the Code.  To the extent applicable, this Agreement shall be interpreted in accordance with the applicable exemptions from, or in compliance with, Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder.  Each series of installment payments made under this Agreement is hereby designated as a series of “separate payments” within the meaning of Section 409A of the Code.   For purposes of this Agreement, all references to the Employee’s “termination of employment” shall mean the Employee’s “separation from service,” as defined in Treasury Regulation Section 1.409A-1(h) (“Separation from Service”).  

b.      If the Employee is a “specified employee” (as defined in Section 409A of the Code), as determined by the Company in accordance with Section 409A of the Code, on the 

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date of the Employee’s Separation from Service, to the extent that the payments or benefits under this Agreement are subject to Section 409A of the Code and the delayed payment or distribution of all or any portion of such amounts to which the Employee is entitled under this Agreement is required in order to avoid a  prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, then such portion deferred pursuant to this Section 22(b) shall be paid or distributed to the Employee in a lump sum on the earlier of (i) the date that is six (6)-months following the Employee’s Separation from Service, (ii) the date of the Employee’s death or (iii) the earliest date as is permitted under Section 409A of the Code.  Any remaining payments due under the Agreement shall be paid as otherwise provided herein.

c.      If the Employee and the Company determine that any payments or benefits payable under this Agreement intended to comply with Sections 409A(a)(2), (3) and (4) of the Code do not comply with Section 409A of the Code, Employee and the Company agree to amend this Agreement, or take such other actions as Employee and the Company deem reasonably necessary or appropriate, to comply with the requirements of Section 409A of the Code and the Treasury Regulations thereunder (and any applicable transition relief) while preserving the economic agreement of the parties.  To the extent that any provision in this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner that no payments payable under this Agreement shall be subject to an “additional tax” as defined in Section 409A(a)(1)(B) of the Code.

d.      Any reimbursement of expenses or in-kind benefits payable under this Agreement shall be made in accordance with Treasury Regulation Section 1.409A-3(i)(1)(iv) and shall be paid on or before the last day of the Employee’s taxable year following the taxable year in which the Employee incurred the expenses.  The amount of expenses reimbursed or in-kind benefits payable during any taxable year of the Employee shall not affect the amount eligible for reimbursement or in-kind benefits payable in any other taxable year of the Employee, and the Employee’s right to reimbursement for such amounts shall not be subject to liquidation or exchange for any other benefit. 

23.    Clawbacks and Forfeitures.

This Agreement and all compensation paid or payable hereunder shall be subject in all respects to the applicable provisions of any claw-back policy or forfeiture policy implemented by the Company after the Effective Date, including without limitation, any claw-back policy or forfeiture policy adopted to comply with the requirements of applicable law or the rules and regulations of any stock exchange applicable to the Company, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy or forfeiture policy.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Employee has hereunto set the Employee’s hand and, pursuant to the due authorization of its Board, the Company has caused this Agreement to be executed in its name and on its behalf, all as of the day and year first written above.

 

	
GOLDEN ENTERTAINMENT, INC.:
	
 
	
EMPLOYEE:

	
 
	
 
	
 

	
By:
	
/s/ Blake L. Sartini
	
 
	
By:
	
/s/ Gary A. Vecchiarelli

	
 
	
Name:
	
Blake L. Sartini
	
 
	
 
	
 
	
Gary A. Vecchiarelli

	
 
	
Its:
	
President and Chief Executive Officer
	
 
	
 
	
 

 

16

 

 

 

 

EXHIBIT A

 

ADDITIONAL BENEFITS

 

The Employee shall be entitled to receive the following additional benefits:

	
 
	
•
	
Allowance for health insurance premiums for the Employee and his covered dependents and participation in the Company’s supplemental health insurance program, in each case consistent with past practice.

17gden-ex104_8.htm

Exhibit 10.4

GOLDEN ENTERTAINMENT, INC.

2015 INCENTIVE AWARD PLAN

RESTRICTED STOCK UNIT AWARD GRANT NOTICE AND
RESTRICTED STOCK UNIT AWARD AGREEMENT

Golden Entertainment, Inc., a Minnesota corporation (the “Company”), pursuant to its 2015 Incentive Award Plan (the “Plan”), hereby grants to the individual listed below (“Participant”), an award of restricted stock units (“Restricted Stock Units” or “RSUs”) with respect to the number of shares of the Company’s common stock (the “Shares”) set forth below.  This award for Restricted Stock Units (this “RSU Award”) is subject to all of the terms and conditions as set forth herein and in the Restricted Stock Unit Award Agreement attached hereto as Exhibit A (the “Restricted Stock Unit Agreement”) and the Plan, each of which are incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Grant Notice and the Restricted Stock Unit Agreement.

	
Participant:
	
 

	
Grant Date:
	
 

	
Total Number of RSUs:
	
 

	
Distribution Schedule:
	
Subject to the terms of the Restricted Stock Unit Agreement, the RSUs shall be distributable as they vest pursuant to the Vesting Schedule in accordance with Section 2.1(c) of the Restricted Stock Unit Agreement.

	
Vesting Schedule:
	
Subject to the terms of the Restricted Stock Unit Agreement, _______ of the RSU Award shall vest on __________, and _______ of the RSU Award shall vest on __________, provided that Participant shall not have had a Termination of Service prior to the applicable vesting date(s).

	
 
	
 

By his or her signature below, Participant agrees to be bound by the terms and conditions of the Plan, the Restricted Stock Unit Agreement and this Grant Notice.  Participant has reviewed the Restricted Stock Unit Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Restricted Stock Unit Agreement and the Plan. Participant has been provided with a copy or electronic access to a copy of the prospectus for the Plan. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Restricted Stock Unit Agreement.  

Participant understands and agrees that this RSU Award does not alter the at-will nature of his or her employment relationship with the Company and is not a promise of continued employment for the vesting period of the RSU Award or any portion of it.  

The Plan, this Grant Notice and the Restricted Stock Unit Agreement constitute the entire agreement of the parties and supersede in their entirety all oral, implied or written promises, statements, understandings, undertakings and agreements between the Company and Participant with respect to the subject matter hereof, including without limitation, the provisions of any employment agreement or offer letter regarding equity awards to be awarded to Participant by the Company, or any other oral, implied or written promises, statements, understandings, undertakings or agreements by the Company or any of its representatives regarding equity awards to be awarded to Participant by the Company.

	
GOLDEN ENTERTAINMENT, INC.
	
 
	
Participant

	
By:
	
  
	
 
	
By:
	
 

	
Print Name:
	
  
	
 
	
Print 
	
 

	
Title:
	
  
	
 
	
Name:
	
  

 

 

 

 

EXHIBIT A

TO RESTRICTED STOCK UNIT AWARD GRANT NOTICE

RESTRICTED STOCK UNIT AWARD AGREEMENT

Pursuant to the Grant Notice to which this Restricted Stock Unit Award Agreement (this “Agreement”) is attached, the Company has granted to Participant the right to receive the number of RSUs set forth in the Grant Notice. 

ARTICLE I.

GENERAL

1.1      Defined Terms.  Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.

1.2      Incorporation of Terms of Plan.  The RSU Award is subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference.  In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control.

ARTICLE II.

award of restricted stock units

2.1      Award of Restricted Stock Units.  

(a)      Award.  In consideration of Participant’s past and/or continued employment with or service to the Company or any Subsidiary and for other good and valuable consideration, the Company hereby grants to Participant the right to receive the number of RSUs set forth in the Grant Notice, subject to all of the terms and conditions set forth in this Agreement, the Grant Notice and the Plan.  Prior to actual issuance of any Shares, the RSUs and the RSU Award represent an unsecured obligation of the Company, payable only from the general assets of the Company.

(b)      Vesting.  The RSUs subject to the RSU Award shall vest in accordance with the Vesting Schedule set forth in the Grant Notice.  Unless and until the RSUs have vested in accordance with the Vesting Schedule set forth in the Grant Notice, Participant will have no right to any distribution with respect to such RSUs.  In the event of Participant’s Termination of Service prior to the vesting of all of the RSUs, any unvested RSUs will terminate automatically without any further action by the Company and be forfeited without further notice and at no cost to the Company.  

(c)      Distribution of Shares. 

(i)      Shares of Common Stock shall be distributed to Participant (or in the event of Participant’s death, to his or her estate) with respect to such Participant’s vested RSUs within thirty (30) days following the vesting date of the RSUs as specified in the Vesting Schedule set forth in the Grant Notice, subject to the terms and provisions of the Plan and this Agreement.  

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(ii)      All distributions shall be made by the Company in the form of whole shares of Common Stock.  In lieu of any fractional share of Common Stock, the Company shall make a cash payment to Participant equal to the Fair Market Value of such fractional share on the date the RSUs are settled pursuant to this Section 2.1.

(iii)      Neither the time nor form of distribution of Common Stock with respect to the RSUs may be changed, except as may be permitted by the Administrator in accordance with the Plan and Section 409A of the Code and the Treasury Regulations thereunder.

2.2      Tax Withholding.  Notwithstanding any other provision of this Agreement (including, without limitation, Section 2.1(b) hereof): 

(a)      The Company and its Subsidiaries have the authority to deduct or withhold from other compensation payable to Participant, or to require Participant to remit to the Company or the applicable Subsidiary, an amount sufficient to satisfy applicable federal, state, local and foreign taxes (including the Employee’s portion of any FICA obligation) required by Applicable Law to be withheld with respect to any taxable event arising from the vesting of the RSUs or the receipt of the Shares upon settlement of the RSUs.  Participant may, at his or her election, satisfy the tax withholding obligation in one or more of the forms specified below: 

 

(i)      by cash or check made payable to the Company or the Subsidiary with respect to which the withholding obligation arises; 

 

(ii)      by the deduction of such amount from other compensation payable to Participant; 

 

(iii)      by requesting that the Company withhold a net number of vested Shares otherwise issuable pursuant to the RSUs having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes;

 

(iv)      by tendering vested shares of Common Stock having a then current Fair Market Value not exceeding the amount necessary to satisfy the withholding obligation of the Company and its Subsidiaries based on the minimum applicable statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes; 

 

(v)      through the delivery of a notice that Participant has placed a market sell order with a broker acceptable to the Company with respect to the Shares issuable pursuant to the RSUs then vesting and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company or the Subsidiary with respect to which the tax withholding obligation arises in satisfaction of such obligation; provided that payment of such proceeds is then made to the Company or the applicable Subsidiary at such time as may be required by the Administrator, but in any event not later than the settlement of such sale; or 

 

(v)      in any combination of the foregoing.

 

A-2

 

 

(b)      In the event Participant fails to provide timely payment of all sums required pursuant to Section 2.2(a), the Company shall satisfy all or any portion of Participant’s required payment obligation pursuant to Section 2.2(a)(iii) above. The Company shall not be obligated to deliver any certificate representing Shares issuable with respect to the RSUs to Participant or his or her legal representative unless and until Participant or his or her legal representative shall have paid or otherwise satisfied in full the amount of all federal, state, local and foreign taxes applicable with respect to the taxable income of Participant resulting from the grant of the RSUs, the distribution of the Shares issuable with respect thereto, or any other taxable event related to the RSUs, provided that no payment shall be delayed under this Section 2.2(b) if such delay will result in the imposition of taxes or penalties under Section 409A of the Code.

 

2.3      Conditions to Issuance of Shares.  The Company shall not be required to issue or deliver any Shares issuable upon the vesting of the RSUs prior to the fulfillment of all of the following conditions:  

(a)      the admission of the Shares to listing on all stock exchanges on which such Shares are then listed; 

(b)      the completion of any registration or other qualification of the Shares under any state or federal law or under rulings or regulations of the U.S. Securities and Exchange Commission or other governmental regulatory body, which the Administrator shall, in its sole and absolute discretion, deem necessary and advisable; 

(c)      the obtaining of any approval or other clearance from any state or federal governmental agency that the Administrator shall, in its absolute discretion, determine to be necessary or advisable; 

(d)      the lapse of any such reasonable period of time following the date the RSUs vest as the Administrator may from time to time establish for reasons of administrative convenience, subject to Section 409A of the Code and the Treasury Regulations and other guidance issued thereunder; and 

(e)      the receipt by the Company of full payment of any applicable withholding tax in any manner permitted under Section 2.2 above.  

2.4      Forfeiture and Claw-Back Provisions.  Participant hereby acknowledges and agrees that the RSU Award is subject to the provisions of Section 10.5(b) of the Plan.

ARTICLE III.

other provisions

3.1      Administration.  The Administrator shall have the power to interpret the Plan, the Grant Notice and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan, the Grant Notice and this Agreement as are consistent therewith and to interpret, amend or revoke any such rules.  All actions taken and all interpretations and determinations made by the Administrator will be final and binding upon Participant, the Company and all other interested persons.  To the extent allowable pursuant to Applicable Law, no member of the Administrator will be personally liable for any action, determination or interpretation made with respect to the Plan, the Grant Notice or this Agreement. 

A-3

 

 

3.2      RSU Award and Interests Not Transferable.  This RSU Award and the rights and privileges conferred hereby, including the RSUs awarded hereunder, shall not be liable for the debts, contracts or engagements of Participant or his or her successors in interest nor shall they be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect.

3.3      Rights as Stockholder.  Neither Participant nor any person claiming under or through Participant shall have any of the rights or privileges of a stockholder of the Company in respect of any Shares issuable hereunder unless and until certificates representing such Shares (which may be in book-entry form) shall have been issued and recorded on the books and records of the Company or its transfer agents or registrars, and delivered to Participant (including through electronic delivery to a brokerage account).   No adjustment will be made for a dividend or other right for which the record date is prior to the date of such issuance, recordation and delivery, except as provided in Article 12 of the Plan. After such issuance, recordation and delivery, Participant shall have all the rights of a stockholder of the Company, including with respect to the right to vote the Shares and the right to receive any cash or share dividends or other distributions paid to or made with respect to the Shares. 

3.4      Adjustments.  Participant acknowledges that the RSU Award, including the vesting of the RSU Award and the number of Shares subject to the RSU Award, is subject to adjustment in the discretion of the Administrator upon the occurrence of certain events as provided in this Agreement and Article 12 of the Plan.

3.5      Not a Contract of Employment or other Service Relationship.  Nothing in this Agreement or in the Plan shall confer upon Participant any right to continue to serve as an employee or other service provider of the Company or any of its affiliates.  Participant understands and agrees that this RSU Award does not alter the at-will nature of his or her employment relationship with the Company and is not a promise of continued employment for the vesting period of the RSU Award or any portion of it.

3.6      Conformity to Securities Laws.  Participant acknowledges that the Plan, the Grant Notice and this Agreement are intended to conform to the extent necessary with all Applicable Laws, including, without limitation, the provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated thereunder by the Securities and Exchange Commission, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the RSUs are granted and may be settled, only in such a manner as to conform to Applicable Law. To the extent permitted by Applicable Law, the Plan, the Grant Notice and this Agreement shall be deemed amended to the extent necessary to conform to Applicable Law.

3.7      Amendment, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator, provided, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall impair any rights or obligations under this Agreement in any material way without the prior written consent of Participant.

A-4

 

 

3.8      Notices.  Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the Company's principal office, and any notice to be given to Participant shall be addressed to Participant at Participant's last address reflected on the Company's records. By a notice given pursuant to this Section 3.8, either party may hereafter designate a different address for notices to be given to that party. Any notice shall be deemed duly given when sent via email (if to Participant) or when sent by certified mail (return receipt requested) and deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.

3.9      Successors and Assigns.  The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein and the Plan, this Agreement shall be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

3.10      Section 409A.  

(a)      Notwithstanding any other provision of the Plan, this Agreement or the Grant Notice, the Plan, this Agreement and the Grant Notice shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Grant Date, “Section 409A”).  The Administrator may, in its discretion, adopt such amendments to the Plan, this Agreement or the Grant Notice or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate to comply with the requirements of Section 409A.  

(b)     This Agreement is not intended to provide for any deferral of compensation subject to Section 409A of the Code, and, accordingly, the Shares issuable pursuant to the RSUs hereunder shall be distributed to Participant no later than the later of:  (i) the fifteenth (15th) day of the third month following Participant’s first taxable year in which such RSUs are no longer subject to a substantial risk of forfeiture, and (ii) the fifteenth (15th) day of the third month following first taxable year of the Company in which such RSUs are no longer subject to substantial risk of forfeiture, as determined in accordance with Section 409A and any Treasury Regulations and other guidance issued thereunder. 

(c)      For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payment that Participant may be eligible to receive under this Agreement shall be treated as a separate and distinct payment. 

3.11      Tax Representations.  Participant has reviewed with Participant’s own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by the Grant Notice and this Agreement.  Participant is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Participant understands that Participant (and not the Company) shall be responsible for Participant’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. 

3.12      Titles.  Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

A-5

 

 

3.13      Governing Law; Severability.  The laws of the State of Minnesota shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws. Should any provision of this Agreement be determined by a court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable.

3.14      Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if Participant is subject to Section 16 of the Exchange Act, the RSUs, the Plan and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule. To the extent permitted by Applicable Law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

3.15      Entire Agreement.  The Plan, the Grant Notice and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof.  

3.16      Limitation on Participant's Rights.  Participation in the Plan confers no rights or interests other than as herein provided.  This Agreement creates only a contractual obligation on the part of the Company as to amounts payable and shall not be construed as creating a trust.  Neither the Plan nor any underlying program, in and of itself, has any assets.  Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the RSUs, and rights no greater than the right to receive the Common Stock as a general unsecured creditor.

3.17      Counterparts.  The Grant Notice may be executed in one or more counterparts, including by way of any electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together shall constitute one instrument.

3.11      Paperless Administration.  By accepting this RSU Award, Participant hereby agrees to receive documentation related to the RSU Award by electronic delivery, such as a system using an internet website or interactive voice response, maintained by the Company or a third party designated by the Company.

A-6

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