EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated as of August 2nd,
2005, by and between GTECH HOLDINGS CORPORATION AND GTECH CORPORATION, each a
Delaware corporation (collectively, the "Company"), and W. XXXXX XXXXXX
("Executive").
WHEREAS, pursuant to an employment agreement dated as of August 2, 2002
(the "Original Employment Agreement"), Executive is employed by the Company as
Chief Executive Officer and President.
WHEREAS, the Company and Executive desire to amend certain provisions of
the Original Employment Agreement and to restate the Original Employment
Agreement in its entirety.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
hereby covenant and agree as follows:
1. DEFINITIONS. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the following meanings:
"ACT" means the Securities Exchange Act of 1934, as amended to date.
"AFFILIATE" shall mean any joint venture or other entity in which the
Company or any of its subsidiaries has an equity interest of at least 20%.
"ANNUAL CASH COMPENSATION" means the most recent annualized Base Salary
paid or payable to Executive plus the average Performance Bonus paid or payable
to Executive for the three most recent completed fiscal years of employment. For
the purposes of calculating Annual Cash Compensation, Base Salary shall include
any elective salary reductions made by Executive and contributed by the Company
on Executive's behalf to the Company's retirement plans.
"BOARD" means the Board of Directors of GTECH Holdings Corporation.
"CAUSE" means any of the following:
(i) any negligent and/or willful failure by Executive to
substantially perform his duties;
(ii) Executive's engaging in serious misconduct which is injurious
to the Company or breaching any of the Company's ethics and
compliance policies (unless, in its sole discretion, the Board
determines that the breach is immaterial, inadvertent and
subject to cure under Section 8(b) hereof without harm to the
Company) as from time to time implemented by the Company;
(iii) any material breach by Executive of the terms of Sections
4(c), 10; 11 or 14(a) hereof,
(iv) Executive's having been convicted of, or pleading nolo
contendere to, a crime that constitutes a felony or is a
gaming or gambling-related offense; or
(v) Executive's use of illegal drugs or abuse of other controlled
substances or his habitual intoxication.
"CHANGE IN CONTROL" means the happening of any of the following:
(i) any "person," including a "group" (as such terms are used in
Sections 13(d) and 14(d) of the Act, but excluding the
Company, any of its Affiliates, or any employee benefit plan
of the Company or any of its Affiliates) is or becomes the
"beneficial owner" (as defined in Rule 13(d)(3) under the
Act), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the
Company's then outstanding securities;
(ii) the stockholders of the Company shall approve a definitive
agreement (1) for the merger or other business combination of
the Company with or into another corporation if (A) a majority
of the directors of the surviving corporation were not
directors of the Company immediately prior to the effective
date of such merger, or (B) the stockholders of the Company
immediately prior to the effective date of such merger own
less than 50% of the combined voting power in the then
outstanding securities in such surviving corporation; or (2)
for the sale or other disposition of all or substantially all
of the assets of the Company; or
(iii) the purchase of 30% or more of the Common Stock pursuant to
any tender or exchange offer made by any "person," including a
"group" (as such terms are used in Sections 13(d) and 14(d) of
the Act), other than the Company, any of its Affiliates, or
any employee benefit plan of the Company or any of its
Affiliates.
"CHANGE OF CONTROL DATE" means the date on which a Change in Control
occurs, provided however that if a Change in Control occurs and if Executive's
employment with the Company is terminated by the Company prior to the date on
which the Change in Control occurs, and if it is reasonably demonstrated by
Executive that such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change in Control or
(ii) otherwise arose in connection with or in anticipation of a Change in
Control, then the "Change of Control Date" shall mean the date immediately prior
to the date of such termination.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMITTEE" means the Compensation Committee of the Board.
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"COMMON STOCK" means the Common Stock, par value $.01 per share, of the
Company.
"DISABILITY" means the inability (as determined by the Board in its sole
discretion after affording Executive a reasonable opportunity to present his
case) of Executive to render his agreed-upon, full-time services to the Company
due to physical and/or mental infirmity.
"EFFECTIVE DATE" means August 6, 2005.
"EXPIRATION DATE" means the latest date upon which stock option granted to
Executive would be exercisable under its grant terms if Employee had remained
employed with the Company though such date.
"FAMILY" means Executive's spouse and dependant children.
"GOOD REASON" means any of the following events (subject to the notice and
cure provisions of Section 8(c) hereof):
(i) the assignment to Executive of duties, responsibilities and/or
reporting relationship that are materially inconsistent with
those associated with Executive's position as stated in
Sections 4(a) and 4(b) hereof, excluding any interim relieving
of Executive's duties pursuant to Section 8(b);
(ii) the Company's failure to pay Executive any amounts otherwise
vested and due hereunder or under any plan or policy of the
Company;
(iii) a reduction in the title of Executive or in the authorities,
duties or responsibilities of Executive except that the loss
of the title of President shall not be "Good Reason" as set
forth herein;
(iv) any material breach of this Agreement by the Company;
(v) the failure to extend this Agreement (for a minimum of one
year on the same or better terms respecting annual cash
compensation and benefits, excluding one time awards of
restricted stock or stock options, other one-time benefits
such as relocation benefits, and any other benefits which have
been changed with respect to Senior Executives generally) at
least 90 days prior to the end of the Term or the end of any
extended term, as the case may be; or
(vi) the failure by the Company to renominate Executive as a
director at the expiration of his current term as director.
"PERFORMANCE BONUS" means the actual amount of a performance bonus
recommended by the Committee and approved by the Board to Executive with respect
to the relevant fiscal year in accordance with Section 5(b) hereof, including
the portion of the Performance Bonus paid in stock equivalent (but excluding the
portion of the stock award representing a discount beyond the cash equivalent
made in conjunction with the payment of the Performance Bonus).
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"PRORATED PERFORMANCE BONUS" means the portion of the Performance Bonus,
if any, that is payable with respect to a fiscal year which becomes due after a
termination of this Agreement under Sections 5(c) or 9(b) hereof. The Prorated
Performance Bonus will be calculated as follows: the Committee shall (a)
determine the Performance Bonus to which Executive would have been entitled, had
Executive been employed for the entire fiscal year, in accordance with Section
5(b)(i) hereof, (b) divide that amount by 52 to produce a Weekly Amount; and (c)
multiply the Weekly Amount by the number of weeks during the relevant fiscal
year that Executive was employed by the Company.
"RETIREMENT" means Executive's termination of his employment when the sum
of Executive's age and years of continuous full-time employment with the Company
or any Affiliate total to 65 or more.
"RETIREMENT FACTOR" means the sum of Executive's age and years of
continuous full-time employment with the Company or any Affiliate at the time of
Executive's Retirement.
"SENIOR EXECUTIVES" means such executives of the Company as constitute,
from time-to-time, the "executive officers" of the Company within the meaning of
Regulation Section 240.3b-7 issued under the Act.
"STOCK OWNERSHIP REQUIREMENTS" mean with respect to Executive, holding
Common Stock having a fair market value of at least two (2) times his Base
Salary.
2. EMPLOYMENT OF EXECUTIVE.
The Company hereby agrees to employ Executive, and Executive agrees to be
employed by the Company, to render services to the Company and its subsidiaries,
affiliates and divisions for the period, at the rate of compensation and upon
the other terms and conditions set forth in this Agreement.
3. TERM.
The term of Executive's engagement hereunder shall commence on Effective
Date, and shall continue for a term of three years (the "Term"). The Term is
subject to earlier termination as hereinafter provided in Section 8 hereof, and
the compensation, benefits, etc., if any, payable upon termination shall be as
set forth in Section 9 hereof.
4. POSITION AND DUTIES.
(a) Position. During the Term, Executive shall be retained and shall
serve as Chief Executive Officer and President of the Company. During the Term,
Executive also agrees to serve, if elected, as a director and/or officer of any
subsidiary or Affiliate of the Company.
(b) Duties. During the Term, Executive shall have the authority and
power to perform such duties consistent with his positions as Chief Executive
Officer and President as designated by the Board, and shall report only to the
Board or any committees thereof at the request of the Board. Executive shall not
be required without his consent to undertake responsibilities not commensurate
with his position. Executive shall comply fully and promptly
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with the various policies, procedures and rules governing employees promulgated
and/or as amended from time to time by the Company and any applicable subsidiary
or Affiliate of the Company (including, without limitation, the Company's Code
of Conduct and Government Affairs Policies and Procedures) and with any
applicable disclosure and other requirements of any governmental authority and
of any other entity with which the Company, its subsidiaries and Affiliates are
doing or propose to do business. Except for illness, vacations, and holidays in
accordance with then-current Company policy, and (subject to the approval of the
Board) reasonable leaves of absence, Executive shall devote his full business
time, attention, skill, undivided loyalty and best efforts to the faithful
performance of his duties hereunder; provided, however, that Executive may, as
long as such activities do not interfere with the performance of Executive's
responsibilities: (i) with the prior approval of the Chairman of the Board,
serve (and retain any compensation with respect to such service) on corporate,
civic and charitable boards and committees, (ii) deliver lectures and fulfill
speaking engagements, and (iii) manage personal investments.
(c) Principal Place of Employment. Executive's principal place of
employment shall be at the Company's principal executive offices (currently
located in West Greenwich, Rhode Island) or at such other location as the
Company hereafter reasonably may require. Executive agrees to reside in Rhode
Island, as long as the Company's principal executive offices or such offices of
a successor company to the Company remain in Rhode Island.
(d) Nomination as Director. Assuming the Term has not been
terminated, the Board agrees to nominate Executive for reelection as director at
the Company's 2006 Annual Meeting, at which time Executive's current term as a
director is scheduled to expire, and Executive agrees, subject to Section 8(d)
hereof, to continue to serve as a director if elected.
5. COMPENSATION AND REIMBURSEMENT OF EXPENSES
(a) Base Salary. For all services rendered by Executive in all
capacities with the Company, its subsidiaries and Affiliates during the Term,
the Company shall pay or cause to be paid to Executive as compensation a salary
at an annual rate of $750,000 (the "Base Salary"), payable in equal installments
not less frequently than monthly through the Company's standard payroll
practices.
(b) Performance Bonus.
(i) With respect to each fiscal year of the Company during the
Term, Executive shall be eligible to earn a Performance Bonus at the discretion
of the Committee. The amount of the Performance Bonus, if any, for a given
fiscal year shall be recommended by the Committee and determined by the Board in
accordance with the performance metrics and business objectives included in the
GTECH Management Incentive Plan as approved annually by the Board in its sole
discretion for all Senior Executives. Under the Plan, Executive's performance
will be measured against an established set of targets for each fiscal year, and
depending upon performance against those targets, Executive will be eligible to
receive a bonus in the range of 0% to 200% of Base Salary. The annual target
Performance Bonus will be 100% of Base Salary.
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(ii) Any Performance Bonus awarded to Executive shall be paid
not later than 30 days following payment of bonus amounts to Senior Executives.
Bonus payments for GTECH are normally made in April/May of each year for the
preceding fiscal year ending in February, and Executive shall receive his
Performance Bonus not later than June 15 for such preceding fiscal year.
Executive's Performance Bonus, if any, for any given fiscal year shall be paid
by the Company in a mix of cash and discounted restricted stock, at the
discretion of the Board, which shall determine annually (a) the maximum amount
of bonus required to be paid in discounted restricted stock, not to exceed 30%
of the Performance Bonus, (b) the magnitude of the discount, and (c) the vesting
terms under the Omnibus Stock Plan for GTECH, it being understood that the
portion of the Performance Bonus paid in stock in lieu of the cash payment shall
vest immediately, subject to transfer restrictions as established by the Board
that apply generally to performance bonus stock awards for other Senior
Executives, and the portion of any stock award representing a discount beyond
the Performance Bonus equivalent shall xxxxx xxxx as established by the Board.
Notwithstanding anything in this Section 5(b)(ii) to the contrary, Executive
shall have the right to have up to 100% of the Performance Bonus with respect to
a fiscal year paid in the form of discounted restricted stock by giving written
notice to the Company within the thirty (30) day period prior to the end of a
fiscal year of his exercise of such right with respect to such upcoming fiscal
year.
(iii) Nothing contained in this Agreement constitutes a
guarantee that the Board will award Executive a Performance Bonus for any given
fiscal year.
(c) Change of Control.
(i) In the event Executive's employment is terminated by the
Company for any reason other than Cause, or in the event Executive resigns for
Good Reason. within eighteen months after the Change of Control Date, the
Company will pay Executive, as liquidated damages, a lump sum cash payment in
lieu of the severance payments provided under Section 9(b) hereof, payable
within ten (10) days of Executive's termination, equal to two and ninety-nine
hundredths (2.99) times the sum of (A) Executive's current annual Base Salary in
effect at the date of termination (including in base salary for this purpose any
elective salary reductions made by the Executive and contributed by the Company
on Executive's behalf to the Company's retirement plan, any non-qualified plan,
or a plan meeting the requirements of Section 125 of the Code), plus (B) the
average Performance Bonus paid or payable to the Executive from the Company for
the three (3) most recent full fiscal years of the Company, plus (C) the maximum
amount allowable under the Executive Perquisite Program during the most recent
calendar year of the Company. In addition, Company shall pay Executive within 10
days after such termination (i) his Base Salary accrued through the date of such
termination at the rate in effect immediately prior to such date; (ii) any
accrued but unpaid Performance Bonus under Section 5(b) hereof for the prior
fiscal year; (iii) any Prorated Performance Bonus up to the date of such
termination calculated by reference to Executive's target Performance Bonus, as
determined by the Committee for the current fiscal year; and (iv) any other
amounts to which Executive is entitled under the terms of Sections 5 and 6
hereof up to the date of such termination. The payment of any Performance Bonus
or Prorated Performance Bonus after such termination shall be made in cash,
notwithstanding the provisions of Section 5(b)(i) hereof.
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(ii) In the event of a termination described in Section
5(c)(i) above, Executive, together with Executive's dependents and
beneficiaries, will become fully vested in and continue following Executive's
termination to participate fully in, at no additional cost to Executive, all
life insurance plans, accident and health plans and other welfare plans,
maintained or sponsored by the Company immediately prior to the termination, at
the same level and subject to terms at least as favorable to Executive as in
effect immediately prior to termination (or the full value thereof in cash) from
the Company, until the fourth anniversary of termination, plus any extension
earned pursuant to Section 3 of Appendix A to this Agreement. Executive will
also become fully vested in the retirement plans, and all non-qualified plans,
and within thirty (30) days of Executive's termination of employment, Company
shall pay to Executive the sum of (i) all benefits accrued under the
Non-Qualified Plans and (ii) an amount equal to 2.99 times the average benefit
accrued and/or Company contributions made to the retirement plans and the
non-qualified plans over the last three fiscal years prior to termination.
(iii) Anything in this Agreement to the contrary
notwithstanding and except as set forth below, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise-Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed on the Payments.
(iv) All determinations required to be made under this Section
5(c), including whether and when a Gross-Up Payment is required and the amount
of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by Ernst & Young LLP or such other nationally
recognized certified public accounting firm as may be designated by the
Executive (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change in Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 5(c), shall be paid
by the Company to the Executive within five days of the receipt of the
Accounting Firm's determination. Subject to the remainder of this Section 5(c),
any determination by the Accounting Firm shall be binding upon the Company and
the Executive. As a result of the uncertainty in the application of Section 280G
and Section 4999 of the Code at the time of the initial determination by the
Accounting Finn hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to
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be made hereunder. In the event that the Company exhausts its remedies and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive (so as to fully extinguish Executive's tax liability
for the Payments including all interest and penalties).
(v) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which Executive gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(A) give the Company any information reasonably
requested by the Company relating to such claim,
(B) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company,
(C) cooperate with the Company in good faith in order
effectively to contest such claim, and
(D) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 5(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such
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advance or with respect to any imputed income with respect to such advance; and
further provided that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(vi) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 5(c), the Executive becomes entitled
to receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section 5(c)) promptly pay
to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 5(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
(vii) Notwithstanding anything to the contrary contained
herein, if Executive is dismissed by the Company for Cause, Executive will not
be entitled to the payments or benefits provided under Section 5(c) hereof.
(d) Reimbursement of Expenses. Consistent with the Company's
established policies, the Company shall pay or reimburse Executive for all
reasonable and necessary travel and other expenses of Executive incurred by
Executive in performing his duties hereunder upon receipt of appropriate written
substantiation of such expenses.
6. BENEFITS.
(a) Benefits. Except as otherwise expressly provided herein,
Executive shall be entitled to receive, during the Term, benefits substantially
similar to the level of benefits provided generally to Senior Executives under
any benefit plan, program or arrangement of the Company in effect, subject to
Executive's meeting the eligibility requirements of such plans, programs or
arrangements, and in the case of benefit plans, programs or arrangements
providing for discretionary grants or awards, to the discretion of the Board or
applicable committee.
(b) Stock Options. Executive shall receive the following stock
options in accordance with the following terms and conditions:
(i) Executive shall be eligible for consideration by the
Committee for annual grants of stock options under the Company's 2002 Omnibus
Stock Option and Long-Term Incentive Plan (the "2002 Plan") or any successor
plan, in the sole discretion of the Committee.
(ii) All grants of options under this Agreement are subject to
and conditioned upon the Company obtaining all necessary shareholder approvals,
if any, which
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Company shall use all reasonable efforts to obtain. Each time Executive receives
a grant of stock options pursuant to this Section 6(b), he shall be asked to
enter into the Company's standard Non-Qualified Stock Option Agreement (the
"Option Agreement") which shall set forth the terms and conditions governing the
grant and exercise of the Options including such granting and vesting terms that
are substantially similar to the granting and vesting terms in force as of the
Effective Date. A copy of the current form of stock option agreement is attached
hereto as Appendix B. The Company shall use its best efforts to file, and cause
to be effective under the Securities Act of 1933, as amended, a registration
statement on Form S-8 (or a comparable form) with respect to the shares (or
other rights) granted or issued as provided for or referenced in this Agreement
or, if applicable, issuable upon exercise of rights so provided or referenced,
but the Company shall not be obligated to register any such shares or rights for
resale. The Company will also use its best efforts to ensure that each grant
referenced above shall meet the requirements for exemption under Rule 16b-3
under the Act.
(c) Restricted Stock. Not less than 35% of the calculated value of
annual long term incentive grants under the 2002 Plan (or any subsequent plan)
shall be provided to Executive in Restricted Stock. Any granting and vesting
terms relating to such Restricted Stock shall be substantially similar to the
granting and vesting terms in force as of the Effective Date. A copy of the
current form of restricted stock agreement is attached hereto as Appendix C.
(d) Certain Specific Benefits and Arrangements. Without limiting the
generality of subsection (a) above (except as may otherwise be specified in
Appendix A hereto), Executive shall be entitled to the specific benefits and
arrangements set forth in Appendix A hereto.
(e) Indemnification. The Company shall defend and hold Executive, to
the extent the Executive is a defendant, target or witness, harmless o the
fullest extent permitted by applicable law in connection with any claim, action,
suit, investigation or proceeding arising out of or relating to performance by
Executive of services for, or action of Executive as a director, officer or
employee of the Company or any parent, subsidiary or Affiliate of the Company,
or of any other person or enterprise at the Company's request. To the extent
permitted by law, expenses incurred by Executive in defending a claim, action,
suit or investigation or criminal proceeding shall be paid by the Company in
advance of the final disposition thereof upon the receipt by the Company of an
undertaking by or on behalf of Executive to repay said amount unless it shall
ultimately be determined that Executive is entitled to be indemnified hereunder.
This Section 6(d) shall not apply to a non-derivative action commenced by the
Company against Executive.
7. BENEFITS PAYABLE DURING TERM UPON DISABILITY.
(a) Disability Benefits. In the event of Disability of Executive
during the Term of his employment hereunder, the Company shall continue to pay
Executive the compensation and extend to him the benefits provided in Sections 5
and 6 hereof during the period of Disability, subject to Section 9(c) hereof and
to the extent permitted by applicable law, provided that in the event of
Executive's Disability for an aggregate period of time exceeding 150 calendar
days in any 12 consecutive month period during the Term, the Company, at its
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election, may terminate the Term of Executive's employment, and Executive shall
receive the compensation as set forth in Section 9(b) hereof.
(b) Services During Disability. During the Term, notwithstanding any
Disability, Executive shall, to the extent that he is physically and mentally
able to do so, furnish information and assistance to the Company, and, in
addition, upon the reasonable request in writing on behalf of the Board, or a
senior executive officer designated by the Board, from time to time, he shall
make himself available to the Company, its subsidiaries and Affiliates to
undertake reasonable assignments consistent with his position and his physical
and mental health. In the event of such Disability, Executive shall resign from
the Board.
8. TERMINATION OF EMPLOYMENT.
(a) Expiration and Earlier Termination. Executive's Tern of
employment shall terminate upon expiration of the Term and shall be subject to
earlier termination:
(i) upon the death of Executive;
(ii) at the election of the Company in the event of
Executive's Disability (as provided in Section 7(a)
hereof);
(iii) upon discharge of Executive by the Company for Cause;
(iv) upon discharge of Executive without Cause or resignation
of Executive; and
(v) upon the Retirement of Executive.
(b) Certain Obligations of the Company. The Company shall give the
Executive not less than 60 days' prior written notice of any intended
termination of Executive's employment by the Company for Cause (other than for
the reasons set forth in clauses (ii) and (iv) of the definition of Cause in
Section 1 hereof). In the event of such a proposed termination for Cause, such
notice shall specify the grounds for such termination, and the Company shall
only be entitled to terminate the Executive for such Cause if the Executive
shall have failed to cure the grounds for such termination within said 60-day
notice period and Executive shall have been afforded an opportunity to address
the Board, with legal counsel, to argue against such termination. However, after
giving such notice and before Executive is afforded the opportunity to address
the Board, the Company may relieve Executive of his duties on an interim basis.
The Company may immediately terminate Executive's employment by written notice
in the event of the occurrence of any of the events set forth in clauses (ii)
and (iv) of the definition of Cause in Section 1 hereof. In addition, the
Company may immediately terminate Executive's employment without Cause by
written notice to the Executive.
(c) Certain Obligations of Executive. Executive shall give the
Company not less than 60 days' prior written notice of any intended termination
by Executive of Executive's employment, including Retirement. In the event of a
proposed resignation for Good Reason, such notice shall specify the grounds for
such resignation, and Executive shall only be entitled to terminate his
employment for Good Reason if the Company shall have failed to correct the
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specified grounds within said 60-day notice period and, upon cure thereof by the
Company, such event shall no longer constitute Good Reason. Executive shall not
be entitled to terminate for Good Reason unless he has given notice to the
Company of his intention to so terminate within 60 days following the occurrence
of the event alleged to constitute such Good Reason. In the event of Retirement,
Executive must meet the minimum established threshold index of 65.
Notwithstanding the foregoing, in the event that Executive has given the Company
notice of his intention to resign or retire, the Board may elect to have such
resignation or Retirement become effective immediately or at such other date,
not later than the effective date specified in the notice, as the Board may
determine.
(d) Resignation. Upon termination of the Term for any reason,
Executive (unless otherwise requested by a majority of the independent directors
of the Board) concurrently shall resign any directorships and officer or
employee positions which he holds with the Company, its subsidiaries and
Affiliates.
9. COMPENSATION, BENEFITS, ETC. UPON, AND EFFECTS OF, TERMINATION.
(a) Death, Discharge for Cause and Resignation for Other than Good
Reason. If the Term of Executive's employment is terminated by reason of his
death, discharge for Cause or resignation for other than Good Reason, the
Company shall pay or cause to be paid to Executive or his estate, as the case
may be, at the time such payment is due (i) his Base Salary accrued through the
effective date of such termination at the rate in effect immediately prior to
such termination; (ii) any accrued but unpaid Performance Bonus under Section
5(b) hereof for the prior fiscal year (to be paid at the same time Senior
Executives receive performance bonuses for that fiscal year as set forth in
Section 5(b)(i) hereof); and (iii) any other amounts to which Executive is
entitled under the terms of Sections 5 and 6 hereof up to the effective date of
such termination. In the event of such termination of employment for Cause or
resignation for other than Good Reason under this Section 9(a), all unvested
stock options and unvested shares of restricted stock, as they are scheduled to
vest in accordance with the applicable restricted stock and stock option
agreements, shall be forfeited by Executive, any vested stock options shall
remain exercisable for a period of three (3) months after termination and any
vested restricted stock shall be promptly distributed to Executive. In the event
of Executive's death, (i) Executive's Family should continue to receive any and
all medical benefits and insurance received by Executive at the time of his
death (or equivalent coverages) at no additional expense until the end of the
month in which Executive would have attained age 65, and (ii) Executive's estate
shall have 18 months from the date of Executive's death to exercise all vested
options then held by Executive (or their Expiration Dates, if sooner).
(b) Disability, Discharge Without Cause and Resignation for Good
Reason. If the Term of Executive's employment is terminated by the Company by
reason of his Disability as provided in Section 7(a) hereof, by the Company
without Cause or by reason of Executive's resignation for Good Reason, the
Company shall pay to Executive or his estate, as the case may be, the following:
(i) his Base Salary accrued through the effective date of such termination at
the rate in effect immediately prior to such termination; (ii) an amount equal
to eighteen (18) months of Annual Cash Compensation; (iii) any accrued but
unpaid Performance Bonus under Section 5(b) hereof for the prior fiscal year;
(iv) a Prorated Performance Bonus, if any, payable with respect to the fiscal
year of termination; and (v) any other amounts to which Executive is
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entitled under the terms of Sections 5 and 6 hereof up to the effective date of
such termination. The payments required under this Section 9(b) shall be made by
the Company after such termination as follows: the Base Salary component of
Annual Cash Compensation shall be paid in equal bi-weekly installments over
eighteen (18) months, the Performance Bonus component of Annual Cash
Compensation shall be paid within 14 days, and the Prorated Performance Bonus,
if any, payable with respect to the fiscal year of termination shall be paid at
the same time Senior Executives are paid performance bonuses for the respective
fiscal year. Any such Prorated Performance Bonus shall be paid in cash,
notwithstanding the provisions of Section 5(b)(i) hereof.
(c) Retirement. If this Agreement is terminated as a result of
Executive's Retirement, all medical benefits and insurance received by Executive
and his Family shall continue until the end of the month in which Executive
attains age 65. Any vested options then held by Executive shall remain
exercisable after Retirement until their respective Expiration Dates. If
Executive achieves a Retirement Factor of 65 and retires from the Company, 50%
of Executive's unvested restricted stock will vest immediately and the remaining
50% will expire as of the effective date of Retirement. If Executive achieves a
Retirement Factor of 75 and retires from the Company, 100% of Executive's
unvested restricted stock will vest immediately. Retirement between Retirement
Factor 65 and 75 will result in a 5% increase in vesting for each 1 Retirement
Factor point increase (e.g., a Retirement Factor of 66 will result in 55%
vesting of the unvested restricted stock, a Retirement Factor of 67 will result
in a 60% vesting of the unvested restricted stock, etc). Any vested restricted
stock shall be promptly distributed to Executive.
(d) Effect of Termination Under Section 9(b). In the event this
Agreement is terminated in accordance with Section 9(b) hereof, the Company
shall continue, for a period of eighteen (18) months following such termination,
the benefits described in Sections 2, 4 and 6 of Appendix A, and shall continue
the medical benefits described in Section 3 of Appendix A for the remainder of
the Term, as if the Agreement had not been terminated, and shall continue such
medical coverage for an additional period of thirty (30) months thereafter, plus
any extension as provided for in Section 3 of Appendix A (such medical coverage
shall continue until the end of the month that Executive attains age 65 if
Executive's employment with the Company is terminated by reason of his
Disability). In addition, in the event that this Agreement is terminated in
accordance with Section 9(b) hereof, Executive shall become fully vested in the
retirement plans, all non-qualified plans, and in all benefits accrued under all
other employee benefit plan (e.g., matches under the 401(k) plan), all stock
options and restricted stock grants issued to Executive that have not vested as
of the date of the termination of Executive's employment with the Company shall
vest, any such restricted stock shall be promptly distributed to Executive and
Executive shall have eighteen (18) months from the date of the termination of
his employment with the Company (or until their Expiration Dates, if sooner) to
exercise any vested options then held by Executive. Executive also shall be
entitled, to the extent not inconsistent with this Agreement, to receive such
additional benefits, if any, as he may be entitled to under the express terms of
the applicable benefit plans (other than bonus and severance plans) of the
Company, its subsidiaries and Affiliates, and to whatever medical coverage, if
any, as is required to be provided by applicable law.
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(e) Accrued Benefits Under the Company's Amended and Restated Income
Deferral Plan. Notwithstanding anything in the Company's Amended and Restated
Income Deferral Plan to the contrary, upon the termination of Executive's
employment, whether upon death, upon Disability, for Cause, without Cause, upon
resignation other than for Good Reason, upon resignation for Good Reason, upon
Retirement or otherwise, any Accrued Benefit (as defined in the Amended and
Restated Income Deferral Plan) attributable to the Deferred Amounts (as defined
in the Amended and Restated Income Deferred Plan) deferred by Executive under
the Amended and Restated Income Deferral Plan shall be immediately due and
payable in full. Executive shall be responsible for any taxes owed upon such
distribution.
(f) Reductions, Forfeitures, etc. Notwithstanding the foregoing: (i)
any payments or benefits required to be paid or provided to Executive pursuant
to Section 7(a) in the event of Executive's Disability shall be reduced to the
extent that comparable payments or benefits are received by Executive during
such period under the Company's disability plan, as in effect from time to time,
(ii) without limiting any other rights the Company may have, any payments or
benefits required to be paid or provided to Executive under this Agreement shall
be forfeited to the Company by Executive if Executive shall breach any of his
obligations under Sections 10(b) or 11 hereof, except as may otherwise be
required by applicable law, and (iii) except as otherwise provided above, the
payments and benefits required by this Section 9 shall be made or provided at
such times as they would have been paid or provided if Executive's employment
had not been terminated.
(g) Full Settlement. In the event of the termination of Executive's
employment, the payments and other benefits provided for by this Agreement (and
as otherwise provided under the express terms of any compensation or benefit
plans of the Company, its subsidiaries or Affiliates, to the extent not
inconsistent with this Agreement, or as may otherwise be required by applicable
law) shall constitute the entire obligation of the Company, its subsidiaries and
Affiliates to Executive for compensation and benefits and shall also constitute
full and complete settlement of any claim under law or in equity that the
Executive might otherwise assert against the Company, its subsidiaries or
Affiliates, for compensation and benefits. Executive has no duty to mitigate
respecting other employment after the termination of this Agreement and shall be
entitled to receive the amounts described in this Section 9 irrespective of
whether Executive obtains other employment immediately following such
termination.
10. CERTAIN OBLIGATIONS OF EXECUTIVE.
Executive further covenants with the Company as follows and expressly
agrees that the provisions of Sections 10 and 11 are material obligations to the
Company and the breach of those provisions will constitute material breaches of
this Agreement. As used in Sections 10 and 11, the term "Company" shall include
GTECH Holdings Corporation and its subsidiaries and Affiliates.
(a) Assistance in Litigation. During the Term, and for a period of
three years thereafter subject to reasonable accommodation of Executive's then
business schedule, Executive, upon reasonable notice, shall furnish such
information and proper assistance to the Company as may reasonably be required
in connection with any litigation in which the Company
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is, or may become, a party or in connection with any investigation or review by
any governmental agency to which the Company is, or may become, a subject. The
Company shall compensate Executive at a reasonable hourly rate, plus reimburse
all expenses incurred consistent with Company policy, for any such assistance
provided by Executive after the Term.
(b) Confidential Information. Executive shall not knowingly use for
his own benefit or disclose or reveal to any person, during or after the Term,
any trade secret or other confidential information relating to the Company,
including any customer lists, customer needs, price and performance information,
processes, specifications, hardware, software, firmware, programs, devices,
supply sources and characteristics, business opportunities, marketing,
promotional, pricing and financing techniques, and other information relating to
the Company; provided that such restriction on confidential information shall
not apply to information which is (i) proven to be generally available in the
industry, (ii) disclosed in published literature, or (iii) obtained by Executive
after the Term from a third party without binder of secrecy. Executive agrees
that, except as otherwise agreed by the Company, he will return to the Company,
promptly upon the request of the Board or any executive officer designated by
the Board, any physical embodiment of such confidential information. In the
event Executive is requested by any legal process to disclose Confidential
Information, Executive shall immediately inform the Company and shall permit the
Company an opportunity to oppose such process, it being understood that
Executive's compliance with legal process, after the Company's reasonable
opportunity to oppose such process, does not constitute a violation of this
Section 10(b).
(c) Proprietary Creations. All rights, title and interest in and to
any ideas, inventions, technology, processes, know-how, works, hardware,
software, firmware, programs, devices, trade secrets, trade names, trademarks or
service marks, which Executive may conceive, create, organize, prepare or
produce during the period of his employment with the Company and which relate to
the business of the Company, and all rights, title and interest in and to any
patents, patent applications, copyright registrations and copyright applications
resulting therefrom, shall be owned by the Company, and Executive agrees to
execute instruments or documents, to provide evidence and testimony, and to
otherwise assist the Company in establishing, enforcing and maintaining such
rights, title and interest of the Company during and after the Term.
(d) Authorization. Executive does hereby irrevocably constitute,
authorize, empower and appoint the Company, or any of its officers, such
Executive's true and lawful attorney (with full power of substitution and
delegation) in Executive's name, and in Executive's place and stead, or in the
Company's name, to take and do such action, and to make, sign, execute,
acknowledge and deliver any and all instruments or documents which the Company,
from time to time, may deem desirable or necessary to vest in the Company, its
successors and assigns, any of the rights, title or interest granted pursuant to
Section 10(c) above for the use and benefit of the Company, its successors and
assigns.
11. NON-COMPETITION.
(a) During the Term and for eighteen (18) months following
termination of Executive's employment (irrespective of the reason for such
termination), Executive shall not engage or propose to engage, directly or
indirectly (which includes owning, managing, operating,
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controlling, being employed by, acting as a consultant to, giving financial
assistance to, participating in or being connected in any material way with any
business or person so engaged) in any Company Business anywhere in the world,
including without limitation in any business which competes or proposes to
compete with any Company Business in which the Company was engaged or proposed
to be engaged anywhere in the world; provided, that Executive's ownership as a
passive investor of less than one percent of the issued and outstanding stock or
equity, or $100,000 principal amount of any debt securities, of any corporation,
partnership or other entity so engaged shall not by itself be deemed to
constitute such engagement by Executive. As used herein, the term "Company
Business" shall mean: (i) the manufacturing, distribution and sale of lottery or
gaming machines; or (ii) any other business as to which the Company is required
from time-to-time to report as a segment under applicable rules and regulations
under the Act, provided that the term "Company Business" shall not include the
development, distribution or sale of software related to any such lottery or
gaming machines or any entity whose principal business is providing casino or
gaming services to the public.
(b) Further, for a period of eighteen (18) months following
termination of Executive's employment (irrespective of the reason for such
termination), Executive shall not (i) disturb or interfere with any business
relationship between the Company and any of its customers, suppliers or other
business associates, or (ii) solicit or cause to be solicited any officer,
employee or customer of the Company to terminate such person's relationship with
the Company or to take other action which is materially injurious to the
Company.
12. TAX WITHHOLDING.
The Company may withhold from any benefits payable under this agreement
all Federal, State, City, or other taxes as shall be required pursuant to any
law or governmental regulations or ruling.
13. EFFECT OF PRIOR AGREEMENTS.
This Agreement, including the Appendices hereto, contains the entire
understanding between the parties hereto with respect, to the matters covered
herein and supersedes any prior agreement, condition, practice, custom, usage
and obligation with respect to such matters insofar as any such prior agreement,
condition, practice, custom, usage or obligation might have given rise to any
enforceable right, except for those agreements respecting the grant of stock
options and restricted stock identified on Appendix D hereto, which shall
continue in full force and effect in accordance with their terms, subject to the
provisions contained in this Agreement. Without limiting the generality of the
foregoing, the Original Employment Agreement is superseded in its entirety by
this Agreement.
14. GENERAL PROVISIONS.
(a) Certain Representations and Warranties of Executive. Executive
represents to the Company that (i) the execution and performance of this
Agreement by Executive and his employment hereunder does not and will not
constitute a breach of or violate any contract, agreement, obligation or
understanding, oral or written, or order of any court or governmental authority
to which he is a party or by which he is bound; (ii) the employment and
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other personal background information provided by Executive to Company is true
and correct in all material respects; (iii) to the best of Executive's
knowledge, there is no factor relating to him or his Family not previously
disclosed in writing to the Company which could reasonably be expected, if he
were a senior executive officer or director of the Company, to disqualify the
Company, its subsidiaries or Affiliates from, or materially jeopardize their
chances of, obtaining lottery contracts or other contracts in the businesses in
which they are engaged or propose to engage; and (iv) Executive has been
represented by counsel selected by Executive in the negotiation and preparation
of this Agreement.
(b) Non-Assignability and Inurement. Neither this Agreement nor any
rights or interest hereunder shall be assignable by Executive, his
beneficiaries, or legal representatives without the Company's prior written
consent (it being understood that all payments to which Executive is entitled
hereunder shall inure to the benefit of his estate or legal heirs).
(c) Binding Agreement. This Agreement shall be binding upon, and
accrue to the benefit of, Executive and the Company and their respective heirs,
executors, administrators, successors and permitted assigns, including, in the
case of the Company, any person or entity acquiring all or substantially all of
the Company's assets.
(d) Amendment of Agreement. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto.
(e) Remedies. Executive acknowledges and agrees that the possible
restrictions on his activities which may occur as a result of his performance of
his obligations under Sections 10 and 11 hereof are required for the reasonable
protection of the Company, its subsidiaries and Affiliates, and Executive
expressly acknowledges and agrees that such restrictions are fair and reasonable
for that purpose. Executive further expressly acknowledges and agrees that
damages alone will be an inadequate remedy for any breach or violation by him of
this Agreement and that the Company, its subsidiaries and Affiliates, in
addition to all other remedies at law or in equity, shall be entitled as a
matter of right to injunctive relief, including specific performance, with
respect to any such breach or violation, in any court of competent jurisdiction
including, without limitation, any state or federal court in Rhode Island. If
any of the provisions of such Sections are held to be in any respect an
unreasonable or unlawful restriction upon Executive, then they shall be deemed
to extend only over the maximum period of time, geographic area, and/or range of
activities as to which they may be enforceable.
(f) Waiver. No term or condition of this Agreement shall be deemed
to have been waived, nor shall there be any estoppel against the enforcement of
any provision of this Agreement, except by written instrument of the party
charged with such waiver or estoppel.
(g) Severability. If, for any reason, any provision of this
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not so held invalid, and each such other provision shall to
the full extent consistent with law continue in full force and effect.
(h) Notices. For the purposes of this Agreement, notice and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have
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been duly given when hand delivered or mailed by United States certified or
registered express mail, return receipt requested, postage prepaid, if to
Executive, addressed to the address set forth on the signature page of this
Agreement with a copy to his counsel, Xxxx Xxxxx, Esq., Fox Rothschild LLP,
Midtown Building, Suite 400, 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx Xxxx, Xxx Xxxxxx
00000-0000; if to the Company, addressed to GTECH Holdings Corporation, 00
Xxxxxxxxxx Xxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxxx 00000 and directed to the attention
of the Board with a copy to the General Counsel of the Company; if to a member
of the Board, addressed to each member at his respective address on file with
the General Counsel of the Company with a copy to the Company, or to such other
address as either party may have furnished to the others in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
(i) Counterparts. This Agreement may be executed by facsimile and in
several counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
(j) Indulgences, Etc. Neither the failure nor any delay on the part
of either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.
(k) Headings. The headings of Sections and paragraphs herein are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.
(l) Governing Law; Forum. This Agreement shall be governed by and
construed in accordance with the laws of the State of Rhode Island, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof. In the event of any dispute hereunder, the prevailing party
shall be entitled to recover all costs, including reasonable attorneys' fees,
incurred in adjudicating such dispute.
(m) Joint and Several Liability. Notwithstanding any other provision
of this Agreement, each of GTECH Holdings Corporation and GTECH Corporation, and
their successors and assigns, shall be jointly and severally liable for all
obligations or any of them to Executive hereunder. In the event that a
substantial portion of the assets of either Company are transferred to any other
direct or indirect subsidiary or other Affiliate of the Company, whether in one
transaction or a series of transactions, such Company, as applicable, shall
cause (prior to or concurrently with each transfer) the transferee to become a
signatory to this Agreement and to become jointly and severally liable for all
obligations or any of them to Executive hereunder.
(n) Conflicts. To the extent there is any conflict between the terms
of this Agreement and (i) any Option Agreement or Restricted Stock Agreement
respecting acceleration, vesting or exercisability of stock options or
restricted stock during Executive's employment or thereafter, (ii) the Company's
Amended and Restated Income Deferral Plan
- 18 -
respecting the ability of Executive to receive Accrued Benefits under such plan
(and the timing of any such payments), or (iii) any other agreement, plan or
document to which Executive and the Company are parties or that governs any
benefits received by Executive, the provisions of this Agreement shall supersede
any conflicting provisions in those agreements, plans or documents.
(o) References to Plans. Any reference in this Agreement to a
specific employee benefit plan, program or arrangement maintained by the Company
shall be deemed to be a reference to such plan, program or arrangement, as it
may be amended from time to time, and to any successor thereto. Nothing
contained herein shall be interpreted as requiring the Company to keep any plan,
program or arrangement in effect.
(p) Disposition of Stock or Exercise of Options. Subject to
applicable securities laws and any regulations of the Company relating to the
trading of Common Stock applicable generally to Senior Executives and so long as
Executive meets the Stock Ownership Requirement, Executive shall be required to
give three (3) business days prior written notice to the Chairman of the Board
of his intention to sell any Common Stock or to exercise any Options, but shall
have no other restrictions on his ability to acquire or sell any Common Stock or
to exercise any Options.
(Signatures on Next Page)
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IN WITNESS WHEREOF, GTECH Holdings Corporation and GTECH Corporation have
caused this Agreement to be executed by their duly authorized officers, and
Executive has signed this Agreement, all as of the day and year first above
written.
GTECH HOLDINGS CORPORATION
Attest:_____________________________ By:_______________________
Name: Name:
Title: Title:
GTECH CORPORATION
Attest:_____________________________ By:_______________________
Name: Name:
Title: Title:
Witness: W. XXXXX XXXXXX
____________________________________ __________________________
Address:
20
APPENDIX A
SUMMARY OF CERTAIN BENEFITS AND ARRANGEMENTS
1. Vacation. Executive shall be entitled to a paid vacation of four weeks
per year.
2. Life Insurance. Executive shall receive life insurance coverage in
accordance with the Company's policy in a manner comparable to Senior
Executives.
3. Medical. During the Term, the cost of Executive's annual physical
examination shall be borne by the Company. In addition, the Company shall
provide Executive and his Family with medical insurance in a manner comparable
to Senior Executives as maybe modified from time to time and on the following
additional terms:
(a) Such medical insurance shall be provided to Executive and his
Family during the Term and such medical insurance shall continue to be
provided to Executive and his Family after the expiration of the Term:
(i) to the extent expressly provided in Sections 5(c), 9(a),
9(c) and 9(d), plus for the following additional periods (such periods to be
applied on a cumulative basis);
(ii) during the eighteen (18) month non-compete time period
described in Section 11, plus an additional one (1) year period as a result of
Executive having remained an employee of the Company through the Effective Date;
(iii) for an additional period of one year if Executive
remains an employee of the Company through August 5, 2008;
(iv) for an additional period of two years if Executive
remains an employee of the Company through August 5, 2011;
(v) for an additional period of three years if Executive
remains an employee of the Company through August 5, 2014; and
(vi) until Executive attains age 65 if Executive qualifies
under the minimum requirements of the Company's Retirement Plan.
(b) Executive may participate at his own cost in the Company's
retirement health plan provided he satisfies the eligibility requirements of
such plan and that such plan continues to be made available by the Company.
(c) Notwithstanding the foregoing, Company shall not be obliged to
continue medical insurance for Executive after expiration of the Term (except to
the extent expressly provided in Section 9(d)) if and, to the extent Executive
qualifies for medical insurance benefits with spousal coverage from a successor
employer.
4. Annual Executive Deferred Compensation Contribution. The Company shall
contribute $70,000 each year to the Company's Executive Perquisites Plan for the
benefit of Executive.
5. Deferred Compensation and 401(k). Executive shall be entitled to
participate in the Company's 401(k) retirement plan and deferred compensation
plan in a manner similar to other Senior Executives.
6. Executive Tax Preparation. Executive shall be entitled to tax
preparation and financial planning services, at the Company's expense, up to a
maximum annual expense of $5,000.00.
7. Attorneys Fees. The Company shall reimburse Executive for all
reasonable attorneys fees and reasonable related expenses incurred in the
negotiation and finalization of this Agreement.
