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November 4, 1999
EMPLOYMENT SEVERANCE AGREEMENT AND RELEASE
GTECH Holdings Corporation ("Holdings"), GTECH Corporation, Holdings's direct
wholly-owned subsidiary ("GTECH" or the "Company") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇.
▇▇▇▇▇▇") hereby agree as follows:
1. a. ▇▇. ▇▇▇▇▇▇ hereby resigns as Senior Vice President and Chief
Financial Officer and Treasurer of Holdings and as an officer and
director of all direct and indirect subsidiaries and other affiliates of
GTECH effective on October 22, 1999 (the "Resignation Date").
b. Separate from his resignation as an officer, ▇▇. ▇▇▇▇▇▇ hereby
resigns as an employee of GTECH effective on the Resignation Date.
2. a. On the Resignation Date GTECH will pay ▇▇. ▇▇▇▇▇▇ for any unused
vacation time earned by him through the Resignation Date.
b. Upon the expiration of the Revocation Period (as hereinafter
defined), GTECH shall be obligated to continue to pay ▇▇. ▇▇▇▇▇▇ his
base salary in effect on the Resignation Date, which amount is $309,900
per annum, for the period beginning on October 23, 1999 through and
including April 23, 2001, in bi-weekly installments in accordance with
GTECH's payroll policies in effect from time-to-time.
c. All such amounts shall be subject to required federal and state
withholdings and applicable benefit deductions.
3. a. Upon GTECH's receipt of invoice and supporting documents from ▇▇.
▇▇▇▇▇▇, GTECH shall reimburse Mr. and ▇▇▇. ▇▇▇▇▇▇ for the cost of their
benefits under the Consolidated Omnibus Budget Reconciliation Act
(COBRA), if any, commencing December 1, 1999 and continuing through and
including April 23, 2001. Invoices shall be submitted for each calendar
quarter, excepting the final invoice. Thereafter, GTECH shall respect
▇▇. ▇▇▇▇▇▇'▇ rights, if any, to continued medical coverage at his own
expense under the Consolidated Omnibus Budget Reconciliation Act.
b. GTECH will pay the premiums to continue ▇▇. ▇▇▇▇▇▇'▇ basic life
insurance policy, having a face value of $500,000, through April 23,
2001.
4. Upon the expiration of the Revocation Period, GTECH shall be obligated
to provide the following other benefits to ▇▇. ▇▇▇▇▇▇ under this
Agreement:
a. GTECH will provide ▇▇. ▇▇▇▇▇▇ with executive outplacement assistance
at Right Associates in Providence or other mutually agreed office until
the earlier of his
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resumption of full-time employment or the expiration of the twelve month
period following the commencement of outplacement assistance.
Outplacement assistance shall commence at such time as ▇▇. ▇▇▇▇▇▇ elects
but no later than January 31, 2000. GTECH will not contest ▇▇. ▇▇▇▇▇▇'▇
eligibility to claim unemployment compensation.
b. ▇▇. ▇▇▇▇▇▇ may continue to use his company-leased automobile for a
period of thirty days after the Resignation Date, during which period
GTECH will pay the monthly lease payments and ▇▇. ▇▇▇▇▇▇ will pay for
all operating and maintenance costs. GTECH agrees to make said
company-leased automobile available for purchase by ▇▇. ▇▇▇▇▇▇
immediately upon expiration of said thirty day period, for the sum of
one thousand two hundred dollars ($1,200), and ▇▇. ▇▇▇▇▇▇ agrees to
purchase said automobile for the said sum of $1,200 immediately upon the
expiration of said thirty day period.
c. GTECH agrees to sell to ▇▇. ▇▇▇▇▇▇, and ▇▇. ▇▇▇▇▇▇ agrees to purchase
from GTECH, ▇▇. ▇▇▇▇▇▇'▇ office computer and home fax machine, at
current net book value, as soon as reasonably practicable. Said sale is
made "as is" and "where is" and GTECH disclaims all warranties,
including without limitation all warranties of merchantability or
fitness for a particular purpose. ▇▇. ▇▇▇▇▇▇ shall be responsible for
transferring the cellular phone service to his name, as it will be
cancelled by the Company on the Resignation Date.
d. ▇▇. ▇▇▇▇▇▇ shall be entitled at GTECH's expense and in accordance
with GTECH policy to tax planning and preparation assistance for tax
returns for calendar years 1999 and 2000.
e. ▇▇. ▇▇▇▇▇▇ shall be entitled to the use of the balance of his
Executive Perquisites Account for 1999, if any.
5. a. As of the Resignation Date, ▇▇. ▇▇▇▇▇▇ will no longer be eligible to
receive long-term disability benefits or to participate in the GTECH
401(K) and Profit Sharing Plan, and the Holdings Supplemental Retirement
Plan. GTECH will notify ▇▇. ▇▇▇▇▇▇ in writing concerning his options
with regard to his 401(K) account.
b. In accordance with the 1994 GTECH Holdings Corporation Stock Option
Plan and the 1997 GTECH Holdings Corporation Stock Option Plan, any and
all options ("Options") which have been granted to ▇▇. ▇▇▇▇▇▇ under said
Plans and which have vested but have not been exercised by ▇▇. ▇▇▇▇▇▇
shall be forfeited at the close of business on the Resignation Date. All
unvested Options shall be forfeited at the close of business on the
Resignation Date.
6. a. ▇▇. ▇▇▇▇▇▇ acknowledges that the aggregate payments and benefits
referred to herein are greater than those to which he is entitled under
any existing GTECH separation or benefit plan. In consideration of the
foregoing, ▇▇. ▇▇▇▇▇▇ hereby releases and forever discharges GTECH, its
present and former directors, officers, employees, agents, subsidiaries,
shareholders, successors and assigns from any and all liabilities,
causes of
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action, debts, claims and demands both in law and in equity, known or
unknown, fixed or contingent, which he may have or claim to have based
upon or in any way related to employment or termination of employment by
GTECH, including, but not limited to: (i) the letter from GTECH to ▇▇.
▇▇▇▇▇▇ dated December 22, 1995, attached hereto as Annex 1, including
without limitation the Separation Agreement between GTECH and ▇▇. ▇▇▇▇▇▇
referenced in numbered paragraph 8 therein (the "Offer Letter"), and
(ii) the Change of Control Agreement between Holdings and ▇▇. ▇▇▇▇▇▇,
dated July 15, 1997, (the "Change of Control Agreement") and hereby
covenants not to file a lawsuit or charge to assert such claims,
including but not limited to claims arising under the Federal Age
Discrimination in Employment Act, and any other federal, state or local
laws prohibiting employment discrimination or claims growing out of any
legal restrictions on GTECH's right to terminate its employees.
Notwithstanding the foregoing, ▇▇. ▇▇▇▇▇▇ does not release or waive his
right to ▇▇▇ GTECH and/or Holdings to enforce GTECH's and/or Holdings
obligations under this Employment Severance Agreement and Release and
Annex 3, Indemnification Agreement, thereto.
b. For good and valuable consideration, the receipt of which is hereby
acknowledged, in the absence of willful and demonstrable wrongdoing by
▇▇. ▇▇▇▇▇▇, GTECH and Holdings hereby release, forever discharge, and
convenant not to ▇▇▇ ▇▇. ▇▇▇▇▇▇ (and/or his heirs, executors,
administrators, and legatees) of, from and for any and all liabilities,
causes of action, debts, claims and demands both in law and in equity,
known or unknown, fixed or contingent, which they may have or claim to
have based upon or in any way related to his employment or termination
of employment by GTECH. Notwithstanding the foregoing, GTECH and
Holdings do not release, waive any claims, or covenant not to ▇▇▇ ▇▇.
▇▇▇▇▇▇ to enforce ▇▇. ▇▇▇▇▇▇'▇ obligations under this Employment
Severance Agreement and Release and Annex 3, Indemnification Agreement,
thereto.
7. ▇▇. ▇▇▇▇▇▇ understands that various state and federal laws prohibit
employment discrimination based on age, sex, race, color, national
origin, religion, handicap or veteran status. These laws are enforced
through the Equal Employment Opportunity Commission (EEOC), Department
of Labor and State Human Rights Agencies. ▇▇. ▇▇▇▇▇▇ acknowledges that
he has been advised by GTECH to discuss this Agreement with his attorney
and has been encouraged to take this Agreement home for up to twenty-one
(21) days so that he can thoroughly review it and understand the effect
of this Agreement before acting on it.
8. ▇▇. ▇▇▇▇▇▇ acknowledges and agrees to continue to be bound by the
provisions of the Restrictive Agreement - Employee/Applicant executed by
him on February 1, 1996, a copy of which is attached hereto as Annex 2
and incorporated by reference herein.
9. In consideration of the aggregate payments and benefits he is receiving
hereunder, in the event a court of competent jurisdiction restricts the
time and scope of the non-competition and confidentiality provisions of
the Restrictive Agreement, ▇▇. ▇▇▇▇▇▇ further covenants with GTECH as
follows and expressly agrees that all payments and benefits due Mr.
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▇▇▇▇▇▇ under this Agreement shall be subject to ▇▇. ▇▇▇▇▇▇'▇ compliance
with the following provisions (all references to "GTECH" herein to be
deemed to refer to Holdings and its subsidiaries).
a. Confidentiality Information. ▇▇. ▇▇▇▇▇▇ shall not knowingly use for
his own benefit or disclose or reveal to any unauthorized person, any
trade secret or other confidential information relating to GTECH, or to
any of the businesses operated by it, including, without limitation, any
customer lists, customer needs, price and performance information,
processes, specifications, hardware, software, devices, supply sources
and characteristics, business opportunities, marketing, promotional
pricing and financing techniques, or other information relating to the
business of GTECH, and ▇▇. ▇▇▇▇▇▇ confirms that such information
constitutes the exclusive property of GTECH. Such restriction on
confidential information shall remain in effect until such time as the
information is (i) generally available in the industry, (ii) disclosed
in published literature or (iii) obtained by ▇▇. ▇▇▇▇▇▇ from a third
party without binder of secrecy. ▇▇. ▇▇▇▇▇▇ agrees to return to GTECH
any physical embodiment of such confidential information within seven
(7) days of the execution hereof.
b. Non-competition. For the period ending April 23, 2001, ▇▇. ▇▇▇▇▇▇
shall not engage, directly or indirectly (which includes, without
limitation, owning, managing, operating, controlling, being employed by,
giving financial assistance to, participating in or being connected in
any material way with any person or entity), anywhere in any area which
involves (i) the transmission of data via electronic means and (ii)
elements of chance and/or skill, consideration for the opportunity to
participate and (iii) a prize; provided, however, that ▇▇. ▇▇▇▇▇▇'▇
ownership as a passive investor of less than one percent (1%) of the
issued and outstanding stock of publicly held corporation so engaged
shall not by itself be deemed to constitute such competition. Further,
during the period ending April 23, 2001, ▇▇. ▇▇▇▇▇▇ shall not: (i)
solicit any of GTECH's employees to leave the employment of GTECH or
(ii) solicit any of the GTECH's customers to cease doing business with
GTECH.
c. Remedies. ▇▇. ▇▇▇▇▇▇ recognizes that the possible restrictions on ▇▇.
▇▇▇▇▇▇'▇ activities which may occur as a result of his performance of
his obligations under this Section 9 are required for the reasonable
protection of GTECH and its investments, and ▇▇. ▇▇▇▇▇▇ expressly
acknowledges that such restrictions are fair and reasonable for that
purpose. ▇▇. ▇▇▇▇▇▇ further expressly acknowledges that damages alone
will be an inadequate remedy for any breach or violation of any of the
provisions of this Section 9, and that GTECH, in addition to all other
remedies hereunder, 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. If any
of the provisions of this Section 9 are held to be in any respect an
unreasonable restriction upon ▇▇. ▇▇▇▇▇▇ 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.
10. After the Resignation Date, ▇▇. ▇▇▇▇▇▇ shall make himself available,
upon reasonable
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notice, in any third party claims, investigations, litigation or similar
proceedings to answer any questions relating to his employment or
actions as an employee, officer or director of GTECH or Holdings,
including without limitation attendance at any deposition or similar
proceeding. GTECH shall pay ▇▇. ▇▇▇▇▇▇'▇ expenses, including reasonable
attorneys' fees, but shall not be obligated to compensate him or any
subsequent employer for his time.
11. ▇▇. ▇▇▇▇▇▇ and Holdings agree to enter into the Indemnification
Agreement in the form attached hereto as Annex 3 simultaneously with the
execution of this Agreement.
12. ▇▇. ▇▇▇▇▇▇ shall immediately return to GTECH any GTECH property in his
possession which was not purchased pursuant to Section 4(c).
13. ▇▇. ▇▇▇▇▇▇ shall at no time make any derogatory or disparaging comments
regarding GTECH or Holdings, their business, or their present or past
directors, officers or employees. Senior officers of GTECH and Holdings
shall at no time make any derogatory or disparaging comments regarding
▇▇. ▇▇▇▇▇▇.
14. The execution of this Agreement shall not be construed as an admission
of a violation of any statute or law or breach of any duty or obligation
by either GTECH or ▇▇. ▇▇▇▇▇▇.
15. This Agreement is confidential and shall not be made public by either
GTECH or ▇▇. ▇▇▇▇▇▇ except as required by law or if necessary in order
to enforce this Agreement.
16. The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid and
unenforceable provisions were omitted. If any of the provisions of this
Agreement are held to be in any respect an unreasonable restriction upon
▇▇. ▇▇▇▇▇▇ 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.
17. This Agreement is personal to ▇▇. ▇▇▇▇▇▇ and may not be assigned by him.
However, in the event of ▇▇. ▇▇▇▇▇▇'▇ death, all benefits payable
hereunder shall be payable to his estate.
18. This Agreement is made pursuant to and shall be governed by the laws of
the State of Rhode Island, without regard to its rules regarding
conflict of laws. The parties agree that the courts of the State of
Rhode Island, and the Federal Courts located therein, shall have
exclusive jurisdiction over all matters arising from this Agreement. ▇▇.
▇▇▇▇▇▇ hereby acknowledges that service of process by certified mail
(return receipt requested) shall be deemed to be proper service of
process for such purposes.
19. This Agreement together with the Indemnification Agreement entered into
pursuant to Section 11 hereof and the Restrictive
Agreement-Employee/Applicant referred to in Section 8 hereof, contains
the entire understanding between ▇▇. ▇▇▇▇▇▇ and GTECH,
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supersedes all prior agreements, written or oral, with respect to the
subject matter hereof (except as expressly provided herein), and may not
be changed orally but only by an agreement in writing signed by the
party against whom enforcement of any waiver, change, modification,
extension or discharge is sought. ▇▇. ▇▇▇▇▇▇ acknowledges that he has
not relied upon any representation or statement, written or oral, not
set forth in this Agreement.
20. ▇▇. ▇▇▇▇▇▇ may revoke this Agreement at any time during the seven-day
period following the date of his signature below (the "Revocation
Period") by delivering written notice of his revocation to ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Senior Vice President, Human
Resources. This Agreement shall become effective upon the expiration of
the Revocation Period.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date set
forth below.
GTECH Holdings Corporation Attest:
By /s/ ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------- -----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: Chairman of the Board
Date: 11/4/99
------------------------------
GTECH Corporation Attest:
By /s/ PA ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- --------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Date: 11/4/99
-----------------------------
Witness:
x: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------- --------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Date: 11/4/99
----------------------------
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Annex 1
[GTECH Letterhead]
December 22, 1995
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇▇:
On behalf of GTECH Corporation, I am pleased to offer you the position of Senior
Vice President and Chief Financial Officer, located at our World Headquarters in
West Greenwich, Rhode Island.
Your annual starting salary will be Three Hundred Thousand Dollars
($300,000.00), payable in bi-weekly installments of Eleven Thousand, Five
Hundred Thirty Eight dollars and Forty-seven cents ($11,538.47). Please
understand your employment will be "at will", and that the quotation of an
annual salary is for convenience and is not intended to indicate any proposed
term of employment.
Within thirty days of joining GTECH you will receive a Fifty Thousand dollar
($50,000) sign-on bonus.
Further management will recommend to the Board of Directors that you be granted
the option to purchase One Hundred Thousand (100,000) shares of GTECH common
stock, based on the terms of the plan.
In addition to your base salary, your offer includes eligibility to participate
in the GTECH Corporation's Management Incentive Plan which will normally qualify
you for an annual "Target" bonus of 100% of your base salary, depending on your
individual and Corporate performance compared to a number of predetermined,
mutually agreed upon objectives. These measures will also include a
discretionary element for management's assessment of your contribution to the
Company. For the fiscal year 1997, you will receive a guaranteed bonus pay out
of One Hundred and Fifty Thousand Dollars ($150,000), payable at the normal time
of bonus distribution, in accordance with the bonus eligibility terms of the
plan.
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In connection with your employment and subject to generally applicable company
policy, you will also receive the following benefits:
1. Participation in the Executive Perquisite Plan which entitles
you to a total of $27,500 (net) annually to be spent on a menu
of items developed by GTECH, with selection of the appropriate
items at your discretion. These funds, which are considered
taxable income, will be "grossed up" from a tax point of view at
the end of each year.
2. A vehicle and related operating expenses, provided by GTECH.
3. Vacation accrued at a rate of four (4) weeks a year.
4. A $500,000 Group Life Insurance Policy at GTECH's expense. Other
optional insurance plans are also available through normal GTECH
plans.
5. Annual Executive Tax Preparation and Financial Statement
Services.
6. Annual Executive Physical Examination.
7. Participation in all other Company Benefit Plans (enclosed).
8. A Separation Agreement providing for twelve months of salary
continuation in the form of the attached. Additionally, the
company will enter into a "Change of Control" agreement with you
which will provide you with an additional one year of Base Pay
if you are involuntarily terminated for reasons other than "'for
Cause", within one year of a "Change of Control", as defined in
the actual agreement. This "Change of Control" agreement will be
executed within 60 days of your joining GTECH.
9. Relocation expense reimbursement per Company Guidelines.
This offer of employment is further subject to and contingent upon the
following:
A. Your execution of a Restrictive Agreement, which will include,
but not be limited to, non-disclosure and non-competitive
language in favor of GTECH, in the form attached, prior to
commencement of employment.
B. Your execution of GTECH's Conflict of Interest and Ethical
Conduct Agreement in the form attached, prior to commencement of
employment.
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C. Your receiving a security clearance from GTECH (please return
the enclosed release by fax (▇▇▇) ▇▇▇-▇▇▇▇) and satisfactory
reference checks.
D. Your completion of an 1-9 form in compliance with the National
Immigration Reform Act.
E. Your full cooperation in making all personal and financial
disclosures as the Company may require for purposes of
disclosure to governmental authorities.
This letter constitutes our employment offer to you in its entirety, and
supersedes all prior discussions related to your prospective employment GTECH
and/or its subsidiaries.
▇▇▇, we are enthusiastic about your potential contribution to GTECH Corporation
and look forward to working with you.
Should you elect to accept this offer, please acknowledge by signing the
enclosed copy of this letter where indicated and returning it to me by fax (401)
▇▇▇-▇▇▇▇.
Sincerely,
GTECH CORPORATION
/s/ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President, Human Resources
cc: ▇▇▇ ▇. ▇▇▇▇▇▇▇
I hereby accept the above-described position with GTECH Corporation, upon the
terms and conditions set forth herein.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 01-15-96
-------------------------------- --------------------------
Signature Date
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AGREEMENT
AGREEMENT, dated this 15th day of July, 1997, by and between ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ("Executive") and GTECH HOLDINGS CORPORATION, a Delaware corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the Company wishes to assure itself of continuity of management
in the event of any actual or threatened "Change in Control" (as defined below)
of the Company; and
WHEREAS, the Company and the Executive desire to embody in a written
agreement the terms and conditions under which the Executive shall be employed
by the Company in the event of any actual or threatened Change in Control of the
Company;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
Section 1. Definitions.
1.1 Act. "Act" means the Securities Exchange Act of 1934, as amended
to date.
1.2. Affiliate. "Affiliate" means any corporation which is a
subsidiary of the Company within the definition of "subsidiary corporation"
under Section 424(f) of the Code.
1.3. Board. "Board" means the Board of Directors of the Company.
1.4. Cause. "Cause" means (i) the Executive's engaging in serious
misconduct that is injurious to the Company, (ii) the Executive's having been
convicted of, or entered a plea of nolo contendere to a crime that constitutes a
felony, (iii) the breach by the Executive of any written covenant or agreement
with the Company not to disclose any information pertaining to the Company or
not to compete or interfere with the Company, or (iv) abuse of illegal drugs or
other controlled substances, or habitual intoxication.
1.5. Change In Control. "Change in Control" means the happening of
any of the following:
(i) the members of the Board at the beginning of any
consecutive twenty-four calendar month period (the
"Incumbent Directors") cease for any reason other than due
to death to constitute at least a majority of the members
of the Board, provided that any director whose election,
or nomination for election by the Company's stockholders,
was approved by a vote of at least a majority of the
members of the Board then still in office who were
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members of the Board at the beginning of such twenty-four
calendar month period, shall be deemed an Incumbent
Director;
(ii) 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 the greater of 30%
or more of the combined voting power of the Company's then
outstanding securities;
(iii) 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
(iv) the purchase of 30% or more of the 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.
1.6. Code. "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.
1.7. Effective Date. "Effective Date" means the date on which a Change
in Control occurs. Anything in this Agreement to the contrary notwithstanding,
if a Change in Control occurs and if the Executive's employment with the Company
is terminated prior to the date on which the Change in Control occurs, and if it
is reasonably demonstrated by the 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 for all purposes of this
Agreement, the "Effective Date" shall mean the date immediately prior to the
date of such termination of employment.
1.8 Executive Perquisite Program. "Executive Perquisite Program" means
the Company's Executive Perquisite Program in effect on the date hereof, as the
same may be amended from time to time.
1.9 Non-Qualified Plans. "Non-Qualified Plans" means the Company's
Supplemental Retirement Plan in existence as of the date hereof, and any other
unfunded, non-qualified, deferred compensation, incentive compensation or
retirement plan adopted by the Company
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subsequent to the date hereof, and/or any successor plan or plans.
1.10. Option. "Option" means any option to purchase shares of Stock
granted to Executive pursuant to the Company's 1994 Stock Option Plan, as
amended from time to time, the Company's 1997 Stock Option Plan, as amended from
time to time, or any other stock option plan adopted by the Company.
1.11 Retirement Plan. "Retirement Plan" means the Company's
profit-sharing and 401(k) retirement plan which is qualified under Section
401(a) and 501(a) of the Code in existence as of the date hereof and any other
such plan adopted by the Company subsequent to the date hereof and/or any
successor plan or plans.
1.12. Stock. "Stock" means the Common Stock $.01 par value per share of
the Company.
1.13. Term of Employment. "Term of Employment" means the period
commencing on the Effective Date and ending on the earliest of:
(a) Executive's death or "Total Disability" (as defined
below);
(b) Termination of the Term of Employment pursuant to Section 4
below;
(c) Three (3) years from the Effective Date.
Neither the expiration of the Term of Employment nor the termination of this
Agreement will relieve the Company of the obligation to provide Executive, in
accordance with the terms hereof, the payments, benefits and coverage to which
he has become entitled under this Agreement.
1.14. Total Disability. "Total Disability" shall mean permanent and
total disability as determined under the Company's long term disability program.
Section 2. Employment.
2.1. Capacity and Situs of Employment. The Company agrees to employ
Executive throughout the Term of Employment, during which (a) Executive's
position (including reporting relationships, status, offices and titles),
authority, duties and responsibilities shall be at least equal in all material
respects with the highest position, authority, duties and responsibilities held
by, exercised by and assigned to the Executive at any time during the six month
period immediately preceding the Change in Control, and (b) Executive's situs of
employment will be at the Company's executive headquarters in West Greenwich,
Rhode Island or such other situs (the "Other Situs") to which Executive may be
assigned prior to the Effective Date (the Company's executive headquarters or
the Other Situs, whichever is applicable to the Executive, is herein referred to
as the "Applicable Situs") or such other location within a fifty (50) mile
radius of the Applicable Situs (hereinafter referred to as the "Area") to which
the Applicable Situs be moved.
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2.2. Services of the Executive. Executive agrees, subject to Sections
4.3 and 4.4 below, to remain in the Company's employ during the Term of
Employment, on the terms described in Section 2.1.
Excluding periods of vacation and sick leave to which Executive is
entitled, Executive agrees to devote substantially all of his attention, energy
and time during normal business hours to the business and affairs of the Company
and, to the extent necessary, to discharge responsibilities assigned to
Executive hereunder, to use his best efforts to perform such responsibilities
faithfully and efficiently. Executive may (a) serve on corporate, civic and
charitable boards or committees, (b) deliver lectures and fulfill speaking
engagements and (c) manage personal investments, so long as such activities do
not interfere with the performance of Executive's responsibilities. To the
extent that any such activities have been conducted by Executive prior to the
Change in Control, such prior conduct, and any subsequent conduct similar in
nature and scope, shall not be deemed to interfere with the performance of
Executive's responsibilities.
Section 3. Compensation and Benefits During the Term of Employment.
3.1. Compensation. The Company will pay as compensation to Executive for
his services as an employee during the Term of Employment:
(a) base annual salary at a rate equal to or greater than the rate
of base salary in effect for Executive immediately prior to the
Effective Date; plus
(b) for the year in which a Change in Control occurs, the greater
of (i) a bonus under the annual bonus plan(s) in effect as of the
Change in Control, calculated on the basis of the Company's
performance up to the Change in Control, and payable in accordance
with such plan(s) or (ii) an amount equal to the bonus paid to
Executive under the annual bonus plan(s) in effect for the year
immediately preceding the year in which the Change in Control
occurs, payable in accordance with the terms of such plan(s);
(c) in years subsequent to the year in which the Change in Control
occurs, an annual bonus which is equal to or greater than the
annual bonus paid in the year preceding the year in which the
Change in Control occurs, payable not later than provided for in
the plan(s) in effect for such preceding year.
3.2. Benefits. In addition, for his services as an employee during the
Term of Employment, Executive will receive all life, disability, accident and
group health insurance benefits, retirement, profit-sharing and deferred
compensation, and all other fringe benefits and payments under additional
benefit plans including the Executive Perquisite Program, all in an amount or
with a value at least equal to those benefits being provided by the Company to
the Executive immediately prior to the Effective Date, including but not limited
to the following:
(a) Executive will participate fully in the Company's Retirement Plan
and Non-Qualified Plans with benefit accruals and Company contributions
for the benefit of
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Executive under all such plans, and all other material provisions of
such plans, being at least the same as immediately prior to the
Effective Date, or Company shall pay to Executive annual cash payments
in advance, each at least being equal to the total value of such benefit
accruals and Company contributions under such plans for the last fiscal
year of the Company ending prior to the Effective Date;
(b) At no additional cost to Executive, Company shall continue to
provide coverage to Executive, together with his dependents and
beneficiaries, in all life insurance plans, accident and health plans,
Section 125 plans, and other welfare plans maintained or sponsored by
the Company, at a level and subject to terms which are at least as
favorable to Executive as the coverage provided immediately prior to the
Effective Date, or the Company shall pay to Executive the full value
thereof in cash annually in advance;
(c) Executive will participate fully in additional benefit plans offered
by the Company to executives immediately prior to or after the Effective
Date; and
(d) Executive will receive fringe benefits and job perquisites (which
shall not include any benefit referred to elsewhere in this Section 3),
including the Executive Perquisite Program, automobile in accordance
with the Company's Fleet Policy for Vice Presidents and Corporate
Officers as in effect as of the date hereof, paid vacation, club
memberships, applicable class travel, tax and financial statement
preparation assistance, paid financial assistance, executive physical
examinations, office, office furnishings and equipment and support
staff, at least equivalent to those provided to Executive immediately
prior to the Effective Date, as well as reimbursement, upon proper
accounting, of reasonable expenses and disbursements incurred by
Executive in the course of his duties.
3.3. Funding of Deferred Compensation Benefits. Contemporaneous with the
Change in Control, all benefits accrued by Executive under the terms of any of
the Company's Non-Qualified Plans shall become fully vested and the Company
shall immediately contribute to a rabbi trust for the benefit of the Executive
the full amount of all such accrued benefits. Not less frequently than
quarterly, the Company shall make additional contributions to the rabbi trust
equal to the full amount of any additional benefits accrued by Executive
pursuant to Section 3.2(a) hereof.
3.4. Acceleration of Vesting of Options. The Company hereby agrees that
on or prior to the date of a Change in Control any and all options awarded to
the Executive not previously exercisable and vested shall become fully vested
and exercisable. In addition, in the event the Company decides to terminate any
Options previously awarded to the Executive pursuant to the applicable
provisions of any stock option plan adopted by the Company in connection with a
corporate transaction (as that term is described in Section 424(a) of the Code),
the Company will give the Executive not less than fourteen days' notice prior to
any such termination and such notice shall not be given until any and all
Options previously awarded to Executive shall have become fully vested and
exercisable.
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Section 4. Termination of Employment
4.1. Compensation Prior To Termination. During the year in which either
(i) the Executive's employment is terminated during the Term of Employment for
any reason, or (ii) the Executive resigns during the Term of Employment in
accordance with Section 4.3(b) below, notwithstanding any other provision of
this Agreement, the Company and the Executive hereby agree that the Executive
shall have the right to receive base salary, annual bonuses, contributions to
Retirement Plans and Non-Qualified Plans, gross-up payments made to cover tax
liabilities (to the extent provided in such plans), and all other compensation,
benefits and payments earned or paid with respect to the period prior to the
date of termination of employment, all such payments or contributions to be made
at the times provided for in such plans or in accordance with Company policy as
in effect immediately prior to the Effective Date, except as expressly provided
below. For purposes of this Section 4.1, the amount of the annual bonuses earned
and the amount of the contributions to the Retirement Plans and Non-Qualified
Plans earned (i) shall be at least equal to the amounts paid to, or contributed
on behalf of, the Executive for the year immediately preceding the year in which
the termination of the Executive's employment occurs which amounts shall be
prorated based on the number of days in the year in which the termination of the
Executive's employment occurs which have passed prior to the date of the
termination of the Executive's employment, and (ii) shall be paid or contributed
on behalf of the Executive not later than 10 days after the date of termination
of employment. Nothing in this Section 4.1 shall in any way alter the
Executive's right to receive all the payments and rights and benefits described
in Sections 4.2 and 4.3(a).
4.2. (a) Termination other than for Cause. In the event Executive's
employment is terminated by the Company during the Term of Employment for any
reason other than Cause, the Company will pay Executive, as liquidated damages,
a lump sum cash payment, payable within ten (10) days of his termination, equal
to two and ninety-nine hundredths (2.99) times the sum of (i) 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 his behalf to the Company's
Retirement Plan, any Non-Qualified Plan, or a plan meeting the requirements of
Section 125 of the Code), plus (ii) the total cash bonus received by the
Executive from the Company during the most recent full fiscal year of the
Company pursuant to the Company's annual bonus plan(s), plus (iii) the maximum
amount allowable under the Executive Perquisite Program during the most recent
calendar year of the Company.
(b) Participation in Benefit Plans. In the event of a termination
described in Section 4.2(a) above, Executive, together with his dependents and
beneficiaries, will become fully vested in and continue following his
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 earlier of (a) the Executive's eligibility for comparable
benefit plans with another employer and (b) the third anniversary of
termination. Executive will also become fully vested in the Retirement Plan, 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
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equal to 2.99 times the average benefit accrued and/or Company contributions
made to the Retirement Plan and the Non-Qualified Plans over the last three
fiscal years. In addition, the Company shall provide Executive with
out-placement service through a bona fide out-placement organization acceptable
to Executive that, at a minimum, agrees to supply Executive with out-placement
counseling, a private office and administrative support including telephone
service until such time that Executive secures suitable employment, not to be
limited by Section 1.13 hereof.
4.3. Resignation By Executive - Constructive Termination.
(a) If Executive resigns during the Term of Employment in accordance
with Section 4.3(b) below, his employment will be deemed to have been terminated
by the Company for reasons other than Cause (and he will be deemed to have
offered to continue to provide services to the Company), and, notwithstanding
any provision herein to the contrary, he will be entitled to all the payments
and rights and benefits described in Sections 4.1 and 4.2, at the time provided
for therein.
(b) Executive may resign in accordance with this Section 4.3 upon the
occurrence of any of the following events (in each case, "Good Reason"):
(i) any reduction of, or failure to pay, Executive's base annual
salary or annual bonus in breach of Section 3.1 above;
(ii) any failure by the Company to provide the benefits required
by Section 3.2 above or to make any contribution to a rabbi
trust which might be due in accordance with Section 3.3
above;
(iii) assignment to Executive of any duties inconsistent in any
respect with his position (including the office to which he
reports, status, offices, and titles), authority, duties or
responsibilities as contemplated by Section 2.1 above or any
other action by the Company which results in a diminution of
such position, authority, duties or responsibilities;
(iv) as a result of the Change in Control and a change in
circumstances thereafter significantly affecting Executive's
position, including, without limitation, a change in scope
of the business or other activities for which he was
responsible immediately prior to the Change in Control, he
has been rendered substantially unable to carry out, or has
been substantially hindered in the performance of, any of
the authority, duties or responsibilities contemplated by
Section 2.1 above;
(v) the failure of the Company after a Change in Control to
comply with and satisfy Section 7.1 or 7.2 below;
(vi) relocation by the Company of its principal executive
offices, or any event that causes Executive to have his
principal location of work changed, to
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any location outside the Area;
(vii) any requirement by the Company that Executive travel away from
his office in the course of his duties significantly more than
the number of consecutive days or aggregate days in any
calendar year than was required of him prior to the Change in
Control; or
(viii) without limiting the generality or effect of the foregoing
any material breach of this Agreement by the Company or any
successor thereto or transferee of substantially all of the
assets thereof.
For purposes of this Agreement, any good faith determination of "Good Reason"
made by the Executive shall be presumptively correct.
(c) If Executive resigns during the Term of Employment in accordance
with Section 4.3(b) above, the Company shall have the right to request that the
Executive agree to remain as an employee of the Company during a transition
period of up to three months (the "Transition Period") and the Executive hereby
agrees that, if requested by the Company, he will remain as an employee of the
Company during the Transition Period. During the Transition Period, the Company
will continue to pay the Executive the Executive's base salary, annual bonus and
all other compensation and benefits on the same basis as such items were paid to
the Executive prior to his resignation.
4.4. Resignation by Executive. If Executive resigns during the Term of
Employment without Good Reason, the Executive shall have the right to receive
base salary, annual bonuses, contributions to Retirement Plans and all other
compensation and benefits earned during the calendar year of his resignation up
to the date of his resignation. For purposes of this Section 4.4, the amount of
the annual bonuses and the amount of the contributions to the Retirement Plan
shall be at least equal to the amounts paid to, or contributed on behalf of, the
Executive for the year immediately preceding the year in which the resignation
of the Executive occurs which amounts shall be prorated based on the number of
days in the year in which such resignation occurs which have passed prior to the
date of such resignation. In addition all vested Non-Qualified Plan benefits
shall be paid within thirty (30) days of resignation.
4.5. Termination for Cause. If Executive is dismissed by the Company for
Cause, he will not be entitled to the payments or benefits provided under
Section 4.2 hereof.
4.6. Dispute Resolution. All disputes between the parties to this
Agreement concerning the matters set forth herein shall be resolved exclusively
pursuant to the dispute resolution procedures of this Section 4.6. In
furtherance thereof, Executive or the Company, as the case may be, shall
initiate binding arbitration in Rhode Island before the American Arbitration
Association ("AAA") and under its rules by serving a notice to arbitrate upon
the other party hereto and AAA within 90 days of the occurrence of any dispute
hereunder that is unable to be resolved by negotiation between the parties. The
parties shall bear their respective costs in any such dispute resolution, except
that with respect to any such action initiated by the Executive, provided the
Executive initiates such action in good faith, the Company agrees (i) to
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pay the costs and expenses (including fees of counsel to the Executive) of any
such arbitration or judicial proceeding, and (ii) to pay interest to Executive
on any amounts found to be due to Executive hereunder during any period of time
that such amounts are withheld pending arbitration and/or judicial proceedings.
Such interest will be at the base or prime rate most recently announced by Rhode
Island Hospital Trust National Bank (or its successor) prior to the commencement
of the arbitration or litigation. The Company and Executive agree that any
arbitration award shall be binding and may be enforced by any court of competent
jurisdiction.
4.7. Death or Total Disability of the Executive.
(a) If Executive dies or suffers a Total Disability during the Term of
Employment, then this Agreement shall terminate and the Company, its successors
and assigns shall be relieved and discharged of any and all obligations
whatsoever to make further payment to Executive pursuant to the terms of this
Agreement after the date of death or Total Disability of Executive, except as to
base salary earned for services actually rendered and vacation pay accrued prior
to the date of death or Total Disability of Executive.
(b) If Executive dies or suffers a Total Disability following a
termination of employment which entitled him to payments and benefits under this
Section 4 but prior to receipt of all such payments and benefits, his
beneficiary (as designated to the Company in writing) or, if none, his estate,
will be entitled to receive all unpaid amounts and benefits due under this
Agreement.
4.8. Enforcement of Rights. Termination of Executive's employment,
whether or not giving rise to payments or benefits under this Section 4, will
not in any way prevent Executive from enforcing rights to payments or benefits
under Section 3 relating to periods during which he was employed.
Section 5. Certain Additional Payments by the Company.
(a) 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, but determined without regard to any additional payments
required under this Section 5) (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.
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(b) Subject to the provisions of Section 5(c), all determinations
required to be made under this Section 5, 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, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination. 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 Firm 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 be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 5(c) 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.
(c) 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 he 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:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) 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,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
(iv) permit the Company to participate in any proceedings relating
to such claim;
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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 ▇▇▇ 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 ▇▇▇ 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 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.
(d) 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
determinative 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.
Section 6. Payment of Fees, Costs and Expenses.
It is the intent of the Company that the Executive not be required to
incur the expenses associated with the enforcement of his rights under this
Agreement by litigation or other legal action or arbitration proceeding because
the cost and expense thereof would substantially detract from the benefits
intended to be extended to the Executive hereunder. Accordingly, if Executive
determines in good faith that the Company has failed to comply with any of its
obligations under this Agreement or if the Company or any other person takes any
action to declare this Agreement void or unenforceable, or institutes any
litigation or arbitration proceeding designed to deny, or to
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recover from, the Executive the benefits intended to be provided to the
Executive under Section 6 hereof, the Company will promptly, upon request of the
Executive in the event of the likelihood of a Change in Control or upon a Change
in Control, use its best efforts to secure an irrevocable standby letter of
credit (the "Letter of Credit"), issued by Rhode Island Hospital Trust National
Bank or another bank of comparable or greater size (the "Bank") for the benefit
of the Executive providing that the fees and expenses of counsel selected from
time to time by the Executive pursuant to this Section 6 or in proceedings
contemplated by Section 4.6 shall be paid, or reimbursed to the Executive if
paid by the Executive, on a regular, periodic basis upon presentation by the
Executive to the Bank of a statement or statements prepared by such counsel in
accordance with its customary practices. The Company shall pay all amounts and
take all action necessary to maintain the Letter of Credit during the Term of
Employment and for one (1) year thereafter and if, notwithstanding the Company's
complete discharge of such obligations, such Letter of Credit shall be
terminated or not renewed, the Company shall use its best efforts to obtain a
replacement irrevocable letter of credit drawn upon a commercial bank selected
by the Company and reasonably acceptable to the Executive, upon substantially
the same terms and conditions as contained in the Letter of Credit, or any
similar arrangement which, in any case, assures the Executive the benefits of
this Agreement without incurring any cost or expense for enforcement against the
Company or the defense thereof.
Section 7. Merger or Acquisition.
7.1. Assumption of Obligations. If the Company is at any time before or
after a Change in Control merged, consolidated or reorganized into or with any
other corporation or other entity (whether or not the Company is the surviving
entity), or if substantially all of the assets of the Company are transferred to
another corporation or other entity, the entity arising from such merger,
consolidation or reorganization, or the acquirer of such assets, shall (by
agreement in form and substance satisfactory to Executive) expressly assume the
obligations of Company under this Agreement.
7.2. Executive's Rights to Benefits. In the event of any merger,
consolidation, reorganization or sale of assets described above, nothing
contained in this Agreement will detract from or otherwise limit Executive's
right to or privilege of participation in any stock option or purchase plan or
restricted stock plan or any bonus, profit sharing, savings, pension, group
insurance, hospitalization or other incentive or benefit plan or arrangement
which may be or become applicable to executives of the corporation resulting
from such merger or consolidation or the corporation, acquiring such assets of
the Company.
7.3. References. In the event of any merger, consolidation,
reorganization or transfer of assets described above, references to the Company
in this Agreement shall, unless the context suggests otherwise, be deemed to
include the entity resulting from such merger or consolidation or the acquirer
of such assets of the Company.
Section 8. Change in Control Following Certain Circumstances.
Notwithstanding any provision herein to the contrary, should a Change in
Control occur subsequent to Executive's death, Total Disability or retirement
from the Company, the remainder
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of any benefits owed under the terms of any stock plans or other non-qualified
deferred compensation plan, including interest, shall be paid in full on the
date of the Change in Control.
Section 9. Termination of this Agreement.
Either the Company or Executive may, by giving 60 days written notice to
the other party, terminate this Agreement as of the third or any subsequent
annual anniversary of the occurrence of a Change in Control.
Section 10. Withholding of Taxes.
All payments required to be made by the Company hereunder to Executive
or his dependents, beneficiaries or estate will be subject to the withholding on
such amounts relating to tax and/or other payroll deductions as may be required
by law.
Section 11. Amendment.
No amendment, change or modification of this Agreement may be made
except in a writing, signed by or on behalf of both parties.
Section 12. Miscellaneous.
12.1. Binding Effect. The provisions of this Agreement shall be binding
upon and shall inure to the benefit of Executive, his executors, administrators,
legal representatives and assigns, and the Company and its successors and
assigns.
12.2. Governing Law. The validity, interpretation and effect of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Rhode Island.
12.3. Severability. The invalidity or enforceability of any provision
of this Agreement shall not affect the validity of any other provision.
12.4. No Set-Off. There shall be no right of setoff or counterclaim, in
respect of any claim, debt or obligation, against any payments to Executive, his
dependents, beneficiaries or estate provided for in this Agreement, and nothing
in this Agreement shall relieve the Company of its obligations to Executive
under any other agreement, plan, contract or arrangement. Subject to Section
12.6 hereof, no right, benefit or interest hereunder shall be subject to
anticipation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process or assignment by operation of
law. Any attempt, voluntary or involuntary, to effect any action specified in
the immediately preceding sentence shall, to the full extent permitted by law,
be null, void and of no effect. In no event shall the Executive be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and, except as otherwise provided in Section 4.2(b) hereof, such amounts shall
not be reduced whether or not the Executive obtains other employment.
Notwithstanding anything to the contrary in this Agreement, Executive shall
forfeit all future payments and
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benefits hereunder in the event that Executive is determined, pursuant to
procedures established in Section 4.6 hereof, to have materially breached any
written covenant or agreement between the Executive and the Company prohibiting
the disclosure of confidential information pertaining to the Company or
respecting competition or interference with the Company, provided that the
Company shall have given the Executive at least thirty (30) days prior written
notice of such breach and such breach shall not have been cured by the end of
such notice period.
12.5. Remedies. The Company and Executive agree that, because of the
unique nature of this Agreement, failure of either party to carry out or abide
by the obligations under this Agreement could cause irreparable injury;
accordingly, the parties agree that, in addition to any other remedies available
to either party, any such failure by either party TO perform or abide by this
Agreement shall be subject to appropriate equitable remedies, including specific
performance and injunctive relief.
12.6. Assignability. No right or interest to or in any payments shall be
assignable by the Executive; provided, however, that this provision shall not
preclude him from designating one or more beneficiaries to receive any amount
that may be payable after his death and shall not preclude the legal
representative of his estate from assigning any right hereunder to the person or
persons entitled thereto under his will or, in the case of intestacy, to the
person or persons entitled thereto under the laws of intestacy applicable to his
estate. The term "beneficiaries" as used in this Agreement shall mean a
beneficiary or beneficiaries so designated to receive any such amount, or if no
beneficiary has been so designated, the legal representative of the Executive's
estate.
12.7. Counterparts; Headings; References. This Change in Control
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. The headings of the sections of this Agreement are inserted for
convenience only and shall not constitute a part hereof. References to the
masculine or feminine gender (or to the singular or plural number) herein shall
mean the other such gender (or number), as appropriate.
12.8. Entire Agreement. This instrument contains the entire agreement of
the parties pertaining to the subject matter contained herein and supersedes and
is in lieu of any and all other arrangements pertaining to the subject matter
contained herein having effect as of the effective date.
12.9. Notices. All notices given hereunder shall be in writing and shall
be delivered personally or sent by prepaid registered or certified mail, return
receipt requested, addressed as follows or to such other address as may be
provided by any party hereto to the other party:
If to the Company: GTECH Holdings Corporation
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
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If to the Executive: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
All notices shall be deemed to be given on the date received at the
address of the addressee, or if delivered personally, on the date delivered.
IN WITNESS WHEREOF, the Company and Executive have each caused this
Agreement to be duly executed and delivered as of the date set forth above.
ATTEST: GTECH HOLDINGS CORPORATION
/s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ By:/s/ ▇▇ ▇▇▇▇▇▇▇▇
-------------------------- --------------------------------
Title: Senior Vice President
----------------------------
WITNESS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------- -----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Annex 2
RESTRICTIVE AGREEMENT - EMPLOYEE/APPLICANT
THIS AGREEMENT made this 01 day of February 1996 , by and between GTECH
Corporation, a Delaware corporation with offices at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ("GTECH"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual
residing at ________ , ____________ ("Employee").
W I T N E S S E T H:
WHEREAS GTECH has hired or is considering hiring Employee as an employee, and
Employee has agreed or is considering agreeing to perform certain services as an
employee for and on behalf of GTECH; and
WHEREAS as a condition to such relationship or such consideration thereof, GTECH
requires certain protections of its business interests,
NOW THEREFORE, in consideration of these presents and of the sum of One Dollar
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties, intending to be legally bound hereby, agree
as follows:
1. Definitions. The following terms shall have the meanings indicated
below:
The Company: GTECH and/or its parent, affiliates or
subsidiaries.
Services and Products: All gaming systems and equipment and all
other products, services and things which the Company markets or
provides or which to Employee's knowledge the Company plans to market or
provide.
Employment: As used herein, "Employment" shall mean all past,
present and future business activities relating to Services and Products
engaged in by Employee as an employee of the Company or as a negotiant
for such position, and "Employment" shall also mean the period of time
covered by such activities.
2. Confidential Information. Except as required pursuant to Employment, or
as authorized by GTECH in writing, Employee shall never directly or indirectly
use or disclose, and shall take all reasonable steps to prevent others from
using or disclosing any information, discovered or acquired by Employee during
or by virtue of Employment, which relates to the Company, its Services and
Products, or to any Invention (as defined in Section 3 hereof), except
information which through no fault of Employee is within the public domain or
widely known within the United States gaming industry ("Confidential
Information").
Immediately upon termination of Employment or when sooner requested by
GTECH Employee shall deliver to GTECH all records and other things containing or
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embodying Confidential Information within Employee's possession or control,
whether or not such records, things or information were generated by Employee.
3. Inventions. Employee hereby unreservedly assigns to GTECH all rights
Employee may have or hereafter acquire in any new information, concept or thing
(whether or not patentable) which is both (i) based upon or related to any
Confidential Information or Services and Products and (ii) generated during
Employment or within one year after termination thereof ("Invention").
Employee shall make prompt and full disclosure of each Invention to
GTECH and, at GTECH's request and expense, shall execute and/or assist GTECH in
executing formal applications for patents, copyrights or other commercial
protections anywhere in the world, and Employee shall do all other things deemed
by GTECH to be necessary or desirable to effect the full assignment and
protection of all the rights to Inventions herein granted to GTECH.
4. Non-Competition. During Employment and for three (3) years immediately
thereafter, Employee shall not disturb any business relationship between GTECH
and its employees, dealers, customers, suppliers or other business associates.
During Employment and for eighteen (18) months immediately thereafter, Employee
shall not directly or indirectly engage in any activity (if such activity is
reasonably related to any activity engaged in by Employee as an employee of the
Company) in conjunction with and to the benefit of any business or endeavor
which is reasonably deemed by GTECH to be, or about to be in competition with
the Services and Products anywhere in the world where GTECH is then doing or
pursuing business or is to Employee's knowledge about to do or pursue business.
Employee shall promptly notify GTECH of any change in address,
on-Company employment or business activity occurring within eighteen (18) months
after termination of Employment. Such notice shall include the name and address
of each such employer or business associate as well as the nature of each such
non-Company employment or business activity.
5. Games. If Employee is or shall become an employee of the Company, neither
Employee nor any members of Employee's household or immediate family shall,
during such employment, participate in any lottery or other game marketed or
provided by the Company, and all such persons are prohibited from claiming or
receiving any benefit as a result of such prohibited participation.
6. Scienter. Employee represents that he/she has read and fully understands
this Agreement, having consulted such persons as he/she deems appropriate
regarding its scope and effect.
7. Construction
a. Except as may otherwise be provided herein, this writing
represents the entire Agreement and understanding of the parties
with respect to the
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subject matter hereof, and supersedes all prior agreements and
understandings of the parties in respect thereto.
b. Nothing contained herein shall be construed as giving Employee
any right to employment with the Company.
c. In case any one or more of the provisions contained in this
Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the enforceability of any other
provisions of this Agreement. If any one or more of the
provisions contained herein shall for any reason be held to be
excessively broad as to duration, scope, activity or subject, it
shall be construed, by limiting or reducing it, so as to be
enforceable to the extent compatible with the applicable law as
it shall then appear. Employee acknowledges that the duration,
territorial and other restrictions set forth herein are, at this
time, reasonable to protect GTECH's business interests.
d. This Agreement shall not be modified except in writing signed by
all parties hereto.
e. No waiver of any provisions of this Agreement shall be effective
unless agreed to in writing by the party against whom such waiver
is sought to be enforced. Waiver of any default or breach
hereunder shall not constitute a waiver of any other default or
breach whether similar or otherwise.
f. Section headings are for convenience only and do not form any
part of this Agreement and shall not affect the meaning thereof.
g. The validity, interpretation and enforcement of this Agreement
shall be governed by the laws of Rhode Island other than any law
of Renvoir.
8. Binding Effect.
a. This Agreement shall be binding upon and inure to the benefit of
GTECH its legal representatives and permitted assigns and upon
Employee, his/her legal representatives, heirs, executors and
administrators.
b. This Agreement shall be assignable by the Company in whole or in
part, to any successor to substantially all of any major portion
of the Company's business. This Agreement is not assignable by
Employee.
c. The provisions of this Agreement shall survive termination of
Employment.
d. In addition to any other legal and/or equitable remedies
available to GTECH for the enforcement of the terms hereof, GTECH
shall be entitled to specific performance and to injunctive
relief against any actual or actively contemplated violation
thereof, including without limitation, ex parte temporary
restraining orders without proof of irreparable harm, lack of
alternatives at law and other usual prerequisites therefore.
IN WITNESS WHEREOF, the parties hereto have individually, or by their duly
authorized representative(s), executed this Agreement as of the date first above
written.
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FOR GTECH CORPORATION BY:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇. North
------------------------------ ----------------------------------
Employee Signature
Title: CFO Title: Director, HR Admin
---------------------
------------------------------ ----------------------------------
Witness Witness
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Annex 3
INDEMNIFICATION AGREEMENT
This Agreement is made as of the 22nd day of October 1999, by and between GTECH
Holdings Corporation, a Delaware corporation (the "Corporation"), and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ("Indemnitee"), a director and/or officer of the Corporation.
BACKGROUND
Directors and Officers of public companies increasingly have been subjected to
suits by stockholders and third parties, and court decisions, in some instances,
have expanded significantly the scope of directors' and officers' personal
liability. It is deemed to be in the best interests of the Corporation and its
stockholders to attempt to alleviate the increased risks created by these
developments, in order to better enable the Corporation to attract and retain as
directors and officers the most capable persons. Toward this end, the
Corporation desires to enter into this Agreement with Indemnitee.
NOW, THEREFORE, in consideration of the premises, the Corporation and Indemnitee
do hereby agree as follows:
1. DEFINITIONS.
The following terms shall have the following definitions as used in this
Agreement:
(a) "Proceeding" includes any threatened, pending, or completed action,
suit or proceeding, whether brought in the right of the Corporation or otherwise
and whether of a civil, criminal, administrative or investigative nature, in
which Indemnitee may be or may have been involved as a party or otherwise, by
reason of the fact that Indemnitee is or was a director and/or officer of the
Corporation or any subsidiary of the Corporation, by reason of any action taken
by him or of any inaction on his part while acting as such a director and/or
officer, or by reason of the fact that he is or was serving, while a director or
officer of the Corporation, at the request of another corporation, partnership,
joint venture, trust or other enterprise, whether or not he is serving in such
capacity at the time any liability or expense is incurred for which
indemnification or reimbursement can be provided under this Agreement.
(b) "Expenses" includes, without limitation, expenses of investigations,
judicial or administrative proceedings or appeals, amounts paid in settlement by
or on behalf of Indemnitee, attorneys' fees and disbursements and any expenses
of establishing a right to indemnification under Paragraph 5 (c) of this
Agreement, but shall not include the amount of any judgments, fines or penalties
against Indemnitee.
(c) "Independent Legal Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and may include, without
limitation, regular outside counsel to the Corporation.
(d) References to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed with respect
to any employee benefit plan; and a
30
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the Corporation" as referred to in this Agreement.
2. OBLIGATION TO INDEMNIFY.
(a) General. Subject to Paragraph 8, the Corporation shall indemnify
Indemnitee if Indemnitee is a party to or threatened to be made a party to or
otherwise involved in any Proceeding (including a Proceeding against the
Indemnitee by or in the right of the Corporation to procure a judgment in its
favor) by reason of the fact that Indemnitee is or was a director and/or officer
of the Corporation or any subsidiary of the Corporation or is or was serving
while a director or officer of the Corporation, at the request of another
corporation, partnership, joint venture, trust or other enterprise, against all
Expenses, judgments, fines and penalties, actually and reasonably incurred by
Indemnitee in connection with the defense or settlement of such Proceeding, but
only if Indemnitee acted in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Corporation.
(b) Indemnification of Successful Party. Notwithstanding any other
provisions of this Agreement, to the extent that Indemnitee has been successful
on the merits or otherwise, in defense of any Proceeding or in defense of any
claim, issue or matter therein, including the dismissal of an action with or
without prejudice, Indemnitee shall be indemnified by the Corporation against
all Expenses actually and reasonably incurred in connection therewith.
(c) Indemnification of a Witness. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of being a director
or officer of the Corporation or any subsidiary of the Corporation or serving
while a director or officer of the Corporation at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, a witness in any Proceeding, he shall
be indemnified by the Corporation against all expenses actually and reasonably
incurred by him or on his behalf in connection therewith.
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3. ADVANCEMENT OF EXPENSES.
Subject to Paragraph 8, the Expenses actually and reasonably incurred by
Indemnitee pursuant to Paragraph 2 (a) in any Proceeding shall be paid by the
Corporation in advance at the written request of the Indemnitee. Indemnitee
hereby agrees promptly to repay the Corporation any amount so advanced to
Indemnitee if and to the extent that it is ultimately determined that Indemnitee
is not entitled to Indemnification for or to advancement of such Expenses.
4. CERTAIN RIGHTS AND OBLICATIONS CONCERNING THE DEFENSE, SETTLEMENT AND
PAYMENT OF CLAIMS.
(a) Application for Payment. Any indemnification or advance under
Paragraphs 2 and/or 3 shall be made by the Corporation no later than 45 days
after receipt of the written request of the Indemnitee, including therein or
therewith such documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to advancement of expenses or indemnification, as the
case may be, unless within said 45 day period a determination that the
Indemnitee has not met the relevant standards or requirements for
indemnification or advancement of Expenses set forth in Paragraphs 2 and/or 3 is
made (i) by the Board of Directors (by a majority vote of a quorum consisting of
Directors who were not parties to such Proceeding) or (ii) if a quorum of the
Board of Directors consisting of such non-party Directors is not obtainable or,
even if obtainable, such quorum so directs, by Independent Legal Counsel in
written opinion.
(b) Corporation May Assume Defense. The Corporation shall have the
right, upon notice to the Indemnitee, to assume the defense of any Proceeding
with Counsel reasonably satisfactory to the Indemnitee. If the Corporation
notifies the Indemnitee of its election to defend the Proceeding, the
Corporation shall have no liability for the costs (including attorneys' fees) of
the Indemnitee incurred in connection with the defense of such Proceeding
subsequent to such notice, unless (i) such costs (including attorneys' fees)
have been authorized by the Corporation, (ii) the Cooperation shall not have
employed counsel reasonably satisfactory to such Indemnitee to assume the
defense of such Proceeding or (iii) the Corporation shall not, in fact, have
employed counsel on a timely basis to assume the defense of such Proceeding.
Notwithstanding the foregoing, the Indemnitee may elect to retain counsel at the
Indemnitee's own cost and expense to participate with counsel retained by the
Corporation in the defense of such Proceeding.
(c) Settlement. The Corporation shall not be required to obtain the
consent of the Indemnitee to the Settlement of any Proceeding as to which the
Corporation has undertaken the defense of such Indemnitee if (i) the Corporation
assumes the payment of all liability therefore, and (ii) such settlement does
not impose any penalty upon, or restrict the activities of, the Indemnitee.
Indemnitee shall not settle any Proceeding with respect to which indemnification
or advancement of Expenses is sought hereunder, except with the consent of the
Corporation, which consent shall not be unreasonably withheld or delayed.
Failure of Indemnitee to obtain such consent shall release the Corporation from
its obligation to indemnify Indemnitee with respect to such settlement.
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(d) Notice of Claims. Indemnitee shall give to the Corporation notice in
writing as soon as practicable of any claim made against him for which
indemnification will or could reasonably be expected to be sought under this
Agreement, but the good faith failure of Indemnitee to give such notice shall
not constitute a forfeiture of Indemnitee's right of indemnification under this
Agreement. In addition, Indemnitee shall give the Corporation such information
and cooperation as it may reasonably request regarding any such claim and as
shall be within Indemnitee's power to provide.
5. REMEDIES OF INDEMNITEE.
(a) Disputes. In the event of any dispute with respect to entitlement to
payments under this Agreement, Indemnitee shall be entitled, at his option, to
an adjudication in an appropriate court of the State of Delaware, or in any
other court of competent jurisdiction, or in arbitration, of his entitlement to
such payments. Any arbitration shall be conducted pursuant to the rules then
obtaining of the American Arbitration Association in the City of Providence,
Rhode Island (or such other location as the Corporation and Indemnitee shall
mutually agree). Unless otherwise mutually agreed by the Corporation and
Indemnitee, (i) such arbitration shall be conducted before a panel of three
arbitrators, one of whom shall be selected by the Corporation, one by the
Indemnitee and the third by the other two arbitrators, and (ii) the arbitrator
selected by the other two arbitrators shall be required to have served as a
director and/or executive officer of a corporation which, during at least one
year of such service, had equity securities listed for trading on the New York
Stock Exchange or the American Stock Exchange or quoted on the National
Association of Securities Dealers Automated Quotations System. The decision of
the arbitrators shall be final and binding upon the parties and may be entered
in any court of competent jurisdiction. This arbitration provision shall be
specifically enforceable. Indemnitee shall commence any such proceeding seeking
an adjudication within 180 days following the earlier of (i) the expiration of
the 45 day period specified in Paragraph 4 (a) or (ii) the denial by the
Corporation of Indemnitee's demand for such payment.
(b) Proof. The burden of proving that indemnification or advances
requested by Indemnitee are not owed by the Corporation shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors or Independent Legal Counsel) to have made a determination prior to
the commencement of such adjudication proceeding by Indemnitee that
indemnification or advances are proper in the circumstances because Indemnitee
has met the applicable standard of conduct, nor an actual determination by the
Corporation (including its Board of Directors or Independent Legal Counsel) that
Indemnitee has not met such applicable standard of conduct, shall be a defense
to the adjudication proceeding by Indemnitee or create a presumption that the
Indemnitee has not met the applicable standard of conduct. The termination of
any Proceeding by judgment, order of court, settlement, conviction, or upon a
plea of nolo contendere, or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation.
(c) Expenses to Pursue Remedies. In the event that Indemnitee seeks an
adjudication proceeding to enforce his rights under, or to recover damages for
breach of, this Agreement, Indemnitee shall be entitled to recover from the
Corporation, and shall be indemnified by the
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Corporation against, any and all Expenses actually and reasonably incurred by
him in such proceeding, but only if he prevails therein. If it shall be
determined in said proceeding that Indemnitee is entitled to receive part but
not all of the indemnification or advancement of expenses sought, the Expenses
incurred by Indemnitee in connection with such proceeding shall be
appropriately prorated.
6. INDEMNIFICATION AND ADVANCEMENT HEREUNDER NOT EXCLUSIVE.
The indemnification and advancement of expenses provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee
may be entitled under the Corporation's Certificate of Incorporation or By-Laws,
any agreement, any vote of stockholders or disinterested Directors, the General
Corporation Law of the State of Delaware, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. Notwithstanding the foregoing, unless otherwise expressly agreed to by
the Corporation, the provisions of Paragraphs 4, 5, 8 and 10 (a) of this
Agreement shall govern the rights of Indemnitee to indemnification under the
Corporation's By-Laws.
7. PARTIAL INDEMNIFICATION.
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Corporation for some or a portion of the Expenses,
judgments, fines or penalties actually and reasonably incurred by him in the
investigation, defense, appeal or settlement of any Proceeding but not, however,
for the total amount thereof, the Corporation shall nevertheless indemnify
Indemnitee for the portion of such Expenses, judgments, fine or penalties to
which Indemnitee is entitled.
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8. EXCLUSIONS.
Notwithstanding any other provision of this Agreement, the Corporation
shall not be obligated under this Agreement to make payment in regard to any
liability or Expense of Indemnitee:
(a) if such payment is prohibited by applicable law;
(b) to the extent the Indemnitee has received payment in regard to such
liability or Expense under an insurance policy or otherwise;
(c) if such liability or Expense is based upon or attributable to the
Indemnitee gaining any personal profit or advantage to which he was not legally
entitled;
(d) with respect to proceedings or claims for an accounting of profits
made from the purchase or sale by the Indemnitee of securities of the
Corporation within the meaning of Section 16 (b) of the Securities Exchange Act
of 1934 and amendments thereto or similar provisions of any state statutory law
or common law;
(e) if such liability or Expense is determined to have been brought
about by or materially contributed to by the dishonesty of the Indemnitee
seeking payment hereunder or by his acts in bad faith, intentional misconduct or
knowing violation of law or duty of loyalty to the Corporation or its
stockholders; or
(f) with respect to proceedings or claims initiated or brought
voluntarily by the Indemnitee, and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware Corporation Law, but such indemnification or
advancement of Expenses may be provided by the Corporation in specific cases if
the Board of Directors finds it to be appropriate.
9. DURATION OF AGREEMENT.
Unless earlier terminated by mutual agreement of the Corporation and
Indemnitee, this Agreement shall continue until and terminate upon the later of:
(a) 10 years after the date that Indemnitee shall have ceased to serve in all
capacities in respect of which Indemnitee is granted rights of indemnification
hereunder, or (b) the final termination of all pending Proceedings in respect of
which the Indemnitee is granted rights of indemnification or advancement of
Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
Paragraph 5 of this Agreement relating thereto.
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10. MISCELLANEOUS.
(a) Subrogation. In the event of any payment by the Corporation to
Indemnitee under this Agreement, the Corporation shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee (including
rights to receive payments under insurance policies), who shall execute all
papers required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Corporation to bring
suit to enforce such rights.
(b) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute the original.
(c) Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
(d) Successors and Assigns. This Agreement shall be binding upon the
Corporation and its successors and assigns and shall inure to the benefit of the
heirs and personal representatives of the Indemnitee.
(e) Headings. The headings of the paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
(f) Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver. Without the
consent of Indemnitee, no amendment, alteration or termination of this Agreement
or any provision hereof shall be effective as to Indemnitee with respect to any
action taken or omitted by Indemnitee prior to such amendment, alteration or
termination.
(g) Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed or if (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:
(i) If to Indemnitee, at the address indicated on the signature
page hereof.
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(ii) If to the Corporation, to:
GTECH Corporation
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
or to such other address as may have been furnished to Indemnitee by the
Corporation.
(h) Savings Clause. If this Agreement or any portion thereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines and penalties, and advance Expenses to Indemnitee actually and reasonably
incurred, with respect to any Proceeding to the full extent permitted by any
applicable portion of this Agreement that shall not have been invalidated by any
applicable law.
IN WITNESS WHEREOF, the parties hereby have caused this Agreement to be duly
executed as of the date first above written.
GTECH HOLDINGS CORP. INDEMNITEE
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- -----------------------------------------
Address: ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
---------------------------------
02818
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