AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit
10.1
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “Agreement”) is dated
as of December 1, 2009 (the “Effective Date”) and
is by and between International Game Technology, a Nevada corporation (the
“Corporation”),
and Xxxxxx X. Xxxxxxxx (the “Executive”).
WHEREAS, the Executive is
currently employed by the Corporation pursuant to that Amended
and Restated Employment Agreement, dated as of March 20, 2009, between the
Corporation and the Executive (the “Original Agreement”);
and
WHEREAS, the Corporation
considers it important and in its best interest to xxxxxx the employment of key
management personnel and desires to retain the services of the Executive on the
terms and subject to the conditions in this Agreement; and
WHEREAS, the Executive desires
to continue employment by the Corporation to render services to the Corporation
on the terms and subject to the conditions in this Agreement; and
WHEREAS, the Executive and the
Corporation desire to amend and restate the Original Agreement, pursuant to
Section 8.2 thereof, as set forth below.
NOW, THEREFORE, in
consideration of the premises and the respective undertakings of the Corporation
and the Executive set forth below, the Corporation and the Executive agree as
follows:
1. Employment. The
Corporation hereby employs the Executive as an employee of the Corporation, and
the Executive accepts such employment and agrees to perform services for the
Corporation, for the period and upon the other terms and conditions set forth in
this Agreement. The Executive shall assist on such matters as are
within his expertise and experience with the Corporation and perform such duties
as the Corporation shall from time to time require.
During
the Term (as such term is defined below), the Executive shall not serve on the
board of directors (or similar governing body) of any other business entity
without the prior approval of the Board. The Executive shall resign
from any such board of directors (or similar governing body) on which he may
serve (even if such service has been approved by the Board) if the Executive’s
activities on such board (or other body) conflict or interfere with the
performance of the Executive’s duties for the Corporation.
If for
any reason the Executive is not re-elected as a director, such failure to
re-elect the Executive will not constitute a breach of this
Agreement.
2. Term. The
“Term” shall,
unless sooner terminated as provided herein, commence on the Effective Date and
end at the close of business on the earlier of (i) the date of the Corporation’s
2011 Annual Shareholder Meeting or (ii) March 31, 2011.
3. Compensation.
3.1 Base
Salary. As compensation in full for the services to be
rendered by the Executive under this Agreement during the Term, the Corporation
shall pay to the Executive a base salary (“Base Salary”) of
Sixty-Five Thousand Dollars ($65,000). Such Base Salary shall be in
lieu of any and all other payments, reimbursements, excluding
reimbursement for reasonable out-of-pocket expenses undertaken at the
Corporation’s direction, and other fees to which the Executive would
otherwise be entitled as a director of the Corporation, and shall be paid in
accordance with the Corporation’s normal payroll procedures and
policies.
3.2 Cancellation of
Performance-Based Awards. As of December 1, 2009, all unvested
Performance Shares granted to the Executive under the Corporation’s 2002 Stock
Incentive Plan (a) pursuant to that Performance Share Award Agreement, dated
September 29, 2006, and (b) on November 14, 2008, shall be cancelled, and all of
Executive’s rights in and to any such unvested Performance Shares shall be
terminated and of no further force or effect.
3.3 Participation in
Benefit Plans. During the Term, the Executive shall also be
entitled to participate in all employee benefit plans or programs of the
Corporation to the extent that his position, title, tenure, salary, age, health
and other qualifications make him eligible to participate in accordance with the
terms of the applicable plans or programs. The Corporation does not
guarantee the adoption or continuance of any particular employee benefit plan or
program during the Term, and the Executive’s participation in any such plan or
program shall be subject to the provisions, rules and regulations applicable
thereto and as amended from time to time.
3.4 Withholding
Taxes. The Corporation may withhold from any compensation or
other benefits payable under this Agreement, all federal, state, city or other
taxes as shall be required to be withheld pursuant to any law or governmental
regulation or ruling.
3.5 Continuing
Medical Benefits. After the termination of the Executive’s
employment with the Corporation (regardless of the reason for such termination),
the Corporation shall continue to provide medical benefits to the Executive on
the following basis:
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subject
to the next clause, the medical benefits provided shall be on terms and
conditions at least as favorable to Executive as the benefits provided by
the Corporation to the then active chief executive officer of the
Corporation from time to time;
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the
benefits shall terminate upon the Executive’s
death;
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any
co-pays or deductibles with respect to the medical benefits shall be paid
by Executive to the same extent as required of the then active chief
executive officer of the Corporation from time to
time;
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the
Corporation may require that the Executive remit to the Corporation in
cash the amount necessary to satisfy any applicable withholding
obligations due with respect to such
benefits;
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the
obligation to provide the medical benefits under this Section 3.5 shall
terminate when Executive becomes eligible for Medicare (or any successor
plan) or any other medical insurance provided by any employer that may
cover the Executive from time to
time.
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The
Corporation may, in its sole discretion and notwithstanding the foregoing, pay
the Executive on a periodic basis an amount equal to the reasonable cost to
obtain such benefits for the corresponding period in lieu of providing such
benefits directly (the cost of such benefits to be determined before giving
effect to any taxes that may result from the Corporation making such payment and
such payment shall be subject to the tax withholding provisions of Section
3.4). For the sake of clarity, the Corporation shall have no
obligation to provide long or short-term disability benefits or insurance, life
insurance, or any other type of benefits (other than the medical benefits
expressly contemplated above) to the Executive following the termination of the
Executive’s employment with the Corporation. The Executive agrees to
enroll in Medicare parts A and B as soon as he is eligible to do
so.
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4. Confidential
Information. Except as provided below, the Executive shall
not, during the Term or at any time thereafter, divulge, furnish or make
accessible to anyone or use in any way (other than in the ordinary course of the
business of the Corporation or any of its respective affiliates) any
confidential or secret knowledge or information of the Corporation which the
Executive has acquired or become acquainted with or will acquire or become
acquainted with prior to the termination of the period of his employment by the
Corporation (including employment by the Corporation or any affiliated or
predecessor companies prior to the date of this Agreement), whether developed by
himself or by others, concerning any trade secrets, confidential or secret
designs, processes, formulae, plans, devices or material (whether or not
patented or patentable) directly or indirectly useful in any aspect of the
business of the Corporation, any customer or supplier lists of the Corporation,
any confidential or secret development or research work of the Corporation, or
any other confidential information or secret aspects of the business of the
Corporation. The Executive acknowledges that the above-described
knowledge or information constitutes a unique and valuable asset of the
Corporation and represents a substantial investment of time and expense by the
Corporation, and that any disclosure or other use of such knowledge or
information other than for the sole benefit of the Corporation and its
affiliates would be wrongful and would cause irreparable harm to the
Corporation. Both during and after the Term, the Executive shall
refrain from any acts or omissions that would reduce the value of such knowledge
or information to the Corporation. The foregoing obligations of
confidentiality, however, shall not apply to any knowledge or information which
is now published or which subsequently becomes generally publicly known, other
than as a direct or indirect result of the breach of this Agreement by the
Executive. The foregoing obligations of confidentiality shall not,
however, limit the Executive’s disclosure of information (1) to the extent
necessary to comply with government disclosure requirements or other applicable
laws, (2) pursuant to subpoena or order of any judicial, legislative, executive,
regulatory or administrative body, or for the Executive to enforce the
Executive’s rights under this Agreement, (3) to employees, advisors, counsel,
financial advisors and other third parties as may be necessary and appropriate
in connection with the proper performance and enforcement of this Agreement; and
(4) pursuant to the Executive’s normal reporting procedures as an executive of a
publicly traded company (e.g., pursuant to Xxxxxxxx-Xxxxx requirements or
otherwise).
5. Ventures. If,
during the Term, the Executive is engaged in or associated with the planning or
implementing of any project, program or venture involving the Corporation and a
third party or parties, all rights with respect to such project, program or
venture shall belong to the Corporation. Except as approved by the
Board, the Executive shall not be entitled to any interest in such project,
program or venture or to any commission, finder’s fee or other compensation in
connection therewith other than the salary to be paid to the Executive as
provided in this Agreement.
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6. Noncompetition
Covenant.
6.1 Agreement not to
Compete. The Executive agrees that during the Term of this
Agreement and, for the twelve (12) months following the expiration of the
Term of this
Agreement or
termination of this Agreement pursuant to Section 7, the Executive shall not,
without the written consent of the Board, directly or indirectly, engage in
competition with the Corporation in any manner or capacity (e.g., as an advisor,
principal, agent, partner, officer, director, stockholder, employee, member of
any association, or otherwise) in any phase of the business which the
Corporation is conducting during the Term, including the design, development,
manufacture, distribution, marketing, leasing, financing or selling of
accessories, devices, or systems related to the products or services being sold
by the Corporation; provided, however, that nothing herein shall prevent the
Executive from investing as less than a one-half percent (0.5%) stockholder in
the securities of any company listed on a national securities exchange or quoted
on an automated quotation system if such ownership is held indirectly through a
mutual fund or similar investment.
6.2 Scope of
Covenant. The obligations of the Executive under Section 6.1
shall apply to any geographic area in which the Corporation has engaged in
business during the Term.
6.3 Non-Solicitation. The
Executive agrees that during the Term and for a period of twelve (12) months
thereafter, he will not, without the prior written approval of the Board, hire,
solicit or endeavor to entice away from the Corporation or, following
termination of the Executive’s employment, otherwise interfere with the
relationship of the Corporation with any employee of the Corporation or one of
its subsidiaries who earned annually $75,000 or more as an employee of the
Corporation or one of its subsidiaries during the last twelve months of the
Executive’s own employment by the Corporation, or any person or entity who was,
within the then most recent prior 12-month period, a customer, supplier or
contractor of the Corporation or any of its affiliates.
7. Termination.
7.1 Termination of
Employment. The Executive’s employment by the Corporation, and
the Term, may be terminated at any time during the Term (a) by the Corporation
if, within ten (10) days’ notice of material breach of any material term of this
Agreement, Executive shall have failed to cure such breach or (b) by the
Executive on no less than ten (10) days prior written notice.
7.2 Benefits Upon
Termination. If the Executive’s employment by the Corporation
is terminated during the Term for any reason by the Corporation, the Corporation
shall have no further obligation to make or provide to the Executive, and the
Executive shall have no further right to receive or obtain from the Corporation,
any payments or benefits, except (i) the Corporation shall pay the Executive
(or, in the event of his death, the Executive’s estate) the remaining balance of
the Base Salary that would have been paid to the Executive had the Executive’s
employment not been terminated by the Corporation, and (ii) benefits to be
provided to the Executive pursuant to Section 3.5.
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7.3 Release. As a condition precedent
to the Corporation’s obligation to pay the remainder of the Base Salary pursuant
to Section 7.2, the Executive (or, in the event of his death, the Executive’s
estate on behalf of the Executive) shall, upon or promptly following his last
day of employment with the Corporation, provide the Corporation with a valid,
executed, written Release (as such term is defined below) (in a form provided by
the Corporation) and such release shall have not been revoked by the Executive
pursuant to any revocation rights afforded by applicable law. The
Corporation shall have no obligation to make any payment to the Executive
pursuant to Section 7.2 above unless and until the Release contemplated by this
paragraph becomes irrevocable by the Executive in accordance with all applicable
laws, rules and regulations.
As used
herein, “Release” shall mean a
written release, discharge and covenant not to xxx entered into by the Executive
on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, of and in favor of
the Corporation, its parent (if any), the Corporation’s subsidiaries and
affiliates, past and present, and each of them, as well as its and their
trustees, directors, officers, agents, attorneys, insurers, employees,
stockholders, members, representatives, assigns, and successors, past and
present, and each of them (the “releasees”), with respect to and from any and
all claims, wages, demands, rights, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, debts, costs, expenses,
attorneys’ fees, damages, judgments, orders and liabilities of whatever kind or
nature in law, equity or otherwise, whether now known or unknown, suspected or
unsuspected, and whether or not concealed or hidden, which he may then own or
hold or he at any time theretofore owned or held or may in the future hold as
against any or all of said releasees, arising out of or in any way connected
with the Executive’s employment relationship with the Corporation and each of
its subsidiaries with which the Executive has had such a relationship, or the
termination of his employment or any other transactions, occurrences, acts or
omissions or any loss, damage or injury whatever, known or unknown, suspected or
unsuspected, resulting from any act or omission by or on the part of said
releasees, or any of them, committed or omitted prior to the date of such
release including, without limiting the generality of the foregoing, any claim
under Section 1981 of the Civil Rights Act of 1866, Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Family and Medical Leave Act of 1993, the California Fair
Employment and Housing Act, the California Family Rights Act, any other claim
under any other federal, state or local law or regulation, and any other claim
for severance pay, bonus or incentive pay, sick leave, holiday pay, vacation
pay, life insurance, health or medical insurance or any other fringe benefit,
medical expenses, or disability (except that such release shall not constitute a
release of any Corporation obligation, to the Executive that may be due to the
Executive pursuant to Section 7.2(b) or (c), as applicable, upon the
Corporation’s receipt of such release or any obligations referred to in the last
paragraph of Section 7.2). The Release shall also contain the
Executive’s warrant that he has not theretofore assigned or transferred to any
person or entity, other than the Corporation, any released matter or any part or
portion thereof and that he will defend, indemnify and hold harmless the
Corporation and the aforementioned releasees from and against any claim
(including the payment of attorneys’ fees and costs actually incurred whether or
not litigation is commenced) that is directly or indirectly based on or in
connection with or arising out of any such assignment or transfer made,
purported or claimed.
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The
Executive agrees that the payments contemplated by Section 7.2 shall constitute
the exclusive and sole remedy for any termination of his employment and the
Executive covenants not to assert or pursue any other remedies, at law or in
equity, with respect to any termination of employment. The
Corporation and Executive acknowledge and agree that there is no duty of the
Executive to mitigate damages under this Agreement. All amounts paid
to the Executive pursuant to Section 7.2 shall be paid without regard to whether
the Executive has taken or takes actions to mitigate damages.
The
foregoing provisions of this Section 7.2 shall not affect: (1) the Executive’s
receipt of benefits otherwise due terminated employees under group insurance
coverage consistent with the terms of the applicable Corporation welfare benefit
plan, (2) the Executive’s rights under the Consolidated Omnibus Budget
Reconciliation Act to continue participation in medical, dental, hospitalization
and life insurance coverage, (3) the Executive’s receipt of benefits otherwise
due in accordance with the terms of the Corporation’s Profit Sharing Plan
(401(k) plan) (if any); (4) the Executive’s receipt of benefits otherwise
due in accordance with the terms of the Corporation’s Executive Deferred
Compensation Plan nonqualified deferred compensation plan) (if any); (5) any
rights that the Executive may have under and with respect to a stock option or
restricted stock award, to the extent that such award was granted before the
date that the Executive’s employment by the Corporation terminates and to the
extent expressly provided in the written agreement evidencing such award; or (6)
the continuing medical benefit obligation to the Executive pursuant to Section
3.5.
7.4 Resignation From
Board. Upon or promptly following any termination of
Executive’s employment with the Corporation, the Executive agrees to resign from
(1) each and every board of directors (or similar body, as the case may be) of
the Corporation and each of its affiliates on which the Executive may then serve
(if any) and (2) each and every office of the Corporation and each of its
affiliates that the Executive may then hold, and all positions that he may have
previously held with the Corporation and any of its affiliates.
7.5 Means and Effect
of Termination. Any termination of the Executive’s employment
under this Agreement shall be communicated by written notice of termination from
the terminating party to the other party. The notice of termination
shall indicate the specific provision(s) of this Agreement relied upon in
effecting the termination.
8. Miscellaneous.
8.1 Governing
Law. This Agreement and all rights and obligations hereunder,
including, without limitation, matters of construction, validity and
performance, is made under and shall be governed by and construed in accordance
with the internal laws of the State of Nevada, without regard to principles of
conflict of laws.
8.2 Amendments. No
amendment or modification of this Agreement shall be deemed effective unless
made in writing and signed by all of the parties hereto.
8.3 No
Waiver. No term or condition of this Agreement shall be deemed
to have been waived, nor shall there be any estoppel to enforce any provisions
of this Agreement, except by a statement in writing signed by the party against
whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
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8.4 Severability. To
the extent any provision of this Agreement shall be invalid or unenforceable, it
shall be considered deleted herefrom and the remainder of such provision and of
this Agreement shall be unaffected and shall continue in full force and
effect. In furtherance and not in limitation of the foregoing, should
the duration or geographical extent of, or business activities covered by, any
provision of this Agreement be in excess of that which is valid and enforceable
under applicable law, then such provision shall be construed to cover only that
duration, extent or activities which may validly and enforceably he
covered. The Executive acknowledges the uncertainty of the law in
this respect and expressly stipulates that this Agreement be given the
construction which renders its provisions valid and enforceable to the maximum
extent (not exceeding its express terms) possible under applicable
law.
8.5 Assignment. This
Agreement shall not be assignable, in whole or in part, by either party without
the written consent of the other party.
8.6 Injunctive
Relief. Each party agrees that it would be difficult to
compensate the non-breaching party fully for damages for any violation of any
provision set forth in Section 4 or Section 6 hereof. Accordingly,
each party specifically agrees that the other party shall be entitled to
temporary and permanent injunctive relief to enforce the provisions of Sections
4 and 6 of this Agreement and that such relief may be granted without the
necessity of proving actual damages. This provision with respect to
injunctive relief shall not, however, diminish the right of the non-breaching
party to claim and recover damages in addition to injunctive
relief.
8.7 Arbitration. Any
controversy or claim arising out of or relating to this Agreement or the
Executive’s employment by the Corporation shall, except for claims for
injunctive relief set out in paragraph 8.6 above, be settled by binding
arbitration, with a single neutral arbitrator, in accordance with the rules of
the American Arbitration Association relating to employment. The
proper venue for any such action is Washoe County, Nevada. In any
action to enforce this Agreement, the Executive and the Corporation each agree
to accept service of process by mail at its address, as applicable, as set forth
in Section 8.8 below (or at any different address of which the Executive has
notified the Corporation or the Corporation has notified the Executive, as
applicable, in writing). In any action in which service is made
pursuant to this paragraph, the Executive and the Corporation each waive any
challenge to the personal jurisdiction of the American Arbitration
Association. Any judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. In reaching his
or her decision, the arbitrator shall have no authority to change or modify any
provision of this Agreement.
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8.8 Notices. All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given
and made if (1) delivered by hand, (2) otherwise delivered against receipt
therefor, or (3) sent by registered or certified mail, postage prepaid, return
receipt requested. Any notice shall be duly addressed to the parties
as follows:
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If to the Corporation:
0000 Xxxxxxxxx Xxxxx
Xxxx, Xxxxxx 00000
Attn: Chief Executive Officer
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If to the Executive:
to the address furnished to the Corporation
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Any party
may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the foregoing
provisions. Any communication shall be effective when delivered by
hand, when otherwise delivered against receipt therefor, or five (5) business
days after being mailed in accordance with the foregoing.
8.9 Section
Headings. The section headings of, and titles of paragraphs
and subparagraphs contained in, this Agreement are for the purpose of
convenience only, and they neither form a part of this Agreement nor are they to
be used in the construction or interpretation thereof.
8.10 Provisions that
Survive Termination. The provisions of Sections 3.4, 3.5, 4,
5, 6, 7 and 8 shall survive any termination of the Term.
8.11 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original as against any party whose signature appears thereon, and all
of which together shall constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories. Photographic copies of such
signed counterparts may be used in lieu of the originals for any
purpose.
8.12 Entire
Agreement. This Agreement embodies the entire agreement of the
parties hereto respecting the matters within its scope. This
Agreement supersedes all prior and contemporaneous agreements of the parties
hereto that directly or indirectly bears upon the subject matter hereof
(including, without limitation, the Original Agreement). Any prior
negotiations, correspondence, agreements, proposals or understandings relating
to the subject matter hereof shall be deemed to have been merged into this
Agreement, and to the extent inconsistent herewith, such negotiations,
correspondence, agreements, proposals, or understandings shall be deemed to be
of no force or effect. There are no representations, warranties, or
agreements, whether express or implied, or oral or written, with respect to the
subject matter hereof, except as expressly set forth herein.
Notwithstanding
anything in the foregoing paragraph to the contrary, the indemnification
agreement previously entered into by and between the Corporation and the
Executive is outside of the scope of the foregoing integration provisions and
shall continue in effect in accordance with its terms.
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IN WITNESS WHEREOF, the
Executive and the Corporation have executed this Agreement as of the date set
forth in the first paragraph.
| INTERNATIONAL GAME TECHNOLOGY | EXECUTIVE | ||||
| By: |
/s/
Xxxxx X. Xxxx
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By: |
/s/
Xxxxxx X. Xxxxxxxx
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| Its: | President, CEO | Its: |
Member
of the Board of Directors
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[Signature Page to Amended
and Restated Employment Agreement]
