6
EMPLOYMENT AGREEMENT
THIS AGREEMENT made this 1st day of December, 1994,
between International Game Technology, a Nevada corporation,
having its principal place of business located at 0000 Xxxx
Xxxx, Xxxx, Xxxxxx 00000 (hereinafter "IGT"), and Xxxxx X.
Xxxxxx, an individual (hereinafter "Xxxxxx").
A. Term of Employment. IGT hereby employs Xxxxxx and
Xxxxxx hereby accepts the employment with IGT for a period
of three (3) years, commencing December 1, 1994. This
Agreement may be terminated earlier or renewed as
hereinafter provided.
B. Duties of Employee.
1. General Duties. Commencing January 1, 1995,
Xxxxxx shall be appointed President and Chief Operating
Officer ("COO") of International Game Technology. Xxxxxx
shall carefully and accurately perform all the duties and
tasks of the President/COO and perform all duties commonly
discharged by President/COO's.
2. Specific Duties. Xxxxxx is specifically
hired and employed by IGT as President and COO to manage the
day-to-day operations of IGT, and to oversee the operations
of all subsidiaries, divisions, and affiliated companies of
IGT.
3. Change of Duties. The duties of Xxxxxx may be
changed from time to time by mutual consent of IGT and
Xxxxxx. Notwithstanding any such change, the employment of
Xxxxxx shall be construed as continuing under this
Agreement.
4. Place of Performance. At the commencement of
his employment, Xxxxxx shall perform his duties at the
office of IGT located at 0000 Xxxx Xxxx, Xxxx, Xxxxxx
00000.
5. Hours of Employment. Xxxxxx shall work those
hours necessary to accomplish the functions of his
employment at IGT. It is understood and agreed that
Xxxxxx'x position at IGT is that of management capacity, and
as such shall not be held to a minimum or maximum hourly
time frame.
6. Outside Activities. Anything herein to the
contrary notwithstanding, nothing shall preclude Hanlon from
engaging in any of the following, provided that none of the
activities shall materially interfere with the proper
performance of his duties and responsibilities which fall
within the scope of his employment at IGT.
a. Serving on the Board of Directors of any
outside corporation;
b. Engaging in charitable community and
business affairs outside of the scope of his employment with
IGT; or
c. Managing any and all personal
investments and affairs of a personal nature.
C. Compensation.
1. Basic Compensation. As compensation for
services rendered under this Agreement, Xxxxxx shall be
entitled to receive from IGT a salary of Four Hundred Fifty
Thousand Dollars ($450,000.00) per year (hereinafter "Basic
Compensation"), payable in bi-weekly installments during the
period of employment, prorated for any partial employment
period.
2. Additional Compensation. In addition to the
Basic Compensation, Xxxxxx shall be entitled to receive the
following as additional compensation during the term of this
Agreement.
a. Annual Incentive Bonus. An annual bonus
in an amount equal to three percent (3%) of the Basic
Compensation for each one percent (1%) of increase in the
total aggregate amount of gross profits realized by IGT over
the prior year, before deductions for taxes, Cash Sharing
distributions, Profit-Sharing distributions and Management
Bonus distributions. In no event shall the bonus described
in this paragraph be less than Five Hundred Fifty Thousand
Dollars ($550,000.00) per year, and shall be payable in bi-
weekly installments, in advance. The installments shall be
calculated with the minimum guaranteed value of $550,000 and
divided by the number of pay periods which shall occur in
that calendar year. Any additional amounts to Xxxxxx due to
higher than expected distributions of the plans described in
this paragraph, shall be paid in a lump sum not later than
December 31st of each year, until expiration or other
termination of this Agreement. Xxxxxx understands and
agrees that the Annual Incentive Bonus afforded to Xxxxxx
pursuant to this paragraph 2.a. is granted in lieu of
Xxxxxx'x participation in the annual IGT Management Bonus
Program, and no Management Bonus distribution will be
granted to Xxxxxx during the term of this Agreement.
b. Cash Sharing. Participation in IGT's
semi-annual Cash Sharing plan.
c. Profit Sharing. Participation in IGT's
Profit Sharing plan.
d. Stock Options.
(i) Initial Grant. Five Hundred
Thousand (500,000) stock options in International Game
Technology, effective as of December 1, 1994, at an option
price equal to the closing price of International Game
Technology stock on December 1, 1994. The options shall
vest at the rate of twenty percent (20%) per year, and will
be one hundred percent (100%) vested at the end of five
years from the grant date. In the event the Board of
Directors elects not to continue the employment of Xxxxxx at
the end of the three year term of this Agreement, then for
purposes of the Stock Option Agreement and for no other
purpose, the date of termination of Xxxxxx'x employment
shall be the date of one hundred percent (100%) vesting of
the stock options described in this paragraph.
(ii) Subsequent Grants. Xxxxxx shall be
granted additional stock options in International Game
Technology on December 31 of each year during the term of
this Agreement at the rate of one (1) share for each One
Hundred Dollars ($100.00) of his Basic Compensation. The
price of the options described in this paragraph (ii) shall
be the price of the stock of IGT as of the close of business
on the December 31st of the then closing calendar year. The
options shall vest at the rate of twenty percent (20%) per
year, and will be one hundred percent (100%) vested at the
end of five years from the grant date. In the event that
Xxxxxx'x employment at IGT shall have terminated for any
reason prior to full vesting of the stock options described
in this paragraph, Xxxxxx shall be entitled to exercise
those stock options which shall have vested as of the
termination date, in accordance with the IGT Key Man Stock
Option Plan.
e. Travel and Other Expense Reimbursement.
Xxxxxx shall be reimbursed for ordinary and customary travel
and other expenses incurred by Xxxxxx in furtherance of his
duties as President/COO of IGT.
f. Relocation Expenses. Xxxxxx shall be
reimbursed for expenses related to relocation of his family
and personal property to Reno, Nevada.
3. Additional Benefits. Xxxxxx shall, during the
term of this Agreement or any extension thereto, be entitled
to participate in any qualified profit-sharing, 401(k),
cafeteria, medical and/or dental reimbursement plan, group
term life insurance plan, and any other employee benefit
plan that may be established by IGT. Such participation by
Xxxxxx shall be in accordance with the terms and conditions
of the applicable plan.
4. Discretionary Time Off. Xxxxxx shall be
entitled to discretionary time of as such is established in
IGT's relevant policies and procedures governing
discretionary time off to its employees.
5. Annual Physical Examination. IGT agrees to
pay all costs associated with an annual physical examination
by a medical doctor qualified and licensed to perform such
examination for Xxxxxx, including any and all medical
screening or other tests ordered by such doctor.
D. Property Rights.
1. Inventions and Patents. Xxxxxx agrees that
he will promptly, from time to time, fully inform and
disclose to IGT all inventions, designs, improvements, and
discoveries that he now has or may hereinafter have during
the term of this Agreement that pertain or relate to the
business of IGT or to any experimental work carried on by
Xxxxxx, whether conceived by Xxxxxx alone or with others and
whether or not conceived during regular working hours. All
such inventions, designs, improvements and discoveries shall
be the exclusive property of IGT. Xxxxxx shall assist IGT
in obtaining patents on all such inventions, designs,
improvements, and discoveries deemed patentable by IGT and
shall execute all documents and do all things necessary to
obtain letters patent, vest IGT with full and exclusive
title thereto, and protect the same against infringement by
others.
2. Trade Secrets. Xxxxxx during the term of
employment under this Agreement will have access to and
become familiar with various trade secrets, consisting of
software formulas, programs, patterns, devices, secret
inventions, processes, and compilations of information,
records, and specification, of IGT and other records of
corporations owned by or associated with IGT. Xxxxxx shall
not disclose any trade secrets of IGT, directly or
indirectly, nor use them in any way, either during the term
of this Agreement or at any time thereafter, except as
required in the course of his employment. All programs,
formulas, files, records, documents, drawings,
specifications, equipment, and similar items relating to the
business of IGT or others, whether prepared by Xxxxxx or
otherwise coming into his possession, shall remain the
exclusive property of IGT and shall not be removed from the
premises of IGT or the premises of any subsidiary or
affiliate of IGT, under any circumstances whatsoever without
the prior written consent of IGT.
E. Early Termination.
1. By IGT For Cause. The parties hereto agree
that they will enter into an amendment to this Agreement not
later than January 1, 1995, the subject of which shall be
the terms and conditions which will govern the rights and
obligations of each party with regard to termination for
cause provisions.
2. By Xxxxxx. This Agreement may be terminated
by Xxxxxx by giving thirty (30) days written notice of
termination to IGT.
3. Remedies. Termination by either party shall
not prejudice any remedy that the terminating party may have
either at law, in equity or under this Agreement.
4. Effect of Termination on Compensation. In
the event of the termination of this Agreement prior to the
completion of the term of employment specified herein,
Xxxxxx shall be entitled to the Basic Compensation earned by
him prior to the date of termination as provided for in this
Agreement, computed pro rata up to and including that date,
and said compensation shall be paid by IGT within thirty
(30) days of the termination date. Xxxxxx shall be entitled
to no further compensation as of the date of termination.
F. Miscellaneous
1. Notices. Any notices to either party
required hereunder may be given by personal delivery in
writing or by mail, registered or certified, postage prepaid
with return receipt requested. Mailed notices shall be
addressed to the parties at the addresses delineated in the
introductory paragraph to this Agreement. Either party may
change his address by giving written notice in accordance
with this paragraph. Notices delivered personally shall be
deemed communicated as of the time of actual deliver; mailed
notices shall be deemed communicated as of five (5) days
after mailing.
2. Entire Agreement. This Agreement supersedes
any and all other agreements, either oral or in writing,
between the parties hereto with respect to the employment of
Xxxxxx by IGT and contains all of the representations,
covenants, and agreements between the parties with respect
to such employment in any manner whatsoever.
3. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of Nevada.
4. Attorneys' Fees and Costs. If any action at
law or in equity is brought to enforce or interpret the
terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs, and necessary
disbursements in addition to any other relief to which he
may be entitled.
5. Partial Invalidity. In the event that any
term or provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable,
the remainder of this Agreement or the application of such
term or provision to persons or circumstances other than
those as to which it is held invalid, void or unenforceable
shall not be affected thereby and every term and provision
of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
INTERNATIONAL GAME
TECHNOLOGY XXXXXX
By /s/Xxxx X. Xxxxxxx /s/Xxxxx X. Xxxxxx
Xxxx X. Xxxxxxx, Chief Executive Officer Xxxxx X. Xxxxxx
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT is made this 1st
day of January, 1995 between International Game Technology,
a Nevada corporation having its principal place of business
at 0000 Xxxx Xxxx, Xxxx, Xxxxxx 00000 (hereinafter "IGT")
and Xxxxx X. Xxxxxx, an individual (hereinafter "Xxxxxx").
WHEREAS, the parties entered into that certain
Employment Agreement dated as of December 1, 1994; and
WHEREAS, the parties now wish to amend the Employment
Agreement.
NOW, THEREFORE, the parties agree as follows:
A. Paragraph E.1. of the Employment Agreement is
hereby amended in its entirety to read as follows:
1. By IGT for Cause. IGT shall have the
right, in its sole discretion, to terminate Xxxxxx at
any time for cause. "Cause" shall mean (a) conviction
of any felony; (b) repeated intoxication by alcohol or
drugs during the performance of Xxxxxx'x duties; (c)
material misuse or diversion of IGT's funds or assets,
embezzlement or willful and material misrepresentations
or concealments in any report submitted to IGT or to
any regulatory agency or body; (d) material breach of
this Agreement or material failure to perform or follow
the reasonable and lawful directives of the Board of
Directors of IGT or the written policies of IGT; (5)
the revocation of any of Xxxxxx'x gaming licenses or
refusal of a governmental agency to issue a license or
make a finding of qualification or suitability to
engage in a gaming related activity; (6) any personal
conduct by Xxxxxx which causes any of IGT's gaming
licenses to be revoked or suspended or subjects IGT to
a substantial fine or causes an application by IGT for
a gaming license or finding of suitability or any
existing qualification of IGT for a gaming activity to
be placed in jeopardy or denied. In the event of
termination for cause as described herein, Xxxxxx shall
not be entitled to severance compensation.
B. In all other respects, the terms and conditions of
the Employment Agreement shall remain in full force and
effect, and are hereby ratified and affirmed.
INTERNATIONAL GAME
TECHNOLOGY XXXXXX
By /s/Xxxx X. Xxxxxxx By /s/Xxxxx X. Xxxxxx
Xxxx X. Xxxxxxx, Chief Executive Officer Xxxxx X. Xxxxxx
