Exhibit 10.1
[Execution Copy]
EMPLOYMENT AGREEMENT
     THIS EMPLOYMENT AGREEMENT dated as of May 8, 2006 (this “Agreement”), by
and amongst Lottomatica S.p.A., an Italian corporation (the “Company”), GTECH
Corporation, a Delaware corporation (“GTECH”), an indirect wholly-owned
subsidiary of the Company, and CORNELIA LAVERTY O’CONNOR (“Executive”).
     WHEREAS, Executive is currently an executive officer employed by GTECH
Holdings Corporation, a Delaware corporation and GTECH Corporation;
     WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of January 10, 2006, the Company is acquiring 100% of the outstanding capital
stock of GTECH Holdings Corporation, effective as of the date hereof (the
“Merger”), and
     WHEREAS, the Company desires GTECH to employ Executive as an executive
officer of GTECH, and Executive agrees to be employed by GTECH as an executive
officer of GTECH, subject to the terms and conditions set forth below.
     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
hereby covenant and agree as follows:
     1. Definitions. Capitalized terms used in this Agreement and not otherwise
defined herein shall have the following meanings:
     “Act” means the Securities Exchange Act of 1934, as amended to date.
     “Affiliate” shall mean any joint venture or other entity in which the
Company or any of its subsidiaries has an equity interest of at least 20%.
     “Annual Cash Compensation” means the most recent annualized Base Salary
paid or payable to Executive plus the average Performance Bonus paid or payable
to Executive by the Company or GTECH for the three most recent completed fiscal
years of employment. For the purposes of calculating Annual Cash Compensation,
Base Salary shall include any elective salary reductions made by Executive and
contributed by the Company on Executive’s behalf to the Company’s retirement
plans.
     “Board” means the Board of Directors of GTECH.
     “Cause” means any of the following:

  (i)   any grossly negligent and/or willful failure by Executive to
substantially perform her duties;     (ii)   Executive’s engaging in serious
misconduct which is injurious to GTECH or its affiliates or breaching any of
GTECH’s ethics and compliance policies (unless, in its sole discretion, the
Board determines that the breach is immaterial, inadvertent and subject to cure
under Section 8(b) hereof

 

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      without harm to GTECH or its affiliates) as from time to time implemented
by GTECH;     (iii)   any material breach by Executive of the terms of
Sections 10, 11 or 14(a) hereof,     (iv)   Executive’s having been convicted
of, or pleading nolo contendere to, a crime that constitutes a felony or is a
gaming or gambling-related offense; or     (v)   Executive’s use of illegal
drugs or abuse of other controlled substances or her habitual intoxication.

     “Change in Control” means the happening of any of the following:

  (i)   any “person,” including a “group” (as such terms are used in Sections
13(d) and 14(d) of the Act, but excluding the Investor, 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 (i) 30% or more of the combined voting power of the Company’s then
outstanding securities and (ii) a greater percentage of the combined voting
power of the Company’s then outstanding securities than Investor;     (ii)   the
stockholders of the Company or GTECH shall approve a definitive agreement
(1) for the merger or other business combination of the Company or GTECH with or
into another corporation if (A) in the case of a merger or other business
combination of the Company only, 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 or GTECH, as the case
may be, immediately prior to the effective date of such merger, together with
Investor, the Company and any of their respective affiliates, beneficially own,
directly or indirectly, 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
GTECH to an entity, person or group of entities or persons that are not at least
50% beneficially owned, directly or indirectly, by the Company, GTECH and/or the
Investor and/or any of its affiliates; or     (iii)   the purchase of 30% or
more of the Shares 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 Investor, the Company, any of its Affiliates,
or any employee benefit plan of the Company or any of its Affiliates, unless
Investor and its Affiliates

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      beneficially own a greater percentage of the combined voting power of the
Company’s then outstanding securities than such “person” or “group.”

     “Change of Control Date” means the date on which a Change in Control
occurs, provided however that if a Change in Control occurs and if Executive’s
employment with GTECH is terminated by GTECH prior to the date on which the
Change in Control occurs, and if it is reasonably demonstrated by Executive that
such termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change in Control or
(ii) otherwise arose in connection with or in anticipation of a Change in
Control, then the “Change of Control Date” shall mean the date immediately prior
to the date of such termination.
     “Code” means the Internal Revenue Code of 1986, as amended.
     “Committee” means the Remuneration Committee of the Board.
     “Disability” means the inability (as determined by the Board in its sole
discretion after affording Executive a reasonable opportunity to present her
case) of Executive to render her agreed-upon, full-time services to GTECH due to
physical and/or mental infirmity.
     “Effective Date” means the date on which the Merger is consummated.
     “Expiration Date” means the latest date upon which stock options granted to
Executive would be exercisable under its grant terms if Executive had remained
employed with GTECH through such date.
     “Family” means Executive’s spouse and dependant children.
     “Good Reason” means any of the following events (subject to the notice and
cure provisions of Section 8(c) hereof):

  (i)   the assignment to Executive of duties and/or responsibilities that are
materially inconsistent with those associated with Executive’s position as
stated in Sections 4(a) and 4(b) hereof, excluding any interim relieving of
Executive’s duties pursuant to Section 8(b);     (ii)   The Company’s or GTECH’s
failure to pay Executive any amounts otherwise vested and due hereunder or under
any plan or policy of the Company or GTECH; or     (iii)   any material breach
of this Agreement by GTECH or the Company.

     “Investor” shall mean De Agostini, S.p.A. and its affiliates.
     “Performance Bonus” means the actual amount of a performance bonus
recommended by the Committee and approved by the Board to Executive with respect
to the relevant fiscal year in accordance with Section 5(b) hereof.

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     “Prorated Performance Bonus” means the portion of the Performance Bonus, if
any, that is payable with respect to a fiscal year which becomes due after a
termination of this Agreement under Sections 5(c) or 9(b) hereof. The Prorated
Performance Bonus will be calculated as follows: the Committee shall
(a) determine the Performance Bonus to which Executive would have been entitled,
had Executive been employed for the entire fiscal year, in accordance with
Section 5(b)(i) hereof, (b) divide that amount by 52 to produce a Weekly Amount;
and (c) multiply the Weekly Amount by the number of weeks during the relevant
fiscal year that Executive was employed by GTECH.
     “Retirement” means Executive’s termination of her employment when the sum
of Executive’s age and years of continuous full-time employment with GTECH or
any of its affiliates total to 65 or more, provided that Executive may not
retire prior to the 5 year anniversary of the Effective Date.
     “Retirement Factor” means the sum of Executive’s age and years of
continuous full-time employment with GTECH or any affiliate at the time of
Executive’s Retirement.
     “Securities Act” means the Securities Act of 1933, as amended.
     “Senior Executives” means such executives of GTECH as constitute, from
time-to-time, the “executive officers” of GTECH.
     “Shares” means ordinary shares of the Company.
     2. Employment of Executive.
     GTECH hereby agrees to employ Executive, and Executive agrees to be
employed by GTECH, to render services to GTECH and its subsidiaries, affiliates
and divisions for the period, at the rate of compensation and upon the other
terms and conditions set forth in this Agreement.
     3. Term.
     The term of Executive’s engagement hereunder shall commence on the
Effective Date, and shall continue for a term of five (5) years (the “Term”).
The Term is subject to earlier termination as hereinafter provided in Section 8
hereof, and the compensation, benefits, etc., if any, payable upon termination
shall be as set forth in Section 5(c) or 9 hereof.
     4. Position, Duties and Place of Employment.
          (a) Position and Duties. During the Term, Executive shall be retained
and shall serve as the Senior Vice President, Chief Marketing Officer of GTECH,
and in furtherance of her duties as described herein, Executive also agrees to
serve, if elected, as a director and/or officer of any subsidiary or affiliate
of GTECH, including but not limited to GTECH.
          (b) During the Term, Executive shall have the authority and power to
perform such duties consistent with her position as the Senior Vice President,
Chief Marketing Officer, of GTECH.

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          (c) Executive shall not be required without her consent to undertake
responsibilities not commensurate with her position. Executive shall comply
fully and promptly with the various policies, procedures and rules governing
employees promulgated and/or as amended from time to time by GTECH and any
applicable subsidiary or affiliate of GTECH (including, without limitation,
GTECH’s Regulations for the Management of Confidential Information and GTECH’s
Internal Rules Governing Intra-Group Transactions and Transactions with Other
Related Parties) and with any applicable disclosure and other requirements of
any governmental authority and of any other entity with which GTECH, its
subsidiaries and affiliates are doing or propose to do business. Except for
illness, vacations, and holidays in accordance with then-current GTECH policy,
and (subject to the approval of the Chief Executive Officer of GTECH) reasonable
leaves of absence, Executive shall devote her full business time, attention,
skill, undivided loyalty and best efforts to the faithful performance of her
duties hereunder; provided, however, that Executive may, as long as such
activities do not interfere with the performance of Executive’s
responsibilities: (i) with the prior approval of the Chief Executive Officer of
GTECH, serve (and retain any compensation with respect to such service) on
corporate, civic and charitable boards and committees and (ii) deliver lectures
and fulfill speaking engagements.
          (d) Principal Place of Employment. Executive’s principal place of
employment shall be located within the State of Rhode Island. Notwithstanding
the foregoing, Executive understands that she may be required to spend
substantial time in Italy during the Term.
     5. Compensation and Reimbursement of Expenses
          (a) Base Salary. For the services rendered by Executive in her
capacity as the Senior Vice President, Chief Marketing Officer of GTECH during
the Term, GTECH shall pay or cause to be paid to Executive as compensation a
salary at an annual rate of US $300,000, payable in equal installments not less
frequently than monthly through GTECH’s standard payroll practices. Executive
hereby expressly waives any and all of her rights to any further fees or
payments for the offices as a director and/or officer of its subsidiaries and
affiliates which may be held by him during the Term, and agrees to confirm such
waiver before the appropriate corporate bodies of each such company upon request
of the Board .
          (b) Performance Bonus.
               (i) With respect to each fiscal year of GTECH during the Term,
Executive shall be eligible to earn a Performance Bonus at the discretion of the
Board or the Committee. The amount of the Performance Bonus, if any, for a given
fiscal year shall be determined by the Board or the Committee in accordance with
the performance metrics and business objectives included in GTECH annual bonus
plan for Senior Executives, as approved annually in the discretion of the Board
or the Committee. Under the Plan, Executive’s performance will be measured
against an established set of targets for each fiscal year, and depending upon
performance against those targets, Executive will be eligible to receive a bonus
in the range of 0% to 120% of Base Salary. The annual target Performance Bonus
will be 60% of Base Salary.

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               (ii) Bonus payments for GTECH are normally made in April or May
of each year for the preceding fiscal year ending in December, subject to the
provisions of Section 409A of the Code.
               (iii) Nothing contained in this Agreement constitutes a guarantee
that the Board will award Executive a Performance Bonus for any given fiscal
year.
          (c) Change of Control.
               (i) In the event Executive’s employment is terminated by GTECH
for any reason other than Cause, or in the event Executive resigns for Good
Reason within eighteen months after either (A) the effectiveness of the Merger
or (B) the Change of Control Date, GTECH will pay Executive, as liquidated
damages, a lump sum cash payment in lieu of the severance payments provided
under Section 9(b) hereof, payable within ten (10) days of Executive’s
termination, equal to two and ninety-nine hundredths (2.99) times the sum of
(A) Executive’s current annual Base Salary in effect at the date of termination
(including in base salary for this purpose any elective salary reductions made
by Executive and contributed by GTECH on Executive’s behalf to GTECH’s
retirement plan, any non-qualified plan, or a plan meeting the requirements of
Section 125 of the Code), plus (B) the average Performance Bonus paid or payable
to Executive from GTECH for the three (3) most recent full fiscal years of
GTECH, plus (C) the maximum amount allowable under the GTECH Executive
Perquisite Program or any substitute or replacement program adopted by GTECH
during the most recent calendar year of GTECH. In addition, GTECH shall pay
Executive within 10 days after such termination (i) her Base Salary accrued
through the date of such termination at the rate in effect immediately prior to
such date; (ii) any accrued but unpaid Performance Bonus under Section 5(b)
hereof for the prior fiscal year; (iii) any Prorated Performance Bonus up to the
date of such termination calculated by reference to Executive’s target
Performance Bonus, as determined by the Committee for the current fiscal year;
and (iv) any other amounts to which Executive is entitled under the terms of
Sections 5 and 6 hereof up to the date of such termination. The payment of any
Performance Bonus or Prorated Performance Bonus after such termination shall be
made in cash, notwithstanding the provisions of Section 5(b)(i) hereof.
               (ii) In the event of a termination described in Section 5(c)(i)
above, Executive, together with Executive’s dependents and beneficiaries, will
become fully vested in and continue following Executive’s termination to
participate fully in, at no additional cost to Executive, all life insurance
plans, accident and health plans and other welfare plans, maintained or
sponsored by GTECH 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 GTECH, until the
third anniversary of termination. Executive will also become fully vested in all
non-qualified retirement plans, and within thirty (30) days of Executive’s
termination of employment, GTECH shall pay to Executive the sum of (i) all
benefits accrued under the any non-qualified plans and (ii) an amount equal to
2.99 times the average benefit accrued and/or Company or GTECH contributions
made to the retirement plans and the non-qualified plans over the last three
fiscal years prior to termination. Additionally, to the extent Executive is not
fully vested in all Company or GTECH qualified retirement plans, Executive shall
receive a payment equal to any unvested portion of such retirement plans. In
addition, in the event of a Change in Control (other than the Merger) prior to
the Executive’s

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termination of employment, any Shares not yet issued and transferred to
Executive pursuant to Sections 6(c) or 6(d) hereof shall be promptly issued and
transferred to Executive whether or not she has satisfied the performance and
employment requirements set forth therein and any and all Cash-Based Awards (as
defined in Section 6(e) hereof) and stock options granted to Executive that have
not yet become vested and exercisable shall become vested and exercisable.
               (iii) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company or GTECH to or for the benefit of
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (a “Payment”) would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by 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”), whether in connection with the Merger or any Change in
Control, then Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by 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,
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed on the Payments. GTECH shall pay to Executive any Gross-Up Payments
required as a result of Excise Taxes payable by Executive arising from the
Merger.
               (iv) All determinations required to be made under this
Section 5(c), including whether and when a Gross-Up Payment is required and the
amount of such Gross-Up Payment and the assumptions to be utilized in arriving
at such determination, shall be made by Ernst & Young LLP or such other
nationally recognized certified public accounting firm as may be designated by
Executive (the “Accounting Firm”) which shall provide detailed supporting
calculations both to GTECH and Executive within 15 business days of the receipt
of notice from Executive that there has been a Payment, or such earlier time as
is requested by GTECH. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
in Control, 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 GTECH. Any Gross-Up Payment, as
determined pursuant to this Section 5(c), shall be paid by GTECH to Executive
within five days of the receipt of the Accounting Firm’s determination. Subject
to the remainder of this Section 5(c), any determination by the Accounting Firm
shall be binding upon GTECH and 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 GTECH should have been made
(“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that GTECH exhausts its remedies and 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 GTECH to or for the benefit of Executive
(so as to fully extinguish Executive’s tax liability for the Payments including
all interest and penalties).

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               (v) Executive shall notify GTECH in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by GTECH
of the Gross-Up Payment. Such notification shall be given as soon as practicable
but no later than ten business days after Executive is informed in writing of
such claim and shall apprise GTECH of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the 30-day period following the date on which
Executive gives such notice to GTECH (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If GTECH notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:
     (A) give GTECH any information reasonably requested by GTECH relating to
such claim,
     (B) take such action in connection with contesting such claim as GTECH
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 GTECH,
     (C) cooperate with GTECH in good faith in order effectively to contest such
claim, and
     (D) permit GTECH to participate in any proceedings relating to such claim;
provided, however, that GTECH 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 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),
GTECH 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 Executive to pay the tax
claimed and sue for a refund or contest the claim in any permissible manner, and
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 GTECH shall determine; provided, however, that if GTECH
directs Executive to pay such claim and sue for a refund, GTECH shall advance
the amount of such payment to Executive, on an interest-free basis and shall
indemnify and hold 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 Executive with
respect to which such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, GTECH’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and 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.

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               (vi) If, after the receipt by Executive of an amount advanced by
GTECH pursuant to Section 5(c), Executive becomes entitled to receive any refund
with respect to such claim, Executive shall (subject to GTECH’s complying with
the requirements of Section 5(c)) promptly pay to GTECH the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Executive of an amount advanced by
GTECH pursuant to Section 5(c), a determination is made that Executive shall not
be entitled to any refund with respect to such claim and GTECH does not notify
Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
          (d) Reimbursement of Expenses. Consistent with GTECH’s established
policies, GTECH shall pay or reimburse Executive for all reasonable and
necessary travel and other expenses of Executive incurred by Executive in
performing her duties hereunder upon receipt of appropriate written
substantiation of such expenses.
          (e) Housing. If deemed necessary by the Chief Executive Officer of the
Company for the performance of Executive’s duties hereunder, the Company shall
make available to Executive at no cost to Executive rental or other short-term
housing near the Company’s Rome headquarters.
     6. Benefits.
          (a) Benefits. Except as otherwise expressly provided herein, Executive
shall be entitled to receive, during the Term, benefits substantially similar to
the level of benefits provided generally to Senior Executives under any benefit
plan, program or arrangement of GTECH in effect, subject to Executive’s meeting
the eligibility requirements of such plans, programs or arrangements, and in the
case of benefit plans, programs or arrangements providing for discretionary
grants or awards, to the discretion of the Board or applicable committee.
          (b) Stock Options. Executive shall receive the following stock options
in accordance with the following terms and conditions:
               (i) Executive shall be eligible for consideration by the
Committee for annual grants of stock options under the Company’s stock option or
equity compensation plans existing on the date of this Agreement or established
hereafter (each being referred to as a “Long Term Incentive Plan”), in the sole
discretion of the Committee.
               (ii) All grants of stock options under this Agreement are subject
to and conditioned upon the Company obtaining all necessary shareholder
approvals, if any, which Company shall use all reasonable efforts to obtain.
          (c) Grant of Shares. Not less than 35% of the calculated value of
annual long term incentive awards under a Long Term Incentive Plan shall be
provided to Executive in the form of an award of fully-vested Shares. The
foregoing awards of fully-vested Shares will be subject to all the terms of the
applicable Long Term Incentive Plan. It is intended that the foregoing awards of
Shares will be valued on the dates of grant of such awards, but will provide

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that such Shares will only be issued and transferred to the Executive upon the
future achievement of certain target performance goals to be determined by the
Company consistent with its equity compensation policies for Senior Executives,
and provided that the Executive is continuously employed by GTECH.
Notwithstanding the foregoing, the Company may grant the foregoing Shares on
such other basis as is consistent with its Share grants to other Senior
Executives of the Company.
          (d) Award of Shares. Executive shall be eligible for a 2007 long-term
incentive award at such time as such awards are made for other Senior
Executives. The value of such award on the date of grant will be split 65% stock
options and 35% Shares using traditional Black Scholes option pricing. Such
award shall be made under the terms of a Long Term Incentive Plan. The Company
will grant the Executive a retention equity award of 12,500 fully-vested Shares
(the “Non-Performance Shares”) in five (5) annual installments to be issued and
transferred to the Executive on the respective anniversaries of the Effective
Date as set forth on the schedule below, provided that the Executive will not be
entitled to the issuance and transfer of such Shares on any such date unless the
Executive is continuously employed by GTECH up to and including each such date

          Year   Number of Shares to be Issued
1
    2,500  
2
    2,500  
3
    2,500  
4
    2,500  
5
    2,500  

          (e) Cash-Based Awards. The Company reserves the right to substitute,
in its discretion, awards payable in cash for the stock option and Share awards
described in Sections 6(b), (c) and (d) above. Such cash awards (i) shall be in
the form of stock appreciation rights (in the case of stock option grants) or
restricted share units (in the case of Share awards) of equal value as the stock
options or Share awards they are being substituted for, (ii) shall have vesting
schedules no less advantageous to Executive as the stock options or Share awards
they are being substituted for, and (iii) shall provide for payment of such
restricted share unit awards to Executive immediately upon vesting. Any award
granted pursuant to this Section 6(e) shall hereinafter be referred to as a
Cash-Based Award.
          (f) Dividend Equivalent Awards. With respect to the award of Shares
pursuant to Section 6(c) and (d) above, the Executive will be entitled to an
award of additional Shares equal to the value of any dividends or other
distributions declared by the Company with respect to such Shares between the
effective date of the grants applicable to such Shares and the transfer of such
Shares to the Executive in accordance with the provisions of Sections 5(c),
6(c), 6(d), 9(c) and 9(d) hereof. All Shares issued pursuant to this Section
6(f) shall be (i) valued at the price per ordinary share as of the close of
business on the effective date of such dividend or distribution and (ii) will
only be issued and transferred to the Executive when and if the Shares for which
the dividend or distribution was made are issued and transferred to Executive
pursuant to Sections 5(c), 6(c), 6(d), 9(c) or 9(d) hereof.

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          (g) Certain Specific Benefits and Arrangements. Without limiting the
generality of subsection (a) above (except as may otherwise be specified in
Appendix A hereto), Executive shall be entitled to the specific benefits and
arrangements set forth in Appendix A hereto.
          (h) Indemnification. GTECH shall defend and hold Executive, to the
extent Executive is a defendant, target or witness, harmless to the fullest
extent permitted by applicable law and the organizational documents of GTECH in
connection with any claim, action, suit, investigation or proceeding arising out
of or relating to performance by Executive of services for, or action of
Executive as a director, officer or employee of GTECH or any parent, subsidiary
or affiliate of GTECH, or of any other person or enterprise at GTECH’s request.
To the extent permitted by law and by the organizational documents of GTECH,
expenses incurred by Executive in defending a claim, action, suit or
investigation or criminal proceeding shall be paid by GTECH in advance of the
final disposition thereof upon the receipt by GTECH of an undertaking by or on
behalf of Executive to repay said amount unless it shall ultimately be
determined that Executive is entitled to be indemnified hereunder. This Section
6(h) shall not apply to a non-derivative action commenced by GTECH against
Executive.
     7. Benefits Payable During Term Upon Disability.
          (a) Disability Benefits. In the event of Disability of Executive
during the Term of her employment hereunder, GTECH shall continue to pay
Executive the compensation and extend to him the benefits provided in Sections 5
and 6 hereof during the period of Disability, subject to Section 9(e) hereof and
to the extent permitted by applicable law, provided that in the event of
Executive’s Disability for an aggregate period of time exceeding 150 calendar
days in any 12 consecutive month period during the Term, GTECH, at its election,
may terminate the Term of Executive’s employment, and Executive shall receive
the compensation as set forth in Section 9(b) hereof.
          (b) Services During Disability. During the Term, notwithstanding any
Disability, Executive shall, to the extent that she is physically and mentally
able to do so, furnish information and assistance to GTECH, and, in addition,
upon the reasonable request in writing of the Chief Executive Officer of GTECH,
or a senior executive officer designated by the Chief Executive Officer of
GTECH, from time to time, she shall make himself available to GTECH and its
subsidiaries and affiliates to undertake reasonable assignments consistent with
her position and her physical and mental health.
     8. Termination of Employment.
          (a) Expiration and Earlier Termination. Executive’s Term of employment
shall terminate upon expiration of the Term and shall be subject to earlier
termination:
               (i) upon the death of Executive;
               (ii) at the election of GTECH in the event of Executive’s
Disability (as provided in Section 7(a) hereof);
               (iii) upon discharge of Executive by GTECH for Cause;

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               (iv) upon discharge of Executive without Cause or upon
resignation of Executive with or without Good Reason; and
               (v) upon the Retirement of Executive.
          (b) Certain Obligations of GTECH. GTECH shall give Executive not less
than 60 days’ prior written notice of any intended termination of Executive’s
employment by GTECH for Cause (other than for the reasons set forth in clauses
(ii) and (iv) of the definition of Cause in Section 1 hereof). In the event of
such a proposed termination for Cause, such notice shall specify the grounds for
such termination, and GTECH shall only be entitled to terminate Executive for
such Cause if Executive shall have failed to cure the grounds for such
termination within said 60-day notice period and Executive shall have been
afforded an opportunity to address the Board , with legal counsel, to argue
against such termination. However, after giving such notice and before Executive
is afforded the opportunity to address the Board, GTECH may relieve Executive of
her duties on an interim basis. GTECH may immediately terminate Executive’s
employment by written notice in the event of the occurrence of any of the events
set forth in clauses (ii) and (iv) of the definition of Cause in Section 1
hereof. In addition, GTECH may immediately terminate Executive’s employment
without Cause by written notice to Executive.
          (c) Certain Obligations of Executive. Executive shall give GTECH not
less than 60 days’ prior written notice of any intended termination by Executive
of Executive’s employment, including Retirement. In the event of a proposed
resignation for Good Reason, such notice shall specify the grounds for such
resignation, and Executive shall only be entitled to terminate her employment
for Good Reason if GTECH shall have failed to correct the specified grounds
within said 60-day notice period and, upon cure thereof by GTECH, such event
shall no longer constitute Good Reason. Executive shall not be entitled to
terminate for Good Reason unless she has given notice to GTECH of her intention
to so terminate within 60 days following the occurrence of the event alleged to
constitute such Good Reason. In the event of Retirement, Executive must have met
the minimum established threshold index of 65 and must have completed five years
of continuous service from and after the Effective Date. Notwithstanding the
foregoing, in the event that Executive has given GTECH notice of her intention
to resign or retire, the Board may elect to have such resignation or Retirement
become effective immediately or at such other date, not later than the effective
date specified in the notice, as the Board may determine.
          (d) Resignation. Upon termination of the Term for any reason,
Executive (unless otherwise requested by a majority of the independent directors
of the Board) concurrently shall resign any directorships and officer or
employee positions which she holds with GTECH, its subsidiaries and affiliates.
     9. Compensation, Benefits, etc. Upon, and Effects of, Termination.
          (a) Discharge for Cause and Resignation for Other than Good Reason. If
the Term of Executive’s employment is terminated by reason of her discharge for
Cause or resignation for other than Good Reason, GTECH shall pay or cause to be
paid to Executive or her estate, as the case may be, at the time such payment is
due (i) her Base Salary accrued

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through the effective date of such termination at the rate in effect immediately
prior to such termination; (ii) any accrued but unpaid Performance Bonus under
Section 5(b) hereof for the prior fiscal year (to be paid at the same time
Senior Executives receive performance bonuses for that fiscal year as set forth
in Section 5(b)(i) hereof); and (iii) any other amounts to which Executive is
entitled under the terms of Sections 5 and 6 hereof up to the effective date of
such termination. In the event of such termination of employment for Cause or
resignation for other than Good Reason under this Section 9(a), all unvested
stock options and any rights to any Shares awarded but not yet issued and
transferred pursuant to Section 6(c) or (d) hereof, as they are scheduled to
vest or be issued and transferred in accordance with the applicable Share award
and stock option agreements, shall be forfeited by Executive and any vested
stock options shall remain exercisable for a period of three (3) months after
termination.
          (b) Disability, Death, Discharge Without Cause and Resignation for
Good Reason. If the Term of Executive’s employment is terminated by GTECH by
reason of her Disability as provided in Section 7(a) hereof, by reason of her
death, by GTECH without Cause or by reason of Executive’s resignation for Good
Reason, GTECH shall pay to Executive or her estate, as the case may be, the
following: (i) her Base Salary accrued through the effective date of such
termination at the rate in effect immediately prior to such termination; (ii) an
amount equal to eighteen (18) months of Annual Cash Compensation; (iii) any
accrued but unpaid Performance Bonus under Section 5(b) hereof for the prior
fiscal year; (iv) a Prorated Performance Bonus, if any, payable with respect to
the fiscal year of termination; and (v) any other amounts to which Executive is
entitled under the terms of Sections 5 and 6 hereof up to the effective date of
such termination. The payments required under this Section 9(b) shall be made by
GTECH after such termination as follows: the Base Salary component of Annual
Cash Compensation shall be paid in equal bi-weekly installments over eighteen
(18) months, the Performance Bonus component of Annual Cash Compensation shall
be paid within 14 days, and the Prorated Performance Bonus, if any, payable with
respect to the fiscal year of termination shall be paid at the same time Senior
Executives are paid performance bonuses for the respective fiscal year. Any such
Prorated Performance Bonus shall be paid in cash, notwithstanding the provisions
of Section 5(b)(i) hereof. In the event of Executive’s death, Executive’s estate
shall have 18 months from the date of Executive’s death to exercise all vested
stock options then held by Executive (or their Expiration Dates, if sooner).
          (c) Retirement. If this Agreement is terminated as a result of
Executive’s Retirement, any vested stock options then held by Executive shall
remain exercisable after Retirement until their respective Expiration Dates. If
this Agreement is terminated as a result of Executive’s Retirement, Executive
and her Family shall continue to be covered under or entitled to any and all
medical insurance or other medical benefits that the Executive was covered under
or entitled to at the time of such retirement (or provided substantially
equivalent benefits or coverage) at no additional expense for a period of
5 years from such retirement (subject to the limitation that such benefits will
cease in any event at the end of the month of the Executive’s 65th birthday). If
Executive achieves a Retirement Factor of 65 and retires from GTECH, 50% of any
Shares awarded but not yet issued and transferred to Executive on the date of
her retirement pursuant to Sections 5(c), 6(c) or 6(d) hereof will be promptly
issued and transferred to Executive whether or not the Executive has satisfied
any performance or employment requirements set forth in Sections 6(c) or 6(d)
hereof and the Executive’s right to 50% of the Shares awarded but not yet issued
and transferred to Executive will expire as of the effective date

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of Retirement. If this Agreement is terminated as a result of Executive’s
Retirement upon achieving a Retirement Factor of 75, (i) Executive and her
Family shall continue to be covered under or entitled to any and all medical
insurance or other medical benefits that the Executive was covered under or
entitled to at the time of such retirement (or provided substantially equivalent
benefits or coverage) at no additional expense for a period of 10 years from
such retirement (subject to the limitation that such benefits will cease in any
event at the end of the month of the Executive’s 65th birthday) and (ii) 100% of
any Shares awarded but not yet issued and transferred to Executive on the date
of her retirement pursuant to Sections 5(c), 6(c) or 6(d) hereof will be
promptly issued and transferred to Executive whether or not the Executive has
satisfied any performance or employment requirements set forth in Sections 6(c)
or 6(d) hereof. Retirement with a Retirement Factor between 65 and 75 will
result in (i) a six-month increase in the period of continued medical coverage
for each 1 Retirement Factor point increase (subject to the limitation that such
benefits will cease at the end of the month of the Executive’s 65th birthday)
and (ii) a 5% increase in the number of Shares to be issued and transferred for
each 1 Retirement Factor point increase (e.g., a Retirement Factor of 67 will
result in continued medical coverage for a period of 6 years (subject to the
limitation that such benefits will cease at the end of the month of the
Executive’s 65th birthday) and 60% of any Shares awarded but not yet issued and
transferred to Executive to be promptly issued and transferred to Executive).
          (d) Effect of Termination Under Section 9(b). In the event this
Agreement is terminated in accordance with Section 9(b) hereof, GTECH shall
continue, for a period of eighteen (18) months following such termination, the
benefits described in Sections 2, 4 and 6 of Appendix A, and shall continue the
medical benefits described in Section 3 of Appendix A for the remainder of the
Term, as if the Agreement had not been terminated, and shall continue such
medical coverage for an additional period of eighteen (18) months after the
expiration of the Term (the “Continued Medical Benefits”). Notwithstanding the
foregoing, in the event of a termination on account of death or Disability,
Executive and her Family shall continue to be covered under or entitled to any
and all medical insurance or other medical benefits that the Executive was
covered under or entitled to at the time of the Executive’s termination on
account of death or Disability (or provided substantially equivalent benefits of
coverage) at no additional expense for a period of ten years from the
Executive’s termination on account of death or Disability (subject to the
limitation that such benefits will cease in any event at the end of the month of
the Executive’s 65th birthday). In addition, in the event that this Agreement is
terminated in accordance with Section 9(b) hereof, (i) Executive shall become
fully vested in all non-qualified retirement plans, and in all benefits accrued
under all other employee benefit plan (other than qualified retirement plans),
(ii) any Non-Performance Shares awarded but not yet issued and transferred to
Executive pursuant to Sections 5(c) or 6(d) hereof on the date of her
termination of employment shall be promptly issued and transferred to Executive
irrespective of satisfaction of any employment requirements set forth in
Sections 6(d) hereof, (iii) any Cash-Based Awards issued in substitution of
awards of Non-Performance Shares that have not vested as of her date of
termination of employment will become fully vested and (iv) Executive shall have
eighteen (18) months from the date of the termination of her employment (or
until their Expiration Dates, if sooner) to exercise any vested stock options
then held by Executive. Additionally, to the extent Executive is not fully
vested in all Company or GTECH qualified retirement plans, Executive shall
receive a payment equal to any unvested portion of such retirement plans.
Executive also shall be entitled, to the extent not inconsistent with this
Agreement, to receive such additional benefits, if any, as she may be entitled
to under the

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express terms of the applicable benefit plans (other than bonus and severance
plans) of GTECH, its subsidiaries and affiliates, and to whatever medical
coverage, if any, as is required to be provided by applicable law.
          (e) Reductions, Forfeitures, etc. Notwithstanding the foregoing:
(i) any payments or benefits required to be paid or provided to Executive
pursuant to Section 7(a) in the event of Executive’s Disability shall be reduced
to the extent that comparable payments or benefits are received by Executive
during such period under GTECH’s disability plan, as in effect from time to
time, (ii) without limiting any other rights GTECH may have, any payments or
benefits required to be paid or provided to Executive under this Agreement shall
be forfeited to GTECH by Executive if Executive shall breach any of her
obligations under Sections 10(b) or 11 hereof, except as may otherwise be
required by applicable law, and (iii) except as otherwise provided above, the
payments and benefits required by this Section 9 shall be made or provided at
such times as they would have been paid or provided if Executive’s employment
had not been terminated.
          (f) Full Settlement. In the event of the termination of Executive’s
employment, the payments and other benefits provided for by this Agreement (and
as otherwise provided under the express terms of any compensation or benefit
plans of GTECH, its subsidiaries or affiliates, to the extent not inconsistent
with this Agreement, or as may otherwise be required by applicable law) shall
constitute the entire obligation of GTECH, its subsidiaries and affiliates to
Executive for compensation and benefits and shall also constitute full and
complete settlement of any claim under law or in equity that Executive might
otherwise assert against GTECH, its subsidiaries or affiliates, for compensation
and benefits. Executive has no duty to mitigate respecting other employment
after the termination of this Agreement and shall be entitled to receive the
amounts described in this Section 9 irrespective of whether Executive obtains
other employment immediately following such termination.
          (g) Release. The receipt of the benefits described in Section 5(c) or
Section 9 hereof shall be conditioned upon the execution and non-revocation by
Executive of GTECH’s standard general release of claims and covenant not to sue
for Senior Executives located in the United States.
     10. Certain Obligations of Executive.
     Executive further covenants for the benefit of GTECH as follows and
expressly agrees that the provisions of Sections 10 and 11 are material
obligations to GTECH and the breach of those provisions will constitute material
breaches of this Agreement. As used in Sections 10 and 11, the term “GTECH”
shall include Lottomatica S.p.A., GTECH Holdings Corporation, GTECH Corporation
and their subsidiaries and affiliates.
          (a) Assistance in Litigation. During the Term, and for a period of
three years thereafter subject to reasonable accommodation of Executive’s then
business schedule, Executive, upon reasonable notice, shall furnish such
information and proper assistance to GTECH as may reasonably be required in
connection with any litigation in which GTECH is, or may become, a party or in
connection with any investigation or review by any governmental agency to which
GTECH is, or may become, a subject. GTECH shall compensate Executive at a

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reasonable hourly rate, plus reimburse all expenses incurred consistent with
GTECH policy, for any such assistance provided by Executive after the Term.
          (b) Confidential Information. Executive shall not knowingly use for
her own benefit or disclose or reveal to any person, during or after the Term,
any trade secret or other confidential information relating to GTECH, including
any customer lists, customer needs, price and performance information,
processes, specifications, hardware, software, firmware, programs, devices,
supply sources and characteristics, business opportunities, marketing,
promotional, pricing and financing techniques, and other information relating to
GTECH; provided that such restriction on confidential information shall not
apply to information which is (i) proven to be generally available in the
industry, (ii) disclosed in published literature, or (iii) obtained by Executive
after the Term from a third party without binder of secrecy. Executive agrees
that, except as otherwise agreed by GTECH, she will return to GTECH, promptly
upon the request of the Chief Executive Officer of GTECH or any senior executive
officer designated by the Chief Executive Officer of GTECH, any physical
embodiment of such confidential information. In the event Executive is requested
by any legal process to disclose Confidential Information, Executive shall
immediately inform GTECH and shall permit GTECH an opportunity to oppose such
process, it being understood that Executive’s compliance with legal process,
after GTECH’s reasonable opportunity to oppose such process, does not constitute
a violation of this Section 10(b).
          (c) Proprietary Creations. All rights, title and interest in and to
any ideas, inventions, technology, processes, know-how, works, hardware,
software, firmware, programs, devices, trade secrets, trade names, trademarks or
service marks, which Executive may conceive, create, organize, prepare or
produce during the period of her employment with GTECH and which relate to the
business of GTECH, and all rights, title and interest in and to any patents,
patent applications, copyright registrations and copyright applications
resulting therefrom, shall be owned by GTECH, and Executive agrees to execute
instruments or documents, to provide evidence and testimony, and to otherwise
assist GTECH in establishing, enforcing and maintaining such rights, title and
interest of GTECH during and after the Term.
          (d) Authorization. Executive does hereby irrevocably constitute,
authorize, empower and appoint GTECH, or any of its officers, such Executive’s
true and lawful attorney (with full power of substitution and delegation) in
Executive’s name, and in Executive’s place and stead, or in GTECH’s name, to
take and do such action, and to make, sign, execute, acknowledge and deliver any
and all instruments or documents which GTECH, from time to time, may deem
desirable or necessary to vest in GTECH, its successors and assigns, any of the
rights, title or interest granted pursuant to Section 10(c) above for the use
and benefit of GTECH, its successors and assigns.

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     11. Non-Competition.
          (a) During the Term and for eighteen (18) months following termination
of Executive’s employment (irrespective of the reason for such termination),
Executive shall not engage or propose to engage, directly or indirectly (which
includes owning, managing, operating, controlling, being employed by, acting as
a consultant to, giving financial assistance to, participating in or being
connected in any material way with any business or person so engaged) in any
Company Business anywhere in the world, including without limitation in any
business which competes or proposes to compete with any Company Business
anywhere in the world; provided, that Executive’s ownership as a passive
investor of less than one percent of the issued and outstanding stock or equity,
or $100,000 principal amount of any debt securities, of any corporation,
partnership or other entity so engaged shall not by itself be deemed to
constitute such engagement by Executive. As used herein, the term “Company
Business” shall mean (i) the manufacturing, distribution, and sale of lottery or
gaming machines or (ii) any other business engaged in by GTECH or any of its
subsidiaries or affiliates, including the Company, during the Term, provided,
that such term shall not include any business that is (a) principally engaged in
the provision of non-gaming or non-gaming-related transaction processing
services or (b) engaged in the business of non-gaming or non-gaming-related
transaction processing services and not principally engaged in any business
competitive with any other business described in clauses (i) or (ii) above.
          (b) Further, for a period of eighteen (18) months following
termination of Executive’s employment (irrespective of the reason for such
termination), Executive shall not (i) disturb or interfere with any business
relationship between GTECH and any of its customers, suppliers or other business
associates, or (ii) solicit or cause to be solicited any officer, employee or
customer of GTECH to terminate such person’s relationship with GTECH or to take
other action which is materially injurious to GTECH.
     12. Tax Withholding.
     GTECH may withhold from any benefits payable under this agreement all
Federal, State, City, or other taxes as shall be required pursuant to any law or
governmental regulations or ruling.
     13. Effect of Prior Agreements.
     This Agreement, including the Appendices hereto, contains the entire
understanding between the parties hereto or between Executive and GTECH, with
respect, to the matters covered herein and supersedes any prior agreement,
condition, practice, custom, usage and obligation with respect to such matters
insofar as any such prior agreement, condition, practice, custom, usage or
obligation might have given rise to any enforceable right.
     14. General Provisions.
          (a) Certain Representations and Warranties of Executive. Executive
represents to GTECH that (i) the execution and performance of this Agreement by
Executive and her employment hereunder does not and will not constitute a breach
of or violate any contract, agreement, obligation or understanding, oral or
written, or order of any court or governmental

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authority to which she is a party or by which she is bound; (ii) the employment
and other personal background information provided by Executive to GTECH is true
and correct in all material respects; (iii) to the best of Executive’s
knowledge, there is no factor relating to him or her Family not previously
disclosed in writing to GTECH which could reasonably be expected, if she were a
senior executive officer or director of GTECH, to disqualify GTECH or its
subsidiaries or affiliates from, or materially jeopardize their chances of,
obtaining lottery contracts or other contracts in, or any licenses or
governmental permits for, the businesses in which they are engaged or propose to
engage; and (iv) Executive has been represented by counsel selected by Executive
or has had adequate opportunity to select such counsel, in connection with the
execution and delivery of this Agreement.
          (b) Representations and Agreements. Executive represents and agrees
that: (a) (i) the offer and sale of Shares and stock options therefor pursuant
hereto have not been and will not be registered under the Securities Act, and it
is the intention of the parties hereto that the offer and sale of such
securities be exempt from registration under the Securities Act and the rules
and regulations promulgated thereunder; (ii) the reliance of the Company on such
exemption is predicated upon such Executive’s representations and agreements set
forth herein; (iii) the Shares and stock options therefor (and any part thereof
or participation or interest therein) being acquired pursuant hereto cannot be
sold, transferred, assigned, exchanged, pledged, encumbered or otherwise
disposed of (including, without limitation, in connection with any hedging
activities) unless they are registered under the Securities Act or an exemption
from registration (including Regulation S under the Securities Act) is
available, and the Company has no obligation to so register any such Shares or
stock options; (iv) the purchase of Shares and stock options therefor pursuant
hereto does not entitle Executive to participate in any other equity program of
the Company, whether now existing or hereafter established; (v) Executive is not
purchasing Shares or stock options therefor as a result of any general
solicitation or general advertising; and (vi) the Company is relying on the
representations and agreements contained herein in engaging in the offer and
sale of the Shares and stock options therefor, would not engage in such
transactions in the absence of the representations and agreements contained
herein and any obligation of the Company herein to offer or sell Shares or stock
options therefor is conditioned upon the accuracy of such representations;
(b) Executive is acquiring the Shares and stock options therefor being acquired
pursuant hereto for investment for Executive’s own account and not with a view
to the distribution thereof, and Executive does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer, assign,
exchange, pledge, encumber or otherwise dispose of (including, without
limitation, in connection with any hedging activities) any of the Shares or
stock options therefor (or any part thereof or participation or interest
therein) to such person or to any third person; (c) Executive will not directly
or indirectly, sell, transfer, assign, exchange, pledge, encumber or otherwise
dispose of (including, without limitation, in connection with any hedging
activities) any Shares or stock options therefor (or any part thereof or
participation or interest therein) being acquired pursuant hereto except in
accordance with this Agreement and applicable law and Executive will not effect
any sale, transfer, assignment, exchange, pledge, encumbrance or disposition of
any Shares other than on the Milan Stock Exchange or in compliance with any
applicable exemption available under the Securities Act; (d) Executive has, or
Executive together with Executive’s advisers, if any, have, such knowledge and
experience in financial and business matters that Executive is, or Executive
together with Executive’s advisers, if any, are, and will be capable of
evaluating the merits and risks relating to Executive’s purchase of Shares and
stock options

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therefor pursuant hereto; (e) Executive has been given the opportunity to obtain
information and documents relating to the Company and to ask questions of and
receive answers from representatives of the Company concerning the Company and
Executive’s investment in the Shares and stock options therefor; (f) Executive’s
decision to invest in the Company has been based upon independent investigations
made by Executive and Executive’s advisers, if any; (g) Executive is able to
bear the economic risk of a total loss of Executive’s investment in the Company;
(h) Executive has adequate means of providing for Executive’s current needs and
foreseeable personal contingencies and has no need for Executive’s investment in
the Shares or stock options therefor to be liquid; (i) Executive is an
“accredited investor” within the meaning of either Rule 501(a)(5) or (a)(6)
promulgated under the Securities Act; (j) this Agreement has been duly executed
and delivered by Executive, and constitutes a legal, valid and binding
obligation of Executive, enforceable in accordance with its terms, subject to
limitations in bankruptcy and to other equitable limitations; and (k) Executive
will promptly advise the Company if any of the foregoing representations cease
to be true during the term hereof. The Company agrees that the offer and sale of
Shares by Executive on the Milan Stock Exchange shall be considered an “offshore
transaction” for purposes of Rule 904(a)(1) promulgated under the Securities Act
(as such rule is in effect as of the date hereof).
          (c) Non-Assignability and Inurement. Neither this Agreement nor any
rights or interest hereunder shall be assignable by Executive, her
beneficiaries, or legal representatives without GTECH’s prior written consent
(it being understood that all payments to which Executive is entitled hereunder
shall inure to the benefit of her estate or legal heirs).
          (d) Binding Agreement. This Agreement shall be binding upon, and
accrue to the benefit of, Executive, GTECH and the Company and their respective
heirs, executors, administrators, successors and permitted assigns, including,
in the case of GTECH or the Company, any person or entity acquiring all or
substantially all of GTECH’s or the Company’s assets.
          (e) Amendment of Agreement. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto.
          (f) Remedies. Executive acknowledges and agrees that the possible
restrictions on her activities which may occur as a result of her performance of
her obligations under Sections 10 and 11 hereof are required for the reasonable
protection of GTECH, its subsidiaries and affiliates, and Executive expressly
acknowledges and agrees that such restrictions are fair and reasonable for that
purpose. Executive further expressly acknowledges and agrees that damages alone
will be an inadequate remedy for any breach or violation by him of this
Agreement and that GTECH, its subsidiaries and affiliates, in addition to all
other remedies at law or in equity, shall be entitled as a matter of right to
injunctive relief, including specific performance, with respect to any such
breach or violation, in any state or federal court in Rhode Island, which courts
shall have exclusive jurisdiction with respect to any such action. If any of the
provisions of such Sections are held to be in any respect an unreasonable or
unlawful restriction upon Executive, then they shall be deemed to extend only
over the maximum period of time, geographic area, and/or range of activities as
to which they may be enforceable.

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          (g) Waiver. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel.
          (h) Severability. If, for any reason, any provision of this Agreement
is held invalid, such invalidity shall not affect any other provision of this
Agreement not so held invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect.
          (i) Notices. For the purposes of this Agreement, notice and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when hand delivered or mailed by United States
certified or registered express mail, return receipt requested, postage prepaid,
if to Executive, addressed to the address set forth on the signature page of
this Agreement; if to GTECH or to the Company, addressed to Lottomatica S.p.A.,
Viale del Campo Boario n.56/D, 00153 Rome, Italy and directed to the attention
of the Chief Executive Officer of the Company, or to such other address as
either party may have furnished to the others in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
          (j) Counterparts. This Agreement may be executed by facsimile and in
several counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
          (k) Indulgences, Etc. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.
          (l) Headings. The headings of Sections and paragraphs herein are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.
          (m) Governing Law; Forum. This Agreement shall be governed by and
construed in accordance with the laws of the State of Rhode Island, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof. In the event of any dispute hereunder, the prevailing party
shall be entitled to recover all costs, including reasonable attorneys’ fees,
incurred in adjudicating such dispute. The parties submit to the sole and
exclusive jurisdiction and venue of the state and federal courts located in
Rhode Island and waive any and all objections to such jurisdiction or venue.
          (n) Joint and Several Liability. Notwithstanding any other provision
of this Agreement, each of the Company and GTECH, and their successors and
assigns, shall be jointly and severally liable for all obligations of any of
them to Executive hereunder. In the event that a substantial portion of the
assets of the Company or GTECH are transferred to any other direct or

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indirect subsidiary or other affiliate of the Company or GTECH, whether in one
transaction or a series of transactions, the Company or GTECH, as applicable,
shall cause (prior to or concurrently with each transfer) the transferee to
become a signatory to this Agreement and to become jointly and severally liable
for all obligations or any of them to Executive hereunder.
          (o) Conflicts. To the extent there is any conflict between the terms
of this Agreement and (i) any stock option agreement or Share award agreement
respecting acceleration, vesting or exercisability of stock options or Shares
during Executive’s employment or thereafter or (ii) any other agreement, plan or
document to which Executive and GTECH are parties or that governs any benefits
received by Executive, the provisions of this Agreement or those such
agreements, plans or documents that are more beneficial to Executive shall
prevail and supersede any conflicting provisions.
     15. Section 409A. To the extent applicable, it is intended that this
Agreement comply with the provisions of Section 409A of the Code, and this
Agreement shall be construed and applied in a manner consistent with this
intent. In the event that the benefits or payments under this Agreement are
determined by GTECH to be in the nature of nonqualified deferred compensation
payments, GTECH and Executive hereby agree to take such actions and to make such
changes to the benefits or payments hereunder as may be mutually agreed between
the parties to ensure that such benefits or payments comply with the applicable
provisions of Section 409A of the Code and the official guidance issued
thereunder, provided that in the event of any such change to the benefits or
payments hereunder, the value or types of payments or benefits under this
Agreement shall be appropriately adjusted so that the aggregate present value of
the payments and benefits hereunder after such change are economically
equivalent to the aggregate present value that existed prior to such change.
     16. . Consummation of Merger. Notwithstanding anything else in this
Agreement to the contrary, no provision of this Agreement shall be effective
until following the consummation of the Merger. In the event that the Merger is
cancelled prior to its consummation, this Agreement shall be deemed null and
void.
(Signatures on Next Page)

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     IN WITNESS WHEREOF, Lottomatica S.p.A. and GTECH Corporation have caused
this Agreement to be executed by their duly authorized officers, and Executive
has signed this Agreement, all as of the day and year first above written.

                  LOTTOMATICA S.p.A.    
 
           
Attest:
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                GTECH CORPORATION    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                CORNELIA LAVERTY O’CONNOR    
 
            Witness:                                                            
 
                                                                                                    
   
 
  Address:   50 Park Row West, #204    
 
      Providence, RI 02903    

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APPENDIX A
Summary of Certain Benefits and Arrangements
     1. Vacation. Executive shall be entitled to a paid vacation of four weeks
per year provided that if Executive is eligible for “Retirement” as defined in
Section 1, Executive shall be entitled to a paid vacation of five weeks per
year.
     2. Life Insurance. Executive shall receive life insurance coverage in
accordance with GTECH’s policy in a manner comparable to Senior Executives.
     3. Medical. During the Term, the cost of Executive’s annual physical
examination shall be borne by GTECH. In addition, GTECH shall provide Executive
and her Family with medical insurance in a manner comparable to Senior
Executives as may be modified from time to time and on the following additional
terms:
          (a) Such medical insurance shall be provided to Executive and her
Family during the Term and such medical insurance shall continue to be provided
to Executive and her Family after the expiration of the Term to the extent
expressly provided in Sections 5(c), 9(c) and 9(d).
          (b) Executive may participate at her own cost in GTECH’s retirement
health plan provided she satisfies the eligibility requirements of such plan and
that such plan continues to be made available by GTECH.
          (c) Notwithstanding the foregoing, GTECH shall not be obliged to
continue medical insurance for Executive after expiration of the Term (except to
the extent expressly provided in Section 9(d)) if and, to the extent Executive
qualifies for medical insurance benefits with Family coverage from a successor
employer,
     4. Annual Executive Perquisite Compensation Contribution. GTECH shall make
a $70,000 annual contribution to Executive for each year of the Term, payable
annually no later than January 15 of the following year.
     5. 401(k) Plan. Executive shall be entitled to participate in GTECH’s
401(k) or similar retirement plan in a manner similar to other Senior
Executives.
     6. Executive Tax Preparation. Executive shall be entitled to tax
preparation and financial planning services, at GTECH’s expense, up to a maximum
annual expense of $5,000.00.
     7. Language Training. If determined by the Chief Executive Officer of GTECH
to be necessary for performance of Executive’s responsibilities hereunder, GTECH
shall provide Executive with Italian language training.

 

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APPENDIX B
Investment Control Agreement