LICENSED AND OTHER PROPRIETARY GAME ENTERTAINMENT FOR ALL LOTTERY PRODUCT
CHANNELS; INVOLVING PROVISION OF WAGERING (WHETHER PARI-MUTUEL (POOLED) OR
OTHERWISE) OR VENUE MANAGEMENT SERVICES FOR RACETRACKS AND OFF-TRACK BETTING
FACILITIES; PRODUCTION OF PREPAID CELLULAR PHONE CARDS; OR ANY OTHER BUSINESS IN
WHICH THE COMPANY IS THEN OR WAS WITHIN THE PREVIOUS TWENTY-FOUR MONTHS ENGAGED
OR IN WHICH THE COMPANY, TO EXECUTIVE'S ACTUAL KNOWLEDGE, INTENDS TO ENGAGE
DURING THE TERM OR THE COVERED TIME; AND (II) WHICH COMPETING BUSINESS IS
CONDUCTED OR PLANNED TO BE CONDUCTED ANYWHERE IN THE UNITED STATES OR IN ANY
OTHER GEOGRAPHIC AREA IN WHICH SUCH BUSINESS WAS CONDUCTED OR PLANNED TO BE
CONDUCTED BY THE COMPANY; PROVIDED, FURTHER, THAT THIS SECTION 5.1(A) SHALL NOT
RESTRICT EXECUTIVE FROM ENGAGING IN (AND THE TERM "COMPETING BUSINESS" SHALL NOT
INCLUDE) ANY BUSINESS IN WHICH THE COMPANY NO LONGER ENGAGES OR PLANS TO ENGAGE;
AND PROVIDED FURTHER THAT ACTIVITIES OF THE COMPANY, OR ACTIVITIES ENGAGED IN BY
EXECUTIVE FOR OR ON BEHALF OF THE COMPANY, ARE NOT RESTRICTED BY THIS
SECTION 5.1(A) AND SHALL NOT CONSTITUTE A "COMPETING BUSINESS."
OWNERSHIP OF
(I) THE SECURITIES OF ANY ENTITY FOR WHICH A COMPETING BUSINESS REPRESENTS LESS
THAN 10% OF NET SALES OR NET INCOME (AS DETERMINED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES) FOR THE MOST RECENT FISCAL YEAR (OR IF SUCH
ENTITY HAS NOT COMPLETED A FISCAL YEAR, NET SALES OR NET INCOME PROJECTED FOR
ITS FIRST FISCAL YEAR) OR (II) NOT MORE THAN TWO PERCENT OF THE EQUITY
SECURITIES OF ANY COMPANY HAVING SECURITIES LISTED ON AN EXCHANGE OR REGULARLY
TRADED IN THE OVER-THE-COUNTER MARKET SHALL NOT, OF ITSELF, BE DEEMED
INCONSISTENT WITH THIS SECTION 5.1(A).
NOTHING HEREIN SHALL REQUIRE EXECUTIVE
TO SELL OR OTHERWISE DISPOSE OF ANY SECURITIES OF ANY ENTITY IF THE ACQUISITION
OF SUCH SECURITIES DID NOT VIOLATE THE TERMS OF THIS SECTION 5.1(A) AT THE TIME
OF SUCH ACQUISITION.
15
(B)
IN FURTHER CONSIDERATION OF THE AMOUNTS THAT MAY HEREAFTER BE PAID
TO EXECUTIVE PURSUANT TO THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION, SECTIONS
3 AND 4), EXECUTIVE AGREES THAT DURING THE TERM (INCLUDING ANY EXTENSIONS
THEREOF) AND DURING THE COVERED TIME EXECUTIVE SHALL NOT, DIRECTLY OR
INDIRECTLY, (I) SOLICIT OR ATTEMPT TO INDUCE ANY OF THE EMPLOYEES, AGENTS,
CONSULTANTS OR REPRESENTATIVES OF THE COMPANY TO TERMINATE HIS, HER, OR ITS
RELATIONSHIP WITH THE COMPANY; (II) SOLICIT OR ATTEMPT TO INDUCE ANY OF THE
EMPLOYEES, AGENTS, CONSULTANTS OR REPRESENTATIVES OF THE COMPANY TO BECOME
EMPLOYEES, AGENTS, CONSULTANTS OR REPRESENTATIVES OF ANY OTHER PERSON OR ENTITY;
(III) SOLICIT OR ATTEMPT TO INDUCE ANY CUSTOMER, VENDOR OR DISTRIBUTOR OF THE
COMPANY TO CURTAIL OR CANCEL ANY BUSINESS WITH THE COMPANY; OR (IV) HIRE ANY
PERSON WHO, TO EXECUTIVE'S ACTUAL KNOWLEDGE, IS, OR WAS WITHIN 180 DAYS PRIOR TO
SUCH HIRING, AN EMPLOYEE OF THE COMPANY.
(C)
DURING THE TERM (INCLUDING ANY EXTENSIONS THEREOF) AND DURING THE
COVERED TIME, EXECUTIVE AGREES THAT UPON THE EARLIER OF EXECUTIVE'S
(I) NEGOTIATING WITH ANY COMPETITOR (AS DEFINED BELOW) CONCERNING THE POSSIBLE
EMPLOYMENT OF