Document:

Exhibit
10.1

 

EMPLOYMENT
AGREEMENT

 

This
EMPLOYMENT AGREEMENT (the “Agreement”) is entered into on this 31st day
of July, 2006 (the “Commencement Date”) by and between Penn National Gaming,
Inc., a Pennsylvania corporation (the “Company”), and Leonard DeAngelo, an
individual residing in Pennsylvania (“Executive”).

 

WHEREAS,
Executive and the Company are party to a certain Employment Agreement, dated as
of June 10, 2003 (as amended and extended from time to time, the “Initial
Agreement”); and

 

WHEREAS, the parties
now desire to terminate the Initial Agreement and to enter into a new agreement
reflecting, among other things, certain additional covenants and consideration
exchanged by the parties, all as more specifically set forth herein.

 

NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree as
follows:

 

1.  Employment.
The Company hereby agrees to employ Executive and Executive hereby accepts such
employment, in accordance with the terms, conditions and provisions hereinafter
set forth.

 

1.1.          Duties and
Responsibilities. Executive shall serve as Executive Vice President,
Operations of the Company. Executive shall perform all duties and accept all
responsibilities incident to such position as may be reasonably assigned to him
by the President and Chief Operating Officer, the Chief Executive Officer or the
Board of Directors of the Company (the “Board”). Executive’s principal place of
employment shall be in Wyomissing, Pennsylvania.

 

1.2.          Term. The term of
this Agreement shall begin on the date hereof and shall terminate at the close
of business on the third anniversary of the Commencement Date (the “Initial
Term”), unless earlier terminated in accordance with Section 3 hereof. This
Agreement shall automatically renew for additional three-year periods (each, a “Renewal
Term” and, together with the Initial Term, the “Employment Term”) unless either
party has delivered written notice of non-renewal at least 60 days prior to the
start of a Renewal Term or unless earlier terminated in accordance with Section
3 hereof.

 

1.3.          Extent of Service.
Executive agrees to use Executive’s best efforts to carry out Executive’s
duties and responsibilities and, consistent with the other provisions of this
Agreement, to devote substantially all of Executive’s business time, attention
and energy thereto. The foregoing shall not be construed as preventing
Executive from serving on the board of philanthropic organizations, or
providing oversight with respect to his personal investments, so long as such
service does not materially interfere with Executive’s duties hereunder.

 

2.  Compensation.
For all services rendered by Executive to the Company, the Company shall
compensate Executive as set forth below.

 

 

1

 

2.1.          Base Salary. The
Company shall pay Executive a base salary (“Base Salary”) at the annual rate of
seven hundred fifty thousand ($750,000), payable in installments at such times
as the Company customarily pays its other senior executives (“Peer Executives”).
Executive’s performance shall be reviewed annually. Any increase in Base Salary
or other compensation shall be made at the sole discretion of the compensation
committee of the Board (the “Compensation Committee”); it being understood that
the Compensation Committee has no intention of increasing Executive’s Base
Salary during the Initial Term.

 

2.2.          Cash Bonuses. Executive
shall participate in the Company’s incentive compensation plan for senior
management as such may be adopted, amended and approved, from time to time, by
the Compensation Committee.

 

2.3.          Equity Compensation.
In connection herewith, the Company shall grant to Executive options pursuant
to, and subject to the terms and conditions of, the Company’s current equity
compensation plan for 250,000 shares of common stock at an exercise price
determined in accordance with the governing plan. The Company acknowledges that
the Compensation Committee approved the grant of such options on the date
hereof. Such options shall vest in four equal annual installments. The terms of
such options and the amount and terms of any future equity compensation shall
be determined in the sole discretion of the Compensation Committee; it being
understood that the Compensation Committee has no intention of awarding any additional
equity compensation during the Initial Term.

 

2.4.          Other Benefits. Executive
shall be entitled to participate in all other employee benefit plans and
programs, including, without limitation, health, vacation, retirement, deferred
compensation or SERP, made available to other Peer Executives, as such plans
and programs may be in effect from time to time and subject to the eligibility
requirements of the each plan. Nothing in this Agreement shall prevent the
Company from amending or terminating any retirement, welfare or other employee
benefit plans or programs from time to time, as the Company deems appropriate.

 

2.5.          Vacation, Sick Leave
and Holidays. Executive shall be entitled in each calendar year to four (4)
weeks of paid vacation time. Each vacation shall be taken by Executive at such
time or times as agreed upon by the Company and Executive, and any portion of
Executive’s allowable vacation time not used during the calendar year shall be
subject to the Company’s payroll policies regarding carryover vacation. Executive
shall be entitled to holiday and sick leave in accordance with the Company’s
holiday and other pay for time not worked policies.

 

2.6.          Reimbursement of
Expenses. Executive shall be provided with reimbursement of reasonable
expenses related to Executive’s employment by the Company on a basis no less
favorable than that authorized from time to time for Peer Executives.

 

2.7.          Insurance. The
Company shall maintain life insurance on the life of Executive in the amount of
$1,000,000, to the extent it can be issued at standard rates, and Executive may
name the beneficiary of such policy.

 

3.  Termination.
Executive’s employment may be terminated prior to the end of the Employment
Term in accordance with, and subject to the terms and conditions, set forth
below.

 

2

 

3.1.          Termination by the
Company.

 

(a)           Without Cause. The
Company may terminate Executive at any time without Cause (as such term is
defined in subsection (b) below) upon delivery of written notice to Executive,
which notice shall set forth the effective date of such termination.

 

(b)           With Cause. The
Company may terminate Executive at any time for Cause effective immediately
upon delivery of written notice to Executive. As used herein, the term “Cause”
shall mean:

 

(i)            Executive
shall have been convicted of a felony or any misdemeanor involving allegations
of fraud, theft, perjury or conspiracy;

 

(ii)           Executive
is found disqualified or not suitable to hold a casino or other gaming license
by a governmental gaming authority in any jurisdiction where Executive is
required to be found qualified, suitable or licensed;

 

(iii)          Executive
materially breaches any material Company policy or any material term hereof,
including, without limitation, Sections 4 through 7 and, in each case, fails to
cure such breach within 15 days after receipt of written notice thereof; or

 

(iv)          Executive
misappropriates corporate funds as determined in good faith by the audit
committee of the Board.

 

3.2.          Termination by the
Executive.

 

(a)           Executive may
voluntarily terminate employment for any reason effective upon 90 days’ prior
written notice to the Company, unless the Company waives such notice
requirement (in which case the Company shall notify Executive in writing as to
the effective date of termination).

 

(b)           On or after such time
as Executive is required to report to an individual other than the individual
to whom Executive reports as of the date hereof, Executive shall also have the
right to voluntarily terminate employment for Good Reason (as defined in
Section 8.4(b) but, for this purpose, excluding clause (iii) thereof).

 

3.3.          Termination for Death
or Disability. In the event of the death or total disability of Executive,
this Agreement shall terminate effective as of the date of Executive’s death or
total disability. The term “total disability” shall have the definition set
forth in the Company’s Long Term Disability Insurance Policy in effect at the
time of such determination.

 

3.4.          Payments Due Upon
Termination.

 

(a)           Generally. Upon
any termination described in Sections 3.1, 3.2 or 3.3 above, Executive shall be
entitled to receive any amounts due for Base Salary earned or expenses incurred
through the effective date of termination and any benefits accrued or earned on
or prior to such date in accordance with the terms of any applicable benefit
plans and programs.

 

3

 

(b)           Certain
Circumstances. In the event the Company terminates Executive’s employment
without Cause or due to death or a total disability or in the event that the
Company elects not to renew this Agreement or Executive terminates employment
for Good Reason, and subject to Executive executing the release attached hereto
as Exhibit A, Executive shall be entitled to receive the following in
lieu of any other severance:

 

(i)            Executive
shall receive a payment equal to Executive’s monthly Base Salary at the highest
rate in effect for Executive during the 24-month period immediately preceding
the effective date of termination and Executive’s monthly bonus value
(determined by dividing the highest amount of annual cash bonus compensation
paid to Executive in respect of either the first or second full calendar year
immediately preceding the effective date of termination by twelve) for a period
equal to the greater of (1) the number of months remaining in the Employment
Term or (2) 24 months (the “Severance Period”).

 

(ii)           Executive
shall continue to receive the health benefits coverage in effect on the
effective date of termination (or as the same may be changed from time to time
for Peer Executives) for Executive and, if any, Executive’s spouse and
dependents for the Severance Period. At the option of the Company, the Company
may elect to pay Executive cash in lieu of such coverage in an amount equal to
Executive’s after-tax cost of obtaining generally comparable coverage for such
period.

 

(iii)          Executive
shall continue to serve as a non-officer employee of the Company during the
Severance Period and, as such, all options and other equity compensation granted
to Executive shall continue vesting for such period.

 

(c)           Payments. Cash
Payments due under this Section 3.4 shall be made as follows: 75% shall be made
within 15 days of the effective date of termination and the balance shall be
made in accordance with the payroll practices in effect on the date of
termination, unless, at the Company’s sole option, the Company elects to make
all such payments in a single lump sum. Except as otherwise provided in this
Section 3.4, Section 8 or Section 9, no other payments or benefits shall be due
under this Agreement to Executive.

 

3.5.          Notice of Termination.
Any termination of Executive’s employment shall be communicated by a written
notice of termination delivered within the time period specified in this
Section 3. The notice of termination shall (i) indicate the specific
termination provision in this Agreement relied upon, (ii) briefly summarize the
facts and circumstances deemed to provide a basis for a termination of employment
and the applicable provision hereof, and (iii) specify the termination date in
accordance with the requirements of this Agreement.

 

4.  No Conflicts of Interest. Executive agrees that
throughout the period of Executive’s employment hereunder or otherwise,
Executive will not perform any activities or services, or accept other
employment that would materially interfere with or present a conflict of
interest concerning Executive’s employment with the Company. Executive agrees
and acknowledges that Executive’s employment by the Company is conditioned upon
Executive adhering to and complying with the business practices and
requirements of ethical conduct set forth in writing from time to time by the
Company in its employee manual or similar publication. Executive represents 

 

4

 

and warrants
that no other contract, agreement or understanding to which Executive is a
party or may be subject will be violated by the execution of this Agreement by
Executive.

 

5.  Confidentiality. Executive recognizes and
acknowledges that Executive will have access to certain confidential
information of the Company and that such information constitutes valuable,
special and unique property of the Company (including, but not limited to, information
such as business strategies, identity of acquisition or growth targets,
marketing plans, customer lists, and other business related information for the
Company’s customers). Executive agrees that Executive will not, for any reason
or purpose whatsoever, during or after the term of employment, use or disclose
any of such confidential information to any party, and that Executive will keep
inviolate and secret all confidential information or knowledge which Executive
has access to by virtue of Executive’s employment with the Company, except as
otherwise may be necessary in the ordinary course of performing Executive’s
duties with the Company.

 

6.  Non-Competition.

 

(a)           As used herein, the
term “Restriction Period” shall mean a period of 90 days following the
effective date of termination (regardless of the circumstances), except in
cases where the Executive elects to terminate employment without Good Reason,
in which case the Restriction Period shall mean a period equal to the remainder
of the Employment Term in effect on the effective date of termination.

 

(b)           During Executive’s
employment by the Company and for the duration of the Restriction Period
thereafter, Executive shall not, except with the prior written consent of the
Company, directly or indirectly, own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing
of, or be connected as an officer, director, employee, partner, principal,
agent, representative, consultant or otherwise with, or use or permit Executive’s
name to be used in connection with, any business or enterprise which owns or
operates a gaming or pari-mutuel facility located within 150 miles of any gaming or pari-mutuel property
owned or operated by the Company or any of its affiliates at such time.

 

(c)           The foregoing
restrictions shall not be construed to prohibit Executive’s ownership of less
than 5% of any class of securities of any corporation which is engaged in any
of the foregoing businesses and has a class of securities registered pursuant
to the Securities Exchange Act of 1934, provided that such ownership represents
a passive investment and that neither Executive nor any group of persons
including Executive in any way, either directly or indirectly, manages or exercises
control of any such corporation, guarantees any of its financial obligations,
otherwise takes any part in its business, other than exercising Executive’s
rights as a shareholder, or seeks to do any of the foregoing.

 

(d)           Executive acknowledges that
the covenants contained in Sections 5 through 7 hereof are reasonable and
necessary to protect the legitimate interests of the Company and its
affiliates and, in particular, that the duration and geographic scope of such
covenants are reasonable given the nature of this Agreement and the position
that Executive will hold within the
Company. Executive further agrees to disclose the existence and terms of such
covenants to any employer that Executive works for during the Restriction
Period.

 

5

 

7.  Non-Solicitation. During Executive’s employment by
the Company and for a period equal to the greater of the Restriction Period or
one year after the effective date of termination, Executive will not, except
with the prior written consent of the Company, (i) directly or indirectly,
solicit or hire, or encourage the solicitation or hiring of, any person who is,
or was within a six month period prior to such solicitation or hiring, an
executive or management employee of the Company or any of its affiliates for
any position as an employee, independent contractor, consultant or otherwise or
(ii) divert or attempt to divert any existing business of the Company or any of
its affiliates.

 

8.  Change of Control.

 

8.1.          Consideration

 

(a)           Change of Control. In
the event of a Change of Control (as defined below), Executive shall be
entitled to receive a cash payment in an amount equal to the product of three
times the sum of (i) the highest annual rate of Base Salary in effect for Executive
during the 24-month period immediately preceding the effective date of the
Change in Control (the “Trigger Date”) and (ii) the highest amount of annual
cash bonus compensation paid to Executive in respect of either the first or
second full calendar year immediately preceding the Trigger Date.

 

(b)           Restrictive
Provisions. As consideration for the foregoing payments, Executive agrees
not to challenge the enforceability of any of the restrictions contained in
Sections 5, 6 or 7 of this Agreement upon or after the occurrence of a Change
of Control; provided, however, that on or after a Change of Control, the term Restriction
Period for purposes of this Agreement shall mean a period of 90 days from the
termination date of Executive’s employment.

 

8.2.          Payment Terms. This
change of control payment shall be made in two lump sum payments as follows:
(i) 75% to Executive on the Trigger Date; and (ii) 25% into a mutually
acceptable escrow account on the Trigger Date, payable to Executive on the 90th
day following the Trigger Date provided Executive has not elected to terminate
employment without Good Reason prior to such date. Notwithstanding any of the
foregoing to the contrary, the payment contemplated by clause (ii) shall be
paid immediately upon the occurrence of any of the following: (a) Executive’s
employment is terminated by the Company with or without Cause, due to death or
disability or due to non-renewal of this Agreement; or (b) Executive terminates
employment for Good Reason (as defined below).

 

8.3.          Certain Other Terms.
In the event payments are being made to Executive under this Section 8, no
payments shall be due under Section 3.4(b)(i) of this Agreement with respect to
any termination of Executive’s employment following a Change of Control. At the
option of the Company, the Company may require Executive to execute the release
attached hereto as Exhibit A; provided, however, that this requirement
shall not in any way alter the timing of the payments to be made under Section
8.2. In the event that the Company publicly announces that it has signed a
definitive agreement with respect to a Change of Control, the provisions of
this Section 8 shall continue to apply to Executive if, during the period commencing
on the date of such announcement and ending on the Trigger Date, the Company
terminates Executive’s 

 

6

 

employment
without Cause; provided, however, that, in such event, any payments due under
Section 8 shall be reduced by any prior payments made under Section 3.4(b)(i).

 

8.4.          Defined Terms.

 

(a)           Change of Control.
The term Change of Control shall have the meaning given to such term in the
Company’s 2003 Long Term Incentive Compensation Plan, as such may be amended or
modified.

 

(b)           Good Reason. The
term Good Reason shall mean the occurrence of any of the following events that
the Company fails to cure within 10 days after receiving written notice thereof
from Executive: (i) assignment to Executive of any duties inconsistent in any
material respect with Executive’s position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities or
inconsistent with Executive’s legal or fiduciary obligations; (ii) any
reduction in Executive’s compensation or substantial reduction in Executive’s
benefits taken as a whole; (iii) any travel requirements materially greater
than Executive’s travel requirements prior to the Change of Control; or (iv)
breach of any material term of this Agreement by the Company.

 

9.  Certain Tax Matters.

 

9.1.          Generally. In the
event Executive becomes entitled to receive the payments (the “Severance
Payments”) provided under Section 3 or Section 8 hereof or under any other plan
or arrangement providing for payments under circumstances similar to those
contemplated by such sections, and if any of the Severance Payments will be
subject to the tax (the “Excise Tax”) imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the “Code”), the Company shall pay
to Executive at the time specified for such payments, an additional amount (the
“Gross-Up Payment”) such that the net amount retained by Executive shall be
equal to the amount of the Severance Payments after deducting normal and
ordinary taxes but not deducting (a) the Excise Tax and (b) any
federal, state and local income tax and Excise Tax payable on the payment
provided for by this Section 9.

 

9.2.          Illustration. For
example, if the Severance Payments are $1,000,000 and if Executive is subject
to the Excise Tax, then the Gross-Up Payment will be such that Executive will
retain an amount of $1,000,000 less only any normal and ordinary taxes on such
amount. The Excise Tax and federal, state and local taxes and any Excise Tax on
the payment provided by this Section 9 will not be deemed normal and ordinary
taxes.

 

9.3.          Certain Terms. For
purposes of determining whether any of the Severance Payments will be subject
to the Excise Tax and the amount of such Excise Tax, the following will apply:

 

(a)           Any other payments or
benefits received or to be received by Executive in connection with a Change in
Control of the Company or Executive’s termination of employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Company shall be treated as “parachute payments” within the
meaning of Section 280G(b)(2) of the Code, and all “excess parachute
payments” within the meaning of Section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax 

 

7

 

counsel
selected by the Company’s Compensation Committee and acceptable to Executive,
such other payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the
meaning of Section 280G(b)(3) of the Code, or are otherwise not subject to
the Excise Tax;

 

(b)           The amount of the
Severance Payments which shall be treated as subject to the Excise Tax shall be
equal to the lesser of (y) the total amount of the Severance Payments or
(z) the amount of excess parachute payments within the meaning of Section 280G(b)(1)
(after applying clause (a), above); and

 

(c)           The value of any
non-cash benefits or any deferred payment or benefit shall be determined by the
Company’s independent auditors in accordance with proposed, temporary or final
regulations under Sections 280G(d)(3) and (4) of the Code or, in the
absence of such regulations, in accordance with the principles of
Section 280G(d)(3) and (4) of the Code. For purposes of determining
the amount of the Gross-Up Payment, Executive shall be deemed to pay Federal
income taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation in the state and locality
of Executive on the Trigger Date, net of the maximum reduction in Federal
income taxes which could be obtained from deduction of such state and local
taxes. In the event that the amount of Excise Tax attributable to Severance
Payments is subsequently determined to be less than the amount taken into
account hereunder at the time of determination then, subject to applicable law,
appropriate adjustments will be made with respect to the payments hereunder.

 

9.4.          Fees and Expenses.
The Company shall reimburse Executive for all reasonable legal fees and
expenses incurred by Executive in connection with any tax audit or proceeding
to the extent attributable to the application of Section 4999 of the Code
or any regulations pertaining thereto to any payment or benefit provided
hereunder.

 

10.  Document Surrender. Upon the termination of
Executive’s employment for any reason, Executive shall immediately surrender
and deliver to the Company all documents, correspondence and any other
information, of any type whatsoever, from the Company or any of its agents,
servants, employees, suppliers, and existing or potential customers, that came
into Executive’s possession by any means whatsoever, during the course of
employment.

 

11.  Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws (and not the law of
conflicts) of the Commonwealth of Pennsylvania.

 

12.  Jurisdiction. The parties hereby irrevocably
consent to the jurisdiction of the courts of the Commonwealth of Pennsylvania
for all purposes in connection with any action or proceeding which arises out
of or relates to this Agreement and agree that any action instituted under this
Agreement shall be commenced, prosecuted and continued only in the state or
federal courts having jurisdiction for matters arising in Wyomissing,
Pennsylvania, which shall be the exclusive and only proper forum for
adjudicating such a claim.

 

8

 

13.  Notices. All notices and other communications
required or permitted under this Agreement or necessary or convenient in
connection herewith shall be in writing and shall be deemed to have been given
when hand delivered, delivered by guaranteed next-day delivery or sent by
facsimile (with confirmation of transmission) or shall be deemed given on the third
business day when mailed by registered or certified mail, as follows (provided
that notice of change of address shall be deemed given only when received):

 

If to the
Company, to:

 

Penn National Gaming, Inc.

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610

Fax: (610) 376-2842

 

Attention:
Chairman

 

With a copy
to:

 

Penn National Gaming, Inc.

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610

Fax: (610) 373-4710

 

Attention:
General Counsel

 

If to
Executive, to:

 

Leonard
DeAngelo

c/o Penn National Gaming, Inc.

825 Berkshire Boulevard, Suite 200

Wyomissing, PA 19610

Fax: (610) 376-2842

 

or to such other names or addresses as the
Company or Executive, as the case may be, shall designate by notice to each
other person entitled to receive notices in the manner specified in this
Section.

 

14.  Contents of Agreement; Amendment and Assignment.

 

14.1.        This Agreement sets forth
the entire understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior or contemporaneous agreements or
understandings with respect to thereto, including without limitation, the
Initial Agreement which is hereby terminated. This Agreement cannot be changed,
modified, extended, waived or terminated except upon a written instrument signed
by the party against which it is to be enforced.

 

9

 

14.2.        Executive may not
assign any of his rights or obligations under this Agreement. The Company may
assign its rights and obligations under this Agreement
to any
successor to all or substantially all of its assets or business by means of
liquidation, dissolution, merger,
consolidation,
transfer
of assets
or otherwise.

 

15.  Severability.
If any provision of this Agreement or application thereof to anyone or under
any circumstances is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect any other
provision or application of this Agreement which can be given effect without
the invalid or unenforceable provision or application and shall not invalidate
or render unenforceable such provision or application in any other jurisdiction.
If any provision is held void, invalid or unenforceable with respect to
particular circumstances, it shall nevertheless remain in full force and effect
in all other circumstances. In addition, if any court determines that any part of Sections 5, 6 or
7 hereof is unenforceable because of its duration, geographical scope or
otherwise, such court will have the power to modify such provision and, in its
modified form, such provision will then be enforceable.

 

16.  Remedies.

 

16.1.        No remedy conferred upon a
party by this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to any
other remedy given under this Agreement or now or hereafter existing at law or
in equity.

 

16.2.        No delay or omission by a
party in exercising any right, remedy or power under this Agreement or existing
at law or in equity shall be construed as a waiver thereof, and any such right,
remedy or power may be exercised by such party from time to time and as often
as may be deemed expedient or necessary by such party in its sole discretion.

 

16.3.        Executive acknowledges
that money damages would not be a sufficient remedy for any breach of this
Agreement by Executive and that the Company shall be entitled to specific
performance and injunctive relief as remedies for any such breach, in addition
to all other remedies available at law or equity to the Company.

 

17.  Construction. This Agreement is
the result of thoughtful negotiations and reflects an arms’ length bargain
between two sophisticated parties, each represented by counsel. The parties
agree that, if this Agreement requires interpretation, neither party should be
considered “the drafter” nor be entitled to any presumption that ambiguities
are to be resolved in his or her favor.

 

18.  Beneficiaries/References. Executive shall be
entitled, to the extent permitted under any applicable law, to select and
change a beneficiary or beneficiaries to receive any compensation or benefit
payable under this Agreement following Executive’s death by giving the Company
written notice thereof. In the event of Executive’s death or a judicial determination
of Executive’s incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive’s beneficiary, estate or other
legal representative.

 

19.  Withholding. All payments under this Agreement
shall be made subject to applicable tax withholding, and the Company shall
withhold from any payments under this Agreement all 

 

10

 

federal, state
and local taxes, as the Company is required to withhold pursuant to any law or
governmental rule or regulation. Except as specifically provided otherwise in
this Agreement, Executive shall bear all expense of, and be solely responsible
for, all federal, state and local taxes due with respect to any payment
received under this Agreement.

 

20.  Regulatory Compliance. The terms and provisions
hereof shall be conditioned on and subject to compliance with all laws, rules,
and regulations of all jurisdictions, or agencies, boards or commissions
thereof, having regulatory jurisdiction over the employment or activities of
Executive hereunder.

 

21.  Code Section 409A. To the extent that this
Agreement or any plan, program or award of Company in which Executive
participates or which has been or is granted by Company to Executive, as applicable,
is subject to Section 409A of the Internal Revenue Code, Company and Executive
agree to cooperate and work together in good faith to timely amend this
Agreement or each such plan, program or award to comply with Section 409A of
the Code. Notwithstanding anything herein to the contrary, in the event that
Executive is subject to any payment or benefit at a time when he is a “specified
employee” (within the meaning of Section 409A), Company shall delay the making
of such payment or benefit to the extent reasonably necessary to satisfy
Section 409A.

 

IN WITNESS
WHEREOF, the undersigned, intending to be legally bound, have executed this
Agreement as of the date first above written.

 

 

	
   

  	
  PENN NATIONAL GAMING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/Peter M. Carlino

  	
   

  
	
   

  	
  Name:

  	
  Peter M.
  Carlino

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive

  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
    /s/Leonard
  DeAngelo

  	
   

  
	
   

  	
  Leonard
  DeAngelo

  
						

 

11Exhibit
10.2

EQUIFAX

	
  

  	
  Kent E. Mast

  
	
   

  	
  Corporate Vice President &

  
	
   

  	
  General Counsel

  
	
  CONFIDENTIAL

  	
   

  
	
   

  	
  Equifax Inc.

  
	
   

  	
  1550 Peachtree Street, N.W.

  
	
   

  	
  Atlanta, GA 30309

  
	
   

  	
  404-885-8009

  
	
   

  	
  FAX 404-885-8988

  
	
   

  	
  Email: kent.mast@equifax.com

  

 

May 10, 2006

Karen H. Gaston

[Address]

Re: Retirement Agreement and
General Release of Claims

Dear Karen:

This letter (the “Agreement”) will confirm the
arrangements we have discussed concerning your retirement from Equifax Inc.
(the “Company”).

End of Employment. You hereby resign your employment
with the Company effective as of June 1, 2006 (your “Retirement Date”),
which will be your last day of active employment with the Company. As of your Retirement
Date, your duties and responsibilities for the Company will end, and you will
no longer be authorized to transact business or incur any expenses, obligations
or liabilities on behalf of the Company or any of its affiliated entities.

Resignation. You also hereby resign as Chief
Administrative Officer of the Company effective as of the Retirement Date or
such earlier date as may be specified by the Chief Executive Officer of the
Company, and you acknowledge that the Company has accepted your resignation. If
requested by the Company, you will execute additional documents evidencing your
resignation from all positions you hold for the Company and all affiliated
entities of the Company (collectively, “Equifax”) effective as of the
Retirement Date.

Employment. You acknowledge that you have been
employed at the will of the Company.

Between the Effective Date of this Agreement and the
Retirement Date, the Company shall provide you with the salary and benefits
payable at the same levels and in the same manner as are currently in effect.
You agree that between the date when you are first given this Agreement for
your consideration and the Retirement Date, you will use all vacation time to
which you would have been entitled through the Retirement Date under the
Company’s policies. After the Retirement Date, you shall only be entitled to
the consideration provided under this Agreement and all vested rights under the
Company’s benefit plans and programs. You have executed and delivered to the
Company concurrently with the execution and delivery of this Agreement an
Employee Confidentiality, Non-Solicitation and Assignment Agreement in the
Company’s current standard form (the “Confidentiality Agreement”). You
acknowledge and agree that you will be bound by the terms and conditions of the
Confidentiality Agreement hereafter in accordance with its terms, except that
the provisions of the “Non-Solicitation of Employees” paragraph below shall
apply in lieu of and shall supersede Section 2 of the Confidentiality
Agreement. You further acknowledge and agree that the execution and delivery of
the Confidentiality Agreement and this Agreement and acceptance thereof by the
Company shall not constitute a waiver of any existing breaches or defaults by
you 

of any other confidentiality
or employee assignment agreement previously entered into by you in favor of
Equifax.

Post-Retirement
Benefits. In consideration of your agreements and covenants under this
Agreement, commencing after the Retirement Date, the Company will pay and provide
you with the following benefits:

(i)    Salary
Continuation. You will receive an amount equal to your current base salary for
a period of one year, payable in a single lump sum, less payroll deductions
required by law and other deductions authorized by you, on your Retirement
Date. For purposes of this Agreement, your “current base salary” shall be
$373,239 per annum.

(ii)   Annual
Incentive Payment. You shall be paid any annual incentive payment in accordance
with the terms of the Equifax Inc. Key Management Incentive Plan. Any such
incentive shall be based upon your 2006 salary actually paid for services until
the Retirement Date (not including any additional amounts paid under this
Agreement), and the amount of and payment date of any such incentive payment
shall be determined in the manner applicable to other retirees under such plan.

(iii)  Health and
Life Insurance. Your health and life insurance benefits shall be terminated as
of the Retirement Date. However, you are eligible to continue your medical benefits,
at your election, under the terms available to other retirees through the
Company’s retiree medical plan. With respect to your dental coverage, you may
elect to continue this coverage at your expense in accordance with the
Consolidated Omnibus Budget Reconciliation Act (“COBRA”), provided that you
make a timely election of COBRA coverage and complete the necessary forms for
such coverage. In addition, the $3 million of life insurance coverage provided
to you by the Company under its Executive Life & Supplemental
Retirement Benefit Plan will continue to be available to you as a retiree
pursuant to the terms of the plan and to the extent such benefits are available
to other similarly situated retired participants.

(iv)  Financial
Planning and Tax Counseling Services. The Company will continue to provide you
with financial planning and tax counseling services through December 31,
2007. The maximum amount the Company shall be obligated to spend to provide
services to you under this paragraph shall be $15,000 in 2006 (including any
amounts spent in 2006 prior to the Retirement Date) and $15,000 in 2007. The
cost of such services shall be billed to, and paid directly by, the Company and
you shall be “grossed up” for taxes on such amounts consistent with other executives
receiving this benefit.

(v)    Stock
Awards. Your rights and obligations with respect to all stock option grants and
restricted stock awards you have received from the Company shall be governed by
the terms of the plans, agreements and instruments pursuant to which such
grants were made. For purposes of each of your stock option agreements (both
incentive and non-qualified), your retirement shall be treated as a termination
of employment resulting from your retirement (governed by Section 2(e)(ii) of
such agreements). Without limiting the generality of the foregoing, any stock
options unvested on the Retirement Date shall continue to vest under the
original vesting terms.

For purposes of
each of your deferred share award (“restricted stock unit”) agreements (with
the single exception of your deferred share award agreement dated December 20,
2004), your retirement shall be treated as a termination of employment
resulting from your retirement governed by Section 3(b) of such
agreements. Without limiting the generality of the foregoing, any restricted
stock units un vested on the Retirement Date shall vest on such date. With
respect to your deferred share award dated December 20, 2004, your
retirement shall be treated as a “Good Reason” termination under Section 3(c) and,
pursuant to such provision, shall become fully vested on your Retirement Date.
Distribution of deferred shares upon vesting shall be subject to the terms of
any irrevocable elections in place under the Equifax Inc. Director and
Executive Stock Deferral Plan. Any shares so deferred shall then be subject to
the form and timing of distributions elected under such plan. The Company will
make 

 2
 

reasonable
efforts to ensure that share certificates for shares that are immediately
distributable are available to you on the Retirement Date.

(vi)  Supplemental
Retirement Plan. Your rights will be determined under the Supplemental
Retirement Plan for Executives of Equifax Inc. (“SERP”) based on your
eligibility for Early Retirement as of the Retirement Date. The Company shall
credit you with 10 years of Senior Executive Officer Service and 19 additional
years of Benefit Service under the SERP for purposes of determining benefits
thereunder, subject to the terms of the SERP. Such service will have been earned
under the terms of the SERP on the Retirement Date and reflects no supplemental
service credit under this Agreement. For further certainty, it is acknowledged
and agreed that the lump sum salary continuation payment to be made under
subparagraph (i) of this Post-Retirement Benefits paragraph shall not be
treated as compensation for purposes of the SERP or any other retirement plan.

You acknowledge that some of the payments and benefits
described in subparagraphs (i) through (vi) above are consideration in
addition to those that are required to be provided upon your resignation and
retirement by the Company’s policies, agreements, plans (including benefit
plans and programs) and procedures (the “Additional Benefits”), and such
Additional Benefits are given to you in exchange for your executing this
Agreement and abiding by its terms. You further acknowledge that some or all of
the payments and benefits described above are not required by the Company’s
policies, plans and procedures following your resignation and retirement, and
constitute value to which you would not be entitled, unless you executed a
release such as that contained in this Agreement. The payments and benefits
provided to you under this Agreement shall be provided in a manner consistent
with the requirements of Section 409A of the Internal Revenue Code of
1986, as amended, and the regulations and rulings thereunder (“Section 409A”).
No such payment or benefit will be provided in a manner which will violate Section 409A.

You will not be eligible to be an active participant
in any Company (or affiliated company) benefit plan, including, without
limitation, any retirement plan, stock option or stock grant plan or severance
policy or plan, or to receive any other employment benefits, compensation or
severance, after your Retirement Date, other than as specifically set forth
above; provided, however, nothing in this Agreement shall be interpreted to
cause the forfeiture by you of any vested rights under the Company’s benefit
plans and programs, and none of such vested rights shall be considered
Additional Benefits. It is understood and agreed that, except as specifically
set forth above, you remain entitled to any retirement or health and welfare
benefits that vested before your Retirement Date. Other than as set forth in
this Agreement, no further amounts shall be due or owed to you from or on
behalf of Equifax for or in any way relating to or connected with your
employment with the Company.

Post-Retirement Indemnity. The Company agrees to
defend and indemnify you to the same extent and in the same manner it accords
such defense and/or indemnification to other officers of the Company, in
accordance with applicable law, by-laws or insurance policies. Unless required
by law or by-laws and/or within the provided coverage of any applicable
insurance policy, this paragraph does not include defense or indemnity for any
act or omission on your part outside the course and scope of your employment,
or in excess of your actual authority without Company authorization, or
involving any fraud or misrepresentation, or any intentional or grossly
negligent violation of local, state or federal statutory or common law or of
any rights of others.

 3

Departure Announcement. The Company retains the right
to determine the content of any press release concerning your retirement that
it may issue following your execution of this Agreement.

The Company shall permit you to review the content of
any press release concerning your retirement before it is published, but you
acknowledge that you do not have any right to make changes to any such press
release and that the Company may publish any such press release without
obtaining your approval of the content of the press release. You agree that,
except with the prior written consent of the Company, you will not make any
public announcement or communicate, directly or indirectly, with the public or
any press or media representative regarding the circumstances of your
retirement from the Company.

Nondisparagement. You understand that your entitlement
to the Additional Benefits agreed to above is conditioned on your compliance
with the terms of this Agreement. You agree not to make any oral or written
statement or take any other action which disparages or criticizes Equifax’s
management, products, services or practices (including its business plans and
strategies), damages Equifax’s good reputation or impairs its normal
operations. The Company agrees that it shall cause its directors and the
officers elected by the Board of Directors not to make any oral or written
statement or take any other action which disparages or criticizes your work
performance, professional competence or your good reputation. Truthful testimony
compelled by legal process or in the context of enforcing the terms of this
Agreement or other rights, powers, privileges or claims not released by this
Agreement shall not be considered a violation of this provision by either
party.

Noncompetition. You agree that you will not,
commencing on the Effective Date of this Agreement and continuing through the
date that is twelve (12) months after the Retirement Date, within the Territory
(as defined in the attached Exhibit A), directly or indirectly, provide
any Services to or for the benefit of any individual, business, corporation or
other entity or organization that provides any of the following products or
services to or for customers: consumer credit reporting services and products;
commercial credit reporting services and products; direct to consumer credit
reporting services and products; credit and direct marketing services and
products (defined as information products and databases which enable customers
to identify and target an audience for marketing or customer relationship
management purposes); customer data integration products and services; data
based fraud protection services, employment screening services, airport
passenger security services, and identity authentication services
(collectively, the “Company’s Products and Services”). As used herein, “Services”
means participating in, and managing and supervising others in, marketing,
sales, customer service, supplier relations, administration, personnel,
formulation and implementation of budgets and strategic, financial and
operational plans, and the delivery of products and services to customers.

Non-Solicitation of Customers. You agree that,
commencing on the Effective Date of this Agreement and continuing for a period
of twelve (12) months following the Retirement Date, you will not, directly or
indirectly, solicit, or assist others in soliciting, any business from any of
Equifax’s customers with which you had material contact (i.e., dealt with,
supervised dealings with or obtained confidential information concerning) on
Equifax’s behalf during the two-year period preceding the Retirement Date, for
purposes of providing products or services that are identical to or reasonably
substitutable for the Company’s Products and Services.

Non-Solicitation of Employees. You agree that you will
not at any time during the period commencing on the Effective Date of this
Agreement and continuing for a period of twelve (12) months after the
Retirement Date, directly or indirectly, whether alone or with any other person
or entity as a partner, officer, director, employee, agent, shareholder,
consultant, sales representative or otherwise, solicit for employment or assist
in the solicitation for employment of any Equifax employee with whom you had
regular contact in the course of your employment or any Equifax employee at any
facility where you performed services for Equifax within the Territory defined
in Exhibit A.

 4
 

Acknowledgements regarding Restrictive Covenants. You
acknowledge that you have been in a senior position of trust and responsibility
for Equifax and have been provided access to a substantial amount of
confidential and proprietary information of Equifax, as well as to important
customers and valuable employees of Equifax, that the covenants in the “Nondisparagement”,
“Noncompetition”, “Non-Solicitation of Customers” and “Non-Solicitation of
Employees” paragraphs of this Agreement are reasonable in light of the
substantial rights and benefits you will receive under this Agreement and the
serious harm to Equifax that could result if you engaged in the conduct
prohibited by such paragraphs, and that you are capable of obtaining gainful,
lucrative and desirable employment following the Retirement Date that does not
violate the restrictions of this Agreement.

Confidentiality. You warrant that you have not
communicated with or disclosed, and agree that you will not communicate with or
disclose to anyone, including, but not limited to, any communications media or
financial analyst, or any officer, employee, supplier, customer or competitor
of Equifax, or any other person, except for your communications with the
Company’s Chief Executive Officer and General Counsel, the fact of your
retirement from Equifax, or the circumstances surrounding that retirement,
other than to confirm that you have resigned to pursue other interests. The
foregoing does not apply to, and will not prevent you from having discussions,
on a confidential basis, regarding your retirement with your legal, tax or
financial advisers. provided that they agree to be bound by the confidentiality
obligations of this paragraph.

Furthermore, except to the extent the Company has
publicly disclosed the specific terms, amount and fact of this Agreement, you
agree that, except for the restrictive covenants of this Agreement which you
are free to disclose to prospective employers, you will keep the terms, amount
and fact of this Agreement completely confidential, and that, except as
required by law or authorized in writing by the Company, you will not hereafter
disclose any information concerning the fact of or provisions of this Agreement
to anyone other than your immediate family and legal, tax or financial
advisors, all of whom will be informed by you of, and be bound by, this
confidentiality provision. As used in this Agreement, “authorized by the
Company” or words of similar effect shall mean the written authorization of the
Chief Executive Officer or General Counsel of the Company.

Post-Retirement Cooperation. You agree to cooperate
ful1y with and devote your reasonable best efforts to providing assistance
reasonably requested by Equifax. Such assistance shall not require you to be
active after the Retirement Date in Equifax’s day-to-day activities and you
shall be reimbursed, upon providing appropriate documentation, for all
reasonable and necessary out-of-pocket business expenses incurred in providing
such assistance. Without limiting the generality of the foregoing, you agree to
provide reasonable assistance to the management of Equifax in connection with
the transition of your previous duties and responsibilities and to assist
Equifax, including after the completion of all salary continuation payments
payable hereunder, in the defense of any pending or subsequently filed lawsuit,
arbitration or administrative proceeding (collectively, “Suits”) against
Equifax and/or any of its officers, directors, employees or agents by providing
truthful testimony or other requested lawful forms of assistance; in the
analysis, preparation and prosecution by Equifax of any Suit against any
individual, company or other person, including by providing truthful testimony
in connection with any such Suit; and in connection with any other dispute or
claim arising out of any matter for which you were responsible during your employment
or about which you have knowledge. The Company agrees that its requests for
assistance will not unreasonably interfere with the requirements of your
subsequent employment or other personal and professional obligations.

 5

Access to Property. On and after your Retirement Date,
you will not have access to Equifax’s executive offices or any of its other
facilities or systems except as requested or authorized by Equifax.

Return of Property. Except for items (if any) you are
permitted to retain by an express provision of this Agreement, you agree that
you will return to Equifax on or before the Retirement Date any and all Equifax
property in your possession or control, including, but not limited to, all
keys, credit cards, security passes, computers and other tangible items or
equipment provided to you by Equifax for use during your employment, together
with all written or recorded materials, documents, computer discs, plans,
records, notes, files, drawings or papers, and all copies thereof, relating to
the business or affairs of Equifax.

Covenant Not to Sue and Release. You represent that
you have not, and agree, to the maximum extent permitted by applicable law,
that you will not, file any claims, complaints, charges or lawsuits against the
Company (including any of the Company’s present and former divisions,
subsidiaries and other affiliated entities, predecessors, successors and
assigns), its benefit plans and programs, or any of their respective present or
former agents, directors, officers, trustees, employees, consultants, owners,
representatives or attorneys (hereinafter collectively referred to as the “Releasees”),
about anything which has occurred up to and including the date you execute this
Agreement, except such claims, complaints, charges or lawsuits seeking vested
rights under the Company’s benefit plans and programs, including benefits under
pension and retirement plans that are vested under the terms thereof, or any
rights or benefits expressly created or preserved by this Agreement. In
addition, except for any vested rights under the Company’s benefit plans and
programs, including benefits under pension and retirement plans that are vested
under the terms thereof, and any rights or benefits expressly created or preserved
by this Agreement (which are not released or modified by this Agreement), and
in further consideration of the benefits we have agreed to provide you, you do
hereby release and discharge each and all of the Releasees from any and all
claims, liabilities, agreements, damages, losses or expenses (including
attorneys’ fees and costs actually incurred), of any nature whatsoever, known
or unknown (hereinafter “Claim or “Claims”), which you have, may have had, or
may later claim to have had against any of them for personal injuries, losses
or damage to personal property, breach of contract (express or implied), breach
of any covenant of good faith (express or implied), or any other losses or
expenses of any kind (whether arising in tort, contract or by statute)
resulting or arising from anything that has occurred prior to the date you
execute this Agreement. You understand and agree that you will not hereafter be
entitled to pursue any Claims arising out of any violation of your rights while
employed by the Company against any of the Releasees in any state or federal
court or before any state or federal agency for back pay, severance pay,
liquidated damages, compensatory damages, or any other losses or other damages
to you or your property resulting or arising from any claimed violation of
state or federal law, including, for example, Claims arising under Title VII of
the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967,
the Americans With Disabilities Act, the Employee Retirement Income Security
Act, and Claims under any other federal or state statute or common law. This
Agreement does not, however, waive rights or claims that may arise after the
date you sign it below.

For the purpose of implementing a full and complete
release and discharge of the Releasees, you expressly acknowledge that this
Agreement is intended to include in its effect, without limitation, all Claims
which you do not know or suspect to exist in your favor at the time of
execution hereof, and that this Agreement contemplates the extinguishment of
any such Claim or Claims. You expressly waive and relinquish all rights and
benefits which you may have under any state or federal statute or common law
principle that would otherwise limit the effect of this Agreement to claims
known or suspected prior to the date you execute this Agreement, and do so
understanding and acknowledging the significance and consequences of such
specific waiver.

The undertakings and benefits of this covenant not to
sue and release shall survive and not be extinguished by either party’s breach
of the other provisions of this Agreement.

 6
 

This Agreement does not prohibit you from enforcing
the terms of this Agreement. Furthermore, this Agreement does not prohibit you
from attempting to challenge the legal sufficiency of your release of Age
Discrimination in Employment Act claims or filing an administrative charge of
age discrimination with the Equal Employment Opportunity Commission. However,
this Agreement does release any Claim that you have or might have for monetary
relief or any other remedy to you personally, that arises out of any proceeding
before a government agency or court that relates to any Claim released herein.
If any agency or court takes jurisdiction over any matter in which you have or
may have any personal interest, you agree to inform that agency or court that
this Agreement is a full and final settlement by you of all Claims released
under this Agreement.

Withholding Taxes. All payments and deliveries to you
hereunder will be subject to withholding of taxes and other amounts as required
by law.

Consequences of Breach. You agree that you will
indemnify and hold the Releasees harmless from any loss, cost, damage or
expense (including attorneys’ fees) incurred by them arising out of your breach
of any portion of this Agreement, excluding any breach of the obligations set
forth in the Post-Retirement Cooperation section of this Agreement. You also
understand that your entitlement to and retention of the lump sum salary
continuation payment to be made under subparagraph (i) of the
“Post-Retirement Benefits” paragraph of this Agreement and all other Additional
Benefits that we have agreed to provide you (except for $500 of such payments
and benefits, which you shall in all cases be entitled to retain), are
expressly conditioned upon your fulfillment of your promises herein, and you
agree, to the extent permitted or required by law, immediately to return or
repay the amounts of such benefits you have received from us, upon your filing or
asserting any Claim against the Releasees (other than claims for breach of this
Agreement) or upon your breach of any other provision of this Agreement,
excluding any breach of the obligations set forth in the Post-Retirement
Cooperation section of this Agreement; provided that if you breach the
“Noncompetition”, “Non-Solicitation of Customers” and “Non-Solicitation of
Employees” paragraphs of this Agreement, you will not be required to return or
repay any such amounts unless you fail to cure the breach within ten days after
receiving notice of the breach from the Company. For purposes of this paragraph
only, the filing of an Age Discrimination in Employment Act charge or lawsuit
will not be considered a breach of this Agreement; provided, however, that the
severance benefits paid to you under this Agreement may serve as restitution,
recoupment and/or set-off in the event you prevail on the merits of such claim.

Waiver/Remedies. Except as expressly limited herein,
both parties reserve all rights and remedies available to them in the event of
a breach of any provision of this Agreement by the other party. You acknowledge
that if you breach or threaten to breach your covenants and agreements in this
Agreement, then your actions may cause irreparable harm and damage to the
Company which could not be adequately compensated in monetary damages.
Accordingly, if you breach or threaten to breach this Agreement, then the
Company will be entitled to injunctive or other equitable relief, in addition
to any other rights or remedies of the Company under this Agreement or
otherwise. No failure on the part of either party hereto to exercise, and no
delay by either party in exercising any right, power, or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or remedy by either party preclude any other or further exercise
thereof or the exercise by such party of any other right, power or remedy. No
express waiver or assent by either party of any breach of or default in any
term or condition of this Agreement shall constitute a waiver of or an assent
to any succeeding breach of or default in the same or any other term or
condition hereof.

 7

Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia and
the federal laws of the United States of America, without regard to rules relating
to the conflict of laws. You hereby consent to the exclusive jurisdiction of
the Superior Court of Fulton County, Georgia and the U.S. District Court in
Atlanta, Georgia, and hereby waive any objection you might otherwise have to
jurisdiction and venue in such courts in the event either court is requested to
resolve a dispute between the parties.

Notices. All notices, consents and other
communications required or authorized to be given by either party to the other
under this Agreement shall be in writing and shall be deemed to have been given
or submitted (i) upon actual receipt if delivered in person or by
facsimile transmission, (ii) upon the earlier of actual receipt or the
expiration of two business days after sending by express courier (such as UPS
or Federal Express), and (iii) upon the earlier of actual receipt or the
expiration of seven days after mailing if sent by registered or certified
express mail, postage prepaid, to the parties at the following addresses:

To the Company:

Equifax Inc.

1550 Peachtree Street Atlanta, Georgia 30309 Fax No.: (404) 885-8766
Attn: Chief Executive Officer

Equifax Inc.

1550 Peachtree Street Atlanta, Georgia 30309 Fax No. (404) 885-8988
Attn: General Counsel

To you:

Karen H. Gaston [Address]

You shall be responsible for providing the Company
with your current address from time to time.

Either party may change its address (and facsimile
number) for purposes of notices under this Agreement by providing notice to the
other party in the manner set forth above.

Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

Non-Admission. This Agreement shall not in any way be
construed as an admission by the Company or by any person that it or he has
acted wrongfully with respect to you or any other person, or that you have any
claim or cause of action whatsoever against the Company or any person.

Severability. The provisions of this Agreement are
severable, and if any term of this Agreement not essential to its purpose is
held to be illegal, invalid or unenforceable by a court of competent
jurisdiction, the remaining terms shall continue in full force and effect. If
any covenant in this Agreement, including, without limitation, the covenants in
the “Nondisparagement”, “Noncompetition”, “Non-Solicitation of Customers” and “Non-Solicitation
of Employees” paragraphs, is held to be unreasonable, arbitrary or against
public policy, such covenant will be considered to be divisible with respect to
scope, time and geographic area, and such lesser scope, time or geographic
area, or all of them, as a court of competent jurisdiction may determine to be
reasonable, not arbitrary and not against public policy will be effective,
binding and enforceable against you.

Consideration Period. Because the arrangements
discussed in this Agreement affect important rights and obligations, the
Company advised you to consult with an attorney before you agreed to the terms
set forth herein, and you acknowledge that you have been represented by an
attorney in the negotiation of this Agreement. You have twenty-one (21) days
from the date you receive this Agreement within which to consider it, and you
may take as much of that time as you wish before signing. If you decide to
accept the benefits offered herein, you must sign this Agreement on or before
the expiration of the 2l-day period and 

 8
 

return it promptly to the
Company. If you do not wish to accept the terms of this Agreement, you do not
have to do anything.

Revocation Rights. For a period of up to and including
seven (7) days after the date you sign this Agreement, you may revoke it
entirely. No rights or obligations contained in this Agreement shall become
enforceable before the end of the 7-day revocation period. If you decide
to revoke this Agreement, you must deliver to the Company’s General Counsel a
signed notice of revocation on or before the last day of this 7-day period.
Upon delivery of a timely notice of revocation by you, this Agreement shall be
canceled and void, and neither you nor the Company shall have any rights or
obligations arising under it.

Effective Date. This Agreement shall become effective
at midnight on the seventh day (the “Effective Date”) after you execute it below,
unless it is earlier revoked by you pursuant to the provisions set forth in the
“Revocation Rights” paragraph of this Agreement.

Entire Agreement. This Agreement supersedes all other
prior discussions and agreements with respect to the matters covered hereby
and, except as otherwise expressly provided in this Agreement, contains the
sole and entire agreement between the parties relating to the subject matter
hereof. In the event of any inconsistency between this Agreement and the terms
and conditions of the Confidentiality Agreement or any other agreement that is
not superseded by this Agreement, this Agreement shall be deemed to amend such
terms and conditions and shall control. On the Effective Date of this
Agreement, your Change-in-Control agreement with the Company shall terminate.

Acknowledgments. If the
terms of this Agreement correctly set forth our agreement, please so indicate
by signing in the appropriate space below and initialing each page. Your
signature will be an acknowledgment that no other promise or agreement of any
kind has been made to you by the Company to cause you to execute this
Agreement, that you were afforded a reasonable period of at least twenty-one
(21) days to review this Agreement and to consult with an attorney or other person
of your choosing about its terms before signing it, that the only consideration
for your signature is as indicated above, that you fully understand and accept
this Agreement, that you are not coerced into signing it, and that you signed
it knowingly and voluntarily because it is satisfactory to you.

	
  Sincerely,

  	
   

  
	
   

  	
   

  	
   

  
	
  EQUIFAX INC.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ KENT E.
  MAST

  	
   

  
	
   

  	
  Kent Mast

  	
   

  
	
   

  	
  Corporate Vice President and General Counsel

  

 

I have carefully read the
above Retirement Agreement and General Release of Claims, understand the
meaning and intent thereof, and voluntarily agree to its terms this 10th day of May, 2006.

	
  /s/ KAREN H. GASTON

  	
   

  
	
  Karen H. Gaston

  	
   

  

 

I acknowledge that I first
received this Retirement Agreement and General Release of Claims on the 10th
day of May, 2006.

	
  /s/ KAREN H. GASTON

  	
   

  
	
  Karen H. Gaston

  	
   

  

 

 9
 

EXHIBIT A

You acknowledge that
during the twelve-month period before the Retirement Date, you provided
Services for or on behalf of the Company in the following countries (the “Territory”):

United States of America

Canada

Brazil

Chile

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 10

EQUIFAX

EMPLOYEE
CONFIDENTIALITY, NON-SOLICITATION AND ASSIGNMENT AGREEMENT

This Employee
Confidentiality, Non-solicitation and Assignment Agreement (the “Agreement”) is
entered into on May 10, 2006, by and between Equifax Inc. on behalf of
itself, its subsidiary and/or affiliate companies (collectively “Equifax”) and
the undersigned Equifax employee (“Employee”).

Statement of Facts

The purpose of this
Agreement is to obtain Employee’s commitment to protect and preserve Equifax’s
business relationships, Trade Secrets and Confidential Information as defined
below.

Statement of Terms

1.   Employment Relationship.   Employee
acknowledges that (A) this Agreement is not an employment agreement, and (B) his
or her employment with Equifax is not specified for any particular term.
Employee will abide by Equifax’s rules, regulations, policies and practices as
revised from time to time by Equifax at its sole discretion.

2.   Agreement Not to Solicit Emplovees.   During
the term of Employee’s employment by Equifax and for a period of six (6) months
following the termination of Employee’s employment for any reason, Employee
will not, either directly or indirectly, on his or her behalf or on behalf of
others, solicit for employment or hire, or attempt to solicit for employment or
hire, any Equifax employee with whom Employee had regular contact in the course
of his or her employment or any Equifax employee at any facility where Employee
performed services for Equifax.

3.   Trade Secrets and Confidential Information.

(a)   All Trade
Secrets (defined below) and Confidential Information (defined below), and all
materials containing them, received or developed by Employee during the term of
his or her employment are confidential to Equifax, and will remain Equifax’s
property exclusively. Except as necessary to perform Employee’s duties for
Equifax, Employee will hold all Trade Secrets and Confidential Information in
strict confidence, and will not use, reproduce, disclose or otherwise
distribute the Trade Secrets or Confidential Information, or any materials
containing them, and will take those actions reasonably necessary to protect
any Trade Secret or Confidential Information. Employee’s obligation regarding
Trade Secrets will continue indefinitely, while Employee’s obligations
regarding Confidential Information will cease two (2) years from the date
of termination of Employee’s employment with Equifax.

(b)   “Trade
Secret” means information, including, but not limited to, technical or
non-technical data, a formula, a pattern, a compilation, a program, a device, a
method, a technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential Equifax customers or suppliers
which (A) derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or
use, and (B) is the subject of Equifax’s efforts that are reasonable under
the circumstances to maintain secrecy; or as otherwise defined by applicable
state law.

“Confidential
Information” means any and all knowledge, information, data, methods or plans
(other than Trade Secrets) which are now or at any time in the future
developed, used or employed by Equifax which are treated as confidential by
Equifax and not generally disclosed by Equifax to the public, and which relate
to the business or financial affairs of Equifax, including, but not limited to,
financial statements and information, marketing strategies, business
development plans and product or process enhancement plans.

(c)   Employee
acknowledges that Equifax is obligated under federal and state credit reporting
and similar laws and regulations to hold in confidence and not disclose certain
information regarding individuals, firms or corporations which is obtained or
held by Equifax, and that Equifax is required to adopt reasonable procedures
for protecting the confidentiality, accuracy, relevancy and proper utilization 

of consumer credit
information. In that regard, except as necessary to perform Employee’s duties
for Equifax, Employee will hold in strict confidence, and will not use,
reproduce, disclose or otherwise distribute any information which Equifax is
required to hold confidential under applicable federal and state laws and
regulations, including the federal Fair Credit reporting Act (15 V.S.C. § 1681
et seq.) and any state credit reporting statutes.

(d)   Employee
agrees that any unauthorized disclosure of confidential codes or system access
instructions or file data, intentional alteration or destruction of data, or
unauthorized access or updating of Employee’s own or any other file can lead to
immediate dismissal and federal prosecution under the Fair Credit Reporting
Act, the Counterfeit Access Device and Computer Fraud and Abuse Act, or
prosecution under other state and federal laws. Should Employee ever be
approached by anyone to commit unauthorized or illegal acts or to disclose
confidential materials or data, Employee will immediately report this directly
to Equifax management.

(e)   Except as
set forth in a separate written agreement executed by a corporate executive
officer of Equifax, ownership of all programs, systems, inventions,
discoveries, developments, modifications, procedures, ideas, innovations,
know-how or designs developed or first reduced to practice by Employee during
the term of employment relating in any way to his or her employment with
Equifax (hereinafter collectively called “Inventions”) are the property of
Equifax. Employee will cooperate in applying for patents, trademarks or
copyrights on all Inventions as Equifax requests, and agrees to assign and
hereby does assign those patents, trademarks, copyrights and/or all other
intellectual property rights to Equifax. Any works of authorship created by
Employee in the course of Employee’s duties are subject to the “Work for Hire”
provisions contained in sections 101 and 201 of the United States Copyright
Law, Title 17 of the United States Code. Accordingly, all rights, title and
interest to copyrights in all works of authorship which have been or will be
prepared by Employee within the scope of Employee’s employment (hereinafter
collectively called the “Works”), shall be the property of Equifax. Employee
further acknowledges and agrees that, to the extent the provisions of Title 17
of the United States Code do not vest in Equifax the copyrights to any Works,
employee shall assign and hereby does assign to Equifax all rights, title and
interest to copyrights which Employee may have in the Works. Employee shall
disclose to Equifax all Works and will execute and deliver all applications for
registration, registrations, and further documents relating to the copyrights to
the Works. Employee shall provide such additional assistance as Equifax may
deem necessary and desirable to assign the Works or Inventions to Equifax
and/or secure Equifax title to the patents, trademarks, copyrights and/or all
other intellectual property rights in the Works or Inventions, including the
appointment of Equifax as its agent to effect for such purposes. To the extent
that any preexisting rights are embodied or reflected in the Works or
Inventions, Employee grants to Equifax an irrevocable, perpetual,
non-exclusive, worldwide, royalty-free right and license to (i) use,
execute, reproduce, display, perform, distribute copies of and prepare
derivative works based upon such preexisting rights; and (ii) authorize
others on Equifax’s behalf to do any or all of the foregoing, and Employee
warrants that he or she has full and unencumbered authority to grant such a
license. The confidentiality requirements of the preceding paragraphs will
apply to all of the above.

(t)    At Equifax’s
request or on termination of Employee’s employment with Equifax, Employee will
deliver promptly to Equifax all Equifax property in his or her possession or
control, including all Trade Secrets and Confidential Information and all
materials containing them.

4.   HIPAA.   Employee
acknowledges that if Employee’s job duties and responsibilities are within the
Equifax Information Technology Department, such duties may cause the Employee
to have incidental access to protected health information (“PHI”) of the
Equifax health plans that is maintained in electronic form. PHI is mandated by
the Health Insurance Portability and Accountability Act of 1996 (“HIPAA’) to be
kept secure and confidential and may not be accessed, used or disclosed, except
as permitted by the Policies and Procedures of the Equifax health plans.
Employee acknowledges that he or she will not at any time access PHI, except
and only to the extent as may be expressly required in the course of his or her
duties and responsibilities within the Equifax information Technology
Department. Further, Employee acknowledges that he or she will not at any time—either
during or after his or her employment with Equifax—use or disclose PHI to any
person or entity, either within Equifax or externally to third parties, 

except and only to the
extent as expressly permitted by the Privacy Official for the Equifax health
plans. Employee understands and acknowledges that unauthorized access, use or
disclosure of PHI will result in disciplinary action, up to and including
termination of employment, and may also result in the imposition of civil and
criminal penalties under HIPAA and other applicable law.

5.   Remedies.   Employee
agrees that his or her promises in this Agreement are reasonable and necessary
to protect and preserve the interests and assets of Equifax, and that Equifax
will suffer irreparable harm if Employee breaches any of his or her promises.

Therefore, in
addition to all the remedies provided at law or in equity, Equifax will be
entitled to a temporary restraining order and permanent injunctions to prevent
a breach or contemplated breach of any of Employee’s promises. While Employee
will retain the absolute right to pursue any claim, demand, action or cause of
action that he or she may have against Equifax, if not otherwise compromised or
released, the existence of any claim, demand, action or cause of action by
Employee against Equifax, if any, will not constitute a defense to the
enforcement by Equifax ofa ny of Employee’ s promises in this Agreement.

6.   Severability.   Each
provision of this Agreement is separate and severable from the remaining
provisions, and the invalidity or unenforceability of any provision will not
affect the validity or enforceability of any other provisions. Further, if any
provision is ruled invalid or unenforceable by a court of competent
jurisdiction because of a conflict between that provision and any applicable
law or regulation, that provision will be curtailed only to the extent
necessary to make it consistent with that law or regulation.

7.   Assignment.   Equifax
may assign its rights and obligations under this Agreement. Employee may not
assign his or her rights and obligations under this Agreement.

8.   Waiver.   Equifax’s
waiver of any breach of this Agreement will not be effective unless in writing,
and will not be a waiver of the same or another breach on a subsequent
occasion.

9.   Governing Law.   This
Agreement will be governed and construed in accordance with the laws of the
State of Georgia without reference to its conflicts of laws provisions.

10.   Entire Agreement.   This
Agreement contains Employee’s entire agreement with Equifax regarding the
subject matter covered by this Agreement. No amendment or modification of this
Agreement will be valid or binding on Equifax or Employee unless in writing
signed by both parties. All prior understandings and agreements regarding the
subject matter of this Agreement are terminated.

THIS AGREEMENT, AS A
CONDITION OF EMPLOYEE’S EMPLOYMENT OR CONTINUED EMPLOYMENT WITH EQUIFAX,
IMPOSES UPON EMPLOYEE CERTAIN CONFIDENTIALITY RESTRICTIONS WITH RESPECT TO
TRADE SECRETS AND CONFIDENTIAL INFORMATION BELONGING TO EQUIFAX. BY SIGNING
BELOW, EMPLOYEE ACKNOWLEDGES THAT HE OR SHE HAS READ AND UNDERSTANDS THIS
AGREEMENT.

	
  EMPLOYEE: 

  	
   

  
	
  By:

  	
  /s/ KAREN H.
  GASTON

  	
   

  
	
   

  	
  Signature

  	
   

  
	
  Print Name: Karen
  H. Gaston

  	
   

  
	
  Date: 

  	
  5/10/2006

  	
   

  

 

	
  EQUIFAX

  	
   

  
	
  By: 

  	
  /s/ KENT E.
  MAST

  	
   

  
	
  Title:

  	
  Corporate Vice
  President & General Counsel

  
	
  Company/Department:

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