Document:

exv10w5

Exhibit 10.5

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is effective as of June 30, 2008 (the “Effective
Date”), by and between FIDELITY NATIONAL INFORMATION SERVICES, INC., a Georgia corporation (the
“Company”), and James W. Woodall (the “Employee”). In consideration of the mutual covenants and
agreements set forth herein, the parties agree as follows:

     1. Purpose and Release. The purpose of this Agreement is to terminate all prior
agreements between Company, and any of its affiliates, and Employee relating to the subject matter
of this Agreement, to recognize Employee’s significant contributions to the overall financial
performance and success of Company, to protect Company’s business interests through the addition of
restrictive covenants, and to provide a single, integrated document which shall provide the basis
for Employee’s continued employment by Company. In consideration of the execution of this Agreement
and the termination of all such prior agreements, the parties each release all rights and claims
that they have, had or may have arising under such prior agreements.

     2. Employment and Duties. Subject to the terms and conditions of this Agreement,
Company employs Employee to serve as SVP and Chief Accounting Officer. Employee accepts such
employment and agrees to undertake and discharge the duties, functions and responsibilities
commensurate with the aforesaid position and such other duties and responsibilities as may be
prescribed from time to time by the Company. Employee shall devote substantially all of his
business time, attention and effort to the performance of his duties hereunder and shall not engage
in any business, profession or occupation, for compensation or otherwise without the express
written consent of the Company, other than personal, personal investment, charitable, or civic
activities or other matters that do not conflict with Employee’s duties.

     3. Term. This Agreement shall commence on the Effective Date and, unless terminated
as set forth in Section 8, continue for a period of two (2) years ending on the second anniversary
of the Effective Date (the “Employment Term”). Notwithstanding any termination of this Agreement or
Employee’s employment, Sections 8 through 10 shall remain in effect until all obligations and
benefits that accrued prior to termination are satisfied.

     4. Salary. During the Employment Term, Company shall pay Employee an annual base
salary, before deducting all applicable withholdings, of no less than $275,000.00 per year, payable
at the time and in the manner dictated by Company’s standard payroll policies. Such minimum annual
base salary may be periodically reviewed and increased (but not decreased without Employee’s
express written consent) at the discretion of the Company to reflect, among other matters, cost of
living increases and performance results (such annual base salary, including any increases pursuant
to this Section 4, the “Annual Base Salary”).

     5. Other Compensation and Fringe Benefits. In addition to any executive bonus,
pension, deferred compensation and long-term incentive plans which Company or an affiliate of
Company may from time to time make available to Employee, Employee shall be entitled to the
following during the Employment Term:

 

 

	 	(a)	 	the standard Company benefits enjoyed by Company’s other top executives as a
group;
	 
	 	(b)	 	medical and other insurance coverage (for Employee and any covered dependents)
provided by Company to its other top executives as a group;
	 
	 	(c)	 	an annual incentive bonus opportunity under Company’s annual incentive plan
(“Annual Bonus Plan”) for each calendar year included in the Employment Term, with such
opportunity to be earned based upon attainment of performance objectives established by
the Company (“Annual Bonus”). Employee’s target Annual Bonus under the Annual Bonus
Plan shall be no less than 50% of Employee’s then current Annual Base Salary (the
“Annual Bonus Opportunity”). Employee’s Annual Bonus Opportunity may be periodically
reviewed and increased (but not decreased without Employee’s express written consent)
at the discretion of the Company. The Annual Bonus shall be paid no later than the
March 15th first following the calendar year to which the Annual Bonus
relates. Unless provided otherwise herein or the Board determines otherwise, no Annual
Bonus shall be paid to Employee unless Employee is employed by Company, or an affiliate
thereof, on the Annual Bonus payment date; and
	 
	 	(d)	 	participation in Company’s equity incentive plans.

     6. Vacation. For and during each calendar year within the Employment Term, Employee
shall be entitled to reasonable paid vacation periods consistent with Employee’s position and in
accordance with Company’s standard policies, or as the Company may approve. In addition, Employee
shall be entitled to such holidays consistent with Company’s standard policies or as Company may
approve.

     7. Expense Reimbursement. In addition to the compensation and benefits provided
herein, Company shall, upon receipt of appropriate documentation, reimburse Employee each month for
his reasonable travel, lodging, entertainment, promotion and other ordinary and necessary business
expenses to the extent such reimbursement is permitted under Company’s expense reimbursement
policy.

     8. Termination of Employment. Company or Employee may terminate Employee’s employment
at any time and for any reason in accordance with Subsection 8(a) below. The Employment Term shall
be deemed to have ended on the last day of Employee’s employment. The Employment Term shall
terminate automatically upon Employee’s death.

	 	(a)	 	Notice of Termination. Any purported termination of Employee’s
employment (other than by reason of death) shall be communicated by written Notice of
Termination (as defined herein) from one party to the other in accordance with the
notice provisions contained in Section 25. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice that indicates the Date of Termination (as that term
is defined in Subsection 8(b)) and, with respect to a termination due to Cause (as that
term is defined in Subsection 8(d)), Disability (as that term is defined in Subsection
8(e)) or Good Reason (as that term is

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	 	 	 	defined in Subsection 8(f)), sets forth in
reasonable detail the facts and circumstances that are alleged to provide a basis for
such termination. A Notice of Termination from Company shall specify whether the
termination is with or without Cause or due to Employee’s Disability. A Notice of
Termination from Employee shall specify whether the termination is with or without Good
Reason or due to Disability.
	 
	 	(b)	 	Date of Termination. For purposes of this Agreement, “Date of
Termination” shall mean the date specified in the Notice of Termination (but in no
event shall such date be earlier than the thirtieth (30th) day following the
date the Notice of Termination is given) or the date of Employee’s death.
	 
	 	(c)	 	No Waiver. The failure to set forth any fact or circumstance in a
Notice of Termination, which fact or circumstance was not known to the party giving the
Notice of Termination when the notice was given, shall not constitute a waiver of the
right to assert such fact or circumstance in an attempt to enforce any right under or
provision of this Agreement.
	 
	 	(d)	 	Cause. For purposes of this Agreement, a termination for “Cause” means
a termination by Company based upon Employee’s: (i) persistent failure to perform
duties consistent with a commercially reasonable standard of care (other than due to a
physical or mental impairment or due to an action or inaction directed by Company that
would otherwise constitute Good Reason); (ii) willful neglect of duties (other than due
to a physical or mental impairment or due to an action or inaction directed by Company
that would otherwise constitute Good Reason); (iii) conviction of, or pleading nolo
contendere to, criminal or other illegal activities involving dishonesty; (iv) material
breach of this Agreement; or (v) failure to materially cooperate with or impeding an
investigation authorized by the Board.
	 
	 	(e)	 	Disability. For purposes of this Agreement, a termination based upon
“Disability” means a termination by Company based upon Employee’s entitlement to
long-term disability benefits under Company’s long-term disability plan or policy, as
the case may be, as in effect on the Date of Termination.
	 
	 	(f)	 	Good Reason. For purposes of this Agreement, a termination for “Good
Reason” means a termination by Employee during the Employment Term based upon the
occurrence (without Employee’s express written consent) of any of the following:

	 	(i)	 	a material diminution in Employee’s position or title, or the
assignment of duties to Employee that are materially inconsistent with
Employee’s position or title;
	 
	 	(ii)	 	a material diminution in Employee’s Annual Base Salary or
Annual Bonus Opportunity;
	 
	 	(iii)	 	within six (6) months immediately preceding or within one (1)
year immediately following a Change in Control: (A) a material adverse change
in Employee’s status, authority or responsibility (e.g., The Company has

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	 	 	 	determined that a change in the department or functional group over which
Employee has managerial authority would constitute such a material adverse
change); (B) a change in the person to whom Employee reports that results in a
material adverse impact on the Employee; (C) a material adverse change in the
position to whom Employee reports or a material diminution in the authority,
duties or responsibilities of that position; (D) a material diminution in the
budget over which Employee has managing authority; or (E) a material change in
the geographic location of Employee’s principal place of employment, which is
currently Jacksonville, Florida (e.g., The Company has determined that a
relocation of more than thirty-five (35) miles would constitute such a material
change); or
	 
	 	(iv)	 	a material breach by Company of any of its obligations under
this Agreement.

Notwithstanding the foregoing, Employee being placed on a paid leave for up to sixty (60) days
pending a determination of whether there is a basis to terminate Employee for Cause shall not
constitute Good Reason. Employee’s continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder;
provided, however, that no such event described above shall constitute Good Reason unless: (1)
Employee gives Notice of Termination to Company specifying the condition or event relied upon for
such termination either: (x) within ninety (90) days of the initial existence of such event; or (y)
in the case of an event predating a Change in Control, within ninety (90) days of the Change in
Control; and (2) Company fails to cure the condition or event constituting Good Reason within
thirty (30) days following receipt of Employee’s Notice of Termination.

     9. Obligations of Company Upon Termination.

	 	(a)	 	Termination by Company for a Reason Other than Cause, Death or Disability
and Termination by Employee for Good Reason. If Employee’s employment is
terminated by: (1) Company for any reason other than Cause, Death or Disability; or (2)
Employee for Good Reason:

	 	(i)	 	Company shall pay Employee the following (collectively, the
“Accrued Obligations”): (A) within five (5) business days after the Date of
Termination, any earned but unpaid Annual Base Salary; (B) within a reasonable
time following submission of all applicable documentation, any expense
reimbursement payments owed to Employee for expenses incurred prior to the Date
of Termination; and (C) no later than March 15th of the year in which the Date
of Termination occurs, any earned but unpaid Annual Bonus payments relating to
the prior calendar year;
	 
	 	(ii)	 	Company shall pay Employee no later than March 15th
of the calendar year following the year in which the Date of Termination
occurs, a prorated Annual Bonus based upon the actual Annual Bonus that would
have been earned by Employee for the year in which the Date of

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	 	 	 	Termination
occurs (based upon the target Annual Bonus opportunity in the year in which the
Date of Termination occurred, or the prior year if no target Annual Bonus
opportunity has yet been determined, and the actual satisfaction of the
applicable performance measures, but ignoring any requirement under the Annual
Bonus plan that Employee must be employed on the payment date) multiplied by
the percentage of the calendar year completed before the Date of Termination;
	 
	 	(iii)	 	Company shall pay Employee, within thirty (30) business days
after the Date of Termination, a lump-sum payment equal to 150% of the sum of:
(A) Employee’s Annual Base Salary in effect immediately prior to the Date of
Termination (disregarding any reduction in Annual Base Salary to which Employee
did not expressly consent in writing); and (B) the average Annual Bonus paid to
Employee by Company during the three (3) years immediately preceding
termination of employment or, if higher, the target Annual Bonus opportunity in
the year in which the Date of Termination occurs; and
	 
	 	(iv)	 	all stock option, restricted stock and other equity-based
incentive awards granted by Company that were outstanding but not vested as of
the Date of Termination shall become immediately vested and/or payable, as the
case may be unless the equity incentive awards are based upon satisfaction of
performance criteria; in which case, they will only vest pursuant to their
express terms.

	 	(b)	 	Termination by Company for Cause and by Employee without Good Reason.
If Employee’s employment is terminated by Company for Cause or by Employee without Good
Reason, Company’s only obligation under this Agreement shall be payment of any Accrued
Obligations.
	 
	 	(c)	 	Termination due to Death or Disability. If Employee’s employment is
terminated due to death or Disability, Company shall pay Employee (or to Employee’s
estate or personal representative in the case of death), within thirty (30) business
days after the Date of Termination: (i) any Accrued Obligations; plus (ii) a prorated
Annual Bonus based upon the target Annual Bonus opportunity in the year in which the
Date of Termination occurred (or the prior year if no target Annual Bonus opportunity
has yet been determined) multiplied by the percentage of the calendar year completed
before the Date of Termination; plus (iii) the unpaid portion of the Annual Base Salary
for the remainder of the Employment Term.
	 
	 	(d)	 	Definition of Change in Control. For purposes of this Agreement, the
term “Change in Control” shall mean that the conditions set forth in any one of the
following subsections shall have been satisfied:

	 	(i)	 	the acquisition, directly or indirectly, by any “person”
(within the meaning of Section 3(a)(9) of the Securities and Exchange Act of
1934, as amended (the “Exchange Act”) and used in Sections 13(d) and 14(d)
thereof) of

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	 	 	 	“beneficial ownership” (within the meaning of Rule 13d-3 of the
Exchange Act) of securities of Company possessing more than 50% of the total
combined voting power of all outstanding securities of Company;
	 
	 	(ii)	 	a merger or consolidation in which Company is not the surviving
entity, except for a transaction in which the holders of the outstanding voting
securities of Company immediately prior to such merger or consolidation hold,
in the aggregate, securities possessing more than 50% of the total combined
voting power of all outstanding voting securities of the surviving entity
immediately after such merger or consolidation;
	 
	 	(iii)	 	a reverse merger in which Company is the surviving entity but
in which securities possessing more than 50% of the total combined voting power
of all outstanding voting securities of Company are transferred to or acquired
by a person or persons different from the persons holding those securities
immediately prior to such merger;
	 
	 	(iv)	 	during any period of two (2) consecutive years during the
Employment Term or any extensions thereof, individuals, who, at the beginning
of such period, constitute the Board, cease for any reason to constitute at
least a majority thereof, unless the election of each director who was not a
director at the beginning of such period has been approved in advance by
directors representing at least two-thirds of the directors then in office who
were directors at the beginning of the period;
	 
	 	(v)	 	the sale, transfer or other disposition (in one transaction or
a series of related transactions) of assets of Company that have a total fair
market value equal to or more than one-third of the total fair market value of
all of the assets of Company immediately prior to such sale, transfer or other
disposition, other than a sale, transfer or other disposition to an entity (x)
which immediately following such sale, transfer or other disposition owns,
directly or indirectly, at least 50% of Company’s outstanding voting securities
or (y) 50% or more of whose outstanding voting securities is immediately
following such sale, transfer or other disposition owned, directly or
indirectly, by Company. For purposes of the foregoing clause, the sale of
stock of a subsidiary of Company (or the assets of such subsidiary) shall be
treated as a sale of assets of Company; or
	 
	 	(vi)	 	the approval by the stockholders of a plan or proposal for the
liquidation or dissolution of Company.

     10. Excise Tax Gross-up Payments.

	 	(a)	 	If any payments or benefits paid or provided or to be paid or provided to
Employee or for his benefit pursuant to the terms of this Agreement or otherwise in
connection with, or arising out of, his employment with Company or its subsidiaries or
the termination thereof (a “Payment” and, collectively, the

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	 	 	 	“Payments”) would be
subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code, then,
except as otherwise provided in this Subsection 10(a), Employee will be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount such that, after
payment by Employee of all income taxes, all employment taxes and any Excise Tax
imposed upon the Gross-Up Payment (including any related interest and penalties),
Employee retains an amount of the Gross-Up Payment equal to the Excise Tax (including
any related interest and penalties) imposed upon the Payments. Notwithstanding the
foregoing, if the amount of the Payments does not exceed by more than 3% the amount
that would be payable to Employee if the Payments were reduced to one dollar less than
what would constitute a “parachute payment” under Section 280G of the Code (the “Scaled
Back Amount”), then the Payments shall be reduced, in a manner determined by Employee,
to the Scaled Back Amount, and Employee shall not be entitled to any Gross-Up Payment.
	 
	 	(b)	 	An initial determination of (i) whether a Gross-Up Payment is required pursuant
to this Agreement, and, if applicable, the amount of such Gross-Up Payment or (ii)
whether the Payments must be reduced to the Scaled Back Amount and, if so, the amount
of such reduction, will be made at Company’s expense by an accounting firm selected by
Company. The accounting firm will provide its determination, together with detailed
supporting calculations and documentation, to Company and Employee within ten (10)
business days after the date of termination of Employee’s employment, or such other
time as may be reasonably requested by Company or Employee. If the accounting firm
determines that no Excise Tax is payable by Employee with respect to a Payment or
Payments, it will furnish Employee with an opinion to that effect. If a Gross-Up
Payment becomes payable, such Gross-Up Payment will be paid by Company to Employee
within thirty (30) business days of the receipt of the accounting firm’s determination.
If a reduction in Payments is required, such reduction shall be effectuated within
thirty (30) business days of the receipt of the accounting firm’s determination. Within
ten (10) business days after the accounting firm delivers its determination to
Employee, Employee will have the right to dispute the determination. The existence of a
dispute will not in any way affect Employee’s right to receive a Gross-Up Payment in
accordance with the determination. If there is no dispute, the determination will be
binding, final, and conclusive upon Company and Employee. If there is a dispute,
Company and Employee will together select a second accounting firm, which will review
the determination and Employee’s basis for the dispute and then will render its own
determination, which will be binding, final, and conclusive on Company and on Employee
for purposes of determining whether a Gross-Up Payment is required pursuant to this
Subsection 10(b) or whether a reduction to the Scaled Back Amount is required, as the
case may be. If as a result of any dispute pursuant to this Subsection 10(b) a
Gross-Up Payment is made or additional Gross-Up Payments are made, such Gross-Up
Payment(s) will be paid by Company to Employee within thirty (30) business days of the
receipt of the second accounting firm’s determination. Company will bear all costs
associated with the second accounting firm’s determination, unless such determination
does not result in additional Gross-Up Payments to Employee

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	 		 	or unless such
determination does not mitigate the reduction in Payments required to arrive at the
Scaled Back Amount, in which case all such costs will be borne by Employee.
	 
	 	(c)	 	For purposes of determining the amount of the Gross-Up Payment and, if
applicable, the Scaled Back Amount, Employee will 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 or the Scaled Back Amount is determined, as the case
may be, and applicable state and local income taxes at the highest marginal rate of
taxation in the state and locality of Employee’s residence on the date of termination
of Employee’s employment, net of the maximum reduction in federal income taxes that
would be obtained from deduction of those state and local taxes.
	 
	 	(d)	 	As a result of the uncertainty in the application of Section 4999 of the Code,
it is possible that Gross-Up Payments which will not have been made by Company should
have been made, Employee’s Payments will be reduced to the Scaled Back Amount when they
should not have been or Employee’s Payments are reduced to a greater extent than they
should have been (an “Underpayment”) or Gross-Up Payments are made by Company which
should not have been made, Employee’s Payments are not reduced to the Scaled Back
Amount when they should have been or they are not reduced to the extent they should
have been (an “Overpayment”). If it is determined that an Underpayment has occurred,
the accounting firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) shall be promptly paid by Company to or for the benefit of
Employee. If it is determined that an Overpayment has occurred, the accounting firm
shall determine the amount of the Overpayment that has occurred and any such
Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the
Code) shall be promptly paid by Employee (to the extent he has received a refund if the
applicable Excise Tax has been paid to the Internal Revenue Service) to or for the
benefit of Company; provided, however, that if Company determines that such repayment
obligation would be or result in an unlawful extension of credit under Section 13(k) of
the Exchange Act, repayment shall not be required. Employee shall cooperate, to the
extent his expenses are reimbursed by Company, with any reasonable requests by Company
in connection with any contest or disputes with the Internal Revenue Service in
connection with the Excise Tax.
	 
	 	(e)	 	Employee shall notify Company in writing of any claim by the Internal Revenue
Service that, if successful, would require a payment resulting in an Underpayment. Such
notification shall be given as soon as practicable but no later than ten (10) business
days after Employee is informed in writing of such claim and shall apprise Company of
the nature of such claim and the date on which such claim is requested to be paid.
Employee shall not pay such claim prior to the expiration of the thirty (30) day period
following the date on which he gives such notice to Company (or such shorter period
ending on the date that any payment of

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	 	 	 	taxes with respect to such claim is due). If
Company notifies Employee in writing prior to the expiration of such period that it
desires to contest such claim, Employee shall: (i) give Company any information
reasonably requested by Company relating to such claim; (ii) take such action in
connection with contesting such claim as Company 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 Company; (iii) cooperate
with Company in good faith in order effectively to contest such claim; and (iv) permit
Company to participate in any proceeding relating to such claim; provided, however,
that Company 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 Employee harmless, on an after-tax basis, for any Excise Tax or income tax
(including related interest and penalties) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing provisions of
this Subsection 10(e), Company 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 Employee to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner, and Employee
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 Company
shall determine; provided, however, that if Company directs Employee to pay such claim
and sue for a refund, Company shall advance the amount of such payment to Employee, on
an interest-free basis and shall indemnify and hold Employee harmless, on an after-tax
basis, from any Excise Tax or income tax (including related interest or penalties)
imposed with respect to such advance or with respect to any imputed income with respect
to such advance. Company’s control of the contest shall be limited to issues that may
impact Gross-Up Payments or reduction in Payments under this Section 10, and Employee
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.
	 
	 	(f)	 	If, after the receipt by Employee of an amount advanced by Company pursuant to
Subsection 10(e), Employee becomes entitled to receive any refund with respect to such
claim, Employee shall (subject to Company’s complying with the requirements of
Subsection 10(e)) promptly pay to Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by Employee of an amount advanced by Company pursuant to Subsection 10(e), a
determination is made that Employee shall not be entitled to any refund with respect to
such claim and Company does not notify Employee in writing of its intent to contest
such denial of refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not be required to be
repaid.

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	 	(g)	 	Any payment under this Section 10 must be made by Company no later than the end
of the Employee’s tax year following the Employee’s tax year in which the Employee
remits the related tax payments.

     11. Non-Delegation of Employee’s Rights. The obligations, rights and benefits of
Employee hereunder are personal and may not be delegated, assigned or transferred in any manner
whatsoever, nor are such obligations, rights or benefits subject to involuntary alienation,
assignment or transfer.

     12. Confidential Information. Employee acknowledges that he will occupy a position of
trust and confidence and will have access to and learn substantial information about Company and
its affiliates and their operations that is confidential or not generally known in the industry
including, without limitation, information that relates to purchasing, sales, customers, marketing,
and the financial positions and financing arrangements of Company and its affiliates. Employee
agrees that all such information is proprietary or confidential, or constitutes trade secrets and
is the sole property of Company and/or its affiliates, as the case may be. Employee will keep
confidential, and will not reproduce, copy or disclose to any other person or firm, any such
information or any documents or information relating to Company’s or its affiliates’ methods,
processes, customers, accounts, analyses, systems, charts, programs, procedures, correspondence or
records, or any other documents used or owned by Company or any of its affiliates, nor will
Employee advise, discuss with or in any way assist any other person, firm or entity in obtaining or
learning about any of the items described in this Section 12. Accordingly, Employee agrees that
during the Employment Term and at all times thereafter he will not disclose, or permit or encourage
anyone else to disclose, any such information, nor will he utilize any such information, either
alone or with others, outside the scope of his duties and responsibilities with Company and its
affiliates.

     13. Non-Competition.

	 	(a)	 	During Employment Term Employee agrees that, during the Employment
Term, he will devote such business time, attention and energies reasonably necessary to
the diligent and faithful performance of the services to Company and its affiliates,
and he will not engage in any way whatsoever, directly or indirectly, in any business
that is a direct competitor with Company’s or its affiliates’ principal business, nor
solicit customers, suppliers or employees of Company or affiliates on behalf of, or in
any other manner work for or assist any business which is a direct competitor with
Company’s or its affiliates’ principal business. In addition, during the Employment
Term, Employee will undertake no planning for or organization of any business activity
competitive with the work he performs as an employee of Company, and Employee will not
combine or conspire with any other employee of Company or any other person for the
purpose of organizing any such competitive business activity.
	 
	 	(b)	 	After Employment Term. The parties acknowledge that Employee will
acquire substantial knowledge and information concerning the business of Company and
its affiliates as a result of his employment. The parties further acknowledge that the
scope of business in which Company and its affiliates are engaged as of the

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	 	 	 	Effective
Date is national and very competitive and one in which few companies can successfully
compete. Competition by Employee in that business after the Employment Term would
severely injure Company and its affiliates. Accordingly, for a period of one (1) year
after Employee’s employment terminates for any reason whatsoever, except as otherwise
stated herein below, Employee agrees: (1) not to become an employee, consultant,
advisor, principal, partner or substantial shareholder of any firm or business that
directly competes with Company or its affiliates in their principal products and
markets; and (2), on behalf of any such competitive firm or business, not to solicit
any person or business that was at the time of such termination and remains a customer
or prospective customer, a supplier or prospective supplier, or an employee of Company
or an affiliate. Notwithstanding any of the foregoing provisions to the contrary,
Employee shall not be subject to the restrictions set forth in this Subsection 13(b) if
Employee’s employment is terminated by Company without Cause.

     14. Return of Company Documents. Upon termination of the Employment Term, Employee
shall return immediately to Company all records and documents of or pertaining to Company or its
affiliates and shall not make or retain any copy or extract of any such record or document, or any
other property of Company or its affiliates.

     15. Improvements and Inventions. Any and all improvements or inventions that Employee
may make or participate in during the Employment Term, unless wholly unrelated to the business of
Company and its affiliates and not produced within the scope of Employee’s employment hereunder,
shall be the sole and exclusive property of Company. Employee shall, whenever requested by Company,
execute and deliver any and all documents that Company deems appropriate in order to apply for and
obtain patents or copyrights in improvements or inventions or in order to assign and/or convey to
Company the sole and exclusive right, title and interest in and to such improvements, inventions,
patents, copyrights or applications.

     16. Actions. The parties agree and acknowledge that the rights conveyed by this
Agreement are of a unique and special nature and that Company will not have an adequate remedy at
law in the event of a failure by Employee to abide by its terms and conditions, nor will money
damages adequately compensate for such injury. Therefore, it is agreed between and hereby
acknowledged by the parties that, in the event of a breach by Employee of any of the obligations of
this Agreement, Company shall have the right, among other rights, to damages sustained thereby and
to obtain an injunction or decree of specific performance from any court of competent jurisdiction
to restrain or compel Employee to perform as agreed herein. Employee hereby acknowledges that
obligations under Sections and Subsections 12, 13(b), 14, 15, 16, 17 and 18 shall survive the
termination of employment and be binding by their terms at all times subsequent to the termination
of employment for the periods specified therein. Nothing herein shall in any way limit or exclude
any other right granted by law or equity to Company.

     17. Release. Notwithstanding any provision herein to the contrary, Company may
require that, prior to payment of any amount or provision of any benefit under Section 9 or payment
of any Gross-Up Payment pursuant to Section 10 of this Agreement (other than due to Employee’s
death), Employee shall have executed a complete release of Company and its

11

 

affiliates and related
parties in such form as is reasonably required by Company, and any waiting periods contained in
such release shall have expired. With respect to any release required to receive payments owed
pursuant to Section 9, Company must provide Employee with the form of release no later than seven
(7) days after the Date of Termination and the release must be signed by Employee and returned to
Company, unchanged, effective and irrevocable, no later than sixty (60) days after the Date of
Termination.

     18. No Mitigation. Company agrees that, if Employee’s employment hereunder is
terminated during the Employment Term, Employee is not required to seek other employment or to
attempt in any way to reduce any amounts payable to Employee by Company hereunder. Further, the
amount of any payment or benefit provided for hereunder (other than pursuant to Subsection 9(a)(v)
hereof) shall not be reduced by any compensation earned by Employee as the result of employment by
another employer, by retirement benefits or otherwise.

     19. Entire Agreement and Amendment. This Agreement embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter of this Agreement, and
supersedes and replaces all prior agreements, understandings and commitments with respect to such
subject matter. This Agreement may be amended only by a written document signed by both parties to
this Agreement.

     20. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Florida, excluding any conflicts or choice of law rule or principle
that might otherwise refer construction or interpretation of this Agreement to the substantive law
of another jurisdiction. Any litigation pertaining to this Agreement shall be adjudicated in courts
located in Duval County, Florida.

     21. Successors. This Agreement may not be assigned by Employee. This Agreement shall
be binding upon and inure to the benefit of the parties and their permitted successors or assigns.

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

     23. Attorneys’ Fees. If any party finds it necessary to employ legal counsel or to
bring an action at law or other proceedings against the other party to interpret or enforce any of
the terms hereof, the party prevailing in any such action or other proceeding shall be promptly
paid by the other party its reasonable legal fees, court costs, litigation expenses, all as
determined by the court and not a jury, and such payment shall be made by the non-prevailing party
no later than the end of the Employee’s tax year following the Employee’s tax year in which the
payment amount becomes known and payable. The rights under this Section shall survive the
termination of employment and this Agreement until the expiration of the applicable statute of
limitations.

     24. Severability. If any section, subsection or provision hereof is found for any
reason whatsoever to be invalid or inoperative, that section, subsection or provision shall be
deemed severable and shall not affect the force and validity of any other provision of this
Agreement. If any covenant herein is determined by a court to be overly broad thereby making

12

 

the
covenant unenforceable, the parties agree and it is their desire that such court shall substitute a
reasonable judicially enforceable limitation in place of the offensive part of the covenant and
that as so modified the covenant shall be as fully enforceable as if set forth herein by the
parties themselves in the modified form. The covenants of Employee in this Agreement shall each be
construed as an agreement independent of any other provision in this Agreement, and the existence
of any claim or cause of action of Employee against Company, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by Company of the covenants in this
Agreement.

     25. Notices. Any notice, request, or instruction to be given hereunder shall be in
writing and shall be deemed given when personally delivered or three (3) days after being sent by
United States Certified Mail, postage prepaid, with Return Receipt Requested, to the parties at
their respective addresses set forth below:

     To Company:

Fidelity National Information Services, Inc.

601 Riverside Avenue

Jacksonville, FL 32204

Attention: General Counsel

     To Employee:

James W. Woodall

Fidelity National Information Services, Inc.

601 Riverside Avenue

Jacksonville, FL 32204

     26. Waiver of Breach. The waiver by any party of any provisions of this Agreement
shall not operate or be construed as a waiver of any prior or subsequent breach by the other party.

     27. Tax Withholding. Company or an affiliate may deduct from all compensation and
benefits payable under this Agreement any taxes or withholdings Company is required to deduct
pursuant to state, federal or local laws.

     28. Code Section 409A. To the extent applicable, it is intended that this Agreement
and any payment made hereunder shall comply with the requirements of Section 409A of the Code, and
any related regulations or other guidance promulgated with respect to such Section by the U.S.
Department of the Treasury or the Internal Revenue Service (“Code Section 409A”). Any provision
that would cause the Agreement or any payment hereof to fail to satisfy Code Section 409A shall
have no force or effect until amended to comply with Code Section 409A, which amendment may be
retroactive to the extent permitted by Code Section 409A.

13

 

     IN WITNESS WHEREOF the parties have executed this Agreement to be effective as of the date
first set forth above.

	 	 	 	 	 
	 	FIDELITY NATIONAL INFORMATION SERVICES, INC.

 	 
	 	By:  	/s/ Lee A. Kennedy
 	 
	 	Its: 
 	 President and Chief Executive Officer
 	 
	 	JAMES W. WOODALL 	 
	 
	 	 
	 	/s/ James W. Woodall
 	 
	 

14statementwithrespect.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 4.1

STATEMENT WITH RESPECT TO SHARES OF 

SERIES B REDEEMABLE PREFERRED STOCK OF

PENN NATIONAL GAMING, INC.

Pursuant to Section 1522(c) of the 

Pennsylvania Business Corporation Law of 1988

          In compliance with the requirements of Section 1522(c) of the Pennsylvania Business Corporation Law of 1988, as amended (the “PBCL”), Penn National Gaming, Inc., a Pennsylvania corporation (the “Corporation”) does hereby certify that, pursuant to the authority expressly vested in the Board of Directors of the Corporation (the “Board of Directors”) by the Corporation’s Amended and Restated Articles of Incorporation, the Board of Directors has adopted the resolution set forth below at a duly-called meeting held on July 2, 2008, establishing and designating a series of Preferred Stock of the Corporation, par value $0.01 per share (the “Preferred Stock”) and fixing and determining the amount and the voting powers, designations, preferences and other special rights, and the qualifications, limitations and restrictions, of a series of Preferred Stock (this “Resolution”).

          RESOLVED, that a series of Preferred Stock of the Corporation, par value $0.01 per share be, and hereby is, created, and the voting powers, designations, preferences and other special rights, and the qualifications, limitations and restrictions thereof are as follows:

          1. Number of Shares and Designation. 12,500 shares of Preferred Stock of the Corporation shall constitute a series of Preferred Stock designated as Series B Redeemable Preferred Stock (the “Series B Preferred Stock”). The number of shares of Series B Preferred Stock may be increased (to the extent of the Corporation’s authorized and unissued Preferred Stock) or decreased (but not below the number of shares of Series B Preferred Stock then outstanding) by further resolution duly adopted by the Board of Directors and the requisite filing with the Department of State of the Commonwealth of Pennsylvania.

          2. Rank. Each share of the Series B Preferred Stock shall rank equally in all respects with all other shares of the Series B Preferred Stock. The Series B Preferred Stock shall, with respect to redemption payments and rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (i) rank senior and prior to the common stock of the Corporation, par value $0.01 per share (the “Common Stock”), the Series A Preferred Stock of the Corporation, par value $0.01 per share, and each other class or series of equity securities of the Corporation, whether currently issued or issued in the future, that by its terms ranks junior to the Series B Preferred Stock as to rights upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities, including the Common Stock, are collectively referred to herein as the “Junior Securities”), (ii) rank on a parity with each class or series of equity securities of the Corporation, issued in the future without violation of this Resolution, that does not by its terms expressly provide that it

ranks senior to or junior to the Series B Preferred Stock as to rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities, other than Junior Securities, are collectively referred to herein as the “Parity Securities”), and (iii) rank junior to each other class or series of equity securities of the Corporation, issued in the future without violation of this Resolution, that by its terms ranks senior to the Series B Preferred Stock as to rights (including as to the distribution of assets) upon liquidation, dissolution or winding up of the affairs of the Corporation (all of such equity securities are collectively referred to herein as the “Senior Securities”). The respective definitions of Junior Securities, Parity Securities and Senior Securities shall also include any securities, rights or options exercisable or exchangeable for or convertible into any of the Junior Securities, Parity Securities or Senior Securities, as the case may be. At the date of the initial issuance of the Series B Preferred Stock there are no Parity Securities and no Senior Securities authorized or outstanding. For so long as any shares of Series B Preferred Stock remain outstanding, the Corporation will not, without the affirmative vote or consent of the Holders of a majority of the shares of Series B Preferred Stock outstanding at the time, authorize or issue any Parity Securities or Senior Securities.

          3. Dividends.

             (a) For so long as any shares of Series B Preferred Stock remain outstanding, the Corporation shall not, without the affirmative vote or consent of the Holders of a majority of the shares of Series B Preferred Stock outstanding at the time, redeem, purchase or acquire, or pay or make available any monies for a sinking fund for the redemption of, any Common Stock or other Junior Securities of the Corporation, except for (i) open-market purchases of Common Stock or (ii) tender offers for Common Stock made by the Corporation at a price which is not higher than the price which the Board of Directors has determined in good faith would enable the Corporation to acquire the desired number of shares to be purchased and in no event at a price per share greater than a 20% premium to the market price of the Common Stock on the date that such tender offer is announced. 

             (b) The Holders of record of the issued and outstanding shares of Series B Preferred Stock shall be entitled to receive, out of assets legally available for the payment of dividends, dividends on the terms described below:

          (i) Subject to Section 3(b)(ii), Holders shall be entitled to participate equally and ratably with the holders of shares of Common Stock in all dividends and distributions paid (whether in the form of cash, stock, other assets, or otherwise, and including, without limitation, any dividend or distribution of shares of stock or other equity, or evidences of indebtedness, of any Person, including, without limitation, the Corporation or any Subsidiary of the Corporation) on the shares of Common Stock, in the amount that such Holders would have received if, immediately prior to each record date in respect of which dividends or distributions are paid, each share of Series B Preferred Stock were redeemed for a number of shares of Common Stock equal to the Liquidation Preference divided by the Ceiling Price. Dividends or distributions payable to the Holders pursuant to this Section 3(b)(i) shall be declared and paid on the same dates that such dividends or distributions are declared and paid, and in the same form payable, to holders of shares of Common Stock.

2

          (ii) In the event that any dividend or distribution is made in excess of a Regular Dividend (a “special dividend”), the Ceiling Price and Floor Price shall be reduced by an amount equal to (A) the aggregate Fair Market Value of such special dividend payable in respect of all outstanding Common Shares, restricted stock and Preferred Stock divided by (B)(I) the total number of Common Shares and restricted stock currently outstanding plus (II) the number of Common Shares into which all shares of Series B Preferred Stock could have been redeemed as calculated in accordance with the provisions of Section 3(b)(i) prior to such special dividend. Furthermore, in the event of any special dividend, the Liquidation Preference per share of Series B Preferred Stock shall be an amount equal to (A) the Liquidation Preference per share immediately prior to such special dividend multiplied by (B) a fraction, the numerator of which is the aggregate Liquidation Preference immediately prior to such special dividend less the aggregate Fair Market Value of such special dividend payable in respect of all of the Series B Preferred Stock and the denominator of which is the aggregate Liquidation Preference of the Series B Preferred Stock immediately prior to the date of such special dividend. The Corporation shall not make any special dividend to the extent that the payment of the special dividend would cause the Ceiling Price to be reduced below $1.00 pursuant to the calculations set forth in this Section 3(b)(ii), or, in the good faith judgment of the Board of Directors, make any non-cash special dividend that, when taken together with all other non-cash special dividends and asset sale self-tenders (as defined below), would, or when declared or paid would be reasonably likely to, cause the Ceiling Price to be reduced by greater than $7.50 (appropriately adjusted for events of the type set forth in Section 8) pursuant to the calculations set forth in this Section 3(b)(ii), without, in either instance, obtaining the approval of the Holders of a majority of the shares of Series B Preferred Stock outstanding at the time, which approval shall not be unreasonably withheld. In addition, in the event that the Floor Price would otherwise be reduced to less than zero as a result of any special dividend, then the Floor Price shall be deemed to equal zero after such special dividend.

          (iii) Notwithstanding Section 3(a), any purchase of Common Stock by the Corporation by means of a tender offer which is funded by an asset sale outside the ordinary course (an “asset sale self-tender”) will require the approval of the Holders of a majority of the shares of Series B Preferred Stock outstanding at the time of such asset sale self-tender (such approval not to be unreasonably withheld) if the aggregate amount to be paid in such asset sale self-tender would have, if paid as a special dividend, alone or together with other asset sale self-tenders and special dividends, caused the Ceiling Price to be reduced by greater than $7.50 pursuant to the calculations set forth in Section 3(b)(ii). In addition, in the event of any asset sale self-tender, the Ceiling Price and the Floor Price shall be reduced pursuant to the calculations set forth in Section 3(b)(ii), substituting, for these purposes, the total premium in such asset sale self-tender for the term “special dividend” in Section 3(b)(ii). The “total premium” in an asset sale self-tender shall be the excess of the aggregate amount paid to the holders of Common Stock pursuant to such asset sale self-tender over the market price of the Common Stock immediately prior to the announcement of such asset sale self-tender.

          (iv) Each dividend or distribution payable pursuant to Section 3(b)(i) hereof shall be payable to the Holders of record of shares of Series B Preferred Stock as they appear on the stock records of the Corporation at the close of business on the record date designated by 

3

the Board of Directors for such dividends or distributions (each, a “Dividend Payment Record Date”), which shall be the same day as the record date for the payment of such dividends or distributions to the holders of shares of Common Stock. 

             (c) For the avoidance of doubt, the shares of Series B Preferred Stock that have been redeemed upon payment of the Redemption Price shall not be entitled to receive any dividend or distribution pursuant to this Section 3 payable on or after the Redemption Date. 

          4. Liquidation Preference. In the event of any liquidation of the Corporation, the Holders shall, with respect to each share of Series B Preferred Stock, receive and be paid out of the assets of the Corporation available for distribution to its shareholders an amount equal to the greater of (i) the Liquidation Preference and (ii) the amount such Holder would have been entitled to receive in the liquidation if the share of Series B Preferred Stock were redeemed for a number of Common Shares equal to the Liquidation Preference divided by the Ceiling Price, in preference to the holders of, and before any payment or distribution of any assets of the Corporation is made on or set apart for, any Junior Securities. If the assets of the Corporation available for distribution to its shareholders are not sufficient to pay in full the amount payable to the Holders pursuant to this Section 4 and the liquidation preference payable to the holders of any Parity Securities, then such assets, or the proceeds thereof, shall be distributed among the Holders and any such other Parity Securities ratably in accordance with the amount payable pursuant to this Section 4 and the liquidation preference for the Parity Securities, respectively. For the avoidance of doubt, no Business Combination shall be considered a liquidation of the Corporation. 

          5. Business Combination.

             (a) In the event of any Business Combination in which the consideration for the transaction is payable to all of the holders of Common Stock generally and consists entirely of cash, upon consummation of such Business Combination each share of Series B Preferred Stock shall be entitled to receive from the entity (or an Affiliate thereof) merging with the Corporation or acquiring its assets or voting shares, in exchange for the cancellation of such share, an amount in cash per share equal to:

          (i) if the Transaction Price is less than or equal to the Ceiling Price and greater than or equal to the Floor Price, the Stated Value (calculated as of the date of consummation of such Business Combination), 

          (ii) if the Transaction Price is greater than the Ceiling Price, the amount equal to (x) the Stated Value (calculated as of the date of consummation of such Business Combination) plus (y) the product of (A)(I) the Transaction Price less the Ceiling Price divided by (II) the Ceiling Price multiplied by (B) the Liquidation Preference, and 

          (iii) if the Transaction Price is less than the Floor Price, the amount equal to (x) the Stated Value (calculated as of the date of consummation of such Business Combination) minus (y) the product of (A)(I) the Floor Price less the Transaction Price divided by (II) the Floor Price multiplied by (B) the Stated Value (calculated as of the date of consummation of such Business Combination).

4

             (b) In the event of any Business Combination in which the consideration for the transaction is payable to all of the holders of Common Stock generally and includes stock and/or other securities and property (including cash), upon consummation of such Business Combination the Holder of each share of Series B Preferred Stock shall be entitled to receive from the entity (or an Affiliate thereof) merging with the Corporation or acquiring its assets or voting shares, in exchange for the cancellation of each such share, the same kind or kinds of shares of stock and/or other securities and property (including cash), in the same relative proportion, receivable by holders of shares of Common Stock, which would have an aggregate Fair Market Value per share of Series B Preferred Stock equal to the Fair Market Value of the consideration such Holder would have received for one share of Series B Preferred Stock pursuant to clause (i), (ii) or (iii) of Section 5(a), as applicable.

             (c) The Holders shall have the right to vote upon any Business Combination to which clause (iii) of Section 5(a) applies (regardless of the form of consideration paid in such Business Combination), voting together with the holders of Common Stock as a single class. In any such vote, each Holder shall be entitled to cast the number of votes, for each share of Series B Preferred Stock held, equal to the quotient obtained by dividing the Liquidation Preference by the Transaction Price (with such Transaction Price determined, solely for this purpose, as of the record date for determining which holders of Common Stock are entitled to vote on such Business Combination, rather than as of immediately prior to the consummation of the Business Combination). The Corporation shall secure the agreement of any entity (or Affiliate thereof) merging with the Corporation, or acquiring its assets or voting shares, to make the payment referred to in Section 5(a) or 5(b), as applicable. 

             (d) To the extent that the shares of stock payable to the holders of Common Stock generally in a Business Combination are, upon delivery, duly and validly authorized and issued, fully paid and nonassessable and free from all liens, security interests and charges (other than liens or charges created by or imposed upon the holders of Common Stock or taxes in respect of any transfer occurring contemporaneously therewith), then the shares of stock received by the Holders pursuant to Section 5(b) will be duly and validly authorized and issued, fully paid and nonassessable and free from all liens, security interests and charges (other than liens or charges created by or imposed upon the Holder or taxes in respect of any transfer occurring contemporaneously therewith) to the same extent. 

          6. Redemption by the Corporation.

          (a) On June 30, 2015 (the “Maturity Date”), the Corporation shall redeem all (but not less than all) of the outstanding shares of Series B Preferred Stock (the “Redemption”), for an amount in cash per share equal to:

          (i) if the Average Trading Price calculated as of May 26, 2015 is greater than or equal to the Floor Price, but less than or equal to the Ceiling Price, the Liquidation Preference,

          (ii) if the Average Trading Price calculated as of May 26, 2015 is less than the Floor Price, the product of (x)(I) the Liquidation Preference divided by (II) the Floor Price, multiplied by (y) the Average Trading Price (calculated as of May 26, 2015), or 

5

          (iii) if the Average Trading Price calculated as of May 26, 2015 is greater than the Ceiling Price, the product of (x)(I) the Liquidation Preference divided by (II) the Ceiling Price, multiplied by (y) the Average Trading Price (calculated as of May 26, 2015) ((i), (ii) or (iii), as applicable, the “Redemption Price”).

          (b) Notwithstanding anything in Section 6(a) to the contrary, at the election of and in the sole and absolute discretion of the Corporation, in connection with the mandatory redemption contemplated by Section 6(a), the Corporation may pay all or part of the Redemption Price in shares of Common Stock (such election, the “Stock Election”), provided that public announcement of the Stock Election is made on or prior to June 1, 2015. Any such Stock Election shall be irrevocable. In the event of a Stock Election, the number of shares (calculated to the nearest whole share) so payable shall be determined by dividing (i) the amount of the Redemption Price that the Corporation elects to pay in Common Stock by (ii) the Average Trading Price (calculated as of May 26, 2015). All shares of Common Stock delivered upon redemption of the Series B Preferred Stock will, upon delivery, be duly and validly authorized and issued, fully paid and nonassessable and free from all liens, security interests and charges (other than liens or charges created by or imposed upon the Holder or taxes in respect of any transfer occurring contemporaneously therewith). Prior to the Maturity Date, the Corporation will procure the listing of the shares of Common Stock, subject to issuance or notice of issuance and approval by the Corporation’s shareholders and/or Board of Directors (to the extent such approval is necessary in order to increase the number of authorized shares of Common Stock or to approve the issuance of Common Stock), on NASDAQ (or, if the Common Stock is not listed or quoted on NASDAQ, the principal national or regional exchange or market on which the Common Stock is then listed or quoted), and will pay all fees and expenses associated with such listing. If notified by a Holder of any required filing or reasonable request for information pursuant to the HSR Act or other required regulatory approvals, the Corporation will, at the sole expense of such Holder, make such filings or provide such information, as applicable, and the Corporation shall cooperate with such Holder to obtain approval under the HSR Act or other required regulatory approvals prior to the Maturity Date. In addition, in the event that the Corporation makes a Stock Election, the Corporation shall use commercially reasonable efforts (i) to cause a registration statement covering the resale of such shares of Common Stock to be issued to the Holders to be effective as of the Maturity Date as the shares may be issued and (ii) to obtain the Issuance Approval (as defined below) prior to the Maturity Date.

          Until such time as there has been any vote of the Corporation’s shareholders that is necessary to approve the issuance of Common Stock on the Redemption Date pursuant to the rules of NASDAQ (or, if the Common Stock is not listed or quoted on NASDAQ, the requirements of the principal national or regional exchange or market on which the Common Stock is then listed or quoted) (such approval, the “Issuance Approval”), the provisions of this Section 6(b) shall not apply for those shares of Common Stock with respect to which such Issuance Approval shall be required. If such vote is held and the Corporation’s shareholders vote in favor of the Issuance Approval, then the Redemption Price shall be paid pursuant to the provisions of this Section 6(b), provided that the Corporation shall be entitled to hold one or more shareholder meetings in order to seek the Issuance Approval. If the Corporation’s shareholders fail to vote in favor of the Issuance Approval after such meeting or meetings, then unless and until the Corporation shall receive such approval, the Corporation shall pay the Redemption Price in shares of Common Stock pursuant to Section 6(b), up to the maximum 

6

amount permitted by applicable law or regulation (including the rules of the principal national or regional exchange or market on which the Common Stock is then listed or quoted) without obtaining such approval (such amount, the “Permitted Issuance Amount”), with the remainder of the Redemption Price (the “Remaining Amount”) to be paid in cash funded with the proceeds of a public offering (as such term is defined by the rules of NASDAQ, or, if the Common Stock is not listed or quoted on NASDAQ, as such term may be defined by the principal national or regional exchange or market on which the Common Stock is then listed or quoted) of Common Shares, which offering the Corporation shall use commercially reasonable efforts to complete.

          In the event that the payment of all or part of the Redemption Price in shares of Common Stock would cause a Holder of Series B Preferred Stock to be an Acquiring Person making a Control Share Acquisition (as such terms are defined in the Control Share Acquisition Statute), then, unless the Corporation and such Holder shall have completed the procedures under the Control Share Acquisition Statute to accord voting rights to the full number of shares of Common Stock to be issued to such Holder, the shares of Common Stock delivered to such Holder upon Redemption shall be issued together with, and the Holder shall execute and deliver to the Corporation, a proxy in favor of an attorney-in-fact designated by the Board of Directors covering a number of the shares of Common Stock such that the shares of Common Stock delivered upon Redemption would not be Control Shares (as such term is defined in the Control Share Acquisition Statute) (such number of shares issued with such proxy, the “Excess Shares”). As to any Excess Shares, the proxy shall automatically be terminated on any sale of such Excess Shares or as of the date on which the Holder would not have sufficient voting power over voting shares of the Corporation to meet the threshold in the definition of Control Share Acquisition in the Control Share Acquisition Statute.

             (c) To the extent that the Corporation has not paid the Holders the Redemption Price in full on or prior to the Maturity Date, then any such unpaid amount shall bear interest at a rate of 7.75% per annum, compounded semi-annually (the “Default Rate”), until it is paid in full. The Default Rate shall increase by 1.00% after each ninety (90) day period following the commencement of accrual of interest following the Maturity Date, up to an amount equal to 13.50% per annum. The Default Rate shall commence accruing on the forty-fifth (45th) calendar day following the Maturity Date, with respect to any portion of the Redemption Price as to which a Stock Election has been made in accordance with Section 6(b), and on the first day after the Maturity Date, with respect to any portion of the Redemption Price which is to be paid in cash. 

             (d) Any shares of Common Stock issued in connection with a redemption of Series B Preferred Stock pursuant to Section 6(b) are to be issued in the same name as the name in which such shares of Series B Preferred Stock are registered.

             (e) If the Redemption does not occur on the Maturity Date, from the Maturity Date until the Redemption Date, the Corporation may not, at any time, (i) declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, or pay or make available monies for a sinking fund for the redemption of, any Common Stock or other Junior Securities of the Corporation, or (ii) redeem, purchase or acquire, or make a liquidation payment with respect to, or pay or make available monies for a sinking fund for the redemption of, any Parity Securities.

7

             (f) The redemption of the Series B Preferred Stock shall be deemed to have been effected immediately prior to the close of business on the first Business Day on which the Corporation pays the Redemption Price in full (the “Redemption Date”). At such time on the Redemption Date, the shares of Series B Preferred Stock shall no longer be deemed to be outstanding, and all rights of a Holder with respect to such shares shall immediately terminate except the right to receive cash and/or Common Stock pursuant to this Section 6.

          7. Voting Rights.

             (a) Except as set forth below or in Section 2, Section 3(a), Section 3(b)(iii) or Section 5(c) or as required by applicable law, the Holders shall not be entitled to vote at any meeting of the shareholders for election of members of the Board of Directors or for any other purpose or otherwise to participate in any action taken by the Corporation or the shareholders thereof, or to receive notice of any meeting of shareholders.

             (b) So long as any Series B Preferred Stock remains outstanding, the Corporation will not, without the affirmative vote or consent of the holders of a majority of the Series B Preferred Shares outstanding at the time, given in person or by proxy, either in writing or at a meeting (such series voting separately as a class) amend, alter or repeal the provisions of this Resolution, including by merger or consolidation (an “Event”), so as to adversely affect any right or privilege of the Series B Preferred Stock; provided, however, that no Event shall be deemed to adversely affect the rights and privileges of the Series B Preferred Stock, and the Holders shall have no right to vote with respect to such Event, if (x) following such Event, the Series B Preferred Stock remains outstanding with the terms thereof not adversely changed and represent an interest in the same issuer in which holders of Common Stock prior to such Event will hold their shares following such Event, (y) in connection with the merger or consolidation of the Corporation with or into another entity in which the Corporation is not the surviving entity, which merger or consolidation is not a Business Combination pursuant to the definition thereof, the Series B Preferred Stock is redeemed or exchanged for a security (a “Replacement Security”) with rights, preferences, privileges and voting powers that are not less favorable than the rights, preferences, privileges and voting powers of the Series B Preferred Stock (it being understood that a Replacement Security shall not be deemed to have rights, preferences, privileges or voting power that are less favorable than the Series B Preferred Stock if the difference in the rights, preferences, privileges or voting power is caused solely by differences between the state law of the jurisdiction of incorporation of the Corporation and the jurisdiction of incorporation of the issuer of the Replacement Security) or (z) Section 5 hereof shall apply to the Event, and as a result the Holders shall be entitled to receive the consideration provided for in Section 5(a) or 5(b), as applicable.

             (c) On each matter submitted to a vote of the Holders in accordance with this Resolution, or as otherwise required by applicable law, each share of Series B Preferred Stock shall be entitled to one vote. With respect to each share of Series B Preferred Stock, the Holder thereof may designate a proxy, with each such proxy having the right to vote on behalf of the Holder.

          8. Stock Splits, Subdivisions, Reclassifications or Combinations. If the Corporation shall (1) declare a dividend or make a distribution on its Common Stock in shares of Common 

8

Stock, (2) subdivide or reclassify the outstanding shares of Common Stock into a greater number of shares or (3) combine or reclassify the outstanding Common Stock into a smaller number of shares, the Floor Price and the Ceiling Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be adjusted to the number obtained by multiplying each of the Floor Price and the Ceiling Price, respectively, in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such action, and the denominator of which shall be the number of shares of Common Stock outstanding immediately following such action. An appropriate adjustment to the Floor Price and the Ceiling Price shall also be made in connection with any event that causes a Triggering Event or a Distribution Date (as such terms are defined in the Rights Agreement or corresponding terms in any successor plan).

          9. Definitions.

          Unless the context otherwise requires, when used herein the following terms shall have the meaning indicated.

          “Affiliate” means, with respect to any Person, any other Person directly, or indirectly through one or more intermediaries, controlling, controlled by or under common control with such Person. For purposes of this definition, the term “control” (and correlative terms “controlling,” “controlled by” and “under common control with”) means possession of the power, whether by contract, equity ownership or otherwise, to direct the policies or management of a Person. 

          “Average Trading Price” means, as of any date, the volume weighted average trading price per share of Common Stock for the 20 consecutive Trading Days immediately preceding such date.

          “Beneficially Own,” “Beneficially Owned,” or “Beneficial Ownership” shall have the meaning set forth in Rule 13d-3 of the rules and regulations promulgated under the Exchange Act, except that for purposes of this Resolution (i) the words “within sixty days” in Rule 13d-3(d)(1)(i) shall not apply, to the effect that a Person shall be deemed to be the beneficial owner of a security if that Person has the right to acquire beneficial ownership of such security at any time and (ii) a Person shall be deemed to Beneficially Own any security that, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, is the subject of a derivative transaction entered into by such Person, or derivative security acquired by such Person, which gives such Person the economic equivalent of ownership of an amount of or an interest in such securities due to the fact that the value of the derivative is determined by reference to the price or value of such securities.

          “Business Combination” means (i) the direct or indirect sale, assignment, conveyance, transfer or other disposition by the Corporation of all or substantially all of its properties or assets (other than a bona fide financing transaction) or (ii) the acquisition by any Person of Beneficial Ownership of more than 50% of the then-outstanding voting 

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securities of the Corporation entitled to vote generally in the election of directors, other than any such acquisition in which the holders of the Common Stock and/or Preferred Stock prior to such acquisition own greater than 50% of the voting securities of such Person immediately following the consummation of such acquisition, provided that the term Business Combination shall not include any transaction described in (i) or (ii) above that occurs solely between the Corporation and either (A) a corporation of which it is a wholly-owned Subsidiary (a “Parent”) or (B) any direct or indirect wholly-owned Subsidiary of the Corporation or a Parent, and in which holders of Common Stock receive solely shares of common stock of the Parent or of such direct or indirect wholly-owned Subsidiary of the Corporation or a Parent. For the avoidance of doubt, no liquidation of the Corporation shall be considered a Business Combination. Any merger, consolidation or similar transaction or series of related transaction as a result of which the holders of Common Stock immediately prior to the consummation of such transaction represent less than 50% of the voting securities of the surviving corporation or successor corporation of such transaction shall be deemed to be a “Business Combination” if such designation would not result in the Series B Preferred Stock being deemed to be “Disqualified Capital” or “Disqualified Capital Stock” under either of the indentures governing the Corporation’s publicly traded senior notes and/or senior subordinated notes or the Corporation’s credit agreement, as in effect as of the date of the initial issuance of the Series B Preferred Stock or if it would constitute “Disqualified Capital” or “Disqualified Capital Stock,” the indebtedness issued under such indentures or the credit agreement is no longer outstanding or is being satisfied in full in such transaction. 

          “Business Day” means any day other than a Saturday, Sunday or a day on which the banks in New York City are authorized by law or executive order to be closed.

          “Capital Stock” means (i) with respect to any Person that is a corporation or company, any and all shares, interests, participations or other equivalents (however designated) of capital or capital stock of such Person and (ii) with respect to any Person that is not a corporation or company, any and all partnership or other equity interests of such Person. 

          “Ceiling Price” means $67.00 per share (subject to adjustment pursuant to the terms of this Resolution, including adjustment pursuant to Sections 3(b)(ii), 3(b)(iii) and 8).

          “Common Stock” means the common stock of the Corporation, par value $0.01 per share. 

          “Comparable Treasury Issue” means the United States Treasury security selected by a Reference Treasury Dealer appointed by the Corporation as having a maturity comparable to the remaining term of the Series B Preferred Stock (as if the final maturity of the Series B Preferred Stock was the Maturity Date) that would be utilized at the time of selection and in accordance with customary financial practice in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Series B Preferred Stock (as if the final maturity of the Series B Preferred Stock was the Maturity Date).

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          “Comparable Treasury Price” means with respect to any date on which the Stated Value is calculated, (1) the average of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) on the third Business Day preceding such calculation date, as set forth in the daily statistical release (or any successor release) published by the Federal Reserve Bank of New York and designated “Composite 3:30 p.m. Quotations for U.S. Government Securities” or (2) if such release (or any successor release) is not published or does not contain such prices on such Business Day, (A) the average of the Reference Treasury Dealer Quotations for such calculation date, after excluding the highest and lowest such Reference Treasury Dealer Quotation or (B) if the Corporation obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such Reference Treasury Dealer Quotations.

          “Control Share Acquisition Statute” means the Pennsylvania Control Share Acquisition Statute, 15 Pa.C.S. §2561 et seq.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

          “Fair Market Value” means the fair market value (as determined by an independent third party appraiser selected by the Corporation and reasonably acceptable to the Holders of a majority of the then outstanding Preferred Stock) of any cash, stock or other property.

          “Floor Price” means $45.00 per share (subject to adjustment pursuant to the terms of this Resolution, including adjustment pursuant to Sections 3(b)(ii), 3(b)(iii) and 8).

          “Holder” means the holders of Series B Preferred Stock.

          “HSR Act” means the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.

          “Investor Rights Agreement” means the Investor Rights Agreement, dated as of July 3, 2008, by and among the Corporation, FIF V PFD LLC, Centerbridge Capital Partners, L.P., DB Investment Partners, Inc. and Wachovia Investment Holdings, LLC.

          “Liquidation Preference” means $100,000 per share of Series B Preferred Stock (subject to adjustment pursuant to the terms of this Resolution, including adjustment pursuant to Section 3(b)(ii)).

          “Person” means an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).

          “Purchase Agreement” means the Stock Purchase Agreement, dated as of July 3, 2008 among the Corporation and the purchasers named therein, including all schedules and exhibits thereto, as the same may be amended from time to time.

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          “Reference Treasury Dealer” means any primary U.S. government securities dealer in the City of New York selected by the Corporation.

          “Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any date on which the Stated Value is calculated, the average, as determined by the Corporation, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Corporation by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business date preceding such calculation date.

               “Regular Dividend” means cash dividends or distributions with respect to the Common Stock or other Junior Securities of the Corporation in amounts and at intervals which are within the customary practice for companies that pay current recurring cash dividends. Although the Corporation does not pay Regular Dividends on the date hereof, it reserves the right to institute the payment of a Regular Dividend in the future.

              “Rights Agreement” means the Rights Agreement between the Corporation and Continental Stock Transfer and Trust Company, dated as of March 2, 1999, as amended from time to time, or any subsequent rights plan.

               “Securities Act” means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

               “Stated Value” means, for each share of Series B Preferred Stock, the present value, as of any calculation date, of the Liquidation Preference to be paid on the Maturity Date, computed using a discount rate equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such period. For the avoidance of doubt, in the event that the Stated Value is calculated as of the Maturity Date, the Stated Value shall equal $100,000 per share of Series B Preferred Stock. 

               “Subsidiary” of a Person means (i) a corporation, a majority of whose stock with voting power, under ordinary circumstances, to elect directors is at the time of determination, directly or indirectly, owned by such Person or by one or more Subsidiaries of such Person, or (ii) any other entity (other than a corporation) in which such Person or one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof has at least a majority ownership interest.

               “Trading Day” means any day that the NASDAQ (or, if the Common Stock is not listed or quoted on the NASDAQ, such other national or regional exchange or market on which the Common Stock is then listed or quoted) is open for trading.

               “Transaction Price” means the Fair Market Value of the consideration payable in any Business Combination in respect of one share of Common Stock as of the time immediately prior to the consummation of the Business Combination. 

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          10. Certain Other Provisions.

              (a) If any Series B Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation will issue, in exchange and in substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the certificate lost, stolen or destroyed, a new Series B Preferred Stock certificate of like tenor and representing an equivalent amount of Series B Preferred Stock, upon receipt of evidence of such loss, theft or destruction of such certificate and, if requested by the Corporation, an indemnity on customary terms for such situations reasonably satisfactory to the Corporation.

             (b) The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

             (c) The Corporation shall be entitled to deduct and withhold from any payment of cash, shares of Common Stock or other consideration payable to a Holder of a share of Series B Preferred Stock, any amounts required to be deducted or withheld under applicable U.S. federal, state, local or foreign tax laws with respect to such payment. In the event the Corporation previously remitted withholding taxes to a governmental authority in respect of any amount treated as a distribution on a share of Series B Preferred Stock, the Corporation shall be entitled to offset any such taxes against any amounts otherwise payable in respect of such share of Series B Preferred Stock.

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     IN WITNESS WHEREOF, the Corporation has caused this certificate to be duly executed and acknowledged by its undersigned duly authorized officer this 9th day of July, 2008.

                                                                                 PENN NATIONAL GAMING, INC.

                                                                                  By:  /s/  Robert Ippolito

                                                                                  Name:  Robert Ippolito

                                                                                  Title:     Vice President, Secretary, and

                                                                                               Treasurer

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