Document:

Exhibit
10.1

 

SEPARATION
AGREEMENT WITH RELEASE OF ALL CLAIMS

 

This Separation Agreement
(the “Agreement”) is made this 15TH day of May, 2002, effective as
of the 5th day of April, 2002, by and between Penn National Gaming,
Inc., a Pennsylvania corporation (the “Employer”) and Joseph A. Lashinger, Jr. (“Executive”).

 

BACKGROUND

 

A.            Executive
has been employed by Employer for approximately the past five years and, most
recently, as a Vice President and General Counsel.  No employment agreement has ever been entered into between
Employer and Executive.

 

B.            The
parties hereto have determined that it is in their mutual best interests to
terminate the employment relationship between Executive and Employer, all as
more specifically set forth herein.

 

C.            Although
there exists no written or other confidentiality agreement between Executive
and Employer, Executive acknowledges that, as General Counsel and a Vice
President of Employer, Executive received information of both a confidential
and legally privileged character and acknowledges his common law fiduciary duty
and obligation to maintain confidential certain information communicated to or
received by him.

 

NOW, THEREFORE, in
consideration of the foregoing preambles, the mutual covenants and agreements
set forth below, and other valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:

 

1.             Employment Termination. The parties hereto
mutually agree that Executive’s employment with Employer is terminated effective
April 5, 2002.  Thereafter any
relationship between the parties shall be governed solely by this Agreement.

 

2.             Resignation of Executive.  Executive hereby resigns, effective as of
the close of business on the April 5, 2002, from any and all positions he held
as employee, officer and/or director of Employer and any of Employer’s
subsidiaries and affiliates (the “Affiliates”); provided, however, that
Executive shall continue any regulatory positions or designations necessary to
maintain Employer’s and Affiliates’ existing licenses until a successor has
been named and qualified, but not later than May 31, 2002.  Employer accepts the resignation of
Executive effective as of April 5, 2002 and releases him of all responsibility
associated with his position except as otherwise specifically provided herein.

 

 

3.             Compensation
and Services.

 

3.1           Severance
Payment.  Employer will pay
Executive, as a severance payment, the sum of $230,000 (less normal
withholdings) payable by direct deposit on May 24, 2002.

 

3.2           Bonus
Payment.  Employer will pay
Executive, as a payment for any and all earned bonuses for the period July 1,
2001 through April 5, 2002, the sum of $75,000 (less normal withholdings) which
bonus shall be paid by direct deposit on May 24, 2002.

 

3.3           Benefits.  Employer will continue providing to
Employee, at Employer’s cost, those benefits made available to Executive as of
April 5, 2002 for the one year period ending April 4, 2003.

 

3.4           Options.  The Chairman and President of Employer will
request the Compensation Committee of Employer to take such action as is
necessary to vest 11,250 of Executive’s existing unvested options to purchase
shares of Employer’s stock as follows: 
1,250 shares on 8/6/02 ($6.438 stock price), 3,750 shares on 1/4/03
($10.313 strike price), 2500 shares on 1/4/03 ($6.875 strike price) and 3,750
shares on 2/8/03 ($8.125 strike price); provided, however, the vested options
shall not be exercised prior to the date that they would have otherwise been
vested provided that the vested options shall be subject to forfeiture upon the
occurrence of a material breach by Executive of his obligations under this
Agreement on or before December 31, 2002. 
Such forfeiture provision shall terminate upon a change in control of
Employer.  Employer will use
commercially reasonable efforts to permit Executive to exercise his stock
options for Employer’s stock until the latest possible date permitted by
Employers Amended and Restated 1994 Stock Option Plan, but shall not be
required to amend such Stock Option Plan.

 

3.5           Lockup.  Employer will use reasonable commercial
efforts to promptly obtain an agreement from Merrill Lynch to terminate the
“lockup” applying to shares of Common Stock of Employer owned by Executive.

 

3.6           Life
Insurance.  Employer will take such
action as is necessary to transfer to Executive the ownership of a $300,000
life insurance policy on the life of Executive on and as of April 4, 2003.

 

3.7           Vesting.  Employer confirms that Executive is 100%
vested under his 401(k) account and non-qualified deferred compensation plans.

 

3.8           Availability.  Executive will be generally available
(subject to his other business and personal commitments) to provide transition
in the legal/government

 

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relations/compliance
functions of Employer until December 31, 2002.

 

3.9           No
Other Compensation.  Other than as
specifically set forth in this Agreement, Executive shall not be eligible for
any other compensation for services rendered prior to April 6, 2002, including,
without limitation, bonus or other incentive compensation, related to his
employment with Employer;  provided, however, Executive shall be
reimbursed in the normal course for all reasonable business-related expenses
incurred by him in accordance with Employer’s policies on or before April 5,
2002  and submitted to the
Employer for reimbursement on or before May 15, 2002.

 

4              Covenants.

 

4.1           The
parties will cooperate with each other in terminating or transferring any
licenses presently held by Executive (other than his license to practice law),
which were issued in connection with his employment with Employer.

 

4.2           To
the extent permitted pursuant to the Pennsylvania Business Corporation Law of
1988, as amended, and the Bylaws of Employer, Executive shall be defended and
indemnified with respect to acts or omissions of Executive as an employee,
agent or officer of Employer occurring on or prior to April 5, 2002.

 

4.3           Executive
authorizes Employer to open all mail received by Employer addressed to
Executive as an officer or employee of Employer.  All other mail will be forwarded, unopened, to Executive and, if
it pertains to the business of Employer, will be promptly returned by Executive
to Employer.

 

4.4           Executive
agrees to execute and deliver such instruments and documents in his capacity as
a registered person with any regulatory agency required to be filed by Employer
until his successor has been duly qualified, so long as such documents are in
form and substance reasonably satisfactory to Executive.

 

5.             Confidentiality/Non-Disclosure
Covenant of Executive.

 

5.1           Confidentiality.  Executive hereby acknowledges that
throughout his employment, and during his engagement as a consultant, by
Employer and the Affiliates, as applicable, he has had, and may have, access
to, obtained, or developed certain confidential or legally privileged
information (including but not limited to trade secrets, methods and practices,
financial information, information technology systems, technical and research
data, new product development information, pricing information, and business
and marketing plans, lobbying activities, legal strategies and compliance
matters) of each of the Employer, and that such information constitutes
valuable, special and unique property of Employer and the Affiliates. Executive
agrees that he shall hold inviolate and keep secret all such confidential or
legally privileged information and will not, for any reason or purpose
whatsoever, hereafter disclose to 

 

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any party or in any
manner use or permit to be used, any of such confidential or legally privileged
information.

 

5.2           Exception.  Notwithstanding anything to the contrary in
this Section 5, Executive may divulge any information required by law to be
divulged by him to any government commission, agency or other regulatory body
or pursuant to a subpoena; provided, however, that, unless it is not feasible
under the circumstances, prior to divulging any such information, Executive
shall advise the Chairman of the Compliance Committee of Employer or Employer’s
General Counsel that a request has been made and cooperate with Employer, if
requested, in Employer’s efforts to seek protective relief against the
divulgence of any such information.  In
any event, unless prohibited by law, Executive will keep Employer fully advised
of any contacts from any such government agency, commission or regulatory body,
and any information given by him to the same.

 

5.3           No
Removal.  Executive represents and
warrants that he has not removed from the premises of Employer any information
or documents, in any form (including, but not limited to, electronic format) or
any files pertaining to Employer’s business and operations or any personal
information (including, but not limited to, personal tax returns of officers
and directors of Employer) furnished to Executive, as General Counsel and
compliance officer of Employer, by any employee or director of Employer, and
that the only items he has removed are personal to Executive or copies of
documents which are publicly available.

 

6.             Disparaging
Remarks. From the date hereof and forever after, the Executive on one hand,
and the Employer and its respective officers, directors, employees and agents
on the other hand, agree that neither shall make disparaging remarks about the
other to any person or entity.  If asked
for a reference for Executive, Employer agrees to reply in substantially the
form of Exhibit A, attached hereto and made a part hereof.

 

7.             Remedies.

 

7.1           Breaches by Executive.

 

7.1.1        Equitable Relief. 
Executive acknowledges that the material provisions of this
Agreement are of crucial importance to Employer and that any damage caused by
the breach of Sections 5, 6 or 9 of this Agreement would result in irreparable
harm to the business of Employer for which money damages alone would not be
adequate compensation. Accordingly, Executive agrees that if he violates
Sections 5, 6 or 9 of this Agreement, Employer shall be entitled to, in
addition to any other rights or remedies of Employer available at law: (i)
equitable relief in any court of competent jurisdiction, including, without
limitation, temporary injunction and permanent injunction; and (ii) hold
Executive liable to Employer for all costs and expenses to Employer resulting
from such breach (including, without limitation, reasonable attorneys’ fees and
expenses in dealing with this breach and/or any suits or actions with regard
thereto).

 

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7.1.2        Damages.  In the event Executive commits a material
breach of his representations, warranties or duties and obligations hereunder,
in addition to the equitable relief provided for in Section 7.1.1 above,
Employer shall be released from performing any of its executory obligations
hereunder and Executive shall return to Employer amounts paid to him under
Section 3 hereof, including but not limited to the net after tax proceeds of
the sale of Employer stock pursuant to the exercise of options pursuant to
Section 3.4 above.

 

7.2           Breaches
by Employer

 

7.2.1        Equitable
Relief.  Employer acknowledges that
the material provisions of this Agreement are of crucial importance to
Executive and that any damage caused by the breach of Sections 6 or 9 of this
Agreement would result in irreparable harm to the reputation of Executive for
which money damages alone would not be adequate compensation.  Accordingly, Employer agrees that if it
violates Section 6 or 9 of this Agreement, Executive shall be entitled to, in
addition to any other rights or remedies of Executive available at law:  (i) equitable relief in any court of
competent jurisdiction, including, without limitation, temporary injunction and
permanent injunction; and (ii) hold Employer liable to Executive for all costs
and expenses to Executive resulting from such breach (including, without
limitation, reasonable attorneys’ fees and expenses in dealing with this breach
and/or any suits or actions with regard thereto).

 

7.2.2        Damages.  In the event Employer commits a material
breach of its representations, warranties or duties and obligations hereunder,
in addition to the equitable relief provided for in Section 7.2.1 above,
Executive shall be released from performing any of its executory obligations
hereunder.

 

8.             
No Wrongdoing. By entering into this Agreement, neither Employer nor
Executive asserts or  admits
any wrongdoing.

 

9.             Confidentiality
of this Agreement.  This Agreement
and its terms and conditions shall remain confidential to the parties and the
parties shall not disclose the fact of and contents, terms, and conditions of
this Agreement except to their personal or financial representatives who shall
similarly keep confidential the fact of and contents, terms, and conditions of
this Agreement or as such disclosure may be required pursuant to applicable
laws, rules or regulations.

 

10.           Release.
Executive and Employer hereby release, acquit, and discharge each and the
other, and each and all of his and its agents, employees, officers, directors,
and shareholders, and each and all of his and its predecessors, heirs,
successors, and assigns (as applicable) from and against all claims, actions,
and causes of action (collectively the “claims”), of every kind, nature, and
description, whenever they arose, whether known or unknown, asserted or
unasserted, arising out of or related to Executive’s employment and the
termination thereof (except any obligations arising hereunder), including, but
not limited to, all claims for damages, wages, bonuses, monies, expenses,
severance pay, vacation pay, fringe benefits,

 

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emotional distress, loss of consortium, or any other monies or
accountings including, but not limited to, compensatory damages, punitive
damages, exemplary damages, liquidated damages, pain and suffering, back pay,
front pay, costs and attorneys’ fees, arising under any federal, state, and
local laws and statutes, including, but not limited to, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act, the Rehabilitation Act, any federal, state, and local handicap
or disability act, statute or regulation, the Americans with Disabilities Act,
any federal, state, and local civil rights and/or human relations acts, the
Fair Labor Standards Act, federal, state, and local wage and hour and wage
payment acts, the Family and Medical Leave Act, health, medical, or fringe
benefit related laws, the National Labor Relations Act, Employee Retirement
Income Security Act, any express or implied public policy of the United States
or any state, county, or locality, the common law, express or implied
contracts, actions in tort, or wrongful discharge or breach of contract or
breach of covenant of good faith and fair dealing, case decisions, or any other
source whatsoever.

 

11.           Review
and Consideration Period. Executive acknowledges that he has been
instructed to and has had the opportunity to review this Agreement with an
attorney and/or any person of his choosing before signing it. Executive further
acknowledges that he has had twenty-one days to consider this Agreement. By
executing this Agreement, Executive acknowledges that, as of the date of
execution, he has either considered the Agreement for twenty-one days, or has,
on the advice of counsel, waived the twenty-one day consideration period.

 

12.           Revocation
Right. Executive shall have seven days after signing this Agreement to
revoke it. This Agreement shall not be effective nor will any consideration be
provided until after the revocation period has passed. A revocation of this
Agreement shall be written and shall not be effective unless actually received
by the Chairman or President of Employer on or before the 7th day
after this Agreement has been signed.

 

13.           Notices.
All notices, requests, demands, claims, and other communications hereunder will
be in writing and addressed to the intended recipient as set forth below. Any
party hereto may give any notice, request, demand, claim or other communication
hereunder by registered or certified mail, return receipt requested, or
delivery by any courier service (including, without limitation, Federal
Express) that requires a return receipt or signature for delivery, but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the individual for
whom it is intended. Any party hereto may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other parties hereto notice in the manner herein set
forth.

 

	
  If to Executive:

  	
   

  	
  Joseph A. Lashinger, Jr.

  
	
   

  	
   

  	
  115 Spyglass Drive

  
	
   

  	
   

  	
  Blue Bell Country Club

  
	
   

  	
   

  	
  Blue Bell, PA 
  19422

  

 

6

 

	
  If to Employer:

  	
   

  	
  Penn National Gaming, Inc.

  
	
   

  	
   

  	
  825 Berkshire Blvd., Suite 200

  
	
   

  	
   

  	
  Wyomissing, PA 19610

  
	
   

  	
   

  	
  Attention: Kevin DeSanctis

  

 

14.           Remedies
Cumulative; No Waiver. No remedy conferred upon either party by this Agreement, including, without limitation the remedies set forth in Section 7
hereof, is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and in addition to and not in derogation of any
other remedy or right given hereunder or now or hereafter existing at law or in
equity, including, without limitation, any remedies conferred upon either party by virtue of their prior
employment relationship.  No
delay or omission by either party in
exercising any right, remedy or power hereunder 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 any either party from
time to time and as often as may be deemed expedient or necessary by the party in its sole discretion.

 

15.           Enforceability.
If any provision of this Agreement shall be invalid or unenforceable, in whole
or in part, then such provision shall be deemed to be modified or restricted to
the extent and in the manner necessary to render the same valid and
enforceable, or shall be deemed excised from this Agreement, as the case may
require, and this Agreement shall be construed and enforced to the maximum
extent permitted by law, as if such provision had been originally incorporated
herein as so modified or restricted, or as if such provision had not been
originally incorporated herein, as the case may be; provided, however, that if
the modification or restriction of some provision of this Agreement deprives
any party hereto of the substantial benefit of his or its bargain as set forth
herein, then such modification or restriction shall be deemed ineffective.

 

16.           Governing
Law.  Executive and the Employer
agree that the terms of this Agreement shall be interpreted under and
consistent with the laws of the Commonwealth of Pennsylvania.  In any legal proceeding, involving directly
or indirectly, any matter arising out of or related to this Agreement, each of
the parties hereby irrevocably submits to the exclusive jurisdiction of the
Court of Common Pleas of Montgomery County, Pennsylvania and agrees not to
raise any objection to such jurisdiction or to the laying or maintaining of the
venue of any such proceeding, and service of process in any such proceeding may
be duly effected by mailing a copy thereof, by registered mail, postage
prepaid, or by hand delivery or by a nationally recognized overnight delivery
service to each party thereto.

 

17.           Contents
of Agreement; Amendment and Assignment; Successors and Assigns. This
Agreement sets forth all of the promises, covenants, agreements, conditions and
understandings between the parties with respect to the subject matter hereof,
supersedes all prior and contemporaneous agreements, covenants, and understandings, inducements or conditions

 

7

 

pertaining thereto,
express or implied, oral or written, and cannot be modified, altered,
supplemented, terminated or amended except by a writing signed by the parties.
All of the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective heirs,
representatives, successors, assigns and affiliates of the parties hereto.

 

IN WITNESS WHEREOF, the parties hereto execute this
Separation Agreement With Release Of All Claims as of the day and year first
above set forth.

 

 

	
  /s/ Joseph A Lashinger, Jr.

  	
   

  	
  Dated:  May
  15, 2002

  
	
  Joseph A. Lashinger, Jr.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PENN NATIONAL GAMING, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Kevin DeSanctis

  	
   

  	
  Dated:  May
  15, 2002

  
	
   

  	
  Kevin DeSanctis, President

  	
   

  	
   

  

 

8

 

EXHIBIT “A”

 

Dear
                     :

 

I am pleased to
respond to your request for information concerning our former Vice-President
and General Counsel, Joseph A. Lashinger, Jr.

 

As you are
probably aware, Joe left Penn National on April 5, 2002 after having served the
Company for nearly six years to pursue other opportunities.

 

While at Penn
National, Joe served as a valuable member of our executive team as chief legal
advisor and provided leadership in government and regulatory affairs.

 

Joe’s compensation
during his final year at Penn National included a base salary of $230,000 per
annum, a cash bonus and a grant of stock options.

 

I hope this
information is of assistance.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Kevin DeSanctis

  	
   

  
	
   

  	
  Kevin DeSanctis

  
	
   

  	
  President

  

 

9Exhibit
10.1

 

FIRST
AMENDMENT TO EQUITY RESIDENTIAL 2002 SHARE INCENTIVE PLAN 

 

THIS FIRST AMENDMENT (“First
Amendment”) TO EQUITY RESIDENTIAL 2002 SHARE INCENTIVE PLAN  (“Plan”) is made as of the 7th
day of February 2003.

 

Recitals:

 

1.           The
Board of Trustees of Equity Residential (the “Company”) has determined to adopt
an amendment to the Plan, which does not require shareholder approval as
permitted under Section 16 (c).

 

2.           Terms
used in this First Amendment which are defined in the Plan have the meanings
given them in the Plan.

 

1.  AMENDMENTS.  Section 3 (b) of the Plan is hereby deleted and the following
Section 3 (b) is substituted therefore:

 

(b)                       Board of Trustees. Each
member of the Board of Trustees will receive an annual award of Share Awards
and Options equal to $50,000 in value on the same day as the annual grant of
Share Awards and Options to the Company’s executive officers.  The annual $50,000 award will be allocated
between Options (valued by using the same valuation criteria utilized by the Committee
in its employee option grants made as of the same date) and Share Awards
(valued at the closing price of the Company’s common shares on the date of
grant), in the same ratio as approved by the Committee for the annual long term
incentive awards to the Company’s executive officers.  The Share Award will vest in full on the third anniversary of the
Grant Date.  The Options will vest in
equal installments six months, twelve months and twenty-four months from the
Grant Date.

 

2.  PLAN IN FULL FORCE AND EFFECT.  After giving effect to this First Amendment,
the Plan remains in full force and effect.

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