Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

Employment Agreement, dated as of December 1, 2005, (the “Agreement”),
by and between Gayla J. Delly (the “Employee”) and Benchmark Electronics, Inc.,
a Texas corporation (the “Company”).

 

WITNESSETH:

 

In consideration of the mutual covenants and conditions contained
herein, the parties hereto agree as follows:

 

Section 1.  Employment.  The Company hereby agrees to employ the
Employee, and the Employee hereby accepts employment by the Company, upon the
terms and subject to the conditions hereinafter set forth.  During the term of her employment, the
Employee shall have the title of Executive Vice President and Chief Financial
Officer.

 

Section 2.  Duties.  In her capacity as Executive Vice President
and Chief Financial Officer of the Company, the Employee shall perform such
reasonable executive duties as a Executive Vice President and Chief Financial
Officer would normally perform or as otherwise specified in the By-laws of the
Company, and such other reasonable executive duties as the Board of Directors
of the Company may from time to time reasonably prescribe with the concurrence
of the Employee.  Except as otherwise
provided herein, except as may otherwise be approved by the Board of Directors
of the Company, and except during vacation periods and reasonable periods due
to sickness, personal injury or other disability, the Employee agrees to devote
substantially all of her available time to the performance of her duties to the
Company hereunder, provided that nothing contained herein shall preclude the
Employee from (i) serving on the board of directors of any business or
corporation on which she is serving on the date hereof or, with the consent of
the Board of Directors, serving on the board of directors of any other business
or corporation, (ii) serving on the board of, or working for, any
charitable or community organization, and (iii) pursuing her personal
financial and legal affairs so long as such activities do not materially
interfere with the performance of the Employee’s duties hereunder.

 

Section 3.  Term.  Except as otherwise provided herein, the term
of this Agreement shall be for three (3) years (the “Initial Term”),
commencing on the date of this Agreement. 
This Agreement shall be automatically renewed thereafter for successive one
1) year terms (each such renewal term, a “Renewal Term”), unless either party
gives to the other written notice of termination no fewer than ninety (90) days
prior to the expiration of any such Renewal Term, which notice shall expressly
refer to this Section 3

 

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of the Agreement and state that such party does not wish to extend this
Agreement (any such notice, a “Non-Renewal Notice”).  Any such Non-Renewal Notice given by the
Company shall constitute a termination of the Employee’s employment without
Cause for purposes of this Agreement. 
The Initial Term, as the same may be extended by any Renewal Term, is
referred to herein as the “Employment Term”. 
The provisions of this Agreement shall survive any termination hereof.

 

Section 4.  Compensation
and Benefits.  In consideration for
the services of the Employee hereunder, the Company shall compensate the
Employee and perform its other obligations as provided in this Section 4.

 

(a) Base Salary. 
Commencing on the date hereof, the Employee shall be entitled to
receive, and the Company shall pay the Employee in equal bi-weekly
installments, a base salary at a rate per annum of Four Hundred Ten Thousand United
States Dollars ($410,000.00), as increased from time to time by the
Compensation Committee of the Board of Directors of the Company (the “Compensation
Committee”).  Commencing in 2006 and from
time to time at least annually thereafter, the Compensation Committee shall
review and evaluate the annual base salary of the Employee in accordance with
its standard policies and practices for key executive employee compensation
and, in its discretion, may increase the Employee’s annual base salary
commencing on August 1, 2006, and on anniversaries of such date
thereafter.  The amount of such base
salary for each respective annual one (1) year period, including any
increases hereafter approved, is referred to as the Base Salary for such
respective one year period.  The Employee’s
Base Salary may not and shall not be decreased or reduced more than ten percent
(10%) in any year, including but not limited to after giving effect to any such
increase.

 

(b) Bonus.  During
the Employment Term, the Employee shall be eligible to participate in any
annual fiscal year bonus program that may be provided by the Company for its
key executive employees, subject to its terms and conditions.  On February 14, 2005, the Compensation
Committee adopted a formal bonus plan (the “Executive Bonus Plan”) for eligible
senior executive officers, including the Employee.  The Executive Bonus Plan provides the
Employee with a target bonus opportunity of Sixty percent (60%) of Base Salary
for each calendar year in the Employment Term if the Company attains specified
performance objectives for such year, and an over achievement bonus opportunity
of up to Sixty percent (60%) of Base Salary if the Company exceeds the
foregoing performance objectives by predetermined amounts.  Such objectives and targets shall be
determined on an annual basis each year during the Employment Term, and shall
be reasonably satisfactory to the Company and the Employee.  All bonuses payable to the Employee under the
Executive Bonus Plan or any other annual bonus plan shall be determined and
paid on or prior to March 31 of the year following the year for which such
bonus is payable.

 

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(c) Other Long Term Incentive Compensation.  The Employee shall be entitled to participate
in all long-term incentive compensation programs for key executives (if any) at
a level commensurate with her position.

 

(d) Other Benefits. 
During the term of this Agreement, the Employee shall be entitled to
participate in and receive benefits under any and all pension, profit-sharing,
life and other insurance, medical, dental, health and other welfare and fringe
benefit plans and programs, and be provided any and all other perquisites, that
are from time to time made available to executive employees or other employees
of the Company.  The Employee shall also
be entitled to an amount of paid vacation per calendar year, and sick leave and
illness and disability benefits, in accordance with such reasonable Company
policy as may be applicable from time to time to key executive employees.

 

Section 5.  Expenses and
Other Employment-Related Matters.  It
is acknowledged by the parties that the Employee, in connection with the
services to be performed by him pursuant to the terms of this Agreement, will
be required to make payments for travel, entertainment and similar
expenses.  The Company shall reimburse
the Employee for all reasonable expenses incurred by the Employee in connection
with the performance of her duties hereunder or otherwise on behalf of the
Company.

 

Section 6.  Termination.  The Employee’s employment may terminate prior
to the end of the Employment Term as provided in this Section 6.

 

(a) Death or Disability. 
The Employee’s employment will terminate (x) immediately upon the death
of the Employee during the term of her employment hereunder or (y) at the
option of the Company, upon thirty (30) days’ prior written notice to the
Employee, in the event of the Employee’s disability.  The Employee shall not be deemed disabled
unless, as a result of the Employee’s incapacity due to physical or mental
illness (as determined by a physician selected by the Employer or its insurers
and reasonably acceptable to the Employee or her representative), the Employee
shall have been absent from and unable to perform her duties with the Company
on a full-time bases for one hundred twenty (120) consecutive business
days.   In the event of termination of
the Employee’s employment pursuant to this Section 6(a):

 

(1) The Company shall immediately pay
the Employee any portion of the Employee’s Base Salary accrued but unpaid
through the date of such termination and all payments and reimbursements under Section 5
hereof for expenses incurred prior to such termination.  Six (6) months after the date of
termination, the Company will make a lump sum cash payment equal to the
Employee’s Base Salary and a prorated annual bonus for the year of termination
equal to Sixty

 

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percent (60%) of the amount calculated by dividing the Employee’s
annual Base Salary at the date of such termination by twelve (12) and
multiplying the result by the number of months in the year of such termination
that began or ended prior to the date of such termination.  If the Company achieves target performance
objectives for the entire year in which such termination occurs that, under the
Executive Bonus Plan or any other then effective bonus plan, would have
entitled the Employee to receive an annual bonus for such year calculated at a
percent greater than Sixty percent (60%) of Base Salary, the Employee or her
estate shall be entitled to receive, at the time such bonus would have normally
been payable or six (6) months after the termination of employment
(whichever later occurs), an additional amount equal to (x) such larger bonus
amount divided by twelve (12) and multiplied by the number of months in the
year of such termination that began or ended prior to the date of such
termination minus (y) the amount previously paid pursuant to the preceding
sentence.

 

(2) The Employee shall be entitled to
receive all vested benefits under the Company’s otherwise applicable plans and
programs.

 

(b) For Cause.  The
Company may terminate the employee’s employment for Cause (as defined below)
upon written notice by the Company to the Employee, such termination to take
effect on the date determined in accordance with the last paragraph of this Section 6(b) below
to be the termination date for such purpose. 
In the event of termination of the Employee’s employment for Cause
pursuant to this Section 6(b):

 

(1) The Company shall immediately pay
the Employee (i) any portion of the Employee’s Base Salary accrued but
unpaid through the date of such termination and (ii) all payments and
reimbursement under Section 5 hereof for expenses incurred prior to such
termination.

 

(2) The Employee shall be entitled to
receive all vested benefits under the Company’s otherwise applicable plans and
programs.

 

For purposes of this Agreement, the term “Cause” shall mean the
Employee’s (i) gross negligence in the performance of her duties with the
Company, which gross negligence results in a material adverse effect on the
Company, provided that no such gross negligence will constitute “Cause” if it
relates to an action taken or omitted by the Employee in the good faith,
reasonable belief that such action or omission was in or not opposed to the
best interests of the Company; (ii) habitual neglect or disregard of her
duties with the Company that is materially and demonstrably injurious to the
Company, after written notice from the Company stating the duties the Employee
has failed to perform; (iii) engaging in conduct or misconduct that
materially harms the reputation or

 

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financial position of the Company; (iv) obstruction, impedance, or
failure to materially cooperate with an investigation authorized by the Board,
a self-regulatory organization empowered with self-regulatory responsibilities
under federal or state laws, or a governmental department or agency; or (v) conviction
of a felony, provided that no such conviction will constitute “Cause” if it
relates to an action taken or omitted by the Employee in the good faith,
reasonable belief that such action or omission was in or not opposed to the
best interest of the Company.  The
Employee’s employment may not and shall not be terminated for Cause unless the (1) Board
of Directors provides the Employee with written notice stating the conduct
alleged to give rise to such Cause, (2) the Employee has been given an
opportunity to be heard by the Board, (3) in the case of clause (i) or
(ii) of the definition of Cause, the Employee has been given a reasonable
time to cure, and the Employee has not cured such negligence or failure to the
reasonable satisfaction of the Board, and (4) the Board has approved such
termination by majority vote of the members of the Board of Directors,
excluding the Employee.

 

(c) By Company Without Cause.  The Company may terminate the Employee’s
employment at any time for any reason without Cause.  In the event of any termination of the
Employee’s employment by the Company without Cause:

 

(1) The Company shall pay the Employee
severance pay for the Severance Period (as defined below) at the per annum rate
which shall equal one hundred percent (100%) of her Base Salary at the date of
such termination.  The Company shall pay
such severance pay in lump sum six (6) months after the date of such
termination.  The Company’s obligation to
make such payments shall be absolute and unconditional.  Without limiting the foregoing, such payments
shall not be subject to any right of offset or similar right, and the Employee
shall have no obligation of mitigation or similar obligation with respect
thereto.

 

(2) The Company shall immediately pay
the Employee the portion of the Employee’s Base Salary accrued but unpaid
through the date of such termination and all payments and reimbursements under Section 5
hereof for expenses incurred prior to such termination.  Six (6) months after the date of
termination, the Company will pay and a prorated annual bonus for the year of
termination equal to Sixty percent (60%) of the amount calculated by dividing
the Employee’s annual Base Salary at the date of such termination by twelve
(12) and multiplying the result by the number of months in the year of such
termination that began or ended prior to the date of such termination.  If the Company achieves target performance
objectives for the entire year in which such termination occurs that, under the
Executive Bonus Plan or any other then effective bonus plan, would have
entitled the Employee to receive an annual bonus for such year calculated at a
percent greater than Sixty percent (60%) of Base Salary, the Employee (or her
estate) shall

 

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be entitled to receive, and the Company shall pay, at the time the
bonus would have normally been payable or six (6) months after the
termination of employment (whichever later occurs), an additional amount equal
to (x) such larger bonus amount divided by twelve (12) and multiplied by the
number of months in the year of such termination that began or ended prior to
the date of termination minus (y) the amount previously paid pursuant to the
preceding sentence.

 

(3) The Employee shall be entitled to
receive all vested benefits under the Company’s otherwise applicable plans and
programs.

 

(4) Following such termination, the
Employee shall be entitled to continue participation in all medical, dental,
health and other welfare benefits (or receive comparable coverage if such
participation is not permitted under the terms of such plans or if the Board,
at its option, determines that it is in the best interest of the Company to
provide such comparable coverage rather than continued participation in the
Company’s plans) until the end of the Severance Period upon the same terms and
conditions that would have applied if the Employee continued to be employed by
the Company, provided that the benefits referred to in this clause (4) will
cease if and to the extent the Employee becomes eligible for similar benefits
by reason of new employment.

 

For purposes of this Agreement, the term “Severance Period” means (i) if
the Employee’s employment is terminated at or prior to the end of the Initial
Term (including but not limited to by the giving of a Non-Renewal Notice or
other notice as provided in Section 3 hereof), a period equal to the
greater of (x) two (2) full years beginning on the date of such
termination and (y) the then remaining portion of the Initial Term and (ii) if
the Employee’s employment is terminated after the end of the Initial Term and
prior to the end of the then-current Renewal Term (including but not limited to
by the giving of any Non-Renewal Notice as provided in Section 3 hereof),
a period equal to one (1) full year beginning on the date of such
termination.

 

(d) By Employee for Good Reason.  The Employee may terminate her employment at
any time for Good Reason (as defined below). 
In the event of any termination of the Employee’s employment by the
Employee for Good Reason:

 

(1) The Company shall pay the Employee
severance pay for the Severance Period (as defined above) at the per annum rate
which shall equal one hundred percent (100%) of her Base Salary at the date of
such termination.  The Company shall pay
such severance pay in lump sum six (6) months after the date of such
termination.  The Company’s obligation to
make such payments shall be absolute and unconditional.  Without limiting the foregoing, such payments
shall not be

 

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subject to any right of offset or similar right, and the Employee shall
have no obligation of mitigation or similar obligation with respect thereto.

 

(2) The Company shall immediately pay
the Employee the portion of the Employee’s Base Salary accrued but unpaid
through the date of such termination and all payments and reimbursements under Section 5
hereof for expenses incurred prior to such termination.  Six (6) months after the date of
termination, the Company will pay a prorated annual bonus for the year of
termination equal to Sixty percent (60%) of the amount calculated by dividing
the Employee’s annual Base Salary at the date of such termination by twelve
(12) and multiplying the result by the number of months in the year of such
termination that began or ended prior to the date of such termination.  If the Company achieves target performance
objectives for the entire year in which such termination occurs that, under the
Executive Bonus Plan or any other then effective bonus plan, would have entitled
the Employee to receive an annual bonus for such year calculated at a percent
greater than Sixty percent (60%) of Base Salary, the Employee (or her estate)
shall be entitled to receive, and the Company shall pay, at the time the bonus
would have normally been payable or six (6) months after the termination
of employment (whichever later occurs), an additional amount equal to (x) such
larger bonus amount divided by twelve (12) and multiplied by the number of
months in the year of such termination that began or ended prior to the date of
termination minus (y) the amount previously paid pursuant to the preceding
sentence.

 

(3) The Employee shall be entitled to
receive all vested benefits under the Company’s otherwise applicable plans and
programs.

 

(4) Following such termination, the
Employee shall be entitled to continue participation in all medical, dental,
health and other welfare benefits (or receive comparable coverage if such
participation is not permitted under the terms of such plans or if the Board, at
its option, determines that it is in the best interest of the Company to
provide such comparable coverage rather than continued participation in the
Company’s plans) until the end of the Severance Period upon the same terms and
conditions that would have applied if the Employee continued to be employed by
the Company, provided that the benefits referred to in this clause (4) will
cease if and to the extent the Employee becomes eligible for similar benefits
by reason of new employment.

 

For purposes of this Agreement, “Good Reason” means (A) a material
diminution of the Employee’s duties or responsibilities, (B) a reduction
in the Employee’s Base Salary greater than ten percent (10%), or annual bonus
or long-term incentive compensation opportunity, (C) a Change of Control
(as defined in Section 7 hereof), but

 

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only if the Employee terminates her employment pursuant to this subsection within
ninety (90) days after the date of such Change of Control, or (D) a
material breach by the Company of any other provision of this Agreement that is
not cured promptly after written notice to the Company by the Employee.

 

(e) By Employee Without Good Reason.  The Employee may terminate her employment at
any time without Good Reason upon thirty (30) days’ prior written notice to the
Company.  In the event of any such
termination of the Employee’s employment by the Employee with Good Reason:

 

(1)  The Company shall immediately pay
the Employee (i) any portion of the Employee’s Base Salary accrued but
unpaid through the date of such termination and (ii) all payments and
reimbursements under Section 5 hereof for expenses incurred prior to such
termination.

 

(2) The Employee shall be entitled to
receive all vested benefits under the Company’s otherwise applicable plans and
programs.

 

(f) Excise Tax Gross-Up Payment.  If a Change of Control or other transaction
triggers or results in the imposition upon the Employee of any excise or
similar tax under Section 4999 of the Internal Revenue Code (or any
similar or successor provision) pursuant to the terms of this Agreement or any
employee stock option agreement or plan in which the Employee is a participant,
the Company shall pay (or cause any acquirer in such transaction to pay) any such
excise or similar tax and make “gross-up” payments to the Employee to the
extent necessary so that the Employee will receive the same net after-tax
amount she would have received if no excise tax had been imposed on him.

 

(g) No Penalty, Forfeiture or Liability.  Any termination by the Employee of her
employment with the Company in accordance with the terms hereof shall be
without penalty, forfeiture, or liability arising out of such termination of
any kind or nature.  Notwithstanding any
other provision hereof, any termination of the Employee’s employment on or
after the occurrence of a Change of Control shall be deemed to be a termination
by the Company without Cause if by the Company.

 

Section 7. Change in Control.  For purposes of this Agreement, (1) the
term “Person” means any corporation, partnership, trust, company, business,
firm, association, organization, individual, governmental instrumentality or
entity, or other person or entity, (2) the term “Voting Stock” shall mean,
as to any Person, the then-outstanding securities of or other interests in such
corporation entitled to vote generally in the election of directors, trustees
or similar managers of such Person, and (3) the term “Change in Control”
shall mean:

 

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(a) The Company is merged, consolidated or reorganized into or
with another corporation or other Person, or the stockholders of the Company
approve such a merger, consolidation or reorganization, and as a result of such
merger, consolidation or reorganization, the holders of the Voting Stock of the
Company immediately prior to such transaction hold or would hold in the
aggregate less than seventy percent (70%) of the combined voting power of the
then-outstanding Voting Stock of the surviving corporation or Person
immediately after such transaction; or

 

(b) The Company sells or otherwise transfers all or substantially
all of its assets to another corporation or other Person, or the stockholders
of the Company approve such a sale or transfer, and either (x) as a result of
such sale or transfer, the holders of the Voting Stock of the Company
immediately prior to such sale or transfer hold or would hold in the aggregate
less than seventy percent (70%) of the combined voting power of the then-outstanding
Voting Stock of such corporation or Person immediately after such sale or
transfer, or (y) such corporation or Person does not assume all of the Company’s
obligations to the Employee pursuant to an instrument in form and substance
reasonably satisfactory to the Employee; or

 

(c) The Company is liquidated or dissolved, or the stockholders of
the Company approve such a liquidation or dissolution; or

 

(d) Any Person or “group” [as the term “group” is used in Section 13(d)(3) or
Section 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)] becomes, or a report is filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated pursuant to
the Exchange Act, disclosing that any Person or “group” (as the term “group” is
used in Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act) has become, the beneficial owner (as the term “beneficial owner”
is defined under Rule 13d-3 or any successor rules or regulations
promulgated under the Exchange Act) of securities representing thirty percent
(30%) or more of the combined voting power of the then outstanding Voting Stock
of the Company or fifty percent (50%) or more of the then outstanding shares of
Voting Stock of the Company; or

 

(e) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule,
form, report or item therein) that a change in control of the Company has
occurred or will occur in the future pursuant to any then-existing contract or
transaction; or

 

(f) If, during any period of two consecutive years, individuals
who at the beginning of any such period constitute the Directors of the Company
cease for any reason to

 

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constitute at least a majority thereof; provided, however, that for
purposes of this clause (f), each Director who is first elected, or first
nominated for election by the Company’s 
stockholders, by a vote of at least two-thirds of the Directors of the
Company then still in office who were Directors of the Company at the beginning
of any such period (other than an election or nomination of any individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the Directors of the
Company, as such terms are used in Rule 14a-11 or any successor rule or
regulation promulgated under the Exchange Act) will be deemed to have been a
Director of the Company at the beginning of such period.

 

Section 8.  Confidential
Information.  The Employee recognizes
and acknowledges that certain proprietary, non-public information owned by the
Company and its affiliates, including without limitation proprietary,
non-public information regarding customers, pricing policies, methods of
operation, proprietary computer programs, sales products, profits, costs,
markets, key personnel, technical processes, and trade secrets (hereinafter
called “Confidential Information”), are valuable, special and unique assets of
the Company and its affiliates.  The
Employee will not, during or after her term of employment, without the prior
written consent of a member of the Board believed by the Employee to have been authorized
by the Board for such purpose, knowingly and intentionally disclose any of the
Confidential Information obtained by him while in the employ of the Company to
any person, firm, corporation, association or other entity for any reason or
purpose whatsoever, directly or indirectly (other than to an employee of the
Company of its affiliates, a director of the Company or its affiliates, or a
person to whom disclosure is necessary or appropriate in the Employee’s good
faith judgment in connection with the performance of her duties hereunder or
otherwise on behalf of the Company), unless and until such Confidential
Information becomes publicly available (other than as a consequence of the
breach by the Employee of her confidentiality obligations under this Section 8),
and except as may be required (or as the Employee may be advised by counsel is
required) in connection with any judicial, administrative or other governmental
proceeding or inquiry.  In the event of
the termination of her employment, whether voluntary or involuntary and whether
by the Company or the Employee, the Employee will deliver to the Company and
will not take with him any documents, or any other reproductions (in whole or
in part) of any items, comprising Confidential Information (except that the
Employee may retain her personal address, telephone and other contact lists and
information and any other documents or reproductions retained upon the advice
of counsel).  Notwithstanding any other
provision hereof, the term “Confidential Information” does not include any
information that (a) is or becomes publicly available other than as the
result of the breach by the Employee of her confidentiality obligations under
this Section 8, (b) became, is or becomes available to the Employee
on a non-confidential basis from a source, other than the Company, that to the
Employee’s knowledge is not prohibited from disclosing such information to the
Employee by a

 

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confidentiality obligation owed to the Company or (c) was known to
the Employee prior to becoming an officer of the Company.  The provisions of this Section 8 shall
expire and be of no further force and effect on the third anniversary of the
date of termination of the Employee’s employment with the Company.

 

Section 9.  Non-Competition.  The Company promises that during the term of
this Agreement and before the Company can exercise any right to terminate the
Employee’s employment without cause, the Company shall provide the Employee
with Confidential Information that the Employee did not possess and had not
received prior to the execution of this Agreement.  In exchange for and ancillary to the Company’s
enforceable promise to provide him with that Confidential Information, the
Employee agrees that she will not disclose or make improper use of any of the
Confidential Information.  In order to
enforce that promise by the Employee, she agrees to the provisions of this Section 9.  Accordingly, during her employment with the
Company pursuant to this Agreement and for a period of two (2) years
thereafter, the Employee will not knowingly and intentionally (i) engage,
directly or indirectly, alone or as a partner, officer, director, employee, or
consultant of any other business organization, in any business activities that
are substantially and directly competitive with the business activities then
conducted by the Company anywhere in the world (the “Designated Industry”), (ii) divert
to any competitor of the Company in the Designated Industry any customer of the
Company or (iii) solicit or encourage any officer, employee, or consultant
of the Company to leave its employ for employment by or with any competitor of
the Company in the Designated Industry. 
The parties hereto acknowledge that the Employee’s non-competition
obligations hereunder will not preclude the Employee from (i) owning less
than 5% of the common stock of any publicly traded corporation or other Persons
conducting business activities in the Designated Industry or (ii) serving
as a director of a corporation or other Person engaged in the manufacturing or
electronics industry whose business operations are not substantially and
directly competitive with those of the Company.

 

Section 10.  Arbitration.

 

(a) Subject Claims; Initiation of Binding Arbitration. The
Company and the Employee agree that all (i) disputes and claims of any
nature that the employee may have against the Company and any subsidiaries or
affiliates and their officers and employees, including all federal or state
statutory, contractual, and common law claims (including all employment
discrimination claims) arising from, concerning, or relating in any way to our
employment relationship, (ii) all disputes and claims of any nature that
the Company may have against the Employee, or (iii) any dispute among us
about the arbitrability of any claims or controversy will be resolved out of
court.  Any such claims will be submitted

 

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exclusively first to mandatory mediation and, if mediation is
unsuccessful, to mandatory arbitration.

 

(b) Arbitration Procedure. 
Unless otherwise agreed in writing by the Company and the Employee, any
arbitration proceeding will be held in Houston, Texas.  The arbitration will be conducted under the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association (“AAA” Rules). 
The claim will be submitted to a single experienced, neutral employment
arbitrator selected in accordance with the AAA Rules.  The arbitrator shall have full authority to
award or grant all remedies provided by law. 
The arbitrator shall have full authority to permit adequate
discovery.  At the conclusion of the
arbitration proceeding, the arbitrator shall issue a written, reasoned
award.  The award of the arbitration
shall be final and binding.  A judgment
upon the award may be entered and enforced by any court having
jurisdiction.  Each party shall pay the
fees of their respective attorneys, the expenses of their witnesses, and any
other expenses incurred by such party in connection with the arbitration,
provided, however, that the Company shall pay for the fees of the arbitrator
and the administrative and filing fees charged by the AAA.

 

(c) Confidentiality; Nonjoinder. All information regarding
the dispute or claim or mediation or arbitration proceedings, including the
mediation settlement or arbitration award, will not be disclosed by the
Employee or by the Company or any mediator or arbitrator to any third party
without the written consent of the Employee and the Company.  In no event may an arbitrator allow any party
to join claims of any other employee in a single arbitration proceeding without
consent of the Employee and the Company. 
In the event that the dispute or claim involves a written agreement between
the Employee and the Company (including this Agreement) or a compensation plan,
the arbitrator will have no authority to add to, detract from, or otherwise
modify the agreement or plan provisions other than as expressly set forth in
that agreement or plan.  Should this
arbitration agreement conflict with the arbitration provisions of any other
agreement that the Employee has with the Company, the terms of this agreement
will govern.

 

(d) Equitable Relief. 
In the event that irreparable injury could occur during the pendency of
a mediation or arbitration proceeding, to restore or maintain the status quo
until the dispute has been resolved by mediation or arbitration a party may
apply to a court of competent jurisdiction to obtain a temporary or preliminary
injunction in aid of mediation and arbitration.

 

(e) Binding Agreement. 
Notwithstanding any policy of the Company permitting it to alter its
policies, procedures, and the terms and conditions of employment, this
agreement to arbitrate is binding and cannot be modified or superseded except
by a written

 

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agreement signed by an authorized representative of the Company and the
Employee.

 

13

 

Section 11.  General.

 

(a) Notices.  All
notices and other communications hereunder will be in writing, and will be
deemed to have been duly given if delivered personally, or three (3) business
days after being mailed by certified mail, return receipt requested, or upon
receipt if sent by written telecommunications, to the relevant address set
forth below, or to such other address as the recipient of such notice or
communication will have specified to the other party hereto in accordance with
this Section 11(a):

 

If to Company, to:

 

Benchmark Electronics, Inc.

3000 Technology Drive

Angleton, Texas 77515

Attn: Corporate Secretary

Fax No.: 979/848-5269

 

If to Employee, to:

 

Gayla J. Delly

1203 Woodbank Drive

Seabrook, Texas 77586

 

(b) Withholding; No Offset. 
All payments required to be made by the Company under this Agreement to
the Employee will be subject to the withholding of such amounts, if any,
relating to federal, state and local taxes as may be required by law.  No payment under this Agreement will be
subject to offset or reduction attributable to any amount of obligation the
Employee may owe or be liable for to the Company or any other Person.

 

(c) Equitable Remedies. 
Each of the parties hereto acknowledges and agrees that upon any breach
by the Employee of her obligations under any of Sections 8 and 9 hereof, the
Company will have no adequate remedy at law, and accordingly will be entitled
to specific performance and other appropriate injunctive and equitable relief.

 

(d) Severability.  If
any provision of this Agreement is held to be illegal, invalid or
unenforceable, such provision will be fully severable and this Agreement will
be construed and enforced as if such illegal, invalid, or unenforceable
provision never comprised a part hereof; and the remaining provisions hereof
will remain in full force and effect and will not be affected by the illegal,
invalid, or unenforceable provision or by its severance herefrom.  Furthermore, in lieu of such illegal,
invalid, or unenforceable provision, there

 

14

 

will be added automatically as part of this Agreement a provision as
similar in its terms to such illegal, invalid, or unenforceable provision as
may be possible and be legal, valid, and enforceable.

 

  (e) Waivers.  No delay or omission by either party hereto
in exercising any right, power or privilege hereunder will impair such right,
power or privilege, nor will any single or partial exercise of any such right,
power or privilege preclude any further exercise of any other right, power or
privilege.

 

(f) Counterparts. 
This Agreement may be executed in multiple counterparts, each of which
will be deemed an original, and all of which together will constitute one and
the same instrument

 

(g) Captions.  The
captions in this Agreement are for convenience of reference only and will not
limit or otherwise affect any of the terms or provisions hereof.

 

(h) Reference to Agreement. 
Use of the words “herein”, “hereof”, and “hereto” and the like in this
Agreement refer to this Agreement only as a whole and not to any particular
Section, subsection or provision of this Agreement, unless otherwise
noted.  Any reference to a “Section” or “subsection”
shall refer to a Section or subsection of this Agreement, unless
otherwise noted.

 

(i) Successors and Binding Agreement.  The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business or assets of the
Company, by agreement in form and substance satisfactory to the Employee,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent the Company would be required to perform if no such
succession had taken place.  This
Agreement shall be binding upon and inure to the benefit of the Company and any
successor to the Company, including without limitation any Persons acquiring
directly or indirectly all or substantially all of the business or assets of
the Company whether by purchase, merger, consolidation, reorganization, or
otherwise ( and such successor shall thereafter be deemed the “Company” for the
purposes of this Agreement), but shall not otherwise be assignable,
transferable, or delegable by the Company. 
Without limiting the foregoing, the surviving or transferee corporation
or other person in any such transaction (whether by merger, consolidation,
reorganization, transfer of business or assets, or otherwise) shall be subject
to the provisions of Section 7 hereof and shall be deemed to be the
Company for purposes of such provisions, regardless of whether such transaction
itself constituted a Change of Control of the Company.

 

15

 

(j) Entire Agreement; Amendments and Waivers.  This Agreement contains the entire
understanding of the parties, and supersedes all prior agreements and
understandings between them, relating to the subject matter hereof including
that certain Key Contributor Severance Agreement between the parties dated January 24,
2002.  This Agreement may not be amended
or modified except by a written instrument hereafter signed by each of the
parties hereto, and may not be waived except by a written instrument hereafter
signed by the party granting such waiver. 
The Company has not made any promise or entered into any agreement that
is not expressed in this Agreement, and the Employee is not relying upon any
statement or representation of any agent of the Company.  In executing this Agreement, the Employee is
relying solely on her judgment and has been represented by the legal counsel of
her choice in connection with this Agreement who has read and explained to the
Employee the entire contents of this Agreement, as well as explained the legal
consequences.  No agreements or
representation, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.

 

(k) Governing Law.  This
Agreement and the performance hereof shall be governed and construed in all
respects, including but not limited to as to validity, interpretation and
effect, by the laws of the State of Texas, without regard to the principles or rules of
conflict of laws thereof.

 

16

 

Executed as of the date and year first above written.

 

	
   

  	
  Benchmark Electronics, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Cary T. Fu

  	
   

  
	
   

  	
  Cary T. Fu

  
	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Employee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Gayla J. Delly

  	
   

  
	
   

  	
  Gayla J. Delly

  
	
   

  	
  November 11, 2005

  
					

 

17Exhibit 10.1

 

Call
Option Deed

 

CVC
Limited

ACN 007 931 606

 

and

 

Shuffle
Master, Inc.

 

 

 

 

 

MLC Centre Martin Place Sydney New South Wales 2000 Australia

Telephone +61 2 9225 5000 
Facsimile +61 2 9322 4000

www.freehills.com  DX 361 Sydney

 

SYDNEY MELBOURNE PERTH BRISBANE SINGAPORE

Correspondent Offices HANOI HO CHI MINH CITY JAKARTA KUALA LUMPUR

 

Reference FGH:30C

 

 

Table
of contents

 

	
  Clause

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1

  	
  Interpretation

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
  1.2

  	
  Rules for interpreting this document

  	
   

  
	
   

  	
  1.3

  	
  Business Days

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  Call Option

  	
   

  
	
   

  	
  2.1

  	
  Call Option

  	
   

  
	
   

  	
  2.2

  	
  Takeover Bid by Bidder

  	
   

  
	
   

  	
  2.3

  	
  Exercise Notice

  	
   

  
	
   

  	
  2.4

  	
  Nature of the Call Option

  	
   

  
	
   

  	
  2.5

  	
  Contract of Sale

  	
   

  
	
   

  	
  2.6

  	
  Settlement

  	
   

  
	
   

  	
  2.7

  	
  Obligations on Settlement Date

  	
   

  
	
   

  	
  2.8

  	
  Lapse for Non-Exercise

  	
   

  
	
   

  	
  2.9

  	
  Lapse for Delay

  	
   

  
	
   

  	
  2.10

  	
  Nominee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  Restrictions on the shares

  	
   

  
	
   

  	
  3.1

  	
  Exercise of Voting Rights

  	
   

  
	
   

  	
  3.2

  	
  Restraint on Disposal

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  Representations and warranties

  	
   

  
	
   

  	
  4.1

  	
  Representations and warranties

  	
   

  
	
   

  	
  4.2

  	
  Repetition of representations and warranties

  	
   

  
	
   

  	
  4.3

  	
  Reliance on representations and warranties

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  Warranty by the Shareholder

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  Notices

  	
   

  
	
   

  	
  6.1

  	
  How to give a notice

  	
   

  
	
   

  	
  6.2

  	
  When a notice is given

  	
   

  
	
   

  	
  6.3

  	
  Address for notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  Amendment and assignment

  	
   

  
	
   

  	
  7.1

  	
  Amendment

  	
   

  
	
   

  	
  7.2

  	
  Assignment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  General

  	
   

  
	
   

  	
  8.1

  	
  Governing law

  	
   

  
	
   

  	
  8.2

  	
  Liability for expenses

  	
   

  
	
   

  	
  8.3

  	
  Giving effect to this deed

  	
   

  
	
   

  	
  8.4

  	
  Waiver of rights

  	
   

  
	
   

  	
  8.5

  	
  Operation of this deed

  	
   

  

 

i

 

	
   

  	
  8.6

  	
  Counterparts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule 1

  	
   

  

 

ii

 

This deed

 

is made on 15 November 2005 between the
following parties:

 

1.                                      CVC Limited 

ACN 007 931 606

Level 42, 259 George Street, Sydney New South Wales

(the Shareholder)

 

2.                                       Shuffle Master, Inc.

1106 Palms
Airport Drive Las Vegas, Nevada 89119-3730, U.S.A

(the Bidder)

 

Recitals

 

A.                                    The
Shareholder is the registered holder and the beneficial owner of the Option
Shares.

 

B.                                      The
Shareholder wishes to grant to the Bidder the Call Option on the terms and
conditions of this document.

 

The parties agree

 

in consideration of, among other things, the
mutual promises contained in this deed

 

1                                        Interpretation

 

1.1                               Definitions

 

The following definitions apply in this document.

 

ASTC means the securities clearing house for “CHESS Approved Securities”
or any clearing house or other entity which is substituted for it.

 

ASTC
Settlement Rules means the business rules of
ASTC.

 

Authorisation means:

 

(a)                                 an authorisation, consent, declaration, exemption, notarisation or
waiver, however it is described; and

 

(b)                                in relation to anything that could be prohibited or restricted by
law if a Government Agency acts in any way within a specified period, the
expiry of that period without that action being taken,

 

including any renewal or amendment.

 

Business
Day means:

 

(a)                                 for determining when a notice, consent or other communication is
given, a day that is not a Saturday, Sunday or public holiday in the place to
which the notice, consent or other communication is sent; and

 

(b)                                for any other purpose, a day
(other than a Saturday, Sunday or public holiday) on which banks are open for
general banking business in Sydney.

 

Call
Option the call option granted by the Shareholder
to the Bidder under clause 2.

 

Call
Period means, subject to clauses 2.2(c)(1) and
2.9, the period:

 

(a)                                 commencing on the date of this deed; and

 

1

 

(b)                                ending on the date specified in
clause 2.8.

 

CHESS has the meaning given to it in the ASTC Settlement Rules.

 

CHESS
Sub-Register has the meaning given to it in
the ASTC Settlement Rules.

 

Closing
Date means the last day of the offer period
of the Takeover Bid.

 

Company means Stargames Limited ABN 54 003 190 501.

 

Competing
Takeover Bid means any proposal or offer
with respect to any transaction (by purchase, scheme of arrangement, takeover
bid or otherwise) that would, if completed substantially in accordance with its
terms, result in any person (or group of persons) other than Bidder or its
related corporations acquiring control of the Company.

 

Corporations
Act means the Corporations
Act 2001 (Cth).

 

Encumbrance means a mortgage, charge, pledge, lien, hypothecation or third
party interest of any kind whatever, or an agreement to create any of them or
to allow any of them to exist.

 

End
Date means 3 months and 3 Business Days from
the date of the first Offer being made or, if a Competing Takeover Bid is
announced during that 3 month and 3 Business Day period, 5 months from the date
of this document.

 

Exercise
Notice means a notice given by the Bidder to
the Shareholder under clause 2.3 substantively in the form of schedule 1.

 

Government
Agency means:

 

(a)                                 a government or government department or other body;

 

(b)                                a governmental, semi-governmental or judicial person; or

 

(c)                                 a person (whether autonomous or not) who is charged with the
administration of a law.

 

HIN has the meaning given to it in the ASTC Settlement Rules.

 

Issuer
Sponsored Statement has the meaning given to
it in the ASTC Settlement Rules.

 

Issuer
Sponsored Sub-Register has the meaning given
to it in the SCH Business Rules.

 

Option
Shares means 10,610,000 ordinary shares in
the Company.

 

Offer means an offer under the Takeover Bid.

 

Prescribed
Matter means a resolution concerning or in
relation to:

 

(a)                                 a Competing Takeover Bid;

 

(b)                                the Offer, including without limitation approving a course of
conduct by the Company in connection with the Offer or that is related to the
conditions of the Offer;

 

(c)                                 item 7 of section 611 of the Corporations Act; or

 

(d)                                Chapter 11 of the ASX Listing Rules;

 

Rights means all accretions and rights attaching to the Option Shares (as
the case may be) including, but not limited to, all rights to receive dividends
and other

 

2

 

distributions declared or paid and to receive or subscribe for shares,
notes or options issued by Company as at the date of this agreement and which
accrue between the date of this agreement and the Settlement Date.

 

Settlement
Amount means $16,445,500.00.

 

Settlement
Date means:

 

(a)                                 if the Offer period is open when the Call Option is exercised, the
earlier of:

 

(1)                                 the
date of first payment to a Company shareholder under the Offer; and

 

(2)                                 the Closing
Date; or

 

(c)                                 if the Offer period is not open when the Call Option is exercised, 5
Business Days after the Shareholder receives an Exercise Notice from the Bidder
for the Option Shares.

 

Sponsoring
Participant has the meaning given to it in
the ASTC Settlement Rules.

 

SRN has the meaning given to it in the ASTC Settlement Rules.

 

Takeover
Bid means a takeover bid for the shares in the
Company for a total consideration of at least $1.55 per share (which bid may or
may not be subject to defeating conditions).

 

Transfer means dispose of in any way and incudes (without limitation)
assign, assure, declare a trust over, transfer or sell and also includes
agreeing to do any of those things.

 

1.2                               Rules for
interpreting this document

 

In this deed, unless the context otherwise requires, headings and bold
text are for convenience only and do not affect the interpretation of this deed
and:

 

(a)                                 words importing the singular include the plural and vice versa;

 

(b)                                words importing a gender include any gender;

 

(c)                                 other parts of speech and grammatical forms of a word or phrase
defined in this deed have a corresponding meaning;

 

(d)                                an expression importing a natural person includes any company,
partnership, joint venture, association, corporation or other body corporate
and any Government Agency;

 

(e)                                 a reference to any thing (including, but not limited to, any right)
includes a part of that thing but nothing in this subclause (e) implies
that performance of part of an obligation constitutes performance of the
obligation;

 

(f)                                   a reference to a clause, party or schedule is a reference to a
clause of, and a party or schedule to, this deed and a reference to this deed
includes any schedule;

 

(g)                                a reference to a statute, regulation, proclamation, ordinance or by-law
includes all statutes, regulations, proclamations, ordinances or by-laws
amending, consolidating or replacing it, whether passed by the same or another
Government Agency with legal power to do so, and a reference

 

3

 

to a statute includes all regulations,
proclamations, ordinances and by-laws issued under that statute;

 

(h)                                a reference to a document includes all amendments or supplements to,
or replacements or novations of, that document;

 

(i)                                    a reference to a party to a document includes that party’s
successors and permitted assigns;

 

(j)                                    a reference to an agreement or deed other than this deed includes an
undertaking, deed, agreement or legally enforceable arrangement or
understanding whether or not in writing;

 

(k)                                 a reference to any time is a reference to that time in Sydney; and

 

(l)                                    an expression defined in, or given a meaning for the purpose of, the
Corporations Act in a context similar to that in which the expression is used
in this deed has the same meaning or definition.

 

1.3                               Business
Days

 

If the day on or by which a person must do something under this
document is not a Business Day:

 

(a)                                 if the act involves a payment that is due on demand, the person must
do it on or by the next Business Day; and

 

(b)                                in any other case, the person must do it on or by the previous
Business Day.

 

2                                        Call Option

 

2.1                               Call
Option

 

In return for the Bidder agreeing to pay to the Shareholder $10.00
following a written request from the Shareholder, the Shareholder grants to the
Bidder the right, by giving an Exercise Notice to the Shareholder during the
Call Period, to require the Shareholder to sell to the Bidder (or to its
nominee as the Bidder may direct) the Option Shares for the Settlement Amount.

 

2.2                               Takeover
Bid by Bidder

 

(a)                                 The Bidder must make or cause to be made the Takeover Bid.

 

(b)                                Subject to paragraph (c), the Shareholder may only accept an Offer
under the Takeover Bid in respect of the Option Shares if directed to do so by
the Bidder. If the Bidder gives such a direction, the Shareholder must accept
the Offer in accordance with its terms within 3 Business Days after receipt of
the direction.

 

(c)                                 If the Shareholder accepts an Offer under the Takeover Bid under
paragraph (b) in respect of the Option Shares then:

 

(1)                                 if
the Offer does not become void under section 650G of the Corporations Act,
the Shareholder will receive for the shares accepted into the Takeover Bid the
consideration offered in accordance with the terms of the Takeover Bid and the
Call Option

 

4

 

will be
taken to have lapsed and to have been of no further force and effect in
relation to the shares accepted into the Takeover Bid from the moment they were
so accepted into the Takeover Bid (but without prejudice to their continued
operation in relation to any Option Shares not accepted into the Takeover Bid);
or

 

(2)                                 if
the Offer does become void under section 650G of the Corporations Act, the
Call Option will continue in force throughout the Call Period unaffected by the
fact that some or all of the shares the subject of the Call Option were
accepted into the Takeover Bid.

 

2.3                               Exercise
Notice

 

The Bidder may exercise the Call Option in respect of all of the Option
Shares by giving to the Shareholder an Exercise Notice during the Call Period.

 

2.4                               Nature
of the Call Option

 

The Call Option:

 

(a)                                 confers on the Bidder the right, but not the obligation, to give the
Shareholder the Exercise Notice, which is irrevocable and which may only be
given once on or before 6 pm (Sydney time) during the Call Period; and

 

(b)                                on exercise of the rights conferred by clause 2.4(a) in
accordance with this document, requires the Shareholder to sell the shares
specified in the Exercise Notice to the Bidder or to its nominee as the Bidder
may direct.

 

2.5                               Contract
of Sale

 

(a)                                 Upon giving an Exercise Notice, a contract arises between the Bidder
and the Shareholder under which the Shareholder must sell to the Bidder or to
its nominee as the Bidder may direct all the Option Shares together with the
Rights free from any Encumbrance or restriction on transfer and the Bidder must
buy the Option Shares from the Shareholder for the Settlement Amount.

 

(b)                                The Bidder agrees and undertakes to give an Exercise Notice within 5
Business Days of its Offer becoming unconditional (and for the avoidance of
doubt the Bidder retains the right in its absolute discretion to determine as
to whether or not it waives any conditions to the Offer that are not
fulfilled).

 

2.6                               Settlement

 

Settlement of the sale and purchase of the Option Shares must take place
on the Settlement Date.

 

5

 

2.7                               Obligations
on Settlement Date

 

On a Settlement Date:

 

(a)                                 the Shareholder must:

 

(1)                                 give
the Bidder all relevant CHESS details for the shares specified in the Exercise
Notice to be delivered by the Shareholder including:

 

(A)                             if the
shares are on an Issuer Sponsored Sub-Register, a copy of the Shareholder’s
Issuer Sponsored Statement showing the holding of those shares and its SRN; or

 

(B)                               if the
Option Shares are on a CHESS Sub-Register, the Shareholder’s HIN and the Shareholder’s
written instructions to its Sponsoring Participant to deliver those shares to
the Bidder or its nominee; and

 

(2)                                 procure
performance of all that is required under the ASTC Settlement Rules to
enable those shares to be acquired by the Bidder; and

 

(b)                                the Bidder or its nominee must pay to the Shareholder the Settlement
Amount (as directed by the Shareholder).

 

2.8                               Lapse
for Non-Exercise

 

Subject to clauses 2.2(c)(1) and 2.9, the Call Option lapses on
the earlier of:

 

(a)                                 6pm (Sydney time) on the End Date; or

 

(b)                                6pm (Sydney time) on the day which is 5
Business Days after the Closing Date.

 

2.9                               Lapse
for Delay

 

Despite anything else in this document, if the Bidder does not either:

 

(a)                                 publicly propose the Takeover Bid within 2 Business Days of this
deed; or

 

(b)                                make or cause to be made the Takeover Bid within 10 Business Days of
the date of this deed (except where a delay to the making of the Takeover Bid
is caused by an action of or application to the Takeovers Panel),

 

then the Call Option automatically lapses and is of no further force or
effect.

 

2.10                        Nominee

 

(a)                                 Bidder may appoint one or more of its wholly owned subsidiaries as
its nominee to exercise the Call Option and acquire some or all of the Option
Shares (so long, as if that nominee acquires some of the Option Shares, Bidder
or another nominee permitted by this clause acquires the remaining of the
Option Shares).

 

(b)                                In the event that two or more persons permitted by clause 2.10(a) acquire
the Option Shares, then appropriate amendments to the Exercise Notice will be
permitted to account for the fact that Option Shares are being acquired by more
than one party.

 

6

 

3                                        Restrictions
on the shares

 

3.1                               Exercise
of Voting Rights

 

Pending exercise of the Call Option and settlement of the sale and
purchase of the Option Shares under clause 2.6 of this deed, the Shareholder
must, in relation to a Prescribed Matter, exercise its votes in respect of the
Option Shares as directed by the Bidder or the Bidder’s authorised
representative or nominee.

 

3.2                               Restraint
on Disposal

 

The Shareholder must not Transfer or allow any Encumbrance to attach to
any interest in any of the Option Shares other than in accordance with this deed.

 

4                                        Representations
and warranties

 

4.1                               Representations
and warranties

 

Each party represents and warrants that:

 

(a)                                 (documents effective) this deed
constitutes its legal, valid and binding obligations, enforceable against it in
accordance with its terms (except to the extent limited by equitable principles
and laws affecting creditors’ rights generally), subject to any necessary
stamping or registration; and

 

(b)                                (no contravention) neither its
execution of this deed nor the carrying out by it of the transactions that it
contemplates, does or will:

 

(1)                                 contravene
any law to which it or any of its property is subject or any order of any
Government Agency that is binding on it or any of its property;

 

(2)                                 contravene
any Authorisation;

 

(3)                                 contravene
any undertaking or instrument binding on it or any of its property;

 

(4)                                 contravene
its constitution; or

 

(5)                                 require
it to make any payment or delivery in respect of any financial accommodation or
financial instrument before it would otherwise be obliged to do so.

 

4.2                               Repetition
of representations and warranties

 

The representations and warranties in clause 4.1 are taken to be
repeated on the Settlement Date, on the basis of the facts and circumstances as
at that date.

 

4.3                               Reliance
on representations and warranties

 

Each party acknowledges that the other party has executed this deed and
agreed to take part in the transactions that it contemplates in reliance on the
representations and warranties that are made or repeated in this clause.

 

7

 

5                                        Warranty by
the Shareholder

 

The Shareholder represents and warrants to the Bidder that on the date
of this deed and, subject to the transactions under this deed, on the Settlement
Date:

 

(a)                                 the Shareholder is, and will be, legally and beneficially entitled
to the Option Shares; and

 

(b)                                the Option Shares are not, and will not be, subject to any
Encumbrance.

 

6                                        Notices

 

6.1                               How
to give a notice

 

A notice, consent or other communication under this deed is only
effective if it is:

 

(a)                                 in writing, signed:

 

(1)                                 if it
is an Exercise Notice, by an officer (as defined in section 9 of the
Corporations Act) or under common seal or as provided in section 127(1) and
127(2) of the Corporations Act; and

 

(2)                                 for
any other notice, by or on behalf of the person giving it;

 

(b)                                addressed to the person to whom it is to be given; and

 

(c)                                 either:

 

(1)                                 delivered
or sent by pre-paid mail (by airmail, if the addressee is overseas) to that
person’s address; or

 

(2)                                 sent
by fax to that person’s fax number and the machine from which it is sent
produces a report that states that it was sent in full.

 

6.2                               When
a notice is given

 

A notice, consent or other communication that complies with this clause
is regarded as given and received:

 

(a)                                 if it is delivered or sent by fax:

 

(1)                                 by
6.00 pm (local time in the place of receipt) on a Business Day - on that
day; or

 

(2)                                 after
6.00 pm (local time in the place of receipt) on a Business Day, or on a
day that is not a Business Day - on the next Business Day; and

 

(b)                                if it is sent by mail:

 

(1)                                 within
Australia – 3 Business Days after posting; or

 

(2)                                 to or
from a place outside Australia – 7 Business Days after posting.

 

8

 

6.3                               Address
for notices

 

A person’s address and fax number are those set out below, or as the
person notifies the sender:

 

	
  Shareholder

  	
   

  
	
  Address:

  	
  Level
  42, 259 George Street, Sydney Australia 2000

  
	
  Fax number:

  	
  +61 2
  9087 8088

  
	
  Attention:

  	
  Sandy
  Beard

  
	
   

  	
   

  
	
  Bidder

  	
   

  
	
  Address:

  	
  1106 Palms Airport Drive Las Vegas, Nevada 89119-3730,
  U.S.A

  
	
  Fax number:

  	
  +1
  702 270 5161

  
	
  Attention:

  	
  Jerry
  Smith

  
	
   

  	
   

  
	
  with a copy to Susan Livingstone:

  
	
   

  	
   

  
	
  Address:

  	
  Suite 12,
  5 Michigan Drive

  
	
   

  	
  Oxenford

  
	
   

  	
  Queensland
  4210

  
	
  Fax number:

  	
  61 7
  5561 8700

  

 

7                                        Amendment and
assignment

 

7.1                               Amendment

 

This deed can only be amended, supplemented, replaced or novated by
another document signed by the parties.

 

7.2                               Assignment

 

A party may not dispose of, declare a trust over or otherwise create an
interest in its rights under this deed.

 

8                                        General

 

8.1                               Governing
law

 

This deed is governed by the laws of New South Wales, Australia. Each party
irrevocably and unconditionally submits to the non-exclusive jurisdiction of
the courts of New
South Wales for determining any dispute concerning this deed or the
transactions contemplated by this deed. Each party waives any right it has to
object to an action being brought in those courts including, but not limited
to, claiming that the action has been brought in an inconvenient forum or that
those courts do not have jurisdiction.

 

8.2                               Liability
for expenses

 

(a)                                 Subject to paragraph (b), each party must pay its own expenses
incurred in negotiating, executing and registering this deed.

 

9

 

(b)                                The Bidder must indemnify each other party against, and must pay
each other party on demand the amount of, any duty that is payable on or in
relation to this deed and the transactions that it contemplates.

 

8.3                               Giving
effect to this deed

 

Each party must do anything (including execute any document), and must
ensure that its employees and agents do anything (including execute any
document), that the other party may reasonably require to give full effect to
this deed.

 

8.4                               Waiver
of rights

 

A right may only be waived in writing, signed by the party giving the
waiver, and:

 

(a)                                 no other conduct of a party (including a failure to exercise, or
delay in exercising, the right) operates as a waiver of the right or otherwise
prevents the exercise of the right;

 

(b)                                a waiver of a right on one or more occasions does not operate as a
waiver of that right if it arises again; and

 

(c)                                 the exercise of a right does not prevent any further exercise of
that right or of any other right.

 

8.5                               Operation
of this deed

 

(a)                                 This deed contains the entire agreement between the parties about
its subject matter. Any previous understanding, agreement, representation or
warranty relating to that subject matter is replaced by this deed and has no
further effect.

 

(b)                                Any provision of this deed which is unenforceable or partly
unenforceable is, where possible, to be severed to the extent necessary to make
this deed enforceable, unless this would materially change the intended effect
of this deed.

 

8.6                               Counterparts

 

This deed may be executed in counterparts.

 

10

 

	
  Executed as a deed:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed sealed and delivered by

  	
   

  	
   

  	
   

  
	
  CVC Limited

  	
   

  	
   

  	
   

  
	
  by:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Secretary/Director

  	
   

  	
  Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name (please print)

  	
   

  	
  Name (please print)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed sealed and delivered by

  	
   

  	
   

  	
   

  
	
  Shuffle Master, Inc.

  	
   

  	
   

  	
   

  
	
  by:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Officer

  	
   

  	
  Witness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name (please print)

  	
   

  	
  Name (please print)

  	
   

  

 

11

 

Schedule 1

 

EXERCISE NOTICE - OPTION
SHARES

 

To:  CVC
Limited

 

By this notice Shuffle Master, Inc. exercises the Call Option
conferred by clause 2.1 of the deed entitled Call Option Deed (the “Deed”) dated 15 November 2005 and requires
you to sell your Option Shares for the relevant Settlement Amount and otherwise
in accordance with the Deed.

 

This Exercise Notice is irrevocable.

 

In this Exercise Notice, words defined in the Deed have the same
meanings.

 

 

DATED

 

 

Signed for and on behalf of

	
  Shuffle Master, Inc. by:

  
	
   

  
	
   

  	
   

  
	
  Officer:

  
	
  Name:

  

 

12

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