Document:

Exhibit 4.1

 

EXECUTION COPY

 

 

 

	
 
    

 

 

 

NINTH SUPPLEMENTAL INDENTURE

 

between

 

WESTPAC BANKING CORPORATION

 

and

 

THE BANK OF NEW YORK MELLON

 

as Trustee

 

Dated as of November 25, 2013

 

 

 

NINTH SUPPLEMENTAL INDENTURE

 

NINTH SUPPLEMENTAL INDENTURE, dated as of November 25, 2013 (the “Ninth Supplemental Indenture”), between WESTPAC BANKING CORPORATION (ABN 33 007 457 141), a company incorporated in the Commonwealth of Australia under the Corporations Act 2001 of Australia and registered in New South Wales (the “Company”), and THE BANK OF NEW YORK MELLON, a New York banking corporation, as trustee (the “Trustee”).

 

RECITALS:

 

WHEREAS, the Company and The Chase Manhattan Bank are parties to a Senior Indenture, dated as of July 1, 1999 (the “Base Indenture”), relating to the issuance from time to time by the Company of Securities in one or more series as therein provided;

 

WHEREAS, the Trustee has succeeded The Chase Manhattan Bank as trustee under the Base Indenture;

 

WHEREAS, the Company and the Trustee entered into the First Supplemental Indenture, dated as of August 27, 2009 (the “First Supplemental Indenture”), and the Fifth Supplemental Indenture, dated as of August 14, 2012 (the “Fifth Supplemental Indenture”), among other things, to supplement and amend certain provisions of the Base Indenture (the Base Indenture, as supplemented and amended by the First Supplemental Indenture and the Fifth Supplemental Indenture is referred to herein as the “Amended Base Indenture” and the Amended Base Indenture as further supplemented by this Ninth Supplemental Indenture, is referred to herein as the “Indenture”);

 

WHEREAS, Section 8.1(7) of the Amended Base Indenture provides that the Company may enter into a supplemental indenture to establish the forms or terms of Securities of any series as permitted by Sections 2.1 and 3.1 therein;

 

WHEREAS, in connection with the issuance of the 2016 Notes and the Floating Rate Notes (each as defined herein), the Company has duly authorized the execution and delivery of this Ninth Supplemental Indenture to establish the forms and terms of the 2016 Notes and the Floating Rate Notes as hereinafter described; and

 

WHEREAS, all conditions and requirements of the Amended Base Indenture necessary to make this Ninth Supplemental Indenture a valid, binding and legal instrument in accordance with its terms have been performed and fulfilled by the parties hereto.

 

NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

 

 

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ARTICLE I
 DEFINITIONS

 

Section 1.01                General Definitions.  For purposes of this Ninth Supplemental Indenture:

 

(a)                               Capitalized terms used herein without definition shall have the meanings specified in the Amended Base Indenture;

 

(b)                              All references to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of the Amended Base Indenture; and

 

(c)                               The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Ninth Supplemental Indenture as a whole and not to any particular Article, Section or other subdivision.

 

ARTICLE II
 THE 2016 NOTES

 

Section 2.01                Title of Securities.  There shall be a series of Securities of the Company designated the “1.050% Notes due November 25, 2016” (the “2016 Notes”).

 

Section 2.02                Limitation of Aggregate Principal Amount.  The aggregate principal amount of the 2016 Notes shall initially be limited to US$500,000,000.  The Company may from time to time, without the consent of the Holders of the 2016 Notes, create and issue additional notes having the same terms and conditions as the 2016 Notes in all respects or in all respects except for issue date, issue price and, if applicable, the first date on which interest accrues and the first payment of interest thereon (“Additional 2016 Notes”).  Additional 2016 Notes issued in this manner will be consolidated with, and will form a single series with, the 2016 Notes, unless such Additional 2016 Notes will not be treated as fungible with the 2016 Notes for U.S. federal income tax purposes. The 2016 Notes and any such Additional 2016 Notes would rank equally and ratably.

 

Section 2.03                Principal Payment Date.  The principal amount of the 2016 Notes Outstanding (together with any accrued and unpaid interest) shall be payable in a single installment on November 25, 2016, which date shall be the Stated Maturity of the 2016 Notes.

 

Section 2.04                Interest and Interest Rates.  The 2016 Notes will bear interest on the unpaid principal amount thereof at a rate of 1.050% per year from November 25, 2013, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, until the principal amount of the 2016 Notes shall have been paid or duly provided for, and interest on the 2016 Notes shall be payable semi-annually in arrears on May 25 and November 25 of each year, beginning on May 25, 2014, to the 

 

 

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Holders of record as of the close of business on the preceding May 10 or November 10 (whether or not a Business Day), as the case may be. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of interest payable for any period less than a full interest period shall be computed on the basis of a 360-day year consisting of twelve 30-day months and the actual days elapsed in a partial month in such period.  Any payment of principal or interest required to be made on an Interest Payment Date that is not a Business Day shall be made on the next succeeding Business Day, and no interest will accrue on that payment for the period from and after such Interest Payment Date to the date of payment on the next succeeding Business Day.  For purposes of the 2016 Notes, “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in Sydney, Australia, New York, New York, or London, United Kingdom are authorized or obligated by law or executive order to close.

 

Section 2.05                Place of Payment.  The Place of Payment where the 2016 Notes may be presented or surrendered for payment, where the 2016 Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the 2016 Notes and the Indenture may be served initially shall be the Corporate Trust Office of the Trustee maintained for that purpose in the Borough of Manhattan, City of New York.

 

Section 2.06                Redemption.  The Company shall not have the right to redeem the 2016 Notes other than pursuant to Section 10.8 of the Indenture.

 

Section 2.07                No Sinking Fund. The 2016 Notes are not entitled to the benefit of any sinking fund.

 

Section 2.08                Form.  The 2016 Notes shall be issued initially as Registered Securities (as defined in the Indenture) in the form of one or more permanent notes in global form, without coupons, substantially in the form attached hereto as Exhibit A, deposited with The Bank of New York Mellon, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as provided in the Indenture.

 

Section 2.09                Denomination.  The 2016 Notes shall be issuable only in denominations of US$2,000 and integral multiples of US$1,000 in excess thereof. The 2016 Notes shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with such plans as the Officers of the Company executing the same may determine with the approval of the Trustee.

 

Section 2.10                Depositary.  The Depository Trust Company shall be the initial Depositary for the 2016 Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of the Indenture, and thereafter, “Depositary” shall mean or include such successor.

 

 

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Section 2.11                Defeasance; Discharge.  The provisions of Sections 4.3, 4.4, 4.5 and 4.6 of the Indenture will apply to the 2016 Notes.

 

ARTICLE III
 THE FLOATING RATE NOTES

 

Section 3.01                Title of Securities.  There shall be a series of Securities of the Company designated the “Floating Rate Notes due November 25, 2016” (the “Floating Rate Notes”).

 

Section 3.02                Limitation of Aggregate Principal Amount.  The aggregate principal amount of the Floating Rate Notes shall initially be limited to US$1,250,000,000.  The Company may from time to time, without the consent of the Holders of the Floating Rate Notes, create and issue additional notes having the same terms and conditions as the Floating Rate Notes in all respects or in all respects except for issue date, issue price and, if applicable, the first date on which interest accrues and the first payment of interest thereon (“Additional Floating Rate Notes”).  Additional Floating Rate Notes issued in this manner will be consolidated with, and will form a single series with, the Floating Rate Notes, unless such Additional Floating Rate Notes will not be treated as fungible with the Floating Rate Notes for U.S. federal income tax purposes. The Floating Rate Notes and any such Additional Floating Rate Notes would rank equally and ratably.

 

Section 3.03                Principal Payment Date.  The principal amount of the Floating Rate Notes Outstanding (together with any accrued and unpaid interest) shall be payable in a single installment on November 25, 2016, which date shall be the Stated Maturity of the Floating Rate Notes.

 

Section 3.04                Interest and Interest Rates.

 

(a)                                                       The Floating Rate Notes will bear interest on the unpaid principal amount thereof from November 25, 2013, or from the most recent Floating Rate Interest Payment Date (as defined below) to which interest has been paid or duly provided for, until the principal amount of the Floating Rate Notes shall have been paid or duly provided for.  The interest rate per annum for the Floating Rate Notes will be reset quarterly on the first day of each Floating Rate Interest Period (as defined below) and will be equal to LIBOR (as defined below) plus 0.430%, as determined by a calculation agent (the “Calculation Agent”).  The Bank of New York Mellon will initially act as Calculation Agent.  The amount of interest for each day the Floating Rate Notes are Outstanding (the “Daily Interest Amount”) will be calculated by dividing the interest rate in effect for that day by 360 and multiplying the result by the principal amount of the Floating Rate Notes.  The amount of interest to be paid on the Floating Rate Notes for each Floating 

 

 

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Rate Interest Period will be calculated by adding the Daily Interest Amount for each day in the Floating Rate Interest Period.

 

(b)                                                      Interest on the Floating Rate Notes shall be payable quarterly in arrears on each February 25, May 25, August 25 and November 25 (each such date, a “Floating Rate Interest Payment Date”), beginning on February 25, 2014.  If any Floating Rate Interest Payment Date would fall on a day that is not a Business Day, other than the Floating Rate Interest Payment Date that is also the Stated Maturity of the Floating Rate Notes, that Floating Rate Interest Payment Date will be postponed to the following day that is a Business Day, except that if such next Business Day is in a different month, then that Floating Rate Interest Payment Date will be the immediately preceding day that is a Business Day.  If the Stated Maturity of the Floating Rate Notes is not a Business Day, payment of principal and interest on the Floating Rate Notes will be made on the following day that is a Business Day and no interest will accrue for the period from and after such Stated Maturity of the Floating Rate Notes.  Interest on a Floating Rate Note will be paid to the Person in whose name that Floating Rate Note was registered at the close of business on the February 10, May 10, August 10 or November 10, as the case may be, whether or not a Business Day, prior to the applicable Floating Rate Interest Payment Date, except that in the case of the Floating Rate Interest Payment Date that is also the Stated Maturity of the Floating Rate Notes, the interest due on such date will be paid to the Person to whom principal is payable upon surrender of such Floating Rate Note at a Place of Payment.

 

(c)                                                       On each Floating Rate Interest Payment Date, the Company will pay interest for the Floating Rate Interest Period ended on the day immediately preceding such Floating Rate Interest Payment Date.  “Floating Rate Interest Period” shall mean the period commencing on and including November 25, 2013 to but excluding the first Floating Rate Interest Payment Date and each successive period from and including a Floating Rate Interest Payment Date to but excluding the next Floating Rate Interest Payment Date.

 

(d)                                                     “LIBOR,” with respect to a Floating Rate Interest Period, shall be the rate (expressed as a percentage per annum) for deposits in United States dollars for a three-month period beginning on the second London Banking Day after the Determination Date (each as defined below) that appears on the Designated LIBOR Page (as defined below) as of 11:00 a.m., London time, on the Determination Date.  If the Designated LIBOR Page does not include this rate or is unavailable on the Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected and identified by the Company, to provide that bank’s offered quotation (expressed as a percentage per annum) as of approximately 11:00 a.m., London time, on the Determination Date to prime banks in the London interbank 

 

 

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market for deposits in a Representative Amount (as defined below) in United States dollars for a three-month period beginning on the second London Banking Day after the Determination Date.  If at least two offered quotations are so provided, LIBOR for the Floating Rate Interest Period will be the arithmetic mean of all quotations so provided.  If fewer than two quotations are so provided, the Calculation Agent will request each of three major banks in New York City, as selected and identified by the Company, to provide that bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on the Determination Date for loans in a Representative Amount in United States dollars to leading European banks for a three-month period beginning on the second London Banking Day after the Determination Date.  If at least two rates are so provided, LIBOR for the Floating Rate Interest Period will be the arithmetic mean of all rates so provided.  If fewer than two rates are so provided, then LIBOR for the Floating Rate Interest Period will be LIBOR in effect with respect to the immediately preceding Floating Rate Interest Period.

 

(e)                                                       “Designated LIBOR Page” means the display on the Reuters 3000 Xtra Service (or any successor service) on the “LIBOR01” page (or any other page as may replace such page on such service) for the purpose of displaying the London interbank rates of major banks for United States dollars.

 

(f)                                                        “Determination Date” with respect to a Floating Rate Interest Period will be the second London Banking Day preceding the first day of the Floating Rate Interest Period.

 

(g)                                                      “London Banking Day” is any day in which dealings in United States dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

 

(h)                                                      “Representative Amount” means a principal amount that is representative for a single transaction in the relevant market at the relevant time.

 

(i)                                                          For purposes of the Floating Rate Notes, “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in Sydney, Australia, New York, New York, or London, United Kingdom are authorized or obligated by law or executive order to close.

 

(j)                                                          All calculations of the Calculation Agent, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and on the Holders of the Floating Rate Notes. In no event shall the interest rate on the Floating Rate Notes be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general 

 

 

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application. The Calculation Agent will, upon the request of any Holder of the Floating Rate Notes, provide the rate of interest then in effect.

 

(k)                                                      All percentages resulting from any of the calculations in this Article III will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).

 

Section 3.05                Place of Payment.  The Place of Payment where the Floating Rate Notes may be presented or surrendered for payment, where the Floating Rate Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Floating Rate Notes and the Indenture may be served initially shall be the Corporate Trust Office of the Trustee maintained for that purpose in the Borough of Manhattan, City of New York.

 

Section 3.06                Redemption.  The Company shall not have the right to redeem the Floating Rate Notes other than pursuant to Section 10.8 of the Indenture.

 

Section 3.07                No Sinking Fund. The Floating Rate Notes are not entitled to the benefit of any sinking fund.

 

Section 3.08                Form.  The Floating Rate Notes shall be issued initially as Registered Securities (as defined in the Indenture) in the form of one or more permanent notes in global form, without coupons, substantially in the form attached hereto as Exhibit B, deposited with The Bank of New York Mellon, as custodian for the Depositary, duly executed by the Company and authenticated by the Trustee as provided in the Indenture.

 

Section 3.09                Denomination.  The Floating Rate Notes shall be issuable only in denominations of US$2,000 and integral multiples of US$1,000 in excess thereof. The Floating Rate Notes shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with such plans as the Officers of the Company executing the same may determine with the approval of the Trustee.

 

Section 3.10                Depositary.  The Depository Trust Company shall be the initial Depositary for the Floating Rate Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of the Indenture, and thereafter, “Depositary” shall mean or include such successor.

 

Section 3.11                Defeasance; Discharge.  The provisions of Sections 4.3, 4.4, 4.5 and 4.6 of the Indenture will apply to the Floating Rate Notes.

 

 

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ARTICLE IV
 MISCELLANEOUS

 

Section 4.01                Integral Part; Effect of Supplement on Indenture.  This Ninth Supplemental Indenture constitutes an integral part of the Indenture. Except for the supplements made by this Ninth Supplemental Indenture, the Amended Base Indenture shall remain in full force and effect as executed.

 

Section 4.02                Adoption, Ratification and Confirmation.  The Indenture, as supplemented by this Ninth Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.

 

Section 4.03                Trustee Not Responsible for Recitals.  The recitals in this Ninth Supplemental Indenture shall be taken as statements of the Company, and the Trustee assumes no responsibility for their correctness.  The Trustee makes no representations as to the validity or adequacy of this Ninth Supplemental Indenture.

 

Section 4.04                Counterparts.  This Ninth Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original but such counterparts shall together constitute but one instrument.

 

Section 4.05                Separability.  In case any provision of this Ninth Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 4.06                Governing Law.  This Ninth Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York, including all matters of construction, validity and performance.

 

 

[signature page follows]

 

 

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IN WITNESS WHEREOF, the Company and the Trustee have executed this Ninth Supplemental Indenture as of the date first above written.

 

	
 
    	
WESTPAC BANKING CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
  /s/ Sean Crellin
    
	
 
    	
 
    	
Name: Sean Crellin
    
	
 
    	
 
    	
Title:   Director, Legal
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
THE BANK OF NEW YORK MELLON, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
  /s/ Latoya Elvin
    
	
 
    	
 
    	
Name: Latoya Elvin
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

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EXHIBIT A

 

 

 

(FORM OF FACE OF NOTE)

 

[THIS SECURITY IS IN GLOBAL FORM WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. EVERY SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS SECURITY WILL BE IN GLOBAL FORM, SUBJECT TO THE FOREGOING.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]1

 

 

	
No.
    	
CUSIP No. 961214 CD3
    
	
 
    	
ISIN No. US961214CD32
    

 

WESTPAC BANKING CORPORATION

 

1.050% NOTE DUE NOVEMBER 25, 2016

 

WESTPAC BANKING CORPORATION, a company incorporated in the Commonwealth of Australia under the Corporations Act 2001 of the Commonwealth of Australia and registered in New South Wales (the “Company”, which term includes any 

 

 

1  Insert in Global Notes only

 

 

successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to                              or registered assigns, the principal sum of             (US$                    ) on November 25, 2016 (the “Stated Maturity”).  This Note will bear interest on the unpaid principal amount hereof at a rate of 1.050% per year from November 25, 2013, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, until the principal amount hereof shall have been paid or duly provided for, and interest on the Notes shall be payable semi-annually in arrears on May 25 and November 25 of each year (each such date, an “Interest Payment Date”), beginning on May 25, 2014.  Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of interest payable for any period less than a full interest period shall be computed on the basis of a 360-day year consisting of twelve 30-day months and the actual days elapsed in a partial month in such period.  Any payment of principal or interest required to be made on an Interest Payment Date that is not a Business Day shall be made on the next succeeding Business Day, and no interest will accrue on that payment for the period from and after such Interest Payment Date to the date of payment on the next succeeding Business Day.  For purposes hereof, “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in Sydney, Australia, New York, New York, or London, United Kingdom are authorized or obligated by law or executive order to close.

 

Interest on this Note which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the close of business on the May 10 or November 10 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date, at the office or agency maintained for such purpose pursuant to the Indenture; provided, however, that at the option of the Company, interest on this Note may be paid (i) by check mailed to the address of the Person entitled thereto as it shall appear on the Register or (ii) to a Holder of US$1,000,000 or more in aggregate principal amount of the Notes by wire transfer to an account maintained by the Person entitled thereto as specified in the Register.  Any interest on this Note which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest shall instead be payable to the Person in whose name this Note is registered on the Special Record Date or other specified date in accordance with the Indenture.

 

This Note shall not be entitled to any benefit under the Indenture hereinafter referred to or be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee.

 

 

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The provisions of this Note are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be executed on this ___ day of _______________, 20___.

 

 

	
 
    	
WESTPAC BANKING CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated herein and issued under the within-mentioned Indenture.

 

 

 

	
 
    	
The Bank of New York Mellon, as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Authorized Signatory
    

 

 

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(FORM OF REVERSE OF NOTE)

 

This Note is one of a duly authorized series of securities of the Company, issued and to be issued in one or more series under and pursuant to a Senior Indenture, dated as of July 1, 1999 (the “Base Indenture”), duly executed and delivered between the Company and The Bank of New York Mellon, as successor to The Chase Manhattan Bank, as trustee (the “Trustee”, which term includes any successor trustee under the Indenture), as supplemented and amended by the First Supplemental Indenture, dated as of August 27, 2009, between the Company and the Trustee (the “First Supplemental Indenture”) and the Fifth Supplemental Indenture, dated as of August 14, 2012, between the Company and the Trustee (the “Fifth Supplemental Indenture”; the Base Indenture as amended and supplemented by the First Supplemental Indenture and the Fifth Supplemental Indenture is referred to herein as the “Amended Base Indenture”), and as further supplemented by the Ninth Supplemental Indenture, dated as of November 25, 2013, between the Company and the Trustee (the “Ninth Supplemental Indenture”; the Amended Base Indenture, as further supplemented by the Ninth Supplemental Indenture, is referred to herein as the “Indenture”), to which Indenture and all Indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes.  This Note is one of a series of securities designated on the face hereof (the “Notes”).  The Notes are issued pursuant to the Indenture and are limited in aggregate principal amount to US$500,000,000; provided, however, that the Company may from time to time, without the consent of the Holders of the Notes, create and issue additional notes having the same terms and conditions as the Notes in all respects or in all respects except for issue date, issue price and, if applicable, the first date on which interest accrues and the first payment of interest thereon.  Additional notes issued in this manner will be consolidated with, and will form a single series with, the Notes, unless such additional notes will not be treated as fungible with the Notes for U.S. federal income tax purposes. The Notes and any such additional notes would rank equally and ratably.

 

In accordance with Section 10.8 of the Indenture, pursuant to the procedure set forth in Article X of the Indenture, the Company may, at its option, redeem all, but not less than all, of the Notes if (a) there is a change in or any amendment to the laws or regulations (i) of the Commonwealth of Australia, or any political subdivision or taxing authority thereof or therein, or (ii) in the event of the assumption pursuant to Section 7.1 of the Indenture of the obligations of the Company under the Indenture and this Note by an entity organized under the laws of a country other than the Commonwealth of Australia or a political subdivision of a country other than the Commonwealth of Australia, of the Commonwealth of Australia or the country in which such entity is organized or resident or deemed resident for tax purposes or any political subdivision or taxing authority thereof or therein, or (b) there is a change in any application or interpretation of any such laws or regulations, which change or amendment becomes 

 

 

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effective, (i) with respect to taxes imposed by the Commonwealth of Australia or any  political subdivision or taxing authority thereof or therein, on or after the date the Company originally issued this Note, or (ii) in the event of the assumption pursuant to Section 7.1 of the Indenture of the obligations of the Company under the Indenture and this Note by an entity organized under the laws of a country other than the Commonwealth of Australia or a political subdivision of a country other than the Commonwealth of Australia, with respect to taxes imposed by a non-Australian jurisdiction, on or after the date of the transaction resulting in such assumption, and, in each case, as a result of such change or amendment (1) the Company is or will become obligated to pay any Additional Amounts on this Note pursuant to Section 9.8 of the Indenture or (2) the Company would not be entitled to claim a deduction in computing its taxation liabilities in respect of (A) any payments of interest or Additional Amounts or (B) any original issue discount on this Note.

 

Before the Company may redeem this Note, it must give the Holder of this Note at least 30 days’ written notice and not more than 60 days’ written notice of its intention to redeem this Note, provided that if the earliest date on which (i) the Company will be obligated to pay any Additional Amounts, or (ii) the Company would not be entitled to claim a deduction in respect of any payments of interest or Additional Amounts on or any original issue discount in respect of this Note in computing its taxation liabilities, would occur less than 45 days after the relevant change or amendment to the applicable laws, regulations, determinations or guidelines, the Company may give less than 30 days’ written notice but in no case less than 15 days’ written notice, provided it gives such notice as soon as practicable in all the circumstances.

 

The Redemption Price for this Note shall equal 100% of the principal amount of this Note plus accrued but unpaid interest to but excluding the date of redemption.

 

The Indenture contains provisions for defeasance and covenant defeasance at any time of the indebtedness evidenced by this Note upon compliance by the Company with certain conditions set forth therein.

 

If an Event of Default shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration become, due and payable immediately, in the manner, with the effect and subject to the conditions provided in the Indenture.  The Indenture contains provisions permitting the Holders of not less than a majority in aggregate principal amount of the Outstanding Notes, on behalf of all of the Holders of the Notes, to waive any Event of Default under the Indenture and its consequences, subject to Section 5.7 of the Indenture.

 

In accordance with Section 9.8 of the Indenture, the Company will pay all amounts that it is required to pay on this Note without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or other governmental charges imposed or levied by or on behalf of the Commonwealth of Australia or any political 

 

 

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subdivision or taxing authority thereof or therein, unless such withholding or deduction is required by law.  If the Company withholds or deducts any such amount from any payment on this Note, the Company will pay such additional amounts (the “Additional  Amounts”) so that the net amounts received by the Holder of this Note, after such withholding or deduction, will equal the amounts that the Holder of this Note would have received on this Note if such withholding or deduction had not been required; provided that no Additional Amounts shall be payable for or on account of:

 

(1)  any tax, duty, assessment or other governmental charge that would not have been imposed but for the fact that the Holder of this Note was a resident, domiciliary or national of, or engaged in business or maintained a permanent establishment or was physically present in, the Commonwealth of Australia or any political subdivision or taxing authority thereof or therein or otherwise had some connection with the Commonwealth of Australia or any political subdivision or taxing authority thereof or therein other than merely holding this Note, or receiving payments under this Note;

 

(2)  any tax, duty, assessment or other governmental charge that would not have been imposed but for the fact that the Holder of this Note presented this Note for payment in the Commonwealth of Australia, unless the Holder was required to present this Note for payment and it could not have been presented for payment anywhere else;

 

(3)  any tax, duty, assessment or other governmental charge that would not have been imposed but for the fact that the Holder of this Note presented this Note for payment more than 30 days after the date such payment became due and was provided for, whichever is later, except to the extent that the Holder would have been entitled to the Additional Amounts on presenting this Note for payment on any day during that 30 day period;

 

(4)  any estate, inheritance, gift, sale, transfer, personal property or similar tax, duty, assessment or other governmental charge;

 

(5)  any tax, duty, assessment or other governmental charge which is payable otherwise than by withholding or deduction;

 

(6)  any tax, duty, assessment or other governmental charge that would not have been imposed if the Holder or beneficial owner of this Note complied with the Company’s request to provide information concerning his, her or its nationality, residence or identity or to make a declaration, claim or filing or satisfy any requirement for information or reporting that is required to establish the eligibility of the Holder, or the beneficial owner, of this Note to receive the relevant payment without (or at a reduced rate of) withholding or deduction for or on account of any such tax, duty, assessment or other governmental charge;

 

 

A-6

 

(7)  any tax, duty, assessment or other governmental charge that would not have been imposed but for the Holder or beneficial owner of this Note being an associate of the Company for purposes of section 128F(6) of the Income Tax Assessment Act 1936 of the Commonwealth of Australia (the “Australian Tax Act”) (other than in the capacity of a clearing house, paying agent, custodian, funds manager or  responsible entity of a registered managed investment scheme under the Corporations Act 2001 of the Commonwealth of Australia);

 

(8)  any tax, duty, assessment or other governmental charge that is imposed or withheld as a consequence of a determination having been made under Part IVA of the Australian Tax Act (or any modification thereof or provision substituted therefore) by the Australian Commissioner of Taxation that such tax, duty, assessment or other governmental charge is payable in circumstances where the Holder or the beneficial owner of this Note is a party to or participated in a scheme to avoid such tax which the Company was not a party to;

 

(9)  any tax, duty, assessment or other governmental charge that is imposed pursuant to European Council Directive 2003/48/EC (the “Directive”) or any law implementing or complying with, or introduced in order to conform to, such Directive, or any agreement entered into by a Member State of the European Union with (A) any other state or (B) any relevant, dependent or associated territory of any Member State of the European Union providing for measures equivalent to, or the same as, those provided for by such Directive;

 

(10)  any tax, duty, assessment or other governmental charge arising under or in connection with sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986, as amended (including any regulations or official interpretations issued, agreements entered into or non-U.S. laws enacted, with respect thereto) (“FATCA”); or

 

(11)  any combination of the foregoing.

 

Subject to the foregoing, Additional Amounts will also not be payable by the Company with respect to any payment on this Note to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment in respect of this Note to the extent that payment would, under the laws of the Commonwealth of Australia or any political subdivision or taxing authority thereof or therein, be treated as being derived or received for tax purposes by a beneficiary or settler of that fiduciary or a member of that partnership or a beneficial owner, in each case, who would not have been entitled to those Additional Amounts had it been the actual Holder of this Note.

 

The Company, and any other Person to or through which any payment with respect to this Note may be made, shall be entitled to withhold or deduct from any payment with respect to this Note amounts required to be withheld or deducted under or 

 

 

A-7

 

in connection with FATCA, and Holders and beneficial owners of this Note shall not be entitled to receive any gross up or other additional amounts on account of any such withholding or deduction.

 

Any reference in this Note to principal or interest shall be deemed to also refer to any Additional Amount that may be payable as provided above.

 

The Indenture contains provisions permitting the Company and the Trustee, with the written consent of the Holders of not less than a majority in aggregate principal  amount (calculated as provided in the Indenture) of the Outstanding Securities of each series adversely affected thereby to add any provisions to or to change or eliminate any provisions of the Indenture or any supplemental indenture or to modify the rights of the Holders of the Securities of such series, provided that, without the consent of the Holder of each such Security so affected, no such modification shall (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount of any Security or the rate of interest thereon, or change the coin or currency in which any Security or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity of any Security (or, in the case of redemption, on or after the Redemption Date), or (b) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such amendment or modification, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences) provided for in the Indenture, or (c) change any obligation of the Company to maintain an office or agency in the places and for the purposes specified in Section 9.2 of the Indenture, or (d) except to the extent provided in Section 8.1(9) of the Indenture, make any change in Section 5.2, 5.7, 5.10 or 8.2 of the Indenture except to increase any percentage or to provide that certain other provisions of the Indenture cannot be modified or waived except with the consent of the Holders of each Outstanding Security affected thereby.  Any such consent given by the Holder of this Note shall be conclusive and binding upon such Holder and all future Holders of this Note and of any Notes issued on registration hereof, the transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent is made upon this Note.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective time, at the rate and in the coin or currency herein prescribed.

 

Upon surrender for registration of transfer of this Note, the Company shall execute and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note or Notes of like tenor and authorized denominations for an equal aggregate principal amount in exchange herefor, subject to the limitations provided in the Indenture.  Every Note presented or surrendered for registration of 

 

 

A-8

 

transfer or for exchange shall (if so required by the Company, the Registrar or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company, the Registrar and the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing.  No service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the person in whose name this Note is registered as the owner hereof for all purposes (subject to the  provisions hereof with respect to determination of the Person to whom interest is payable).

 

Reference is made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are to be authenticated and delivered.

 

No past, present or future director, officer, employee, agent, member, manager, trustee or stockholder, as such, of the Company or any successor Person shall have any liability for any obligations of the Company or any successor Person, either directly or through the Company or any successor Person, under the Notes or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation, whether by virtue of any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise.  By accepting a Note, each Holder agrees to the provisions of Section 1.13 of the Indenture and waives and releases all such liability.  Such waiver and release shall be part of the consideration for the issue of the Notes.

 

The Notes of this series shall be issuable only in denominations of US$2,000 and integral multiples of US$1,000 in excess thereof.  [This Global Note is exchangeable for Notes in definitive form only under certain limited circumstances set forth in the Indenture.]2  At the option of the Holder, the Notes (except a Note in global form) may be exchanged for other Notes, of any authorized denominations and of a like aggregate principal amount containing identical terms and provisions, upon surrender of the Notes to be exchanged at such office or agency.

 

All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

2  Insert in Global Notes only

 

 

A-9

 

THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS.

 

 

A-10

 

TRANSFER NOTICE

 

FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto

 

Insert Taxpayer Identification No.

 

	
 
    

Please print or typewrite name and address including zip code of assignee

 

	
 
    

the within Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer such Note on the books of the Company with full power of substitution in the premises.

 

Your Signature:

 

	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    

 

 

Signature Guarantee:

 

	
By:
    	
 
    	
 
    
	
 
    	
(Participant in a Recognized Signature
    	
 
    
	
 
    	
Guaranty Medallion Program)
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    

 

 

A-11

 

EXHIBIT B

 

 

(FORM OF FACE OF NOTE)

 

[THIS SECURITY IS IN GLOBAL FORM WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. EVERY SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OF, OR IN EXCHANGE FOR, OR IN LIEU OF, THIS SECURITY WILL BE IN GLOBAL FORM, SUBJECT TO THE FOREGOING.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]1

 

 

	
No.
    	
CUSIP No. 961214 CE1
    
	
 
    	
ISIN No. US961214CE15
    

 

WESTPAC BANKING CORPORATION

 

FLOATING RATE NOTE DUE NOVEMBER 25, 2016

 

WESTPAC BANKING CORPORATION, a company incorporated in the Commonwealth of Australia under the Corporations Act 2001 of the Commonwealth of Australia and registered in New South Wales (the “Company”, which term includes any 

 

1  Insert in Global Notes only

 

 

 

successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to                    or registered assigns, the principal sum of           (US$                  ) on November 25, 2016 (the “Stated Maturity”).  This Note will bear  interest on the unpaid principal amount hereof from November 25, 2013, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, until the principal amount hereof shall have been paid or duly provided for.  The interest rate per annum on this Note will be reset quarterly on the first day of each Interest Period (as defined below) and will be equal to LIBOR (as defined below) plus 0.430%, as determined by a calculation agent (the “Calculation Agent”).  The Bank of New York Mellon will initially act as Calculation Agent.  The amount of interest for each day this Note is Outstanding (the “Daily Interest Amount”) will be calculated by dividing the interest rate in effect for that day by 360 and multiplying the result by the principal amount of this Note.  The amount of interest to be paid on this Note for each Interest Period will be calculated by adding the Daily Interest Amount for each day in the Interest Period.

 

Interest on this Note shall be payable quarterly in arrears on each February 25, May 25, August 25 and November 25 (each such date, an “Interest Payment Date”), beginning on February 25, 2014.  If any Interest Payment Date would fall on a day that is not a Business Day, other than the Interest Payment Date that is also the Stated Maturity for this Note, that Interest Payment Date will be postponed to the following day that is a Business Day, except that if such next Business Day is in a different month, then that Interest Payment Date will be the immediately preceding day that is a Business Day.  If the Stated Maturity for this Note is not a Business Day, payment of principal and interest on this Note will be made on the following day that is a Business Day and no interest will accrue for the period from and after such Stated Maturity.

 

On each Interest Payment Date, the Company will pay interest for the Interest Period ended on the day immediately preceding such Interest Payment Date.  “Interest Period” shall mean the period commencing on and including November 25, 2013 to but excluding the first Interest Payment Date and each successive period from and including an Interest Payment Date to but excluding the next Interest Payment Date.

 

“LIBOR,” with respect to an Interest Period, shall be the rate (expressed as a percentage per annum) for deposits in United States dollars for a three-month period beginning on the second London Banking Day after the Determination Date (each as defined below) that appears on the Designated LIBOR Page (as defined below) as of 11:00 a.m., London time, on the Determination Date.  If the Designated LIBOR Page does not include this rate or is unavailable on the Determination Date, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected and identified by the Company, to provide that bank’s offered quotation (expressed as a percentage per annum) as of approximately 11:00 a.m., London time, on the Determination Date to prime banks in the London interbank market 

 

 

B-2

 

for deposits in a Representative Amount (as defined below) in United States dollars for a three-month period beginning on the second London Banking Day after the Determination Date.  If at least two offered quotations are so provided, LIBOR for the Interest Period will be the arithmetic mean of all quotations so provided.  If fewer than two quotations are so provided, the Calculation Agent will request each of three major banks in New York City, as selected and identified by the Company, to provide that bank’s rate (expressed as a percentage per annum), as of approximately 11:00 a.m., New York City time, on the Determination Date for loans in a Representative Amount in United States dollars to leading European banks for a three-month period beginning on the second London Banking Day after the Determination Date.  If at least two rates are so provided, LIBOR for the Interest Period will be the arithmetic mean of all rates so provided.  If fewer than two rates are so provided, then LIBOR for the Interest Period will be LIBOR in effect with respect to the immediately preceding Interest Period.

 

“Designated LIBOR Page” means the display on the Reuters 3000 Xtra Service (or any successor service) on the “LIBOR01” page (or any other page as may replace such page on such service) for the purpose of displaying the London interbank rates of major banks for United States dollars.

 

“Determination Date” with respect to an Interest Period will be the second London Banking Day preceding the first day of the Interest Period.

 

“London Banking Day” is any day in which dealings in United States dollars are transacted or, with respect to any future date, are expected to be transacted in the London interbank market.

 

“Representative Amount” means a principal amount that is representative for a single transaction in the relevant market at the relevant time.

 

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in Sydney, Australia, New York, New York, or London, United Kingdom are authorized or obligated by law or executive order to close.

 

All calculations of the Calculation Agent, in the absence of manifest error, will be conclusive for all purposes and binding on the Company and on the Holder of this Note. In no event shall the interest rate on this Note be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. The Calculation Agent will, upon the request of any Holder of this Note, provide the rate of interest then in effect.

 

All percentages resulting from any of the above calculations will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-

 

 

B-3

 

millionths of a percentage point rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or .0987655)) and all dollar amounts used in or resulting from such calculations will be rounded to the nearest cent (with one-half cent being rounded upwards).

 

Interest on this Note which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name this Note (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the close of business on the February 10, May 10, August 10 or November 10 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date, at the office or agency maintained for such purpose pursuant to the Indenture; provided, however, that at the option of the Company, interest on this Note may be paid (i) by check mailed to the address of the Person entitled thereto as it shall appear on the Register or (ii) to a Holder of US$1,000,000 or more in aggregate principal amount of the Notes by wire transfer to an account maintained by the Person entitled thereto as specified in the Register.  Any interest on this Note which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest shall instead be payable to the Person in whose name this Note is registered on the Special Record Date or other specified date in accordance with the Indenture.  Notwithstanding the foregoing, interest payable on an Interest Payment Date that is also the Stated Maturity of this Note will be paid at such office or agency to the Person to whom the principal hereof is payable, upon surrender of this Note at such office or agency.

 

This Note shall not be entitled to any benefit under the Indenture hereinafter referred to or be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the Trustee.

 

The provisions of this Note are continued on the reverse side hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place.

 

 

B-4

 

IN WITNESS WHEREOF, the Company has caused this instrument to be executed on this        day of                               , 20      .

 

 

	
 
    	
WESTPAC BANKING CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Securities of the series designated herein and issued under the within-mentioned Indenture.

 

 

	
 
    	
 
    	
The Bank of New York Mellon, as Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Dated:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Authorized Signatory
    
					

 

 

B-5

 

(FORM OF REVERSE OF NOTE)

 

This Note is one of a duly authorized series of securities of the Company, issued and to be issued in one or more series under and pursuant to a Senior Indenture, dated as of July 1, 1999 (the “Base Indenture”), duly executed and delivered between the Company and The Bank of New York Mellon, as successor to The Chase Manhattan Bank, as trustee (the “Trustee”, which term includes any successor trustee under the Indenture), as supplemented and amended by the First Supplemental Indenture, dated as of August 27, 2009, between the Company and the Trustee (the “First Supplemental Indenture”) and the Fifth Supplemental Indenture, dated as of August 14, 2012, between the Company and the Trustee (the “Fifth Supplemental Indenture”; the Base Indenture as amended and supplemented by the First Supplemental Indenture and the Fifth Supplemental Indenture is referred to herein as the “Amended Base Indenture”), and as further supplemented by the Ninth Supplemental Indenture, dated as of November 25, 2013, between the Company and the Trustee (the “Ninth Supplemental Indenture”; the Amended Base Indenture, as further supplemented by the Ninth Supplemental Indenture, is referred to herein as the “Indenture”), to which Indenture and all Indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes.  This Note is one of a series of securities designated on the face hereof (the “Notes”).  The Notes are issued pursuant to the Indenture and are limited in aggregate principal amount to US$1,250,000,000; provided, however, that the Company may from time to time, without the consent of the Holders of the Notes, create and issue additional notes having the same terms and conditions as the Notes in all respects or in all respects except for issue date, issue price and, if applicable, the first date on which interest accrues and the first payment of interest thereon.  Additional notes issued in this manner will be consolidated with, and will form a single series with, the Notes, unless such additional notes will not be treated as fungible with the Notes for U.S. federal income tax purposes. The Notes and any such additional notes would rank equally and ratably.

 

In accordance with Section 10.8 of the Indenture, pursuant to the procedure set forth in Article X of the Indenture, the Company may, at its option, redeem all, but not less than all, of the Notes if (a) there is a change in or any amendment to the laws or regulations (i) of the Commonwealth of Australia, or any political subdivision or taxing authority thereof or therein, or (ii) in the event of the assumption pursuant to Section 7.1 of the Indenture of the obligations of the Company under the Indenture and this Note by an entity organized under the laws of a country other than the Commonwealth of Australia or a political subdivision of a country other than the Commonwealth of Australia, of the Commonwealth of Australia or the country in which such entity is organized or resident or deemed resident for tax purposes or any political subdivision or taxing authority thereof or therein, or (b) there is a change in any application or interpretation of any such laws or regulations, which change or amendment becomes

 

 

B-6

 

effective, (i) with respect to taxes imposed by the Commonwealth of Australia or any  political subdivision or taxing authority thereof or therein, on or after the date the Company originally issued this Note, or (ii) in the event of the assumption pursuant to Section 7.1 of the Indenture of the obligations of the Company under the Indenture and this Note by an entity organized under the laws of a country other than the Commonwealth of Australia or a political subdivision of a country other than the Commonwealth of Australia, with respect to taxes imposed by a non-Australian jurisdiction, on or after the date of the transaction resulting in such assumption, and, in each case, as a result of such change or amendment (1) the Company is or will become obligated to pay any Additional Amounts on this Note pursuant to Section 9.8 of the Indenture or (2) the Company would not be entitled to claim a deduction in computing its taxation liabilities in respect of (A) any payments of interest or Additional Amounts or (B) any original issue discount on this Note.

 

Before the Company may redeem this Note, it must give the Holder of this Note at least 30 days’ written notice and not more than 60 days’ written notice of its intention to redeem this Note, provided that if the earliest date on which (i) the Company will be obligated to pay any Additional Amounts, or (ii) the Company would not be entitled to claim a deduction in respect of any payments of interest or Additional Amounts on or any original issue discount in respect of this Note in computing its taxation liabilities, would occur less than 45 days after the relevant change or amendment to the applicable laws, regulations, determinations or guidelines, the Company may give less than 30 days’ written notice but in no case less than 15 days’ written notice, provided it gives such notice as soon as practicable in all the circumstances.

 

The Redemption Price for this Note shall equal 100% of the principal amount of this Note plus accrued but unpaid interest to but excluding the date of redemption.

 

The Indenture contains provisions for defeasance and covenant defeasance at any time of the indebtedness evidenced by this Note upon compliance by the Company with certain conditions set forth therein.

 

If an Event of Default shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration become, due and payable immediately, in the manner, with the effect and subject to the conditions provided in the Indenture.  The Indenture contains provisions permitting the Holders of not less than a majority in aggregate principal amount of the Outstanding Notes, on behalf of all of the Holders of the Notes, to waive any Event of Default under the Indenture and its consequences, subject to Section 5.7 of the Indenture.

 

In accordance with Section 9.8 of the Indenture, the Company will pay all amounts that it is required to pay on this Note without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or other governmental charges imposed or levied by or on behalf of the Commonwealth of Australia or any political

 

 

B-7

 

subdivision or taxing authority thereof or therein, unless such withholding or deduction is required by law.  If the Company withholds or deducts any such amount from any payment on this Note, the Company will pay such additional amounts (the “Additional  Amounts”) so that the net amounts received by the Holder of this Note, after such withholding or deduction, will equal the amounts that the Holder of this Note would have received on this Note if such withholding or deduction had not been required; provided that no Additional Amounts shall be payable for or on account of:

 

(1)  any tax, duty, assessment or other governmental charge that would not have been imposed but for the fact that the Holder of this Note was a resident, domiciliary or national of, or engaged in business or maintained a permanent establishment or was physically present in, the Commonwealth of Australia or any political subdivision or taxing authority thereof or therein or otherwise had some connection with the Commonwealth of Australia or any political subdivision or taxing authority thereof or therein other than merely holding this Note, or receiving payments under this Note;

 

(2)  any tax, duty, assessment or other governmental charge that would not have been imposed but for the fact that the Holder of this Note presented this Note for payment in the Commonwealth of Australia, unless the Holder was required to present this Note for payment and it could not have been presented for payment anywhere else;

 

(3)  any tax, duty, assessment or other governmental charge that would not have been imposed but for the fact that the Holder of this Note presented this Note for payment more than 30 days after the date such payment became due and was provided for, whichever is later, except to the extent that the Holder would have been entitled to the Additional Amounts on presenting this Note for payment on any day during that 30 day period;

 

(4)  any estate, inheritance, gift, sale, transfer, personal property or similar tax, duty, assessment or other governmental charge;

 

(5)  any tax, duty, assessment or other governmental charge which is payable otherwise than by withholding or deduction;

 

(6)  any tax, duty, assessment or other governmental charge that would not have been imposed if the Holder or beneficial owner of this Note complied with the Company’s request to provide information concerning his, her or its nationality, residence or identity or to make a declaration, claim or filing or satisfy any requirement for information or reporting that is required to establish the eligibility of the Holder, or the beneficial owner, of this Note to receive the relevant payment without (or at a reduced rate of) withholding or deduction for or on account of any such tax, duty, assessment or other governmental charge;

 

 

B-8

 

(7)  any tax, duty, assessment or other governmental charge that would not have been imposed but for the Holder or beneficial owner of this Note being an associate of the Company for purposes of section 128F(6) of the Income Tax Assessment Act 1936 of the Commonwealth of Australia (the “Australian Tax Act”) (other than in the capacity of a clearing house, paying agent, custodian, funds manager or  responsible entity of a registered managed investment scheme under the Corporations Act 2001 of the Commonwealth of Australia);

 

(8)  any tax, duty, assessment or other governmental charge that is imposed or withheld as a consequence of a determination having been made under Part IVA of the Australian Tax Act (or any modification thereof or provision substituted therefore) by the Australian Commissioner of Taxation that such tax, duty, assessment or other governmental charge is payable in circumstances where the Holder or the beneficial owner of this Note is a party to or participated in a scheme to avoid such tax which the Company was not a party to;

 

(9)  any tax, duty, assessment or other governmental charge that is imposed pursuant to European Council Directive 2003/48/EC (the “Directive”) or any law implementing or complying with, or introduced in order to conform to, such Directive, or any agreement entered into by a Member State of the European Union with (A) any other state or (B) any relevant, dependent or associated territory of any Member State of the European Union providing for measures equivalent to, or the same as, those provided for by such Directive;

 

(10) any tax, duty, assessment or other governmental charge arising under or in connection with sections 1471 to 1474 of the U.S. Internal Revenue Code of 1986, as amended (including any regulations or official interpretations issued, agreements entered into or non-U.S. laws enacted, with respect thereto) (“FATCA”); or

 

(11)  any combination of the foregoing.

 

Subject to the foregoing, Additional Amounts will also not be payable by the Company with respect to any payment on this Note to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such payment in respect of this Note to the extent that payment would, under the laws of the Commonwealth of Australia or any political subdivision or taxing authority thereof or therein, be treated as being derived or received for tax purposes by a beneficiary or settler of that fiduciary or a member of that partnership or a beneficial owner, in each case, who would not have been entitled to those Additional Amounts had it been the actual Holder of this Note.

 

The Company, and any other Person to or through which any payment with respect to this Note may be made, shall be entitled to withhold or deduct from any payment with respect to this Note amounts required to be withheld or deducted under or

 

 

B-9

 

in connection with FATCA, and Holders and beneficial owners of this Note shall not be entitled to receive any gross up or other additional amounts on account of any such withholding or deduction.

 

Any reference in this Note to principal or interest shall be deemed to also refer to any Additional Amount that may be payable as provided above.

 

The Indenture contains provisions permitting the Company and the Trustee, with the written consent of the Holders of not less than a majority in aggregate principal  amount (calculated as provided in the Indenture) of the Outstanding Securities of each series adversely affected thereby to add any provisions to or to change or eliminate any provisions of the Indenture or any supplemental indenture or to modify the rights of the Holders of the Securities of such series, provided that, without the consent of the Holder of each such Security so affected, no such modification shall (a) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount of any Security or the rate of interest thereon, or change the coin or currency in which any Security or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity of any Security (or, in the case of redemption, on or after the Redemption Date), or (b) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such amendment or modification, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences) provided for in the Indenture, or (c) change any obligation of the Company to maintain an office or agency in the places and for the purposes specified in Section 9.2 of the Indenture, or (d) except to the extent provided in Section 8.1(9) of the Indenture, make any change in Section 5.2, 5.7, 5.10 or 8.2 of the Indenture except to increase any percentage or to provide that certain other provisions of the Indenture cannot be modified or waived except with the consent of the Holders of each Outstanding Security affected thereby.  Any such consent given by the Holder of this Note shall be conclusive and binding upon such Holder and all future Holders of this Note and of any Notes issued on registration hereof, the transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent is made upon this Note.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective time, at the rates and in the coin or currency herein prescribed.

 

Upon surrender for registration of transfer of this Note, the Company shall execute and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, a new Note or Notes of like tenor and authorized denominations for an equal aggregate principal amount in exchange herefor, subject to the limitations provided in the Indenture.  Every Note presented or surrendered for registration of

 

 

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transfer or for exchange shall (if so required by the Company, the Registrar or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company, the Registrar and the Trustee duly executed by the Holder thereof or his attorney duly authorized in writing.  No service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the person in whose name this Note is registered as the owner hereof for all purposes (subject to the  provisions hereof with respect to determination of the Person to whom interest is payable).

 

Reference is made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are to be authenticated and delivered.

 

No past, present or future director, officer, employee, agent, member, manager, trustee or stockholder, as such, of the Company or any successor Person shall have any liability for any obligations of the Company or any successor Person, either directly or through the Company or any successor Person, under the Notes or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation, whether by virtue of any rule of law, statute or constitutional provision or by the enforcement of any assessment or by any legal or equitable proceeding or otherwise.  By accepting a Note, each Holder agrees to the provisions of Section 1.13 of the Indenture and waives and releases all such liability.  Such waiver and release shall be part of the consideration for the issue of the Notes.

 

The Notes of this series shall be issuable only in denominations of US$2,000 and integral multiples of US$1,000 in excess thereof.  [This Global Note is exchangeable for Notes in definitive form only under certain limited circumstances set forth in the Indenture.]2  At the option of the Holder, the Notes (except a Note in global form) may be exchanged for other Notes, of any authorized denominations and of a like aggregate principal amount containing identical terms and provisions, upon surrender of the Notes to be exchanged at such office or agency.

 

All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

2 Insert in Global Notes only

 

 

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THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS.

 

 

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TRANSFER NOTICE

 

FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto

 

Insert Taxpayer Identification No.

 

	
 
    
	
Please print or typewrite name and address including zip code of   assignee
    

 

	
 
    

the within Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer such Note on the books of the Company with full power of substitution in the premises.

 

Your Signature:

 

	
By:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Signature Guarantee:
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
(Participant in a Recognized Signature
    	
 
    
	
 
    	
Guaranty Medallion Program)
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    

 

 

B-13Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into on this 25th day of November, 2013, by and between Penn National Gaming, Inc., a Pennsylvania corporation (the “Company”), and Saul V. Reibstein, an individual residing in Pennsylvania (“Executive”).

 

WHEREAS, Executive and the Company desire to enter into this Agreement;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its stockholders to enter into this Agreement and Executive is willing to serve as an employee of the Company subject to the terms and conditions of this Agreement.

 

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

 

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

 

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

 

1.2.                            Term. The term of this Agreement shall begin on December 2, 2013 (the “Commencement Date”) and shall terminate at the close of business on the third anniversary of the Commencement Date (the “Initial Term”), unless earlier terminated in accordance with Section 3 hereof.  The term of this Agreement may be renewed for additional periods (each, a “Renewal Term” and, together with the Initial Term, the “Employment Term”) only upon the execution of a written renewal by the parties hereto.  Notwithstanding anything in this Agreement to the contrary, Sections 5 through 20 shall survive any termination of the Employment Term until the expiration of any applicable time periods set forth in Sections 5, 6 and 7.

 

1.3.                            Extent of Service.  Executive agrees to use Executive’s best efforts to carry out Executive’s duties and responsibilities and, consistent with the other provisions of this Agreement, to devote substantially all of Executive’s business time, attention and energy thereto.  The foregoing shall not be construed as preventing Executive from serving on the board of philanthropic organizations, commercial entities (but only if and to the extent that Executive is so serving as of the date hereof) or providing oversight with respect to his personal investments, so long as such service does not materially interfere with Executive’s duties hereunder.  If, following the termination or expiration of the Employment Term, Executive is not continuing to serve as the Company’s Chief Financial Officer, the Nominating and Corporate Governance Committee of the Board may consider Executive as a candidate for election to the Board.

 

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

 

2.1.                            Base Salary.  The Company shall pay to Executive an initial base salary at the annual rate of Five Hundred and Fifty Thousand dollars ($550,000), payable in accordance with the Company’s payroll practices as in effect from time to time.  Executive’s Base Salary shall be reviewed annually by the Company, subject to approval of the Board or the compensation committee of the Board (the “Compensation Committee”), as the case may be. The term “Base Salary” as utilized in this Agreement shall refer to the base salary in effect from time to time.

 

2.2.                            Signing Bonus.  On March 1, 2014, subject to Executive’s continued employment by the Company through such date, the Company shall pay to Executive, in cash, a signing bonus (the “Signing Bonus”) of Two Hundred and Twenty Five Thousand dollars ($225,000), subject to pro rata clawback if Executive resigns during the first two years of employment.

 

2.3.                            Bonuses.  Executive shall participate in the Company’s annual incentive compensation plan applicable to other similarly situated senior executives (“Peer Executives”) for fiscal years commencing in January, 2014, with a target payment of not less than 60% of the Base Salary in effect at the beginning of such calendar year and a maximum payment of up to 90% of such Base Salary amount.  Each annual bonus award earned in a fiscal year shall be paid pursuant to the terms of the annual incentive plan by March 15 of the immediately following fiscal year, unless the plan provides for a different payment date or Executive elects to defer the receipt of such bonus award pursuant to an arrangement that meets the requirements of Section 409A.  To the extent that additional cash incentive compensation programs (other than annual cash bonus awards) are generally made available to Peer Executives, Executive shall be eligible to participate in such programs.

 

2.4.                            Initial Equity Grant.  On the Commencement Date, the Board or Compensation Committee shall grant to Executive, pursuant to the equity compensation plan of Penn National Gaming, Inc., an initial equity grant with a value (as determined by the Board or Compensation Committee) equal to 135% of the Base Salary.  Such initial equity grant shall be in a form, and shall have terms and conditions, determined by the Compensation Committee, consistent with contemporaneous initial equity awards made to Peer Executives; provided that such initial equity grant shall vest on a 25% per annum schedule from the date of grant.

 

2.5.                            Additional Equity Compensation.  With respect to equity compensation awards that may in the future be made generally to Peer Executives, Executive shall be entitled to participate in such awards, subject to the terms and conditions of the applicable equity compensation plan and award instrument, on the same basis as the other Peer Executives.  The Company shall set the amount and terms of such options or other equity or equity-based compensation, subject to approval of the Board or the Compensation Committee if required.

 

2.6                               Certain Other Equity Compensation.  The parties acknowledge that Executive hereby resigns from the Board effective upon the Commencement Date but, as contemplated in Section 1.3, may in the future resume his service on the Board.  For purposes of any equity compensation issued prior to or after the date hereof, Executive’s service shall be deemed 

 

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continuing as long he is employed by the Company, or is serving, or actively being considered to serve, on the Board.

 

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

 

2.8.                            Vacation, Sick Leave and Holidays.  Executive shall be entitled in each calendar year to twenty (20) days of paid vacation time.  Each vacation day shall be taken by Executive at such time or times as agreed upon by the Company and Executive, and any portion of Executive’s allowable vacation time not used during the calendar year shall be subject to the Company’s payroll policies regarding carryover vacation days.  Executive shall be entitled to holiday and sick leave in accordance with the Company’s holiday and other pay for time not worked policies.

 

2.9.                            Reimbursement of Expenses.  During the Employment Term, the Company shall reimburse Executive for all reasonable expenses incurred by him in the performance of his duties in accordance with the Company’s policies applicable to Peer Executives.

 

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

 

3.1.                            Termination by the Company.

 

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

 

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

 

(i)                                     Executive shall have been convicted of, or pled guilty or nolo contendere to, a felony or any misdemeanor involving allegations of fraud, theft, perjury or conspiracy to commit fraud or theft;

 

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

 

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

 

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(iv)                              Executive misappropriates corporate funds as determined in good faith by the Audit Committee of the Board;

 

(v)                                 the Company’s good faith, reasonable determination of Executive’s willful and continued failure to perform Executive’s material duties with the Company (other than any such failure resulting from incapacity due to physical disability or mental illness); or

 

(vi)                              the Company’s good faith, reasonable determination of Executive’s willful engagement in illegal conduct or gross misconduct which is materially injurious to the Company or one of its affiliates.

 

3.2.                            Termination by Executive.  Executive may voluntarily terminate employment for any reason effective upon 60 days’ prior written notice to the Company, unless the Company waives such notice requirement.

 

3.3.                            Termination for Death or Disability.  In the event of the death or disability of Executive, Executive’s employment shall terminate effective as of the date of Executive’s death or disability.  The term “disability” shall have the definition set forth in the Company’s Long Term Disability Insurance Policy (the “Policy”) in effect at the time of such determination.  The Company, in its sole discretion, may determine whether Executive has incurred a disability by using the definitions and criteria established and set forth in the Policy and, if consistent with the terms of the Policy, may require such medical proof as it deems necessary, including the certificate of one or more licensed physicians selected by the Company.  The Company’s decision as to disability shall be final and binding.  The date for determining when Executive is disabled for purposes of this Section 3.3 shall be the date upon which Executive becomes eligible to receive benefits under the Policy or, if the Company makes the determination, the date on which the Company makes its determination that Executive has a disability.

 

3.4.                            Payments Due Upon Termination.

 

(a)                                 Already Accrued Base Salary and Expense.  Upon any termination of employment during the Employment Term, Executive shall be entitled to receive any amounts due for Base Salary accrued but unpaid through the date of Executive’s termination of employment (the “Termination Date”), and such amounts shall be paid in accordance with the Company’s then current payroll system for Peer Executives.  Any expenses incurred but not reimbursed through the Termination Date shall be paid at such time and in such manner as provided under the Company’s expense reimbursement policy applicable to Peer Executives.

 

(b)                                 Severance Pay and Benefits.  Subject to the conditions in subsection (c) hereof, if Executive’s employment is terminated under Section 3.1(a), then the Company will provide Executive with the following severance pay and benefits (in addition to any amounts payable under subsection (a) hereof); provided, for purposes of Section 409A, each payment (whether an installment or lump sum) of severance pay under this subsection (b) shall be considered a separate payment:

 

(i)                                     Amount of Post-Employment Base Salary.  The Company shall pay to Executive an amount equal to the greater of (i) the product of 1.5 times the annual rate of 

 

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Base Salary in effect for Executive on the Termination Date or (ii), if such termination takes place during the Initial Term, the product of the number of months remaining in the Initial Term times the monthly rate of Base Salary in effect for Executive as of the Termination Date.

 

(ii)                                  Amount of Post-Employment Bonus.  The Company shall pay to Executive an amount equal to the product of 1.5 times the amount of annual cash bonus compensation that would have been paid to Executive based on the actual performance of the Company for the calendar year in which the Termination Date occurred.

 

(iii)                               Payment of Post-Employment Base Salary and Bonus.  The amount described in subsection (b)(i) shall be paid to Executive in cash in a single lump-sum immediately following expiration of the 7 day revocation period referenced in subsection (c).  The amount described in subsection (b)(ii) shall be paid on the date such bonus is paid to Peer Executives.  In each case, such payments are expressly subject to subsection (c) hereof.

 

(iv)                              Continued Medical Benefits Coverage.  During the 18-month period following the Termination Date (the “Severance Period”), Executive and his dependents will have the opportunity under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) to elect COBRA continuation coverage.  If elected in a timely manner, the Company shall reimburse Executive for the full cost of purchasing COBRA coverage until the end of the Severance Period (or until such earlier date as Executive and his dependents cease to receive COBRA coverage).

 

(c)                                  Release Agreement.  Executive’s entitlement to any severance pay and benefit subsidies under Section 3.4(b) is conditioned upon Executive’s first entering into a release agreement in substantially the form attached hereto as Exhibit “A”; such release agreement shall be delivered to Executive within 7 days after the Termination Date.  Any payment of severance pay or benefit subsidies due under subsection (b) hereof shall be delayed until after the expiration of the 7-day revocation period required for an effective age-based release, and any amount otherwise due under said subsection (b) before the end of such revocation period shall be paid on the day after the end of such period in a single lump-sum payment.  In no event shall any payment be made unless the release agreement is executed within 45 days following the Termination Date and any applicable revocation period shall have expired. In the event the Termination Date occurs in one calendar year and the 52nd day following the Termination Date is in another calendar year, any payment of severance pay or benefit subsidies due under subsection (b) hereof shall be paid in the later calendar year.

 

(d)                                 Termination Following End of Employment Term. No payments or benefits shall be due under this Agreement to Executive upon termination of employment upon or following the expiration of the Employment Term; provided, however, that, as contemplated in Section 1.3 hereof, if Executive is not nominated or elected to the Board following the expiration of the Employment Term despite his willingness to serve on the Board and his employment has not been terminated under the circumstances contemplated in Sections 3.1, 3.2 or 3.3, all outstanding equity awards that would have vested prior to January 30, 2019 will vest 

 

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in full on the earlier of (i) the date the Board fails to nominate Executive to serve on the Board or (ii) the date the shareholders of the Company fail to elect Executive to the Board, as applicable.

 

(e)                                  No Other Payments or Benefits.  Except as otherwise provided in this Section 3.4 or Section 8, no other payments or benefits shall be due under this Agreement to Executive upon termination of employment.

 

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

 

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

 

5.                                      Confidentiality.  Executive acknowledges that, as an integral part of the Company’s business, the Company and its affiliates have developed, and will develop, at a considerable investment of time and expense, plans, procedures, methods of operation, financial data, lists of actual and potential customers and suppliers, marketing strategies, plans for development and expansion, customer and supplier data and other confidential and sensitive information (collectively the “Company Confidential Information”).  Executive acknowledges that the Company and its affiliates have legitimate business interests in protecting the confidentiality of that information.  Executive acknowledges that in his position he has been and will be entrusted with that information. Therefore, Executive acknowledges a continuing responsibility to protect that information and agrees as follows:

 

(a)                                 Definition of Trade Secrets.  “Trade Secrets” means data and information that the Company or any of its affiliates owns or licenses including, but not limited to, technical or nontechnical data, formulae, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans or lists of actual or potential customers or suppliers, which (i) derive economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons or entities who can obtain economic value from their disclosure or use, (ii) are the subject of efforts that are reasonable under the circumstances to maintain their secrecy, and (iii) are protected as trade secrets under applicable state law.

 

(b)                                 Definition of Confidential Information.  “Confidential Information” means data and information relating to the business of the Company or its affiliates, (i) which the 

 

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Company or its affiliates have disclosed to Executive, or of which Executive became aware as a consequence of or in the course of his employment with the Company, (ii) which have value to the Company or its affiliates, and (iii) which are not generally known to its competitors, including but not limited to the Company’s Confidential Information.  Confidential Information will not include any data or information that the Company or its affiliates have voluntarily disclosed to the public (except where Executive made or caused that public disclosure without authorization), that others have independently developed and disclosed to the public, or that otherwise enters the public domain through lawful means.

 

(c)                                  Restrictions.  Executive agrees to treat as confidential and will not, without the prior written approval of the Company in each instance, use (other than in the performance of his duties of employment with the Company or its affiliates), publish, disclose, copyright or authorize anyone else to use, publish, disclose or copyright, any Confidential Information or any Trade Secrets obtained during his employment with the Company or its affiliates, whether or not the Confidential Information or Trade Secrets are in written or other tangible form.  Additionally, this restriction will continue to apply for a period of 2 years after the Termination Date (and, in the case of a Trade Secret, for as long as that information remains a Trade Secret).  Executive acknowledges and agrees that the prohibitions against disclosure and use of Confidential Information recited in this section are in addition to, and not in lieu of, any rights or remedies that the Company or its affiliates may have available under applicable state laws to prevent the disclosure of Trade Secrets.

 

(d)                                 Return of Materials.  Executive agrees that all records, notes, files, drawings, documents, plans and like items, and all copies of them, relating to or containing or disclosing Confidential Information or Trade Secrets of the Company or its affiliates (i) which are made or kept by Executive, or (ii) which are disclosed to him or come into his possession, are and will remain the sole and exclusive property of the Company or its affiliates.  Upon his termination of employment, Executive will deliver to his supervisor the originals and all copies of any and all of the items described above together with any material derived from, or containing portions of, any of the items described above.

 

6.                                      Non-Competition.

 

(a)                                 As used herein, the term “Restriction Period” shall mean a period equal to: (i) the six month period immediately following the Termination Date if Executive’s employment terminates under circumstances where he is not entitled to payments under Section 3.4(b) or (ii) the Severance Period if Executive’s employment terminates under circumstances where he is entitled to payments under Section 3.4(b) or Section 8.

 

(b)                                 During the Employment Term and for the duration of the Restriction Period thereafter, Executive shall not, except with the prior written consent of the Company, directly or indirectly, own, manage, operate, join, control, finance or participate in the ownership, management, operation, control or financing of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with, or use or permit Executive’s name to be used in connection with, any business or enterprise which owns or operates, or is actively seeking to own or operate, a gaming or pari-mutuel facility located 

 

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within 100 miles of any gaming or pari-mutuel facility owned or operated by the Company or any of its affiliates at such time.

 

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

 

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

 

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

 

8.                                      Change of Control.

 

8.1.                            Consideration

 

(a)                                 Change of Control.  In the event of a Change of Control (as defined below), and either (A) Executive’s employment is terminated without Cause within 12 months after the effective date of the Change of Control or (B) Executive resigns from employment for Good Reason within 12 months after the effective date of the Change of Control (the effective date of such termination or resignation, the “Trigger Date”), Executive shall be entitled to receive a cash payment in an amount equal to the product of two times the sum of (i) the highest annual rate of Base Salary in effect for Executive during the 12-month period immediately preceding the Trigger Date and (ii) the amount of targeted bonus compensation as established pursuant to Section 2.3 for Executive for the full calendar year immediately preceding the Trigger Date.  Such payment shall be in lieu of any payment to which Executive would be entitled under Section 3.4(b).

 

8.2.                            Release Agreement and Payment Terms.  Executive’s entitlement to any severance pay under Section 8.1(a) is conditioned upon Executive’s first entering into a release agreement in substantially the form attached hereto as Exhibit “A”; such release agreement shall be delivered to Executive within 7 days after the Trigger Date.  The amount described in Section 

 

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8.1(a) shall be paid to Executive in cash in a single lump-sum immediately following expiration of the 7-day revocation period required for an effective age-based release.  In no event shall any payment be made unless the release agreement is executed within 45 days following the Trigger Date and any applicable revocation period shall have expired. In the event the Trigger Date occurs in one calendar year and the 52nd day following the Trigger Date is in another calendar year, any payment of severance pay or benefit subsidies due under subsection (b) hereof shall be paid in the later calendar year.

 

8.3.                            Certain Other Terms.  In the event payments are being made to Executive under this Section 8, no payments shall be due under Section 3.4(b) with respect to any termination of Executive’s employment following a Change of Control.  In the event that the Company announces that it has signed a definitive agreement with respect to a Change of Control, the provisions of this Section 8 shall continue to apply to Executive if, during the period after the public announcement and immediately preceding the date such transaction is consummated or terminated, the Company terminates Executive’s employment without Cause; provided, however, that, in such event, any amount payable under this Section 8 shall be reduced by any payments received pursuant to Section 3.4(b).

 

8.4.                                                                            Defined Terms.

 

(a)                                 Change of Control.  The term Change of Control shall have the meaning given to such term in the Company’s 2008 Long Term Incentive Compensation Plan, as in effect on the date hereof.

 

(b)                                 Good Reason.  The occurrence of any of the following events that the Company fails to cure within 10 days after receiving written notice thereof from Executive (which notice must be delivered within 30 days of Executive becoming aware of the applicable event or circumstance): (i) assignment to Executive of any duties inconsistent in any material respect with Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities or inconsistent with Executive’s legal or fiduciary obligations; (ii) any reduction in (A) Executive’s annual base compensation, (B) targeted bonus compensation as established pursuant to Section 2.3 for Executive for the full calendar year immediately preceding the Change of Control, or (C) the annualized grant date fair value of the equity-based awards granted to Executive in the year prior to the Change of Control (with such annualized grant date value determined in the sole discretion of the Compensation Committee); (iii) any travel requirements materially greater than Executive’s travel requirements prior to the Change of Control; or (iv) any breach of any material term of this Agreement by the Company.

 

9.                                      Property Surrender.  Without limiting the generality of Section 5(d), upon termination of Executive’s employment for any reason, Executive shall immediately surrender and deliver to the Company all property that belongs to the Company, including any computers, phones, disk drives and any documents, correspondence and other information, of any type whatsoever, from the Company or any of its agents, servants, employees, suppliers, and existing or potential customers, that came into Executive’s possession by any means whatsoever during the course of employment.

 

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

 

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

 

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

 

If to the Company, to:

 

Penn National Gaming, Inc.

825 Berkshire Boulevard, Suite 200

Wyomissing, Pennsylvania 19610

Attention:                           Chief Executive Officer

Facsimile:                           (610) 373-4966

 

If to Executive, to:

 

His then current home address.

 

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

 

13.                               Contents of Agreement; Amendment and Assignment.  This Agreement sets forth the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements or understandings with respect to thereto.  This Agreement cannot be changed, modified, extended, waived or terminated except upon a written instrument signed by the party against which it is to be enforced.  Executive may not assign any of his rights or obligations under this Agreement.  The Company may assign its rights and obligations under this Agreement to any successor to all or substantially all of its assets or business by means of liquidation, dissolution, merger, consolidation, transfer of assets, stock transfer or otherwise.

 

14.                               Severability.  If any provision of this Agreement or application thereof to anyone or under any circumstances is adjudicated to be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect any other provision or application of this

 

10

 

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

 

15.                               Remedies.  No remedy conferred upon a party by this Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion.  Executive acknowledges that money damages would not be a sufficient remedy for any breach of this Agreement by Executive and that the Company shall be entitled to specific performance and injunctive relief as remedies for any such breach, in addition to all other remedies available at law or equity to the Company.

 

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

 

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

 

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

 

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

 

20.                               Section 409A.  This Agreement is intended to comply with the requirements of Section 409A and shall be construed accordingly.  Any payments or distributions to be made to

 

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Employee under this Agreement upon a separation from service (as defined in Section 409A) of amounts classified as “nonqualified deferred compensation” for purposes of Code Section 409A and do not satisfy an exemption from the time and form of payment requirements of Section 409A, shall in no event be made or commence until six months after such separation from service if Executive is a specified employee (as defined in Section 409A).  Each payment of nonqualified deferred compensation under this Agreement shall be treated as a separate payment for purposes of Code Section 409A.  Any reimbursements made pursuant to this Agreement shall be paid as soon as practicable but no later than 90 days after Employee submits evidence of such expenses to the Company (which payment date shall in no event be later than the last day of the calendar year following the calendar year in which the expense was incurred).  The amount of such reimbursements during any calendar year shall not affect the benefits provided in any other calendar year, and the right to any such benefits shall not be subject to liquidation or exchange for another benefit.

 

[Signatures on the Following Page]

 

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

 

 

	
 
    	
PENN   NATIONAL GAMING, INC.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Timothy J. Wilmott
    
	
 
    	
 
    	
Name:
    	
Timothy   J. Wilmott
    
	
 
    	
 
    	
Title:
    	
President &   Chief Executive Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
EXECUTIVE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   Saul V. Reibstein
    
	
 
    	
 
    	
Saul   V. Reibstein
    

 

13

 

Exhibit A

 

SEPARATION AGREEMENT AND GENERAL RELEASE

 

This is a Separation Agreement and General Release (hereinafter referred to as the “Agreement”) between                            (hereinafter referred to as the “Employee”) and Penn National Gaming, Inc. (hereinafter referred to as the “Employer”).  In consideration of the mutual promises and commitments made in this Agreement, and intending to be legally bound, Employee, on the one hand, and the Employer on the other hand, agree to the terms set forth in this Agreement.

 

1.                                      Employer and Employee hereby acknowledge that [the Company notified Employee/Employee notified the Company on                                        that Executive’s employment pursuant to that certain Employment Agreement executed on                            (“Employment Agreement”) would be terminated as of [                    ].  Upon the termination of the Employment Agreement, Employee will be subject to the obligations and be the beneficiary of the surviving benefits as set forth in Section [3.2(b)][8.1] of the Employment Agreement(1), all as described in the Employment Agreement.  Employee’s last day of work will be                         .

 

2.                                      (a)                                 When used in this Agreement, the word “Releasees” means the Employer and all or any of its past and present parent, subsidiary and affiliated corporations, companies, partnerships, joint ventures and other entities and their groups, divisions, departments and units, and their past and present directors, trustees, officers, managers, partners, supervisors, employees, attorneys, agents and consultants, and their predecessors, successors and assigns.

 

(b)                                 When used in this Agreement, the word “Claims” means each and every claim, complaint, cause of action, and grievance, whether known or unknown and whether fixed or contingent, and each and every promise, assurance, contract, representation, guarantee, warranty, right and commitment of any kind, whether known or unknown and whether fixed or contingent.

 

3.                                      In consideration of the promises of the Employer set forth in this Agreement and the Employment Agreement, and intending to be legally bound, Employee hereby irrevocably remises, releases and forever discharges all Releasees of and from any and all Claims that he (on behalf of either himself or any other person or persons) ever had or now has against any and all of the Releasees, or which he (or his heirs, executors, administrators or assigns or any of them) hereafter can, shall or may have against any and all of the Releasees, for or by reason of any cause, matter, thing, occurrence or event whatsoever through the effective date of this Agreement.  Employee acknowledges and agrees that the Claims released in this paragraph include, but are not limited to, (a) any and all Claims based on any law, statute or constitution or based on contract or in tort on common law, and (b) any and all Claims based on or arising under any civil rights laws, such as any Pennsylvania employment laws, or Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e et seq.), or the Federal Age Discrimination in Employment Act (29 U.S.C. § 621 et seq.) (hereinafter referred to as the “ADEA”), and (c) any and all Claims under any grievance or complaint procedure of any kind, and (d) any and all Claims based on or arising out of or related to his recruitment by, employment with, the termination of his employment with, his performance of any services in any capacity for, or any business transaction with, each or any of the Releasees.  Employee also understands, that by signing this Agreement, he is waiving all Claims against any and all of the Releasees released by this Agreement; provided, however, that as set forth in section 7 (f) (1) (c) of the ADEA, as added by the Older Workers Benefit Protection Act of 1990, nothing in this Agreement constitutes or shall (i) be construed to constitute a waiver by Employee of any rights or claims that may arise after this Agreement is executed by Employee, or (ii) impair Employee’s right to file a charge with the U.S. Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board or any state agency or to participate in an investigation or proceeding conducted by the EEOC or any state agency.  Notwithstanding the foregoing, Employee agrees to waive Employee’s right to recover individual relief in any charge, complaint, or lawsuit filed by Employee or anyone on Employee’s behalf.

 

Notwithstanding the foregoing, this Agreement will not release any right of Employee (x) in his capacity as a shareholder or owner in the Company or any of its affiliates or with respect to any equity awards held by Employee,

 

(1)  As applicable.

 

 

(y) to be indemnified for any act or omission in his capacity as an employee, officer or director of the Company or any of its affiliates (whether arising under contract, the governing documents of the entity, state law or otherwise), or (z) in respect of the benefits owed to him under this Separation Agreement and vested benefits under the Company’s retirement or deferred compensation plans.

 

4.                                      In consideration of the promises of the Employee set forth in this Agreement and the Employment Agreement and intending to be legally bound, Employer hereby irrevocably remises, releases and forever discharges Employee and his heirs, successors and assigns from any and all Claims that the Employer ever had or now has though the effective date of this Agreement. Employee further certifies that he is not aware of any actual or attempted regulatory, EEOC or legal violations by Employer and that his separation is not a result of retaliation based on any legal rights or opposition to an illegal practice.

 

5.                                      Employee and Employer covenant and agree not to sue each other or any of the Releasees for any Claims released by this Agreement and to waive any recovery related to any Claims covered by this Agreement.

 

6.                                      Employee agrees to provide reasonable transition assistance to Employer (including without limitation assistance on regulatory matters, operational matters and in connection with litigation) for a period of one year from the execution of this Agreement at no additional cost; provided, such assistance shall not unreasonably interfere with Employee’s pursuit of gainful employment or result in Employee not having a separation from service (as defined in Section 409A of the Internal Revenue Code of 1986).  Any assistance beyond this period will be provided at a mutually agreed cost.  Employee further agrees that he will return to the Employer all property in his possession, including, but not limited to, keys, identification cards and credit cards, files, records, publications, address lists and documents that belong to each or any of the Releasees.  Such documents also include, without limitation, any documents created or made by Employee during his employment with the Employer.

 

7.                                      Employee agrees that, except as specifically provided in this Agreement and the Employment Agreement, there are no compensation, benefits, or other payments due or owed to him by each or any of the Releasees.  Employee further acknowledges that he has not experienced or reported any work-related injury or illness.

 

8.                                      Except where disclosure has been made by the Company pursuant to applicable federal or state law, rule or regulation, Employee agrees that the terms of this Agreement are confidential and that he will not disclose or publicize the terms of this Agreement and the amounts paid or agreed to be paid pursuant to this Agreement to any person or entity, except to his spouse, his attorney, his accountant, and to a government agency for the purpose of payment or collection of taxes or application for unemployment compensation benefits.  Employee agrees that his disclosure of the terms of this Agreement to his spouse, his attorney and his accountant shall be conditioned upon him obtaining agreement from them, for the benefit of the Employer, not to disclose or publicize to any person or entity the terms of this Agreement and the amounts paid or agreed to be paid under this Agreement. Further, Employer and Employee agree not to make any false, misleading, defamatory or disparaging communications about the other party (including without limitation Employer’s products, services, partners, investors or personnel) and to refrain from taking any action designed to harm the public perception of the other party or the Releasees.  Employee further agrees that he has disclosed to Employer all information, if any, in his possession, custody or control related to any legal, compliance or regulatory obligations of Employer and any failures to meet such obligations.

 

9.                                      The terms of this Agreement are not to be considered as an admission on behalf of either party.  Neither this Agreement nor its terms shall be admissible as evidence of any liability or wrongdoing by each or any of the Releasees in any judicial, administrative or other proceeding now pending or hereafter instituted by any person or entity.  The Employer is entering into this Agreement solely for the purpose of effectuating a mutually satisfactory separation of Employee’s employment.

 

10.                               All provisions of this Agreement are severable and if any of them is determined to be invalid or unenforceable for any reason, the remaining provisions and portions of this Agreement shall be unaffected thereby and shall remain in full force to the fullest extent permitted by law.

 

 

11.                               This Agreement shall be governed by and interpreted under and in accordance with the laws of Pennsylvania.  Any suit, claim or cause of action arising under or related to this Agreement shall be submitted by the parties hereto to the exclusive jurisdiction of the courts of Pennsylvania or to the federal courts located therein if they otherwise have jurisdiction.

 

12.                               This Agreement constitutes a complete and final agreement between the parties and supersedes and replaces all prior or contemporaneous agreements, offer letters, negotiations, or discussions relating to the subject matter of this Agreement.  With the exception of the Employment Agreement, no other agreement shall be binding upon each or any of the Releasees, including, but not limited to, any agreement made hereafter, unless in writing and signed by an officer of the Employer, and only such agreement shall be binding against the Employer.

 

13.                               Employee is advised, and acknowledges that he has been advised, to consult with an attorney before signing this Agreement.

 

14.                               Employee acknowledges that he is signing this Agreement voluntarily, with full knowledge of the nature and consequences of its terms.

 

15.                               All executed copies of this Agreement and photocopies thereof shall have the same force and effect and shall be as legally binding and enforceable as the original.

 

16.                               Employee acknowledges that he has been given up to twenty-one (21) days within which to consider this Agreement before signing it.  Subject to paragraph 17 below, this Agreement will become effective on the date of Employee’s signature hereof.

 

17.                               For a period of seven (7) calendar days following his signature of this Agreement, Employee may revoke the Agreement, and the Agreement shall not become effective or enforceable until the seven (7) day revocation period has expired.  Employee may revoke this Agreement at any time within that seven (7) day period, by sending a written notice of revocation to the                                                         .  Such written notice must be actually received by the Employer within that seven (7) day period in order to be valid.  If a valid revocation is received within that seven (7) day period, this Agreement shall be null and void for all purposes.  Payment of the severance pay amount set forth in the Employment Agreement will be paid in the manner and at the time(s) described in the Employment Agreement.

 

IN WITNESS WHEREOF, the Parties have read, understand and do voluntarily execute this Separation Agreement and General Release which consists of four pages.

 

 

	
EMPLOYER
    	
 
    	
EMPLOYEE
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Date:

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