Document:

ex10-1.htm

Exhibit 10.1

 

INTERNATIONAL GAME TECHNOLOGY

2002 STOCK INCENTIVE PLAN

NOTICE OF PERFORMANCE RESTRICTED STOCK UNIT AWARD – 2013

 

Name

You have been granted an award of performance restricted stock units (the “Award”) by International Game Technology, a Nevada corporation (the “Corporation”), as follows:

 

	Award Date:	Month Day Year
	 	 
	Total Number of Stock Units Subject to Award:  	share amount 1,2
	 	 
	Vesting Schedule: 	

The Award shall vest and become nonforfeitable as set forth in Section 3 of the Terms and Conditions of Performance Restricted Stock Unit Award – 2013 attached to this Notice of Performance Restricted Stock Unit Award – 2013.

 

                                                                                                                                                   

The Award is subject to the terms and conditions of this Notice of Performance Restricted Stock Unit Award – 2013 (this “Notice”), the attached Terms and Conditions of Performance Restricted Stock Unit Award – 2013 (the “Terms”), and the International Game Technology 2002 Stock Incentive Plan (the “Plan”).  By accepting the Award, you are agreeing to the terms of the Award as set forth in those documents.  You should read the Plan, the Prospectus for the Plan, and the Terms.  The Terms and the Plan are each incorporated into (made part of) this Notice by this reference.  You do not have to accept the Award.

 

1 Subject to adjustment under Section 6.2 of the Plan.

2 Subject to early termination pursuant to Section 8 of the Terms.

 

  

  

  

 

INTERNATIONAL GAME TECHNOLOGY

2002 STOCK INCENTIVE PLAN

TERMS AND CONDITIONS OF PERFORMANCE RESTRICTED STOCK UNIT AWARD – 2013

1.           General. These Terms and Conditions of Performance Restricted Stock Unit Award – 2013 (these “Terms”) apply to certain performance restricted stock units granted by International Game Technology, a Nevada corporation (the “Corporation”), pursuant to the International Game Technology 2002 Stock Incentive Plan (the “Plan”).  If you were granted an award (the “Award”) of performance restricted stock units (the “Stock Units”) by the Corporation, the date of grant of the Award (the “Award Date”) of the Stock Units and the total number of shares of the Corporation’s Common Stock with respect to the Stock Units are set forth in the Notice of Performance Restricted Stock Unit Award – 2013 (the “Notice”) and are reflected in the electronic stock plan award recordkeeping system (the “Stock Plan System”) maintained by the Corporation or its designee.  These Terms apply to the Stock Units if referenced in the Notice and/or the Stock Plan System with respect to the Stock Units.  The recipient of the Award identified in the Notice is referred to as the “Grantee” with respect to the Stock Units.  The Award has been granted to the Grantee in addition to, and not in lieu of, any other form of compensation otherwise payable or to be paid to the Grantee.  Capitalized terms are defined in the Plan if not defined herein.  The parties agree to the terms of the Award set forth herein.  The Grantee acknowledges receipt of a copy of these Terms, the Plan and the Prospectus for the Plan.  The Notice and these Terms are collectively referred to as the “Award Agreement” applicable to the Award.

 

2.           Stock Units.  As used herein, the term “Stock Unit” shall mean a non-voting unit of measurement which is deemed solely for bookkeeping purposes to be equivalent in value to one outstanding share of the Corporation’s Common Stock (subject to adjustment as provided in Section 6.2(a) of the Plan) solely for purposes of the Plan and the Award Agreement.  The Stock Units shall be used solely as a device for the determination of any payment to eventually be made to the Grantee if and when such Stock Units vest pursuant to the terms hereof.

 

The Stock Units create no fiduciary duty to the Grantee and shall create only a contractual obligation on the part of the Corporation to make payments, subject to vesting and the other terms and conditions hereof, as provided in Sections 5 and 7 below.  The Stock Units shall not be treated as property or as a trust fund of any kind.  No assets have been secured or set aside by the Corporation with respect to the Award and, if amounts become payable to the Grantee pursuant to the Award Agreement, the Grantee’s rights with respect to such amounts shall be no greater than the rights of any general unsecured creditor of the Corporation.

 

3.           Vesting.  Subject to Section 8 below, the Award shall vest and become nonforfeitable based on the achievement of the performance goals and the time-based vesting requirements established by the Committee and set forth on Exhibit A attached hereto, incorporated herein by this reference.  The Total Number of Stock Units Subject to Award as set forth in the Notice are divided into two separate tranches as follows:  two-thirds (2/3) of such Total Number of Stock Units Subject to Award (rounded to the nearest whole unit) will be eligible to vest with respect to a performance measurement period consisting of the 2013-2014 Performance Period (the “2013-2014 Stock Units”) and one-third (1/3) of such Total Number of Stock Units Subject to Award (rounded to the nearest whole unit) will be eligible to vest with respect to a performance measurement period consisting of the 2013-2015 Performance Period (the “2013-2015 Stock Units”).  The “2013-2014” Performance Period means the Corporation’s 2013 and 2014 fiscal years.  The “2013-2015 Performance Period” means the Corporation’s 2013, 2014, and 2015 fiscal years.  In each case, the number of 2013-2014 Stock Units and the number of 2013-2015 Stock Units that vest may range from zero (0) to two hundred percent (200%) of the allocated portion of the Total Number of Stock Units Subject to Award as a result of the performance modifiers set forth in Exhibit A attached hereto.

 

4.           Continuance of Employment.  Except as expressly provided in Section 8, the vesting schedule requires continued employment or service through each applicable vesting date as a condition to the vesting of the applicable installment of the Award and the rights and benefits under the Award Agreement.  Employment or service for only a portion of the vesting period, even if a substantial portion, will not (except as expressly provided in Section 8) entitle the Grantee to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a termination of employment or services as provided in Section 8 below or under the Plan.

 

  

  

  

 

Nothing contained in the Award Agreement or the Plan constitutes an employment or service commitment by the Corporation or any Subsidiary, affects the Grantee’s status as an employee at will who is subject to termination without cause, confers upon the Grantee any right to remain employed by or in service to the Corporation or any Subsidiary, interferes in any way with the right of the Corporation or any Subsidiary at any time to terminate such employment or services, or affects the right of the Corporation or any Subsidiary to increase or decrease the Grantee’s other compensation or benefits.  Nothing in this paragraph, however, is intended to adversely affect any independent contractual right of the Grantee under any written employment agreement with the Corporation.

 

5.      No Stockholder Rights.  The Stock Units are bookkeeping entries only.  The Grantee shall have no rights as a stockholder of the Corporation, including dividend rights and voting rights, with respect to the Stock Units or any shares of Common Stock issuable in respect of such Stock Units until such shares of Common Stock are actually issued to and held of record by the Grantee.  No adjustments will be made for dividends or other rights of a holder for which the record date is prior to the date of issuance of the stock certificate evidencing the shares.

 

6.           Restrictions on Transfer.  Prior to the time the Stock Units are vested and paid, neither the Stock Units comprising the Award nor any interest therein or amount payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily, other than by will or the laws of descent and distribution.

 

7.           Timing and Manner of Payment of Stock Units.  Vested Stock Units subject to the Award Agreement shall be paid in an equivalent number of shares of Common Stock, subject to the tax withholding provisions of Section 10 hereof, subject to adjustment as provided in Section 6.2(a) of the Plan, and provided that no payment will be made until the Committee has certified that the corresponding performance vesting criteria have been attained.  Such payment shall be in complete satisfaction of such vested Stock Units.  2013-2014 Stock Units that vest will be paid in October, November or December of calendar year 2014.  2013-2015 Stock Units that vest will be paid in October, November or December of calendar year 2015.  The Grantee or any other person entitled under the Plan to receive such shares shall deliver to the Corporation any representations or other documents or assurances required pursuant to Section 6.4 of the Plan.

 

8.           Effect of Termination of Employment; Termination of Stock Units.  The Grantee’s Stock Units shall, except as otherwise expressly provided below, automatically terminate and be forfeited to the extent such units have not actually been paid on or before the first date the Grantee is no longer employed by the Corporation or one of its Subsidiaries, regardless of the reason for the termination of the Grantee’s employment, whether with or without cause, voluntarily or involuntarily.  The Grantee’s 2013-2014 Stock Units shall automatically be deemed to have terminated and been forfeited as of the end of the 2013-2014 Performance Period to the extent that they do not vest with respect to or during the 2013-2014 Performance Period.  The Grantee’s 2013-2015 Stock Units shall automatically be deemed to have terminated and been forfeited as of the end of the 2013-2015 Performance Period to the extent that they do not vest with respect to or during the 2013-2015 Performance Period.  The Grantee shall have no further rights with respect to any Stock Units that terminate or are forfeited.  If the Grantee is employed by a Subsidiary and that entity ceases to be a Subsidiary, such event shall be deemed to be a termination of employment of the Grantee for purposes of the Award Agreement, unless the Grantee otherwise continues to be employed by the Corporation or another of its Subsidiaries following such event.

 

(a)      Retirement, Death and Disability in 2013-2014 Performance Period.  In the event that the Grantee ceases to be employed by the Corporation or one of its Subsidiaries during the 2013-2014 Performance Period and such termination of employment is due to the Grantee’s death, Total Disability, or Retirement:

 

	
  

	
·

	
the number of 2013-2014 Stock Units shall be pro-rated based on the ratio of the number of calendar days in the 2013-2014 Performance Period that occurred while the Grantee was employed by the Corporation or one of its Subsidiaries (including the date of such termination of employment) to the total number of calendar days in the 2013-2014 Performance Period;

 

  

2

  

	
  

	
·

	
the number of 2013-2015 Stock Units shall be pro-rated based on the ratio of the number of calendar days in the 2013-2015 Performance Period that occurred while the Grantee was employed by the Corporation or one of its Subsidiaries (including the date of such termination of employment) to the total number of calendar days in the 2013-2015 Performance Period;

 

	
  

	
·

	
such pro-rated number of Stock Units shall remain outstanding and eligible to vest at the end of the corresponding performance period as though the Grantee’s employment had not terminated.

 

(b)      Retirement, Death and Disability in 2013-2015 Performance Period but after the conclusion of the 2013-2014 Performance Period.  In the event that the Grantee ceases to be employed by the Corporation or one of its Subsidiaries during the 2013-2015 Performance Period, but after the conclusion of the 2013-2014 Performance Period, and such termination of employment is due to the Grantee’s death, Total Disability, or Retirement:

 

	
  

	
·

	
the 2013-2014 Stock Units shall be paid (to the extent the related performance vesting conditions were satisfied and such units had not previously been paid) as though the Grantee’s employment had not terminated;

 

	
  

	
·

	
the number of 2013-2015 Stock Units shall be pro-rated based on the ratio of the number of calendar days in the 2013-2015 Performance Period that occurred while the Grantee was employed by the Corporation or one of its Subsidiaries (including the date of such termination of employment) to the total number of calendar days in the 2013-2015 Performance Period;

 

	
  

	
·

	
such pro-rated number of Stock Units shall remain outstanding and eligible to vest at the end of the corresponding performance period as though the Grantee’s employment had not terminated.

 

(c)      Retirement, Death and Disability after 2013-2015 Performance Period.  In the event that the Grantee ceases to be employed by the Corporation or one of its Subsidiaries after the 2013-2015 Performance Period, and such termination of employment is due to the Grantee’s death, Total Disability, or Retirement:

 

	
  

	
·

	
the 2013-2014 Stock Units and 2013-2015 Stock Units shall be paid (to the extent the related performance vesting conditions were satisfied and such units had not previously been paid) as though the Grantee’s employment had not terminated.

 

(d)      Upon or Following Change in Control Event due to Retirement, Death, Disability, Without Cause or For Good Reason.  In the event that the Grantee ceases to be employed by the Corporation or one of its Subsidiaries upon or following a Change in Control Event, and such termination of employment is by the Corporation (or the Subsidiary that employs the Grantee, as the case may be) without Cause, or due to the Grantee’s death, Total Disability, Retirement, or a termination by the Grantee for Good Reason:

 

	
  

	
·

	
the 2013-2014 Stock Units and 2013-2015 Stock Units shall be paid (to the extent the related performance vesting conditions were satisfied and such units had not previously been paid) as though the Grantee’s employment had not terminated.

 

For purposes of the Award, “Cause” means the Grantee’s (1) willful and material failure to perform the duties of the Grantee’s employment with the Corporation and its Subsidiaries (other than any such failure due to the Grantee’s physical or mental illness), or the Grantee’s willful and material breach of the Grantee’s obligations to the Corporation or any of its Subsidiaries arising out of the Grantee’s employment, in each case following the Grantee’s receipt of written notice thereof from the Corporation; (2) engaging in willful and serious misconduct that has caused or is reasonably expected to result in material injury to the Corporation; (3) being convicted of, or entering a plea of guilty or nolo contendere to, a crime that constitutes a felony; (4) failure or inability to obtain or retain any governmental approval, license or authorization required to be obtained or retained by the Grantee in any jurisdiction in which the Corporation or one of its Subsidiaries does or proposes to do business, which failure has or would reasonably be expected to have a material detrimental effect on the Grantee’s ability to perform the duties of the Grantee’s employment; or (5) embezzlement, fraud or misappropriation of property or assets of the Corporation or any of its Subsidiaries; provided, however, that if the Grantee is a party to a written employment agreement with the Corporation on the Award Date that defines the term “cause,” then Cause for purposes of the Award shall have the meaning given to such term in such employment agreement.  The Committee, acting in its own discretion, will be responsible for determining whether particular conduct constitutes “Cause” for purposes of the Award.

 

  

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For purposes of the Award, “Good Reason” means the occurrence of any of the following after the Award Date without the Grantee’s express written consent: (1) a material reduction of the Grantee’s duties, position or responsibilities relative to the Grantee’s duties, position or responsibilities in effect immediately prior to such reduction; or (2) a material reduction by the Corporation of the Grantee’s rate of annual base salary or annual target bonus opportunity as in effect immediately prior to such reduction that is not based upon the Corporation’s standard annual competitive market review; provided, however, that any such occurrence shall not give rise to Good Reason unless, within 90 days after such occurrence is first known (or reasonably should have been known to exist) by the Grantee, the Grantee furnishes written notice to the Corporation of the Grantee’s intention to terminate employment due to such occurrence and the Corporation shall have failed to reasonably cure the circumstances promptly (and in no event more than 30 days after) its receipt of such notice; further provided, that if the Grantee is a party to a written employment agreement with the Corporation on the Award Date that defines the term “good reason” (or a substantially similar concept for purposes of determining whether Grantee has the right to additional severance benefits upon a termination of employment) then Good Reason for purposes of the Award shall have the meaning given to such term (or such substantially similar term, as the case may be) in such employment agreement.

 

For purposes of the Award, “Retirement” means that the Grantee ceases to be employed by the Corporation or one of its Subsidiaries on or after attaining age 65 with at least ten (10) years of employment with the Corporation or one of its Subsidiaries.

 

For purposes of the Award, “Total Disability” has the meaning given to such term in the Plan.

 

For purposes of clarity, clause (d) above, if applicable, controls over clauses (a), (b) and (c) above.  In addition, the termination of employment rules set forth in this Award Agreement control in the event of any conflict or inconsistency with any employment agreement to which the Grantee may be a party with the Corporation or any of its Subsidiaries.

 

9.           Adjustments Upon Specified Events; Change in Control Events.  Upon the occurrence of certain events relating to the Corporation’s stock contemplated by Section 6.2(a) of the Plan, the Committee will make adjustments if appropriate in the number of Stock Units contemplated hereby and the number and kind of securities that may be issued in respect of the Award.  Sections 6.2(b) and (c) of the Plan shall not apply with respect to the Award, but the Award is subject to adjustment in connection with a Change in Control Event as follows:

 

	
  

	
·

	
If a Change in Control Event occurs after the 2013-2015 Performance Period, the 2013-2014 Stock Units and 2013-2015 Stock Units shall be paid (to the extent the related performance vesting conditions were satisfied and such units had not previously been paid) as otherwise provided.

 

	
  

	
·

	
If a Change in Control Event occurs after the 2013-2014 Performance Period but during the 2013-2015 Performance Period, and in connection with such change in control event the Corporation ceases to exist or ceases to exist as a public company with respect to its Common Stock, the 2013-2014 Stock Units shall be paid (to the extent the related performance vesting conditions were satisfied and such units had not previously been paid) as otherwise provided, but the 2013-2015 Stock Units shall be adjusted as provided in the next sentence.  In such circumstances: (A) the number of 2013-2015 Stock Units shall be determined as though the 2013-2015 Performance Period ended as of the Change in Control Event, the EPS performance condition for the 2013-2015 Performance Period set forth on Exhibit A attached hereto shall be deemed satisfied at the target/100% level, and TSR performance modifications shall be determined based on actual TSR performance for such shortened period; and (B) the number of 2013-2015 Stock Units so determined will vest on the last day of the scheduled 2013-2015 Performance Period (without it being shortened due to the occurrence of the Change in Control Event), subject to the Grantee’s continued employment by the Corporation or one of its Subsidiaries through that date and subject to Section 8.

 

  

4

  

	
  

	
·

	
If a Change in Control Event occurs during the 2013-2014 Performance Period but following the first two quarters of the Corporation’s 2013 fiscal year, and in connection with such change in control event the Corporation ceases to exist or ceases to exist as a public company with respect to its Common Stock, the 2013-2015 Stock Units shall be adjusted as provided in the immediately preceding paragraph and the 2013-2014 Stock Units shall be adjusted as provided in the next sentence.  In such circumstances: (A) the number of 2013-2014 Stock Units shall be determined as though the 2013-2014 Performance Period ended as of the Change in Control Event, the EPS performance condition for the 2013-2014 Performance Period set forth on Exhibit A attached hereto shall be deemed satisfied at the target/100% level, and TSR performance modifications shall be determined based on actual TSR performance for such shortened period; and (B) the number of 2013-2014 Stock Units so determined will vest on the last day of the scheduled 2013-2014 Performance Period (without it being shortened due to the occurrence of the Change in Control Event), subject to the Grantee’s continued employment by the Corporation or one of its Subsidiaries through that date and subject to Section 8.

 

	
  

	
·

	
If a Change in Control Event occurs during the first two quarters of the Corporation’s 2013 fiscal year, and in connection with such change in control event the Corporation ceases to exist or ceases to exist as a public company with respect to its Common Stock, the performance-based vesting conditions of Exhibit A attached hereto shall not apply to the Award, and instead the Total Number of Stock Units Subject to Award (with no performance modifications taken into account) will be subject to a time-based vesting schedule as follows:  the 2013-2014 Stock Units will vest on the last day of the 2013-2014 Performance Period, subject to the Grantee’s continued employment by the Corporation or one of its Subsidiaries through that date and subject to Section 8, and the 2013-2015 Stock Units will vest on the last day of the 2013-2015 Performance Period, subject to the Grantee’s continued employment by the Corporation or one of its Subsidiaries through that date and subject to Section 8.

 

10.           Tax Withholding.  Subject to Section 6.5 of the Plan, upon any distribution of Common Stock in respect of the Award, the Corporation shall, to the extent it is legally permitted to do so, automatically reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of whole shares, valued at their then Fair Market Value, to satisfy any withholding obligations of the Corporation or its Subsidiaries with respect to such distribution of shares at the minimum applicable withholding rates unless the Grantee has made other arrangements approved by the Committee to provide for such withholding.  In the event that the Corporation cannot legally satisfy such withholding obligations by such reduction of shares, or in the event of a cash payment or any other withholding event in respect of the Award, the Corporation (or a Subsidiary) shall be entitled to require a cash payment by or on behalf of the Grantee and/or to deduct from other compensation payable to the Grantee any sums required by federal, state or local tax law to be withheld with respect to such distribution or payment.

 

11.           Notices.  Any notice to be given under the Award Agreement, the Stock Plan System or the Plan shall be in writing and addressed to the Corporation at its principal office to the attention of the Secretary, and to the Grantee at the Grantee’s last address reflected on the Corporation’s records, or at such other address as either party may hereafter designate in writing to the other.  Any such notice shall be given only when received, but if the Grantee is no longer an employee of the Corporation or one of its Subsidiaries, shall be deemed to have been duly given by the Corporation when enclosed in a properly sealed envelope addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government.

 

  

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12.           Plan.  The Award and all rights of the Grantee under the Award Agreement are subject to the terms and conditions of the Plan, incorporated herein by this reference.  The Grantee agrees to be bound by the terms of the Plan and the Award Agreement.  The Grantee acknowledges receiving, reading and understanding the Plan, the Prospectus for the Plan and the Award Agreement.  Unless otherwise expressly provided in other sections of the Award Agreement, provisions of the Plan that confer discretionary authority on the Board or the Committee do not (and shall not be deemed to) create any rights in the Grantee unless such rights are expressly set forth herein or are otherwise in the sole discretion of the Board or the Committee so conferred by appropriate action of the Board or the Committee under the Plan after the date hereof.

 

13.           Entire Agreement.  The Award Agreement and the Plan together constitute the entire agreement and supersede all prior understandings and agreements, written or oral, of the parties hereto with respect to the subject matter hereof, with the exception of the Invention and Secrecy Agreement and the Confidentiality and Invention Agreement.  The Plan and the Award Agreement may be amended pursuant to Section 6.6 of the Plan.  Such amendment must be in writing and signed by the Corporation.  The Corporation may, however, unilaterally waive any provision hereof in writing to the extent such waiver does not adversely affect the interests of the Grantee hereunder, but no such waiver shall operate as or be construed to be a subsequent waiver of the same provision or a waiver of any other provision hereof.

 

14.           Section Headings.  The section headings of the Award Agreement are for convenience of reference only and shall not be deemed to alter or affect any provision hereof.

 

15.           Governing Law and Venue.  The Award Agreement and the rights of the parties hereunder and with respect to the Award shall be governed by and construed and enforced in accordance with the laws of the State of Nevada without regard to conflict of law principles thereunder.  The parties, as well as any of their successors, employees, or representatives, irrevocably agree to the exclusive jurisdiction of the Courts of the State of Nevada (or such judicial district of a court of the United States as shall include same) for the determination of all matters arising hereunder or with respect to the Award.

 

16.           Construction.  It is intended that the terms of the Award will not result in the imposition of any tax liability pursuant to Section 409A of the Code.  It is further intended that the Award will qualify as performance-based compensation (to the extent possible) within the meaning of Section 162(m) of the Code.  The Award Agreement shall be construed and interpreted consistent with the foregoing intents.

 

17.           Restrictive Covenants. In consideration of the granting of the Award, the Grantee agrees that:

 

(a)      For a period of one (1) year after the Grantee ceases to be employed by the Corporation or a Subsidiary, the Grantee will not engage on behalf of any person, company or entity, in any activities worldwide, directly or indirectly, relating to the development, design, manufacture, sale, or distribution of gaming devices, gaming systems, or gaming content, or other products or services competitive with or similar to products or services offered by, developed by, designed by, manufactured by, sold by or distributed by the Corporation or any of its Subsidiaries.

 

(b)      Both during and after the termination of the Grantee’s employment with the Corporation or a Subsidiary, the Grantee shall keep confidential and not disclose to other persons or entities, or use for any purpose other than as required in the course of the Grantee’s employment with the Corporation or a Subsidiary, any and all Confidential Information.  For these purposes, “Confidential Information” shall include any information or material, regardless of how it is stored or disseminated, which is not generally known or available to the public, and which (i) is generated or collected by or utilized in the operation of the Corporation or a Subsidiary and relates to the actual or anticipated business or research or development of the Corporation or a Subsidiary; or (ii) is suggested by or results from any task assigned to the Grantee by the Corporation or a Subsidiary or work performed by the Grantee for or on behalf of the Corporation or a Subsidiary.  Confidential information shall not be considered generally known to the public if revealed improperly to the public by the Grantee or others without the Corporation’s express written consent and/or in violation of an obligation of confidentiality to the Corporation or a Subsidiary.  Examples of Confidential Information include, but are not limited to, customer lists, customer information, customer contacts, the identity of suppliers, pricing, margins, business plans, marketing plans, financial data, business and customer strategy, techniques, technical know-how, formulae, processes, designs, prototypes, models, software, solutions, discussion guides, employee performance, and research and development.  The confidentiality obligations herein shall not prevent the Grantee from divulging Confidential Information or trade secrets by order of court or agency of competent jurisdiction; however, the Grantee shall promptly inform the Corporation of any such situations and shall take such reasonable steps to prevent disclosure of  Confidential Information or trade secrets until Corporation has been informed of such requested disclosure and the Corporation has had an opportunity to respond to the court or agency.

 

  

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(c)      When the Grantee’s employment with the Corporation or a Subsidiary ends for any reason, or upon the request of the Corporation at any time, the Grantee will deliver promptly to the Corporation all property of the Corporation or a Subsidiary in the Grantee’s possession, custody or control, including, but not limited to, all computers or other Corporation-owned equipment, electronic data, notes, books, records, files, correspondence, drawings, software, program discs and other materials relating to the Corporation’s business, products and projects, including all copies thereof.

 

(d)      The Grantee recognizes that the Corporation’s business interests may be irreparably harmed by any violation of this Section of these Terms or threatened violation of this Section such that the Corporation shall, in addition to all other remedies available at law or in equity, be entitled to injunctive relief.  In the event the Corporation successfully enforces any part of this Section 17 through legal proceedings, the Grantee will pay the Corporation’s costs and attorneys’ fees.

 

(e)      Should any portion of this Section 17 be determined to be unenforceable, that portion may be severed or modified by a court of competent jurisdiction, to permit enforcement of the remainder of the Section to the fullest extent possible.  Any court enforcing the Award Agreement is specifically authorized to modify the restrictions contained in the Award Agreement in order to make it enforceable.  Any waiver by the Corporation of a breach of any provision of the Award Agreement shall not operate or be construed as a waiver of any subsequent breach by the Corporation.  No waiver shall be valid unless in writing and signed by an authorized officer of the Corporation.

 

18.           Clawback Policy.  The Stock Units are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of the Stock Units or any shares of Common Stock or other cash or property received with respect to the Stock Units (including any value received from a disposition of the shares acquired upon payment of the Stock Units).

 

19.      No Advice Regarding Grant.  The Grantee is hereby advised to consult with his or her own tax, legal and/or investment advisors with respect to any advice the Grantee may determine is needed or appropriate with respect to the Stock Units (including, without limitation, to determine the foreign, state, local, estate and/or gift tax consequences with respect to the Award).  Neither the Corporation nor any of its officers, directors, affiliates or advisors makes any representation (except for the terms and conditions expressly set forth in this Award Agreement) or recommendation with respect to the Award.  Except for the withholding rights set forth in Section 10 above, the Grantee is solely responsible for any and all tax liability that may arise with respect to the Award.

 

YOUR ACCEPTANCE OF THE AWARD THROUGH THE STOCK PLAN SYSTEM MAINTAINED BY THE CORPORATION OR ITS DESIGNEE CONSTITUTES YOUR AGREEMENT TO THE TERMS AND CONDITIONS HEREOF, AND THAT THE AWARD IS GRANTED UNDER AND GOVERNED BY THE TERMS AND CONDITIONS OF THE PLAN AND THE AWARD AGREEMENT.

 

* * * * *

 

  

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EXHIBIT A

 

PERFORMANCE-BASED AND TIME-BASED VESTING REQUIREMENTS

 

This Exhibit A is subject to the other provisions of the Terms (including, without limitation, Sections 4, 8 and 9 of the Terms).

 

The percentage of 2013-2014 Stock Units subject to the Award that vest will be based on the Corporation’s Average EPS Growth and TSR Percentile for the 2013-2014 Performance Period in accordance with the following table.  The percentage of 2013-2015 Stock Units subject to the Award that vest will be based on the Corporation’s Average EPS Growth and TSR Percentile for the 2013-2015 Performance Period in accordance with the following table.

 

	
Average EPS Growth Payout Scale

	
TSR Percentile Modifier Scale

	
Average EPS Growth for the Performance Period

	
Payout Percentage

	
TSR Percentile for the Performance Period

	
Modifier Percentage

	
Less than 5%

	
0%

	
Less than 25%

	
-33%

	
5%

	
25%

	
25%

	
-33%

	
6%

	
40%

	
30%

	
-26%

	
7%

	
55%

	
35%

	
-20%

	
8%

	
70%

	
40%

	
-13%

	
9%

	
85%

	
45%

	
-7%

	
10%

	
100%

	
50%

	
0%

	
11%

	
110%

	
55%

	
7%

	
12%

	
120%

	
60%

	
13%

	
13%

	
130%

	
65%

	
20%

	
14%

	
140%

	
70%

	
26%

	
15% or Greater

	
150%

	
75% or Greater

	
33%

 

For Average EPS Growth or TSR Percentile results between two points in the preceding table, the actual payout percentage shall be determined on a straight-line bases between the two closest points based on the actual Average EPS Growth or TSR Percentile performance achieved (with the actual payout percentage in each case rounded down to the nearest whole percentage).

 

Determination.  As soon as practicable (and in all events within two and one-half months) after the last day of each applicable Performance Period, the Committee shall determine performance for the corresponding Performance Period and the extent (if any) to which Stock Units corresponding to that Performance Period vested.  The number of Stock Units that vest for a Performance Period shall be determined as follows: (1) first, the number of Stock Units corresponding to that Performance Period (the 2013-2014 Stock Units or the 2013-2015 Stock Units, as the case may be) will be multiplied by the Average EPS Growth payout percentage determined pursuant to the preceding table (based on the Average EPS Growth for that Performance Period); and (2) increasing or decreasing such number of Stock Units by a number of Stock Units determined by multiplying the number of Stock Units obtained pursuant to step (1) by the TSR Percentile modifier percentage determined pursuant to the preceding table (based on the TSR Percentile for that Performance Period).  Such determinations by the Committee shall be final and binding.

 

Defined Terms.  For purposes of the Award, the following definitions will apply.

 

“TSR Percentile” means the percentile ranking of the Corporation’s TSR among the TSRs for the Corporation Peer Group members for the corresponding Performance Period.

 

“EPS” means the Corporation’s earnings per share for a particular fiscal year as determined by the Corporation in accordance with its standard practices and procedures and reflected in its financial statements for that fiscal year, subject to the adjustments described below.

 

  

  

  

 

“Average EPS Growth” for the corresponding Performance Period means the average of the Corporation’s annual EPS growth grates for each fiscal year in the Performance Period.

 

“Beginning Price” means, with respect to the Corporation and any other Corporation Peer Group member, the average of the closing market prices of  such company’s common stock on the principal exchange on which such stock is traded for the thirty (30) consecutive trading days ending with the first day of the corresponding Performance Period.  As to a stock which goes ex-dividend during such 30-day period, the closing market prices as to such stock for the portion of the 30-day period preceding the ex-dividend date shall be equitably adjusted to exclude the amount of the related dividend.

 

“Corporation Peer Group” means the Corporation and each of the following companies:

 

	Activision Blizzard, Inc. 

Adobe Systems Incorporated

Juniper Networks, Inc.

Intuit Inc.

Electronic Arts Inc.

Lexmark International, Inc.

NVIDIA Corporation

Alliance Data Systems Corporation

Diebold, Incorporated

IAC/InterActiveCorp

Autodesk, Inc.

BMC Software, Inc.

Coinstar, Inc.

	Akamai Technologies, Inc. 

Cadence Design Systems, Inc.

MICROS Systems, Inc.

Mentor Graphics Corporation

Scientific Games Corporation

Bally Technologies, Inc.

Take-Two Interactive Software, Inc.

WMS Industries Inc.

Aristocrat Leisure

SHFL entertainment, Inc.

 

The Corporation Peer Group shall be subject to adjustment by the Committee for changes that occur prior to the end of the applicable Performance Period as follows:  In the event of a merger or other business combination of two Corporation Peer Group members (including, without limitation, the acquisition of one Corporation Peer Group member, or all or substantially all of its assets, by another Corporation Peer Group member), the surviving, resulting or successor entity, as the case may be, shall continue to be treated as a member of the Corporation Peer Group, provided that the common stock (or similar equity security) of such entity is listed or traded on a national securities exchange as of the end of the applicable Performance Period.  In the event that the common stock (or similar equity security) of a Corporation Peer Group member is otherwise not listed or traded on a national securities exchange at the end of the applicable Performance Period, such entity shall be excluded from the Corporation Peer Group.

 

“Ending Price” means, with respect to the Corporation and any other Corporation Peer Group member, the average of the closing market prices of such company’s common stock on the principal exchange on which such stock is traded for the thirty (30) consecutive trading days ending with the last day of the applicable Performance Period.  As to a stock which goes ex-dividend during such 30-day period, the closing market prices as to such stock for the portion of the 30-day period preceding the ex-dividend date shall be equitably adjusted to exclude the amount of the related dividend.

 

“Performance Period” means either the 2013-2014 Performance Period or the 2013-2015 Performance Period, as applicable.

 

“TSR” means total shareholder return and shall be determined with respect to the Corporation and any other Corporation Peer Group member by dividing: (a) the sum of (i) the difference obtained by subtracting the applicable Beginning Price from the applicable Ending Price plus (ii) all dividends and other distributions for which the ex-dividend date (or similar date in the case of a distribution other than a dividend) related to such dividend or other distribution occurs during the applicable Performance Period by (b) the applicable Beginning Price.  Any non-cash distributions shall be ascribed such dollar value as may be determined by or at the direction of the Committee.

 

  

2

  

 

Adjustments.  For purposes of determining EPS under the Award, the Committee shall adjust (without duplication) the Corporation’s EPS (as determined before giving effect to such adjustments) for the applicable fiscal year for the following items:

 

	
  

	
(a)        increased or decreased to eliminate the financial statement impact of employee retention and earn-out costs that result from mergers and acquisitions;

 

	
  

	
(b)        increased or decreased to eliminate the financial statement impact of divestitures;

 

	
  

	
(c)        increased or decreased to eliminate the financial statement impact of any new changes in accounting standards announced during the year that are required to be applied during the year in accordance with U.S. Generally Accepted Accounting Principles;

 

	
  

	
(d)       increased or decreased to eliminate the financial impact for the dispositions or impairments of long-lived assets, excluding gaming operations equipment;

 

	
  

	
(e)       increased or decreased to eliminate the financial impact related to early extinguishment of debt and debt related instruments; and

 

	
  

	
(f)      increased or decreased to eliminate the financial impact of natural disasters and related insurance recoveries.

 

The Committee’s determination of whether an adjustment is required, and the nature and extent of any such adjustment, shall be final and binding.

 

* * * * *

 

3aedc101.htm

Exhibit 10.1

 

ASSIGNMENT OF OIL AND GAS LEASES,

TERMINATION OF LEASE ACQUISITION AGREEMENT AND

OPERATING AGREEMENT, AND DISCLAIMER

This Assignment of Oil and Gas Leases, Termination of Lease Acquisition Agreement and Operating Agreement, and Disclaimer (“Agreement”) dated as of 21 January, 2013 is between American Energy Development Corp., a Nevada corporation (“Assignor”), whose address is 1230 Avenue of the Americas, 7th Floor, New York, New York 10020, and Range Michigan LLC, a Wyoming limited liability company (“Assignee”), whose address is 504 Fremont Street, Thermopolis, Wyoming 82443 (collectively the “Parties”).

 

RECITALS

 

	
A.  

	
Assignor and Assignee entered into a Lease Acquisition Agreement (“LAA”) dated June 15, 2012,  and Joint Operating Agreement (“JOA”) dated March 31, 2012, wherein Assignor agreed to purchase an undivided forty-three and three-quarters percent (43.75%) of Assignee’s right, title and interest in and to certain leasehold estates created by the oil and gas leases described in Exhibit A (the “Leases”).

	
B.  

	
The effective time of the LAA was 7:00 A.M. Eastern Time on June 15, 2012,  and JOA was 7:00 A.M. Eastern Time on March 31, 2012.

	
C.  

	
The LAA provided for an Area of Mutual Interest (“AMI”).

	
D.  

	
Assignor did not make all payments as required by Section 2.1 of the LAA.

	
E.  

	
Assignor and Assignee have agreed to terminate their contractual relationship as provided for herein.

 

ASSIGNMENT

	
1.  

	
For and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration, the  receipt and sufficiency whereof is hereby acknowledged, Assignor assigns and conveys any and all interest it has in, to, and under the Leases (oil and gas leases described in Exhibit A) any permits, licenses, concessions, or similar interests therein, as well as any of Assignor’s interest in any wells located on the Property (collectively referred to as the “Oil and Gas Interests”) to Assignee, regardless of whether Assignor’s interest in the Property is of record in the Register of Deeds.

	
2.  

	
This Assignment includes all of Assignor’s interest in the Property derived from the (i) LAA, and (ii) the JOA.

	
3.  

	
This Assignment is effective as of 0800 A.M. 22nd of January 2013 (“Effective Time”).  After this time, Assignor acknowledges it has no right or claim to any interest in the Leases and no interest in the AMI or production therefrom.

	
4.  

	
As of the Effective Time of this Assignment, Assignee acknowledges that Assignor has no further, prospective liability or responsibility as to any costs or expenses associated with the Leases or AMI.

 

TO HAVE AND TO HOLD the Oil and Gas Interests unto Assignee, its successors and assigns, forever.

 

So long as authorized by applicable law, Assignor agrees to execute, acknowledge and deliver all and every such further acts, conveyances, transfer orders, division orders, notices, releases and acquittances and such other instruments as may be necessary or appropriate more fully to assure Assignee, or its successors or assigns, all of the properties, rights, titles, interests, estates, remedies, powers and privileges by this instrument conveyed and assigned, or otherwise vested in Assignee.  Without limiting the foregoing, Assignor agrees to execute any and all form assignments of individual state oil and gas leases comprising any portion of the Oil and Gas Interests as may be required by state law or regulation, any and all such individual assignments to constitute, as to such individual leases, one and the same assignment as is made herein.

 

This Assignment shall inure to the benefit of and be binding upon Assignor and Assignee and their respective successors.  This Assignment is made without representation or warranty of title, express or implied.

  

1

  

TERMINATION

 

	
1.  

	
Assignor and Assignee agree that the LAA and JOA are terminated in effectiveness as of January 23rd, 2013.  The AMI established in Article 9 of the LAA is terminated.  (The Parties acknowledge all references to “T.5 N.” in the LAA and JOA should have stated “T. 25 N.”)

	
2.  

	
The Parties acknowledge the joint account is considered current and closed.  Each acknowledges the other has no indebtedness to and has no claim for compensation or reimbursement from the other.

DISCLAIMER

	
1.  

	
Assignor disclaims any present ownership in, or right to receive an ownership interest in the future, in the Leases, the AMI lands, and in the State Grant 1-31B well (Permit No. 55028).

	
2.  

	
Assignor disclaims any interest in or right to copies of any seismic investigations, test results or reports generated or received while the LAA and JOA were in effect.

 

MISCELLANEOUS

 

	
1.  

	
Notices. All notices and other communications under this Agreement shall be in writing and delivered (a) personally, (b) by registered or certified mail with postage prepaid, and return receipt requested, (c) by nationally recognized commercial overnight courier service with charges prepaid, or (d) by facsimile transmission, directed to the intended recipient as follows:

If to Assignee:

 

Range Michigan LLC

504 Fremont Street

Thermopolis, WY 82443

Attn:  JB Roden

Telephone: (307) 864-3754

Facsimile:  (307) 864-3756

If to Assignor:

American Energy Development Corp.

1230 Avenue of the Americas, 7th Floor

New York, NY  10020

Attn: Herold Ribsskog

Telephone:  (855) 645-2332

Facsimile:  ___________________

2. Amendments.  Except for waivers specifically provided for in this Agreement, this Agreement may not be amended nor any rights hereunder waived except by an instrument in writing signed by the Party to be charged with such amendment or waiver and delivered by such Party to the Party claiming the benefit of such amendment or waiver.

 

3. Counterparts/Fax Signatures.  This Agreement may be executed by Assignor and Assignee in any number of counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same instrument.  Fax or .pdf signatures shall be considered binding.

 

  

2

  

4. Governing Law; Waiver of Jury Trial.  This Agreement and the transactions contemplated hereby shall be construed in accordance with, and governed by, the Laws of the State of Michigan, without regard to its conflicts of Laws rules.  EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.

 

5. Entire Agreement.  This Agreement constitutes the entire understanding among the Parties, their respective partners, members, trustees, shareholders, officers, directors and employees with respect to the subject matter hereof, superseding all negotiations, prior discussions and prior agreements and understandings relating to such subject matter.

 

6. Binding Effect.  This Agreement shall be binding upon, and shall inure to the benefit of, the Parties hereto, and their respective successors and assigns.

 

7. Authority.  Each Party represents that it has the full power and authority to enter into this Agreement.

 

The Parties have executed this Agreement effective as of the Effective Time.

 

	
 

 

ASSIGNOR:

 

 

AMERICAN ENERGY DEVELOPMENT CORP.

 

 

By:         /s/ Herold Ribsskog

Herold Ribsskog

Its: Chief Executive Officer

 

	  	
 

 

ASSIGNEE:

 

 

RANGE MICHIGAN, LLC

 

By: Range Exploration Partners LLC

Its:  Manager

 

By: /s/ Frode L. Aschim

      Frode L. Aschim

      Its: Manager

 

	  	  	  

  

3

  

ACKNOWLEDGMENTS

STATE OF SOUTH CAROLINA    )

                                                            ) ss.

COUNTY OF BEAUFORT             )

The foregoing instrument was acknowledged before me this 5th day of February, 2013, by Herold Ribsskog, as Chief Executive Officer of American Energy Development Corp., a Nevada corporation, on behalf of the Corporation.

  /s/ Zyad Khalil                                        

Zyad Khalil, Notary Public

Beaufort County, South Carolina

Acting in Beaufort County, South Carolina

My Commission Expires: April 30, 2017

  

4

  

STATE OF Wyoming                            )

                                                                ) ss.

COUNTY OF Hot Springs                    )

The foregoing instrument was acknowledged before me this 5th day of February, 2013, by Frode Aschim, as Managing Partner of Range Michigan, LLC, a Wyoming limited liability company, on behalf of the Corporation.

     s/ Sheri A. Bravenec                         

Sheri A. Bravenec, Notary Public

Hot Springs County, Wyoming

Acting in Hot Springs County, Wyoming

My Commission Expires: June 4, 2013

Prepared by:

Sheri Bravenec

Range Michigan LLC

P O Box 726

504 Fremont Street

Thermopolis, WY 82443

 

 

5

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