Change in Control Agreement - Autotote Corp.
AUTOTOTE CORPORATION
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Change in Control Agreement for _______________
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Page
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1. Definitions...................................................... 1
2. Term of Agreement................................................ 3
3. Entitlement to Severance Benefits................................ 3
4 Acceleration of Vesting of Options............................... 6
5. Non-Solicitation; Non-Disclosure; Executive Cooperation; and Non-
Disparagement.................................................... 6
6. Remedies......................................................... 7
7. Governing Law; Arbitration....................................... 8
8. Miscellaneous.................................................... 9
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THIS AGREEMENT by and between AUTOTOTE CORPORATION, a Delaware corporation
(the "Company"), and _____________ ("Executive") shall become effective as of
November 1, 1997 (the "Effective Date").
W I T N E S S E T H :
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WHEREAS, Executive is an employee of the Company serving in an executive
capacity;
WHEREAS, the Board of Directors of the Company (the "Board") believes it is
necessary and desirable that the Company be able to rely upon Executive to
continue serving in his or her position in the event of a potential or actual
change in control of the Company or otherwise;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and Executive (individually a
"Party" and together the "Parties") agree as follows:
1. DEFINITIONS.
(a) "Cause" shall mean Executive's gross misconduct (as defined herein) or
willful and material breach of Section 5 of this Agreement. For purposes
of this definition, "gross misconduct" shall mean (A) a felony conviction
in a court of law under applicable federal or state laws, or (B) willfully
engaging in one or more acts, or willfully omitting to act in accordance
with Executive's material duties, including acts and omissions that
constitute gross negligence in the performance of Executive's material
duties. For purposes of this Agreement, an act or failure to act on
Executive's part shall be considered "willful" if it was done or omitted to
be done by him not in good faith, and shall not include any act or failure
to act resulting from any incapacity of Executive. The foregoing
notwithstanding, Executive may not be terminated for Cause unless and until
there shall have been delivered to him, within six months after the
Compensation and Stock Option Committee of the Board (the "Committee") (A)
had knowledge of conduct or an event allegedly constituting Cause and (B)
had reason to believe that such conduct or event could be grounds for
Cause, a copy of a resolution duly adopted by a majority affirmative vote
of the membership of the Committee at a meeting of the Committee called and
held for such purpose (after giving Executive reasonable notice specifying
the nature of the grounds for such termination
<PAGE>
and not less than 30 days to correct the acts or omissions complained of,
if correctable, and affording Executive the opportunity, together with his
counsel, to be heard before the Committee) finding that, in the good faith
opinion of the Committee, Executive was guilty of conduct constituting
Cause under this Agreement. Notwithstanding the foregoing, Executive shall
not be considered to have terminated for Good Reason unless Executive shall
have provided the Company with written notice of the specific reasons for
such termination within ninety (90) days after he has knowledge of the
event that is the basis for such termination and affords Company at least
thirty (30) days to cure the alleged conduct.
(b) A "Change in Control" shall be deemed to have occurred if:
(i) any "person" as defined in Section 3(a)(9) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and as used in Sections
13(d) and 14(d) thereof, including a "group" as defined in Section
13(d) of the Exchange Act but excluding the Company and any subsidiary
and any employee benefit plan sponsored or maintained by the Company
or any subsidiary (including any trustee of such plan acting as
trustee), directly or indirectly, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of securities of the
Company representing at least 40% of the combined voting power of the
Company's then-outstanding securities;
(ii) the stockholders of the Company approve a merger, consolidation,
recapitalization, or reorganization of the Company, or a reverse stock
split of any class of voting securities of the Company, or the
consummation of any such transaction if stockholder approval is not
obtained, other than any such transaction which would result in at
least 60% of the total voting power represented by the voting
securities of the Company or the surviving entity outstanding
immediately after such transaction being beneficially owned by persons
who together beneficially owned at least 80% of the combined voting
power of the voting securities of the Company outstanding immediately
prior to such transaction; provided that, for purposes of this
paragraph (ii), such continuity of ownership (and preservation of
relative voting power) shall be deemed to be satisfied if the failure
to meet such 60% threshold is due solely to the acquisition of voting
securities by an employee benefit plan of the Company or such
surviving entity or of any subsidiary of the Company or such surviving
entity;
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(iii) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of its assets (or any
transaction having a similar effect); or
(iv) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, together with any new
director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described
in paragraph (i), (ii), or (iii) hereof) whose election by the Board
or nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved
(the "Continuing Directors"), cease for any reason to constitute at
least a majority of the Board.
(c) "Disability" means the failure of Executive to render and perform the
services required of him for a total of 180 days or more during any
consecutive 12 month period, because of any physical or mental incapacity
or disability as determined by a physician or physicians selected by the
Company and reasonably acceptable to Executive unless, within 30 days after
Executive has received written notice from the Company of a proposed
termination due to such absence, Executive shall have returned to the full
performance of his duties and shall have presented to the Company a written
certificate of Executive's good health prepared by a physician selected by
the Company and reasonably acceptable to Executive.
(d) "Good Reason" shall mean, without Executive's prior written consent, (A) a
material change, adverse to Executive, in Executive's positions, nature of
responsibilities, or authority within the Company, except if occurring in
connection with the termination of Executive's employment for Cause,
Disability, Retirement, as a result of Executive's death, or as a result of
action by Executive, (B) a decrease in annual base salary or other
compensation opportunities or a material decrease in the aggregate benefits
from the level provided to Executive immediately prior to the date of the
Change in Control, (C) a relocation of Executive's principal place of
employment by more than 35 miles from the latest location of such principal
place of employment prior to the date of the Change in Control, (D) any
failure to secure the agreement of any successor corporation or other
entity to the Company to fully assume the Company's obligations under this
Agreement in a form reasonably acceptable to Executive, and (E) any attempt
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by the Company to terminate Executive for Cause which does not result in a
valid termination for Cause, except in the case that valid grounds for
termination for Cause exist but are corrected as permitted under Section
1(a).
(e) "Plans" shall mean the plans, programs, and arrangements,
including agreements and documents thereunder and including any agreement solely
with Executive, providing or relating to compensation or benefits.
(f) "Retirement" shall mean Executive's termination of employment with
the Company at or after attaining age 65 or, if early retirement is requested by
Executive and approved in advance by the Committee, Executive's early retirement
prior to age 65.
(g) "Term" shall have the meaning set forth in Section 2 below.
2. TERM OF AGREEMENT.
The term of this Agreement (the "Term") shall be the period commencing
on the Effective Date and ending on October 31, 2000 and any period of extension
of the Term in accordance with this Section 2. The Term shall be extended
automatically without further action by either party by one additional year
(added to the end of the Term) first on October 31, 2000 (extending the Term to
October 31, 2001) and on each succeeding October 31 thereafter, unless either
party shall have served written notice upon the other party prior to the April
30 preceding the date upon which such extension would become effective electing
not to extend the Term further as of the next extension date, in which case the
Term shall end at the later of the next October 31 or the date two years after
the latest Change in Control occurring on or before the next October 31.
3. ENTITLEMENT TO SEVERANCE BENEFITS.
(a) Change in Control Severance Benefits. In the event Executive's
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employment with the Company or any of its subsidiaries is terminated without
Cause, other than due to death, Disability or Retirement, or in the event
Executive terminates such employment for Good Reason, in either case at the time
of or within two years following a Change in Control, the Company will pay and
Executive will be entitled to receive the following:
(i) The unpaid portion of Executive's annual base salary at the rate
payable at the date of termination of employment, pro rated through
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such date of termination, will be paid in a cash lump sum;
(ii) Cash will be paid in a lump sum to Executive in an aggregate amount
equal to the sum of Executive's annual base salary at the rate payable
immediately prior to termination of employment plus the Severance
Annual Incentive Amount (as defined below) multiplied by 2, which
amount shall be reduced pro rata to the extent the number of full
months remaining until Executive attains age 65 is less than 18
months, and which amount will be further reduced (but not to less than
zero) by the amount of any severance payment or benefit provided apart
from this Agreement. For purposes of this Section 3(a)(ii) and
Section 3(a)(iv) below, the "Severance Annual Incentive Amount" shall
be the greater of (1) the average annual incentive compensation paid
to Executive for the three years immediately preceding the year of
termination or (2) the annual incentive compensation payable to
Executive upon achievement of the target level of performance for the
year of termination;
(iii) All vested, nonforfeitable amounts owing or accrued at the date of
termination of employment under any compensation and benefit Plans
(including any earned and vested annual incentive compensation) in
which Executive theretofore participated will be paid under the terms
and conditions of the Plans pursuant to which such compensation and
benefits were granted;
(iv) In lieu of any annual incentive compensation for the year in which
Executive's employment terminated, Executive will be paid a cash
amount equal to the Severance Annual Incentive Amount as defined in
Section 3(a)(ii) above, multiplied by a fraction the numerator of
which is the number of days Executive was employed in the year of
termination and the denominator of which is the total number of days
in the year of termination; provided, however, that payments under
this Section 3(a)(iv) shall be reduced (but not below zero) to the
extent it would duplicate a payment for the same year under Section
3(a)(iii);
(v) Stock options held by Executive at termination, if not then vested and
exercisable, will become fully vested and exercisable at the date of
such termination, and any such options which were granted on or after
the Effective Date or, if previously granted, were not "in the money"
as of the date
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hereof shall remain exercisable until the earlier of 36 months after
termination or the scheduled expiration date, and, in other respects,
all such options shall be governed by the Plans pursuant to which such
options were granted;
(vi) Deferred stock held by Executive at termination will become fully
vested and non-forfeitable, and shall be settled upon such
termination, without regard to any stated period of deferral otherwise
remaining in respect of such amounts;
(vii) All deferred compensation arrangements between Executive and the
Company or a subsidiary at the date of termination of employment
shall be paid or distributed, less applicable withholding taxes under
Section 3(d) as promptly as practicable following such date of
termination, without regard to any stated period of deferral otherwise
remaining in respect of such amounts, and the payment of such amounts
shall be deemed to fully settle such accounts;
(viii) Reasonable business expenses and disbursements incurred by
Executive prior to such termination of employment will be reimbursed
in accordance with policies applicable to Executive while still
employed; and
(ix) Executive shall continue to participate in all employee and executive
benefit Plans providing health, medical, and life insurance benefits
in which Executive was participating immediately prior to termination,
the terms of which allow Executive's continued participation, as if
Executive had continued in employment with the Company at the same
level of responsibility, for a period that shall extend until the
earliest of (A) the expiration of 18 months after termination, (B) the
date Executive attains age 65, or (C) the date, or dates, Executive
receives equivalent coverage and benefits under the plans, programs or
arrangements of a subsequent employer (such coverage and benefits to
be determined on a coverage-by-coverage, or benefit-by-benefit,
basis); provided that (X) if Executive is precluded from continuing
his or her participation in any Plan as provided in this clause (ix)
of this Section 3(a), Executive shall receive cash payments equal on
an after-tax basis to the cost to Executive of obtaining the benefits
provided under the Plan in which Executive is unable to participate
for the period specified in this clause (ix) of this Section 3(a), (Y)
such cost shall be deemed to be the lowest reasonable cost
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that would be incurred by Executive in obtaining such benefit on an
individual basis, and (Z) payment of such amounts shall be made
quarterly in advance;
provided, however, that Executive will be entitled to the benefit of any terms
of Plans applicable to Executive which are more favorable than those specified
in this Section 3(a); and provided further, if any payment or benefit under this
Section 3(a) is based on base salary or other level of compensation or benefits
at the time of termination and if a reduction in such base salary or other level
of compensation or benefit was the basis for Executive's termination for Good
Reason, then the base salary or other level of compensation in effect before
such reduction shall be used to calculate payments or benefits under this
Section 3(a). Except as otherwise expressly provided above, amounts payable
under this Section 3(a) will be paid as promptly as practicable after
termination of Executive's employment and in no event more than 15 days after
such termination.
(b) General Severance Benefits. In the event Executive's employment
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with the Company or any of its subsidiaries is terminated without Cause and
Executive is not entitled to any payment or benefit pursuant to Section 3(a)
above, the Company will pay and Executive will be entitled to receive the
following:
(i) The unpaid portion of Executive's annual base salary at the rate
payable at the date of termination of employment, pro rated through
such date of termination, will be paid in a cash lump sum;
(ii) Cash will be paid in a lump sum to Executive in an amount equal to the
Executive's annual base salary at the rate payable immediately prior
to termination of employment;
(iii) All vested, nonforfeitable amounts owing or accrued at the date of
termination of employment under any compensation and benefit Plans
(including any earned and vested annual incentive compensation) in
which Executive theretofore participated will be paid under the terms
and conditions of the Plans pursuant to which such compensation and
benefits were granted;
(iv) The Committee may, but is not required to, extend the period in which
any stock options held by Executive at termination shall remain
exercisable, and, in all other respects, all such options shall be
governed by the Plans pursuant to which such options were granted; and
<PAGE>
(v) Reasonable business expenses and disbursements incurred by Executive
prior to such termination of employment will be reimbursed in
accordance with policies applicable to Executive while still employed.
With the exception of the amount payable to Executive pursuant to Section
3(b)(iv) above, which will be paid after the end of the year in which
Executive's employment terminates in accordance with the Company's normal pay
practices with respect to annual incentive compensation, amounts payable under
this Section 3(b) will be paid as promptly as practicable after termination of
Executive's employment and in no event more than 15 days after such termination.
(c) No Mitigation. Executive shall not be required by this Agreement
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to seek other employment or otherwise to mitigate Executive's damages upon any
termination of employment.
(d) Offsets; Withholding. The amounts required to be paid by the
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Company to Executive pursuant to this Agreement shall not be subject to offset
other than with respect to any amounts that are owed to the Company by Executive
due to his receipt of funds as a result of his fraudulent activity and except as
provided in Section 3(a)(ix). The foregoing and other provisions of this
Agreement notwithstanding, all payments to be made to Executive under this
Agreement or otherwise by the Company will be subject to required withholding
taxes and other required deductions.
(e) Nature of Payments. Any amounts due under this Section 3 are in
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the nature of severance payments considered to be reasonable by the Company and
are not in the nature of a penalty.
(f) Exclusivity of Severance Payments. Upon termination of
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Executive's employment during the Term and receipt of benefits hereunder,
Executive shall not be entitled to any severance payments or severance benefits
from the Company or any payments by the Company on account of any claim by
Executive of wrongful termination, including claims under any federal, state or
local human and civil rights or labor laws, other than the payments and benefits
provided in this Section 3.
(g) Release of Employment Claims. Executive agrees, as a condition to
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receipt of any termination payments and benefits provided hereunder (other than
salary earned through the date of termination), that Executive will execute a
general release agreement, in a form satisfactory to
<PAGE>
the Company, releasing any and all claims arising out of Executive's employment
(other than enforcement of this Agreement).
4. ACCELERATION OF VESTING OF OPTIONS.
In the event of a Change in Control, all outstanding stock options
then held by Executive shall become fully vested and non-forfeitable.
5. NON-SOLICITATION; NON-DISCLOSURE; EXECUTIVE COOPERATION; AND NON-
DISPARAGEMENT.
(a) Non-Solicitation. Without the consent in writing of the Board,
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Executive will not, at any time during employment and for a period of 18 months
following termination of Executive's employment for any reason, acting alone or
in conjunction with others, directly or indirectly (i) induce any customers of
the Company or any of its subsidiaries with whom Executive has had contacts or
relationships, directly or indirectly, during and within the scope of his
employment with the Company or any of its subsidiaries, to curtail or cancel
their business with the Company or any such subsidiary; (ii) induce, or attempt
to influence, any employee of the Company or any of its subsidiaries to
terminate employment; or (iii) hire, either directly or through any employee,
agent or representative, any employee of the Company or any of its subsidiaries
or any person who was employed by the Company or any of its subsidiaries within
180 days preceding such hiring; provided, however, that activities engaged in by
or on behalf of the Company are not restricted by this covenant. The provisions
of subparagraphs (i), (ii) and (iii) above are separate and distinct commitments
independent of each other.
(b) Non-Disclosure. Executive shall not, at any time during the Term
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and thereafter (including following Executive's termination of employment for
any reason), disclose, use, transfer, or sell, except in the course of
employment with or other service to the Company, any proprietary information,
secrets, or other confidential information belonging or relating to the Company
and its subsidiaries so long as such information has not otherwise been
disclosed or is not otherwise in the public domain, except as required by law or
pursuant to legal process. In addition, upon termination of employment for any
reason, Executive will return to the Company or its subsidiaries all documents
and other media containing information belonging or relating to the Company or
its subsidiaries.
(c) Cooperation With Regard to Litigation. Executive agrees to
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cooperate with the Company, during the Term and thereafter (including following
Executive's termination of employment for any reason), by making himself
available to testify on behalf of the Company or any subsidiary
<PAGE>
or affiliate of the Company, in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, and to assist the Company, or any
subsidiary or affiliate of the Company, in any such action, suit, or proceeding,
by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company, or any
subsidiary or affiliate of the Company, as requested. The Company agrees to
reimburse Executive, on an after-tax basis, for all expenses actually incurred
in connection with his provision of testimony or assistance.
(d) Non-Disparagement. Executive shall not, at any time during the
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Term and thereafter (including following Executive's termination of employment
for any reason), make statements or representations, or otherwise communicate,
directly or indirectly, in writing, orally, or otherwise, or take any action
which may, directly or indirectly, disparage or be damaging to the Company or
any of its subsidiaries or affiliates or their respective officers, directors,
employees, advisors, businesses or reputations. Notwithstanding the foregoing,
nothing in this Agreement shall preclude Executive from making truthful
statements that are required by applicable law or legal process.
6. REMEDIES.
In addition to whatever other rights and remedies the Company may have
at equity or in law, if Executive breaches any of the provisions contained in
Section 5 above, (i) the Company shall have the right to immediately terminate
all payments and benefits due under this Agreement and cancel all stock options
and deferred stock then outstanding, (ii) Executive shall have the obligation to
repay to the Company an amount equal to all cash previously paid to Executive
pursuant to Sections 3(a)(ii), 3(a)(iii), 3(a)(iv), 3(a)(vi), 3(a)(vii) and
3(a)(ix) or Sections 3(b)(ii), 3(b)(iii) and 3(b)(iv), and (iii) the Company
shall have the right to seek injunctive relief. Executive acknowledges that
such a breach would cause irreparable injury and that money damages would not
provide an adequate remedy for the Company; provided, however, the foregoing
shall not prevent Executive from contesting the issuance of any such injunction
on the ground that no violation or threatened violation of Section 5 has
occurred. Notwithstanding the foregoing, Executive shall not forfeit any
payment, benefit or option unless and until there shall have been delivered to
him, within six months after the committee (A) had knowledge of conduct or an
event allegedly constituting grounds for such forfeiture and (B) had reason to
believe that such conduct or event could be grounds for such forfeiture, a copy
of a resolution duly adopted by a majority affirmative vote of the membership of
the Committee at a meeting of the committee called and held for such purpose
(after giving Executive reasonable notice specifying the nature of the grounds
for such forfeiture and not less than 30 days to correct the acts or omissions
complained of, if correctable,
<PAGE>
and affording Executive the opportunity, together with his counsel, to be heard
before the Committee) finding that, in the good faith opinion of the Committee,
Executive has engaged and continues to engage in conduct set forth in section 5
which constitutes grounds for forfeiture; provided, however, that if any payment
or benefit is received by Executive or any option is exercised after delivery of
such notice and the Committee subsequently makes the determination described in
this sentence, Executive shall be required to repay to the Company any amounts
received and the amount, if any, equal to the difference between the aggregate
value of all shares acquired upon exercise of any option at the date of the
Committee's determination and the aggregate exercise price paid by Executive.
Any such forfeiture shall apply to such payments, benefits and options
notwithstanding any term or provision of any Plan or agreement.
7. GOVERNING LAW; ARBITRATION.
(a) Governing Law. This Agreement is governed by and is to be
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construed, administered, and enforced in accordance with the laws of the State
of Delaware, without regard to conflicts of law principles, except insofar as
federal laws and regulations may be applicable. If under the governing law, any
portion of this Agreement is at any time deemed to be in conflict with any
applicable statute, rule, regulation, ordinance, or other principle of law, such
portion shall be deemed to be modified or altered to the extent necessary to
conform thereto or, if that is not possible, to be omitted from this Agreement.
The invalidity of any such portion shall not affect the force, effect, and
validity of the remaining portion hereof.
(b) Arbitration. Any dispute or controversy arising under or in
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connection with this Agreement shall be settled exclusively by arbitration in
New York, New York by three arbitrators in accordance with the rules of the
American Arbitration Association in effect at the time of submission to
arbitration. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. For purposes of entering any judgment upon an award
rendered by the arbitrators, the Company and Executive hereby consent to the
jurisdiction of any or all of the following courts: (i) the United States
District Court for the Southern District of New York, (ii) any of the courts of
the State of New York or the State of Delaware, or (iii) any other court having
jurisdiction. The Company and Executive further agree that any service of
process or notice requirements in any such proceeding shall be satisfied if the
rules of such court relating thereto have been substantially satisfied. The
Company and Executive hereby waive, to the fullest extent permitted by
applicable law, any objection which it may now or hereafter have to such
jurisdiction and any defense of inconvenient forum. The Company and Executive
hereby agree that a judgment upon an award rendered by the
<PAGE>
arbitrators may be enforced in other jurisdictions by suit on the judgment or in
any other manner provided by law. Pending the resolution of any arbitration or
court proceeding, the Company shall continue payment of all amounts and benefits
due Executive under this Agreement. All reasonable costs and expenses of any
arbitration or court proceeding (including fees and disbursements of counsel)
shall be paid on behalf of or reimbursed to Executive promptly by the Company;
provided, however, that no reimbursement shall be made of such expenses if and
to the extent the arbitrators determine that any of Executive's litigation
assertions or defenses were in bad faith or frivolous.
(c) Interest on Unpaid Amounts. Any amounts that have become payable
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pursuant to the terms of this Agreement or any decision by arbitrators or
judgment by a court of law pursuant to this Section 7 but which are not timely
paid shall bear interest at the prime rate in effect at the time such payment
first becomes payable, as quoted by the Company's principal bank.
8. MISCELLANEOUS.
(a) Effect of Agreement on Other Benefits. Except as specifically
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provided in this Agreement, the existence of this Agreement shall not be
interpreted to preclude, prohibit or restrict Executive's participation in any
other employee benefit or other Plans in which Executive currently participates.
(b) Not an Employment Agreement. This Agreement is not, and nothing
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herein shall be deemed to create, a contract of employment between Executive and
the Company. The Company may terminate the employment of Executive at any time,
subject to the terms of any employment agreement between the Company and
Executive that may then be in effect.
(c) Assignability; Binding Nature. This Agreement shall be binding
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upon and inure to the benefit of the parties and their respective successors,
heirs (in the case of Executive) and permitted assigns.
(d) Non-Transferability. Neither this Agreement nor the rights or
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obligations hereunder of the parties hereto shall be transferable or assignable
by Executive, except in accordance with the laws of descent and distribution or
as specified in Section 8(f). The Company may assign this Agreement and the
Company's rights and obligations hereunder, and shall assign this Agreement, to
any Successor (as hereinafter defined) which, by operation of law or otherwise,
continues to carry on substantially the business of the Company prior to the
event of succession, and the Company shall, as a
<PAGE>
condition of the succession, require such Successor to agree to assume the
Company's obligations and be bound by this Agreement. For purposes of this
Agreement, "Successor" shall mean any person that succeeds to, or has the
practical ability to control (either immediately or with the passage of time),
the Company's business directly, by merger or consolidation, or indirectly, by
purchase of the Company's voting securities or all or substantially all of its
assets, or otherwise.
(e) Indemnification All rights to indemnification by the Company
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existing immediately prior to a Change in Control in favor of the Executive as
provided in the Company's Certificate of Incorporation or By-Laws or pursuant to
other agreements in effect on or immediately prior to a Change in Control shall
continue in full force and effect, and the Company shall also advance expenses
for which indemnification may be ultimately claimed as such expenses are
incurred to the fullest extent permitted under applicable law, subject to any
requirement that the Executive provide an undertaking to repay such advances if
it is ultimately determined that the Executive is not entitled to
indemnification; provided, however, that any determination required to be made
with respect to whether the Executive's conduct complies with the standards
required to be met as a condition of indemnification or advancement of expenses
under applicable law and the Company's Certificate of Incorporation, By-Laws, or
other agreement shall be made by independent counsel mutually acceptable to the
Executive and the Company (except to the extent otherwise required by law). The
Company shall not amend its Certificate of Incorporation or By-Laws or any
agreement in any manner which adversely affects the rights of the Executive to
indemnification thereunder. Any provision contained herein notwithstanding,
this Agreement shall not limit or reduce any rights of the Executive to
indemnification pursuant to applicable law. In addition, the Company will
maintain directors' and officers' liability insurance in effect and covering
acts and omissions of Executive during the Term and for a period of six years
thereafter on terms substantially no less favorable than those in effect on the
Effective Date.
(f) Beneficiaries. Executive shall be entitled to designate (and
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change, to the extent permitted under applicable law) a beneficiary or
beneficiaries to receive any compensation or benefits payable hereunder
following Executive's death.
(g) Integration. This Agreement constitutes the entire agreement
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among the parties with respect to the matters herein provided, and supersedes
all prior agreements, arrangements, communications, whether oral or written, and
policies with respect to severance benefits payable by the Company to Executive
upon termination of employment following a Change in
<PAGE>
Control. No modification or waiver of any provision hereof shall be effective
unless in writing and signed by the parties hereto.
(h) No General Waivers. The failure of any party at any time to
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require performance by any other party of any provision hereof or to resort to
any remedy provided herein or at law or in equity shall in no way affect the
right of such party to require such performance or to resort to such remedy at
any time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such
provisions. No such waiver shall be effective unless in writing and signed by
the party against whom such waiver is sought to be enforced.
(i) Survivorship. The respective rights and obligations of the
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Parties hereunder shall survive any termination of Executive's employment to the
extent necessary to the intended preservation of such rights and obligations.
(j) Notices. Whenever under this Agreement it becomes necessary to
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give notice, such notice shall be in writing, signed by the party or parties
giving or making the same, and shall be served on the person or persons for whom
it is intended or who should be advised or notified, by Federal Express or other
similar overnight service or by certified or registered mail, return receipt
requested, postage prepaid and addressed to such party at the address set forth
below or at such other address as may be designated by such party by like
notice:
If to the Company:
Autotote Corporation
750 Lexington Avenue
25th Floor
New York, New York 10022
Attention: Secretary
If to Executive:
______________________
______________________
______________________
If the parties by mutual agreement supply each other with telecopier numbers for
the purposes of providing notice by facsimile, such notice shall also be proper
notice under this Agreement. In the case of Federal Express or other similar
overnight service, such notice or advice shall be effective when sent,
<PAGE>
and, in the cases of certified or registered mail, shall be effective 2 days
after deposit into the mails by delivery to the U.S. Post Office.
(k) Reformation. The invalidity of any portion of this Agreement
-----------
shall not deemed to render the remainder of this Agreement invalid.
(l) Headings. The headings of this Agreement are for convenience of
--------
reference only and do not constitute a part hereof.
(m) Counterparts. This Agreement may be executed in two or more
------------
counterparts.
IN WITNESS WHEREOF, Executive has hereunto set his hand and the
Company has caused this instrument to be duly executed as of the day and year
first above written.
AUTOTOTE CORPORATION
By:__________________________________________________
Name: A. Lorne Weil
Title:Chairman of the Board,
President and CEO
EXECUTIVE
_____________________________________________________
Name: