EXHIBIT 10.32
GTECH HOLDINGS CORPORATION
AND SUBSIDIARIES
AMENDED AND RESTATED
INCOME DEFERRAL PLAN 1998
GTECH HOLDINGS CORPORATION AND SUBSIDIARIES
AMENDED AND RESTATED INCOME DEFERRAL PLAN 1998
Effective July 1, 2001
1. PURPOSE. The purpose of this GTECH Holdings
Corporation and Subsidiaries Income Deferral Plan 1998 ("Plan") is to provide
eligible key employees of GTECH Holdings Corporation and its subsidiaries
("Company") with an opportunity to defer compensation to be earned by them from
the Company as a means of saving for retirement or other future purposes. For
purposes of the Employee Retirement Income Security Act of 1974, as amended, the
Company intends that this Plan be considered an unfunded arrangement, maintained
primarily to provide deferred compensation benefits for members of a select
group of management or highly compensated employees of the Company.
2. DEFINITION OF TERMS. Certain words and phrases are
defined when first used in later paragraphs of this Plan. In addition, the
following words and phrases when used herein, unless the context clearly
requires otherwise, shall have the following respective meanings:
(a) ACCRUED BENEFIT: The sum of all Deferred
Amounts credited to the Participant's Deferred Income Account and due and owing
to the Participant or his beneficiaries pursuant to this Plan, together with
Investment Returns thereon calculated as set forth in paragraph 4 hereof, minus
any distributions hereunder.
(b) AFFILIATE: Any corporation, partnership,
joint venture, association, or similar organization or entity, the employees of
which would be treated as employed by the Company under Section 414(b) and
414(c) of the Code.
(c) CAUSE: An Employee's failure to perform his
duties as designated by GTECH; breach of his Restrictive
Agreement-Employee/Applicant; breach of GTECH's Conflict of Interest and Ethical
Conduct Policy; conviction of any felony or of any crime involving gambling,
fraud, deceit, theft, dishonesty, or moral turpitude; and/or acting in any
manner that has an adverse effect on GTECH.
(d) CODE: The Internal Revenue Code of 1986, as
amended.
(e) COMPENSATION COMMITTEE: The Compensation
Committee of the Board of Directors of the Company.
(f) DEFERRED AMOUNTS: The amounts of Income
actually deferred less any and all deductions required to be made by applicable
law.
(g) DEFERRED INCOME ACCOUNT: Book entries
maintained by the Company reflecting Deferred Amounts and Investment Returns
thereon; provided, however, that the existence of such book entries and the
Deferred Income Account shall not create and shall not be deemed to create a
trust of any kind, or a fiduciary relationship
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between the Company and the Participant, his designated beneficiary, or other
beneficiaries under this Plan.
(h) EFFECTIVE DATE: The Plan was originally
effective as of December 15, 1998. This Amended and Restated Plan is effective
as of July 1, 2001.
(i) ELECTION OF DEFERRAL: A written notice filed
by the Participant with the Compensation Committee of the Company in
substantially the form attached hereto as Exhibit A, respecting Income to be
deferred in any Plan Year.
(j) INCOME: Total salary, commissions and
bonuses of the Participant paid or accrued by the Company, exclusive of Accrued
Benefits and any employer contributions or payments to any other trust, fund,
agreement or plan providing retirement, pension, profit sharing, health,
welfare, death, insurance or similar benefits.
(k) PARTICIPANT: Each employee who:
(i) is an executive officer, officer or
vice president of the Company or an Affiliate of the
Company; and
(ii) has elected to defer payment of a
percentage of his Income under the Plan.
(l) PLAN YEAR: Any fiscal year of the Company.
3. DEFERRED INCOME. Each Participant shall be entitled
to elect, in accordance with Section 5, to defer into his Deferred Income
Account from between ten percent (10%) to one-hundred percent (100%), in whole
percentages, of the base salary that the Participant would otherwise be entitled
to receive from and after the date of election from the Company in any given
Plan Year. In addition, prior to the start of a Plan Year, the Participant shall
be entitled to elect to defer from between ten percent (10%) to one-hundred
percent (100%), in whole percentages, of any commissions and/or bonuses that the
Participant would otherwise be entitled to receive from the Company with respect
to such Plan Year. The Participant's Deferred Amounts shall be credited to the
Participant's Deferred Income Account as of the dates such Deferred Amounts
would, but for such deferral, be payable to the Participant. Except as provided
in Section 9 hereof (with respect to certain financial hardships), an Election
of Deferral with respect to a Plan Year, once made, shall be irrevocable.
4. INVESTMENT RETURNS ON DEFERRED AMOUNTS.
(a) The Company hereby agrees that it will
credit Deferred Amounts in each Participant's Deferred Income Account with
investment gains thereon and debit Deferred Amounts in the Participant's
Deferred Income Account with investment losses thereon (collectively,
"Investment Returns") from and after the dates Deferred Amounts are credited to
the Deferred Income Account. Investments Returns on
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Deferred Amounts shall accrue commencing on the date the Deferred Income Account
first has a positive balance. Investment Returns shall mirror the earnings and
valuation performance of an investment fund ("Investment Fund") selected by the
Participant from various investment options offered by the Company in its sole
discretion. An investment election shall remain effective until a subsequent
properly filed election becomes effective. If the Participant fails to file an
initial election, Investment Returns shall be calculated based on the average
rate earned by all the investment options offered by the Company under the Plan
until such time as an investment election by the Participant becomes effective.
(b) INVESTMENT ELECTIONS. Elections to allocate
balances in a Participant's Deferred Income Account to the available Investment
Funds shall be made in whole percentages, subject to the following rules:
(i) INITIAL INVESTMENT ELECTIONS. A Participant
shall submit his initial investment election on a form provided by the Company
for such purpose within thirty (30) days of becoming eligible to participate in
the Plan. Investment elections may allocate balances in the Participant's
Deferred Income Account to any Investment Fund.
(ii) CHANGES IN INVESTMENT ELECTIONS.
Participants shall be permitted to change their Investment Elections at least
once per month, and may be permitted to change their elections more frequently
if so determined by the Senior Vice President of Human Resources. Any change in
Investment Elections will be effective on the first business day following such
change.
5. ELECTION TO DEFER INCOME.
(a) ELECTION PROCEDURE. The Participant may
elect to defer Income hereunder by filing an Election of Deferral. With respect
to base salary to be earned by a Participant during a Plan Year, an Election of
Deferral may be filed prior to the start of, or at any time during, such Plan
Year, provided that if such an Election of Deferral is filed after the start of
a Plan Year, it shall only be effective with respect to base salary earned after
the filing date of the Election of Deferral. With respect to commissions and/or
bonuses to be earned by a Participant with respect to a Plan Year, an Election
of Deferral may only be filed prior to the start of the Plan Year to which such
bonuses or commissions relate. (For example, Participants may, prior to the
start date of the Plan Year next following the Effective Date of the Plan, [i.e.
February 28, 1999], file an Election of Deferral with respect to any commissions
and/or bonuses to be earned with respect to the Company's fiscal year ending in
February 2000. Participants may not, however, file an Election of Deferral with
respect to any commissions and/or bonuses to be paid with respect to the
Company's fiscal year ending February 27, 1999). Each Election of Deferral shall
be effective only in the Plan Year to which such Election of Deferral applies
and, as provided above, shall generally be irrevocable once made.
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(b) NEWLY HIRED AND NEWLY PROMOTED PARTICIPANTS.
Newly hired and newly promoted Participants shall have a thirty (30) day period,
following the effective date of such hiring or promotion, in which to file an
Election of Deferral with the Compensation Committee. The Election of Deferral
shall be effective only in the Plan Year to which the Election of Deferral
applies and, as provided in subsection (a) above, shall generally be irrevocable
once made. An Election of Deferral for subsequent years shall be governed by the
general rules set forth in subsection (a) above.
(c) DURATION OF DEFERRAL. At the time each
Election of Deferral is filed, the Participant must elect the period of deferral
for Income deferred pursuant to such Election of Deferral. With respect to each
Election of Deferral, the Participant may elect to defer Income earned in the
Plan Year to which such Election of Deferral applies for one of the following
time periods ("Deferral Period"):
(1) Five (5) years;
(2) Eight (8) years;
(3) Ten (10) years;
(4) Until attainment of age fifty-five
(55); provided that the Participant is under age 50 at the time of such
election; or
(5) Until attainment of age sixty-five
(65); provided that the Participant is under age 60 at the time of such
election.
(6) Until retirement in accordance with
the Company's policies respecting retirement from time to time in effect.
(7) Until termination of employment.
The period of deferral may be different as to each
Election of Deferral filed by the Participant with the Company.
6. DEFERRED BENEFIT.
(a) The Company agrees that upon the expiration
of a Deferral Period, the Company shall thereafter pay to the Participant that
portion of the Participant's Accrued Benefit which relates to Deferred Amounts
and Investment Returns thereon for which the Deferral Period has expired
("Deferred Income Benefit"); provided however that a Participant may change the
Deferral Period by filing a written notice of the desired change with the
Compensation Committee at least one year prior to the expiration of the current
Deferral Period. At the time each Election of Deferral is filed, the Participant
must elect the Deferred Income Benefit payment form for Income deferred pursuant
to such Election of Deferral. Such election as to payment form may be changed by
the Participant by filing a written notice of the desired change with the
Compensation
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Committee at least one year prior to the end of the Deferral Period. A Deferred
Income Benefit shall be payable in the form of either:
(i) a single sum, payable on the first
day of the month following the expiration of a Deferral Period; or
(ii) a monthly annuity for a period of
five (5), eight (8) or ten (10) years, commencing with the first day of the
first month following the expiration of the Deferral Period. The Participant
shall elect whether the annuity payments are to be fixed or variable. Fixed
annuity payments shall be monthly payments which remain level during the payout
period and which are based on an effective annual rate of interest to be
determined by the Company as of the date of the expiration of the Deferral
Period. Variable annuity payments shall be monthly payments, commencing on the
first day of the first month following the expiration of the Deferral Period,
which fluctuate each Plan Year based on the average rate earned in the preceding
Plan Year on all investments offered by the Company as investment options
pursuant to Section 4 above.
(b) TERMINATION FOR CAUSE. In the event of a
Participant's termination of employment for Cause, the Participant shall cease
to participate in this Plan and the Company shall pay to the Participant the sum
of:
(i) with respect to those portions of
the Participant's Accrued Benefit for which the Deferral Period has expired and
which are being paid in the form of an annuity, the present value (calculated
using reasonable actuarial assumptions established for the such purpose by the
Company) of that portion of the future Deferred Income Benefit payable to the
Participant attributable to Deferred Amounts only; plus
(ii) with respect to those portions of
the Participant's Accrued Benefit for which the Deferral Period has not expired,
the balance, if any, remaining in the Participant's Deferred Income Account
attributable to Deferred Amounts only.
The form of payment shall be in a single lump sum, payable as
of the date which is ninety (90) days after the date of the Participant's
termination of employment. The portion of the Participant's Accrued Benefit
which represents Investment Returns shall be forfeited by the Participant.
7. DISABILITY BENEFIT. Notwithstanding any other
provision in the Plan to the contrary, upon a Participant's long term
disability, the Participant shall be entitled to receive his entire Accrued
Benefit, in a single sum, payable on the first day of the first month following
a determination that the Participant has a long term disability. A long term
disability shall have the meaning of such term as defined in the long-term
disability plan, as amended from time to time, maintained by the Company.
8. DEATH BENEFITS.
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(a) CALCULATION. In the event of the
Participant's death (whether prior to or after the commencement of Deferred
Income Benefits), the Company shall pay the sum of the balance, if any,
remaining in the Participant's Deferred Income Account, in a single lump sum,
payable on the first day of the first month following the Participant's date of
death, to the Participant's designated beneficiary, in accordance with the last
such designation received by the Company from the Participant prior to his
death; provided however that a Participant may elect by written instruction
delivered to the Company prior to his death for payment to be made to his
designated beneficiary in a monthly annuity for a period designated by the
Participant in accordance with Section 6(b) hereof. If no such designation has
been received by the Company from the Participant prior to his death, the
balance of said payments shall be paid to the Participant's then living spouse,
or if the Participant is not survived by a spouse, or if such spouse does not
live to receive all such payments, any balance of the payments shall be made in
a single lump sum to the estate of the Participant on the first day of the first
month following the Participant's death or spouse's death, whichever applies.
After the Participant's death, his designated beneficiary shall have the right
to elect a lump sum payment by written instruction delivered to the Company.
(b) BENEFICIARY DESIGNATION. The Participant
shall have the right, at any time, to submit in substantially the form attached
hereto as Exhibit B, a written designation of primary and secondary
beneficiaries to whom payment under this Plan shall be made in the event of his
death prior to complete distribution of the benefits due and payable under the
Plan. Each beneficiary designation shall become effective only when receipt
thereof is acknowledged in writing by the Company.
9. HARDSHIP BENEFIT. In the event the Participant
suffers a Financial Hardship (as hereinafter defined), the Compensation
Committee may, if it deems advisable in its sole and absolute discretion,
distribute to or utilize on behalf of the Participant as a hardship benefit (the
"Hardship Benefit") any portion of the Participant's Deferred Income Account as
of the date a Hardship Benefit is distributed or utilized. Any Hardship Benefit
shall be distributed or utilized at such times as the Compensation Committee
shall determine, and the Accrued Benefit in the Participant's Deferred Income
Account shall be reduced by the amount so distributed and/or utilized. Financial
Hardship shall mean an immediate and heavy financial need of the Participant on
account of an unforeseeable emergency as determined by the Compensation
Committee upon application by the Participant.
In addition to or in lieu of granting a distribution of a Hardship
Benefit, upon a showing of a financial hardship, the Compensation Committee,
may, if it deems advisable in its sole and absolute discretion, permit or
require a discontinuance of deferrals in a Plan Year.
10. CHANGE IN CONTROL BENEFIT. In the event of a change
in control, the Participant's Accrued Benefit shall be immediately due and
payable. A change in control means the happening of any of the following:
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(a) The members of the Board of Directors of the
Company at the beginning of any consecutive twenty-four calendar month period
(the "Incumbent Directors") cease for any reason other than due to death to
constitute at least a majority of the members of the Board of Directors of the
Company, provided that any director whose election, or nomination for election
by the Company's stockholders, was approved by a vote of at least a majority of
the members of the Board of Directors of the Company then still in office who
were members of the Board of Directors of the Company at the beginning of such
twenty-four calendar month period, shall be deemed an Incumbent Director;
(b) Any "person", including a "group" (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934 ("Act"), but excluding the Company, any of its Affiliates, or any employee
benefit plan of the Company or any of its Affiliates) is or becomes the
"beneficial owner" (as defined in Rule 13(d)(3) under the Act), directly or
indirectly, of securities of the Company representing the greater of 30% or more
of the combined voting power of the Company's then outstanding securities;
(c) The stockholders of the Company shall
approve a definitive agreement (1) for the merger or business combination of the
Company with or into another corporation if (A) a majority of the directors of
the surviving corporation were not directors of the Company immediately prior to
the effective date of the merger or (B) the stockholders of the Company
immediately prior to the effective date of such merger own less than 50% of the
combined voting power in the then outstanding securities in such surviving
corporation or (2) for the sale or other disposition of all or substantially all
of the assets of the Company; or
(d) The purchase of the common stock of the
Company pursuant to any tender or exchange offer made by any "person", including
a "group" (as such terms are used in Section 13(d) and 14(d) of the Act, other
than the Company, any of its Affiliates, or any employee benefit plan of the
Company or any of its Affiliates), for 30% more of the common stock of the
Company.
11. IMMEDIATE BENEFIT; CHANGE IN TAX LAW; ADMINISTRATION
FEES.
(a) In the event that the benefits to the
Participants under this Plan are taxable for federal income tax purposes to the
Participants at a time other than the time the Participants actually receive
such benefits, the Company shall as promptly as practicable pay to the
Participants the amounts so determined to be taxable and the Company's
obligations to the Participants under this Plan shall be reduced by a
corresponding amount.
(b) In the event that the benefits to
Participants under this Plan are abrogated by virtue of a change in the federal
income tax law, as determined by the Compensation Committee in its sole
discretion, the Company shall as promptly as practicable pay to the Participants
in a single sum the amounts credited to the
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Participants' respective Deferred Income Accounts and thereupon the Compensation
Committee may, in its sole discretion, terminate the Plan.
(c) The Company, in its sole discretion, may
require that certain administration fees be paid out of the Deferred Income
Account of a Participant who has terminated employment with the Company.
12. OFFSET FOR OBLIGATIONS TO COMPANY. If, at such time
as the Participant becomes entitled to benefit payments hereunder, the
Participant has any debt, obligation or other liability representing an amount
owing to the Company or an Affiliate of the Company, and if such debt,
obligation, or other liability is due and owing at the time benefit payments are
payable hereunder, the Company may offset the amount owing it or an Affiliate
against the amount of benefits otherwise distributable hereunder.
13. NO TRUST CREATED. Nothing contained in this Plan, and
no action taken pursuant to its provisions by either party hereto shall create,
or be construed to create, a trust of any kind, or a fiduciary relationship
between the Company and the Participant, his designated beneficiary, other
beneficiaries of the Participant or any other person.
14. BENEFITS PAYABLE ONLY FROM GENERAL CORPORATE ASSETS;
UNSECURED GENERAL CREDITOR STATUS OF PARTICIPANT.
(a) The payments to the Participant or his
designated beneficiary or any other beneficiary hereunder shall be made from
assets which shall continue, for all purposes, to be a part of the general,
unrestricted assets of the Company; no person shall have any interest in any
such assets by virtue of the provisions of this Plan. The Company's obligation
hereunder shall be an unfunded and unsecured promise to pay money in the future.
To the extent that any person acquires a right to receive payments from the
Company under the provisions hereof, such right shall be no greater than the
right of any unsecured general creditor of the Company; no such person shall
have nor acquire any legal or equitable right, interest or claim in or to any
property or assets of the Company.
(b) In the event that, in its discretion, the
Company purchases an insurance policy or policies insuring the life of the
Participant (or any other property), to allow the Company to recover the cost of
providing benefits, in whole or in part, hereunder, neither the Participant, his
designated beneficiary nor any other beneficiary shall have any rights
whatsoever therein or in the proceeds therefrom. The Company shall be the sole
owner and beneficiary of any such insurance policy and shall possess and may
exercise all incidents of ownership therein. No such policy, policies or other
property shall be held in any trust for the Participant or any other person nor
as collateral security for any obligation of the Company hereunder.
15. NO CONTRACT OF EMPLOYMENT. Nothing contained herein
shall be construed to be a contract of employment for any term of years, nor as
conferring upon the Participant the right to continue to be employed by the
Company in his present
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capacity, or in any capacity. It is expressly understood by the parties hereto
that this Plan relates to the payment of deferred compensation for the
Participant's services, payable after termination of his employment with the
Company, and is not intended to be an employment contract.
16. BENEFITS NOT TRANSFERABLE. Neither the Participant,
his designated beneficiary, nor any other beneficiary under this Plan shall have
any power or right to transfer, assign, anticipate, hypothecate or otherwise
encumber any part or all of the amounts payable hereunder. No such amounts shall
be subject to seizure by any creditor of any such beneficiary, by a proceeding
at law or in equity, nor shall such amounts be transferable by operation of law
in the event of bankruptcy, insolvency or death of the Participant, his
designated beneficiary, or any other beneficiary hereunder. Any such attempted
assignment or transfer shall be void.
17. DETERMINATION OF BENEFITS.
(a) CLAIM.
A person who believes that he is being denied a
benefit to which he is entitled under the Plan (hereinafter referred to as a
"Claimant") may file a written request for such benefit with the Senior Vice
President of Human Resources, setting forth his claim. The request must be
addressed to the Senior Vice President of Human Resources at the Company's then
principal place of business.
(b) CLAIM DECISION.
Upon receipt of a claim, the Senior Vice President of
Human Resources shall advise the Claimant that a reply will be forthcoming
within ninety (90) days and shall, in fact, deliver such reply within such
period. The Senior Vice President of Human Resources may, however, extend the
reply period for an additional ninety (90) days for reasonable cause.
If the claim is denied in whole or in part, the
Senior Vice President of Human Resources shall adopt a written opinion, using
language calculated to be understood by the Claimant, setting forth:
(a) The specific reason or reasons for
such denial;
(b) The specific reference to pertinent
provisions of this Plan on which
such denial is based;
(c) A description of any additional
material or information necessary for the Claimant to perfect his claim and an
explanation why such material or such information is necessary;
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(d) Appropriate information as to the
steps to be taken if the Claimant wishes to submit the claim for review; and
(e) The time limits for requesting a
review under subsection c. and for review under subsection d. hereof.
(c) REQUEST FOR REVIEW
With sixty (60) days after the receipt by
the Claimant of the written opinion described above, the Claimant may request in
writing that the Compensation Committee review the determination of the Senior
Vice President of Human Resources. Such request must be addressed to the
Chairman of the Compensation Committee, at the Company's then principal place of
business. The Claimant or his duly authorized representative may, but need not,
review the pertinent documents and submit issues and comments in writing for
consideration. If the Claimant does not request a review of the Senior Vice
President of Human Resources' determination by the Compensation Committee within
such sixty (60) day period, he shall be barred and estopped from challenging the
Senior Vice President of Human Resources' determination.
(d) REVIEW OF DECISION.
Within sixty (60) days after the
Compensation Committee's receipt of a request for review, it will review the
Senior Vice President of Human Resources' determination. After considering all
materials presented by the Claimant, the Compensation Committee will render a
written opinion, written in a manner calculated to be understood by the
Claimant, setting forth the specific reasons for the decision and containing
specific references to the pertinent provisions of this Plan on which the
decision is based. If special circumstances require that the sixty (60) day time
period be extended, the Compensation Committee will so notify the Claimant and
will render the decision as soon as possible, but no later than one-hundred
twenty (120) days after receipt of the request for review.
18. AMENDMENT AND TERMINATION. This Plan may be
terminated, amended, altered or modified, by the Company in its sole discretion
from time to time upon execution by written amendment.
19. NOTICE. Any notice, consent or demand required or
permitted to be given under the provisions of this Plan shall be in writing, and
shall be signed by the party giving or making the same. If such notice, consent
or demand is mailed to a party hereto, it shall be sent by United States
certified mail, postage prepaid, addressed to such party's last known address as
shown on the records of the Company. The date of such mailing shall be deemed
the date of notice, consent or demand. Either party may change the address to
which notice is to be sent by giving notice of the change of address in the
manner aforesaid.
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20. GOVERNING LAW. This Plan, and the rights of the
parties hereunder, shall be governed by and construed in accordance with the
laws of the State of Rhode Island.
IN WITNESS WHEREOF, effective July 1, 2001, the Company has executed
this Plan as of the ___ day of ___________, 2001.
GTECH HOLDINGS
CORPORATION
By: ____________________
Name: __________________
Title: _________________
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