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SEVERANCE AGREEMENT AND RELEASE
This SEVERANCE AGREEMENT AND RELEASE ("Agreement") is made as of the 9th day of
March, 1998, by and among GTECH Holdings Corporation, GTECH Corporation
(together with their respective direct and indirect subsidiaries, collectively,
"GTECH"), with offices at 00 Xxxxxxxxxx Xxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxxx 00000
and Xxxxxxxx X. Xxx ("Xx. Xxx").
1. Mr. Gay hereby resigns his employment: (a) as an employee and officer
of GTECH Corporation, (b) as an employee and officer of GTECH Holdings
Corporation, and (c) as an employee and officer of all direct and
indirect subsidiaries and other affiliates of GTECH Holdings
Corporation, all upon the date hereof (the "Resignation Date").
2. a. GTECH shall pay Mr. Gay all accrued and unpaid commissions due him
as of the Resignation Date pursuant to that certain Amended and
Restated Employment Agreement dated as of December 1, 1995 (the
"Employment Agreement").
b. Upon the expiration of the Revocation Period (as hereinafter
defined) GTECH shall make to Mr. Gay a lump sum payment with respect to
post-employment severance of Three Million Six Hundred Thousand Dollars
($3,600,000).
c. All such amounts shall be subject to applicable federal and state
withholdings.
3. GTECH shall continue to provide Mr. Gay its current basic life and
medical and dental insurance coverage until March 8, 2001, subject to
applicable benefits deductions. Thereafter, GTECH shall respect Mr.
Gay's rights, if any, to continued medical coverage at his own expense
under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
4. GTECH shall provide the following other benefits to Mr. Gay:
a. Mr. Gay shall be eligible for a bonus for the fiscal year ending
February 28, 1998, in accordance with the terms governing such bonus.
Nothing herein shall be deemed to create an expectation that such bonus
shall be paid.
b. Mr. Gay may continue to use his company-owned automobile until March
8, 2001, although he shall be responsible for all operating and
maintenance costs. Mr. Gay will be allowed to retain the phone in the
company automobile, provided that GTECH is no longer responsible for
phone service. Mr. Gay will be allowed to purchase his company-owned
automobile at any time, upon at least fifteen days notice to GTECH,
upon terms and conditions to be determined by GTECH.
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c. For one dollar and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, GTECH hereby
sells to Mr. Gay and Mr. Gay hereby purchases from GTECH Mr. Gay's
personal computer, fax machine and cellular phone (provided that GTECH
is no longer responsible for phone service). Said sale is made "as is"
and "where is" and GTECH disclaims all warranties, including without
limitation all warranties of merchantability or fitness for a
particular purpose.
5. a. As of the Resignation Date, Mr. Gay is no longer eligible to
participate in the GTECH 401(k) and Profit Sharing Plan; the Executive
Perquisites Program; the GTECH Holdings Corporation 1992 Supplemental
Retirement Plan; or any other GTECH benefit program or plan. GTECH will
notify Mr. Gay in writing concerning his options with regard to his
401(k) account.
b. Mr. Gay shall retain the right to exercise any options which have
been granted under the GTECH Holdings Corporation 1994 Stock Option
Plan, to the extent such options have vested and have not been
exercised as of the Resignation Date, for the period ending on March 9,
1999. All unvested options are forfeit.
6. a. Mr. Gay acknowledges that the aggregate payments referred to herein
are greater than those to which he is entitled under the Employment
Agreement or, to the extent not superseded by the Employment Agreement,
any existing GTECH separation or benefit plan. In consideration of the
foregoing, Mr. Gay hereby releases and forever discharges GTECH, its
present and former directors, officers, employees, agents,
subsidiaries, shareholders, successors and assigns from any and all
liabilities, causes of action, debts, claims and demands (including
without limitation claims and demands for monetary payment) both in law
and in equity, known or unknown, fixed or contingent, which he may have
or claim to have based upon or in any way related to employment(as an
officer, director or employee), rights or entitlements related thereto
or termination of such employment by GTECH and hereby covenants not to
file a lawsuit or charge to assert such claims. This includes but is
not limited to claims arising from: (i) those certain Written
Submissions (and any annexes thereto) of the Board of GTECH Holdings
Corporation to the Director General of the Office of the National
Lottery submitted March 9, 1998 and (ii) the Federal Age Discrimination
in Employment Act and (iii) any other federal, state or local laws
prohibiting employment discrimination or claims growing out of any
legal restrictions on GTECH's right to terminate its employees.
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b. In consideration for the above release, GTECH hereby releases and
forever discharges Mr. Gay and his successors, heirs and assigns from
any and all liabilities, causes of action, debts, claims and demands
both in law and in equity, known or unknown, fixed or contingent, which
it may have or claim to have based upon or in any way related to Mr.
Gay's actions as an employee, officer or director and hereby covenants
not to file a lawsuit or charge to assert such claims.
c. The above releases shall not apply to breaches of this Agreement,
nor does GTECH's release apply to the loans from GTECH to Mr. Gay in
connection with taxes paid on the GTECH Holdings Corporation Common
Stock granted to Mr. Gay under the GTECH Holdings Corporation Amended
and Restated 1990 Restricted Stock Unit Plan.
7. Mr. Gay understands that various State and Federal laws prohibit
employment discrimination based on age, sex, race, color, national
origin, religion, handicap or veteran status. These laws are enforced
through the Equal Employment Opportunity Commission (EEOC), Department
of Labor and State Human Rights Agencies. Mr. Gay acknowledges that he
has been advised by GTECH to discuss this Agreement with his attorney
and has been encouraged to take this Agreement home for up to
twenty-one (21) days so that he can thoroughly review it and understand
the effect of this Agreement before acting on it.
8. Mr. Gay acknowledges and agrees to continue to be bound by the
provisions of Section 8 of the Employment Agreement, and GTECH
acknowledges and agrees to continue to be bound by the provisions of
Section 7 of the Employment Agreement, a copy of which is attached
hereto and incorporated by reference herein.
9. a. After the Resignation Date, Mr. Gay shall make himself available in
any third party claims, investigations, litigation or similar
proceedings to answer any questions relating to his employment or
actions as an employee, officer or director of GTECH, including without
limitation attendance at any deposition or similar proceeding. GTECH
shall pay Mr. Gay's expenses, but shall not be obligated to compensate
him or any subsequent employer for his time.
b. After the Resignation Date, GTECH shall make itself, its employees
and directors available in any third party claims, investigations,
litigation or similar proceedings to answer any questions relating to
Mr. Gay's employment or actions as an employee, officer or director of
GTECH, including without limitation attendance at any deposition or
similar proceeding, at GTECH expense.
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10. Except as set forth in Sections 4(b) and 4(c) Mr. Gay shall use his
best efforts to return to GTECH any GTECH property in his possession as
soon as possible, but in all events by March 31, 1998.
11. Mr. Gay shall at no time make any derogatory or disparaging comments
regarding GTECH, its business, or its present or past directors,
officers or employees. GTECH shall at no time make any derogatory or
disparaging comments regarding Mr. Gay.
12. Mr. Gay hereby waives any and all rights to future employment with
GTECH.
13. The execution of this Agreement does not represent and shall not be
construed as an admission of a violation of any statute or law or
breach of any duty or obligation by either GTECH or Mr. Gay.
14. The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this
Agreement shall be construed in all respects as if such invalid and
unenforceable provisions were omitted.
15. This Agreement is personal to Mr. Gay and may not be assigned by him.
However, in the event of Mr. Gay's death, all benefits payable
hereunder shall be payable to his estate.
16. This Agreement is made pursuant to and shall be governed by the laws of
the State of Rhode Island, without regard to its rules regarding
conflict of laws. The parties agree that the courts of the State of
Rhode Island, and the Federal Courts located therein, shall have
exclusive jurisdiction over all matters arising from this Agreement and
further agree that service of process by first class mail shall be
deemed appropriate service of process.
17. This Agreement contains the entire understanding between Mr. Gay and
GTECH regarding the subject matter hereof and, except as expressly set
forth herein, supersedes any prior agreements, written or oral,
including without limitation the Employment Agreement.
18. Anything to the contrary herein notwithstanding, the terms and
conditions of that certain Indemnification Agreement dated as of
November 1, 1993, between Mr. Gay and GTECH Holdings Corporation, which
is incorporated by reference herein and made a part hereof, shall
continue in full force and effect.
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19. This Agreement may not be changed orally but only by an agreement in
writing signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought. Mr. Gay
acknowledges that he has not relied upon any representation or
statement, written or oral, not set forth in this Agreement.
20. Mr. Gay may revoke this Agreement at any time during the seven-day
period following the date of his signature below (the "Revocation
Period") by delivering written notice of his revocation to 00
Xxxxxxxxxx Xxx, Xxxx Xxxxxxxxx, XX 00000, attention: Xxxxxxx X.
Xxxxxxxx. This Agreement (with the exception of Section 1, which is
effective March 9, 1998) shall become effective upon the expiration of
the Revocation Period.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates set forth below.
GTECH Holdings Corporation Attest:
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by
GTECH Corporation Attest:
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by
Witness:
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Xxxxxxxx X. Xxx
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