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SEVERANCE AGREEMENT AND RELEASE
This SEVERANCE AGREEMENT AND RELEASE ("Agreement") is made as of the
28th day of February, 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 Xxxxxx Xxxxxxxxx ("Xx. Xxxxxxxxx"), who resides at 0000
Xxxxxxxxx 00xx Xxxxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000.
WITNESSETH:
WHEREAS, the parties have agreed that it is in their mutual best
interest that Xx. Xxxxxxxxx sever his relationship with GTECH; and
WHEREAS, the parties wish to set forth their agreement respecting the
terms and conditions thereof.
NOW, THEREFORE, the parties hereby agree as follows:
1. Xx. Xxxxxxxxx hereby resigns: (a) as an employee, officer, director and
Vice Chairman of the Board of Directors of GTECH Holdings Corporation;
(b) as an employee of GTECH Corporation, and (c) as an employee,
officer and director of all direct and indirect subsidiaries and other
affiliates of GTECH Holdings Corporation, effective March 1, 1998 (the
"Resignation Date"), such resignation to include without limitation a
resignation from any long-term duties with respect to advice and
assistance for the three-year post employment period referenced in his
Employment Agreement (as hereinafter described) that Xx. Xxxxxxxxx
would continue to provide.
2. On April 1, 1998 (or before in its discretion), GTECH shall make to Xx.
Xxxxxxxxx a lump sum payment with respect to post-employment severance
of $6,597,836.00 (which reflects a deduction of all federal income tax
and Medicare withholdings).
3. From and after the Resignation Date, and except as otherwise expressly
provided herein, Xx. Xxxxxxxxx shall not be eligible for any GTECH
benefits or perquisites, including, without limitation, medical, dental
or vision benefits; executive physicals; insurance; long-term
disability benefits; fringe benefits; tax "gross-ups"; automobiles; air
travel; offices and office assistance; and security personnel.
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4. As of the Resignation Date, Xx. Xxxxxxxxx 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 Xx. Xxxxxxxxx in writing concerning his options with regard to
his 401(k) account. Anything to the contrary notwithstanding: (a) Xx.
Xxxxxxxxx shall have the option, on an annual basis, to purchase
medical, dental and vision benefits for him and the eligible members of
his family through GTECH at 100% of GTECH's cost; (b) GTECH shall also
respect Xx. Xxxxxxxxx' rights, if any, to continued medical coverage at
his own expense under the Consolidated Omnibus Budget Reconciliation
Act (COBRA) and (c) Xx. Xxxxxxxxx shall continue to have access to and
the use of his office in Boca Raton, at GTECH expense, for the period
ending May 31, 1998. During that period of time Xxxxxxxx Xxxxxxxx, an
employee of GTECH, shall continue to be assigned to Xx. Xxxxxxxxx to
assist him in his transition. Xx. Xxxxxxxx'x compensation and
anticipated expenses for such period have been paid by Xx. Xxxxxxxxx
pursuant to a deduction from the amount set forth in Section 2.
5. a. In consideration of the foregoing, Xx. Xxxxxxxxx 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 under the
Federal Age Discrimination in Employment Act, and 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. GTECH will continue to cooperate in enabling Xx. Xxxxxxxxx
and the Xxxxxx Xxxxxxxxx Irrevocable Trust-1990 to sell unregistered
shares of GTECH Holdings Corporation Common Stock pursuant to Rule 144.
b. In consideration for the above release, GTECH hereby releases and
forever discharges Xx. Xxxxxxxxx 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 Xx. Xxxxxxxxx' actions as an employee, officer or director
and hereby covenants not to file a lawsuit or
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charge to assert such claims.
c. The above releases shall not apply to breaches of this Agreement.
6. Xx. Xxxxxxxxx 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. Xx. Xxxxxxxxx acknowledges
that he has entered into this Agreement on the prior advice of counsel.
7. Xx. Xxxxxxxxx further covenants with GTECH as follows and expressly
agrees that all payments and benefits due Xx. Xxxxxxxxx under this
Agreement shall be subject to Xx. Xxxxxxxxx' compliance with the
following provisions.
a. Confidential Information. Xx. Xxxxxxxxx shall not knowingly use for
Xx. Xxxxxxxxx' own benefit or disclose or reveal to any unauthorized
person, any trade secret or other confidential information relating to
GTECH, or to any of the businesses operated by it, including, without
limitation, any customer lists, customer needs, price and performance
information, processes, specifications, hardware, software, devices,
supply sources and characteristics, business opportunities, marketing,
promotional pricing and financing techniques, or other information
relating to the business of GTECH, and Xx. Xxxxxxxxx confirms that such
information constitutes the exclusive property of GTECH. Such
restriction on confidential information shall remain in effect until
such time as the confidential information is (i) generally available in
the industry, (ii) disclosed in published literature or (iii) obtained
by Xx. Xxxxxxxxx from a third party without binder of secrecy. Xx.
Xxxxxxxxx shall use his best efforts to return to GTECH any physical
embodiment of such confidential information as soon as possible, but in
all events by May 31, 1998.
b. Non-Competition. For the period ending on the third anniversary of
the Resignation Date, Xx. Xxxxxxxxx shall not engage, directly or
indirectly (which includes, without limitation, owning, managing,
operating, controlling, being employed by, giving financial assistance
to, participating in or being connected in any material way with any
person or entity), anywhere in the world, in either of the following
areas: (i) any area which involves (A) the transmission of data via
electronic means and (B)
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elements of chance and/or skill, consideration for the opportunity to
participate and (C) a prize; and (ii) any area which involves a
computer based system in which the food stamp or similar government
benefit is received from a central computer through a point-of-sale
terminal or automatic bank teller machine; provided, however, that Xx.
Xxxxxxxxx' ownership as a passive investor of less than one percent
(1%) of the issued and outstanding stock of a publicly held corporation
so engaged shall not by itself be deemed to constitute such
competition. Further, during the period ending eighteen (18) months
after the Resignation Date, Xx. Xxxxxxxxx shall not: (i) solicit any of
GTECH's employees to leave the employment of GTECH or (ii) solicit any
of GTECH's customers to cease doing business with GTECH.
c. Remedies. Xx. Xxxxxxxxx recognizes that the possible restrictions on
Xx. Xxxxxxxxx' activities which may occur as a result of his
performance of his obligations under this Section 7 are required for
the reasonable protection of GTECH and its investments, and Xx.
Xxxxxxxxx expressly acknowledges that such restrictions are fair and
reasonable for that purpose. Xx. Xxxxxxxxx further expressly
acknowledges that damages alone will be an inadequate remedy for any
breach or violation of any of the provisions of this Section 7, and
that GTECH, in addition to all other remedies hereunder, shall be
entitled, as a matter of right, to injunctive relief, including
specific performance, with respect to any such breach or violation, in
any court of competent jurisdiction. If any of the provisions of this
Section 7 are held to be in any respect an unreasonable restriction
upon Xx. Xxxxxxxxx then they shall be deemed to extend only over the
maximum period of time, geographic area, and/or range of activities as
to which they may be enforceable.
8. a. After the Resignation Date, Xx. Xxxxxxxxx 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 Xx. Xxxxxxxxx'x expenses, including reasonable
attorneys' fees, 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
Xx. Xxxxxxxxx'x employment or actions as an employee, officer or
director of GTECH, including without limitation attendance at any
deposition or
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similar proceeding, at GTECH expense.
9. Xx. Xxxxxxxxx shall use his best efforts to return to GTECH any GTECH
property in his possession as soon as possible, but in all events by
May 31, 1998.
10. Xx. Xxxxxxxxx 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 Xx. Xxxxxxxxx.
11. Xx. Xxxxxxxxx hereby waives any and all rights to future employment
with GTECH.
12. 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 Xx. Xxxxxxxxx.
13. 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.
14. This Agreement is personal to Xx. Xxxxxxxxx and may not be assigned by
him. However, in the event of Xx. Xxxxxxxxx'x death, all benefits
payable hereunder shall be payable to his estate.
15. This Agreement is made pursuant to and shall be governed by the laws of
the State of New York, without regard to its rules regarding conflict
of laws. The parties agree that the courts of the State of New York,
and the Federal Courts located therein, shall have exclusive
jurisdiction over all matters arising from this Agreement and further
agree to accept service of process with respect to any such
proceedings.
16. This Agreement contains the entire understanding between Xx. Xxxxxxxxx
and GTECH regarding the subject matter hereof and, except as expressly
set forth herein, supersedes any prior agreements, written or oral,
including without limitation that certain Employment Agreement dated as
of January 23, 1990, as amended or clarified.
17. Anything to the contrary herein notwithstanding, the terms and
conditions of that certain Indemnification Agreement dated January 21,
1988 between Xx. Xxxxxxxxx and GTECH Corporation, which is incorporated
by reference herein and made a part hereof shall continue in full force
and effect.
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18. 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. Xx. Xxxxxxxxx
acknowledges that he has not relied upon any representation or
statement, written or oral, not set forth in this Agreement.
19. Xx. Xxxxxxxxx hereby waives any rights he may have to revoke this
Agreement after the execution hereof.
20. This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute
one instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
GTECH Holdings Corporation Attest:
by
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GTECH Corporation Attest:
by
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Witness:
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Xxxxxx Xxxxxxxxx
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