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SEVERANCE AGREEMENT AND RELEASE
This SEVERANCE AGREEMENT AND RELEASE ("Agreement") is made as of the
third day of February, 1998, by and among GTECH Holdings Corporation, GTECH
Corporation (together with their respective direct and indirect subsidiaries,
collectively, "GTECH") and Xxx X. Xxxxxxx ("Xx. Xxxxxxx").
WITNESSETH:
WHEREAS, the parties have agreed that it is in their mutual best
interest that Xx. Xxxxxxx 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. Xxxxxxx hereby resigns: (a) as an employee, director and Chairman
of the Board of Directors of GTECH Holdings Corporation; (b) as an
employee, director and Chairman of the Board of Directors 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 February 3, 1998 (the "Resignation Date").
2. Upon execution hereof, GTECH shall make to Xx. Xxxxxxx a lump sum
payment with respect to post-employment severance of $6,560,967.56
(after deduction of all federal withholdings), which sum includes no
amount or benefit arising from the United Kingdom National Lottery or
the promotion of lotteries in the United Kingdom after February 2,
1998.
3. From and after the Resignation Date, and except as otherwise expressly
provided herein, Xx. Xxxxxxx 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.
4. As of the Resignation Date, Xx. Xxxxxxx 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. Xxxxxxx in writing concerning his options with regard to
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his 401(k) account. Anything to the contrary notwithstanding: (a) Xx.
Xxxxxxx 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; and (b) GTECH shall also
respect Xx. Xxxxxxx'x rights, if any, to continued medical coverage at
his own expense under the Consolidated Omnibus Budget Reconciliation
Act (COBRA).
5. a. In consideration of the foregoing, Xx. Xxxxxxx 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. Any rights which Xx. Xxxxxxx may have to sell unregistered
shares GTECH Holdings Corporation Common Stock pursuant to Rule 144
shall not be unreasonably infringed by GTECH.
b. In consideration for the above release, GTECH hereby releases and
forever discharges Xx. Xxxxxxx 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. Xxxxxxx'x 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.
6. Xx. Xxxxxxx 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. Xxxxxxx acknowledges that
he has entered into this Agreement on the prior advice of counsel.
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7. Xx. Xxxxxxx further covenants with GTECH as follows and expressly
agrees that all payments and benefits due Xx. Xxxxxxx under this
Agreement shall be subject to Xx. Xxxxxxx'x compliance with the
following provisions.
a. Confidential Information. Xx. Xxxxxxx shall not knowingly use for
Xx. Xxxxxxx'x 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. Xxxxxxx 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. Xxxxxxx from a third party without binder of secrecy. Xx.
Xxxxxxx agrees to return to GTECH any physical embodiment of such
confidential information within seven (7) days of the execution hereof.
b. Non-Competition. For the period ending on the third anniversary of
the Resignation Date, Xx. Xxxxxxx 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) 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. Xxxxxxx'x 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. Xxxxxxx 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.
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c. Remedies. Xx. Xxxxxxx recognizes that the possible restrictions on
Xx. Xxxxxxx'x 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. Xxxxxxx expressly
acknowledges that such restrictions are fair and reasonable for that
purpose. Xx. Xxxxxxx 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. Xxxxxxx 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. Xxxxxxx 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. Xxxxxxx'x 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 available in any
third party claims, investigations, litigation or similar proceedings
to answer any questions relating to Xx. Xxxxxxx'x employment or actions
as an employee, officer or director of GTECH, including without
limitation attendance at any deposition or similar proceeding.
9. Xx. Xxxxxxx shall return to GTECH any GTECH property in his possession
within seven (7) days of the execution hereof.
10. Xx. Xxxxxxx 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. Xxxxxxx.
11. Xx. Xxxxxxx 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
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GTECH or Xx. Xxxxxxx.
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. Xxxxxxx and may not be assigned by
him. However, in the event of Xx. Xxxxxxx'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. Xxxxxxx
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. Xxxxxxx and GTECH Corporation shall continue in full
force and effect.
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. Xxxxxxx
acknowledges that he has not relied upon any representation or
statement, written or oral, not set forth in this Agreement.
19. Xx. Xxxxxxx hereby waives any rights he may have to revoke this
Agreement after the execution hereof.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date set forth below.
GTECH Holdings Corporation Attest:
by
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date
GTECH Corporation Attest:
by
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date
Witness:
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Xxx X. Xxxxxxx
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date
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