Exhibit 10.9
SEPARATION AGREEMENT AND MUTUAL RELEASE
THIS SEPARATION AGREEMENT AND MUTUAL RELEASE ("Agreement") is dated and
effective as of this 7th day of January 2004, by and among GTECH Holdings
Corporation, GTECH Corporation, together with their direct and indirect
subsidiaries and affiliates and any of their respective officers, directors or
employees, (collectively, "GTECH" or "Company") and Xxxxx Xxxxx ("Xx. Xxxxx" or
"Executive").
WHEREAS, Xx. Xxxxx has been employed by GTECH since June 18, 2001, as
Senior Vice President of Technology and Chief Technology Officer.
NOW, THEREFORE, in consideration of the covenants contained herein and
other consideration, the receipt of which is hereby acknowledged, the Parties
agree as follows:
1. Resignation. GTECH has accepted Xx. Xxxxx'x voluntary resignation, effective
January 7, 2004.
2. Compensation. GTECH hereby agrees to pay Xx. Xxxxx a prorated portion of his
bonus against his Target for FY04 in the amount of two hundred sixty thousand,
eight hundred thirty-five dollars ($260,835.00). GTECH agrees to pay Xx. Xxxxx
all accrued salary and vacation through the date of this Agreement. In addition,
GTECH agrees to make a one-time lump-sum payment in the amount of eighteen
thousand dollars ($18,000.00) related to Xx. Xxxxx'x temporary residence in
Rhode Island. GTECH agrees to lift all transfer restrictions on all vested stock
acquired by Xx. Xxxxx through the Bonus Program and the Employee Stock Purchase
Plan. Xx. Xxxxx and GTECH acknowledge that Xx. Xxxxx retains all vested
restricted stock and forfeits all unvested stock pursuant to all applicable
stock option plans and agreements. Xx. Xxxxx and GTECH also acknowledge that Xx.
Xxxxx retains the right to exercise twenty-five thousand (25,000) vested stock
options issued to him under the 2000 Omnibus Plan pursuant to the terms of that
plan and the applicable stock option agreement and that all other stock options
are forfeited pursuant to the terms of all applicable stock option plans and
agreements. Xx. Xxxxx and GTECH acknowledge that Xx. Xxxxx is not entitled to
any other compensation or benefits, including without limitation any medical, or
other relocation benefits, except as set forth in this paragraph as a result of
his resignation. For the avoidance of doubt, Xx. Xxxxx'x eligibility for cash,
stock and benefits compensation is outlined in Exhibit 1. In addition, a copy of
the paystub and check issued to Xx. Xxxxx is attached hereto as Exhibit 2.
3. Mutual Releases.
(a) Xx. Xxxxx 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 equity, known or unknown, fixed or contingent, which he
may have or claim to have based upon or in any way related to his employment (as
an officer, director or employee of GTECH or any of its subsidiaries or
affiliates), rights or entitlements related thereto or the 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 of breach of contract and wrongful
termination 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.
(b) GTECH hereby releases and forever discharges Xx. Xxxxx 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 equity,
known or unknown, fixed or contingent, which it may have or claim to have based
upon or in any way related to Xx. Xxxxx'x employment (as an officer, director or
employee of GTECH or any of its subsidiaries or affiliates), rights or
entitlements related thereto or the termination of such employment by GTECH, and
hereby covenants not to file a lawsuit or charge to assert such claims.
4. Obligations.
(a) Confidential Information. Executive shall not knowingly use for his
own benefit or disclose or reveal to any unauthorized person, at any time, any
trade secret or other confidential information relating to the Company,
including any customer lists, customer needs, price and performance information,
processes, specifications, hardware, software, firmware, programs, devices,
supply sources and characteristics, business opportunities, marketing,
promotional, pricing and financing techniques, and other information relating to
the business of the Company; provided that such restriction on confidential
information shall not apply to information which is (i) proven to be generally
available in the industry, (ii) disclosed in published literature or (iii)
obtained by Executive from a third party without binder of secrecy. Executive
agrees that, except as otherwise agreed by the Company, he will return to the
Company, promptly upon request of the Board or any executive officer designated
by the Board, any physical embodiment of such confidential information. In the
event Executive is requested by any legal process to disclose confidential
information, Executive shall immediately inform the Company and shall permit the
Company an opportunity to oppose such process, it being understood that
Executive's compliance with legal process, after the Company's reasonable
opportunity to oppose such process, does not constitute a violation of this
covenant.
(b) Proprietary Creations. All rights, title and interest in and to any
ideas, inventions, technology, processes, know-how, works, hardware, software,
firmware, programs, devices, trade secrets, trade names, trademarks or service
marks, which Executive may have conceived, created, organized, prepared or
produced during the period of his employment with the Company and which relate
to the business of the Company, and all rights, title and interest in and to any
patents, patent applications, copyright registrations and copyright applications
resulting therefrom, shall be owned by the Company, and Executive agrees to
execute instruments or documents, to provide evidence and testimony, and to
otherwise assist the Company in establishing, enforcing and maintaining such
rights, title and interest of the Company at any time.
(c) Non-Competition. For two years following the Effective Date,
Executive shall not engage or propose to engage, directly or indirectly (which
includes owning, managing, operating, controlling, being employed by, acting as
a consultant to, giving financial assistance to, participating in or being
connected in any material way with any business or person so engaged)
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in any Lottery Business anywhere in the world, including without limitation in
any business which competes or proposes to compete with any Lottery Business in
which the Company was engaged or proposed to be engaged anywhere in the world;
provided, that Executive's ownership as a passive investor of less than one
percent of the issued and outstanding stock or equity, or $100,000 principal
amount of any debt securities, of any corporation, partnership or other entity
so engaged shall not by itself be deemed to constitute such engagement by
Executive. As used herein, the "Lottery Business" shall mean the provision of
products or services of every nature relating to the operation of all manner of
lotteries however and wherever conducted, but does not include traditional
gaming activities not of the type and nature customarily operated by
governments.
(d) Further, for a period of two years following the Effective Date,
Executive shall not (i) disturb or interfere with any business relationship
between the Company and any of its customers, suppliers or other business
associates, or (ii) solicit or cause to be solicited any officer, employee or
customer of the Company to terminate such person's relationship with the Company
or to take other action which is materially injurious to the Company.
(e) Executive and Company mutually agree that neither party shall at
any time make or cause to be made any derogatory or disparaging comments
regarding (i) the Executive or (ii) the Company, its business, or its present or
past directors, officers or employees. Executive acknowledges that the Company
may be required to disclose information about Xx. Xxxxx and/or his resignation
from the Company pursuant to legal regulations or administrative requirements
and that such disclosure does not violate any of the provisions of this
Agreement. In the event the Company is required to make such disclosure, the
Company shall notify Xx. Xxxxx of such disclosure in advance or as soon as
reasonably practicable thereafter.
5. Miscellaneous Provisions.
(a) The Parties acknowledge that they have been afforded sufficient
time to understand the terms and effects of this Agreement and the opportunity
to consult counsel and that the agreements and obligations herein are made
voluntarily, knowingly and without duress, and that neither Xx. Xxxxx, GTECH nor
their agents or representatives have made any representations inconsistent with
the provisions of this Agreement.
(b) This Agreement shall not be construed against the Party preparing
same, but shall be construed as if both Parties jointly prepared this Agreement
and any uncertainty and ambiguity shall not be interpreted against the drafting
Party.
(c) Executive represents to the Company and the Company represents to
the Executive that the execution and performance of this Agreement by Executive
or the Company, as applicable, does not and will not constitute a breach of or
violate any contract, agreement, obligation or understanding, oral or written,
or order of any court or governmental authority to which he is a party or by
which he or the Company is bound.
(d) Binding Agreement. This Agreement shall be binding upon, and accrue
to the benefit of, Executive and the Company and their respective heirs,
executors, administrators, successors and permitted assigns, including, in the
case of the Company, any person or entity acquiring all
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or substantially all of the Company's assets or the surviving entity if there is
a change in control of the Company.
(e) Amendment of Agreement. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto.
(f) Remedies. Each of the Executive and the Company acknowledges and
agrees that the possible restrictions on each of their activities which may
occur as a result of each of their performance of the obligations under Section
4 hereof are required for the reasonable protection of the Company and
Executive. Executive and the Company expressly acknowledge and agree that such
restrictions are fair and reasonable for that purpose. Each of the Executive and
the Company further expressly acknowledges and agrees that damages alone will be
an inadequate remedy for any breach or violation by the Executive or the Company
of this Agreement and that the Company or the Executive, in addition to all
other remedies at law or in equity, 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 including, without
limitation, any state or federal court in Rhode Island. If any of the provisions
of such Sections are held to be in any respect an unreasonable or unlawful
restriction upon Executive, 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. Executive further acknowledges and agrees that, without
limiting any other rights the Company may have, any of the payments and benefits
required to be provided to Executive under this Agreement shall be forfeited to
the Company if Executive breaches any of his obligations to the Company under
Section 4 hereof. This provision shall remain in effect for a period of two
years.
(g) Waiver. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel.
(h) Severability. If, for any reason, any provision of this Agreement
is held invalid, such invalidity shall not affect any other provision of this
Agreement no so held invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect.
(i) Counterparts. This Agreement may be executed by facsimile and in
several counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
(j) Indulgences, Etc. Neither the failure nor any delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.
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(k) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Rhode Island, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof. In the event of any dispute hereunder, the prevailing party shall be
entitled to recover all costs, including reasonable attorneys' fees, incurred in
adjudicating such dispute.
(l) Costs. Each party to this Agreement shall be responsible for its
own costs and expenses incurred in the preparation and negotiation hereof
(including, without limitation, the fees and disbursements of its counsel).
(m) No Admission. 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 the Company or the Executive.
(n) The Company agrees to provide Xx. Xxxxx with a reference from the
Company's Chief Executive Officer describing the positive influences Xx. Xxxxx
had in his role as Chief Technology Officer. The Company further agrees that the
Chief Executive Officer will be reasonably available to serve as a positive
reference for Xx. Xxxxx by telephone. All calls seeking a reference for Xx.
Xxxxx will be directed to the Chief Executive Officer's office.
IN WITNESS WHEREOF, the Parties have executed this Agreement the day
and year first above written.
GTECH Holdings Corporation Xxxxx Xxxxx
/s/ Xxxx X. Xxxxxxxxxx /s/ Xxxxx X. Xxxxx
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Signature Signature
Xxxx X. Xxxxxxxxxx Xxxxx X. Xxxxx
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Name Name
Senior Vice President
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Title
GTECH Corporation
/s/ Xxxx X. Xxxxxxxxxx
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Signature
Xxxx X. Xxxxxxxxxx
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Name
Senior Vice President
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Title
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