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EXHIBIT 10.2
SEVERANCE AGREEMENT AND RELEASE
This SEVERANCE AGREEMENT AND RELEASE ("Agreement") is made as of the 24th
day of May, 2001, by and among GTECH Holdings Corporation, GTECH Corporation
(together with their respective direct and indirect subsidiaries and affiliates
and any of their respective officers, directors or employees) (collectively
"GTECH" or the "Company") and Xxxxxx Xxxxxxxx ("Xx. Xxxxxxxx").
WITNESSETH:
WHEREAS, Xx. Xxxxxxxx has been employed by GTECH since October, 1979,
presently as Chief Technology Officer; and
WHEREAS, GTECH has sought for its own convenience that Xx. Xxxxxxxx and
GTECH sever their relationship; 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. Termination of Employment.
It is hereby agreed that Xx. Xxxxxxxx'x employment shall terminate
effective as of February 15, 2002 or six (6) months after the date of hire of a
Chief Development officer, whichever is sooner (the "Termination Date").
2. Continuation of Base Salary.
a. In furtherance of GTECH's obligations to Xx. Xxxxxxxx under its
severance policy, and in consideration of his long-standing contribution to
GTECH, GTECH shall provide Xx. Xxxxxxxx, within ten (10) days of the Termination
Date, with a one-time payment of $700,000, subject to all applicable
withholdings and deductions.
b. This payment and the other benefits provided for in this Agreement
constitute the entire obligation of GTECH, represent full and complete
satisfaction by GTECH of all obligations under the severance policy, and
constitute full and complete settlement of any claim under law or equity that
that Xx. Xxxxxxxx might otherwise assert against GTECH for compensation,
benefits or remuneration of any form.
3. Benefits. From and after the Termination Date, Xx. Xxxxxxxx shall not be
eligible for any GTECH benefits or perquisites, and shall no longer be eligible
to participate in any GTECH benefit program or plan, except as expressly set
forth below:
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a. So long as GTECH participates in an "insured" plan (currently United
Health Plans of New England), GTECH shall, for a period of six (6) years
following the Termination Date, or until Xx. Xxxxxxxx'x earlier death, continue
to provide medical benefits to Xx. Xxxxxxxx under such "insured" plan.
Thereafter, Xx. Xxxxxxxx shall be entitled to whatever medical coverage, if any,
is required to be provided by applicable law. GTECH shall provide Xx. Xxxxxxxx,
within ten (10) days of the Termination Date, with a one-time payment in the
amount of $2,500.00 in lieu of providing dental and vision coverage.
b. GTECH shall pay to Xx. Xxxxxxxx his accrued but unused vacation pay
during the pay period following the Termination Date.
c. Xx. Xxxxxxxx shall be eligible for consideration for a CMIP bonus for
FYE `01, in accordance with the terms of the current incentive plan. Xx.
Xxxxxxxx also shall be eligible for a pro rata CMIP bonus for FYE '02, in
accordance with the terms of the then-current incentive plan. Nothing herein
shall create an expectation of an entitlement to a bonus on the part of Xx.
Xxxxxxxx.
d. Xx. Xxxxxxxx shall have pro rata usage of his Executive Perquisites
Plan account for calendar year 2002.
4. Continuing Obligations. Xx. Xxxxxxxx further covenants with GTECH as
follows:
a. For a period of three years (3) years after the Termination Date, Xx.
Xxxxxxxx, upon reasonable notice, shall furnish such information and proper
assistance to GTECH as may reasonably be required in connection with any third
party claims, investigations, litigation or similar proceedings which may
involve GTECH with respect to the period of Xx. Xxxxxxxx'x employment with
GTECH.
b. Xx. Xxxxxxxx shall not knowingly use for his own benefit or disclose or
reveal to any unauthorized person any trade secret or other confidential
information relating to GTECH, 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, or other information relating to the business of GTECH, provided
that such restriction on additional information shall not apply to information
which is (i) proven to be generally available in the industry, (ii) disclosed in
published literature, (iii) obtained by Xx. Xxxxxxxx after the Termination Date
from a third party without binder of secrecy, or (iv) required to be disclosed
by Xx. Xxxxxxxx by court order or other process of law, provided however, that
Xx. Xxxxxxxx shall to the extent the circumstances allow, provide GTECH with
prior written notice of such requirement and with the opportunity to assist in
opposing such court order or other process of law. Xx. Xxxxxxxx agrees that,
except as otherwise agreed by GTECH, he will return to GTECH, promptly upon
request, any physical embodiment of such confidential information.
c. 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 Xx.
Xxxxxxxx may have conceived, created, organized,
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prepared or produced during the period of his employment with GTECH and which
relate to the business of GTECH, and all rights, title and interest in and to
any patents, patent applications, copyright registrations and copyright
applications resulting therefrom, are owned by GTECH, and Xx. Xxxxxxxx agrees to
execute instruments or documents, provide evidence and testimony, and to
otherwise assist GTECH in establishing, enforcing and maintaining such rights,
title and interest of GTECH.
d. GTECH shall reimburse Xx. Xxxxxxxx for all reasonable and necessary
expenses incurred by him pursuant to this Section 4, which are consistent with
GTECH policy, upon submission by Xx. Xxxxxxxx to GTECH of receipts and vouchers
verifying such expenses in sufficient detail to identify the nature and amount
thereof.
5. Release. Xx. Xxxxxxxx acknowledges that the payments provided for in
paragraphs 2 and 3 of this Agreement are greater than any to which he may have
otherwise been entitled under any existing Company separation, benefit or
compensation policy. In consideration of the foregoing, Xx. Xxxxxxxx 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 of breach of
contract and wrongful termination and 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.
6. Advice of Counsel. Xx. Xxxxxxxx understands that various state and federal
laws prohibit employment discrimination based on age, sex, race, color, national
origin, religion, disability or veteran status. These laws are enforced through
the Equal Employment Opportunity Commission (EEOC), Department of Labor and
state human rights agencies. Xx. Xxxxxxxx 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 at least forty-five days so that he can thoroughly
review and understand the effect of this Agreement before acting on it.
Xx. Xxxxxxxx acknowledges that he has been informed that the benefits
provided in this Severance Agreement and Release are part of an employment
termination program that has been offered to certain employees of GTECH. Xx.
Xxxxxxxx also acknowledges that he has been informed in writing about the job
titles and ages of all individuals eligible or selected for the program, as well
as the ages of all individuals in the same job classification or organizational
unit who were not selected for the program.
7. Non-Competition and Other Restrictions. Xx. Xxxxxxxx further covenants
with GTECH as follows and expressly agrees that all payments and benefits due
to him under this Agreement are subject to his compliance with the following
provisions.
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a. For six (6) years after the Termination Date, Xx. Xxxxxxxx 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) in the Lottery and Gaming
Business (as defined below).
As used herein, the "Lottery and Gaming Business" shall mean the provision
of products or services of every nature (other than on behalf of GTECH) relating
to the operation of all manner of lotteries, games of chance and parimutuel
wagering however and wherever conducted. Xx. Xxxxxxxx shall not be deemed to
have violated this Section 7(a) merely by virtue of employment by a
non-competitive division or subsidiary of a business entity or consolidated
group that includes one or more divisions or subsidiaries that does in fact
compete with a business carried on by GTECH, nor shall he be precluded from
involvement in any internet business as long as the business is not the Lottery
and Gaming Business. Xx. Xxxxxxxx'x 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
engaged in the Lottery and Gaming Business shall not by itself be deemed to
constitute engagement by Xx. Xxxxxxxx.
b. Further, for a period of six (6) years after the Termination Date, Xx.
Xxxxxxxx shall not (i) disturb or interfere with any business relationship
between GTECH and any of its employees, dealers, customers, suppliers or other
business associates, or (ii) solicit or cause to be solicited any officer,
employee, customer or shareholder of GTECH to terminate such person's
relationship with GTECH.
c. Xx. Xxxxxxxx recognizes that the possible restrictions on Xx.
Xxxxxxxx'x activities which may occur as a result of his performance of his
obligations under this Section 7 and Section 4 are required for the reasonable
protection of GTECH and its investments, and Xx. Xxxxxxxx expressly acknowledges
that such restrictions are fair and reasonable for that purpose. Xx. Xxxxxxxx
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
Section 4, and that GTECH, in addition to all other remedies hereunder and at
law or 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. If any of the provisions of this Section 7
are held to be in any respect an unreasonable restriction upon Xx. Xxxxxxxx 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. Change of Address. Xx. Xxxxxxxx agrees to promptly notify GTECH of any
change in address, and/or non-GTECH employment or business activity occurring
within twelve (12) months of the Termination Date. Such notice shall include
the name and address of each such employer or business associated as well as
the nature of each such non-GTECH employment or business activity.
9. Return of Property. Xx. Xxxxxxxx shall return to GTECH any GTECH property
in his possession, custody or control on the Termination Date.
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10. Comments. Xx. Xxxxxxxx shall at no time make or cause to be made any
derogatory or disparaging comments regarding GTECH, its business, or its
present or past directors, officers or employees.
11. Tax Withholding. GTECH may withhold from any compensation or benefits
payable under this agreement all Federal, State, City, or other taxes as
shall be required pursuant to any law or governmental regulations or ruling.
12. 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 GTECH or Xx. Xxxxxxxx.
13. Severability. 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. Non-assignability.
a. Neither this Agreement nor any rights or interest hereunder shall be
assignable by Xx. Xxxxxxxx, his beneficiaries, or legal representatives without
prior written consent.
b. This Agreement shall be binding upon, and accrue to the benefit of, Xx.
Xxxxxxxx and GTECH and their respective heirs, executors, administrator,
successors and permitted assigns, including, in the case of GTECH, any person or
entity acquiring all or substantially all of GTECH's assets.
15. Governing Law. 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. In any dispute concerning this Agreement, the non-prevailing
party shall pay the prevailing party's reasonable attorney's fees and costs,
together with interest on any unpaid amount due at the rate of twelve percent
per annum (but not in excess of the highest rate allowed by law).
16. Entire Agreement. This Agreement, along with the Business Services
Agreement being executed contemporaneously with this Agreement, contain the
entire understanding between Xx. Xxxxxxxx and GTECH regarding the subject matter
hereof and, except as expressly set forth herein, supersedes any prior
agreements, written or oral.
17. Stock Options and Restricted Stock. Xx. Xxxxxxxx'x entitlement to any
options shall be exercised in accordance with the applicable Stock Option
Plans. GTECH will recommend to the Compensation Committee the acceleration
of unvested options and the extension of unvested options. Xx. Xxxxxxxx'x
entitlement to Restricted Stock, if any, shall be exercised in accordance
with the 2000 Plan, which provides for the immediate vesting of all shares
upon termination of employment.
18. Confidentiality. This Agreement is confidential and neither the Agreement
nor any of its terms or contents shall be made public by Xx. Xxxxxxxx or
otherwise disclosed by him to any
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person other than his immediate family, attorney, tax advisor or accountant,
except as required by law or if necessary to enforce this Agreement.
19. Modification. This Agreement may not be changed orally but only by an
instrument in writing signed by the parties hereto. The parties acknowledge
that they have not relied upon any representation or statement, written or
oral, not set forth in this Agreement.
20. Revocation; Effective Date. Xx. Xxxxxxxx may revoke his agreement to the
terms hereof at any time during the seven-day period immediately following the
date of his signature below ("Revocation Period") by delivering written notice
of his revocation to GTECH. This Agreement shall become effective upon the
expiration of the Revocation Period.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
set forth below.
GTECH Holdings Corporation Attest:
By: /s/ Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxxx
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Date: 6/12/01
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GTECH Corporation Attest:
By: /s/ Xxxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxx
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Date: June 12, 2001
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Witness:
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxxx Xxxxxxx
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Xxxxxx Xxxxxxxx
Date: May 24, 2001
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