CONFIDENTIAL SETTLEMENT AGREEMENT AND GENERAL RELEASE
Exhibit
10.1
CONFIDENTIAL
SETTLEMENT AGREEMENT AND GENERAL RELEASE
This
Confidential Settlement Agreement and General Release (“Agreement”) is entered
into by and between
XXXXXX XXXXXX (“Employee”)
and WMS
GAMING INC.
(the
“Company” or “Employer.”)
WHEREAS,
Employee and Employer are parties to that certain amended and restated
employment agreement, dated February 1, 2001, as amended by those certain letter
agreements, dated November 1, 2001 and February 24, 2004 (as
amended, the “Employment Agreement”);
WHEREAS,
the Company and Employee deem it to be in their respective best interest to
enter into an agreement providing for the termination of Employee’s employment
with the Company pursuant to the terms herein stated;
WHEREAS,
Employer and Employee, each denying any wrongdoing or liability whatsoever,
desire to sever their employment relationship in an amicable fashion and to
settle all actual and potential disputes.
NOW,
THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged:
1.
Termination. Employee’s
employment with the Company shall terminate August 31, 2006 (the "Termination
Date").
2. Payment
to Employee.
For
settlement purposes only and provided this Agreement is final and irrevocable
under paragraph 9 hereof, Employer agrees to pay Employee:
(a)
as
severance an amount equal to two years’ of Employee’s base annual salary in
effect as of June 30, 2006, less usual payroll deductions, payable in normal
payroll intervals;
(b)
Employee will be paid .25% of the revenue received by the Company for each
gaming device purchased by a certain state lottery under an amendment effective
April 6, 2006 to the agreement between the Company and such lottery;
and
(c)
Employee’s annual bonus for the year ended June 30, 2006, in an amount
determined by the Compensation Committee and Board of Directors based upon
the
recommendation of management, payable when annual bonuses are paid to employees
generally;
provided
that all terms of the Employment Agreement which are intended to survive
termination of employment that are to be satisfied by Employee are met. Employee
acknowledges that the amounts described in paragraph 2 hereof satisfy the terms
of the Employment Agreement. Payments will be sent to Employee by U.S. Mail
to
his home address commencing
with the first pay period after this Agreement is final and irrevocable under
paragraph 9 hereof. Employee further acknowledges that he has received
separately all compensation and other sums to which he is entitled, other than
(i) regular base salary minus regular deductions for the period from the date
of
this Agreement through the Termination Date, (ii) certain open expense reports
previously submitted by Employee, and (iii) paid time-off accrued through the
Termination Date, payment of which will be sent to Employee’s home unless
otherwise agreed. Employee will not accrue any paid time-off, credited service
under any benefit plan or other benefits during the period of payments
hereunder.
3. Continuation
of Health Benefits.
Employee is advised that he shall be afforded continuation of health insurance
coverage under COBRA, 29 U.S.C. § 1161 et
seq.
and
Exec-U-Care supplemental medical coverage, provided he elects continuation
of
health insurance coverage under and pursuant to COBRA, 29 U.S.C. § 1161
et
seq.,
in
which case he shall be solely responsible for any related premiums to the extent
that participants in the Exec-U-Care plan generally are required to pay premiums
for standard medical coverage, except that the Company will pay the difference
in premium under COBRA
on
Employee’s behalf for standard employee medical coverage and Exec-U-Care
supplemental medical coverage through February 28, 2008, or until Employee
is
re-employed elsewhere and any applicable waiting period has expired, whichever
is earlier, provided all the terms herein and all provisions of the Employment
Agreement which are intended to survive termination of employment that are
to be
satisfied by Employee are met. Coverage provided during this period will count
toward the maximum of 18 months of coverage provided under COBRA. Employee
will
receive information on his opportunity to elect “COBRA” coverage under separate
cover. Beginning March 1, 2008, if the Employee is not re-employed elsewhere
and
eligible for coverage under the new employer’s health insurance plan, the
Company will pay $1,500 per month towards a separate policy for medical coverage
to be obtained by Employee through August 31, 2008 or until Employee is
re-employed elsewhere and any applicable waiting period has expired, whichever
is earlier, provided all the terms herein and all provisions of the Employment
Agreement which are intended to survive termination of employment that are
to be
satisfied by Employee are met.
4. Non-Competition.
The
provisions of Section 7 (“Non-Competition”) of the Employment Agreement and the
non-competition and forfeiture provisions of the stock option agreements,
restricted stock agreements and equity-based performance unit agreements between
the Company and Employee, are hereby amended to provided that Employee may
not,
without the Company's prior written consent, for a period of one (1) year
beginning on the Termination Date, directly or indirectly own, manage, operate,
join, control, participate in, perform any services for, invest in, or otherwise
be connected with, in any manner, whether as an officer, director, employee,
consultant, partner, investor or otherwise, [*].
Nothing
herein contained shall be deemed to prohibit Employee from [*]
investing
his funds in securities of a company if the securities of such company are
listed for trading on a national stock exchange or traded in the
over-the-counter market and
*
Information has been omitted from this document and filed separately with the
Securities and Exchange Commission under a request for confidential treatment
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
-2-
Employee's
holdings therein represent less than five (5) percent of the total number of
shares or principal amount of other securities of such company
outstanding.
5. Club
Membership.
To the
extent permitted by the TPC Country Club, the Company will tender the club
membership to you effective September 1, 2006; provided, you will be responsible
for any transfer fees and expenses. You will be responsible for monthly dues,
fees and assessments beginning September 1, 2006.
6. General
Release and Covenant Not To Xxx. In
consideration of the promises contained herein, the adequacy of which is hereby
acknowledged, and other good and valuable consideration, Employee (on behalf
of
himself and his heirs, executors, administrators, successors and assigns)
irrevocably and unconditionally releases and forever discharges and acquits
the
Company (and all its agents, officers, employees, directors, shareholders,
attorneys and any affiliated or related companies, including parent companies,
subsidiaries, divisions, successors, and assigns) (collectively “Releasees”),
from any and all claims, charges, liabilities, debts, demands, grievances and
causes of action of whatsoever kind, at law or in equity, whether known or
unknown, suspected or unsuspected, or otherwise, including but not limited
to
claims relating to or arising out of Employee's employment and termination
of
employment, claims for breach of employment contract, claims for attorneys'
fees, claims under the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964 and 1991, as amended, The Fair Labor Standards Act,
The
Family and Medical Leave Act, the Americans with Disabilities Act, the Employee
Retirement Income Security Act (“ERISA”), the Worker Adjustment and Retraining
Notification Act (“WARN”), the Nevada Wage Payment and Collection Act, the
Nevada Human Rights Act, claims of retaliation, claims for pain and suffering
and mental and emotional distress, wrongful discharge claims, severance pay
claims, accrued paid time-off, bonuses, salary and benefits, or other claims
under any federal, state or local constitution, statute, or common law, which
Employee has, had or may have against the Releasees arising from or relating
to
acts or omissions through the date hereof, or involving the continuing effects
of any acts or omissions which occurred through the date hereof. Notwithstanding
anything to the contrary herein, Employee reserves the right to apply for
unemployment compensation relating to his termination of employment by the
Company.
Employee
acknowledges and agrees that the nature, materiality, extent and results of
the
claims compromised and released by this Agreement may not now all be known
or
anticipated by him. However, it is the intention of the parties hereto that
this
Agreement shall be effective as a bar to each and every claim, charge,
liability, offset, demand, grievance, debt and cause of action that Employee
may
have against the Company. Employee further acknowledges and agrees that he
may
hereafter discover facts different from or in addition to those now known,
suspected or believed to be true with respect to such claims, demands or causes
of action and agrees that this release will be and remain effective in all
respects notwithstanding any such differences or additional facts.
Employee
covenants and agrees not to xxx, to make a claim or demand, or to commence
or
maintain any action or proceeding of any kind in any court, before any
government agency or in any other forum, except nothing herein shall preclude
Employee from exercising rights protected by public policy. Employee shall
not
assist or otherwise participate in any court proceeding, except as required
by
applicable law. Employee agrees to indemnify the Company against all liability,
costs and expenses, including reasonable attorneys’ fees, in the event he
breaches this release and covenant not to xxx, whether brought directly by
Employee or brought by any other person, agency or entity. Employee expressly
waives his right to any money, benefit or other relief that may be ordered
by a
court or administrative agency with respect to a claim within the scope of
this
General Release. The
foregoing or any other provision in this Agreement to the contrary
notwithstanding, the release provided by Employee under this Agreement shall
not
apply to [1] any claim concerning the enforcement or construction of this
Agreement; or [2] any claim Employee may now or hereafter have for indemnity
from the Company in respect to any claim asserted by third parties against
Employee arising from acts or omissions of Employee within the scope of his
employment by the Company.
-3-
Effective
when this Agreement becomes final and irrevocable under paragraph 9 below,
the
Company hereby releases and forever discharges Employee, together with
Employee’s agents, representatives, heirs and assigns, from any and all claims,
demands, damages, actions, causes of action, suits, debts, liabilities and
obligations, liens, costs and expenses of any nature, character and description,
known or unknown, accrued or not yet accrued, whether anticipated or
unanticipated, arising from or in any way related to Employee’s employment by
the Company which the Company now holds, or has any time heretofore owned or
held, or may at any time hereafter own or hold, by reason of any manner, cause
or thing whatsoever existing as of the date hereof or at any time prior hereto
other than those arising from willful misconduct, fraud or criminal
conduct.
7. Return
of Company Property.
On the
Termination Date, Employee will immediately return all keys, key cards,
identification badges, records, papers, files, blueprints, documents, computers,
computer disks, software, data stored on any computer or other storage device,
cell phones, and other materials or property belonging to Company or its
employees to the Company.
8. Counterparts.
This
Agreement may be executed in counterparts, each of which may be signed
separately and may be enforceable as an original, but all of which together
shall constitute but one agreement.
9. Notice
of Employee Rights; Effective Date. Employee
has been advised (a) that he has up to twenty-one (21) days to consider this
Agreement; (b) that the Agreement does not take effect until seven (7) days
after signing and may be revoked by him during that time period; (c) to consult
an attorney before signing this Agreement; and (d) the Employee does not waive
rights or claims that may arise after the date the waiver is executed. This
Agreement will be effective 8 days after Employee signs it, provided he has
not
revoked his agreement during the 7 day revocation period. If Employee agrees
to
the terms of this Agreement, Employee should sign the Agreement and deliver
it
to Vice President of Human Resources at WMS Gaming Inc., 000 X. Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxxx 00000 at any time within such twenty-one (21)
day
period. If Employee does not sign or if he timely revokes his agreement, this
Agreement will be null and void.
10. Confidentiality.
Employee agrees that the fact and terms of this Agreement are strictly
confidential, and therefore, agrees that from the date of presentment to him
of
this Agreement forward, Employee shall not disclose, permit or cause the
disclosure of any information concerning this Agreement, except to his attorney,
tax preparer and immediate family members, provided they also agree to keep
this
Agreement and its terms confidential.
-4-
11. Entire
Agreement.
With
respect to the matters set forth herein, this Agreement, represents the entire
agreement between Employee and the Company and supersedes all prior agreements
or understandings, if any, between the parties, except for (a) any Inventions,
Intellectual Material and Confidentiality Agreement signed by Employee, (b)
the
provisions of Sections 7 (“Non-Competition”), as modified in this Agreement, 8
(“Confidentiality Agreement”), 9 (“Invention Disclosure”) and 10 (“Remedies”) of
the Employment Agreement and (c) the non-competition and forfeiture provisions
of the stock option agreements, restricted stock agreements and equity-based
performance unit agreements between the Company and Employee (as modified by
this Agreement), all of which provisions of which Employee acknowledges are
designed to survive the termination of his employment, as expressly modified
by
this Agreement. Employee acknowledges that except for the explicit provisions
of
this Agreement, no promises or representations of any kind have been made to
Employee by the Company, its attorneys or any of the Releasees, to induce him
to
enter into this Agreement. No modification of this Agreement can be made except
in writing and signed by Employee and an authorized representative of the
Company.
12. Choice
of Law; Savings Provision. This
Agreement shall be governed, interpreted and construed under the laws of the
State of Nevada without regard to its conflict of law principles. The parties
agree that any dispute or litigation arising in whole or in part hereunder
shall, at the option of Employer, be litigated in any state or federal court
of
competent subject matter jurisdiction sitting in Nevada, to the jurisdiction
of
which and venue in which Employee irrevocably consents. If any provision of
this
Agreement shall be invalidated or refused enforcement by any court of competent
jurisdiction, the provisions not invalidated or refused enforcement shall remain
in full force and effect.
13. No
Attorney's
Fees.
Employee waives his right, if any, to attorney’s fees. The Company will pay all
expenses incurred by it, and Employee will bear all expenses incurred by him,
in
the negotiation and preparation of this Agreement.
14. Non-Disparagement
Pledge. The
parties agree that it would be counterproductive and undesirable for either
to
communicate in a derogatory manner to third parties about one another, and
each
party pledges not to do so, unless required by law. The Company will refer
all
inquiries from prospective employers concerning Employee to the Company's Human
Resources Department, which will respond to such inquiries by providing the
dates of employment, position held and compensation of Employee. Employee will
not allege or claim that he was mistreated by the Company. The Company will
provide Employee the opportunity to comment on any public disclosure of this
Agreement made in accordance with the rules of the Securities Exchange
Commission and, provided Employee responds in a timely manner will consider
any
input in good faith. The Company and Employee will agree on the terms of any
other public statement, such as a press release, announcing Employee’s departure
from the Company.
15. For
Settlement Only. This
Agreement is entered into for settlement purposes only and represents the
compromise of disputed claims, actual or potential. Neither this Agreement,
the
decision to enter into this Agreement nor anything done pursuant to this
Agreement shall be construed to be an admission or evidence of any wrongdoing
or
liability by any party, such wrongdoing and liability being expressly denied.
Nor will this Agreement, its existence or its terms be admissible in any
proceeding other than a proceeding to enforce or construe the terms of this
Agreement.
-5-
16. Representations
& Warranties by All Parties.
Each of
the parties represents and warrants, as to itself and himself that (a) it/he
has
the capacity, full power and authority to enter into this Agreement, (b) the
individual signing on behalf of the corporate party is authorized to do so,
(c)
it/he has not assigned, encumbered or in any manner transferred all or any
portion of the claims covered by this Agreement, (d) there are no other charges,
complaints, suits, arbitrations or other claims or proceedings pending between
the parties in any court, before any agency, or in any forum, and (e) no other
person, party or corporation has any right, title or interest in any of the
claims covered by this Agreement.
17. Successors
& Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective personal representatives, agents, attorneys, executors,
administrators, heirs, successors and assigns.
18. Knowing
and Voluntary Signing of Binding Contract.
The
parties represent and warrant that they have read this Agreement and understand
all of its terms and execute this Agreement voluntarily and without duress
or
undue influence, and with full knowledge of its significance, intending to
be
legally bound. Employee acknowledges that by signing this Agreement, subject
to
the limited right to revoke in paragraph 9, he is
GIVING UP ALL CLAIMS AGAINST
the
Company and Releasees.
19. Opportunity
to Consult Advisors.
Both
Employee and the Company have had reasonable opportunity to consult with
attorneys or other advisors of their own choosing before executing this
Agreement.
20. Variation
of Pronouns.
All
pronouns and variations thereof shall be deemed to refer to masculine, feminine
or neuter, singular or plural, as the identity of persons may require.
-6-
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement by affixing
their signatures and the date of execution where indicated below.
| WMS GAMING INC. | EMPLOYEE | |||
| By: | /s/ Xxxxxxxx X. XxXxxx |
By:
|
/s/ Xxxxxx XxXxxx | |
|
Name: Xxxxxxxx X. XxXxxx |
Xxxxxx XxXxxx |
|||
| Title: VP, General Counsel and Secretary | ||||
| Dated: August 9, 2006 | Dated: August 3, 2006 | |||
-7-
