SEPARATION AND RELEASE AGREEMENT
Exhibit
10.2
This
Separation and Release Agreement (the “Agreement”)
is
entered into as of September 13, 2006, by and among Xxxxxxx X. Mix
(“Mix”),
and
Spectre Gaming, Inc., a Minnesota corporation (the “Company”),
with
respect to the separation of Mix from employment with the Company and the
termination of certain obligations among the parties.
INTRODUCTION
A.
Mix
and
the Company are parties to a certain Employment Agreement dated April 16, 2004
(the “Employment
Agreement”),
and a
certain Stock Option Agreement dated on or about March 22, 2004, relating to
the
grant of options to purchase up to 600,000 shares of the Company’s common stock
at $1.50 per share, as described in the Employment Agreement (such agreement,
the “Existing
Option Agreement”).
B.
The
parties have agreed to terminate the Employment Agreement and the Existing
Option Agreement on the terms and conditions set forth herein.
C.
In
furtherance of Mix’s separation from the Company and the termination of the
Employment Agreement and the Existing Option Agreement, and simultaneously
with
the execution and delivery of this Agreement, the parties will enter into a
New
Stock Option Agreement as set forth in Sections 1
and
2
of this
Agreement. In addition, the parties have agreed to other terms and conditions
related to Mix’s separation from the Company, including mutual releases of
potential claims against each other.
D.
In
order
to effectuate the separation, the parties desire to enter into this Agreement
and set forth in writing their respective rights, obligations, duties and
remedies pertaining to the separation of Mix from the Company and the other
matters contemplated hereby.
AGREEMENT
Now,
Therefore,
in
consideration of the foregoing facts and premises hereby made a part of this
Agreement, the mutual covenants set forth herein, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree
as
follows:
1.
Obligations
of Mix.
(a)
Mix
hereby resigns from his position as the Company’s Chief Executive
Officer.
(b)
Mix
hereby acknowledges that he has executed and delivered the New Stock Option
Agreement attached hereto as Exhibit
A
(the
“New Stock
Option Agreement”),
prior
to the execution and delivery of this Agreement.
(c)
Mix
hereby agrees to execute and deliver the Consulting Agreement, in the form
attached hereto as Exhibit
B
(the
“Consulting
Agreement”),
simultaneously with the execution and delivery of this Agreement.
(d)
Mix
hereby provides the release set forth in Section 3(b)
of this
Agreement, the employment-related releases set forth in Section 5
of this
Agreement, and the covenants set forth in Sections 6
and
7
of this
Agreement.
2.
Obligations
of the Company.
(a)
The
Company hereby agrees to pay Mix, on the first business day after the lapse
of
Mix’s recission rights described in Section 5
below, a
total of Fifteen Thousand and No/100 Dollars ($15,000.00) as full payment for
Mix’s accrued but unpaid vacation time under the Employment Agreement, together
with all reasonable Company-related expenses submitted to the Company by Mix
by
such time (in the manner consistent with past practice and policies of the
Company).
(b)
The
Company hereby acknowledges that it has executed and delivered the New Stock
Option Agreement prior to the execution and delivery of this
Agreement.
(c)
The
Company hereby agrees to execute and deliver the Consulting Agreement
simultaneously with the execution and delivery of this Agreement.
(d)
The
Company hereby provides the release set forth in Section 3(a)
of this
Agreement, and the covenants set forth in Section 8
of this
Agreement.
3.
Mutual
Releases.
The parties hereby provide the following releases:
(a)
The
Company hereby releases and forever discharges Mix of and from any and all
past,
present and future claims, demands, liabilities, judgments and causes of action,
at law or in equity, known or unknown, asserted or unasserted, liquidated or
unliquidated, absolute or contingent, accrued or not accrued, which the Company
ever had, presently has, might have in the future, claim to have, or claim
to
have had against Mix arising out of, touching upon, relating to or in any manner
connected with: (i) Mix’s affiliation with the Company prior to and including
the date of this Agreement, including but not limited to his position as an
employee, officer and director of the Company; and (ii) the Company or the
operation and conduct of the Company’s business prior to and including the date
of this Agreement; provided,
however,
that
Mix’s obligation and liability for the observation and performance of this
Agreement, the New Stock Option Agreement and the Consulting Agreement is
specifically excluded from the foregoing release.
(b)
Mix
hereby releases and forever discharges the Company and its employees, agents,
affiliates and representatives (collectively, the “Company
Released Parties”)
of and
from any and all past, present and future claims, demands, liabilities,
judgments and causes of action, at law or in equity, known or unknown, asserted
or unasserted, liquidated or unliquidated, absolute or contingent, accrued
or
not accrued, which Mix ever had, presently has, might have in the future, claim
to have, or claim to have had against any of the Company Released Parties
arising out of, touching upon, relating to or in any manner connected with:
(i)
any of the Company Released Parties’ affiliation with the Company prior to and
including the date of this Agreement, including but not limited to any of their
positions as an employee, shareholder, officer and/or director of the Company;
(ii) the Company or the operation and conduct of the Company’s business prior to
and including the date of this Agreement; and (iii) any and all claims under
the
ADEA and MHRA as indicated in Section 5
below;
provided,
however,
that
obligation and liability of the Company for the observation and performance
of
this Agreement, the New Stock Option Agreement and the Consulting Agreement
is
specifically excluded from the foregoing release.
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4.
Non-Admission.
Even though Company has given Mix valuable consideration for the release set
forth in Section 3(a)
above,
the Company does not admit that it is responsible or legally obligated to Mix,
and in fact the Company denies that it is responsible or legally obligated
to
Mix except as specifically provided under this Agreement. Similarly, even though
Mix has given the Company valuable consideration for the release set forth
in
Section 3(b)
above,
Mix does not admit that he is responsible or legally obligated to the Company,
and in fact Mix denies that he is responsible or legally obligated to the
Company except as specifically provided under this Agreement.
5.
Employment-Related
Releases.
Mix understands, acknowledges and agrees to the following
paragraphs:
(a)
The
release set forth above in Section 3(b)
extends
to all of Mix’s rights and claims for (i) alleged discrimination and any other
rights and claims under the federal Age Discrimination in Employment Act (the
“ADEA”),
Minnesota Human Rights Act (the “MHRA”),
or
any other federal, state or local law, (ii) all claims arising out of his
employment or separation from employment with the Company, including but not
limited to any alleged breach of contract, wrongful termination, defamation,
invasion of privacy, tortious interference with contract, and/or infliction
of
emotional distress (intentional or otherwise), (iii) all claims for any
other alleged unlawful employment practices arising out of or relating to Mix’s
employment or termination of employment with and separation from the Company,
and (iv) all claims for any other form of pay, including but not limited to
holiday pay, vacation pay and sick pay (except as provided in Section
2(a)
above).
(b)
The
Company has advised Mix to consult an attorney prior to signing this Agreement.
Mix understands that he has 21 days to consider his release of age
discrimination claims under the ADEA, beginning on the date of this Agreement.
Further, Mix understands that if he signs this Agreement, he will then be
entitled to revoke such release of any rights and claims of age discrimination
under the ADEA within seven days of executing this Agreement; and the release
of
his ADEA rights and claims shall not become effective or enforceable until
the
seven-day period has expired.
(c)
Mix
further understands that he has the right to rescind his release of
discrimination rights and claims under the MHRA within 15 calendar days of
the
date of this Agreement. Mix understands that if he desires to rescind his
release of discrimination rights and claims under the MHRA, he must put his
rescission request in writing and deliver it to the Company by hand or by mail
within 15 calendar days of executing this Agreement. Mix understands that if
he
delivers any rescission request by mail, it must be: (i) postmarked within
15
calendar days of the day on which he signs this Agreement; (ii) addressed to
the
Company at 00000 00xx Xxxxxx X., Xxxxxxxxxxx, Xxxxxxxxx 00000, attention: Chief
Financial Officer; and (iii) sent by certified mail, return-receipt requested.
Mix understands that, if he revokes or rescinds his releases as provided above,
all of the Company’s obligations under this Agreement (including the release of
claims granted by the Company under Section 3(a)
above)
will immediately terminate, and the Company will not pay or provide Mix any
of
the benefits accorded him under this Agreement.
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6.
Confidentiality
and Inventions.
(a)
Mix
recognizes and acknowledges that in the course of his employment with the
Company, he has received confidential or proprietary information owned by the
Company, its affiliates or third parties with whom the Company or any such
affiliates has (or have) an obligation of confidentiality. Accordingly, Mix
agrees to keep confidential and not disclose or make accessible to any other
person or use for any other purpose, any Confidential and Proprietary
Information (as defined below) owned by, or received by or on behalf of, the
Company or any of its affiliates. For purposes of this Agreement, “Confidential
and Proprietary Information”
shall
include but not be limited to confidential or proprietary technical information,
data, formulae and concepts, business plans (both current and under
development), client lists, promotion and marketing programs, trade secrets,
or
any other confidential or proprietary business information relating to
development programs, costs, revenues, marketing, investments, sales activities,
promotions, credit and financial data, manufacturing processes, financing
methods, plans or the business and affairs of the Company or of any affiliate
or
client of the Company. Mix hereby expressly acknowledges that the Confidential
and Proprietary Information constitutes a protectable business interest of
the
Company.
(b)
Except
with the Company’s prior written authorization, Mix agrees not to disclose or
publish any of the Confidential and Proprietary Information, or any
confidential, scientific, technical or business information of any other party
to whom the Company or any of its affiliates owes an obligation of confidence,
at any time after entering into this Agreement.
(c)
Mix
acknowledges that, during the course of his employment with the Company, Mix
may
have located, identified and/or evaluated patented or patentable inventions
having commercial potential in fields which may be of potential interest to
the
Company or one of its affiliates (the “Inventions”).
Mix
understands, acknowledges and agrees that all rights to, interests in or
opportunities regarding all Inventions shall be and remain the sole and
exclusive property of the Company and that Mix shall have no rights whatsoever
to such Inventions and will not pursue for himself or for others any transaction
relating to the Inventions. The Company hereby advises Mix that, pursuant to
Minn. Statutes §§ 181.78, this provision does not apply to any Invention for
which for which no equipment, supplies, facility or trade secret information
of
the Company was used and which was developed entirely on Mix’s own time, and (i)
which does not relate (A) directly to the business of the Company or (B) to
the
Company’s actual or demonstrably anticipated research or development, or (ii)
which does not result from any work performed by Mix for the
Company.
(d)
The
Company acknowledges that, in the course of its relationship with Mix, the
Company has received personal non-public information about Mix. Accordingly,
the
Company agrees to keep confidential and not disclose or make accessible to
any
other person or use for any other purpose (except as may be required by law),
any such personal non-public information possessed by, or in the future received
by or on behalf of, the Company.
7.
Non-Competition.
Mix recognizes that he has had a responsibility in the development of goodwill
for the purposes of marketing and selling the Company’s amusement-with-prize
products, and that he has had access to the Company’s Confidential and
Proprietary Information. Accordingly, from and after the date hereof until
the
expiration of a one-year period after the date of the termination or expiration
of the Consulting Agreement, Mix will not use Confidential and Proprietary
Information to: (a) encourage or induce any Company customer (including any
supplier) to cease doing business with the Company, (b) solicit, or participate
in or promote the solicitation of any Company customer (including any supplier)
to purchase, use or prescribe or product or service that competes with the
Company, or (c) conduct, participate in or promote research into products
or technology intended to produce or result in the production of products or
services that compete with the Company.
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8.
Termination
of Employment Agreement;
Amendment of Existing Option Agreement.
The parties hereby terminate: (i) the Employment Agreement and all obligations
of the parties thereunder; and (ii) the Existing Option Agreement and all
obligations of the parties thereunder.
9.
Representations
and Warranties.
The parties to this Agreement hereby represent and warrant to each other that
such representing and warranting party (i) has full power and authority to
enter
into this Agreement and perform all of its obligations under this Agreement,
has
duly executed and delivered this Agreement, and this Agreement is legally
binding on it and is enforceable in accordance with its terms (subject to the
recission rights specified in Section 5
above);
(ii) the execution, delivery and performance of the transactions
contemplated herein do not conflict with or violate, or result in a breach
of or
constitute a default under, any contract or agreement to which it is a party
or
by which it is bound; (iii) it has relied solely upon its own judgment, belief
and knowledge, and the advice and recommendations of its own independently
selected counsel, in executing this Agreement; and (iv) no consent or approval
from any person, firm or entity, or any other consent, approval, order or
authorization of, or registration, declaration or filing with any governmental
authority or court, is required in connection with the execution and delivery
of
this Agreement or the consummation of the transactions contemplated hereby.
All
of the foregoing representations and warranties shall forever survive this
Agreement and the effectiveness of the transactions contemplated
hereby.
10.
Indemnification.
Each party shall indemnify and hold each other party harmless from, against,
and
in respect of any and all loss, liability and expense (including without
limitation reasonable attorneys’ fees and expenses in connection with any
action, suit or proceeding, including proceedings necessary to enforce this
covenant for indemnification) (collectively, “Damages”)
suffered or incurred by reason of or in connection with (a) any breach of a
representation or warranty by such indemnifying party, or (b) failure of
such indemnifying party to perform any obligation contained herein. In addition,
Mix shall indemnify and hold harmless the Company from, against, and in respect
of any and all Damages suffered or incurred in connection with any
employment-related third-party claim the underlying facts of which involve
the
actions or conduct of Mix outside the scope of his employment; and the Company
shall indemnify and hold harmless Mix from, against, and in respect of any
and
all Damages suffered or incurred in connection with any other employment-related
third-party claim.
11.
Dispute
Resolution.
(a)
The
parties will resolve any disputes relating to the Agreement through amicable
negotiations. Failing an amicable settlement, any controversy, claim or dispute
arising under or relating to this Agreement, including the existence, validity,
interpretation, performance, termination or breach of this Agreement, will
finally be settled by binding arbitration before a single arbitrator (the
“Arbitration
Tribunal”)
which
will be jointly appointed by the parties. The Arbitration Tribunal shall
self-administer the arbitration proceedings utilizing the Commercial Rules
of
the American Arbitration Association (“AAA”);
provided,
however,
the AAA
shall not be involved in administration of the arbitration. The arbitrator
must
be a retired judge of a state or federal court of the United States or a
licensed lawyer with at least ten years of corporate or commercial law
experience.
5
(b)
The
arbitration will be held in Denver, Colorado. Each party will have discovery
rights as provided by the Federal Rules of Civil Procedure within the limits
imposed by the arbitrator; provided,
however,
that
all such discovery will be commenced and concluded within 60 days of the
selection of the arbitrator. It is the intent of the parties that any
arbitration will be concluded as quickly as reasonably practicable. The
arbitrator will use all reasonable efforts to issue the final written report
containing award or awards within a period of five business days after closure
of the proceedings. Failure of the arbitrator to meet such time limits will
not
be a basis for challenging the award. The Arbitration Tribunal will not have
the
authority to award punitive damages to either party. Each party will bear its
own expenses, but the parties will share equally the expenses of the Arbitration
Tribunal. The Arbitration Tribunal may award attorneys’ fees and other related
costs payable by the losing party to the successful party as it deems equitable.
This Agreement will be enforceable, and any arbitration award will be final
and
non-appealable, and judgment thereon may be entered in any court of competent
jurisdiction. Notwithstanding the foregoing, claims for injunctive relief may
be
brought in a state or federal court in Minneapolis, Minnesota.
12.
General
Provisions.
(a)
In
the
event that Mix revokes, pursuant to Section 5
(or
otherwise), any of his releases delivered hereunder, this Agreement, the New
Stock Option Agreement and the Consulting Agreement shall immediately terminate
and all of their respective provisions shall become null and void and of no
legal effect whatsoever.
(b)
This
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective heirs, successors and assigns; provided,
however,
that
this Agreement may not be assigned by any party without the written consent
of
all other parties, which consent may be granted or withheld in the sole and
absolute discretion of such parties.
(c)
This
Agreement may be executed in any number of counterparts, all of which will
be
considered one and the same agreement. Signatures to this Agreement may be
delivered by facsimile or other means of electronic transmission, and signatures
so delivered shall be fully valid and binding expressions of intent to be bound
to the same extent as the delivery of original signatures.
(d)
The
headings of Sections hereunder are for convenience and reference only, and
shall
not be deemed a part of this Agreement or otherwise affect the interpretation
hereof.
(e)
This
Agreement, together will all exhibits hereto (which are hereby incorporated
into
this Agreement by this reference), sets forth the parties’ final and entire
agreement with respect to its subject matter and supersedes any and all prior
understandings and agreements, whether oral or written. This Agreement shall
not
be modified or amended in any fashion except by an instrument in writing signed
by the parties.
(f)
Other
than as expressly set forth herein, this Agreement is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder,
and no third party shall be entitled to rely on the provisions
hereof.
(g)
This
Agreement shall be construed in accordance with the laws of the State of
Minnesota applicable to contracts made and to be performed within Minnesota,
without regard to its conflicts-of-law principles.
(h)
All
parties agree to execute and deliver any documents or instruments (including
legal instruments of conveyance or otherwise) that may be reasonably requested
by another party in order to effectuate the transactions contemplated hereby,
or
to provide reasonable assurance to such requesting party that any of such
transactions has been completed.
6
(i)
If
any
provision of this Agreement is held by any court of competent jurisdiction
to be
illegal, invalid, or not enforceable, such provision will be construed and
enforced as if it was narrowly drawn so as not to be illegal, invalid, or not
enforceable, and any such illegality, invalidity, or unenforceability will
have
no effect upon, and will not impair the enforceability of, any other provision
in this Agreement.
(j)
The
parties agree that this Agreement has been jointly drafted and negotiated by
the
parties and their respective attorneys and advisors and that no party may assert
an ambiguity in the construction of this Agreement against another party because
the other party allegedly drafted the allegedly ambiguous
provision.
(k)
In
view
of the purposes of this Agreement, it is agreed that the remedy at law for
failure of any party to perform would be inadequate and that the injured party
or parties, at its option, shall have the right to compel the specific
performance of this Agreement in a court of competent jurisdiction, to the
extent permitted by applicable law and not expressly prohibited by this
Agreement.
(l)
No
consent under and no waiver of any provision of this Agreement on any one
occasion shall constitute a consent under or waiver of any other provision
on
such occasion or on any other occasion, nor shall it constitute a consent under
or waiver of the consented-to or waived provision on any other occasion. No
consent or waiver shall be enforceable unless it is in writing and signed by
the
party against whom such consent or waiver is sought to be enforced.
* * * * *
7
In
Witness Whereof,
the
parties have executed this Separation and Release Agreement as of the date
first
written above.
| SPECTRE GAMING, INC.: | ||
|
By:
|
/s/
D. Xxxxxx
Xxxx
|
|
|
D.
XXXXXX XXXX, President
|
||
|
/s/
Xxxxxxx X.
Mix
|
||
|
XXXXXXX
X. MIX
|
||
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