Exhibit 10.35


 


SEPARATION AND CONSULTING AGREEMENT


 


This
SEPARATION AND CONSULTING AGREEMENT (the “Agreement”) is entered into by and
between Bally Gaming, Inc. (“Company”) and Robert Luciano (“Luciano”), and
shall be effective on the date last signed by the parties, as indicated below.


 


WHEREAS,
Luciano has been employed at-will by the Company, as Chief Technology Officer; Luciano
and the Company wish to set forth terms and conditions of his post-employment
relationship with the Company, along with related rights and obligations of the
parties; and, Luciano and the Company wish to resolve all matters related to
Luciano’s employment with the Company, on the terms and conditions expressed in
this Agreement.


 


NOW
THEREFORE, in consideration of the mutual promises contained herein, the
parties, intending to be legally bound, agree as follows:


 


1.                                       Consulting
Obligations.


 


1.1                                 Agreement for
Services. For a period of two years commencing on July 7,
2009 and  ending on July 6, 2011 (the “Term”), Luciano shall provide such
consulting services as the Company may reasonably request from time to time and
at the Sierra Manor location or such location as the Company may reasonably
require. The Company and Luciano agree and understand that the services
performed by Luciano under this Agreement will not require Luciano to engage in
full-time efforts or work, but instead shall be periodic and limited in nature
and that Luciano shall be entitled to accept other employment and pursue other
activities and interests, so long as such employment, activities and interests
do not otherwise breach Luciano’s covenants and obligations under Section 3.1
of this Agreement. Luciano shall perform the services as an independent
contractor and shall not be deemed an employee of the Company for any purpose.


 


2.                                       Payments; Benefits.


 


2.1                                 Consulting Fee. The Company
shall pay Luciano (i) an annual consulting fee of $10,000  on each of July 7,
2009 and July 7, 2010 so long as this Agreement has not been terminated by
either party prior to such payment date, plus (ii) an additional
consulting fee at a rate of $1,250 per half day (2 to 4 hours) or $2,500 per
full day (more than 4 hours), payable monthly in arrears based on the number of
full days or half days actually worked during the applicable month (collectively,
“Consulting Fees”). Luciano shall submit written time records to the Company no
later than 30 days after any work is performed under this Agreement. Luciano
agrees he will be fully and solely responsible for any income or other tax
liability imposed on him in his capacity as an independent contractor. Accordingly,
the  Company will not withhold federal or state income, social security, or
other taxes from the consulting fees and other amount paid under this Agreement,
unless otherwise required by law.


 


2.2                                 Expenses. The Company
agrees to reimburse Luciano for all reasonable and necessary  out-of-pocket
business related expenses he incurs at the request of the Company, provided
that Luciano shall submit reasonable documentation of such expenses. In lieu of
paying for Luciano’s lodging expenses while in Las Vegas, and in addition to
any other payments under this Agreement, the Company shall pay Luciano $5,000
each month until the expiration or other termination of this Agreement. Luciano
shall also retain use of a company paid Blackberry and access to his Company
email.


 


2.3                                 Benefits. The Company
shall reimburse Luciano for the expense of his COBRA  coverage until the earlier
of (i) the termination of this Agreement or (ii) the expiration of
Luciano’s


 

















 


COBRA
coverage. The following Luciano benefits shall terminate on the Separation Date:
a) short-term disability; b) long-term disability; c) basic life; d) accidental
death and dismemberment; e) dependent life insurance; f) medical insurance, but
still subject to extended coverage via COBRA; and g) company sponsored 401k.


 


3.                                       Restrictive
Covenants.


 


3.1                                 Covenant Not to
Compete. During the Term and for a period of two years following the  expiration or
termination of this Agreement for any reason, Luciano will not, directly or
indirectly, whether as employee, owner, partner, agent, officer, consultant, advisor,
stockholder (except as the beneficial owner of not more than 3% of the
outstanding shares of a corporation, any of the capital stock of which is listed
on any national or regional securities exchange or quoted in the daily listing
of over-the-counter market securities and, in each case, in which Luciano does
not undertake any management or operational or advisory role) or in any other
capacity, for Luciano’s own account or for the benefit of any person or entity,
establish, engage, or be connected with any person or entity that is at the
time engaged in the gaming business or otherwise competitive with the Company. The
Company acknowledges that Luciano currently has certain personal and
professional non Gaming relationships with Msrs. Aki Ioki, Randy Hendrick, Rich
Fiore and John Acres and that such non Gaming relationships do not violate his
section 3.1.


 


3.2                                 Luciano
acknowledges and agrees that the scope of these
noncompete provisions are  unlimited geographically and
that the scope and duration of the covenant are reasonable and fair; however, if
a court of competent jurisdiction determines that this covenant is overbroad or
unenforceable in any respect, the Company and Luciano agree that the covenant
shall be enforced to the greatest extent the court deems appropriate, and such
court may modify this covenant to that extent.


 


3.3                                 Non-Solicitation. Luciano shall
not, directly or indirectly, during the Term and through the date two years
after the expiration or termination of this Agreement for any reason, hire or
aid or endeavor to solicit or induce any employee or consultant of the Company
to leave the service of the Company or to accept employment of any kind with
any other person or entity.


 


4.                                       Termination of
Employment. Luciano’s employment with the Company, the
Employment Agreement letter dated March 2, 2004, the subsequent amendment
dated April 13, 2005, and the Second Amendment to Employment Agreement
dated May 16, 2008 (collectively, the “Employment Agreements”), shall
terminate effective as July 6, 2009 (the “Separation Date”).


 


5.                                       Release of
Claims


 


5.1                                 Luciano Release. Luciano
hereby forever releases and discharges the Company, its  employees, agents
and attorneys (in their individual and representative capacities), from any and
all claims, demands, losses, damages, actions, causes of action, suits, debts, promises,
liabilities, obligations, liens, costs, expenses, attorney’s fees, indemnities,
subrogations (contractual or equitable) or duties, of any nature, character or
description whatsoever, arising from or relating to, directly or indirectly, Luciano’s
employment with the Company or the Employment Agreements as of the Separation
Date. This release shall only apply to claims relating to Luciano’s employment
with the Company prior to the Separation Date or the termination of Luciano’s
employment with the Company, and shall not apply to obligations of the Company
after the Separation Date pursuant to this Agreement. This release of claims
includes, but is not limited to, claims at law or equity or sounding in
contract (express or implied) or torts arising under federal, state or local
laws or the common law prohibiting age, sex, race, national origins, disability,
veteran status or any other forms of discrimination (including, but not limited
to, the Nevada Fair Employment Practices Act, the Family and Medical Leave Act,
the Age Discrimination in  Employment Act of 1967, the
American with Disabilities Act of 1991, Title VII of the Civil Rights Act of


 

















 


1964,
the Civil Rights Act of 1866, the Civil Rights Act of 1991, the Older Workers
Benefit Protection Act, 42 U.S.C. § 1981, the National Labor Relation Act, and
all amendments to the aforementioned statutes).


 


5.2                                 Company Release. The Company
hereby forever releases and discharges Luciano and his agents and attorneys (in
their individual and representative capacities), from any and all known claims,
demands, losses, damages, actions, causes of action, suits, debts, promises, liabilities,
obligations, liens, costs, expenses, attorney’s fees, indemnities, subrogations
(contractual or equitable), or duties, of any nature, character or description
whatsoever, arising from or relating to, directly or indirectly, Luciano’s
employment with the Company or the Employment Agreements as of the Separation
Date. This release shall only apply to claims relating to Luciano’s employment
with the Company prior to the Separation Date, and shall not apply to
obligations of Luciano after the Separation Date pursuant to this Agreement.


 


6.                                       Revocation
Period. This Agreement is enforceable when both parties have signed the
Agreement. The parties understand and acknowledge that Luciano has seven
calendar days following his execution of this Agreement to revoke his
acceptance. For revocation to be effective, notice of revocation must be
received by the Company no later than 5:00 p.m. on the seventh calendar day
after Luciano signs the Agreement. If Luciano revokes this Agreement, it shall
not be effective or enforceable, and neither party will be deemed to have
released the other or to have waived any rights with respect to the matters
addressed in this Agreement.


 


7.                                       Time to Review
Agreement; Advice of Counsel. Luciano acknowledges that
he received a copy of this Agreement for review on or before June 29, 2009
and was offered at least twenty-one days to review, consider and negotiate the
provisions of this Agreement prior to execution (“Review Period”), however, in
the event that Luciano executes this Agreement prior to the expiration of the
Review Period, Luciano knowingly and voluntarily waives all rights to any
further time for review remaining in the Review Period. Luciano is advised to
consult with an attorney before signing this Agreement and acknowledges that he
has been afforded an opportunity for counsel of his choosing to read and review
it; that he has had the provisions fully explained to him by his
counsel; and that he is signing this Agreement freely, voluntarily and with
full knowledge of its terms and consequences.


 


8.                                       Confidential
Information; Intellectual Property.  (a) Luciano shall hold in a fiduciary
capacity for the benefit of the Company and its stockholders all secret, confidential,
and proprietary information, knowledge, and data relating to the Company (and
any of its subsidiaries or affiliates), obtained by Luciano during his
employment or by reason of the scope of his consulting services provided
hereunder. Other than is necessary in the business of the Company or the scope
of his consulting services, during the Term and after the expiration or
termination of the this Agreement, Luciano shall not directly or indirectly, without
the prior written consent of the Company or except as may be required by law, communicate
or divulge any such information to any person or entity.


 


(b) Luciano
will promptly disclose to the Company all inventions, discoveries, concepts, ideas,
developments, improvements, and innovations, whether or not patentable, and the
expressions of all inventions, discoveries, concepts, ideas, developments, improvements,
and innovations, whether or not copyrightable (collectively, “Inventions”), conceived,
developed, or first actually reduced to practice by him, related to his
services under this Agreement. All such Inventions that relate in any manner to
the existing or contemplated business or research activities of the Company
shall be the exclusive property of the Company. Luciano assigns to the Company
his entire right, title, and interest in and to all such Inventions. Luciano
will, at the Company’s request and expense, execute specific assignments to any
Inventions and execute, acknowledge, and deliver patent applications and such
other documents as the Company may reasonably request.


 

















 


9.                                       Non-Disparagement. Luciano and
the Company agree that during and after the Term, neither shall, publicly or
privately, disparage or make any statements (written or oral) that could impugn
the integrity, acumen (business or otherwise), ethics or business practices, of
the other, except, in each case, to the extent (but solely to the extent) (i) necessary
in any judicial or arbitral action to enforce the provisions of this Agreement
or (ii) in connection with any judicial, regulatory or administrative
proceeding to the extent required by applicable laws. For purposes of this Section 9,
references to the Company include its officers, directors, employees, consultants
and shareholders (which are reasonably known as such to Luciano) on the date
hereof and hereafter.


 


10.                                 Injunctive
Relief; Jurisdiction. Luciano acknowledges that the Company will suffer
irreparable injury, not readily susceptible of valuation in monetary damages, if
Luciano breaches or threatens to breach his obligations under Sections 3, 5, 8,
and 9. Accordingly, Luciano agrees that the Company will be entitled, at the
Company’s option, to injunctive relief, without the necessity of posting a bond
against any breach or prospective breach by Luciano of his obligations under
this section, in any federal or state court of competent jurisdiction sitting
in the State of Nevada, in addition to monetary damages and any other remedies
available at law or in equity.


 


11.                                 Termination. This
Agreement shall terminate upon the earlier of July 6, 2011, or Luciano’s
death. Upon termination of this Agreement, for any reason, the Company’s
obligations and the rights of Luciano shall terminate. Except as set forth in Section 2.1,
upon termination of this Agreement for any reason the
Company shall pay to Luciano or his estate, as applicable, all amounts due and
payable prior to termination of the Agreement. Unless otherwise provided herein,
Sections 3.1, 3.2, 5.1, 5.2, 8(a), 9, and 10 shall survive the termination of
this Agreement. Luciano’s obligations to assist the company in transferring the
Inventions under the agreement, in section 8(b), shall also survive the
termination of the agreement.


 


12.                                 Entire
Agreement; Assignment. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements between the parties with respect to such
matters, unless specifically provided otherwise herein. Without limiting the
foregoing, the Employment Agreement, dated March 2, 2004, as amended, between
Luciano and the Company will terminate on July 6, 2009 and thereafter be
of no force or effect. This Agreement may be modified or amended only with the
written consent of both parties. This Agreement is for Luciano’s personal
services and he may not assign, transfer, or delegate any duty or obligation to
perform such services. Any such attempted assignment shall be null and void.


 


13.                                 Waiver. 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.


 


14.                                 Notice. All notices
required by this Agreement must be in writing and must be delivered or mailed
to the addresses given below or such other addresses as the parties may
designate in writing.


 


	
  Bally
  Gaming, Inc.

  	
   

  	
  Robert
  Luciano

  
	
  6601
  S. Bermuda Road

  	
   

  	
  4665
  Lakewood CT

  
	
  Las
  Vegas, Nevada 89119

  	
   

  	
  Reno,
  Nevada 89509

  
	
  Attention:
  General Counsel

  	
   

  	
   

  



 


15.                                 Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an original, and all of
which, taken together, shall constitute one and the same instrument. This


 

















 


Agreement
may be executed and delivered by exchange of facsimile copies showing the
signatures of the parties, and those signatures need not be affixed to the same
copy.


 


IN
WITNESS WHEREOF, the parties have executed this Agreement as of the dates
indicated below.


 


 


	
  BALLY
  GAMING, INC.

  	
   

  	
  LUCIANO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/
  MARK LERNER

  	
   

  	
  /s/
  Robert Luciano

  
	
   

  	
   

  	
   

  	
  Robert Luciano

  
	
  Name:

  	
  MARK
  LERNER, 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Secretary

  	
   

  	
  Date:

  	
  7/2/09

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  7/7/09