Exhibit 10.23

 

SEVENTH AMENDMENT TO
HADDRILL EMPLOYMENT AGREEMENT

 

This Seventh  Amendment to the Employment Agreement (the “Seventh Amendment”) is
made and entered into as of August 10, 2009 (the “Effective Date”), by and
between Bally Technologies, Inc., a Nevada corporation (the “Company”), and
Richard Haddrill (“Haddrill”).

 

WHEREAS, the Company and Haddrill are parties to that certain Employment
Agreement dated as of June 30, 2004, as amended on December 22, 2004, June 13,
2005, June 20, 2006, February 13, 2008, October 22, 2008, and December 30, 2008,
(as amended, the “Employment Agreement”) pursuant to which Haddrill is employed
as the Company’s Chief Executive Officer; and

 

WHEREAS, the Company and Haddrill desire to amend the Employment Agreement in
accordance with and subject to the terms and conditions of this Seventh
Amendment.

 

NOW THEREFORE, on the basis of the foregoing premises and in consideration of
the mutual covenants and agreements contained herein, the parties hereto agree
as follows:

 

1.             During the term of the Employment Agreement: (i) Haddrill will
continue to receive the compensation and benefits currently provided to him on
the terms and conditions set forth in the Employment Agreement and
(ii) Haddrill’s base salary will remain at $998,000 per year through
December 31, 2012.

 

2.             The Company and Haddrill agree that the following Section 4(g) is
hereby added to the Employment Agreement:

 

“(g)         Strategic Initiatives Bonus. Haddrill shall be entitled to a lump
sum cash payment of $2,500,000 (the “Strategic Initiatives Bonus”) upon the
first to occur of: (i) the achievement of certain strategic initiatives
established by the Board of Directors on or before December 31, 2010, as
determined by Board of Directors, in its sole discretion, or (ii) a Change of
Control occurring on or before December 31, 2010. If the Strategic Initiatives
Bonus becomes payable pursuant to the preceding sentence, the Strategic
Initiatives Bonus shall be paid to Haddrill within fifteen (15) days following
the Board of Director’s determination that the Strategic Initiatives Bonus has
been earned; provided, however, that the payment of the Strategic Initiatives
Bonus shall be delayed until the first business day of the first taxable year in
which Haddrill is not subject to Section 162(m) of the Code. If payment of the
Strategic Initiatives Bonus is delayed pursuant to the preceding sentence,
interest shall accrue on the Strategic Initiatives Bonus at a rate equal to the
prime rate in effect on the date that the Strategic Initiatives Bonus is earned
(as determined by the Board of Directors), as reported by Reuters, for the
period beginning on the date that the Strategic Initiatives Bonus is earned (as
determined by the Board of Directors) and ending on the date that the Strategic
Initiatives Bonus is paid.”

 

3.             The Company and Haddrill agree that the following Section 4(h) is
hereby added to the Employment Agreement:

 

“(h)         Performance Bonus. Subject to stockholder approval of the Bally
Technologies, Inc. Executive Incentive Plan (the “EIP”) at the 2009 Annual
Meeting of Stockholders, Haddrill shall be entitled to a cash bonus under the
EIP, if earned, ranging in value from $1,000,000 to

 

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$3,500,000 (the “Performance Bonus”), based upon the Company’s achievement of
cumulative diluted EPS targets established by the Board of Directors with
respect to the Company’s combined fiscal year 2010-2011 period, and, if earned,
payable at the same time bonuses are paid to executives generally for the 2011
fiscal year, but in no event later than December 31, 2011.”

 

4.             The Company and Haddrill agree that Section 8(d)(i)[a] of the
Employment Agreement shall is hereby amended and restated in its entirety to
read as follows:

 

“[a] the Company shall pay to Haddrill $998,000 and, if such Change of Control
occurs on or before December 31, 2010, an additional payment equal to
$1,996,000, and”

 

5.             The Company and Haddrill agree that the following Section 8(e) is
hereby added to the Employment Agreement:

 

“(e)         Notwithstanding anything to the contrary in this Agreement, upon
Haddrill’s termination for any reason other than as described in Section 7(a),
he shall continue to receive the benefits provided in Section 4(b) (other than
paid vacation and holidays), through December 31, 2012.”

 

6.             The Company and Haddrill agree that Section 12(a) of the
Employment Agreement shall is hereby amended and restated in its entirety to
read as follows:

 

“During his employment under this Agreement and until the date that is four
(4) years following the later of December 31, 2012 or the termination of his
employment under this Agreement for whatever reason, Haddrill shall not become
employed by, act as a consultant for, contract with, obtain a beneficial
ownership interest of 5% or more in or otherwise enter into any form of business
relationship with any business entity that is engaged in the design,
importation, manufacture and/or sale of electronic gaming devices, systems or
systems products or any business entity which is engaged in any other business
in which the Company or any subsidiary of the Company is engaged at the time of
termination of Haddrill’s service with the Company or, to the knowledge of
Haddrill, is planning to be engaged (“Competitors”). Such Competitors currently
include, but are not limited to, International Game Technology, Inc., WMS
Industries, Inc., Shuffle Master, Inc., Aristocrat Leisure, Ltd., Gtech Holdings
Corp., Multimedia Games, Inc. or Konami Gaming, Inc., or any of their present
and future affiliates, subsidiaries, divisions, parent companies and
successors.”

 

7.             The Company and Haddrill agree that Section 12(b) of the
Employment Agreement shall is hereby amended and restated in its entirety to
read as follows:

 

“During his employment under this Agreement and until the date that is one
(1) year following the later of December 31, 2012 or the termination of his
employment under this Agreement for whatever reason, Haddrill shall not become
employed by, act as a consultant for, contract with, obtain a beneficial
ownership interest of 5% or more in or otherwise enter into any form of business
relationship with any person, film, company, corporation, partnership,
association or other organization within the United States that is not listed in
or otherwise covered by paragraph 12(a) but that is otherwise engaged in the
gaming business.”

 

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8.             The Company and Haddrill agree that the reference to “for a
period of one (1) or (2) years” contained in Section 14 of the Employment
Agreement is hereby changed to “during the period of time covered by the
covenant not to compete contained in Section 12(a).”

 

9.             On August 10, 2009, the Company granted Haddrill a number of
restricted stock units under the Plan (the “Additional Restricted Stock Units”)
having a value equal to $1.5 million dollars, as calculated in accordance with
Schedule A-6 hereto. The Additional Restricted Stock Units shall vest and be
subject to the terms and conditions set forth in the Plan and on Schedule A-6
hereto.

 

10.           Except as expressly modified by this Seventh Amendment, the
Employment Agreement shall remain unchanged and shall remain in full force and
effect.

 

[signatures on next page]

 

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IN WITNESS WHEREOF, the Company and Haddrill have duly executed this Seventh
Amendment as of the date first above written.

 

 

 

BALLY TECHNOLOGIES, INC.

 

 

 

 

 

 

By:

/s/ Kevin Verner

 

Name:

Kevin Verner

 

Title:

Chairman, Compensation Committee

 

 

 

 

 

/s/ Richard Haddrill

 

Richard Haddrill

 

[Signature Page to Seventh Amendment to Haddrill Employment Agreement]

 

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Schedule A-6

 

ADDITIONAL RESTRICTED STOCK UNITS

 

1.             The number of shares of common stock subject to the Additional
Restricted Stock Units was determined by dividing $1.5 million dollars by the
average per share closing price of the Company’s common stock on the stock
exchange in which the stock is principally traded for the 20 business days
immediately prior to the date of the grant.

 

2.             The Additional Restricted Stock Units shall vest in full on
January 1, 2011, so long as Haddrill remains in continuous service with the
Company through such date.

 

3.             If Haddrill’s employment with the Company is terminated under
paragraphs 7(b) or 7(c) of the Employment Agreement, in addition to the other
compensation and benefits provided under the Employment Agreement, the vesting
of the Additional Restricted Stock Units will accelerate in full as of the
termination date.

 

4.             In addition to the above, notwithstanding any provision of the
Employment Agreement, or the Plan to the contrary, in the event of a Change of
Control (as defined in the Employment Agreement), the Additional Restricted
Stock Units shall become immediately and fully vested and exercisable effective
as of immediately prior to such Change of Control.

 

5.             Each vested Additional Restricted Stock Unit represents
Haddrill’s right to receive one share of the Company’s common stock on the
applicable vesting date (subject to the terms and conditions of the Plan,
including the satisfaction of any tax withholding obligations).

 

6.             Except as described in this Schedule A-6, upon a termination of
Haddrill’s service with the Company (or any successor) for any reason, the
unvested portion of the Additional Restricted Stock Units granted hereunder at
the time of such termination of service (after giving effect to the accelerated
vesting, if any, described in this Schedule A-6, if any) shall be forfeited
effective as of the date of termination.

 

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