Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

EXECUTIVE EMPLOYMENT AGREEMENT dated as of November 14, 2012, by and between
BALLY TECHNOLOGIES, INC., a Nevada corporation (the “Company”), and RAMESH
SRINIVASAN (“Executive”).

 

WHEREAS, the Company and Executive are parties to that certain Executive
Employment Agreement dated as of March 9, 2005, and amended as of December 31,
2008 and May 23, 2011 (the “Prior Employment Agreement”); and

 

WHEREAS, the Company and Executive desire to enter into a new Executive
Employment Agreement (this “Agreement”) in accordance with and subject to the
terms and conditions hereof;

 

WHEREAS, this Agreement shall supersede the Prior Employment Agreement in its
entirety.

 

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.             Term.  The term of this Agreement shall commence on December 14,
2012 (the “Effective Date”) and shall continue, unless earlier terminated
pursuant to Section 4 of this Agreement, through the third anniversary of the
Effective Date, and shall thereafter be automatically renewed for successive one
year periods unless either party gives written notice to the other party of its
intention not to renew at least ninety days prior to the expiration of said
term.

 

2.             Position and Duties.  From and after the Effective Date,
Executive shall serve as the Company’s President and Chief Executive Officer and
shall report to the Board of Directors of the Company.  Executive shall perform
the duties contemplated by such title and such other duties, consistent with his
experience and abilities, as the Board of Directors of the Company may assign to
Executive.  Executive shall devote his full business time and efforts to the
business and affairs of the Company, use his best efforts to advance the
interests of the Company, and at all times conduct himself in a manner that
reflects credit on the Company.  It is contemplated that Executive shall render
services to the Company from the Company’s principal place of business; however,
the parties acknowledge and agree that Executive may be required to travel
extensively in fulfilling his duties hereunder.

 

3.             Compensation.

 

(a)           Salary.  From and after the Effective Date, the Company shall pay
Executive an annual base salary of $825,000, payable in equal installments on
the Company’s regularly recurring paydays in accordance with the Company’s
normal payroll practice.  Increases in annual base salary shall be considered by
the Company at least annually, beginning with the Company’s 2014 fiscal year and
will be based on criteria applicable to other senior executives of the Company,
provided, however, that the award of any such increase shall be at the sole
discretion of the Company.

 

--------------------------------------------------------------------------------

 

(b)           Management Incentive Program.  Executive shall continue to be
entitled to participate in the Company’s Management Incentive Program (and/or
such other incentive compensation plan maintained by the Company) established
for the Company (the “MIP”).  The terms of Executive’s participation in the MIP
shall continue in place as provided in the Prior Employment Agreement until
June 30, 2013.  From and after July 1, 2013, the MIP will entitle Executive to
receive up to 200 percent of Executive’s base salary for performance at plan
maximum, with Executive’s target annual bonus under the MIP equal to 100 percent
of his base salary and the threshold annual bonus under the MIP equal to 60
percent of his base salary.  Executive’s bonus under the MIP shall be earned
based upon objectives established by the Board of Directors each year, which
objectives shall be based on the Company’s earnings per share performance (or
such other objective measure determined by the Compensation Committee of the
Board of Directors).  Any payment made to Executive pursuant to the MIP in
accordance with this Section 3(b) shall be paid to Executive in a lump sum
payment payable in the normal business course similar to those payments made to
other Company executives, but in no event later than by December 31 of the
calendar year that includes the last day of the fiscal year to which such
payment relates.

 

(c)           Promotion Restricted Stock Unit Award.  On December 14, 2012
Executive shall receive an award of performance-vesting restricted stock units
(the “Promotion RSUs”) under the Company’s 2010 Long Term Incentive Plan (the
“LTIP”) covering a number of shares initially equal to $3,000,000.  Subject to
the terms of the award agreement and the achievement of performance targets, the
Promotion RSUs will vest annually over three years.

 

(d)           Equity Awards.  Executive shall be eligible to receive equity
grants in the future, at the discretion of and as approved by the Company’s
Board of Directors and/or Compensation Committee thereof.

 

(e)           Reimbursement of expenses.  In accordance with established
policies and procedures of the Company as in effect from time to time, the
Company shall pay or reimburse Executive for all reasonable and actual
out-of-pocket expenses including but not limited to travel, hotel, and similar
expenses, incurred by Executive from time to time in performing his obligations
under this Agreement.  Any reimbursement of Executive’s expenses made by the
Company pursuant to this Section 3(e) shall be payable in the normal business
course in accordance with the Company’s expense reimbursement policy, but in no
event later than the last day of the calendar year following the calendar year
in which the expense was incurred, and the expenses eligible for reimbursement
in anyone calendar year shall not affect the expenses eligible for reimbursement
in any other calendar year.

 

(f)            Vacation.  Executive shall be entitled to annual paid vacation
time in accordance with the Company’s policy with respect to the senior
executives of the Company prorated for any partial employment year.

 

2

--------------------------------------------------------------------------------

 

(g)           Other benefits.  Executive shall be entitled to other employment
benefits, including but not limited to life insurance, medical and
hospitalization, disability, and retirement benefits, consistent with the
benefits provided to other senior executives of the Company.

 

(h)           No Reduction.  There shall be no material reduction or diminution
of the benefits provided in this Section 3 during the term of this Agreement
unless (i) Executive consents in writing, (ii) an equitable arrangement
(embodied in a substitute or alternative benefit or plan) is made with respect
to such benefit or plan, or (iii) the reduction is part of a program of
across-the-board benefit reductions similarly affecting all other senior
executive officers of the Company.

 

4.             Termination or Material Change of Employment

 

(a)           At-will employment.  Executive’s employment with the Company is
“at-will.” Either Executive or the Company may terminate Executive’s employment
at any time with or without Cause.

 

(b)           Termination by Company for Cause.

 

(1)           The Company may terminate this Agreement for Cause at any time
immediately on written notice to Executive, in which case the Company’s
obligations and Executive’s rights under this Agreement shall terminate.  For
purposes of this provision, the term “Cause” means:

 

(i)            Executive’s clear and substantiated insubordination, fraud,
disloyalty, dishonesty, willful misconduct, or gross negligence in the
performance of Executive’s duties under this Agreement, including willful and
material failure to perform such duties as may properly be assigned to Executive
under this Agreement;

 

(ii)           Executive’s material breach (without cure within 30 days
following notice thereof) of any material provision of this Agreement;

 

(iii)          Executive’s failure to qualify (or having so qualified being
thereafter disqualified) under any suitability or licensing requirement of any
jurisdiction or regulatory authority to which Executive may be subject by reason
of his position with the Company and its affiliates or subsidiaries.  The
Company will use its best efforts to work with Executive in fulfilling the
requirements and will promptly provide written information on the suitability
and licensing requirements to Executive so that Executive may adequately
prepare;

 

(iv)          Executive’s commission of a crime against the Company or violation
of any material law, order, rule, or regulation pertaining to the Company’s
business;

 

3

--------------------------------------------------------------------------------

 

(v)           Executive’s inability to perform the job functions and
responsibilities assigned in accordance with reasonable standards established
from time to time by the Company in its sole and reasonable discretion, which
inability, if subject to cure, is not cured by Executive within 30 days after
notice thereof; and

 

(vi)          The Company’s obtaining from any reliable source accurate
information with respect to Executive that would, in the reasonable good faith
opinion of the Company, jeopardize the gaming licenses, permits, or status of
the Company or any of its subsidiaries or affiliates with any gaming commission,
board, or similar regulatory or law enforcement authority.

 

(2)           Any termination by the Company for Cause shall not be in
limitation of any other right or remedy the Company may have under this
Agreement or otherwise.

 

(c)           Termination by Company without Cause.  The Company may terminate
this Agreement at any time without Cause (as defined in Section 4(b)(1)),
whereupon the Company’s obligations and Executive’s rights under this Agreement
shall terminate, except that the Company shall, subject to Executive’s
execution, within 21 days following Executive’s date of termination, of an
effective general release of claims in favor of the Company (i) pay to
Executive, in lump sum, on the date that is 30 days following Executive’s date
of termination, an amount equal to Executive’s base salary for twenty-four
months, (ii) pay to Executive, on the date that is 30 days following Executive’s
date of termination, a pro-rata amount of Executive’s target bonus under the MIP
for the year of termination, based on actual performance through the end of the
fiscal quarter that ended most recently prior to the date of termination, and
(iii) accelerate on a pro-rata basis the vesting of Executive’s equity awards
outstanding on the date of termination in a manner consistent with the terms
thereof, which, in the case of awards that vest based upon the attainment of
performance targets, shall be based upon actual performance through the end of
the fiscal quarter that ended most recently prior to the date of termination.

 

(d)           Termination by Executive.  Except as set forth in Section 4(e), if
Executive resigns for any reason, the Company’s obligations and Executive’s
rights under this Agreement shall terminate; provided, however, that a
resignation within 60 days following a material diminution of Executive’s duties
shall be treated as a termination without cause under Section 4(c).  As used in
this Section 4, Executive’s duties shall be deemed to have been materially
diminished if, without Executive’s prior written consent, (1) Executive (A) is
not the Chief Executive Officer of, the Company or, following a Change of
Control, the combined or surviving corporation resulting from the Change of
Control or (B) does not report directly to the Board of Directors of the Company
or, following a Change of Control, the ultimate parent company resulting from
the transaction, (2) the Company materially breaches (without cure within 30
days following notice

 

4

--------------------------------------------------------------------------------

 

thereof) any material provision of this Agreement, or (3) his position, title,
duties, authority or responsibilities are otherwise substantially diminished.

 

(e)           Termination by Company due to Death or Disability.  The Company
may terminate this Agreement at any time due to Executive’s death or disability
(as defined below), whereupon the Company’s obligations and Executive’s rights
under this Agreement shall terminate, except that the Company shall, (ii) pay to
Executive or Executive’s estate a pro-rata amount of Executive’s target bonus
under the MIP for the year of termination, based on actual performance through
the end of the fiscal quarter that ended most recently prior to the date of
termination, and (iii) accelerate on a pro-rata basis the vesting of Executive’s
equity awards outstanding on the date of termination in a manner consistent with
the terms thereof, which, in the case of awards that vest based upon the
attainment of performance targets, shall be based upon actual performance
through the end of the fiscal quarter that ended most recently prior to the date
of termination.  “Disability” shall mean Executive’s failure to discharge his
duties under this Agreement for six or more consecutive months or for
non-continuous periods aggregating to twenty-two weeks in any twelve-month
period as a result of illness or incapacity.

 

(f)            Change of Control.

 

(1)           Termination by Company or Executive.  In lieu of the payments and
benefits described in Section 4(c), in the event of a termination by the Company
without Cause or resignation within 60 days following a material diminution of
Executive’s duties, which termination without Cause or material diminution of
duties occurs within one year following the occurrence of a Change of Control,
the Company’s obligations and Executive’s rights under this Agreement shall
terminate, except that the Company shall, subject to Executive’s execution,
within 21 days following Executive’s date of termination, of an effective
general release of claims in favor of the Company (i) pay to Executive, in lump
sum, on the date that is 30 days following Executive’s date of termination, an
amount equal to Executive’s base salary for twenty-four months, (ii) pay to
Executive, on the date that is 30 days following Executive’s date of
termination, an amount equal to Executive’s target bonus under the MIP for the
year of termination, and (iii) accelerate in full the vesting of Executive’s
equity awards outstanding on the date of termination in a manner consistent with
the terms thereof.  Accelerated vesting in the case of equity awards that vest
based upon the attainment of TSR performance targets, shall be based upon actual
performance through the date of the Change of Control; provided, that
accelerated vesting in the case of equity awards that vest based on the
attainment of non-TSR performance targets, shall be based upon actual
performance through the end of the fiscal quarter that ended most recently prior
to the date of Change of Control.

 

5

--------------------------------------------------------------------------------

 

(2)           “Change of Control” defined.  As used in this Section 4(e), a
Change of Control shall be deemed to have occurred upon the earliest to occur of
the following events: (i) the date an unaffiliated person, entity or group (as
defined in Treas. Reg. I.409A-3(i)(5)(v)(B)) acquires, directly or indirectly,
ownership of a substantial portion of the Company’s assets equal to or more than
50% of the total gross fair market value (as defined in Treas. Reg.
1.409A-3(i)(5)(vii)) of all of the assets of the Company immediately before such
acquisition or acquisitions; (ii) the date any unaffiliated person, entity or
group (as defined in Treas. Reg. 1.409A-3(i)(5)(v)(B)) acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of the Company’s capital stock having more
than 50% of the combined voting power of the Company’s then outstanding voting
securities entitled to vote generally in the election of directors; or (iii) a
majority of members of the Company’s Board of Directors (together with any
directors elected or nominated by a majority of such members) is replaced during
any 12-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Board of Directors before the date of the
appointment or election; except that any event or transaction which would be a
“Change of Control” under (i) or (ii) of this definition shall not be a Change
of Control if persons who were the equity holders of the Company immediately
prior to such event or transaction (other than the acquirer in the case of a
reorganization, merger or consolidation), immediately thereafter, beneficially
own more than 50% of the combined voting power of the Company’s or the
reorganized, merged or consolidated company’s then outstanding voting securities
entitled to vote generally in the election of directors.

 

(g)           Termination of Employment.  For all purposes of this Agreement,
“termination of employment” and any phrase of similar meaning shall have the
meaning assigned to such term in Treas. Reg. Section 1.409A-1(h)(1).

 

(h)           Six-Month Delay for Payments to Specified Employee.  If Executive
is a Specified Employee (as defined below) as of the date of his termination of
employment under this Agreement, notwithstanding any other provision of this
Agreement, any payment (or commencement of a series of payments) to Executive
following a termination of employment of any nonqualified deferred compensation
(within the meaning of Code Section 409A will be accumulated (the “Accumulated
Amount”) and Executive’s right to receive payment or distribution of such
Accumulated Amount will be delayed until the earlier of Executive’s death or the
first day of the seventh month following Executive’s termination of employment
(the “Termination Payment Date”), whereupon the Accumulated Amount will be paid
or distributed to Executive and the normal payment or distribution schedule for
any remaining payments or distributions will resume.  During the period in which
the payment of the Accumulated Amount is delayed pursuant to Code Section 409A,
the Accumulated Amount will be set aside in a “rabbi trust” (within the meaning
of Internal Revenue Service Revenue Procedure 92-64)

 

6

--------------------------------------------------------------------------------

 

established by the Company for purposes of holding the funds constituting the
Accumulated Amount.  Such funds shall be invested in short-term U.S. Government
obligations until the Termination Payment Date, and an amount equal to the
interest earned on obligations held by the rabbi trust shall be paid to
Executive on the Termination Payment Date or, if later, the date the Termination
Payment is actually paid to Executive.  For purposes of this Agreement, the term
“Specified Employee” has the meaning given such term in Code Section 409A and
the final regulations thereunder (“Final 409A Regulations”), provided, however,
that, as permitted in the Final409A Regulations, the Company’s Specified
Employees and its application of the six-month delay rule of Code
Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by
the Board of Directors or a committee thereof, which shall be applied
consistently with respect to all nonqualified deferred compensation arrangements
of the Company, including this Agreement.

 

(i)            Resignation as a Member of the Board of Directors.  In all cases
of termination and upon the expiration of this Agreement, unless otherwise
agreed to in writing, Executive shall be deemed to have contemporaneously
resigned from his position, if any, as a member of the Board of Directors of the
Company or any of its subsidiaries, effective as of the date of termination or
expiration.  Notwithstanding the foregoing, Executive’s resignation from the
Board of Directors shall not adversely affect any options to purchase shares of
the Company’s common stock, restricted stock grants or RSUs that were granted to
Executive solely in his capacity as a Director of the Company or its
subsidiaries, so long as, Executive’s termination is a result of his having been
terminated pursuant to paragraphs (c), (e) or (f) above.

 

5.             Restrictive covenants.

 

(a)           Covenant not to compete.

 

(1)           Executive will not compete with the Company:

 

(i)            During the term of Executive’s employment with the Company; or

 

(ii)           For twenty-four months after the Company terminates Executive’s
employment for any reason, subject to the Company continuing, to the extent
required under Section 4, to pay Executive’s base salary as required in
Section 4.

 

(2)           As used in Section 5(a), “compete” means to establish, engage, or
be connected with, directly or indirectly, any company engaged in a business in
competition with the business of the Company or its subsidiaries or affiliates
in any area where the Company, its subsidiaries or affiliates are doing
business, whether as owner, partner, agent, employee, director, officer,
consultant, advisor, or stockholder (except as the beneficial owner of not more
than 5 percent of the outstanding shares of a corporation, any

 

7

--------------------------------------------------------------------------------

 

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 Executive does not undertake any management or
operational or advisory role).

 

(3)           The Company and Executive acknowledge and agree that the scope and
duration of the covenant in Section 5(a) are reasonable and fair; however, if a
court of competent jurisdiction determines that this covenant is overly broad or
unenforceable in any respect, the Company and Executive acknowledge and agree
that the covenant shall be enforced to the greatest extent any such court deems
appropriate, and such court may modify this covenant to that extent.

 

(b)           Covenant not to solicit customers.  Executive shall not, directly
or indirectly, during the term of Executive’s employment with the Company and
for twenty-four months after termination of Executive’s employment for any
reason, solicit the trade or patronage of any of the customers or prospective
customers of the Company (which, for purposes of this paragraph, shall include
any of the Company’s subsidiaries or affiliates) of which the Executive has
personally engaged with in his capacity as Executive or of anyone whom the
Executive has heretofore traded or dealt with in his capacity within the
Company, regardless of the location of such customers or prospective customers
of the Company with respect to any technologies, services, products, trade
secrets, or other matters in which the Company is active.

 

(c)           Covenant not to solicit or hire employees, or consultants.  Unless
Executive receives the prior written Consent of the Company, Executive shall
not, directly or indirectly, during the term of Executive’s employment with the
Company and for twenty-four months after termination of Executive’s employment
for any reason, aid or endeavor to solicit or induce any other employee or
consultant of the Company (which, for purposes of this paragraph, shall include
any of the Company’s subsidiaries or affiliates), or anyone who was serving in
such capacity upon the termination of Executive’s employment or who served in
such capacity within one year of the termination of Executive’s employment, to
leave the Company to accept employment of any kind with any other person or
entity or do any act that may result in the impairment of the relationship
between the Company on the one hand and the employees or consultants of the
Company on the other hand.  Unless Executive receives the prior written Consent
of the Company, Executive shall not, directly or indirectly, for eighteen months
after termination of Executive’s employment for any reason, hire any employee or
consultant of the Company or anyone who was serving in such capacity upon the
termination of Executive’s employment or who served in such capacity within one
year of the termination of Executive’s employment.  For the purposes of this
paragraph “consultant” shall mean only those consultants whose use would pose a
threat of competitive harm to the Company or would limit the Company’s ability
to obtain the services of such consultant.

 

8

--------------------------------------------------------------------------------

 

(d)           Confidential Information.  Executive’s work for the Company will
give Executive access to confidential matters of the Company not publicly known
such as proprietary matters of a technical nature (including but not limited to
know-how, technical data, gaming processes, gaming equipment, techniques,
developments) and proprietary matters of a business nature (including but not
limited to information about costs, profits, markets, sales, lists of customers,
and matters received by the Company in confidence from other parties),
collectively referred to as “Confidential Matters.” Some Confidential Matters
may be entitled to protection as “Trade Secrets,” as that term is defined in
N.R.S. 600A.030(5), the Restatement of Torts, and case law interpreting the
same.  “Confidential Matters” shall not include any matters for which Executive
has prior knowledge of prior to the commencement of Executive’s employment with
the Company or its affiliates or matters that are known or come to be known as
industry standard practice.  Executive agrees to keep secret all such
Confidential Matters and agree not to directly or indirectly, other than is
necessary in the business of the Company and the scope of Executive’s
employment, disclose or use any such Confidential Matters at any time except
with prior written consent of the Company.  Executive agrees that all written
materials (including correspondence, memoranda, manuals, notes, and notebooks)
and all models, mechanisms, devices, drawings, and plans in Executive’s
possession from time to time (whether or not written or prepared by Executive)
embodying Confidential Matters shall be and remain the sole property of the
Company, and Executive will use all reasonable precautions to assure that all
such written materials and models, mechanisms, devices, drawings, and plans are
properly protected and kept from unauthorized persons.  Executive further agrees
to deliver all Confidential Matters, including copies, immediately to the
Company on termination of Executive’s employment for any reason, or at any time
the Company may request.  Unless required by court proceeding, for a period of
three years after termination of Executive’s employment with the Company for any
reason, Executive shall not reveal directly or indirectly to any person or
entity or use for Executive’s personal benefit (including without limitation,
for the purpose of soliciting business, whether or not competitive with any
business of the Company) any Confidential Matters.  These obligations will not
apply to the extent that the Confidential Matters (i) were already known to the
Executive, without an obligation to keep it confidential, at the time of its
receipt from the Company; (ii) were received by the Executive in good faith from
a third party lawfully in possession thereof and having no obligation to keep
such information confidential; or (iii) were publicly known at the time of its
receipt by the Executive or has become publicly known other than by a breach of
this Agreement or other action by the Executive.  To the extent that any
Confidential Matters are considered by the Company as Trade Secrets, Executive
agrees that all limitations on use of these Trade Secrets shall last as long as
such information remains a trade secret under applicable law.  Executive further
agrees that immediately upon or after termination, Executive will deliver to the
Company all memoranda, notes, reports, lists, models, mechanisms, devices,
drawings or plans and other documents (and all copies thereof) in Executive’s
possession relating to the business of the Company or its subsidiaries and
affiliates.

 

9

--------------------------------------------------------------------------------

 

(e)           Non-disparagement.  Each party agrees that, during Executive’s
employment with the Company and after the termination thereof for any reason,
neither shall, publicly or privately, intentionally disparage or make any
willful statements (written or oral) that could impugn the integrity, acumen
(business or otherwise), ethics, or business practices of the other (including,
in the case of the Company, its affiliates and subsidiaries), except, in each
case, to the extent (but solely to the extent) necessary (i) in any judicial or
arbitration action to enforce the provisions of this Agreement, or (ii) in
connection with any judicial or administrative proceeding to the extent required
by applicable law, or (iii) as otherwise required by law.

 

(f)            Intellectual Property.  Executive shall promptly disclose in
writing 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
Executive, either alone or with others, during Executive’s employment with the
Company, that (i) relate in any manner to the existing or contemplated business
or research activities of the Company, (ii) are suggested by or result from
Executive’s work for the Company; or (iii) result from the use of time,
materials, or facilities of the Company.  All Inventions Executive conceives,
develops, or first actually reduces to practice, either alone or with others,
while employed by the Company 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.  Executive will, at the request and expense
of the Company, execute specific assignments to any such Inventions and execute,
acknowledge, and deliver patent applications and such other documents (including
but not limited to all provisionals, continuations, continuations-in-part,
continued prosecution applications, extensions, re-issues, re-examinations,
divisionals and foreign counterparts) and take such further action as may be
considered necessary by the Company at any time, whether during Executive’s
employment with the Company or after it terminates for any reason, to obtain and
define letters patent in any and all countries and to vest title to such
Inventions and related patents or patent applications in the Company or its
assignees.  Any Invention that Executive discloses to a third person or
describes in a patent application filed by Executive or in Executive’s behalf
during Executive’s employment with the Company or within three months after
Executive’s employment with the Company terminates for any reason shall be
presumed to have been conceived or made by Executive during Executive’s
employment with the Company unless proved to have been conceived and made by
Executive after the expiration or termination of this Agreement.

 

(g)           Injunctive relief; jurisdiction.  Executive acknowledges that the
Company will suffer irreparable injury, not readily susceptible of valuation in
monetary damages, if Executive breaches any of Executive’s obligations under the
restrictive covenants in this Section 5  Accordingly, Executive agrees that the
Company will be entitled, at its option, to injunctive relief against any breach
by

 

10

--------------------------------------------------------------------------------

 

Executive of Executive’s obligations under Section 5 in any federal or state
court of competent jurisdiction sitting in Nevada, in addition to monetary
damages and any other remedies available at law or in equity.  Executive hereby
submits to the jurisdiction of such courts for the purposes of any actions or
proceedings instituted by the Company to obtain such injunctive relief, and
agree that process may be served on Executive under the relevant rules of civil
procedure, addressed to Executive’s last address known to the Company, or in any
other manner authorized by law.

 

(h)           Material inducements.  The restrictive covenants and other
provisions in this Agreement are material inducements to the Company entering
into and performing its obligations under this Agreement.  Accordingly, in the
event of any proven breach of these provisions by Executive, in addition to all
other remedies at law or in equity possessed by the Company, including but not
limited to the right to enforce the covenants Executive has agreed to in this
Agreement, the Company shall have the right to terminate this agreement and
Executive’s employment with the Company and not pay any amounts payable to
Executive under this Agreement.

 

6.             Licenses and approvals.  This Agreement is contingent on any
necessary approvals and licenses from any regulatory authorities having
jurisdiction over the parties or the subject matter of this Agreement.  Each
party shall promptly apply to the appropriate regulatory authorities for any
licenses and approvals necessary for Executive to perform under this Agreement
and shall diligently pursue its applications, and the Company shall pay all
associated costs and fees.  Each party shall fully cooperate with any requests,
inquiries, or investigations of any regulatory authorities or law enforcement
agencies in connection with the Company, its affiliates, or this Agreement.  If
any license or approval necessary for either party to perform under this
Agreement is denied, suspended, or revoked, this Agreement shall be void,
provided, however, that if the denial, suspension, or revocation affects
performance of the Agreement in part only, the parties may by mutual agreement
continue to perform under this Agreement to the extent it is unaffected by the
denial, suspension, or revocation.

 

7.             Compliance program.  The parties acknowledge that the Company
operates under privileged licenses in a highly regulated industry, and that
maintains a compliance program to protect and preserve the name, reputation,
integrity, and good will of the Company and its subsidiaries and affiliates (the
“Company Group”) through a thorough review and determination of the integrity
and fitness, both initially and thereafter, of any person or company that
performs work for any member of the Company Group or with which any member of
the Company Group is or are otherwise associated, and to monitor compliance with
the requirements established by gaming regulatory authorities in various
jurisdictions around the world.  This Agreement and the association of the
Company and its affiliates with Executive are contingent on the continued
approval of the Company and its compliance committee under the Company’s
compliance program and the parties shall cooperate with the Company and its
compliance committee as reasonably requested by the Company or the committee and
shall provide the committee with such information as

 

11

--------------------------------------------------------------------------------

 

it may request, but the termination of this Agreement shall in all respects be
governed by and subject to the rights and obligations of the parties as set
forth in Section 4 hereof.

 

8.             Executive’s Indemnification.  The Company shall, to the maximum
extent permitted by law, indemnify Executive against expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred in connection
with any threatened, pending or completed action, suit, arbitration, alternative
dispute mechanism, inquiry, judicial, administrative or legislative hearing,
investigation or proceeding (a “Proceeding”) arising by reason of the fact that
Executive, is or was a director or officer of the Company or while a director or
officer of the Company is or was serving at the request of the Company as a
director, officer, employee, agent or trustee of another corporation or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan.  Notwithstanding anything to the contrary
contained herein, except as otherwise required by law, the Company shall
indemnify Executive in connection with a Proceeding, or part thereof, initiated
by such person (including claims and counterclaims, whether such counterclaims
are asserted by (i) Executive, or (ii) the Company in a Proceeding initiated by
Executive) only if such Proceeding, or part thereof, was authorized or ratified
by the Board of Directors.  Expenses incurred in defending any such Proceeding
by Executive the Company is required to indemnify as set forth above shall be
paid or reimbursed by the Company promptly upon receipt by it of an undertaking
of Executive to repay such expenses if it should ultimately be determined that
Executive was not entitled to be indemnified by the Company.  It shall be the
responsibility of the Company to obtain and keep current adequate liability
insurance coverage to ensure that this provision shall be complied with as
written.

 

9.             General Provisions.

 

(a)           Arbitration.  Any controversy or claim arising out of or relating
to this Agreement or its breach shall be settled by arbitration in Las Vegas,
Nevada, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment on the award rendered by the arbitrator or
arbitrators may be entered in any court having jurisdiction thereof.  Nothing
contained in this section shall in any way deprive the Company of its right to
obtain injunctive or other equitable relief under Section 5 of this Agreement.

 

(b)           Further assurances.  Each party shall execute all documents and
take all other actions necessary to effect the provisions and purposes of this
Agreement.

 

(c)           Entire agreement.  This Agreement contains the entire agreement
between the parties and supersedes all other oral and written agreements
previously entered into by the parties concerning the same subject matter,
including the Prior Employment Agreement, provided, however, that except as
modified by this Agreement, the terms and conditions of Executive’s employment
with the Company shall be subject to the Company’s regular employment policies
and practices as may be in effect from time to time.

 

12

--------------------------------------------------------------------------------

 

(d)           Modification, rescission, and assignment.  This Agreement may be
modified or rescinded only with the written consent of both parties.  Neither
this Agreement nor any right or interest under this Agreement shall be
assignable by either party without the written consent of the other, provided,
that nothing contained in this Agreement shall limit or restrict the Company’s
ability to merge or consolidate or effect any similar transaction with any other
entity, irrespective of whether the Company is the surviving entity (including a
split up, spin off, or similar type transaction), provided that one or more of
such surviving entities continues to be bound by the provisions of this
Agreement.

 

(e)           Controlling law; severability.  Nevada law shall govern this
Agreement and its interpretation.  If any provision is unenforceable for any
reason, it shall be deemed stricken from the Agreement but shall not otherwise
affect the intention of the parties or the remaining provisions of the
Agreement.

 

(f)            Binding effect.  This Agreement shall bind and inure to the
benefit of each of the parties and their respective heirs, successors,
administrators, executors, and assigns.

 

(g)           Notices.  All notices required by this Agreement must be in
writing and must be delivered, mailed, or telecopied to the addresses given
above or such other addresses as the parties may designate in writing.

 

(h)           Counterparts; facsimiles.  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.  The
facsimile copies so signed will constitute originally signed copies of the same
consent requiring no further execution.

 

(i)            Captions; construction; drafting ambiguities.  The captions in
this Agreement are for convenience only and shall not be used in interpreting
it.  In interpreting this Agreement any change in gender or number shall be made
as appropriate to fit the context.  Each party has reviewed and revised this
Agreement with independent counsel or has had the opportunity to do so.  The
rule of construction that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
of any amendments or exhibits to this Agreement.

 

13

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first set forth above.

 

BALLY TECHNOLOGIES, INC.

 

 

 

 

 

By:

/s/ Kevin Verner

 

/s/ Ramesh Srinivasan

 

Kevin Verner, Chairman of the Board

 

Ramesh Srinivasan

 

14

--------------------------------------------------------------------------------