Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

EXECUTIVE EMPLOYMENT AGREEMENT dated as of May 23, 2011, 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 (the “Original Employment Agreement”) pursuant to which Executive is
employed as the Company’s Executive Vice President for the Company’s Systems
Division; and

 

WHEREAS, the Company and Executive desire to amend and restate the Original
Employment Agreement in accordance with and subject to the terms and conditions
hereof;

 

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.             Employment.  The Company continues to employ Executive, and
Executive continues to be employed by the Company, on the terms and conditions
set forth in this Agreement.  This Agreement is not intended to create an
agreement of employment for any specific term or otherwise alter the at-will
nature of Executive’s employment relationship with the Company.

 

2.             Position and Duties.  From and after March 30, 2011 (the
“Effective Date”), Executive shall serve as the Company’s President and Chief
Operating Officer and shall report to the Chief Executive Officer of the
Company.  Executive shall perform the duties contemplated by such title and such
other duties, consistent with his experience and abilities, as the Chief
Executive Officer and/or 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 $600,000, 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 2012 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 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”).  From and after July 1, 2011, the financial metrics part of this 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) and personal objectives established by the
Compensation Committee.  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)           Option.  On April 6, 2011 (the “Grant Date”), Executive shall
receive an option to acquire an aggregate of 36,000 shares of the common stock
of the Company.  Subject to the further provisions of this Agreement, the option
shall “vest” (that is, become exercisable by Executive) in four installments of
9,000 shares on each of the first four anniversaries of the Grant Date.  The
option shall be subject to the Company’s 2010 Long Term Incentive Plan (the
“LTIP”) and the Company’s standard form of stock option agreement.  Executive
shall be eligible to receive additional grants in the future, at the discretion
of and as approved by the Company’s Board of Directors and/or Compensation
Committee thereof.

 

(d)           Restricted stock.  On the Grant Date, Executive shall receive an
award of 18,000 shares of restricted stock under the LTIP (the “Restricted
Stock”).  Subject to the further provisions of this Agreement, the Restricted
Stock shall vest in four installments of 4,500 shares on each of the first four
anniversaries of the Grant Date.  The Restricted Stock shall be subject to the
LTIP and the Company’s standard form of restricted stock agreement.  Executive
shall be eligible to receive additional 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

 

2

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

 

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.

 

(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

 

3

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

 

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;

 

(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, an
effective general release of claims in favor of the Company (i) continue to pay
Executive an amount equal to Executive’s base salary for eighteen months after
the date of termination (with the first payment occurring on the date that is 30
days following the date of termination), (ii) pay to Executive, on the date that
is 12 months following the date of termination, a lump sum payment equal to 1.5
times the annual bonus under the MIP that Executive would have earned for the
year of termination had he remained employed for the full year based on the
Company’s actual results for the full fiscal year and (iii) accelerate the
vesting of a portion of Executive’s Restricted Stock award described in
Section 3(d) such that, taking into account the portion of such award that
vested prior to the date of termination, Executive is vested in a fraction of
the total number of shares subject to the award equal to the number of full
months completed between the Effective Date and the date of termination plus 18
(but in no event greater than 48) divided by 48.

 

(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

 

4

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

 

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
President and Chief Operating 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 Chief Executive Officer or 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 thereof) any material
provision of this Agreement, or (3) his position, title, duties, authority or
responsibilities are otherwise substantially diminished.  Notwithstanding
anything herein to the contrary, if Executive remains employed by the Company
through the end of a fiscal year (or provides up to 90 days written notice of
termination, which 90-day period would run through the end of a fiscal year),
Executive shall be entitled to receive, at the time annual bonuses are paid to
other executive officers of the Company, an annual bonus under the MIP for the
year of termination based on the Company’s actual results for such fiscal year.

 

(e)           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, an effective general
release of claims in favor of the Company (i) continue to pay Executive an
amount equal to Executive’s base salary for eighteen months after the date of
termination (with the first payment occurring on the date that is 30 days
following the date of termination), (ii) pay to Executive, on the date that is
12 months following the date of termination, a lump sum payment equal to 1.5
times the annual bonus under the MIP that Executive would have earned for the
year of termination had he remained employed for the full year based on the
Company’s actual results for the full fiscal year and (iii) accelerate in full
the vesting of all of the equity compensation awards granted to Executive prior
to the date of the Change of Control (including the option and Restricted Stock
awards described in Section 3(c) and 3(d)).

 

(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

 

5

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

 

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.

 

(f)            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).

 

(g)           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 to Executive following a termination of employment
described in Section 4(c) or 4(e)(1) 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) 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

 

6

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

 

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.

 

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 twelve 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 is 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 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)           In addition to the restrictions set forth above, during the term
of Executive’s employment with the Company and until the date that is eighteen
months after the Company terminates Executive’s employment for any reason,
Executive 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 of the following entities:
International Game Technology, Inc., WMS Industries, Inc., Shuffle Master, Inc.,
Aristocrat Leisure, Ltd., Gtech Holdings Corp., Multimedia Games, Inc.,
Scientific Games Corporation, Konami Gaming, Inc., Aruze Gaming America, Inc.,
Novomatic AG,  American Gaming Systems, Global Cash Access
Holdings, Inc., Inspired Gaming Group Limited, Ainsworth Game Technology Ltd.,
or Global

 

7

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

 

Zitro, S.L., or any of their present and future affiliates, subsidiaries,
divisions, parent companies and successors.

 

(4)           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 twelve 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 employees, or consultants.  Executive
shall not, directly or indirectly, during the term of Executive’s employment
with the Company and for eighteen 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 to leave the Company to accept employment
of any kind with any other person or entity.

 

(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

 

8

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

 

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.

 

(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

 

9

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

 

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 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

 

10

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

 

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 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.  To the extent permitted by
applicable law, Executive shall be indemnified by the Company against expenses,
including attorneys’ fees, necessarily incurred by Executive in connection with
the defense or settlement of any action, suit, or proceeding to which he is a
party, alone or together with others, by reason of his being or having been an
Executive of the Company.  To the extent permitted by applicable law, Executive
shall also be reimbursed by the Company for any amounts paid by such person in
satisfaction of any judgment or settlement in connection with any such action,
suit, or proceeding, unless the amount of such judgment shall be adjudged on
such action, suit, or proceeding to be liable for willful misconduct in
violation of law or the Company’s written policies.  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.

 

11

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

 

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 Original 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.

 

(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

 

12

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

 

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.

 

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/ Mark Lerner

 

/s/ Ramesh Srinivasan

 

Mark Lerner

 

Ramesh Srinivasan

 

Secretary

 

 

 

13

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