Exhibit 10.1

 

December 6, 2011

 

Mr. Derik Mooberry

4880 Warren Way

Reno, NV 89509

 

RE:          Employment Offer

 

Dear Derik:

 

Bally Technologies (the “Company”) is pleased to offer you continued employment
with the Company under the following terms and conditions.  The effective date
of this offer letter will be December 6, 2011 (the “Effective Date”). 
Notwithstanding anything herein to the contrary, either you or the Company may
terminate your employment at any time with or without cause, with the rights and
obligations of the parties upon termination of your employment limited strictly
to the terms of this letter agreement.

 

Further, the terms and conditions of this letter agreement shall be conditional
upon the continuous review and approval of Bally Technologies’ Compliance
Committee.

 

1.             Definitions.

 

“Cause” means the following events leading to termination of employment as
determined by the Company, upon reasonable investigation, in its judgment and
discretion, as the case may be after: (1) a substantial act or omission which is
dishonest or fraudulent against the Company, (2) a conviction of a felony or
conviction of a gross misdemeanor involving moral turpitude or criminal conduct
against any person or property, including without limitation, the Company, (3) a
substantial act or omission that constitutes willful misconduct in the
performance of your job responsibilities or failure to adhere to the Company’s
then-current policies, procedures or rules (4) any improper or illegal act,
omission or pattern of conduct in the performance of your job responsibilities,
which is not remedied by you within thirty (30) days of your receipt of written
notice from the Company, (5)  any material breach of this letter agreement by
you, or (6) failure to comply with any provision of the gaming laws of the State
of Nevada or the rules and regulations of the Nevada Gaming Control Board or the
Nevada Gaming Commission or any gaming law, ordinance, rule or regulation of any
city or county having jurisdiction, or the gaming laws, regulations and rules of
any other nation, state, county or other jurisdiction in which the Company may
be doing business at any time which will materially and negatively affect the
registration and licensing of the Company.

 

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“Salary Continuation” means the Company’s continued payment of your then-current
base salary on normal paydays following termination of your employment with the
Company, paid under such circumstances described in further detail in this
letter agreement, less standard withholding and offset by all income earned from
other employment during any period of time that you receive any Salary
Continuation.

 

2.             Compensation.

 

A.            Position and Title.  You are hereby offered the position of Senior
Vice President, Products and Operations.  You will report to the Chief Operating
Officer of Bally Technologies, Inc., or his equivalent as the Company may direct
from time to time.  Your duties will generally include oversight and management
of the Company’s product development, product marketing, and other activities
that the Company may deem appropriate for this position from time to time, along
with any other related duties that the Chief Operating Officer may assign to
you.

 

B.            Salary.  Your base salary will be $231,750 per year.  Your base
salary will be reviewed annually and adjustments may be made at the Company’s
option, and based on merit, and all at the Company’s sole discretion.  The
Company makes no express representations as to the certainty of any salary
increases.

 

C.            Management Incentive Program. Notwithstanding the Effective Date
of this letter agreement, and provided that you are then employed by the
Company, you will be entitled to participate in the Company’s Senior Management
Incentive Program or any successor plan (the “MIP”).  Details of the plan are
provided each year under separate cover. .

 

D.            Variable Compensation.  Notwithstanding the Effective Date of this
letter agreement, Employee will continue to participate in the established
Revenue and Operating Income base incentive programs that are currently in
place.  These programs will continue to be modified annually by mutual agreement
between the Company and the Employee.

 

E.             Equity Awards.  Subject to the approval of the Board, you will be
granted an option on the Effective Date to acquire 4,000 shares of Bally
Technologies, Inc. common stock (the “Common Stock”) at the per-share exercise
price which will be equal to the market price of a share of Common Stock as of
the close of business on the Effective Date, referred to as the “Option.”  In
addition, subject to Board approval, on the Effective Date, you will be awarded
4,000 shares of restricted Common Stock, referred to as the “Restricted Stock.” 
Subject to the express provisions of this letter agreement, the Option and the
Restricted Stock will be issued pursuant to the Bally Technologies, Inc. 2010
Long Term Incentive Plan (the “LTIP”) and the forms of award agreement currently
used thereunder, and in accordance with the Company’s then current policies and
procedures for equity-based compensation awards.

 

The Option and the Restricted Stock shall vest and, to the extent applicable, be
exercisable, at 25% on each of the four anniversaries of the Effective Date,
subject to your continued employment with the Company through each vesting date.

 

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F.             Salary Continuation.  If the Company terminates your employment
without Cause after the Effective Date, the Company will pay you Salary
Continuation for a period of one year immediately following such termination of
your employment, subject to: (1) the release agreement described in paragraph F
below becoming effective and irrevocable in accordance with its terms; and
(2) your continued compliance with the covenants described in Section 3 below. 
You will not receive Salary Continuation for any period of time following your
termination if the Company terminates your employment for Cause or if you
terminate your employment for any reason at any time.

 

G.            Termination Release.  The payment to you of any amounts of cash
and equity compensation following termination of your employment with the
Company in accordance with Section 2 of this letter agreement shall be
conditioned upon the execution by you within 21 days following your termination
of employment of a release agreement providing for the release of all claims
against the Company or any successor, and the irrevocability of the same.

 

3.             Employment Covenants.

 

A.            Covenant not to compete. You agree not to compete with the Company
for as long as you are employed by the Company. You agree not to compete with
the Company for one year after your employment with the Company terminates if
the Company terminates you for Cause, or if you quit for any reason (the
“Non-Compete Period”), on the terms and conditions set forth in Section 2 above.

 

If you are terminated without Cause, you agree not to compete with the Company
for one year after your employment with the Company terminates, subject to the
terms and conditions set forth in Section 2 above.

 

To “compete” means to establish, engage, or be connected with, directly or
indirectly, any person or entity engaged in a business in competition with the
business of the Company (which, as defined above, includes any of the Company’s
subsidiaries or affiliates) in any area where the Company does business, whether
as an employee, owner, partner, agent, employee, officer, consultant, advisor,
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 you do not
undertake any management or operational or advisory role) or in any other
capacity, for your own account or for the benefit of any person or entity.

 

You acknowledge and agree that the scope and duration of this covenant not to
compete are reasonable and fair. However, if a court of competent jurisdiction
determines that this covenant is overly broad or unenforceable in any respect,
you and the Company agree that the covenant shall be enforced to the greatest
extent the court deems appropriate and that the court may modify this covenant
to that extent.

 

B.            Covenant not to solicit customers, employees, or consultants. You
agree that during your employment with the Company and for one year after your
employment ends for any reason, you shall not, directly or indirectly, (i) 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

 

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with any other person or entity, or (ii) solicit the trade or patronage of any
of the Company’s customers (which includes customers of any of the Company’s
subsidiaries or affiliates) or of anyone who has traded or dealt with the
Company with respect to any technologies, services, products, trade secrets, or
other matters in which the Company is active.

 

C.            Confidential information. You agree that your work for the Company
will give you 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.

 

You agree 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 your employment, disclose or use any such Confidential Matters at any
time except (i) with prior written consent of the Company, (ii) as necessary in
any judicial or arbitration action to enforce the provisions of this letter
agreement, (iii) in connection with any judicial or administrative proceeding to
the extent required by law, and (iv) as otherwise required by law. You agree
that all written materials (including correspondence, memoranda, manuals, notes,
and notebooks) and all models, mechanisms, devices, drawings, and plans in your
possession from time to time (whether or not written or prepared by you)
embodying Confidential Matters shall be and remain the sole property of the
Company, and you 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. You further agree to
deliver all Confidential Matters, including copies, immediately to the Company
on termination of your employment for any reason, or at any time the Company may
request.

 

After termination of your employment with the Company for any reason, you shall
not reveal directly or indirectly to any person or entity or use for your
personal benefit (including without limitation, for the purpose of soliciting
business, whether or not competitive with any business of the Company) any
Confidential Matters. To the extent that any Confidential Matters are considered
by the Company as Trade Secrets, you agree that all limitations on use of these
Trade Secrets shall last forever. You further agree that immediately upon or
after termination, you will deliver to the Company all memoranda, notes,
reports, lists, models, mechanisms, devices, drawings or plans and other
documents (and all copies thereof) in your possession relating to the business
of the Company or its subsidiaries and affiliates.

 

D.            Intellectual Property. You 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 you, either alone
or with others, during your employment with the Company or during the first six
months after your employment with the Company ends for any reason, that
(i) relate in any manner to the existing

 

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or contemplated business or research activities of the Company, (ii) are
suggested by or result from your work for the Company; or (iii) result from the
use of time, materials, or facilities of the Company. All Inventions you
conceive, develop, or first actually reduce 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. You assign to the Company your entire right,
title, and interest in and to all such Inventions and to all unpatented
Inventions that you now own, except those specifically described in a statement
that has been separately executed by you and an officer of the Company and
attached hereto, provided, however, that if no such list is attached, you
represent and warrant that there are no such Inventions. You 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 your 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 you disclose to a third person or
describe in a patent application filed by you or in your behalf during your
employment with the Company or within six months after your employment with the
Company terminates for any reason shall be presumed to have been conceived or
made by you during your employment with the Company unless proved to have been
conceived and made by you after the expiration or termination of this letter
agreement.

 

You acknowledge that the remuneration you receive in connection with your
employment with the Company includes reasonable compensation for the fact that
the Intellectual Property rights will vest in the Company and/or its affiliated
companies (if so designated by the Company) by operation of law or for the
assignment and transfer to the Company of such rights pursuant to this
Section 3.

 

E.             Non-disparagement. You and the Company each agree that, during
your employment with the Company and after your employment with the Company
terminates for any reason, neither shall, publicly or privately, disparage or
make any statements (written or oral) that could impugn the integrity, acumen
(business or otherwise), ethics, or business practices of the other (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 letter 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.             Injunctive relief; jurisdiction. You acknowledge that the Company
will suffer irreparable injury, not readily susceptible of valuation in monetary
damages, if you breach any of your obligations under this letter agreement.
Accordingly, you agree that the Company will be entitled, at its option, to
injunctive relief against any breach or prospective breach by you of your
obligations under this section 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. You hereby submit 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

 

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may be served on you by registered mail, addressed to your last address known to
the Company, or in any other manner authorized by law.  The Company may also
suspend any salary continuation payments during any period that you are in
breach of this letter agreement and the applicable restricted period shall be
extended by any period that you are in breach.

 

G.            Material inducements. The restrictive covenants and other
provisions in this letter agreement are material inducements to the Company
entering into and performing its obligations under this letter agreement.
Accordingly, in the event of any breach of the provisions of this section by
you, 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 you
have agreed to in this letter agreement, the Company shall have the right to
terminate this letter agreement and your employment with the Company and not pay
any amounts payable to you under this letter agreement.  In the event any of the
provisions of this letter agreement are individually deemed unlawful, any
remaining provisions of this letter shall remain in full force and effect.

 

4.             Miscellaneous.

 

The intent of the parties is that payments and benefits under this letter
agreement comply with Section 409A of the Internal Revenue Code of 1986, as
amended, and the regulations and guidance promulgated thereunder (collectively
“Section 409A”) and, accordingly, to the maximum extent permitted, this letter
agreement shall be interpreted to be in compliance therewith.  For purposes of
this letter agreement, a termination of employment shall not be deemed to have
occurred for purposes of any provision of this letter agreement providing for
the payment of any amounts or benefits that are considered to be deferred
compensation under Section 409A upon or following a termination of employment
unless such termination is also a “separation from service” within the meaning
of Section 409A.  In addition, if you are deemed on the date of your termination
of employment to be a “specified employee” within the meaning of that term under
Section 409A(a)(2)(B) of the Internal Revenue Code of 1986, as amended, then
with regard to any payment or the provision of any benefit that is considered
deferred compensation under Section 409A payable on account of a “separation
from service,” and that is not exempt from Section 409A as involuntary
separation pay or a short-term deferral (or otherwise), such payment or benefit
shall be made or provided at the date which is the earlier of (i) the expiration
of the six-month period measured from the date of such “separation from
service,” and (ii) the date of your death (the “Delay Period”).  Upon the
expiration of the Delay Period, all payments and benefits delayed pursuant to
this paragraph (whether they would have otherwise been payable in a single sum
or in installments in the absence of such delay) shall be paid or reimbursed to
you in a lump sum without interest, and any remaining payments and benefits due
under this letter agreement will be paid or provided in accordance with the
normal payment dates specified for them herein.  Each payment hereunder shall be
deemed a separate payment for purposes of Section 409A.

 

Except as modified by this letter, the terms and conditions of your employment
with the Company shall continue to be subject to the Company’s regular
employment policies and practices and benefits as may be in effect from time to
time.  This letter comprises the entire agreement between you and the Company
and supersedes all other oral and written agreements previously entered into by
you and the Company concerning the same subject matter.  If accepted, this offer
will not create an agreement of employment for any specific term or

 

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otherwise alter the at-will nature of your employment relationship with the
Company.  If you accept this offer, either you or the Company may terminate your
employment at any time with or without cause.

 

If you accept this offer of employment, please sign below and return this letter
to me. Once signed and returned, this letter will comprise a binding agreement
between you and the Company.  If you have any questions about its meaning, you
are urged to consult with your attorney.

 

Sincerely,

 

BALLY TECHNOLOGIES, INC.

 

 

 

 

 

/s/Gary Kapral

 

By: Gary Kapral

 

Senior Vice President, Human Resources

 

 

 

ACCEPTANCE

 

I have read the foregoing letter, and I have reviewed it with counsel or have
had the opportunity to do so. I understand and accept its terms.

 

 

/s/ Derik Mooberry

 

Derik Mooberry

 

 

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