Exhibit 10.3


 


AGREEMENT


 


This Agreement (this
“Agreement”) is dated as of July 1, 2004, and is between Alliance Gaming
Corporation, a Nevada corporation (the “Company”), and David Robbins, an
individual (“Robbins”).


 


BACKGROUND


 


Robbins is currently, and has
been since December 1997, the Chairman of the Board of Directors of the
Company (the “Board”).  The Company and
industry are currently experiencing a period of rapid growth in an increasingly
complex multi jurisdictional gaming industry which is dynamic and
challenging.  Contemporaneously, the
Company is preparing for a transition in management and is engaging in a
program of succession planning.  To
address, among others, these issues, the Company would like to procure the
services of Robbins as Chairman of the Board and as a director member of the
Office of the Chairman of the Company. 
Robbins is willing to serve in such capacities and provide such
functions pursuant to the terms and conditions of this Agreement.


 


NOW THEREFORE, in consideration
of the mutual covenants and promises set forth in this Agreement, and intending
to be legally bound, the parties agree as follows:


 


1.             Functions.


 


(a)           The Company hereby appoints Robbins to
continue to serve, and Robbins hereby accepts such appointment to continue to
serve, as Chairman of the Board.  As
Chairman, Robbins shall have such powers and perform such duties as are
contemplated by the Amended and Restated Bylaws of the Company and as may be
delegated to Robbins by the Board.


 


(b)           Robbins shall also serve as a director
member of the Office of the Chairman and in that regard shall, without
limitation, perform the following, as may be reasonably requested by the
Company:


 


(i)            Providing for the establishment, management
and oversight of specific goals related to the CEO’s accountabilities in
mentoring and training identified succession candidate(s).


 


(ii)           Coordinating by working with the CEO, the
development of a detailed Management Development Plan for the identified
succession candidate(s).


 


(iii)          Meeting with the incumbent CEO and succession
candidate(s) quarterly to monitor and discuss progress on established
objectives (for both the incumbent CEO and succession candidate(s)).


 


(iv)          Providing on-going mentoring of succession
candidate(s) and monitoring of development progress through the indicated
transition period.


 

















 


(v)           Providing on-going consultation, advice and
mentoring to Alliance Executive Management following transition as reasonable
and appropriate.


 


(c)           In serving as Chairman and undertaking such
functions (collectively, the “Functions”), Robbins shall devote such time and
attention as is reasonable and appropriate to perform such functions hereunder.


 


2.             Term and
Termination.


 


(a)           Term.   The term of this Agreement shall be for a period of three and
one-half (3.5) years commencing on July 1, 2004 and terminating on
December 31, 2007 (the “Term”), unless earlier terminated as provided
herein.


 


(b)           Termination.  This Agreement may be terminated prior to
expiration of the Term as follows:


 


(i)            By Robbins.  If Robbins voluntarily resigns from the Board, or otherwise
provides the Company with written notice of his voluntary termination of this
Agreement prior to the expiration of the Term, this Agreement shall terminate
as of the date of such resignation or termination, and the Company shall have
no further obligations to Robbins or his heirs or estate under this Agreement.


 


(ii)           By the Board.  [a] If the Board requests in writing that
Robbins resign from the Board, or Robbins is not re-nominated or having been
renominated is not re-elected to serve on the Board, or otherwise provides
Robbins with written notice of termination of this Agreement, other than for
Cause (as herein defined) prior to the expiration of the Term, this Agreement
shall terminate as of the date of the Board’s request or notice.  In such circumstances, the Company shall pay
Robbins the remainder, if any, of the fees due under Sections 3(a) and
3(b) of this Agreement for the remainder of the Term, to be paid in
accordance with the payment provisions set forth in
Section 3(c) hereof, and the options referred to in
Section 3(b) shall be fully vested and exercisable.  [b] For purposes of this Agreement, “Cause”
shall mean (i) Robbins’ willful and continual failure to substantially
perform his duties with the Company (other than a failure resulting from
Robbins’ becoming Disabled) and such failure continues for a period of thirty
(30) days after Robbins’ receipt of written notice from the Company providing a
reasonable description of the basis for the determination that Robbins has
failed to perform his duties; (ii) Robbins’ conviction of a felony other
than a conviction not disclosable under the federal securities laws;
(iii) Robbins’ breach of this Agreement in any material respect and such
breach is not susceptible to remedy or cure or has already materially damaged
the Company, or such breach is susceptible to remedy or cure and no such damage
has occurred and such breach is not cured or remedied reasonably promptly after
Robbins’ receipt of written notice from the Company providing a reasonable
description of


 


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the breach;
(iv) Robbins’ failure to qualify (or having so qualified being thereafter
disqualified) under a suitability or licensing requirement of any jurisdiction
or regulatory authority that is material to the Company and to which Robbins
may be subject by reason of his position with the Company and its affiliates or
subsidiaries; (v) the Company’s having obtained from any source
information with respect to Robbins or this Agreement that could reasonably be
expected, in the reasonable written opinion of both the Company and its outside
counsel, to 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; or (vi) conduct to the
material detriment of the Company that is dishonest, fraudulent, unlawful or
grossly negligent or which is not in compliance with the Company’s Code of
Conduct or similar applicable set of standards or conduct and business
practices set forth in writing and provided to Robbins prior to
such conduct and which has a material detriment to the Company and is not
susceptible to remedy or cure by Robbins.


 


(c)           By Death or Disability.  If Robbins dies before the expiration of the
Term, this Agreement shall terminate on the date of his death.  If Robbins becomes disabled or incapacitated
(“Disabled”) for any period of six (6) or more consecutive months or for a
noncontinuous period aggregating to twenty-six weeks in any twelve month period
as a result of illness or incapacity before the expiration of the Term, the
Board shall have the right to terminate this Agreement upon written notice to
Robbins.  In the event Robbins dies or
becomes Disabled, and the Board terminates the Agreement, the Company shall
have no further obligations to Robbins or his heirs or estate under this
Agreement.


 


3.             Compensation.


 


(a)           As compensation for his services as Chairman
of the Board hereunder, the Company shall pay Robbins $235,000 per year.  Robbins shall not be entitled to receive any
other cash fees or compensation for service on the Board during the Term; provided,
however, that this Section 3(a) is not intended to limit or restrict
the Company from providing equity incentive awards to Robbins in accordance
with it stock incentive plans or otherwise and Robbins shall be granted
options/equity compensation in accordance with regular grants applicable to
non-employee Board members.


 


(b)           As compensation for his role as a director
member of the Office of the Chairman hereunder, the Company shall pay Robbins
$90,000 per year.


 


(c)           The Company hereby grants to Robbins stock
options to purchase 39,000 shares of the Company’s Common Stock with an
exercise price of $17.16 and an exercise period of ten years.  The options shall vest in equal increments
on the first, second and third anniversary dates of this Agreement.


 


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(d)           The Company shall pay the fees and
compensation contemplated in Section 3(a) and Section 3(b) in 12
monthly installments per year.  Each
installment shall be due and paid in arrears by the first day of each month
beginning August 1, 2004.


 


4.             Business Expenses.  The Company shall reimburse Robbins for all
reasonable and necessary out-of-pocket expenses incurred or paid by Robbins in
connection with, or related to, the performance of Functions under this
Agreement.  Robbins shall submit to the Company
periodic itemized statements, in a form satisfactory to the Company, of such
expenses as incurred.  The Company shall
pay to Robbins amounts shown on each statement in accordance with its regular
procedures, but in any event, within thirty (30) days after receipt
thereof.  Notwithstanding the foregoing,
Robbins shall not incur total expenses in excess of $5,000.00 per month without
the prior written approval of the Company.


 


5.             Independent
Contractor.  The parties acknowledge
and confirm that Robbins in his capacity as a chairman and a director shall,
for tax purposes, be treated as an independent contractor to the Company and,
as such, shall be responsible for the payment of all taxes including, but not
limited to, social security and income tax relating to the compensation paid to
Robbins pursuant to the terms of this Agreement.  Nothing herein contained shall be construed or deemed by the
parties hereto as creating or having created any relationship of employer and
employee, principal and agent or partnership or joint venture between Robbins
and the Company.


 


6.             Confidential
Information.  Robbins recognizes and
acknowledges that he has had, and will have, during the Term, access to certain
Confidential Information (as defined below) of the Company and that such
information constitutes valuable, special and unique property of the
Company.  Robbins agrees that he will
not, during or after the Term, disclose any of such Confidential Information to
any person or entity without the consent of the Company, except as necessary or
appropriate in the ordinary course of performing the Functions hereunder or as
required by law, rule or regulation.


 


(a)           “Confidential Information” shall mean
information that is not generally known to the public, which is used, developed
or obtained by the Company and/or any of its affiliates, relating to its or
their business and the businesses of its or their clients, vendors or customers
including, but not limited to:  business
and marketing strategies, products or services; fees, costs and pricing
structure; marketing information; advertising and pricing strategies; analyses;
reports; computer software, including operating systems, applications and
program listings; flow charts; manuals and documentation; data bases;
accounting and business methods; hardware design; technology, inventions and
new development and methods, whether patentable or unpatentable and whether or
not reduced to practice; all copyrightable works; the Company’s or any of its
affiliates’ existing and prospective clients, customers, and vendor lists and
other data related thereto; all trade secret information protected by the
federal Economic Espionage Act of 1996, 18 U.S.C. § 1831 et seq.; and all
similar and related information in whatever form.


 


(b)           “Confidential Information” shall not include
any information that has been published in a form generally available to the
public prior to the date upon which Robbins proposes to disclose such
information.  Information shall not be
deemed to have been published


 


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merely because individual
portions of the information have been separately published, but only if all the
material features comprising such information have been published in
combination.


 


7.             Covenant Not to
Compete.  During his engagement
under this Agreement, and in the event of Robbins termination pursuant to
paragraph 2(b)(ii) hereof, during the period the Company is obligated
to pay Robbins the remainder of his fees due under Sections 3(a) and
3(b) of this Agreement, Robbins shall not become employed by, act as a
consultant for, contract with, obtain a beneficial ownership interest in or
otherwise enter into any form of business relationship with International Game
Technology, Inc., WMS Industries, Inc., Shuffle Master, Inc., Aristocrat
Leisure, Ltd., Gtech Holdings Corp., Multimedia Games, Inc., Sigma Game Inc.,
or any of their present and future subsidiaries, divisions, parent companies
and successors (“Peer Group”).  The
provisions of this Section 7 shall not prevent Robbins from investing his
assets in such form and manner as he chooses; provided, however, that Robbins
shall not have any personal interest, direct or indirect (other than through
the Company or its subsidiaries), financial or otherwise, in any member of the
Peer Group unless such interest has been approved by the Compensation Committee
or such interest is, or arises solely from ownership of, less than three
percent (3%) of the outstanding capital stock of such member and such capital
stock is available to the general public through trading on any national,
regional or over-the-counter securities market.


 


8.             Notices.  All notices, requests and other
communications hereunder shall be in writing. 
Any notice, request or other communication hereunder shall be deemed
duly given if it is sent by facsimile, with confirmation received, by hand
delivery, by overnight delivery service or by registered or certified mail,
return receipt requested, postage prepaid, and addressed to the intended
recipient as set forth below:


 


(a)           If to the Company:


 


Alliance Gaming Corporation

6601 South Bermuda Road 

Las Vegas, Nevada 89119 

Attention:  Chief Executive Officer 

Copy to:  General Counsel 

Facsimile:  (702) 270-7699


 


(b)           If to Robbins:


 


David Robbins

c/o Reitler Brown & Rosenblatt LLC 

800 Third Avenue, 21st Floor 

New York, New York 10022 

Facsimile:  (212) 371-5500


 


9.             Entire Agreement.  This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.


 


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10.           Amendment.  This Agreement may be amended or modified
only by a written instrument executed by both the Company and Robbins.


 


11.           Successors and
Assigns.  This Agreement is personal
to Robbins and may not be transferred or assigned by him.  Neither this Agreement nor any right or
interest under it shall be assignable by the Company without the prior written
consent of Robbins; provided, however, that the Company shall be obligated to
cause the assignment of this Agreement pursuant to a Change of Control, as set
forth in Section 12 below.  This
Agreement shall be binding upon and inure to the benefit of the heirs, estate,
successors and permitted assigns of each party.


 


12.           Change of Control.  Upon a Change of Control of the Company (as
defined below), the Company shall be obligated to cause any surviving or
successor entity to assume, be responsible for and honor Sections 2(b)(ii),
3(a) and 3(b) of this Agreement. 
For purposes of this Agreement, a “Change of Control” means (a) the
acquisition, directly or indirectly, by any unaffiliated person, entity or
group (a “Third Party”) of beneficial ownership of 50% or greater of the
combined voting power of the Company’s then outstanding voting securities
entitled to vote generally in the election of directors; or
(b) consummation of (i) a reorganization, merger or consolidation of
the Company, or (ii) a liquidation or dissolution of the Company or
(iii) a sale of all or substantially all of the assets of the Company
(whether such assets are held directly or indirectly) to a Third Party; or
(c) the individuals who as of the date of this Agreement are members of
the Board of Directors (together with any directors elected or nominated by a
majority of such individuals) cease for any reason to constitute at least a
majority of the members of the Board of Directors; except that any event or
transaction which would be a “Change of Control” under clause (a) or b)(i)
or (iii) 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 acquiror 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.


 


13.           Other Activities.  The Company explicitly acknowledges and
agrees that during the Term, Robbins will also be engaged in a variety of other
substantial business activities that do not relate to the business of the
Company.


 


14.           Waiver.  Either party’s failure to enforce any
provision or provisions of this Agreement shall not in any way be construed as
a waiver of any such provision or provisions as to any future violations
thereof, nor prevent that party thereafter from enforcing each and every other
provision of this Agreement.


 


15.           Severability.  If, for any reason, any provision of this
Agreement is determined to be invalid or unenforceable, such invalidity or lack
of enforceability shall not affect any other provision of this Agreement not so
determined to be invalid or unenforceable, and each such provision shall, to
the full extent consistent with applicable law, continue in full force and
effect, irrespective of such invalid or unenforceable provision.


 


16.           Governing Law.  This Agreement shall be construed,
interpreted and enforced in accordance with the laws of Nevada, without regard
to principles of conflicts of law.


 


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17.           Counterparts.  This Agreement may be executed in
counterparts, each of which when so executed and delivered shall be an original
and all of which taken together shall constitute but one and the same
instrument.


 


IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the day and year first set forth
above.


 


	
   

  	
  ALLIANCE GAMING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DAVID ROBBINS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  



 


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