**Exhibit 10.24**

 

**SECONDAMENDMENT TOHADDRILL EMPLOYMENT AGREEMENT**

 

This Second Amendment to the EmploymentAgreement (the “Second Amendment”) is made and entered into as of June 13,2005 (the “Effective Date”), by and between Alliance Gaming Corporation,a Nevada corporation (the “Company”), and Richard Haddrill (“Haddrill”).

 

WHEREAS, the Company and Haddrill are partiesto that certain Employment Agreement dated as of June 30, 2004 (the “EmploymentAgreement”) pursuant to which Haddrill is employed as the Company’s ChiefExecutive Officer;

 

WHEREAS, the Company and Haddrill are partiesto that certain Amendment to the Employment Agreement dated as of December 22,2004 (the “First Amendment”);

 

WHEREAS, pursuant to the EmploymentAgreement, the Company granted to Haddrill non-statutory stock options toacquire 500,000 shares of the Company’s common stock (the “EmploymentAgreement Options”) pursuant to the Company’s 2001 Long Term Incentive Plan(the “Plan”);

 

WHEREAS, the award of the EmploymentAgreement Options has been evidenced by those certain Stock Option Agreementsbetween the Company and Haddrill dated June 30, 2004 (the “June StockOption Agreement”) and October 27, 2004 (the “October StockOption Agreement”);

 

WHEREAS, pursuant to that certain StockOption Agreement between the Company and Haddrill dated January 8, 2004(the “January Stock Option Agreement”), the Company granted toHaddrill non-statutory stock options to acquire 195,000 shares of the Company’scommon stock pursuant to the Plan (the “January Options” andtogether with the Employment Agreement Options, the “Accelerated Options”);

 

WHEREAS, pursuant to that certain StockOption Agreement between the Company and Haddrill dated April 23, 2003(the “April Stock Option Agreement” and together with the June StockOption Agreement, the October Stock Option Agreement and the January StockOption Agreement, the “Stock Option Agreements”), the Company granted toHaddrill non-statutory stock options to acquire 50,000 shares of the Company’scommon stock pursuant to the Plan (the “April Options” and togetherwith the Accelerated Options, the “Pre-Amendment Options”);

 

WHEREAS, the Board of Directors of theCompany has determined that it is in the best interests of the Company toaccelerate the vesting of the Accelerated Options;

 

WHEREAS, the Company has determined that theterms of certain of the Stock Option Agreements do not accurately reflect theagreed upon terms of the Pre-Amendment Options with respect to thepost-termination exercise period applicable to such Pre-Amendment Options; and

 

WHEREAS, the Company and Haddrill desire toamend the Employment Agreement to (i) accelerate the vesting of theAccelerated Options and (ii) clarify the post-termination exerciseprovisions of the Pre-Amendment Options in accordance with and subject to theterms and conditions of this Second Amendment.

 

1

----

 

NOW THEREFORE, on the basis of the foregoingpremises and in consideration of the mutual covenants and agreements containedherein, the parties hereto agree as follows:

 

1.             Effective as of theEffective Date, the Accelerated Options shall be fully vested and immediatelyexercisable in their entirety by Haddrill.

 

2.             Notwithstandinganything in the Employment Agreement, the First Amendment, the Plan or theStock Option Agreements to the contrary, Haddrill and the Company hereby agreethat Haddrill may not sell, encumber, pledge or otherwise transfer any of theshares of the Company’s common stock received upon exercise of the AcceleratedOptions until the dates set forth in the following schedule and that anyattempted transfer shall be without force or effect:

 

(a)           Withrespect to 100% of the shares subject to the January Options, such sharesshall become freely transferable on January 1, 2008.

 

(b)           Withrespect to the shares subject to the Employment Agreement Options, (i) one-thirdof such shares shall become freely transferable on October 1, 2006, (ii) anadditional one-third of such shares shall become freely transferable on October 1,2007 and (iii) the remaining one-third of the shares shall become freelytransferable on October 1, 2008.

 

(c)           Inthe event of Change in Control (as defined in the First Amendment), all of thetransfer restrictions described in this paragraphs 2(a) and 2(b) hereofshall immediately lapse.

 

(d)           Inthe event that Haddrill’s employment is terminated under paragraphs 7(b) or7(c) of the Employment Agreement, the transfer restrictions described inparagraphs 2(a) and 2(b) hereof shall lapse with respect to a prorated number of shares based upon the number of full months between October 1,2004 and the date of Haddrill’s termination of employment divided by 36 months.

 

3.             The Pre-AmendmentOptions shall become “Portable Options” and subject to the applicable extendedpost-termination exercise period described in paragraph 4(b) of thisSecond Amendment in accordance with the following schedule:

 

(a)           100%of the April Options shall be considered Portable Options as of theEffective Date.

 

(b)           100%of the January Options shall become Portable Options October 1, 2007;provided that Haddrill remains continuously employed by the Company as ChiefExecutive Officer until such date.

 

(c)           Withrespect to the Employment Agreement Options, (i) one-third of such optionsshall become Portable Options on October 1, 2005, (ii) an additionalone-third of such options shall become Portable Options on October 1, 2006and (iii) the remaining one-third of such options shall become PortableOptions on October 1, 2007, in each case, provided that Haddrill remainscontinuously employed by the Company as Chief Executive Officer until theapplicable date.

 

2

----

 

(d)           Inthe event that a Change in Control (as defined in the First Amendment) occursprior to a termination of Haddrill’s employment with the Company, 100% of thePre-Amendment Options shall immediately become Portable Options upon theconsummation of such Change in Control.

 

(e)           Inthe event that Haddrill’s employment is terminated under paragraphs 7(b) or7(c) of the Employment Agreement prior to October 1, 2007, a prorated portion of both the January Options and the Employment AgreementOptions that have not yet become Portable Options shall become Portable Optionsbased upon the number of full months between October 1, 2004 and the dateof Haddrill’s termination of employment divided by 36 months.

 

4.             Notwithstandinganything in the Employment Agreement, the First Amendment, the Plan or theStock Option Agreements to the contrary, Haddrill and the Company hereby agreethat following a termination of Haddrill’s employment with the Company for anyreason (a) that portion of each of the Pre-Amendment Options that have notbecome Portable Options pursuant to paragraph 3 of this Second Amendment shallterminate sixty (60) days following the date of termination of employment,unless exercised during such 60-day period, and (b) that portion of eachof the Pre-Amendment Options that have become Portable Options pursuant to paragraph3 of this Second Amendment shall remain exercisable until (i) in the caseof the Employment Agreement Options, October 1, 2014, (ii) in thecase of the April Options, April 23, 2013, and (iii) in the caseof the January Options, July 8, 2011 or the Extension Date (as suchterm is defined in the January Stock Option Agreement).

 

5.             The Company andHaddrill further agree that, in the case of the January Options, shouldHaddrill remain continuously employed by the Company as Chief Executive Officeruntil October 1, 2007, he shall be deemed to have satisfied Section 4(c)(v) ofthe January Stock Option Agreement (which provision provides for anextended post-termination exercise period for the January Optionsfollowing Haddrill’s resignation from the Board of Directors at the request ofthe Board of Directors).

 

6.             Section 3 of Schedule B-1to the First Amendment are hereby amended and restated in their entirety toread as follows:

 

“3.           Eachvested Additional RSU represents Haddrill’s right to receive one (1) shareof Company common stock, as follows:

 

a.             75%of the shares represented by the vested Additional RSUs shall be issued toHaddrill (1) on the later of (a) October 1, 2007 or (b) thefirst date on which such payment or any portion thereof is no longer subject tothe limits of section 162(m) of the Internal Revenue Code in which casethat portion of the payment that is no longer subject to such limits shall beissued to Haddrill at the time such limits become inapplicable, or (2) inthe event that Haddrill’s employment with the Company, as amended, isterminated prior to October 1, 2007, on the first date in which suchpayment or any portion thereof is no longer subject to the limits of Section 162(m)of the Internal Revenue Code in which case that portion of the payment that isno longer subject to such limits shall be issued to Haddrill at the time suchlimits become inapplicable.

 

3

----

 

b.             Theremaining 25% of the shares represented by the vested Additional RSUs shall beissued to Haddrill (1) on the later of (a) October 1, 2008 or (b) thefirst date on which such payment or any portion thereof is no longer subject tothe limits of section 162(m) of the Internal Revenue Code in which casethat portion of the payment that is no longer subject to such limits shall beissued to Haddrill at the time such limits become inapplicable, or (2) inthe event that Haddrill’s employment with the Company is terminated prior to October 1,2008, on the first date in which such payment or any portion thereof is nolonger subject to the limits of Section 162(m) of the Internal RevenueCode in which case that portion of the payment that is no longer subject tosuch limits shall be issued to Haddrill at the time such limits becomeinapplicable.”

 

7.             Except as expresslymodified by this Second Amendment, the Employment Agreement, the FirstAmendment and the Stock Option Agreements shall remain unchanged and shallremain in full force and effect.

 

*[signatures on next page]*

 

4

----

 

IN WITNESS WHEREOF, the Company and Haddrillhave duly executed this Second Amendment as of the date first above written.

 

 
|   | ALLIANCE GAMING CORPORATION |
|--------|-----------------------------|
|   |                        |
|   |                        |
|   | By:                         | /s/ Mark Lerner |
|   | Name:                       | Mark Lerner |
|   | Title:                      | Secretary |
|   |                        |
|   |                        |
|   | /s/ Richard Haddrill        |
|   | Richard Haddrill            |
|        |                             |  |  |  |

 

 

[Signature Page to Second Amendment to Haddrill Employment Agreement]

 

----