**Exhibit 10.5**

 

**RESTRICTED STOCK AGREEMENT**

 
| Grantee: | Richard M. Haddrill           |   | Grant Date:      | June 30, 2004 |
|----------|-------------------------------|--------|------------------|---------------|
|     |                          |   |
| Plan:    | 2001 Long-Term Incentive Plan |   | Number of Units: | 377,030       |
|          |                               |        |                  |               |  |  |

 

**RESTRICTEDSTOCK UNIT AGREEMENT** (this “Agreement”) dated as ofthe Grant Date specified above between Alliance Gaming Corporation, a Nevadacorporation (the “Company”), and the Grantee specified above, pursuant to thePlan specified above as in effect and as amended from time to time.

 

1.             *IncorporationBy Reference. *This Agreementis subject in all respects to the terms and provisions of the Plan, all ofwhich are by this reference made a part of and incorporated in thisAgreement.  Any capitalized term notdefined in this Agreement shall have the meaning ascribed to it in thePlan.  If and to the extent thisAgreement and the Plan conflict, the Plan shall control.

 

2.             *Grantof Restricted Stock Units. *TheCompany grants to the Grantee, as of the Grant Date specified above, an awardof a number of restricted stock units equal to the Number of Units specifiedabove (the “Restricted Stock Units”). Each Restricted Stock Unit represents the right of the Grantee toreceive one share of the common stock, $.10 par value, of the Company (the “Shares”)pursuant to the terms and conditions of this Agreement.

 

3.             *Vestingof the Restricted Stock Units. *Exceptas otherwise provided in the Employment Agreement, dated as of June 30, 2004,between the Company and the Grantee, as amended (the “Employment Agreement”),the Restricted Stock Units shall vest (i.e., become nonforfeitable) in threeequal installments (each equal to one-third of the total number of RestrictedStock Units), with the first installment vesting on October 1, 2005, the secondinstallment vesting on October 1, 2006 and the third installment vesting onOctober 1, 2007, in each case, so long as the Grantee remains continuouslyemployed by the Company as its Chief Executive Officer through each respectivevesting date.  Restricted Stock Unitsthat have vested and are no longer subject to forfeiture are referred herein toas “Vested Units.”  Restricted StockUnits that have not yet vested and thus remain subject to forfeiture arereferred herein to as “Unvested Units.”

 

4.             *Settlementof Restricted Stock Units. *EachVested Unit represents the Grantee’s right to receive one Share as follows:

 

(a)   75% of the Sharesrepresented by the Vested Units shall be issued to the Grantee (1) on thelater of (a) October 1, 2007 or (b) the first date on which suchpayment or any portion thereof is no longer subject to the limits of section162(m) of the Internal Revenue Code in which case that portion of the paymentthat is no longer subject to such limits shall be issued to the Grantee at thetime such limits become inapplicable, or (2) in the event that the Grantee’semployment with the Company is terminated prior to October 1, 2007, on thefirst date in which such payment or any portion thereof is no longer subject tothe limits of Section 162(m) of the Internal Revenue Code in which case thatportion of the payment that is no longer subject to such limits shall be issuedto the Grantee at the time such limits become inapplicable.

 

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(b)   25% of the Sharesrepresented by the Vested Units shall be issued to the Grantee (1) on thelater of (a) October 1, 2008 or (b) the first date on which suchpayment or any portion thereof is no longer subject to the limits of section162(m) of the Internal Revenue Code in which case that portion of the paymentthat is no longer subject to such limits shall be issued to the Grantee at thetime such limits become inapplicable, or (2) in the event that the Grantee’semployment with the Company is terminated prior to October 1, 2008, on thefirst date in which such payment or any portion thereof is no longer subject tothe limits of Section 162(m) of the Internal Revenue Code in which case thatportion of the payment that is no longer subject to such limits shall be issuedto the Grantee at the time such limits become inapplicable.

 

(c)           Notwithstandinganything herein to the contrary, if the vesting of any Restricted Stock Unitsshall be taxable to the Grantee prior to the date on which the Grantee isotherwise entitled to receive Shares pursuant to this paragraph 3 with respectto such Vested Units, then the Company shall promptly upon request issue to theGrantee all of the Shares represented by such Vested Units that have becometaxable, which Shares shall be freely transferable by the Grantee subject onlyto any applicable securities laws.

 

5.             *Rightsas a Stockholder. *The Granteeshall have no rights as a stockholder (including, without limitation, anyvoting rights with respect to the Shares subject to the Restricted Stock Units)with respect to either the Restricted Stock Units granted hereunder or theShares underlying the Restricted Stock Units, unless and until such Shares areissued in respect of Vested Units, and then only to the extent of such issuedShares.

 

6.             *Forfeitureof Unvested Units. *Except asotherwise provided in the Employment Agreement, if the Grantee’s ceases toserve as the Company’s Chief Executive Officer, all Unvested Units shall beimmediately forfeited.

 

7.             *WithholdingTaxes. *The Company has theright to deduct or otherwise effect a withholding of the amount of any taxes(including, but not limited to, any FICA, FUTA, and similar taxes) required byfederal, state, local or foreign laws to be withheld or otherwise deducted andpaid with respect to the grant, vesting or settlement of the Restricted StockUnits; or, in lieu of such withholding, to require that the Grantee pay to theCompany in cash (or, at the sole discretion of the Board or the Committee, inthe form of Shares) the amount of any taxes required to be withheld orotherwise deducted and paid by the Company or its Subsidiary in connection withthe grant, vesting or settlement of the Restricted Stock Units.  Unless the tax withholding obligations of theCompany or any affiliate are satisfied, the Company will have no obligation toissue a certificate for any of the Shares subject to the Restricted Stock Units(whether vested or unvested).

 

8.             *Non-transferability. *Neither the Grantee nor theGrantee’s beneficiaries shall sell, exchange, transfer, assign, or otherwisedispose of any Restricted Stock Units (whether vested or unvested) or anyrights or interests therein (including any Shares subject to Restricted StockUnits (whether vested or unvested) that have not yet been delivered to theGrantee).  The Grantee shall pledge,encumber, or otherwise hypothecate the Restricted Stock Units (whether vestedor unvested) or any rights or interests therein (including any Shares subjectto Restricted Stock Units (whether vested or unvested) that have not yet beendelivered to the Grantee) in any way at any time.  The Restricted Stock Units (and anyundelivered Shares subject thereto) shall not be subject to execution,

 

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attachment, or similar legalprocess.  Any attempted sale, pledge, orother disposition of the Restricted Stock Units (or any undelivered Sharessubject thereto) in violation of this paragraph shall be void and of no forceor effect.

 

9.             *EntireAgreement; Amendment*.  ThisAgreement contains the entire agreement between the parties and supersedesother oral and written agreements previously entered into by the partiesconcerning the same subject matter.  ThisAgreement may be modified or rescinded only with the written consent of bothparties.

 

10.           *GoverningLaw. *Nevada law shall governthis Agreement and its interpretation. The issuance of the Restricted Stock pursuant to this Agreement shall besubject to, and shall comply with, any applicable requirements of any federaland state securities laws, rules, and regulations (including but not limited tothe Securities Act, the Exchange Act, and the respective rules and regulationspromulgated thereunder) and any other applicable law or regulation.

 

11.           *BindingEffect. *This Agreement shallbind and inure to the benefit of the Company and its successors and assigns.

 

12.           *Counterparts*.  This Agreement may be executed incounterparts, each of which shall be deemed an original, and all of which,taken together, shall constitute one and the same instrument.

 
| ALLIANCE GAMING CORPORATION |                   |
|-----------------------------|------------------------|
|                        |                   |
|                        |                   |
| By:                         | /s/ Mark Lerner        |   | /s/ Richard M. Haddrill |   |
|                        | Mark Lerner, Secretary |   | Richard M. Haddrill |   |

 

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