Exhibit 4.5


 


BALLY TECHNOLOGIES, INC.

AMENDED AND RESTATED

2001 LONG TERM INCENTIVE PLAN


 


The
2001 Long Term Incentive Plan was originally established by the Board of
Directors (the “Board”) of Bally Technologies, Inc. (the “Company”) and
was approved by shareholders of the Company on December 11, 2001.  The Plan will continue in effect until
terminated by the Board in accordance with the terms of the Plan.


 


1.                                      Purpose of the Plan


 


The
Bally Technologies, Inc. Amended and Restated 2001 Long-Term Incentive Plan
(the “Plan”) is intended to encourage stock ownership by directors, employees
and designated paid consultants of the Company and its subsidiaries
(collectively, the “Subsidiaries” and individually, a “Subsidiary”), in order
to increase their proprietary interest in the success of the Company and to
encourage them to remain in the employ of the Company or a Subsidiary.


 


Options
granted under the Plan may be either Incentive Stock Options or Nonstatutory
Stock Options; the term “option” when used hereinafter refers to either
Incentive Stock Options or Nonstatutory Stock Options, or both.  Restricted stock and restricted stock units
awarded under the Plan are subject to restrictions as determined in each
specific case by the Board or by a duly appointed committee of the Board (the “Committee”).  Stock Appreciation Rights may be granted
under the Plan.  The term “Award” when
used hereinafter collectively refers to options, Stock Appreciation Rights,
restricted stock and restricted stock units awarded under the Plan.


 


2.                                      Administration


 


Administration of the Plan.  The Plan is administered by the Board or, if
the Board so determines, by the Committee, provided that except as otherwise
provided below, in the case of Awards to directors or officers subject to Section 16
of the Securities Exchange Act of 1934 (the “Exchange Act”), the Committee has
exclusive responsibility for and authority to administer the Plan unless the
Board expressly determines otherwise. 
The membership of the Committee consists of not less than two members of
the Board and will be constituted, if possible, to permit the Plan to comply
with Rule 16b-3 promulgated under the Exchange Act or any successor rule (“Rule 16b-3”)
and with the requirements of Section 162(m) of the Internal Revenue
Code of 1986, as amended (the “Code”). 
Duly authorized actions of the Committee constitute actions of the Board
for the purposes of the Plan and its administration.  The Board or the Committee, as applicable,
has authority in its sole discretion:


 


·                  to determine
the time or times at which, and the directors, employees and consultants to
whom options, Stock Appreciation Rights, restricted stock and restricted stock
units are awarded under the Plan;


 


·                  to determine
the base price of any Stock Appreciation Right, the Incentive Stock Option
Price or the Nonstatutory Stock Option Price (both as defined below) of, and
the number of shares of Stock (as defined below) to be covered by, Stock
Appreciation Rights and options granted under the Plan;


 

















 


 


·                  to determine the
number of shares of Stock to be covered by awards of restricted stock and
restricted stock units under the Plan;


 


·                  to determine
the time or times at which each option and/or Stock Appreciation Right granted
under the Plan may be exercised, including whether the option or Stock
Appreciation Right may be exercised in whole or in installments;


 


·                  to establish
the terms of the restrictions applicable to any restricted stock and/or
restricted stock units awarded, and to determine the time or times at which restrictions
lapse;


 


·                  to interpret
the Plan and to prescribe, amend and rescind rules and regulations
relating to it; and


 


·                  to make all
other determinations which the Board or Committee, as applicable, deem
necessary or advisable for the administration of the Plan.


 


Reserved Authority of the Board.  The Committee has all the powers and duties
set forth above, as well as any additional powers and duties that the Board may
delegate to it; provided, however, that the Board expressly retains the right (i) to
determine whether the shares of Stock reserved for issuance upon the exercise
of options or restricted stock units or as restricted stock awarded under the
Plan shall be issued shares or unissued shares, (ii) to appoint the
members of the Committee, and (iii) to terminate or amend the Plan.  The Board may from time to time appoint
members of the Committee in substitution for or in addition to members
previously appointed, may fill vacancies in the Committee, and may discharge
the Committee.


 


3.                                      Common Stock Subject to
the Plan


 


Limitation on Number of Shares.  The number of shares which may at any time be
made subject to options or Stock Appreciation Rights, or which may be issued
upon the exercise of options or Stock Appreciation Rights granted under the Plan
or made subject to grants of restricted stock or restricted stock units, is
limited to an aggregate of 12,050,000 shares of the common stock, $.10 par
value, of the Company (the “Stock”).  The
shares reserved for issuance pursuant to the Plan may consist either of
authorized but previously unissued shares of Stock, or of issued shares of
Stock which have been reacquired by the Company, as determined from time to
time by the Board.  If any option or
Stock Appreciation Right granted under the Plan expires, terminates or is
canceled for any reason without having been exercised in full, or any
restricted stock or restricted stock unit Award is forfeited for any reason,
the shares of Stock allocable to the unexercised portion of the option or Stock
Appreciation Right or to the forfeited portion of the restricted stock or
restricted stock unit Award may again be made subject to an option or Award
under the Plan.


 


Adjustments of Number of Shares.  In the event of a change in the common stock
of the Company that is limited to a change in the designation thereof to “Capital
Stock” or other similar designation, or to a change in the par value thereof,
or from par value to no par value, without increase or decrease in the number
of issued shares, the shares resulting from any such change are deemed to be
the common stock for purposes of the Plan.


 


 


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4.                                      Eligibility


 


Awards
may be granted under the Plan to paid consultants, directors and employees of
the Company or a Subsidiary designated by the Board or the Committee, provided
that Incentive Stock Options may be awarded only to regular full-time employees
of the Company or a Subsidiary (including employees who serve as officers or
directors).  As used in the Plan, “paid
consultant” means a natural person who is an independent contractor retained to
perform continuing and substantial services for the Company or any subsidiary,
and designated as a paid consultant by the Board or the Committee, except that
no individual shall be designated a “paid consultant” for purposes of this Plan
if such individual is engaged in promoting or maintaining a market in the
securities of the Company, or in any other capacity that would result in the Form S-8
registration statement being ineffective as to any Awards made to such
individual.  Any person granted an Award
under the Plan (a “Grantee”) remains eligible to receive one or more additional
grants thereafter, notwithstanding that options or Stock Appreciation Rights
previously granted to such person remain unexercised in whole or in part, or
that the applicable restrictions on any restricted stock or restricted stock
units issued to such person have not lapsed.


 


5.                                      Stock Options


 


In General.  The Plan authorizes the Board or the Committee
to grant options that qualify as incentive stock options pursuant to Section 422
of the Code (“Incentive Stock Options”), or options that do not so qualify (“Nonstatutory
Stock Options”).  Each option granted
under the Plan is evidenced by a written and executed option agreement which
will specify whether the option granted therein is an Incentive Stock Option or
a Nonstatutory Stock Option.


 


Incentive Stock Options.  Each stock option agreement covering an
Incentive Stock Option granted under the Plan and any amendment thereof, other
than an amendment to convert an Incentive Stock Option into a Nonstatutory
Stock Option, will conform to the following provisions and may contain other
terms and provisions consistent with the requirements of the Plan as the Board
or the Committee deem appropriate:


 


Option Price.  The purchase price of each of the shares of
Stock subject to an Incentive Stock Option (the “Incentive Stock Option Price”)
will be a stated price which is not less than the fair market value of such
share of Stock, determined in accordance with Section 10 below, or the par
value of such share if greater, as of the date such Incentive Stock Option is
granted; provided, however, that if an employee, at the time an Incentive Stock
Option is granted to him or her, owns stock representing more than 10% of the
total combined voting power of all classes of stock of the Company or of the
parent corporation (as defined in Section 424(e) of the Code), if
any, of the Company or of any of the Subsidiaries (or, under Section 424(d) of
the Code, is deemed to own stock representing more than 10% of the total
combined voting power of all such classes of stock, by reason of the ownership
of such classes of stock, directly or indirectly, by or for any brother,
sister, spouse, ancestor, or lineal descendent of such employee, or by or for
any corporation, partnership, estate or trust of which such employee is a
shareholder, partner or beneficiary), then the Incentive Stock Option Price of
each share of Stock subject to such Incentive Stock Option will be at least
110% of the fair market value of such share of Stock, as determined in
accordance with Section 10 below.


 


 


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Term.  Incentive Stock Options granted under the
Plan will be exercisable for the periods determined by the Board or the
Committee at the time of grant of each Incentive Stock Option, but in no event
is an Incentive Stock Option exercisable after the expiration of ten years from
the date of grant; provided, however, that an Incentive Stock Option granted to
any employee as to whom the Incentive Stock Option Price of each share of Stock
subject thereto is required to be 110% of the fair market value of the share of
Stock pursuant to the preceding paragraph will not be exercisable after the
expiration of five years from the date of grant.  Each Incentive Stock Option granted under the
Plan is also subject to earlier termination as provided in the Plan.


 


Exercise.  Generally under the Plan, Incentive Stock
Options may be exercised in whole or in installments, to the extent, and at the
time or times during the terms thereof, as determined by the Board or the
Committee at the time of grant of each option.


 


Incentive
Stock Options granted under the Plan are exercisable only by delivery to the
Company of written notice of exercise, which states the number of shares with
respect to which such Incentive Stock Option is exercised, the date of grant of
the Incentive Stock Option, the aggregate purchase price for the shares with
respect to which the Incentive Stock Option is exercised and the effective date
of such exercise, which date may not be earlier than the date the notice is
received by the Company nor later than the date upon which the Incentive Stock
Option expires.  The written notice of
exercise must be sent together with the full Incentive Stock Option Price of
the shares purchased, which may be paid in cash or in shares of any class of
issued and outstanding stock of the Company held for more than six months by the
option holder, whether preferred or common, or partly in cash and partly in
such shares of stock.  If any portion of
the Incentive Stock Option Price is paid in shares of stock of the Company, the
shares will be valued at their fair market value, as determined in accordance
with Section 10 below, as of the effective date of exercise of the
Incentive Stock Option.  The delivery of
shares of stock upon exercise of an Incentive Stock Option shall be subject to
such restrictions as the Board or the Committee may determine to be
appropriate, including, without limitation, a requirement that such shares be
held by an agent designated by the Company until sold or otherwise disposed of
by the option holder, to assure that the Company is advised of any disposition of
such shares by the option holder within two years of the date of grant of the
Incentive Stock Option or within one year after the date of exercise of the
Incentive Stock Option.


 


In
general, an Incentive Stock Option granted under the Plan remains outstanding
and is exercisable only so long as the person to whom the Incentive Stock
Option was granted remains an officer or employee of the Company, the parent
corporation, if any, of the Company, or any of the Subsidiaries.  All Incentive Stock Options granted under the
Plan are nontransferable, except by will or the laws of descent and
distribution, and are exercisable during the lifetime of the person to whom
granted only by such person (or his duly appointed, qualified, and acting
personal representative).


 


No
Incentive Stock Option may be exercised as to fewer than 100 shares of Stock at
any one time without the consent of the Board or the Committee, unless the
number of shares to be purchased upon the exercise is the total number of
shares at the time available for purchase under the Incentive Stock Option.


 


 


 


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The
Board or the Committee may also permit Grantees (either on a selective or group
basis) to simultaneously exercise options and sell the shares of the Stock
thereby acquired, pursuant to a “cashless exercise” arrangement or program,
selected by and approved of in all respects in advance by the Board or the
Committee.  Payment instruments shall be
received by the Company subject to collection. 
The proceeds received by the Company upon exercise of any option may be
used by the Company for general corporate purposes.  Any portion of an option that is exercised
may not be exercised again.


 


Nonstatutory Stock Options.  Each stock option agreement covering a
Nonstatutory Stock Option granted under the Plan and any amendment thereof will
conform to the following provisions and may contain other terms and provisions
consistent with the requirements of the Plan as the Board or the Committee deem
appropriate:


 


Option Price.  The purchase price of each of the shares of
Stock subject to a Nonstatutory Stock Option (the “Nonstatutory Stock Option
Price”) will be a fixed price determined by the Board or the Committee at the
time of grant, which will not be less than the greater of the par value of such
share, or one hundred percent (100%) of the fair market value of such share,
determined in accordance with Section 10 below, on the date of the grant
of the Nonstatutory Stock Option.


 


Term.  Nonstatutory Stock Options granted under the
Plan are exercisable for a period of ten years unless otherwise determined by
the Board or the Committee at the time of grant.  Each Nonstatutory Stock Option granted under
the Plan will also be subject to earlier termination as provided in the Plan.


 


Exercise.  Generally, under the Plan, Nonstatutory Stock
Options may be exercised in whole or in installments to the extent, and at the
time or times during the terms thereof, as determined by the Board or the
Committee at the time of grant of each option.


 


Nonstatutory
Stock Options granted under the Plan are exercisable only by delivery to the
Company of written notice of exercise, which states the number of shares with
respect to which such Nonstatutory Stock Option is exercised, the date of grant
of the Nonstatutory Stock Option, the aggregate purchase price for the shares
with respect to which the Nonstatutory Stock Option is exercised and the
effective date of such exercise, which date may not be earlier than the date
the notice is received by the Company nor later than the date upon which the
Nonstatutory Stock Option expires.  The
written notice of exercise must be sent together with the full Nonstatutory
Stock Option Price of the shares purchased, which may be paid in cash or in
shares of any class of issued and outstanding stock of the Company held for
more than six months by the option holder, whether preferred or common, or
partly in cash and partly in such shares of stock.  If any portion of the Nonstatutory Stock
Option Price is paid in shares of stock of the Company, the shares will be
valued at their fair market value, as determined in accordance with Section 10
below, as of the effective date of exercise of the Nonstatutory Stock Option.


 


In
general, a Nonstatutory Stock Option granted under the Plan remains outstanding
and is exercisable only so long as the person to whom the Nonstatutory Stock
Option was granted remains either a director, employee or paid consultant of
the Company, the parent corporation, if any, of the Company, or any of the
Subsidiaries.  A person is deemed to be a
paid consultant 


 


 


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only so long as he or she continues to perform and be compensated for
substantial services for the Company, the parent corporation, if any, of the
Company, or a Subsidiary, as to which the determination of the Board or the
Committee, as applicable, will be binding and conclusive.  Unless the Board or Committee determines
otherwise, all Nonstatutory Stock Options granted under the Plan will be
nontransferable, except by will or the laws of descent and distribution.


 


No
Nonstatutory Stock Option may be exercised as to fewer than 100 shares at any
one time without the consent of the Board or the Committee, unless the number
of shares to be purchased upon the exercise is the total number of shares at
the time available for purchase under the Nonstatutory Stock Option.


 


The
Board or the Committee may also permit Grantees (either on a selective or group
basis) to simultaneously exercise options and sell the shares of the Stock
thereby acquired, pursuant to a “cashless exercise” arrangement or program,
selected by and approved of in all respects in advance by the Board or the
Committee.  Payment instruments shall be
received by the Company subject to collection. 
The proceeds received by the Company upon exercise of any option may be
used by the Company for general corporate purposes.  Any portion of an option that is exercised
may not be exercised again.


 


The
exercise or Option Price of any outstanding Incentive Stock Option or
Nonstatutory Stock Option may not be adjusted or amended by the Board or
Committee (other than in accordance with Section 12 below), whether by
amendment, cancellation, replacement grants, or any other means.  As used herein, “replacement grants” means
any grant of Incentive Stock Options, Nonstatutory Stock Options or Stock
Appreciation Rights reasonably related to any prior or potential cancellation
of any outstanding options or stock appreciation rights for new options or new
stock appreciation rights in tandem with previously granted options or stock
appreciation rights that will operate to cancel the previously granted options
or stock appreciation rights upon exercise of the new options or new stock
appreciation rights.


 


6.                                      Restrictions Applicable to
Restricted Stock


 


The
Board or the Committee may place any restrictions it deems appropriate on any
shares of restricted stock awarded under the Plan to an employee, director or
paid consultant; provided, however, that shares of restricted stock awarded
under the Plan are subject to certain restrictions including the following:


 


Vesting.  In general, shares of Stock awarded to
directors, employees or paid consultants will vest (a) in full with
respect to all Stock underlying the Award of restricted stock at the expiration
of a period of not less than three years from the date of grant of the Award,
or (b) proportionately in equal installments of the Stock underlying the
Award of restricted stock over a period of not less than three years from the
date of grant of the Award, as the Board or the Committee determines, and, in
each such case, based upon continued service during any such period by the
recipient as a director, employee or paid consultant of the Company or any of its
Subsidiaries.  Any shares of Stock
remaining subject to forfeiture in accordance with the related vesting
schedule are hereinafter referred to as “Unvested Shares.” Subject to
Sections 11 and 12 below, neither the Board nor the Committee have the
authority to otherwise accelerate the vesting of an Award of restricted stock.


 


 


 


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Delivery to Escrow.  Unless the Board or the Committee determines
otherwise, upon issuance of a certificate evidencing such shares the recipient
will be required to deliver the certificate, endorsed in blank or with a duly
executed stock power attached, to the Secretary of the Company, or such other
person or entity as the Board or the Committee may designate, to be held until
any vesting restrictions applicable thereto have lapsed or any Unvested Shares
have been forfeited.


 


Legend.  Unless the Board or the Committee determines
otherwise, each certificate evidencing Unvested Shares issued under the Plan
will bear a legend to the effect that such shares are subject to potential
forfeiture and may not be sold, exchanged, transferred, pledged, hypothecated
or otherwise disposed of except in accordance with the terms of an agreement
between the issuer and the registered owner.


 


7.                                      Restricted Stock Units


 


The
Committee may at any time and from time to time grant restricted stock units
under the Plan in such amounts as it determines.  Each restricted stock unit shall entitle the
Grantee to receive from the Company at the end of the vesting period applicable
to such unit one share of Stock, unless the Grantee elects in a timely fashion
prior to the end of the vesting period to defer the receipt of the shares of
Stock subject to the Award of restricted stock units.  Each grant of restricted stock units shall be
evidenced by an Award Agreement which shall specify the applicable restrictions
on such units including the following:


 


Vesting.  In general, restricted stock units awarded to
directors, employees or paid consultants will vest (a) in full with
respect to all Stock underlying the Award of restricted stock units at the
expiration of a period of not less than three years from the date of grant of
the Award, or (b) proportionately in equal installments of the Stock
underlying the Award of restricted stock units over a period of not less than
three years from the date of grant of the Award, as the Board or the Committee
determines, and, in each such case, based upon continued service during any
such period by the recipient as a director, employee or paid consultant of the
Company or any of its Subsidiaries.  Any
shares of Stock remaining subject to forfeiture in accordance with the related
vesting schedule are hereinafter referred to as “Unvested Shares.”  Subject to Sections 11 and 12 below, neither
the Board nor the Committee have the authority to otherwise accelerate the
vesting of an Award of restricted stock units.


 


8.                                      Stock Appreciation Rights


 


The
grant of Stock Appreciation Rights under the Plan is subject to the following
terms and conditions and any additional terms and conditions, not inconsistent
with the express terms and provisions of the Plan, as the Board or the
Committee sets forth in the relevant Award agreement:


 


Stock Appreciation Rights.  A Stock Appreciation Right is an Award
granted with respect to a specified number of shares of Stock entitling the
Grantee to receive an amount equal to the excess of (a) the fair market
value of a share of Stock on the date of exercise over (b) the fair market
value of a share of Stock on the date of grant of the Stock Appreciation Right
(the “Base 


 


 


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Price”) multiplied by the number of shares of Stock with respect to
which the Stock Appreciation Right has been exercised.  Fair market value is determined in accordance
with Section 10 below.


 


Grant.  A Stock Appreciation Right may be granted in
addition to any other Award under the Plan or in tandem with or independent of
any Nonstatutory Stock Option or Incentive Stock Option.


 


Date of Exercisability.  Unless otherwise provided in the Grantee’s
Award agreement in respect of any Stock Appreciation Right, a Stock
Appreciation Right may be exercised by the Grantee, in accordance with and
subject to all of the procedures established by the Board or the Committee, in
whole or in part at any time and from time to time during its specified
term.  Notwithstanding the preceding
sentence, in no event is a Stock Appreciation Right exercisable prior to the
exercisability of any Non-Qualified Stock Option or Incentive Stock Option with
which it is granted in tandem.  The Board
or the Committee may also provide, as set forth in the relevant Award
agreement, that some Stock Appreciation Rights will be automatically exercised
on one or more dates specified by the Board or the Committee.


 


Form of Payment.  Upon exercise of a Stock Appreciation Right,
payment may be made in cash, in restricted stock or in shares of unrestricted
Stock, or in any combination thereof, as the Board or the Committee, in its
sole discretion, determines and provides in the relevant Award agreement.


 


Tandem Grant.  The right of the Grantee to exercise a tandem
Stock Appreciation Right terminates to the extent the Grantee exercises the
Non-Qualified Stock Option or the Incentive Stock Option to which the Stock
Appreciation Right is related.


 


The
Base Price of any outstanding Stock Appreciation Right may not be adjusted or
amended by the Board or the Committee (other than in accordance with Section 12
below), whether by amendment, cancellation, replacement grants, or any other
means.


 


9.                                      Rights of Grantees


 


Options.  No holder of an option or Stock Appreciation
Right will be deemed to be the holder of, or to have any of the rights of a
holder with respect to, any shares of Stock subject to such option or Stock
Appreciation Right unless and until his or her option or Stock Appreciation
Right has been exercised pursuant to the terms thereof, the Company has issued
and delivered to the holder of the option or Stock Appreciation Right the
shares of Stock as to which the holder has exercised his or her option or Stock
Appreciation Right, and the holder’s name has been entered as a stockholder of
record on the books of the Company. 
Thereupon, such person shall have full voting and other ownership rights
with respect to such shares of Stock.


 


Restricted Stock.  Each recipient of a restricted stock award is
deemed to be the registered owner of any Unvested Shares subject to such award,
notwithstanding that such shares may be subject to restrictions and possible
forfeiture under the terms of the agreement pursuant to which they were
received.  Unless and until all or a
portion of the Unvested Shares are forfeited in accordance with the terms of
such agreement, the recipient thereof will have full voting rights with respect
to such shares as well as the right to receive any and all distributions
thereon.


 


 


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Restricted Stock Units.  No holder of a restricted stock unit will be
deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to such restricted stock unit unless
and until the Company has issued and delivered to the holder of the restricted
stock unit the shares of Stock as to which the Award of restricted stock units
has vested, and the holder’s name has been entered as a stockholder of record
on the books of the Company.  Thereupon,
such person shall have full voting and other ownership rights with respect to
such shares of Stock.


 


10.                               Determination of Fair
Market Value


 


For
the purposes of the Plan, the fair market value of a share of stock of the
Company is determined as follows:


 


(a)                                  if on the date
as of which a determination is made the class of stock being valued is admitted
to trading on a national securities exchange or exchanges, including without
limitation the National Association of Securities Dealers Automated Quotation
System (“Nasdaq”), for which actual sale prices are regularly reported, or
actual sales prices are otherwise regularly published for such stock, the fair
market value of a share of the stock is deemed to be equal to the closing sale
price reported for the stock on the date as of which the determination is made
(or the next preceding trading date if the date of determination is not a
trading date); or


 


(b)                                 if on the date
as of which a determination is made no such closing sales prices are reported,
but quotations for the class of stock being valued are regularly listed on the
Nasdaq or another comparable system, the fair market value of a share of the
stock is deemed to be equal to the mean of the average of the closing bid and
asked prices for the stock quoted on such system on the date as of which the
determination is made (or the next preceding trading date if the date of determination
is not a trading date); or


 


(c)                                  if no such
quotations or actual sales prices are available, the fair market value of a
share of the stock will be deemed to be the average of the closing bid and
asked prices furnished by a professional securities dealer making a market in
such shares, as selected by the Board, for the trading date as of which the
determination is made (or the next preceding trading date if the date of
determination is not a trading date).


 


Notwithstanding
(a) - (c) above, the Board or the Committee may determine the fair
market value of a share of stock of the Company on the basis of such factors as
it deems appropriate if it determines in good faith that the approach specified
above does not properly reflect the fair market value of such stock.


 


11.                               Retirement, Termination of
Employment or Death of Holders of Options, Stock Appreciation Rights and
Restricted Stock


 


Retirement or Disability.  If a Grantee retires from employment with the
Company or any of its Subsidiaries as a result of normal retirement (that is,
termination of employment by the Grantee after he or she attains age sixty-five
(65)), or terminates employment or service with the


 


 


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Company after becoming “permanently disabled” (as defined in the Gaming
and Technology, Inc.  Profit Sharing
401(k) Plan as in effect on the date of adoption of the Plan by the
Board), any restrictions then applicable to his or her Award will lapse and it will
thereafter be exercisable (in the case of options and Stock Appreciation
Rights) or vested and transferable (in the case of restricted stock and
restricted stock units) in whole or in part, by the person to whom granted (or
his or her duly appointed, qualified, and acting personal representative) in
the manner set forth in Sections 5, 6, 7 and 8 above, at any time within
the remaining term of the Award, unless otherwise determined by the Board or
the Committee at the time of grant.


 


Other Termination of Service or Employment.  Except as determined by the Board or the
Committee at the time of grant, or as otherwise provided herein or in a Grantee’s
employment agreement, (a) if a person to whom restricted stock has been
awarded under the Plan ceases to be either a director, employee or paid
consultant of the Company or a Subsidiary, any Unvested Shares of restricted
stock held by the person are forfeited as of the last date he or she was either
a director, employee or paid consultant of the Company or a Subsidiary, (b) if
a person to whom restricted stock units have been awarded under the Plan ceases
to be either a director, employee or paid consultant of the Company or a
Subsidiary, the unvested portion, if any, of such restricted stock units held
by the person are forfeited as of the last date he or she was either a
director, employee or paid consultant of the Company or a Subsidiary, and (c) if
a person to whom an option or Stock Appreciation Right has been granted under
the Plan ceases to be either a director, employee or paid consultant of the
Company or a Subsidiary, such option or Stock Appreciation Right will continue
to be exercisable or transferable to the same extent that it was exercisable on
the last day on which he or she was either a director, employee or paid
consultant for a period of 60 days thereafter, whereupon such option or Stock
Appreciation Right will terminate and not be exercisable thereafter; provided,
however, that in the event of termination of employment, termination of service
as a paid consultant, or removal from office as a director for Cause (as
defined below), any such option or Stock Appreciation Right will terminate ten
days after such termination of employment, service or removal from office
rather than 60 days thereafter.  Notwithstanding the immediately preceding
sentence, the term during which an option or Stock Appreciation Right may be
exercised shall not in any event extend beyond the remaining term of such Award
as specified in connection with the grant thereof.  No Award made under the Plan will be affected
by any change of duties or position of the person to whom the Award was made or
by any temporary leave of absence granted to the person by the Company or any
of its Subsidiaries.  For purposes of the
Plan, “Cause” means (i) the Grantee being convicted of a felony, (ii) the
Grantee willfully committing an act of embezzlement or malfeasance which is
intended to materially enrich himself or herself at the expense of the Company
or any of its Subsidiaries or is otherwise intended to materially harm the
Company, or (iii) the Grantee being rejected for an applicable license or
approval by a gaming regulatory authority having jurisdiction over the Company
as a result of an explicit finding of lack of suitability solely as a result of
the Grantee’s commission of a crime or an act of embezzlement or malfeasance.


 


Death.  Unless otherwise determined by the Board or
the Committee at the time of grant, (a) if a person to whom an option or
Stock Appreciation Right has been granted under the Plan dies prior to the
expiration of the term of the option or Stock Appreciation Right, the option or
Stock Appreciation Right is exercisable by the estate of the Grantee, or by a
person who acquired the right to exercise such option or Stock Appreciation
Right by bequest or inheritance from the 


 


 


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Grantee, at any time within two years after the death of the person and
prior to the date upon which such option or Stock Appreciation Right expires as
specified in connection with the grant thereof, to the extent and in the manner
exercisable by the Grantee at the date of his or her death; (b) if a
person to whom restricted stock has been awarded under the Plan dies prior to
the lapse of all restrictions applicable to such restricted stock, any Unvested
Shares held by such person on the date of his or her death will be forfeited;
and (c) if a person to whom restricted stock units have been awarded under
the Plan dies prior to the lapse of all restrictions applicable to such
restricted stock units, the unvested portion of such restricted stock units
held by the person on the date of his or her death will be forfeited.


 


Termination with Board Approval.  If a Grantee ceases to be either a director,
employee or paid consultant of the Company or a Subsidiary for any reason other
than removal for Cause, and the Board or the Committee expressly determines
that such termination of service or employment is in the best interests of the
Company, then an option or Stock Appreciation Right awarded to the Grantee
under the Plan will be exercisable by the Grantee or by the estate of the
Grantee, by a person who acquired the right to exercise such option or Stock
Appreciation Right by bequest or inheritance from the Grantee or otherwise, for
an additional period following termination of service or employment as
determined by the Board or the Committee but in no event later than the date
upon which such option or Stock Appreciation Right would have expired absent such
termination of service or employment. 
Any such extended option or Stock Appreciation Right will be exercisable
only to the extent and in the manner exercisable by the Grantee at the time of
such termination of service or employment.


 


Incentive Stock Options.  Notwithstanding anything herein to the
contrary or the provisions of any employment agreement, no Incentive Stock
Option shall be exercisable after the date that is (a) in the case of the
Grantee’s termination of employment for any reason other than death or
disability, three months following such termination of employment, or (b) in
the case of the Grantee’s termination of employment due to death or Total and
Permanent Disability (as defined in Code section 22(e)(3)), twelve months
following such termination of employment.


 


12.                               Adjustments


 


Changes in Capitalization.  In the event of any change in the number of
shares of the outstanding Stock of the Company by reason of a stock split,
stock dividend, combination or reclassification of shares, recapitalization, or
similar event, the Board or the Committee will adjust proportionally (a) the
number and kind of shares subject to the Plan, (b) the number and kind of
shares then subject to unexercised options and Stock Appreciation Rights and
outstanding Awards of restricted stock and restricted stock units and (c) the
per share Incentive Stock Option Price, Nonstatutory Stock Option Price or Base
Price (as the case may be) of unexercised options and Stock Appreciation
Rights.  Any such adjustment will be made
without a change in the aggregate purchase price or aggregate Base Price of the
shares of the Stock subject to the unexercised portion of any option or Stock
Appreciation Right.


 


Merger Event.  In the event of any merger, spin-off,
split-off or other similar consolidation, reorganization or change affecting
any class of stock of the Company (a “Merger Event”) subject to Awards made
under the Plan, or any distribution (other than normal cash dividends) to
holders of the stock, fair and equitable adjustment will be made in good faith
by the 


 


 


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Board or the Committee, including (without limitation) adjustments to
avoid fractional shares, in respect of (a) all unexercised options or
Stock Appreciation Rights and (b) all then outstanding Awards of
restricted stock or restricted stock units to give proper effect to such event
and preserve the value, rights and benefits of such options, Stock Appreciation
Rights, restricted stock or restricted stock units; provided, however, that the
Board or the Committee may, in the case of any Merger Event pursuant to which
the Company is not the surviving corporation and pursuant to which the former
holders of the Stock do not hold, directly or indirectly, more than a majority
of the voting securities of the resulting entity immediately after the Merger
Event or in connection with any acquisition by any person of more than fifty
percent (50%) of the outstanding shares of the Stock, provide that each option
or Stock Appreciation Right holder will receive a cash payment (in exchange for
and in cancellation of such option or Stock Appreciation Right) equal to the
difference (if greater than zero) between the value of the per share
consideration received by the holders of the Stock in the Merger Event or the
acquisition and the purchase price or Base Price of such option or Stock
Appreciation Right, multiplied by the number of shares of the Stock underlying
such option or Stock Appreciation Right (and if the difference is equal to or
less than zero, the Committee may provide that each such holder will receive no
payment, nor any other compensation, in exchange for and in cancellation of any
such option or Stock Appreciation Right).  In addition, in the event that (i) there
occurs any Merger Event pursuant to which all of the outstanding Stock held by
the shareholders of the Company is exchanged for any lawful consideration and (ii) within
twelve months following the date of such Merger Event, a Grantee’s employment
or service with the Company is terminated either by the Company without Cause
or by the Grantee for Good Reason (as defined below), then, effective
immediately prior to such termination of employment or service, all vested and
unexercisable options or Stock Appreciation Rights held by the Grantee on the
date on which his or her employment or service terminated will become 100%
vested and exercisable, and all restrictions then applicable to Awards of
restricted stock and restricted stock units held by the Grantee on the date on
which his or her employment or service terminated will lapse and such Awards
will thereafter be fully vested and transferable.  For purposes of the Plan, ‘Good Reason’
means, unless otherwise provided in a Grantee’s employment agreement, (x) a
material reduction in the Grantee’s base salary or (y) a material
reduction in the Grantee’s duties or responsibilities.


 


13.                               Maximum Awards


 


The
following maximum annual and other amounts are subject to adjustment under Section 12
above and are subject to the Plan maximum under Section 3 above.  Each individual Grantee may not receive in
any fiscal year Awards of options and/or Stock Appreciation Rights exceeding
600,000 underlying shares of Stock.  No
more than 1,400,000 shares of Stock may be granted as Awards of restricted
stock or restricted stock units. 
Notwithstanding the foregoing, to the extent that the aggregate fair
market value of stock (determined at the time of grant of the option) for which
Incentive Stock Options first become exercisable by a Grantee during a calendar
year (under all option plans of the Company) exceeds $100,000, such Options
shall be treated as Options that are not Incentive Stock Options.


 


14.                               Manner of Grant


 


Nothing
contained in the Plan or in any resolution adopted by the Board or any
committee thereof or by the stockholders of the Company with respect to the
Plan, except as 


 


 


12

















 


provided in the Plan, will constitute the granting of an Award under
the Plan.  The granting of an Award under
the Plan is deemed to occur only upon the date on which the Board or the
Committee approves the grant of the Award. 
Each Award granted under the Plan shall be evidenced by a written
agreement, in the form determined by the Board or the Committee, signed by a
representative of the Board or the Committee and the recipient thereof.


 


15.                               Compliance with Laws and
Regulations


 


The
obligation of the Company to sell and deliver any shares of Stock under the
Plan is subject to all applicable laws, rules and regulations, and the
obtaining of all approvals by governmental agencies deemed necessary or
appropriate by the Board or the Committee. 
In general, the Board or the Committee may make such changes in the Plan
and include such terms in any Award agreement as may be necessary or
appropriate, in the opinion of counsel to the Company, to comply with the rules and
regulations of any governmental authority, or to obtain for employees granted
Incentive Stock Options the tax benefits under the applicable provisions of the
Code and the regulations thereunder.


 


16.                               Tax Withholding


 


The
Company or Subsidiary for which services are performed by a director, employee
or paid consultant granted an Award under the Plan has the right to deduct or
otherwise effect a withholding of any tax (including, without limitation, any
FICA (employment) tax required to be withheld under Chapter 21 of the
Code, any income tax required to be withheld under Chapter 24 of the Code,
and any similar tax imposed under state, local, or foreign law) required by
federal, state, local or foreign laws to be withheld or otherwise deducted and
paid with respect to the grant, vesting or exercise of any Award or the sale of
stock acquired upon the exercise of an Incentive Stock Option; or, in lieu of
such withholding, to require that the Grantee or person holding such Award pay
to the Company or such Subsidiary in cash (or, at the sole discretion of the
Board or the Committee, in the form of shares of Stock) the amount of any taxes
required to be withheld or otherwise deducted and paid by the Company or its
Subsidiary in connection with the grant, vesting or exercise of any Award or
the sale of shares acquired upon the exercise of an Incentive Stock
Option.  The Company may condition any
delivery of stock certificates or other evidence of ownership of shares of
Stock on payment of the tax amounts referred to in this Section 16.


 


17.                               Nonexclusivity of the Plan


 


Neither
the adoption of the Plan by the Board nor the submission of the Plan to the
stockholders of the Company for approval has any impact on existing qualified
or nonqualified retirement, bonus or option plans of the Company or creates any
limitations on the power of the Board to adopt any other incentive arrangements
that it may deem desirable, including, without limitation, the granting of
stock options, stock appreciation rights, restricted stock or restricted stock
units otherwise than under the Plan, and such arrangements may be either
applicable generally or only in specific cases.


 


 


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18.                               Amendment


 


The
Board at any time, and from time to time, may amend the Plan, subject to any
required regulatory approval and subject to the limitation that, except as
provided above in Section 12, no amendment is effective unless approved
within 12 months after the date of the adoption of such amendment by the
affirmative vote of the holders of a majority of the shares of the Company’s
Voting Stock present in person or represented by proxy at a duly held meeting at
which a quorum is present (or by such greater vote as may be required by
applicable law, regulation or provision of the certificate of incorporation or
bylaws of the Company) if the amendment would, but for such approval, prevent
the issuance of Incentive Stock Options under the Plan or cause the Plan to no
longer comply with the requirements of Section 162(m) of the Code.


 


Except
as provided in Section 12 above, rights and obligations under any Awards
granted before amendment of the Plan may not be altered or impaired by
amendment of the Plan in any manner having a significant adverse effect on a
Grantee, except with the consent of the Grantee thereof.


 


19.                               Termination or Suspension


 


The
Board at any time may suspend or terminate the Plan.  The Plan, unless sooner terminated, will
terminate on the 10th anniversary of its adoption by the Board or its approval
by the stockholders of the Company, whichever is earlier, but such termination
will not affect any Award theretofore granted. 
No Award may be granted under the Plan while the Plan is suspended or
after it is terminated.  In general, no
rights or obligations under any Award granted while the Plan is in effect will
be altered or impaired by suspension or termination of the Plan, except with
the consent of the person to whom the Award was granted.  Any Award granted under the Plan may be
terminated by agreement between the holder thereof and the Company and, in lieu
of the terminated Award, a new Award may be granted.


 


20.                               Miscellaneous


 


Nothing
contained in the Plan (or in any written Award agreement) obligates the Company
or any Subsidiary to continue for any period to elect any individual as a
director or to employ an employee or consultant to whom an Award has been
granted, or interfere with the right of the Company or any Subsidiary to vary
the terms of the person’s service or employment or reduce the person’s
compensation.


 


21.                               Exculpation and
Indemnification


 


To
the fullest extent permitted by applicable law and regulation, the Company will
indemnify and hold harmless the members of the Board and the members of the
Committee from and against any and all liabilities, costs, and expenses
incurred by them as a result of any act, or omission to act, in connection with
the performance of their duties, responsibilities, and obligations under the
Plan, other than such liabilities, costs and expenses as may result from the
gross negligence, bad faith, willful misconduct, or criminal acts of such
persons.


 


 


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22.                               Governing Law


 


The
Plan and all actions taken thereunder are governed by and construed in
accordance with the laws of the State of Nevada, without reference to the
principles of conflict of laws thereof.


 


23.                               Unfunded Plan


 


The
Plan is unfunded and the Company is not required to segregate any assets in
connection with any Awards under the Plan. 
Any liability of the Company to any person with respect to any Award
under the Plan or any Award agreement is based solely upon the contractual
obligations that may be created as a result of the Plan or any such Award or
agreement.  No such obligation of the
Company will be deemed to be secured by any pledge of, encumbrance on, or other
interest in, any property or asset of the Company or any Subsidiary.  Nothing contained in the Plan or any Award
agreement will be construed as creating in respect of any Grantee (or
beneficiary thereof or any other person) any equity or other interest of any
kind in any assets of the Company or any Subsidiary or creating a trust of any
kind or a fiduciary relationship of any kind between the Company, any
Subsidiary and/or any such Grantee, any beneficiary thereof or any other
person.


 


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