Exhibit 10.24


 


SECOND
AMENDMENT TO

HADDRILL EMPLOYMENT AGREEMENT


 


This Second Amendment to the Employment
Agreement (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 parties
to that certain Employment Agreement dated as of June 30, 2004 (the “Employment
Agreement”) pursuant to which Haddrill is employed as the Company’s Chief
Executive Officer;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


WHEREAS, the Company and Haddrill desire to
amend the Employment Agreement to (i) accelerate the vesting of the
Accelerated Options and (ii) clarify the post-termination exercise
provisions of the Pre-Amendment Options in accordance with and subject to the
terms and conditions of this Second Amendment.


 


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NOW THEREFORE, on the basis of the foregoing
premises and in consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:


 


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


 


2.             Notwithstanding
anything in the Employment Agreement, the First Amendment, the Plan or the
Stock Option Agreements to the contrary, Haddrill and the Company hereby agree
that Haddrill may not sell, encumber, pledge or otherwise transfer any of the
shares of the Company’s common stock received upon exercise of the Accelerated
Options until the dates set forth in the following schedule and that any
attempted transfer shall be without force or effect:


 


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


 


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


 


(c)           In
the event of Change in Control (as defined in the First Amendment), all of the
transfer restrictions described in this paragraphs 2(a) and 2(b) hereof
shall immediately lapse.


 


(d)           In
the event that Haddrill’s employment is terminated under paragraphs 7(b) or
7(c) of the Employment Agreement, the transfer restrictions described in
paragraphs 2(a) and 2(b) hereof shall lapse with respect to a pro
rated 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-Amendment
Options shall become “Portable Options” and subject to the applicable extended
post-termination exercise period described in paragraph 4(b) of this
Second Amendment in accordance with the following schedule:


 


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


 


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


 


(c)           With
respect to the Employment Agreement Options, (i) one-third of such options
shall become Portable Options on October 1, 2005, (ii) an additional
one-third of such options shall become Portable Options on October 1, 2006
and (iii) the remaining one-third of such options shall become Portable
Options on October 1, 2007, in each case, provided that Haddrill remains
continuously employed by the Company as Chief Executive Officer until the
applicable date.


 


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(d)           In
the event that a Change in Control (as defined in the First Amendment) occurs
prior to a termination of Haddrill’s employment with the Company, 100% of the
Pre-Amendment Options shall immediately become Portable Options upon the
consummation of such Change in Control.


 


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


 


4.             Notwithstanding
anything in the Employment Agreement, the First Amendment, the Plan or the
Stock Option Agreements to the contrary, Haddrill and the Company hereby agree
that following a termination of Haddrill’s employment with the Company for any
reason (a) that portion of each of the Pre-Amendment Options that have not
become Portable Options pursuant to paragraph 3 of this Second Amendment shall
terminate sixty (60) days following the date of termination of employment,
unless exercised during such 60-day period, and (b) that portion of each
of the Pre-Amendment Options that have become Portable Options pursuant to paragraph
3 of this Second Amendment shall remain exercisable until (i) in the case
of the Employment Agreement Options, October 1, 2014, (ii) in the
case of the April Options, April 23, 2013, and (iii) in the case
of the January Options, July 8, 2011 or the Extension Date (as such
term is defined in the January Stock Option Agreement).


 


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


 


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


 


“3.           Each
vested Additional RSU represents Haddrill’s right to receive one (1) share
of Company common stock, as follows:


 


a.             75%
of the shares represented by the vested Additional RSUs shall be issued to
Haddrill (1) on the later of (a) October 1, 2007 or (b) the
first date on which such payment 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 is no longer subject to such limits shall be
issued to Haddrill at the time such limits become inapplicable, or (2) in
the event that Haddrill’s employment with the Company, as amended, is
terminated prior to October 1, 2007, on the first date in which such
payment 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 is
no longer subject to such limits shall be issued to Haddrill at the time such
limits become inapplicable.


 


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b.             The
remaining 25% of the shares represented by the vested Additional RSUs shall be
issued to Haddrill (1) on the later of (a) October 1, 2008 or (b) the
first date on which such payment 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 is no longer subject to such limits shall be
issued to Haddrill at the time such limits become inapplicable, or (2) in
the 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 no
longer subject to the limits of Section 162(m) of the Internal Revenue
Code in which case that portion of the payment that is no longer subject to
such limits shall be issued to Haddrill at the time such limits become
inapplicable.”


 


7.             Except as expressly
modified by this Second Amendment, the Employment Agreement, the First
Amendment and the Stock Option Agreements shall remain unchanged and shall
remain in full force and effect.


 


[signatures on next page]


 


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IN WITNESS WHEREOF, the Company and Haddrill
have 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]