Document:

Exhibit - 10.31
        Amendment to Shuffle Master, Inc. Outside Directors' Option Plan
                            Effective March 28, 2001

                                  AMENDMENT TO
                              SHUFFLE MASTER, INC.
                         OUTSIDE DIRECTORS' OPTION PLAN
                            EFFECTIVE MARCH 28, 2001

         The undersigned, the Chief Executive Officer of Shuffle Master, Inc. a
Minnesota corporation (the "Corporation"), does hereby certify that effective as
of the 28th day of March, 2001, the following resolution was adopted by the
Board of Directors of the Corporation in accordance with the applicable
provisions of Minnesota law:

Resolution Amending Outside Directors' Option Plan, as amended, (the "Plan")
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         RESOLVED, that the undersigned, the members of the Board of Directors
of the Corporation, pursuant to Section 10 of the Plan and the applicable
provisions of Minnesota law, hereby resolve that Section 5 of the Plan be
amended by deleting the existing Section 5. (02) in its entirety and replacing
it with the following new section 5. (02):

          "(02) Exercise Price. The exercise price of an Option granted pursuant
         to Section 5. (01) (a) or (b) shall be 100% of the value of the Stock
         on the grant date determined in accordance with Section 6 hereof. The
         exercise price of an Option granted under Section 5. (01) (c) shall be
         such price as determined by the Board of Directors at the time it makes
         the grant, including a price which can be determined on the basis of
         future events."

         IN WITNESS WHEREOF, I have hereunto subscribed my name this 28th day of
March, 2001.

                                        /s/ Joseph J. Lahti
                                        ----------------------------------------
                                        Joseph J. Lahti, Chief Executive OfficerExhibit - 10.32
                              Shuffle Master, Inc.
         Restated Outside Directors' Option Plan Dated January 24, 2002

                              SHUFFLE MASTER, INC.
             RESTATED OUTSIDE DIRECTORS' OPTION PLAN (JANUARY 2002)

                                TABLE OF CONTENTS

1.)   Purposes.................................................................1
2.)   Definitions..............................................................1
3.)   Option Stock Available Under Plan........................................3
4.)   Administration...........................................................3
5.)   Eligibility for Options..................................................4
6.)   Terms and Conditions of Options..........................................4
7.)   Adjustments..............................................................9
8.)   Acceleration of Vesting and Exercisability Upon Certain Events...........9
9.)   Rights as Shareholder...................................................12
10.)  No Obligation to Exercise Option; Maintenance of Relationship...........12
11.)  Withholding Taxes.......................................................12
12.)  Purchase for Investment; Rights of Holder on Subsequent Registration....12
13.)  Modification of Outstanding Options.....................................13
14.)  Approval of Shareholders................................................13
15.)  Liquidation.............................................................13
16.)  Restrictions on Issuance of Shares......................................13
17.)  Amendment, Suspension or Termination of the Plan........................14
18.)  Effective Date..........................................................14
19.)  General Provisions......................................................14

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                              SHUFFLE MASTER, INC.
             RESTATED OUTSIDE DIRECTORS' OPTION PLAN (JANUARY 2002)

         1.) Purposes.

         The principal purposes of the Shuffle Master, Inc. (the "Company")
Restated Outside Directors' Option Plan (the "Plan") are to attract and retain
the best available candidates for the Board, to provide additional equity
incentives to Eligible Directors through their participation in the growth value
of the Stock, and to promote the success of the Company's business. To
accomplish the foregoing objectives, this Plan provides a means whereby Eligible
Directors will receive Options to purchase Stock. Options granted prior to the
effective date of this Restated Outside Directors' Option Plan continue to be
governed by the Outside Directors' Stock Option Plan as in effect and as amended
prior to the effective date of this Restated Outside Directors' Option Plan.

         Options granted under this Plan will be Non-Qualified Stock Options.

         2.) Definitions.

         For purposes of this Plan, the following terms shall have the meanings
         indicated below:

         (a) "Board" means the Board of Directors of the Company.

         (b) "Capital Stock" means any of the Company's authorized but unissued
         shares of voting common stock, par value of One Cent ($0.01)
         designation.

         (c) "Code" means the Internal Revenue Code of 1986, as amended from
         time to time.

         (d) "Committee" means a committee consisting solely of not less than
         two members of the Board of Directors of the Company who are
         "Non-Employee Directors" within the meaning of and to the extent
         required by the general rules and regulations promulgated pursuant to
         Section 16 of the Exchange Act (the "Section 16 Regulations"). The term
         "Committee" shall refer to the Board of Directors of the Company during
         such times as no committee is appointed by the Board of Directors and
         during such times as the Board of Directors is acting in lieu of the
         Committee.

         (e) "Company" means Shuffle Master, Inc., a Minnesota Company, and any
         of its Subsidiaries or its Parent.

         (f) "Director" means a member of the Board.

         (g) "Eligible Director" means a Director who is not also an employee of
         the Company. A director who also serves as Corporate Secretary, and is
         not otherwise employed by the Company, is an Eligible Director.

         (h) "Exchange Act" means the Securities Exchange Act of 1934, as
         amended.

         (i) "Exercise Price" means the price per share at which an Option may
         be exercised.

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         (j) "Fair Market Value" means the price per share determined as
         follows:

                  (i) if the security is listed for trading on one or more
                  national securities exchanges or is quoted on the Nasdaq
                  National Market System ("Nasdaq NMS"), the reported last sales
                  price on such principal exchange or system on the date in
                  question (if such security shall not have been traded on such
                  principal exchange on the Nasdaq NMS on such date, the
                  reported last sales price on such principal exchange or on
                  Nasdaq NMS on the first day prior thereto on which such
                  security was so traded); or (ii) if the security is not listed
                  for trading on a national securities exchange and is not
                  quoted on Nasdaq NMS but is quoted on the Nasdaq Small Cap
                  System or is otherwise traded in the over-the-counter market,
                  the mean of the highest and lowest bid prices for such
                  security on the date in question (if there are no such bid
                  prices for such security on such date, the mean of the highest
                  and lowest bid prices on the most recent day prior thereto
                  (not to exceed ten (10) days prior to the date in question) on
                  which such prices existed); or (iii) if neither (i) nor (ii)
                  is applicable, by any means deemed fair and reasonable by the
                  Committee, which determination shall be final and binding on
                  all parties.

         (k) "Family Member" includes any child, stepchild, grandchild, parent,
         stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
         mother-in-law, father-in-law, son-in-law, daughter-in-law,
         brother-in-law, or sister-in-law, including adoptive relationships, any
         person sharing the Optionee's household (other than a tenant or
         employee), a trust in which Family Members have more than fifty percent
         (50%) of the beneficial interest, a foundation in which these persons
         (or the Optionee) control the management of assets, and any other
         entity in which these persons (or the Optionee) own more than fifty
         percent (50%) of the voting interests.

         (l) "Option" means an option to purchase Stock as described in Section
         6 hereof. An Option granted under this Plan is a nonstatutory option to
         purchase Stock which does not meet the requirements of an incentive
         stock option set forth in Section 422 of the Code.

         (m) "Option Agreement" means a written agreement pursuant to which the
         Company grants an option to an Optionee and sets the terms and
         conditions of the Option.

         (n) "Option Date" means the date upon which an Option Agreement for an
         Option granted pursuant to this Plan is duly executed by or on behalf
         of the Company.

         (o) "Option Stock" means the voting common stock of the Company
         (subject to adjustment as described in Section 7) reserved for Options
         pursuant to this Plan, or any other class of stock of the Company which
         may be substituted therefor by exchange, stock split or otherwise.

         (p) "Optionee" means an Eligible Director who has been granted an
         Option.

         (q) "Plan" means this Restated Outside Directors' Option Plan (January
         2002), as amended hereafter from time to time.

         (r) A "Subsidiary" means any company in an unbroken chain of companies
         beginning with the Company, if, at the time of granting the option,
         each of the companies other than the last company in the chain owns
         stock possessing more than fifty percent (50%) of the

                                       2.
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         total combined voting power of all classes of stock in one of the other
         companies in such chain. The term shall include any subsidiaries which
         become such after adoption of this Plan.

         (s) A "Parent" means a company that directly, or indirectly through
         related companies, owns more than fifty percent (50%) of the voting
         power of the shares entitled to vote for directors of the Company. The
         term shall include a company which becomes such after adoption of this
         Plan.

         (t) "Securities Act" means the Securities Act of 1933, as amended.

         (u) "Termination Date" means the date on which an Optionee ceases to be
         a Director of the Company.

         3.) Option Stock Available Under Plan.

         (a) Stock Subject to the Plan. The maximum number of shares of Stock
         that may be issued upon the exercise of Options is 337,500 (which
         number reflects three 3-for-2 stock splits effected by the Company
         since the date this Plan was first adopted and does not reflect a
         change in the number of Options authorized under the Plan). The shares
         of Stock covered by the portion of any Option that expires or otherwise
         terminates unexercised under this Plan shall become available again for
         grant.

         (b) The aggregate number of shares available under this Plan shall be
         subject to adjustment on the occurrence of any of the events and in the
         manner set forth in Section 7. Except as provided in Section 7, in no
         event shall the number of shares reserved be reduced below the number
         of shares issuable upon exercise of outstanding Options. If an Option
         shall expire or terminate for any reason without having been exercised
         in full, the unpurchased shares, shall (unless the Plan shall have been
         terminated) become available for other Options under the Plan.

         4.) Administration.

         The Plan shall be administered by the Committee. The Company shall
grant Options pursuant to the Plan upon determinations of the Committee as to
which of the eligible persons shall be granted Options, the number of shares to
be optioned, the Exercise Price, the vesting, the term of exercise, the term
during which any such Options may be exercised and the other terms and
provisions of the Options. The Committee may from time to time adopt rules and
regulations for carrying out the Plan and shall have authority and discretion to
interpret and construe any provision of the Plan. Each determination,
interpretation or other action made or taken by the Committee pursuant to the
provisions of the Plan shall be final and conclusive. No member of the Committee
will be liable for any action or determination made in good faith with respect
to the Plan or any Option granted under the Plan.

                                       3.
<PAGE>

         5.) Eligibility for Options.

         Options may be granted only to an Eligible Director of the Company. If
an Eligible Director becomes an employee of the Company subsequent to any Option
Grant pursuant to this Plan, such Option shall remain in effect and exercisable
in accordance with this Plan.

         6.) Terms and Conditions of Options.

         Whenever the Committee shall grant an Option, it shall communicate to
the Secretary of the Company the name of the Optionee, the number of shares to
be optioned and such other terms and conditions as it shall determine, not
inconsistent with the provisions of this Plan. The President or other officer of
the Company shall then enter into an Option Agreement with the Optionee,
complying with and subject to the following terms and conditions and setting
forth such other terms and conditions of the Option as determined by the
Committee:

         (a) Grant of Option. Options shall be granted pursuant to this Plan as
         follows:

                  (1)      Grant upon Election or Appointment - Upon the initial
                           election or appointment of an Eligible Director, the
                           Committee shall grant Options to such new Eligible
                           Director. Such Options shall entitle the Eligible
                           Director to purchase such number of shares of Capital
                           Stock as the Committee shall determine, if any. If
                           more than one Eligible Director is elected or
                           appointed at the same time, the Committee may vary
                           the number of Options granted to each.

                  (2)      Annual Grant - Each person who remains an Eligible
                           Director on the date of the Company's annual
                           shareholder meeting shall be granted an Option to
                           purchase such number of shares of Capital Stock as
                           the Committee shall determine, if any. If more than
                           one Eligible Director is re-elected at the same time,
                           the Committee may vary the number of Options granted
                           to each.

                  (3)      Discretionary Grants. - In addition to the automatic
                           granting of options pursuant to subsections (1) and
                           (2) set forth above in this section, the Committee
                           may grant additional options to Eligible Directors at
                           such times as the Committee shall determine. Options
                           granted under this subsection shall contain such
                           terms and conditions as determined by the Committee
                           at the time of grant.

         (b) Exercise Price.

                  (1)      The Exercise Price of an Option granted under
                           subsection 6(a)(1) or (2) shall be one hundred
                           percent (100%) of the Fair Market Value of the Option
                           Stock at the Option Date.

                                       4.
<PAGE>

                  (2)      The Exercise Price of an Option granted under Section
                           6(a)(3) shall be such price as determined by the
                           Committee at the time it makes the grant, including a
                           price which can be determined on the basis of future
                           events. If the Committee fails to state an Exercise
                           Price at the time of grant, the Exercise Price shall
                           be the Fair Market Value of the Option Stock at the
                           Option Date.

                  (3)      The Exercise Price shall be subject to adjustment as
                           provided in Section 7 hereof.

         (c) Time and Manner of Exercise of Option.

         Except as set forth in this Plan or in the action of the Committee at
         the grant of an Option, all Options shall vest immediately upon grant.
         Fifty percent (50%) of Options granted upon election or appointment
         shall vest on the Option Date and the remaining fifty percent (50%)
         shall vest on the first anniversary of the Option Date. No Option may
         be exercised after ten (10) years from the date on which the option was
         granted.

         (d) Termination, Except Death or Disability.

         An Optionee who ceases to be an Eligible Director of the Company shall
         have the right to exercise any vested outstanding Options which were
         exercisable at the time of such event at any time within twelve (12)
         months after such event or until the earlier date of termination of
         exercisability of such option under this Plan or the Option Agreement,
         unless otherwise set forth in the Option Agreement. Any vested Options
         not exercised within the twelve (12) month period shall terminate at
         the expiration of such period, unless otherwise set forth in the Option
         Agreement. Nothing in this subsection shall act to permit the exercise
         of an Option if such Option otherwise expires pursuant to this Plan.

         (e) Death or Disability of Optionee.

         If an Optionee shall die or become disabled while an Eligible Director
         of the Company and in any such case shall not have fully exercised his
         or her vested Options, any vested Options granted pursuant to the Plan
         which were exercisable at the date of death or disability shall be
         exercisable only within twelve (12) months following his or her date of
         death or disability or until the earlier originally stated expiration
         thereof, unless otherwise set forth in the Option Agreement. In the
         case of death, such Option shall be exercised pursuant to subsection
         (f) of this Section 6 by the person or persons to whom the Optionee's
         rights under the Options shall pass by the Optionee's will or by the
         laws of descent and distribution, but only to the extent that such
         Options were exercisable at the time of death. For purposes of this
         Plan, "disabled" shall not have the same meaning as set forth in
         Section 22(e)(3) of the Code but, recognizing that service as a
         director involves substantially less effort than employment, shall
         refer to an inability to carry out the duties of a director of a
         publicly-held corporation. All determinations as to whether an Optionee
         has become so disabled as to be unable to continue to function as a
         director shall be made by the Committee (not including the Optionee)
         and shall be final and binding upon the Optionee. The fact that the
         Committee does not have power to remove a director from their
         directorship shall not affect the validity of any determination of
         disability by the Committee.

                                       5.
<PAGE>

         (f) Transfer of Option.

                  (1)      Non-Transferability. Except as permitted by the next
                           subsection, each Option granted hereunder shall, by
                           its terms, not be transferable by the Optionee and
                           shall be, during the Optionee's lifetime, exercisable
                           only by the Optionee or Optionee's guardian or legal
                           representative. Except as permitted by the next
                           subsection, each Option granted under the Plan and
                           the rights and privileges thereby conferred shall not
                           be transferred, assigned or pledged in any way
                           (whether by operation of law or otherwise), and shall
                           not be subject to execution, attachment or similar
                           process. Upon any attempt to so transfer, assign,
                           pledge, or otherwise dispose of the Option, or of any
                           right or privilege conferred thereby, contrary to the
                           provisions of the Option or the Plan, or upon levy of
                           any attachment or similar process upon such rights
                           and privileges, the Option, and such rights and
                           privileges, shall immediately become null and void.

                  (2)      Permitted Transfers. Each Option granted hereunder
                           shall, by its terms, be transferable:

                           a.       by the Optionee to an Optionee's Family
                                    Member by a bona fide gift or pursuant to a
                                    domestic relations order in settlement of
                                    marital property rights;

                           b.       by will or pursuant to the laws of descent
                                    and distribution; or

                           c.       as otherwise permitted pursuant to the rules
                                    or regulations adopted by the Securities and
                                    Exchange Commission ("SEC") under the Act or
                                    the interpretations of such rules and
                                    regulations as announced by the SEC from
                                    time to time.

                           Any permitted transfer shall be effective only when
                           accepted by the Company subject to the Company
                           receiving documentation reasonably satisfactory to it
                           of such gift, transfer pursuant to domestic relations
                           order, or transfer pursuant to will or pursuant to
                           the laws descent and distribution. Upon effectiveness
                           of any permitted transfer, the rights under any
                           Option shall be exercisable only by the permitted
                           transferee or such transferee's guardian or legal
                           representative. Except as permitted by this
                           subsection, each Option granted under the Plan and
                           the rights and privileges thereby conferred shall not
                           be further transferred, assigned or pledged in any
                           way (whether by operation of law or otherwise), and
                           shall not be subject to execution, attachment or
                           similar process. Upon any attempt to so further
                           transfer, further assign, pledge, or otherwise
                           further dispose of the Option, or of any right or
                           privilege conferred thereby, contrary to the
                           provisions of the Option or the Plan, or upon levy of
                           any attachment or similar process upon such rights
                           and privileges, the Option, and such rights and
                           privileges, shall immediately become null and void.
                           No permitted transfer shall cause any change in the
                           terms of any Option except the identity of the
                           person(s) entitled to exercise such Option and to
                           receive the common stock issuable upon exercise of
                           the Option.

                                       6.
<PAGE>

                           Without limiting the generality of the foregoing, any
                           Option shall be subject to termination upon the
                           Optionee ceasing to be an Eligible Director, death or
                           disability of the Optionee to whom the Option was
                           originally granted by the Company without reference
                           to the status as an Eligible Director, death or
                           disability of any permitted transferee. In the event
                           of any transfer of an Option, the obligations of the
                           Company owed to the Optionee shall be owed to the
                           transferee and references in this Plan or in any
                           Option Agreement to the Optionee shall, unless the
                           context otherwise requires, refer to the transferee.

         (g) Manner of Exercise of Options.

         An Option may be exercised, in whole or in part, at such time or times
         and with such rights with respect to such shares which have accrued and
         are in effect. Such Option shall be exercisable only by: (i) written
         notice to the Company of intent to exercise the Option with respect to
         a specified number of shares of stock; (ii) tendering the original
         Option Agreement to the Company; and (iii) payment to the Company of
         the Exercise Price for the number of shares of stock with respect to
         which the Option is then exercised. Except as set forth in the next
         sentence, payment of the Exercise Price may be made in any of the
         following manners:

                  (1)      cash, including certified check, bank draft or postal
                           or express money order;

                  (2)      personal check (provided that if payment of the
                           Exercise Price is made by personal check and such
                           personal check is not timely paid by the drawer's
                           bank, such payment shall be deemed not to have been
                           made and any shares issued upon such exercise shall
                           be deemed void and never issued);

                  (3)      by surrender for cancellation of shares of common
                           stock of the Company either:

                           a.       Acquired by the Optionee other than by
                                    exercise of an Option;

                           b.       Acquired by the Optionee upon exercise of an
                                    Option where the Option Shares being
                                    surrendered have been held by the Optionee
                                    for at least six (6) months after such
                                    exercise; or

                           c.       Acquired by the Optionee upon exercise of an
                                    Option where the Option Shares being
                                    surrendered have been held by the Optionee
                                    for six months or less after such exercise
                                    but only if the Optionee has obtained prior
                                    approval of the specific surrender (such
                                    approval to include at least the date of
                                    grant of the Option being exercised, the
                                    dates of grant and exercise of the Option
                                    pursuant to which shares to be surrendered
                                    were acquired, and the number of Option
                                    Shares to be surrendered) by the Committee;
                                    and having a Fair Market Value equal to the
                                    exercise price of the Options being
                                    exercised (if the shares surrendered have a
                                    Fair Market Value in

                                       7.
<PAGE>

                                    excess of the Exercise Price of the Options
                                    being exercised, the Company shall promptly
                                    pay to the Optionee an amount equal to the
                                    excess of such Fair Market Value over the
                                    Exercise Price, not to exceed the Fair
                                    Market Value of one share);

                  (4)      by any other method of payment which the Committee
                           shall approve before, at, or after the date of grant
                           of such Options.

         Notwithstanding the foregoing listing of permissible manners of payment
         of Exercise Price, the Committee shall have the right, from time to
         time, to cancel, limit or suspend the right to make payment under any
         one or more manners of payment (other than the payment by cash,
         certified check, bank draft or postal or express money order),
         including other methods of payment previously approved by the Committee
         under the authority granted in subsection (g)(4) of this Section 6,
         including the right to cancel, limit or suspend such right as to any
         one, some, or all Option(s) and as to any one, some, or all Option
         Holder(s).

         There shall be no exercise at any one time as to fewer than one hundred
         (100) shares (or such lesser number of shares as the Committee may from
         time to time determine in its discretion) or all of the remaining
         shares then purchasable by the Optionee or person exercising the
         Option. When shares of stock are issued pursuant to the exercise of an
         Option, the fact of such issuance shall be noted on the Option
         Agreement by the Company before the Option Agreement is returned. When
         all shares of Optioned stock covered by the Option Agreement have been
         issued, or the Option shall expire, the Option Agreement shall be
         canceled and retained by the Company.

         (h) Delivery of Certificate.

         An Option shall be deemed to have been exercised immediately prior to
         the close of business on the date the Company is in receipt of the
         original Option Agreement, written notice of intent to exercise the
         Option, and payment for the number of Shares being acquired upon
         exercise of the Option. The Optionee shall be treated for all purposes
         as the holder of record of the Option Stock as of the close of business
         on such date, except where shares are held for unpaid withholding
         taxes. As promptly as practicable on or after such date, the Company
         shall issue and deliver to the Optionee a certificate or certificates
         for the Option Stock issuable upon such exercise; provided, however,
         that such delivery shall be deemed effected for all purposes when the
         Company, or the stock transfer agent for the Company, shall have
         deposited such certificates in the United States mail, postage prepaid,
         addressed to the Optionee at the address specified in the written
         notice of exercise.

         (i) Other Provisions.

         The Option Agreements under this Section shall contain such other
         provisions as the Committee shall deem advisable.

                                       8.
<PAGE>

         7.) Adjustments.

         In the event that the outstanding shares of the common stock of the
Company are changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another company by reason of any
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, combination of shares or dividends payable in capital stock,
appropriate adjustment shall be made in the number and kind of shares as to
which Options may be granted under the Plan and as to which outstanding Options
or portions thereof then unexercised shall be exercisable, to the end that the
proportionate interest of the participant shall be maintained as before the
occurrence of such event; such adjustment in outstanding Options shall be made
without change in the total price applicable to the unexercised portion of such
Options and with a corresponding adjustment in the Exercise Price per share.

         If the Company is a party to a merger, consolidation, reorganization or
similar corporate transaction and if, as a result of that transaction, its
shares of common stock are exchanged for: (i) other securities of the Company or
(ii) securities of another company which has assumed the outstanding options
under the Plan or has substituted for such Options its own Options, then each
Optionee shall be entitled (subject to the conditions stated herein or in such
substituted Options, if any), in respect of that Optionee's Options, to purchase
that amount of such other securities of the Company or of such other company as
is sufficient to ensure that the value of the Optionee's Options immediately
before the corporate transaction is equivalent to the value of such Options
immediately after the transaction, taking into account the Exercise Price of the
Option before such transaction, the Fair Market Value per share of the common
stock immediately before such transaction and the fair market value, immediately
after the transaction, of the securities then subject to that Option (or to the
option substituted for that Option, if any). Upon the happening of any such
corporate transaction, the class and aggregate number of shares subject to the
Plan which have been heretofore or may be hereafter granted under the Plan shall
be appropriately adjusted to reflect the events specified in this Section.

         8.) Acceleration of Vesting and Exercisability Upon Certain Events.

         (a) Acceleration of Vesting.

         Notwithstanding any requirements for vesting and time of exercisability
         of any Option as set forth in the Option Agreement with each Optionee
         or as otherwise determined by the Committee, any Option granted under
         this Plan, to the extent not already terminated, shall become vested
         and immediately exercisable if any of the following occur:

                           (1)      Any person (other than the Company) shall
                                    make a tender offer to acquire such number
                                    of shares of the Company's common stock as
                                    shall constitute twenty percent (20%) or
                                    more of the Company's outstanding common
                                    stock;

                           (2)      The Company shall issue or the Company's
                                    officers and directors shall transfer
                                    (and/or assign their voting rights related
                                    to) shares of common stock (or other
                                    securities convertible into or exchangeable
                                    for common stock) representing at least
                                    twenty percent (20%) of the outstanding

                                       9.
<PAGE>

                                    common stock of the Company (including a
                                    series of similar transactions effected
                                    within six (6) months which, in the
                                    aggregate, result in the issuance and/or
                                    transfer of (and/or assignment of voting
                                    rights related to) at least twenty percent
                                    (20%) of the Company's outstanding common
                                    stock) (the percentages set forth in this
                                    paragraph to be computed after completion of
                                    the subject transactions and as though
                                    shares "beneficially owned," as defined in
                                    Rule 13d-3 under the Exchange Act, were, in
                                    fact, owned);

                           (3)      A proxy statement, whether issued by the
                                    Company or another shareholder, proposes a
                                    vote at a shareholder meeting related to any
                                    merger of the Company, any sale of
                                    substantially all of the Company's assets or
                                    any reorganization of the Company involving
                                    a change in beneficial ownership of the
                                    Company;

                           (4)      A change in control of the Company of a
                                    nature that would be required to be reported
                                    pursuant to Section 13 of 15(d) of the
                                    Exchange Act, whether or not the Company is
                                    then subject to such reporting requirements,
                                    including, without limitation, such time as
                                    any person becomes, after the effective date
                                    of the Plan, the "beneficial owner" (as
                                    defined in Rule 13d-3 under the Exchange
                                    Act), directly or indirectly, of forty
                                    percent (40%) or more of the combined voting
                                    power of the Company's outstanding
                                    securities ordinarily having the right to
                                    vote at elections of directors;

                           (5)      The individuals who constitute the Board of
                                    Directors on the effective date of the Plan
                                    cease for any reason to constitute at least
                                    a majority of the Board, provided that any
                                    person becoming a director subsequent to the
                                    effective date of the Plan whose election,
                                    or nomination for election by the Company's
                                    shareholders, was approved by a vote of at
                                    least a majority of the directors comprising
                                    the Board on the effective date of the Plan
                                    will, for purpose of this subsection (a)(5)
                                    of this Section, be considered as though
                                    such persons were a member of the Board of
                                    Directors on the effective date of the Plan.

                           (6)      Any other event which the Committee
                                    determines is of similar effect, such
                                    determination to be made by the Committee on
                                    an event-by-event basis.

         (b) No Limitation on Exercise Period.

         Nothing in this Section shall limit or shorten the period during which
         any such option is exercisable. If an option provides for
         exercisability during a limited period after a contingency is
         satisfied, and the initial exercisability of the option is accelerated
         by means of this Section, the expiration of such option shall be
         delayed until the contingency has been satisfied and the option shall,
         thereafter remain exercisable for the balance of the period initially
         contemplated by the option grant. (For example, if an option is granted
         providing that it shall be exercisable for a period of ninety (90) days
         after a triggering event, and such option is subject to the provisions
         of this Section providing that it shall

                                      10.
<PAGE>

         become immediately exercisable, it shall thereafter remain exercisable
         until such triggering event has occurred and ninety (90) days has
         passed.)

         (c) No Extension of Exercise Period.

         Any acceleration or extension of exercisability pursuant to this
         Section shall not extend such exercisability beyond the expiration or
         maximum term set forth in Section 6.

         (d) Acceleration DUE to Company Call of Options.

         Notwithstanding any requirements for vesting and time of exercisability
         of any Option as set forth in the Option Agreement with each Optionee
         or as otherwise determined by the Committee, any Option granted under
         this Plan, to the extent not already terminated and subject to a call
         provision, shall become vested and immediately exercisable if the
         Company gives notice of its intention to exercise its right to call
         such option.

         (e) Cash Payment for Options.

         If an event described in Section 8 occurs, then the Committee in its
         sole discretion either in an agreement evidencing an Option grant at
         the time of grant or at any time after the grant of an Option, and
         without the consent of any Option recipient affected thereby, may
         determine that some or all recipients holding outstanding Options will
         receive, with respect to and in lieu of some or all of the shares of
         Option Stock, as of the effective date of any such Section 8 event,
         cash in an amount equal to the excess of the Fair Market Value of such
         shares either immediately prior to the effective date of such Section 8
         event or, if greater, determined on the basis of the amount paid as
         consideration by the other party(ies) to the Section 8 event over the
         Exercise Price per share of such Options.

         (f) Limitation on Payments.

         Notwithstanding anything in Sections 8(a), 8(d) or 8(e) of the Plan to
         the contrary, if the Company is then subject to the provisions of
         Section 280G of the Code, and if the acceleration of the vesting of an
         Option as provided in Section 8(a) or 8(d) or the payment of cash in
         exchange for all or part of an Option as provided in Section 8(e)
         (which acceleration or payment could be deemed a "payment" within the
         meaning of Section 280G(b)(2) of the Code), together with any other
         payments which such recipient has the right to receive from the Company
         or any company that is a member of an "affiliated group" (as defined in
         Section 1504(a) of the Code without regard to Section 1504(b) of the
         Code) of which the Company is a member, would constitute a "parachute
         payment" (as defined in Section 280G(b)(2) of the Code), then the
         payments to such recipient pursuant to Sections 8(a), 8(d) or 8(e) will
         be reduced to the largest amount as will result in no portion of such
         payments being subject to the excise tax imposed by Section 4999 of the
         Code; provided, however, that if such recipient is subject to a
         separate agreement with the Company or a Subsidiary which specifically
         provides that payments attributable to one or more forms of employee
         stock incentives or to payments made in lieu of employee stock
         incentives will not reduce any other payments under such agreement,
         even if it would constitute an excess parachute payment, then the
         limitations of this Section 8(e) will, to that extent, not apply.

                                      11.
<PAGE>

         9.) Rights as Shareholder.

         An Optionee shall not, by reason of any Option granted hereunder, have
any right of a shareholder of the Company with respect to the shares covered by
his or her Option until the exercise of such Option is effective.

         10.) No Obligation to Exercise Option; Maintenance of Relationship.

         The granting of an Option shall impose no obligation upon the Optionee
to exercise such Option. Nothing in the Plan or in any Option Agreement entered
into pursuant hereto shall be construed to confer any obligation on the part of
the Board to nominate any Director for re-election by the Company's
shareholders, or confer upon any Director the right to remain a member of the
Board for any period of time, or at any particular rate of compensation or
interfere in any way with the right of the Company to terminate his or her
relationship with the Company at any time.

         11.) Withholding Taxes.

         If applicable, whenever, under the Plan, shares of Option Stock are to
be issued upon exercise of the Options granted hereunder and prior to the
delivery of any certificate or certificates for said shares by the Company, the
Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy any federal and state withholding or other
employment taxes resulting from such exercise. In the event that withholding
taxes are not paid by the date of exercise, to the extent permitted by law, the
Company shall have the right, but not the obligation, to cause such withholding
taxes to be satisfied by reducing the number of shares of stock deliverable or
by offsetting such withholding taxes against amounts otherwise due from the
Company to the Optionee as wages, salary, consulting fees, director's fee or
otherwise. If withholding taxes are paid by reduction of the number of shares
deliverable to Optionee, such shares shall be valued at the Fair Market Value as
of the business day preceding the date of exercise.

         12.) Purchase for Investment; Rights of Holder on Subsequent
Registration.

         Unless the shares to be issued upon exercise of an Option granted under
the Plan have been effectively registered under the Securities Act, the Company
shall be under no obligation to issue any shares covered by any Option unless
the person who exercises such Option, whether such exercise is in whole or in
part, shall give a written representation and undertaking to the Company which
is satisfactory in form and scope to counsel for the Company and upon which, in
the opinion of such counsel, the Company may reasonably rely, that he or she is
acquiring the shares issued to him or her pursuant to such exercise of the
Option for his or her own account as an investment and not with a view to, or
for sale in connection with, the distribution of any such shares, and that he or
she will make no transfer of the same except in compliance with any rules and
regulations in force at the time of such transfer under the Securities Act, or
any other applicable law, and that if shares are issued without such
registration a legend to this effect may be endorsed on the securities so issued
and a "stop transfer" restriction may be placed in the stock transfer records of
the Company.

                                      12.
<PAGE>

In the event that the Company shall, nevertheless, deem it necessary or
desirable to register under the Securities Act or other applicable statutes
anyshares with respect to which an Option shall have been exercised, or to
qualify any such shares for exemption from the Securities Act or other
applicable statutes, then the Company shall take such action at its own expense
and may require from each participant such information in writing for use in any
registration statement, prospectus, preliminary prospectus or offering circular
as is reasonably necessary for such purpose and may require reasonable indemnity
to the Company and its officers and directors from such holder against all
losses, claims, damages and liabilities arising from such use of the information
so furnished and caused by any untrue statement of any material fact required to
be stated therein or necessary to make the statement therein not misleading in
light of the circumstances under which they were made.

         13.) Modification of Outstanding Options.

         The Committee may accelerate the exercisability of an outstanding
Option and may authorize modification of any outstanding Option with the consent
of the Optionee when and subject to such conditions as are deemed to be in the
best interests of the Company and in accordance with the purposes of the Plan.

         14.) Approval of Shareholders.

         The Outside Directors' Stock Option Plan, prior to this restatement,
was previously approved by the Company's shareholders. All amendments thereto,
including this restatement have been approved by the Board and do not require
further shareholder approval for such amendments or restatement.

         15.) Liquidation.

         Upon the complete liquidation of the Company, any unexercised Options
theretofore granted under this Plan shall be deemed canceled, except as
otherwise provided in Section 8 in connection with a merger, consolidation or
reorganization of the Company.

         16.) Restrictions on Issuance of Shares.

         Notwithstanding the provisions of Section 6, the Company may delay the
issuance of shares covered by the exercise of any Option and the delivery of a
certificate for such shares until one of the following conditions shall be
satisfied:

         (a) The shares with respect to which the Option has been exercised are
         at the time of the issue of such shares effectively registered under
         applicable Federal and state securities acts as now in force or
         hereafter amended; or

         (b) A no-action letter in respect of the issuance of such shares shall
         have been obtained by the Company from the Securities and Exchange
         Commission and any applicable state securities commissioner; or

         (c) Counsel for the Company shall have given an opinion, which opinion
         shall not be unreasonably conditioned or withheld, that such shares are
         exempt from registration under applicable federal and state securities
         acts as now in force or hereafter amended.

                                      13.
<PAGE>

         It is intended that all exercises of Options shall be effective, and
the Company shall use its best efforts to bring about compliance with the above
conditions within a reasonable time, except that the Company shall be under no
obligation to cause a registration statement or a post-effective amendment to
any registration statement to be prepared at its expense solely for the purpose
of covering the issue of shares in respect of which any option may be exercised.

         17.) Amendment, Suspension or Termination of the Plan.

         The Committee may at any time amend, alter, suspend, or discontinue
this Plan, except to the extent that shareholder approval is required for any
amendment or alteration: (a) by Rule 16b-3 or applicable law in order to exempt
from Section 16(b) of the Exchange Act any transaction contemplated by this
Plan; (b) by the rules of the New York Stock Exchange, if the Company's
securities are listed thereon; or (c) by the rules of NASDAQ pertaining to the
National Market System, if the Company's securities are quoted thereon;
provided, however, no amendment, alteration, suspension or discontinuation shall
be made that would impair the rights of any Optionee under an Option without
such Optionee's consent; and provided further, that any provision in this Plan
relating to the eligibility of Directors to participate in this Plan, the timing
of Option grants made under this Plan, or the amount of Options granted to a
Director under this Plan, shall not be amended more than once every six months,
other than to comport with the changes in the Code or the rules thereunder.
Subject to the foregoing, the Committee shall have the power to make such
changes in the regulations and administrative provisions hereunder, or in any
Option (with the Optionee's consent), as in the opinion of the Committee may be
appropriate from time to time.

         18.) Effective Date. This Restatement of the Outside Directors' Option
Plan became effective on January 24, 2002 when it was adopted by the Board.

         19.) General Provisions.

         (a) If any day on or before which action under the Plan must be taken
         falls on a Saturday, Sunday, or legal holiday, such action may be taken
         on the next succeeding day not a Saturday, Sunday or legal holiday.

         (b) To the extent that federal laws do not otherwise control, the Plan
         and all determinations made and actions taken pursuant hereto shall be
         governed by and construed under the laws of the State of Minnesota.

Adopted by the Board of Directors:  January 24, 2002

                                      14.
<PAGE>

         IN WITNESS WHEREOF, the undersigned hereby acknowledges that the
Company has caused this document to be finalized and approved as the "Restated
Outside Directors' Option Plan" as of this twenty-fourth day of January, 2002.

                                        SHUFFLE MASTER, INC.

                                        By: /s/ Gary W. Griffin
                                            ------------------------------------

                                            Its: Secretary
                                                 -------------------------------

                                      15.

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