Document:

Exhibit 10.13

 

Axcelis Technologies, Inc.

Director Compensation at
March 1, 2006

 

The
Nominating and Governance Committee has responsibility under its charter to
review any changes to non-employee director compensation and provide a
recommendation as to the adoption of such changes to the full Board. All equity
grants to non-employee directors are either made under automatic granting
language in the 2000 Stock Plan or by the Compensation Committee on the
recommendation of the Board of Directors. The 2000 Stock Plan is filed as Exhibit 10.1 to this Form 10-K
(incorporated by reference to Exhibit 10.2 to the Company’s Report on Form 8-K
filed with the Commission on June 28, 2005).

 

Director Fees. Mr.
Hardis, the Lead Director, receives an annual retainer, payable quarterly. Mr.
Hardis’ annual retainer was set at $100,000 for the period from July 1, 2005
through June 30, 2006, at which time it will be reduced to $50,000 for the
period ending June 30, 2007. Each non-employee director (other than Mr. Hardis)
receives an annual retainer of $30,000 payable quarterly. In addition, each
non-employee director (other than Mr. Hardis) assuming responsibility as
Chairman of a committee of the Board of Directors receives an annual retainer
of $7,500. Non-employee directors also receive cash fees for attendance at
Board and committee meetings. Mr. Hardis will not receive meeting fees for
meetings held prior to July 1, 2006. The meeting fees are: (1) $2,000 for
attendance in person at a meeting of the Board of Directors; (2) $1,000 for
attendance at a meeting of any committee of the Board of Directors; and (3)
$1,000 for participation in a telephonic meeting of the Board of Directors or
committee of the Board of Directors. Fees are paid only to committee members
with respect to attendance at a committee meeting. Non-employee directors also
receive reimbursement of out-of-pocket expenses incurred in attending Board and
committee meetings. Non-employee directors do not receive any Company-paid
perquisites.

 

Automatic Option Grants.
All non-employee directors of Axcelis receive automatic initial stock option
grants under our 2000 Stock Plan. The initial option grant is for 40,000 shares
and is granted upon initial election to the Board. These non-employee director
options have an exercise price equal to the closing price of our common stock
on the grant date and are fully exercisable on the 181st day after
the date the option is granted, provided the optionee is still a director on
that date. The options have a term of ten years from the date of grant.

 

Prior to 2005, non-employee directors also received automatic annual
grants for 15,000 shares beginning in the first calendar year after such
director’s first election to the Board. The 2000 Stock Plan was amended to
eliminate the annual option grant provision in 2005, in light of the restricted
stock grants described below.

 

Restricted Stock Grants. In
2005, the Compensation Committee approved the issuance under the 2000 Stock
Plan of 7,257 shares of restricted stock to each of the non-employee directors
elected in years prior to 2005. The value of the grants was $50,000, using the
closing price on the date of grant. These restricted stock grants became fully
vested on the 181st day after the date of grant for recipients
remaining a director on that date.Exhibit 10.1

March 7, 2006

 

Mr. Robert C. Caller

 

RE:          Employment
offer

 

Dear Mr. Caller:

 

Alliance Gaming Corporation (the “Company,”
defined below) is pleased to offer you employment under the following terms and
conditions.  The date you will start to
work at the Company is March 31, 2006, or at a later mutually agreed-upon date
if your starting date is delayed due to any residual obligations from your
current employer (the “Effective Date”), and it is the intent of you and the
Company that your last day of employment with the Company will be September 30,
2009.  If you accept employment with the
Company, either you or the Company may terminate your employment at any time
with or without cause, with the rights and obligations of the parties upon
termination of your employment limited strictly to the terms of this letter
agreement.

 

1.             Definitions.

 

“Cause” means the
following events leading to termination of employment as determined by the
Company, upon reasonable investigation, in its judgment and discretion, as the
case may be after: (1) a substantial act or omission which is dishonest or
fraudulent against the Company, (2)  a
conviction of a felony or conviction of a gross misdemeanor involving moral
turpitude or criminal conduct against any person or property, including without
limitation, the Company, (3) a substantial act or omission that constitutes
willful misconduct in the performance of your job responsibilities or material
failure to adhere to legal Company policies, (4) any improper or illegal act,
omission or pattern of conduct in the performance of your job responsibilities,
which is not remedied by you within thirty days of your receipt of written
notice from the Company, (5) a breach of the Company’s then-current corporation
employment policies, procedures and rules, (6) 
any material breach of this letter agreement by you, or (7) failure to
comply with any provision of the gaming laws of the State of Nevada or the
rules and regulations of the Nevada Gaming Control Board or the Nevada Gaming
Commission or any gaming law, ordinance, rule or regulation of any city or
county having jurisdiction, or the gaming laws, regulations and rules of any
other nation, state, county or other jurisdiction in which the Company may be
doing business at any time which will materially and negatively affect the
registration and licensing of the Company.

 

“Change of Control” means such
circumstances which shall have been deemed to occur upon (a) the consummation
of a tender for or purchase of more than fifty percent (50%) of the Company’s
capital stock (as “Company” is defined below) by a third party, excluding the
initial public offering by the Company of any class of its capital stock, (b) a
merger, consolidation or recapitalization of the Company such that the stockholders
of the Company immediately prior to the consummation of such transaction
possess less than fifty percent (50%) of the voting securities of the surviving
entity immediately after the transaction or (c) the sale, lease or other
disposition of all or substantially all of the assets of the Company.

 

“Company” means Alliance
Gaming Corporation, as a publicly traded company on the New York Stock
Exchange, and subsequently Bally Technologies, Inc., assuming the pending name
change of Alliance Gaming

 

 

 

is ratified at the upcoming shareholders
meeting held on March 6, 2006.

 

“Diminution of Duties” means any
change in your title, job duties and responsibilities that alters or modifies
your employment duties and responsibilities with the Company, including any
salary reduction, in any manner that results in a material diminution or
reduction of your work duties and responsibilities that occurs following a
Change of Control of the Company.

 

“Salary Continuation” means the
Company’s continued payment of your then-current base salary on normal paydays
following termination of your employment with the Company, paid under such
circumstances described in further detail in this letter agreement, less
standard withholding and offset by all income earned from other employment
during any period of time that you receive any Salary Continuation.

 

“Term” means the
intended term of your employment with the Company, which shall commence on the
Effective Date and expire on September 30, 2009.

 

2.             Compensation.

 

A.            Position and Title.  You are offered the position of Executive
Vice President and Chief Financial Officer. 
You will report to the Chief Executive Office of Alliance Gaming
Corporation. Your duties will generally include all management and supervision
of all of the Company’s finance and accounting functions and staffing, along
with any other related duties that the Chief Executive Officer may assign to
you during the Term.  In addition, your
duties will include assuming the position of corporate Treasurer for the Company
and its subsidiaries and affiliates and fulfilling any other work duties and
requirements for the Company that are related to your appointment as Treasurer.

 

B.            Salary.  Your base salary will be $340,000 a year
beginning on the Effective Date. Your base salary will be reviewed annually and
adjustment may be made at the Company’s option based on merit during the
Term.  While the Company makes no express
representations as to the certainty of any salary increases, the Company
expressly agrees that your annual base salary will not decrease below $340,000
at any time while you are employed by the Company during the Term.

 

C.            Stock Options.  Subject to the approval of the Board of
Directors of Alliance Gaming Corporation, you will be granted an option on the
Effective Date to acquire 175,000 unregistered shares of Alliance Gaming
Corporation common stock at the per-share exercise price which will be equal to
the market price of a common share of Alliance Gaming Corporation common stock
as of the close of business on the Effective Date, referred to below as the
“Option.”  You acknowledge and agree that
this Option constitutes a material inducement for you to accept your new
employment with the Company.

 

The Option shall become exercisable in four
installments, with the first installment of 20,000 shares vesting on June 30,
2006, and with subsequent installments of 50,000 shares each vesting on June
30, 2007, and June 30, 2008, respectively, and with the final installment of
55,000 shares vesting on September 30, 2009. 
The Option granted to you will be granted in accordance with the
Company’s then-current policies and procedures and you agree that you will
cooperate with the Company in completing any registrations, filings or other
documentation that may be required in conjunction with the Option granted to
you.  In the event you terminate your

 

 

 

2

 

employment with the Company during the Term
as a result of a Diminution of Duties occurring within one year following a
Change of Control of the Company or upon you completing the entire Term of your
employment, all installments of the Option granted to you which have not
already vested, will be deemed to have vested on the date of such termination
and you shall have one year to exercise your option to purchase stock pursuant
to the Option under these circumstances. 
Otherwise, if the Company terminates your employment without Cause, any
installment of your Options that would vest within one year of the date of your
termination will vest and you will then have one year following this
termination date to exercise any such installment(s) of the Option granted to
you that are deemed vested as of the date of such termination.  If the Company terminates your employment
with Cause or if you quit for any reason, you will have ninety days to exercise
any installment(s) of the Option which have vested as of the date of such
termination under these circumstances. 
Any subsequent installment(s) of the Option shall not vest and you shall
have no right to exercise them if you are terminated for Cause or if you resign
prior to these remaining scheduled vesting dates.

 

D.            Salary Continuation.  During the Term, if the Company terminates
your employment without Cause after the Effective Date, the Company will pay
you Salary Continuation for a period of one year immediately following such
termination of your employment, unless such termination occurs on or after
September 30, 2008, in which instance the Company will only pay you Salary
Continuation from the date of such termination until September 30, 2009.  Additionally, the Company will pay you Salary
Continuation for one year if the Company terminates your proposed employment
prior to the Effective Date.  You will
not receive Salary Continuation for any period of time following your
termination if the Company terminates your employment for Cause or if you
terminate your employment for any reason at any time, unless you terminate your
employment as a result of a Diminution of Duties occurring within one year
following a Change of Control of the Company. 
During the Term, if you terminate your employment as a result of a
Diminution of Duties occurring within one year following a Change of Control of
the Company, the Company will pay you Salary Continuation for a period of one
year immediately following such termination of employment.  Further, you will not receive any Salary
Continuation following the completion of the entire Term of your employment
with the Company.

 

E.             Management Incentive Program. You will be
entitled to participate in the Company’s Management Incentive Program.  This incentive plan entitles you to receive a
target performance bonus in the amount of $204,000 per year, with a maximum of
$347,000 per year and a minimum of $160,000 for the Company’s Fiscal Year
2007.  You will be subject to the terms
and conditions of the Company’s MIP plan, which will be provided to you
separately from this letter agreement. 
For the remainder of the Company’s Fiscal Year 2006 ending on June 30,
2006, you will receive a pro rata portion of the existing incentive plan based
on your tenure during FY 06 in the fixed amount of $38,400.  For the period July 1, 2009 to September 30,
2009, the company will pay a minimum bonus of $51,000.  Starting in the Company’s FY 2007, the
Company may pay you up to 30% of the amount of any performance bonus you have
earned in shares of restricted stock of the Company that shall vest and become
exercisable by you at the discretion of the Board of Directors up to two years
after such shares are granted.  In no
case shall the shares vesting extend beyond September 30, 2009.

 

F.             Other Consideration. 
You shall receive a one-time signing bonus of $100,000, payable to you
upon your purchase of a home in the greater Las Vegas area as your
residence.  In the event that you are
terminated with Cause or you terminate your employment with the Company within
one year from the Effective Date, you agree to reimburse the Company the
monthly unamortized portion of this bonus amount and agree that the

 

 

 

3

 

Company may withhold this unamortized amount
from any monies owed you at the time of your termination.  If the Company terminates your employment
without Cause at any time, you will not be obligated to reimburse the Company
for any portion of this signing bonus.

 

G.            Relocation Travel.  The Company will pay for two relocation trips
for you and your immediate family in accordance with the Company’s then-current
travel and expense policies to allow you to search for a home in the greater
Las Vegas area.   There are no other
relocation allowances provided by the company.

 

H.            Termination Release. 
The payment to you of any amounts of cash and equity compensation
following termination of your employment with the Company in accordance with
this Section 2 of this letter agreement shall be conditioned upon the execution
by you and the Company of a mutual release agreement providing for the release
of all claims against the Company and you, respectively, except for claims
arising under or in connection with such mutual release agreement.

 

3.             Employment Covenants.

 

A.            Covenant not to compete. You agree not to compete
with the Company for as long as you are employed by the Company. You agree not
to compete with the Company for one year after your employment with the Company
terminates if the Company terminates you for Cause, or if you quit for any
reason (the “Non-Compete Period”).

 

If you are terminated without Cause, or if
you quit as a result of Diminution of Duties following a Change of Control, you
agree not to compete with the Company during any period that you receive Salary
Continuation, as set forth above. 
Furthermore, if you are terminated without Cause, the Company may elect,
at its sole option, to extend your period of non-competition for an additional
period of time of up to six months if the Company provides you with Salary
Continuation during this additional period of non-competition.  In the event the Company so elects to
exercise its option to extend the Non-Compete Period, the Company shall give
you written notice at least ninety days before the expiration of the initial
Non-Compete Period.

 

To “compete” means to establish, engage, or
be connected with, directly or indirectly, any person or entity engaged in a
business in competition with the business of the Company (which, as defined
above, includes any of the Company’s subsidiaries or affiliates) in any area
where the Company does business, whether as an employee, owner, partner, agent,
employee, officer, consultant, advisor, stockholder (except as the beneficial
owner of not more than 5 percent of the outstanding shares of a corporation,
any of the capital stock of which is listed on any national or regional
securities exchange or quoted in the daily listing of over-the-counter market
securities and, in each case, in which you do not undertake any management or
operational or advisory role) or in any other capacity, for your own account or
for the benefit of any person or entity.

 

You acknowledge and agree that the scope and
duration of this covenant not to compete are reasonable and fair. However, if a
court of competent jurisdiction determines that this covenant is overly broad
or unenforceable in any respect, you and the Company agree that the covenant
shall be enforced to the greatest extent the court deems appropriate and that
the court may modify this covenant to that extent.

 

B.            Covenant not to solicit customers, employees, or
consultants. You agree that during your

 

 

 

4

 

employment with the Company and for one year
after your employment ends for any reason, you shall not, directly or
indirectly, (i) aid or endeavor to solicit or induce any other employee or
consultant of the Company to leave the Company to accept employment of any kind
with any other person or entity, or (ii) solicit the trade or patronage of any
of the Company’s customers (which includes customers of any of the Company’s
subsidiaries or affiliates) or of anyone who has traded or dealt with the
Company with respect to any technologies, services, products, trade secrets, or
other matters in which the Company is active.

 

C.            Confidential information. You agree that your work
for the Company will give you access to confidential matters of the Company not
publicly known such as proprietary matters of a technical nature (including but
not limited to know-how, technical data, gaming processes, gaming equipment,
techniques, developments) and proprietary matters of a business nature
(including but not limited to information about costs, profits, markets, sales,
lists of customers, and matters received by the Company in confidence from
other parties), collectively referred to as “Confidential Matters.” Some
Confidential Matters may be entitled to protection as “Trade Secrets,” as that
term is defined in N.R.S. 600A.030(5), the Restatement of Torts, and case law
interpreting the same.

 

You agree to keep secret all such
Confidential Matters and agree not to directly or indirectly, other than is
necessary in the business of the Company and the scope of your employment,
disclose or use any such Confidential Matters at any time except (i) with prior
written consent of the Company, (ii) as necessary in any judicial or
arbitration action to enforce the provisions of this letter agreement, (iii) in
connection with any judicial or administrative proceeding to the extent
required by law, and (iv) as otherwise required by law. You agree that all
written materials (including correspondence, memoranda, manuals, notes, and
notebooks) and all models, mechanisms, devices, drawings, and plans in your
possession from time to time (whether or not written or prepared by you)
embodying Confidential Matters shall be and remain the sole property of the
Company, and you will use all reasonable precautions to assure that all such
written materials and models, mechanisms, devices, drawings, and plans are
properly protected and kept from unauthorized persons. You further agree to
deliver all Confidential Matters, including copies, immediately to the Company
on termination of your employment for any reason, or at any time the Company
may request.

 

For a period of ten years after termination
of your employment with the Company for any reason, you shall not reveal directly
or indirectly to any person or entity or use for your personal benefit
(including without limitation, for the purpose of soliciting business, whether
or not competitive with any business of the Company) any Confidential Matters.
To the extent that any Confidential Matters are considered by the Company as
Trade Secrets, you agree that all limitations on use of these Trade Secrets
shall last forever. You further agree that immediately upon or after
termination, you will deliver to the Company all memoranda, notes, reports,
lists, models, mechanisms, devices, drawings or plans and other documents (and
all copies thereof) in your possession relating to the business of the Company
or its subsidiaries and affiliates.

 

D.            Intellectual Property. You shall promptly disclose
in writing to the Company all inventions, discoveries, concepts, ideas,
developments, improvements, and innovations, whether or not patentable, and the
expressions of all inventions, discoveries, concepts, ideas, developments,
improvements, and innovations, whether or not copyrightable (collectively
“Inventions”), conceived, developed, or first actually reduced to practice by
you, either alone or with others, during your employment with the Company or
during the first six months after your employment with the Company ends for any
reason, that (i) relate in any manner to the

 

 

 

5

 

existing or contemplated business or research
activities of the Company, (ii) are suggested by or result from your work for
the Company; or (iii) result from the use of time, materials, or facilities of
the Company. All Inventions you conceive, develop, or first actually reduce to
practice, either alone or with others, while employed by the Company that
relate in any manner to the existing or contemplated business or research
activities of the Company shall be the exclusive property of the Company. You
assign to the Company your entire right, title, and interest in and to all such
Inventions and to all unpatented Inventions that you now own, except those
specifically described in a statement that has been separately executed by you
and an officer of The Company and attached hereto, provided, however, that if
no such list is attached, you represent and warrant that there are no such
Inventions. You will, at the request and expense of the Company, execute
specific assignments to any such Inventions and execute, acknowledge, and
deliver patent applications and such other documents (including but not limited
to all provisionals, continuations, continuations-in-part, continued
prosecution applications, extensions, re-issues, re-examinations, divisionals
and foreign counterparts) and take such further action as may be considered
necessary by the Company at any time, whether during your employment with the
Company or after it terminates for any reason, to obtain and define letters
patent in any and all countries and to vest title to such Inventions and
related patents or patent applications in the Company or its assignees. Any
Invention that you disclose to a third person or describe in a patent
application filed by you or in your behalf during your employment with the
Company or within six months after your employment with the Company terminates
for any reason shall be presumed to have been conceived or made by you during
your employment with the Company unless proved to have been conceived and made
by you after the expiration or termination of this letter agreement.

 

E.             Non-disparagement. You and the Company each
agree that, during your employment with the Company and after your employment
with the Company terminates for any reason, neither shall, publicly or
privately, disparage or make any statements (written or oral) that could impugn
the integrity, acumen (business or otherwise), ethics, or business practices of
the other (including, in the case of the Company, its affiliates and
subsidiaries), except, in each case, to the extent (but solely to the extent)
necessary (i) in any judicial or arbitration action to enforce the provisions
of this letter agreement, or (ii) in connection with any judicial or
administrative proceeding to the extent required by applicable law, or (iii) as
otherwise required by law.

 

F.             Injunctive relief; jurisdiction. You
acknowledge that the Company will suffer irreparable injury, not readily
susceptible of valuation in monetary damages, if you breach any of your
obligations under this letter agreement. Accordingly, you agree that the
Company will be entitled, at its option, to injunctive relief against any breach
or prospective breach by you of your obligations under this section in any
federal or state court of competent jurisdiction sitting in Nevada, in addition
to monetary damages and any other remedies available at law or in equity. You
hereby submit to the jurisdiction of such courts for the purposes of any
actions or proceedings instituted by the Company to obtain such injunctive
relief, and agree that process may be served on you by registered mail,
addressed to your last address known to the Company, or in any other manner
authorized by law.

 

G.            Material inducements. The restrictive covenants
and other provisions in this letter agreement are material inducements to the
Company entering into and performing its obligations under this letter
agreement. Accordingly, in the event of any breach of the provisions of this
section by you, in addition to all other remedies at law or in equity possessed
by the Company, including but not limited to the right to enforce the covenants
you have agreed to in this letter agreement, the Company shall have the right
to terminate this letter

 

 

 

6

 

agreement and your employment with the
Company and not pay any amounts payable to you under this letter
agreement.  In the event any of the
provisions of this letter agreement are individually deemed unlawful, any
remaining provisions of this letter shall remain in full force and effect.

 

Except as modified by this letter, the terms
and conditions of your employment with the Company shall be subject to the
Company’s regular employment policies and practices and benefits as may be in
effect from time to time. This letter comprises the entire agreement between
you and the Company and supersedes all other oral and written agreements previously
entered into by you and the Company concerning the same subject matter.  If accepted, this offer will not create an
agreement of employment for any specific term or otherwise alter the at-will
nature of your employment relationship with the Company. If you accept this
offer, either you or the Company may terminate your employment at any time with
or without cause.

 

If you accept this offer of employment,
please sign below and return this letter to me. A copy is enclosed for your
records. Once signed and returned, this letter will comprise a binding
agreement between you and the Company. If you have any questions about its
meaning, you are urged to consult with your attorney.

 

Sincerely,

 

	
  ALLIANCE GAMING
  CORPORATION

  
	
   

  	 

	
   

  	 

	
   

  	
   

  	 

	
  By: Richard Haddrill

  	 

	
  Chief Executive Officer

  	 

	
   

  	 

			

 

 

 

ACCEPTANCE

 

I have read the foregoing letter, and I have
reviewed it with counsel or have had the opportunity to do so. I understand and
accept its terms.

 

 

	
   

  	
   

  
	
   

  
	
   

  
	
  Robert C. Caller

  

 

 

 

7

 

EXCLUDED
INVENTIONS

 

In conjunction with my pending offer of
employment with Bally Technologies, Inc. f/k/a Alliance Gaming Corporation
(“Company”), the following is a list of inventions along with all related
intellectual property surrounding such inventions, that are expressly excluded
from any Inventions that I may be required to assign to the Company at any time
prior to, during or after my employment with the Company:

 

1.             Golf
Betting Management Software that is used to calculate individual and team betting
amongst multiple players using a standard “Nassau” format including presses,
two and four man team competitions, calculation of “Skins” both gross and net
of handicap producing summarized results automatically by player for all types
of bets entered into.

 

 

 

	
  Agreed and acknowledged
  this 7th day of March 2006.

  
	
   

  
	
  Bally Technologies, Inc.
  f/k/a

  
	
  Alliance Gaming
  Corporation

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Print name, title:

  	
   

  	
   

  
	
   

  
	
   

  
	
   

  
	
  Robert C. Caller

  
	
   

  
	
  By:

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