Exhibit 10.31
EXECUTIVE EMPLOYMENT
AGREEMENT
EXECUTIVE EMPLOYMENT
AGREEMENT dated as of
March 9, 2005, by and between BALLY GAMING, INC., a Nevada
corporation, 6601 South Bermuda Road, Las Vegas, Nevada 89119
(“Bally” or the “Company”), and RAMESH
SRINIVASAN, 1509 Monarch Drive, Marietta, GA 30062 (the
“Executive”).
The parties agree as
follows:
1.
Employment.
The Company employs Executive, and
Executive accepts employment by the Company, on the terms and
conditions set forth in this Agreement, beginning on March 9,
2005, or on acceptance by Executive, whichever occurs later (the
“Effective Date”). This Agreement is not intended to
create an agreement of employment for any specific term or
otherwise alter the at-will nature of Executive’s employment
relationship with Alliance Gaming.
2.
Position and Duties.
Executive shall serve as Executive
Vice President for Bally’s Systems Division and shall report
to the President and Chief Executive Officer of Bally and of
Alliance Gaming Corporation, Bally’s parent company.
Executive shall perform the duties contemplated by such title and
such other duties, consistent with his experience and abilities, as
the President and Chief Executive Officer of Bally may assign to
Executive. Executive shall devote his full time and efforts to the
business and affairs of the Company, use his best efforts to
advance the interests of the Company, and at all times conduct
himself in a manner that reflects credit on the Company. It is
contemplated that Executive shall render services to the Company
from the Company’s principal place of business; however, the
parties acknowledge and agree that Executive may be required to
travel extensively in fulfilling his duties hereunder.
3.
Compensation.
(a)
Salary. The Company shall pay Executive a base salary of
$250,000 a year in installments on the regularly recurring paydays
in accordance with the Company’s practice. Increases in the
base salary shall be considered by the Company at least annually,
beginning with the completion of the first year of employment and
will be based on criteria applicable to other senior executives of
the Company, provided, however, that the award of any such increase
shall be at the sole discretion of the Company. Notwithstanding the
foregoing, it is agreed that Executive’s base salary shall
increase to $275,000 on January 1, 2006.
(b)
Management Incentive
Program. Executive shall
be entitled to participate in the Company’s Management
Incentive Program established for the Company at the level of
business unit head. This incentive plan entitles Executive to
receive up to 100 percent of Executive’s base salary for
performance at plan. For fiscal 2005, Executive will receive a pro
rata portion of the existing incentive plan based on
Executive’s tenure during the fiscal year, provided, however,
that the bonus shall not be less than $50,000. It is understood
that the Company may modify at its sole
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discretion its incentive plan for
the years after fiscal 2005 upon providing written notice to
Executive.
(c)
Options. Executive shall be entitled to receive options
to acquire an aggregate of 300,000 shares of the publicly-traded
common stock of the Company’s publicly-traded parent company,
Alliance Gaming Corporation. The exercise price of the options
shall be equal to the closing market price on the date Executive
begins actual work for the Company (the “ Start Date
”). The options shall “vest” (that is,
become exercisable by Executive) in four installments as follows:
125,000 shares on the first anniversary of the Start Date; 70,000
shares each on the second and third anniversaries of the Start
Date; and 35,000 shares vesting on September 2, 2008. The
options shall be subject to the applicable long-term incentive plan
and Alliance Gaming’s standard stock option agreement.
Executive shall be eligible to receive additional grants in the
future, at the discretion of and as approved by Alliance
Gaming’s board of directors, and commensurate with peer
positions.
(d)
Restricted stock.
Executive shall receive an award of
20,000 shares of restricted stock under Alliance Gaming
Corporation’s Amended and Restated 2001 Long Term Incentive
Plan (the “Plan”) on the Start Date (the
“Restricted Stock”). The Restricted Stock shall vest
according to the following schedule: 50 percent on the Start Date,
and the remaining 50 percent on September 2, 2008. Executive
shall be eligible to receive additional grants in the future, at
the discretion of and as approved by Alliance Gaming’s board
of directors, and commensurate with peer positions.
(c)
Reimbursement of
expenses. In accordance
with established policies and procedures of the Company as in
effect from time to time, the Company shall pay or reimburse
Executive for all reasonable and actual out-of-pocket expenses
including but not limited to travel, hotel, and similar expenses,
incurred by Executive from time to time in performing his
obligations under this Agreement.
(f)
Relocation Expenses.
The Company will pay the reasonable
costs incurred by Executive and his family relocating from Atlanta,
Georgia, to Las Vegas, Nevada, pursuant to a moving and relocation
budget submitted by Executive and approved by the Company. Payments
made by the Company for reimbursement of relocation expenses may be
subject to federal, state or local taxation, for which Executive
shall be responsible, provided, however, that the Company shall
“gross up” the reimbursement to cover the taxes that
Executive must pay directly. The Company will pay for air and
ground transportation, food and lodging costs for Executive’s
family incurred during two home-finding trips, not to exceed four
days each and completed within six months after the Start Date, for
Executive and Executive’s immediate family to the Las Vegas,
Nevada, area. The Company will pay the entire costs for an
intermediate size rental car for the Executive in Las Vegas for a
maximum of one month after the Start Date. The Company will pay the
rent on a furnished, two-bedroom apartment in Las Vegas for six
months or until Executive purchases a residence, whichever occurs
first. The Company will pay the hotel costs associated with the
period of time Executive needs to temporarily reside prior to
finding the appropriate apartment in Las Vegas. If Executive
decides to purchase a
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single-family residential home in
Clark County, Nevada, the Company will pay the actual closing costs
(not to exceed customary purchaser closing costs) at the close of
escrow for the purchase of the residence; however, Executive will
be responsible for the down payment and all other payments in
connection with the purchase. If Executive sells Executive's house
in Atlanta by December 31, 2005, the Company shall pay the
actual closing costs (not to exceed customary seller closing
costs), including commissions, at the close of escrow.
(g)
Commuting expenses . During the first six months of
Executive's employment, the Company shall pay or reimburse
Executive for the reasonable expenses of not more than two commutes
a month between Atlanta and Las Vegas.
(h)
Vacation . Executive shall be entitled to annual paid
vacation time in accordance with the Company's policy with respect
to the senior executives of the Company prorated for any partial
employment year.
(i)
Other benefits; COBRA payments . Executive shall be entitled
to other employment benefits, including but not limited to life
insurance, medical and hospitalization, disability, and retirement
benefits, consistent with the benefits provided to other senior
executives of the Company. The Company will pay the cost of
maintaining Executive's health insurance with his former employer
("COBRA" payments) during the waiting period before Executive is
covered under the Company's plan.
(j)
No Reduction . There shall be no material reduction or
diminution of the benefits provided in this section 3 during
the term of this Agreement unless (i) Executive consents in
writing, (ii) an equitable arrangement (embodied in a
substitute or alternative benefit or plan) is made with respect to
such benefit or plan, or (iii) the reduction is part of a
program of across-the-board benefit reductions similarly affecting
the senior executive officers of the Company.
4.
Termination or Material Change of Employment
(a)
At-will employment . Executive's employment with the Company
is "at-will." Either Executive or the Company may terminate
Executive's employment at any time with or without
cause.
(b)
Termination by Company for cause.
(1)
The Company may terminate this Agreement for cause at any time
immediately on notice to Executive, in which case the Company's
obligations and Executive's rights under this Agreement shall
terminate. For purposes of this provision, the term "cause"
includes, but is not limited to:
(i)
Executive's clear and substantiated insubordination, fraud,
disloyalty, dishonesty, willful misconduct, or gross negligence in
the performance of Executive's duties under this Agreement,
including
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willful failure to perform such
duties as may properly be assigned to Executive under this
Agreement.
(ii)
Executive’s material breach of
any material provision of this Agreement.
(iii)
Executive’s failure to qualify
(or having so qualified being thereafter disqualified) under any
suitability or licensing requirement of any jurisdiction or
regulatory authority to which Executive may be subject by reason of
his position with the Company and its affiliates or subsidiaries.
The Company will use its best efforts to work with Executive in
fulfilling the requirements and will promptly provide written
information on the suitability and licensing requirements to
Executive so that Executive may adequately prepare.
(iv)
Executive’s commission of a
crime against the Company or violation of any law, order, rule, or
regulation pertaining to the Company’s business.
(v)
Executive’s inability to
perform the job functions and responsibilities assigned in
accordance with reasonable standards established from time to time
by the Company in its sole and reasonable discretion.
(vi)
The Company’s obtaining from
any reliable source accurate information with respect to Executive
that would, in the reasonable opinion of the Company, jeopardize
the gaming licenses, permits, or status of the Company or any of
its subsidiaries or affiliates with any gaming commission, board,
or similar regulatory or law enforcement authority.
(2)
Any termination by the Company for
cause shall not be in limitation of any other right or remedy the
Company may have under this Agreement or otherwise.
(c)
Termination by Company without
cause. The Company
may terminate this Agreement at any time without cause (as defined
in paragraph 4.(b)(1)), whereupon the Company’s obligations
and Executive’s rights under this Agreement shall terminate,
except that the Company shall continue to pay Executive an amount
equal to Executive’s base salary for twelve months after the
date of termination, offset by any compensation received by
Executive (regardless of when received) and attributable to other
employment during the six-month period that begins six months after
termination.
(d)
Change of Control or Diminution
of Duties :
(1)
Termination by
Executive. If Executive
resigns for any reason, the Company’s obligations and
Executive’s rights under this Agreement shall
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terminate, provided, however, that a
resignation following a change of control or a material diminution
of Executive’s duties shall be treated as a termination
without cause under paragraph 4.(c).
(2)
“Change of Control”
defined. As used in this
section 4.(d), a change of control shall be deemed to have
occurred upon the earliest to occur of the following events:
(i) the date the stockholders of the Company (or the Board, if
stockholder action is not required) approve a plan or other
arrangement pursuant to which the Company will be dissolved or
liquidated; (ii) the consummation of the sale, lease, or other
disposition of all or substantially all of the assets of the
Company; (iii) the tender of more than 50 percent of the
Company’s capital stock to a non-affiliate or a merger,
consolidation, or recapitalization of the Company with a
non-affiliate such that the stockholders of the Company immediately
prior to the consummation of such transaction possess less than 50
percent of the voting securities of the surviving entity
immediately after the transaction, or (iv) the individuals
who, as of the date of this Agreement, were members of the Board
cease for any reason to constitute at least a majority of the
Board.
(3)
“Diminution of
duties” defined. As
used in this section 4.(d), Ex
