SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 12)
ALLIANCE GAMING CORPORATION
(Name of Issuer)
Common Stock, Par Value $.10 per Share
(Title of Class of Securities)
36465410
(CUSIP Number)
David W. Heleniak, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 848-4000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications)
December 19, 1997
(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
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CUSIP No. 36465410
(1) Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Alfred H. Wilms
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No Social Security Number
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(2) Check the Appropriate Box if a Member of Group (See Instructions)
|_| (a)
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|_| (b)
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(3) SEC Use Only
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(4) Sources of Funds (See Instructions) PF, BK, OO
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
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(6) Citizenship or Place of Organization Belgium
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Number of (7) Sole Voting Power 7,034,082
Shares ----------------------------
Beneficially ----------------------------------------------
Owned by (8) Shared Voting Power 0
Each --------------------------
Reporting ----------------------------------------------
Person (9) Sole Dispositive Power 7,034,082
With ----------------------
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(10) Shared Dispositive Power 0
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person 7,034,082
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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(13) Percent of Class Represented by Amount in Row (11)
20.8%
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(14) Type of Reporting Person (See Instructions) IN
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Item 1. Securities and Issuer.
Alfred H. Wilms (the "Reporting Person") hereby amends,
supplements and restates his Schedule 13D as previously amended, originally
filed January 9, 1984, relating to the shares of common stock, par value $.10
per share ("Issuer Common Stock"), of Alliance Gaming Corporation, a Nevada
corporation (the "Issuer"), with principal executive offices at 6601 South
Bermuda Rd., Las Vegas, Nevada 89119. This is the first amendment to the
Reporting Person's Schedule 13D to be filed electronically.
Item 2. Identity and Background.
This statement is being filed by the Reporting Person, a
citizen of Belgium.
The Reporting Person has a business address at 2, BUS 6, St.
Jansvliet, 2000 Antwerp, Belgium. The Reporting Person engages in investment in,
and management of, real estate, leisure activity businesses and the gaming
business.
During the last five years, the Reporting Person has not been
(a) convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (b) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
The Reporting Person's interest in shares of Issuer Common
Stock was initially acquired through Omega Enterprises, Inc. ("Omega") which
filed the original Statement on Schedule 13D on January 9, 1984. Omega acquired
4,000,000 Shares of Issuer Common Stock on November 17, 1983 for $1,200,000 in
cash. This purchase was made pursuant to an Agreement dated September 22, 1983
between the Issuer and Omega. Such Agreement was filed as an exhibit to the
original Statement on Schedule 13D. The Reporting Person was Chairman of the
Board and Vice-President of Omega at the time of such purchase.
On March 5, 1984, the Reporting Person purchased 76,000 shares
of Issuer Common Stock for a total consideration of $158,750. All such funds
represented personal funds of the Reporting Person.
On April 2, 1984, the Reporting Person's holdings were reduced
to 56,000 shares of Issuer Common Stock in a 1 for 5 stock split.
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Between April 3, 1984 and November 7, 1989, the Reporting
Person acquired an aggregate of 110,470 shares of Issuer Common Stock through
open market purchases and disposed of an aggregate of 8,102 shares of Issuer
Common Stock on the open market as follows:
Date No. of Shares Purchased (Sold) Price Per Share
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04/03/84 5,000 2.0000
04/04/84 5,000 2.1875
04/05/84 10,000 2.1875
10/10/84 559 1.6400
10/10/84 1,018 1.9800
10/10/84 750 3.0000
10/10/84 1,107 1.7500
08/14/85 1,341 1.3750
08/14/85 850 2.5000
08/14/85 808 2.6875
09/16/86 622 2.4100
09/16/86 593 2.5300
09/16/86 750 2.0000
09/16/86 1,572 2.6200
12/29/86 32,500 6.0000
03/18/87 (3,116) 1.0000
10/22/87 2,000 4.1250
10/22/87 4,000 4.2500
10/22/87 5,000 3.6875
10/22/87 5,000 3.8175
10/23/87 2,300 4.2500
10/26/87 3,500 4.1250
10/26/87 5,000 4.2500
10/27/87 15,000 4.0625
12/08/87 1,200 3.8750
06/24/88 (2,493) 1.0000
11/21/88 (2,493) 1.0000
11/07/89 5,000 10.0000
On December 31, 1984, the Reporting Person acquired 2,624,067
shares of Issuer Common Stock as a result of the merger of Omega Inc. into the
Issuer. No funds were expended, because the consideration involved the corporate
assets of Omega pursuant to the terms of the merger.
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On June 1, 1988, the Reporting Person acquired 499,634 shares
of Issuer Common Stock. This purchase was made pursuant to a Stock Purchase
Agreement dated May 2, 1988 between the Reporting Person and the Issuer at a
price of $3.4125 per share, aggregating $1,705,000, which price constituted 70%
of the average closing prices of the Issuer Common Stock reported by NASDAQ on
its National Market System during the 30 trading days immediately prior to the
execution of such agreement. Such agreement was filed as an exhibit to Amendment
No. 6 to the Reporting Person's Schedule 13D. The consideration for this
purchase was the surrender and cancellation by the Reporting Person of a
promissory note payable to him by the Issuer in the principal amount of
$1,705,000. No cash funds were involved.
On June 24, 1988, the Reporting Person acquired 450,000 shares
of Issuer Common Stock for an aggregate purchase price of $2,497,500 in cash
from his personal funds. This purchase was made pursuant to an Agreement dated
June 20, 1988 among Elizabeth M. Fulton, the Issuer, and the Reporting Person.
Such agreement was filed as an exhibit to Amendment No. 7 to the Reporting
Person's Schedule 13D.
On May 15, 1990, the Reporting Person acquired 1,202,013
shares of Issuer Common Stock at a price of $8.3194 per share, aggregating
$10,000,000, which price constituted 90% of the average closing prices of Issuer
Common Stock for the 20 days prior to the execution of such agreement. This
purchase was made pursuant to a Stock Purchase Agreement dated April 30, 1990
between the Issuer and the Reporting Person. Such agreement was filed as an
exhibit to Amendment No. 8 to the Reporting Person's Schedule 13D. The funds
used by the Reporting Person to make such purchase were obtained pursuant to a
bank loan from Banque Bruxelles Lambert S.A. pursuant to a Loan Agreement
between such bank and the Reporting Person. Such loan agreement was filed as an
exhibit to Amendment No. 9 to the Reporting Person's Schedule 13D.
On December 17, 1991, the Reporting Person received 100,000
shares of Issuer Common Stock from the Issuer as compensation for services
rendered to the Issuer.
In March 1992 the Reporting Person received a warrant to
purchase up to 200,000 shares of Issuer Common Stock at $2.50 per share, subject
to adjustment, as a commitment fee for a loan to Video Services, Inc., a
majority controlled subsidiary of the Issuer ("VSI") of up to $6,500,000. On
October 31, 1993, upon the funding of the balance of such loan to VSI, the
Reporting Person received an additional warrant to purchase up to an additional
1,800,000 shares of Issuer Common Stock at $2.50 per share, subject to
adjustment. This loan has been repaid in full. The Amended Warrant Agreement
between the Issuer and the Reporting Person was filed as an exhibit to Amendment
No. 11 to the Reporting Person's Schedule 13D.
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Item 4. Purpose of Transaction.
The Reporting Person continues to hold the Issuer Common Stock
for the purpose of making an investment in the Issuer and not with the present
intention of acquiring control of the Issuer's business. The Reporting Person
may transfer up to an aggregate of 50% of his holdings of Issuer Common Stock to
members of his family.
The Reporting Person from time to time intends to review his
investment in the Issuer on the basis of various factors, including the Issuer's
business, financial condition, results of operations and prospects, general
economic and industry conditions, the securities markets in general and those
for the Issuer's securities in particular, as well as other developments and
other investment opportunities. Based upon such review, the Reporting Person
will take such actions in the future as the Reporting Person may deem
appropriate in light of the circumstances existing from time to time. If the
Reporting Person believes that further investment in the Issuer is attractive,
whether because of the market price of the Issuer's securities or otherwise, he
may acquire shares of Issuer Common Stock or other securities of the Issuer
either in the open market or in privately negotiated transactions. Similarly,
depending on market and other factors, the Reporting Person may determine to
dispose of some or all of the Issuer Common Stock currently owned by the
Reporting Person or otherwise acquired by the Reporting Person either in the
open market or in privately negotiated transactions.
As described in Item 6 below, in the period September through
early December 1997, the Reporting Person was involved in discussions with
representatives of Kirkland Investment Corporation ("KIC") concerning possible
amendments to or clarification of the Stockholders Agreement (described in Item
6) concerning the Reporting Person's representation on the Issuer's board of
directors. No agreement with respect to any such amendment or clarification has
been reached. The Reporting Person and KIC are not currently involved in such
discussions and there can be no assurance that any agreement concerning the
Representation Ratio will be reached. The Reporting Person has informed KIC that
the Reporting Person considers KIC to be in breach of the Stockholders Agreement
and that the Reporting Person may commence legal or other action with respect
thereto.
Except as set forth above, the Reporting Person has not
formulated any plans or proposals which relate to or would result in: (a) the
acquisition by any person of additional securities of the Issuer or the
disposition of securities of the Issuer, (b) an extraordinary corporate
transaction involving the Issuer or any of its subsidiaries, (c) a sale or
transfer of a material amount of the assets of the Issuer or any of its
subsidiaries, (d) any change in the present board of directors or management of
the Issuer, (e) any material change in the Issuer's capitalization or dividend
policy, (f) any other material change in the Issuer's business or corporate
structure, (g) any change in the Issuer's charter or bylaws or other instrument
corresponding thereto or other action which may impede the acquisition of
control of the Issuer by any person, (h) causing a class of the Issuer's
securities to be
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deregistered or delisted, (i) a class of equity securities of the Issuer
becoming eligible for termination of registration or (j) any action similar to
any of those enumerated above.
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, the Reporting Person beneficially
owns 7,034,032 shares of Issuer Common Stock (20.8% of outstanding) which is
composed of 5,034,032 outstanding shares presently owned by the Reporting Person
and 2,000,000 shares which could be acquired by the Reporting Person within 60
days upon the exercise of certain warrants described below. For purposes of the
percentage calculation set forth herein, such 2,000,000 shares are considered to
be issued and outstanding.
(b) Subject to the terms of his irrevocable proxy and the
Stockholders Agreement, as amended, described below and filed as exhibits to
Amendment No. 11 to the Reporting Person's Schedule 13D, the Reporting Person
has sole power to vote or dispose of the 5,034,032 shares and will have sole
power to vote and dispose of the 2,000,000 shares which are issuable to the
Reporting Person upon his exercise of the warrants.
(c) On September 14, 1993, the Reporting Person, the Issuer,
VSI and the Reporting Person's affiliate, Continental Trust Company ("CTC"),
executed and delivered the VSI Agreements (described below). As described in
Amendment No. 10 to the Reporting Person's Schedule 13D, in March 1992 the
Reporting Person received a warrant to purchase up to 200,000 shares of Issuer
Common Stock at $2.50 per share, subject to adjustment, as a commitment fee for
a loan to VSI of up to $6,500,000. On October 31, 1993 upon the funding of the
balance of such loan to VSI, the Reporting Person received an additional warrant
to purchase up to an additional 1,800,000 shares of Issuer Common Stock at $2.50
per share, subject to adjustment. This loan has been repaid in full.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
On June 25, 1993, the Issuer announced that it had entered
into a Letter Agreement, dated June 25, 1993, among the Issuer, Kirkland-Ft.
Worth Investment Partners, L.P. ("KFW"), Kirkland Investment Corporation, the
general partner in KFW ("KIC"), acting in its individual capacity, and, as to
certain provisions, the Reporting Person (the "Kirkland Letter Agreement"). On
June 25, 1993, the Issuer also announced that it had entered into a second
Letter Agreement, also dated June 25, 1993, among the Issuer, Gaming Systems
Advisors, L.P., an affiliate of KFW ("GSA"), and, as to a particular provision,
the Reporting Person (the "GSA Advisory Agreement"). On September 21, 1993, the
Issuer consummated the issuance of its Convertible Debentures and certain of the
transactions contemplated by the Kirkland Letter Agreement and the GSA Advisory
Agreement. The Kirkland Letter Agreement and the GSA Advisory Agreement,
including the Stockholders Agreement and the other exhibits, were filed as
exhibits to Amendment No. 10 to the
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Reporting Person's Schedule 13D. The descriptions of the material documents
contained in this Statement are qualified in their entirety by reference to the
full text of such documents as filed as exhibits to Amendment No. 10 to the
Reporting Person's Schedule 13D, or in the case of the Four Party Agreement and
the Stockholders Agreement (each as defined below) to Amendment No. 11 to the
Reporting Person's Schedule 13D.
Stockholders Agreement. Pursuant to a Stockholders Agreement
dated as of September 21, 1993, as amended on October 20, 1994, by and among the
Issuer, KIC, GSA, KFW and the Reporting Person (as amended, the "Stockholders
Agreement"), KIC agreed to use its commercially reasonable efforts so as
initially to result in the Issuer's Board of Directors, from and after September
21, 1997, being comprised of such number of directors designated by KIC and such
number of directors designated by the Reporting Person as will be in the ratio
of four to three (the "Representation Ratio"), but neither KIC nor the Reporting
Person is required to vote for a particular designee at any regular or special
meeting of the Issuer's stockholders after September 21, 1997. Notwithstanding
the foregoing, prior to September 21, 2008, KIC is required to vote all of its
shares of Issuer Common Stock to cause the Reporting Person to be elected a
director of the Issuer for so long as the Reporting Person owns share of Issuer
Common Stock. In addition, the Reporting Person is entitled to attend all
meetings of the committees of the Issuer and its subsidiaries' Boards of
Directors. During the period September through early December 1997, the
Reporting Person was involved in discussions with representatives of KIC
concerning possible amendments to or clarification of the provisions in the
Stockholders Agreement concerning the Representation Ratio. No agreement with
respect to any such amendment or clarification has been reached. The Reporting
Person and KIC are not currently involved in such discussions and there can be
no assurance that any agreement concerning the Representation Ratio will be
reached. On December 19, 1997, at the annual meeting of stockholders of the
Issuer (the "1998 Annual Meeting"), three directors were elected, none of whom
were nominees of the Reporting Person. On December 19, 1997, the Reporting
Person ceased to be a director of the Issuer. As disclosed in the Issuer's Proxy
Statement with respect to the 1998 Annual Meeting, the Reporting Person has
informed KIC that the Reporting Person considers KIC to be in breach of the
Representation Ratio provisions of the Stockholders Agreement and that the
Reporting Person may commence legal or other action with respect thereto.
The Stockholders Agreement also contained provisions governing
the composition of the Issuer's Board of Directors from the date that all
necessary governmental approvals have been obtained by KIC and certain related
parties (the "Licensing Date") until the earlier of September 21, 1996 or such
time as the parties (other than the Issuer) and their affiliates own in the
aggregate less than 5% of the Issuer Common Stock on a fully diluted basis (as
defined). Prior to the Licensing Date, the Stockholders Agreement contained
provisions limiting the Issuer's right to effect certain fundamental
transactions including, among others, (i) entering into any merger,
consolidation or recapitalization, (ii) a sale, lease, exchange or transfer of
all or substantially all of the Issuer's assets, (iii) a purchase,
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lease or exchange of "material assets" (as defined), (iv) subject to certain
exceptions, any change in the Issuer's authorized capital or the creation of any
additional class thereof, (v) subject to certain exceptions, any amendment to
the Issuer's Articles of Incorporation or Bylaws, (vi) a voluntary dissolution
or liquidation of the Issuer, (vii) subject to certain exceptions, any
redemptions of equity securities, (viii) the payment of dividends, (ix) the
commencement of certain significant business operations, (x) certain related
party transactions and (xi) any increase in the Issuer's indebtedness. The
Stockholders Agreement also contains provisions limiting or restricting the
parties' ability to transfer certain of the Issuer's securities. In addition,
the Stockholders Agreement contains mutual rights of first offer and certain
tag-along rights in favor of the Reporting Person. The Stockholders Agreement
contains a provision whereby KIC, GSA, KFW and certain related persons have
provided the Issuer an exclusive right of first refusal, subject to certain
exceptions, for all gaming investment opportunities presented to or developed by
such persons. Such right terminates at the later of such time as KIC and certain
of its affiliates hold less than 5% of the Issuer Common Stock on a fully
diluted basis (as defined), or KIC does not have a designee on the Issuer's
Board of Directors. The Stockholders Agreement also contains certain
registration rights running in favor of KIC, KFW, GSA, the Reporting Person and
their respective transferees, including up to four demand registration rights
each (and additional demand rights for the Reporting Person under certain
circumstances) at the expense of the Issuer, and provisions granting the
Reporting Person the right to participate in certain offerings of securities by
the Issuer and by KIC and its transferees.
Director Agreement. The Reporting Person and the Issuer are
parties to an agreement dated as of October 20, 1994 pursuant to which the
Reporting Person performs consulting services for the Issuer. The Reporting
Person receives $150,000 per annum from the Issuer in compensation for such
services. This Agreement is co-terminous with the employment agreement between
the Issuer and Mr. Kirschbaum and can only be terminated by the Issuer in the
event of a material breach by the Reporting Person of such Agreement.
Four Party Agreement and Irrevocable Proxy. In connection with
the sale of its Convertible Debentures and as provided in the Kirkland Letter
Agreement and GSA Advisory Agreement, an agreement dated September 14, 1993 was
signed among the Issuer, the Reporting Person, Kirkland, KIC and GSA (the "Four
Party Agreement"), which provided that (i) Kirkland would make or cause to be
made an investment of $5,000,000 in the Issuer in exchange for shares of Issuer
Common Stock and would deliver a Control Notice, (ii) the Issuer would issue the
warrants set forth in the Kirkland Letter Agreement and related exhibits to
Kirkland and GSA. In addition, the Four Party Agreement provided that in
connection with the sale of the Convertible Debentures, (i) Kirkland, KIC, GSA
and the Reporting Person agreed to waive certain piggyback rights with respect
to the sale of such securities, and (ii) the Reporting Person agreed that until
the first Annual Meeting of Stockholders of the Issuer to be held after the date
of such agreement, he would not sell any of his shares of Issuer Common Stock or
Warrants and he would vote all shares of Issuer Common Stock owned or controlled
by him in favor of the Proposals at such Annual
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Meeting, and the Reporting Person delivered his irrevocable proxy to such effect
to the Issuer's Board of Directors. Additionally, in the event the Issuer has an
insufficient number of shares of Issuer Common Stock required to effect
conversion of Convertible Debentures, the Reporting Person agreed to lend the
Issuer such number of his shares as may be required to effect such conversions
and the Reporting Person, KIC, Kirkland and GSA agreed to forbear the exercise
of their respective derivative Issuer securities - all until such time as
stockholders authorize additional shares of Issuer Common Stock. A copy of the
Four Party Agreement and the Reporting Person's irrevocable proxy were filed as
exhibits to Amendment No. 11 to the Reporting Person's Schedule 13D.
Video Services, Inc. In March, 1992 the Issuer and the
Reporting Person entered into Loan and Warrant Agreements whereby the Reporting
Person committed to provide a $6.5 million loan to VSI. As consideration for
such commitment, the Issuer issued to the Reporting Person warrants to purchase
200,000 shares of Issuer Common Stock at $2.50 per share, and agreed to issue an
additional warrant to purchase 1.8 million shares of Issuer Common Stock at
$2.50 per share upon complete funding of the loan. The additional warrant to
purchase 1.8 million shares of Issuer Common Stock was issued to the Reporting
Person on October 31, 1993. This loan has been repaid in full.
Item 7. Material to Be Filed as Exhibits.
7.1 Agreement dated September 22, 1983 between the Issuer and Omega
Enterprises, Inc. (exhibit to Statement on Schedule 13D filed January 9, 1984).
7.2 Stock Purchase Agreement dated May 2, 1988 between the Issuer and
Alfred H. Wilms (exhibit to Amendment No. 6 to Schedule 13D, filed June 27,
1988).
7.3 Agreement dated June 20, 1988 among Elizabeth M. Fulton, the Issuer
and Alfred H. Wilms (exhibit to Amendment No. 7 to Schedule 13D, filed July 7,
1988).
7.4 Stock Purchase Agreement dated April 30, 1990 between the Issuer
and Alfred H. Wilms (exhibit to Amendment No. 8 to Schedule 13D, filed June 8,
1990).
7.5 Loan Agreement from Banque Bruxelles Lambert S.A. to Alfred H.
Wilms (exhibit to Amendment No. 9 to Schedule 13D, filed November 19, 1990).
7.6 Letter Agreement, dated June 25, 1993, among United Gaming, Inc.,
Kirkland-Ft. Worth Investment Partners, L.P., Kirkland Investment Corporation
and, as to certain provisions, Mr. Alfred H. Wilms, including Exhibit A (form of
Securities Purchase Agreement), Exhibit B (form of Stockholders Agreement),
Exhibit C (form of Certificate of Designations of Non-Voting Junior Convertible
Special Stock) and Exhibit D (form of Warrant Agreement) and Exhibit E (form of
press release) thereto (exhibit to Amendment No. 10 to Schedule 13D filed June
30, 1993).
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7.7 Advisory Agreement, dated June 25, 1993, among United Gaming, Inc.,
Gaming Systems Advisors, L.P. and, as to certain provisions, Mr. Alfred H.
Wilms, including Exhibit A (form of Warrant Agreement) and Exhibit B (form of
press release) thereto (exhibit to Amendment No. 10 to Schedule 13D filed June
30, 1993).
7.8 Agreement delivered September 21, 1993 among Kirkland, KIC, GSA and
the Reporting Person (exhibit to Amendment No. 11 to Schedule 13D, filed
September 30, 1993).
7.9 Stockholders Agreement dated September 21, 1993 (exhibit to
Amendment No. 11 to Schedule 13D, filed September 30, 1993).
7.10 Irrevocable Proxy (exhibit to Amendment No. 11 to Schedule 13D,
filed September 30, 1993).
7.11 Amended Warrant Agreement between the Reporting Person and the
Issuer (exhibit to Amendment No. 11 to Schedule 13D, filed September 30, 1993).
7.12 Amendment Agreement dated as of October 20, 1994 to the
Stockholders Agreement dated September 21, 1993 (incorporated by reference to
exhibit 10.13 to the Issuer's Annual Report on Form 10-K for the year ended June
30, 1997).
7.13 Director Agreement dated as of October 20, 1994 between the
Reporting Person and the Issuer.
7.14 Letter Agreement dated March 3, 1996 between the Reporting Person
and Kirkland Investment Corporation.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Statement is true, complete and
correct.
January 20, 1998
By /s/ Alfred H. Wilms
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Name: Alfred H. Wilms
DIRECTOR AGREEMENT
Director Agreement dated as of October 20, 1994 between Alliance Gaming
Corporation, a Nevada corporation (the "Company") and Alfred H. Wilms (the
"Director").
R E C I T A L :
The Director was formerly the Chairman of the Board and Chief Executive
Officer of the Company and, to date, has provided valuable services to the
Company in those capacities. The Company, valuing the Director's expertise,
experience and excellent judgment, desires to retain the services of the
Director, and the parties desire and intend that the Director continue to
provide such services, in accordance with the terms and conditions of this
Agreement.
A G R E E M E N T :
The parties agree as follows:
1. Duties of Director. The Director shall consult with the Company from
time to time as shall be reasonably agreed to by the Company and the Director.
It is contemplated that the Company shall provide to the Director from time to
time, until the Company is otherwise notified by the Director, all information
(and provide the Director the opportunity to attend all meetings and participate
in all other Company functions, including executive planning sessions, strategic
sessions, development team meetings and similar events). It is contemplated that
the Director will review the activities of the Company and provide such
consulting services to the Company that the Company and the Director shall
reasonably agree to from time to time, including merger and acquisition advice,
new jurisdiction gaming advice and similar matters including technology, game
development and other research and development activities. It is contemplated
that the Director shall perform services in such locations, including Nevada,
New York and Europe, as the Director (upon consultation with the Company) shall
reasonably determine. The parties acknowledge that the Director has other
business endeavors and that the Director shall be required to devote an
appropriate and sufficient amount of time (as reasonably determined by the
Director and the Company), but which may not be the full working time of the
Director, to the duties of the Director hereunder. The Director shall, at all
times during the term hereof, duly and faithfully perform the duties assigned to
him hereunder which the Director agrees to undertake.
2. Term. (a) The Company hereby agrees to engage the Director and the
Director hereby agrees, to work for the Company as provided herein, for the
period commencing on the date hereof and continuing through July 14, 1997.1 The
Company shall only have the right to terminate this Agreement otherwise in the
event of a material breach by the Director of this Agreement.
- --------
1 Termination provisions are to be co-terminous with Joel Kirschbaum's
employment contract including any extensions thereof.
Page 1 of 4
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(b) The Director shall have the right to terminate this Agreement at
any time upon 30 days' written notice to the Company.
(c) From and after the Terminate Date, neither party shall have any
liability of obligation to the other, except (i) as provided in Section 5 below,
or (ii) in respect of any liabilities, damages or obligations resulting from any
wrongful termination or breach by either party hereunder.
3. Compensation. (a) During the term of this Agreement, the Director
shall be compensated at an annual rate of $150,000 initially, and thereafter
subject to annual cost of living adjustments from and after the first
anniversary of the date hereof, based on the Consumer Price Index, as published
by the U.S. Department of Labor, for Las Vegas, Nevada and the surrounding
metropolitan area, as reasonably determined by the Company and the Director. The
compensation payable to Director hereunder shall be payable in monthly
installments, within 15 days of the first day of each month of the Company, or
as may otherwise be agreed upon between the Company and the Director and, solely
to the extent required by applicable laws and regulations, shall be net of any
required withholding taxes and similar payroll deductions. The Company shall
provide life, health, disability or other insurance or similar benefits or
coverages hereunder which shall be substantially similar to such benefits then
being provided to senior executives of the Company.
(b) The Company shall also reimburse to the Director from time to time
for his reasonable travel and other out-of-pocket expenses which are necessary
or appropriate and are incurred in connection with the performance of his duties
hereunder.
4. Covenants. (a) The Director covenants that he shall not divulge,
furnish, use, permit to be used or make accessible to any person or entity
(other than persons or entities employed by the Company or as otherwise directed
in writing by the Company) any knowledge or information with respect to the
Company's or its affiliates' business or any confidential, proprietary or secret
methods, processes, plans, products, know-how or materials or any other
confidential, proprietary or secret aspects of the strategy, business or
activities of the Company or any of its Affiliates.
(b) In addition to, and without in any way limiting any of the
Directors' other covenants to, or agreements with, the Company, the Director
further covenants and agrees that, during the term of his consultantcy
hereunder, he shall not, directly or indirectly, own, manage, operate, control
or participate in the ownership, management, operation or control of, any
corporation, partnership, proprietorship, firm, association or other business
entity (each, a "Business Entity"), if such Business Entity is engaged in any
business activity in competition in any material respect with the Company's
business, as now conducted, such business consisting of a gaming device route
operation, casino development and business and electronic gaming device
development, without first having offered each such opportunity or business to
the Company on the same terms as offered to the Director; provided, that the
foregoing covenant shall not prohibit the Director from owning not more than 5%
of the securities of a Business Entity that are publicly traded on a nationally
recognized securities exchange or in the over-the-counter market.
Page 2 of 4
<PAGE>
(c) The Director acknowledges and agrees during the term hereof that
any product, invention, trade secret, method, diagnostic test, design, process,
procedure, concept, formula, idea or technology whatsoever, or any improvement
thereon, refinement thereof or know-how relating thereto (any of the foregoing,
an "Invention"), developed or discovered by, or under the supervision or with
the assistance of, the Director, relating to or arising from the performance of
the Director's duties hereunder shall be deemed to be included within the
business of the Company and shall be the property of the Company. The Director
covenants that he shall not take any action with respect of such Inventions that
would be inconsistent with, or a breach of, his duty of loyalty to the Company
and that the Director shall, upon the request of the Company, execute, deliver
and cause to be filed any and all documents or instruments and take all other
actions that shall be necessary or appropriate in connection with the foregoing
or that shall otherwise be requested by the Company.
(d) The Director acknowledges that irreparable injury and harm (the
damages in respect of which are extremely difficult and impracticable to
calculate) would or could be sustained by the Company if the Director violates
any provisions of this Section 4; accordingly, the Director irrevocably consents
and agrees that if he violates or breaches or attempts to violate or breach any
of such provisions, the Company shall be entitled to immediate injunctive
relief, in addition to all other remedies at law or in equity available to the
Company hereunder or other side.
5. Miscellaneous. (a) The invalidity or lack of enforceability of any
provision hereof shall not affect the validity or enforceability of any other
provision. If any one or more of the provisions hereof shall for any reason be
held to be excessively broad as to duration, geographical scope, activity or
subject, it shall be construed, by limiting and reducing it, so as to be
enforceable to the extent compatible with the applicable law.
(b) No consent or waiver, express or implied, by either party to or of
any breach or default by the other party in the performance by such other party
of its or his obligations hereunder shall be deemed or construed to be a consent
or waiver to or of any other breach or default in the performance by such other
party of the same or any other obligation of such party hereunder. Failure on
the part of any party to complain of or object to any act or failure to act of
the other party, or to declare such other party in breach or default of the
terms hereof, irrespective of the duration of any such failure, shall not
constitute waiver by such party of its rights hereunder.
(c) Captions contained in this Agreement are inserted only for
convenience, and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof.
(d) This Agreement may be executed in one or more counterparts with all
such counterparts constituting one and the same Agreement.
(e) All notices, requests and other communications hereunder shall be
deemed to have been duly given if sent by registered or certified United States
mail, postage prepaid, reputable overnight delivery service (such as Federal
Express), telecopied (provided, that any
Page 3 of 4
<PAGE>
notice sent by telecopy shall also be sent by any other method permitted
herein), or delivered by hand, in each case, addressed to the Company at its
principal office at c/o Alliance Gaming Corporation, 4380 Boulder Highway, Las
Vegas, Nevada 89121, and addressed to the Director at his address as it appears
on the records of the Company, with a copy to _________________________________.
Either party shall have the right to change its notice address upon written
notice to the other party. Notices shall be effective, in the case of mailing,
five days after mailing, in the case of overnight delivery service, two days
after deposit with such service, in the case of telecopy, upon receipt thereof,
and in the case of hand delivery, upon receipt thereof.
(f) This Agreement shall be binding upon and inure to the benefit of
the Director and his legal representatives and the Company and its successors
and assigns.
(g) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Nevada without regard to principles of
conflicts of laws.
(h) This Agreement contains the entire understanding between the
parties and shall not be modified, amended or changed except by a writing
executed by the parties.
(i) All prior agreements and understandings of every kind between the
parties regarding the consultantcy or employment of the Director by the Company
are superceded by this Agreement and are hereby terminated.
(j) This Agreement (including the continuation of the term hereof) is
subject to compliance by the parties hereto with all applicable laws and
regulations, including without limitation, all applicable gaming laws and
regulations.
(k) This Agreement shall be effective when executed by each of the
parties hereto.
(l) The Director is an [independent contractor,] acting on his own
behalf and not on behalf of any other person or entity.
IN WITNESS WHEREOF, the parties have executed this Director Agreement
as of the date first above written.
ALLIANCE GAMING CORPORATION
By: /s/ S. J. Greathouse
------------------------
Its: President/CEO
-----------------------
/s/ Alfred H. Wilms
---------------------------
Alfred H. Wilms
Page 4 of 4
Alfred H. Wilms
Ducs de Savoie
Rue de la Poste
Tignes 73320 France
March 3, 1996
Kirkland Investment Corporation
535 Madison Avenue
33rd Floor
New York, New York 10022
Dear Joel:
Thank you for your letter of today's date. This is to confirm
that, based on our due diligence and given Alliance's strategic plan, among the
critical elements for the success of Alliance going forward are, as your letter
points out, a strong board of directors and a senior management team with the
appropriate background and stature to lead Alliance.
Based on this understanding:
1. I will vote in favor of Amendment No. 1, dated as of
January 23, 1996, to the Amended and Restated
Agreement and Plan of Merger, dated as of October 18,
1995, and will execute at the appropriate time a
proxy to vote in favor of the Merger at the
stockholders' meeting.
2. If, in connection with the Merger, Alliance issues
common equity or debt in a private placement and the
NASD rules require shareholder approval for such
issuance, I will vote my Alliance shares in favor of
such issuance, provided that (A) the terms of the
issuance are determined to be not unreasonable for a
transaction of this type by one of the following:
(i) Morgan Stanley & Co. Incorporated, (ii) CS First
Boston Corporation, (iii) Painewebber Incorporated,
(iv) UBS Securities, Inc., (v) Wasserstein Perella
Securities, Inc. or (vi) an independent investment
banking firm of recognized standing, selected jointly
by you and me; and (B) neither Kirkland nor any of
its affiliates is permitted to buy or sell securities
of Alliance in connection with such issuance on terms
more favorable than terms offered to me.
You may reflect my intentions in the Alliance proxy statement relating to the
Merger.
<PAGE>
2
In addition, I hereby agree that:
1. irreparable damage would occur in the event any
provision of this letter was not performed in
accordance with the terms hereof and that Kirkland
shall be entitled to equitable relief to enforce its
rights hereunder; and
2. this letter shall be governed by, and construed in
accordance with, the applicable laws of the State of
New York and that all actions and proceedings arising
out of or relating to this letter shall be heard and
determined in a New York state or federal court
sitting in Manhattan, and I hereby irrevocably submit
to the exclusive jurisdiction of such courts in any
such action or proceeding, irrevocably waive the
defense of an inconvenient forum to the maintenance
of any such action or proceeding, and designate CT
Corporation, at 1633 Broadway, New York, N.Y., as my
agent for service of process in connection with any
such action or proceeding.
I share with you the hope that the steps outlined in your
letter will help position Alliance to realize its full potential and I look
forward to working with you to that end.
Very truly yours,
/s/ Alfred H. Wilms
Alfred H. Wilms
