Third Amendment to Employment Agreement (this Amendment), dated as of October 26, 2009, by and between Scientific Games Corporation, a Delaware corporation (the Company), and Joseph R. Wright (Executive).
WHEREAS, the Company and Executive entered into an Employment Agreement effective as of May 1, 2008 (executed on May 14, 2008) as amended by the Amendment to Employment Agreement dated December 30, 2008 and the Second Amendment to Employment Agreement dated April 22, 2009 (as amended, the Agreement); and
WHEREAS, upon succeeding to the Chief Executive Officer position on January 1, 2009, Executive set out certain objectives for the Company relating to the increase of operating margins, the reduction of the Companys capital and operating expenditures and the increase in the Companys profit margins and free cash flow;
WHEREAS, under Executives leadership and direction, the Company has implemented a number of initiatives toward these objectives, including the Companys Profitability Improvement Program, that have substantially benefited the Company and allowed the Company to remain resilient in the current economic environment and to position itself for future growth on a more profitable basis; and
WHEREAS, in light of the substantial realization of the objectives described above, Executive believes, and the Company agrees, that it is appropriate for him to retire as Chief Executive Officer at the end of 2009 and to resume his role as a non-employee director of the Company;
NOW THEREFORE, in consideration of the premises and the mutual benefits to be derived herefrom and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
(a) any accrued but unpaid base salary of Executive for services rendered to the End of Term, payable in accordance with the Companys regular payroll policies (and subject to applicable withholdings);
(b) an amount in respect of accrued and unpaid vacation as of the End of Term, payable within 30 days of the End of Term (and subject to applicable withholdings);
(c) reimbursement in accordance with the Companys policies of any unpaid reasonable business expenses and disbursements incurred by Executive prior to the End of Term;
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provided, however, that Executive must submit vouchers for any such expenses in accordance with the Companys standard procedures on or prior to the End of Term;
(d) US$1,000,000, representing a bonus for 2009 in lieu of any amount Executive would have otherwise been entitled to under any applicable incentive compensation plan in respect of calendar year 2009, payable within 30 days of the End of Term (and subject to applicable withholdings);
(e) US$2,500,000 representing a special payment, payable in a lump sum on no earlier than the date that is six months plus one day following the End of Term and no later than December 15, 2010 (and subject to applicable withholdings);
(f) all unvested restricted stock units (other than restricted stock units granted in connection with Executives service on the Board of Directors) held by Executive as of the End of Term (i.e., the unvested portion of the grants of restricted stock units awarded to Executive on April 15, 2008, February 23, 2009 and March 24, 2009) will become fully vested and non-forfeitable as of the End of Term and the underlying shares in respect of such units (together with the underlying shares in respect of all vested restricted stock units held by Executive as of the End of Term which have not been delivered as of the End of Term) will be delivered six months plus one day (or as soon as reasonably practicable thereafter) following the End of Term;
(g) all vested stock options held by Executive as of the End of Term will be governed by the plans and programs and the agreements and other documents pursuant to which the awards were granted (it being understood that any such vested stock options granted on or after April 15, 2008 will remain exercisable until the earlier of (i) the third anniversary of the End of Term and (ii) the scheduled expiration date thereof);
(h) all unvested stock options (other than stock options granted in connection with Executives service on the Board of Directors) held by Executive immediately prior to the End of Term will be forfeited and canceled as of the End of Term; and
(i) for a period of three (3) years after the End of Term, Executive shall continue to participate in all employee and executive benefit plans, programs, and arrangements under Section 3(g) of the Agreement providing health, medical, disability and life insurance benefits in which Executive was participating immediately prior to the End of Term, the terms of which allow Executives continued participation, as if Executive had continued in employment with the Company during such period or, if such plans, programs, or arrangements do not allow Executives continued participation, the Company shall reimburse Executive (not, for the avoidance of doubt, on an after-tax basis) for the costs he incurs in obtaining benefits that are reasonably comparable to the benefits Executive would have received under such plans, programs, and arrangements in which Executive was participating immediately prior to the End of Term, as if Executive had received credit under such plans, programs, and arrangements for service and age with the Company during such period following the End of Term, with such benefits payable by the Company at the same times and in the same manner as such benefits would have been received by Executive under such plans (it being understood that the value of any insurance-provided benefits will be based on the premium cost to Executive, which shall not exceed the highest risk premium charged by a carrier having an investment grade or better credit rating); provided, however, that, to the extent (and during the time) Executive is eligible to participate in another employers benefit plans, programs, and arrangements providing health, medical, disability and life insurance benefits, (i) Executive will not be eligible to continue to participate in such benefit plans, programs, and arrangements under Section 3(g) of the
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Agreement and (ii) Executive will not be entitled to such reimbursement (except to the extent of any additional costs Executive incurs in obtaining additional health, medical, disability and/or life insurance benefits which, when added to the benefits Executive is eligible to receive under such other employers benefit plans, programs, and arrangements providing health, medical, disability and life insurance benefits, are reasonably comparable to the benefits Executive would have received under such plans, programs, and arrangements under Section 3(g) of the Agreement providing health, medical, disability and life insurance benefits in which Executive was participating immediately prior to the End of Term (such reimbursement not, for the avoidance of doubt, on an after-tax basis)).
Except for any payments or benefits Executive has accrued or vested in pursuant to Executives participation in the Companys 401(k) Plan, deferred compensation plan or employee stock purchase plan, which payments or benefits shall be subject to the terms and conditions set forth in such plans, Executive acknowledges and agrees that the payments described in this Section 2 fulfill any and all of the Companys obligations due to Executive under any agreement or bonus, incentive compensation, severance or separation plan or allowance or any other compensation or benefit plan or arrangement maintained by the Company or any of its subsidiaries (including the Agreement), and Executive specifically acknowledges and agrees that Executive is entitled to no other compensation or benefits from the Company or any of its subsidiaries of any kind or nature whatsoever.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to be executed on its behalf as of the date first above written.
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SCIENTIFIC GAMES CORPORATION |
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By: |
/s/ Jeffrey S. Lipkin |
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Name: |
Jeffrey S. Lipkin |
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Title: |
Vice President and Chief Financial Officer |
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/s/ Joseph R. Wright |
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Joseph R. Wright |
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