Exhibit 10.2
Amendment to Employment
Agreement
This Amendment to Employment Agreement (this
“Amendment”) is made as of May 1, 2008 (the
“Effective Date”) between Scientific Games Corporation,
a Delaware corporation (“SGC” or the
“Company”), and A. Lorne Weil (“Executive”)
(collectively the “Parties”).
WHEREAS, Executive has been employed pursuant
to an Employment Agreement effective as of January 1, 2006
between the Parties (the “2006 Agreement”) as clarified
by a letter agreement dated as of August 2, 2007 by the
Parties regarding amounts payable under the Company’s Key
Executive Deferred Compensation Plan (the “EDCP Payment
Letter”);
WHEREAS, Executive has previously been employed
by the Company and its predecessor entities since 1990 under
various written and oral agreements;
WHEREAS, Section 3(b)(ii) of the 2006
Agreement contemplates the possibility of Executive providing
notice on or before September 1, 2008 of his intention to
relinquish the position of Chief Executive Officer but continue in
the position of Chairman of the Board of Directors of SGC with the
same compensation and benefits provided for therein from
January 1, 2009 through at least December 31, 2009 and
that receipt or giving of such notice and subsequent change in
position shall not constitute “Cause” or “Good
Reason” within the meaning of Section 5 of the 2006
Agreement;
WHEREAS, Executive hereby confirms his giving
of notice to the Company pursuant to Section 3(b)(ii) of
the 2006 Agreement of his intention to serve only as Chairman of
the Board of SGC effective on January 1, 2009 for the
remainder of the initial term of the 2006 Agreement (as such term
is extended hereby until December 31, 2011 or may be
automatically extended thereafter pursuant to Section 2 of the
2006 Agreement as amended by Section 2 hereof);
WHEREAS, the Company wishes to take advantage
and be assured of the availability of Executive’s experience,
expertise and leadership for a period extending beyond the initial
term of the 2006 Agreement;
NOW, THEREFORE, IT IS HEREBY AGREED AS
FOLLOWS:
1.
2006 Agreement Remains In Effect; Definitions .
Except as specifically provided herein, all terms of
the 2006 Agreement shall remain in effect. References to
“this Agreement,” “herein,”
“hereof,” “hereby” and words of similar
import in the 2006 Agreement shall refer to the 2006 Agreement as
amended by this Amendment and by the EDCP Payment Letter, all of
which shall be read together as a single agreement.
References in the 2006 Agreement to Sections, Subsections,
paragraphs and clauses thereof shall refer to those Sections,
Subsections, paragraphs and clauses as the same are amended by the
terms of this Amendment. As amended by this Amendment and the
EDCP Payment Letter, the 2006 Agreement is hereby ratified,
confirmed and continued by the Parties. Capitalized terms
that are used but not defined in this Amendment shall have the
meanings given to them in the 2006 Agreement (as amended by this
Amendment). The 2006 Agreement, as amended by the EDCP
Payment Letter and this Amendment, is referred to herein as the
“Amended Employment Agreement”.
2.
Amendment to Section 2 of 2006 Agreement .
The second sentence of Section 2
of the 2006
Agreement is hereby amended by replacing “December 31,
2009” with “December 31, 2011”.
3.
Amendments to
Section 3 of 2006 Agreement . Section 3
of the 2006 Agreement is hereby amended and restated in its
entirety to read as follows:
“ 3.
Offices and
Duties
a.
From January 1, 2006
through December 31, 2008, Executive will serve as Chief
Executive Officer of the Company and as Chairman of the Board of
Directors of the Company (the “Board of Directors”),
and as an officer or director of any subsidiary or affiliate of the
Company if elected or appointed to any such position by the
shareholders or by the board of directors of such subsidiary or
affiliate, as the case may be.
b.
Effective as of
January 1, 2009, Executive will relinquish the role of Chief
Executive Officer of the Company and shall continue to be employed by
the Company and provide services in the capacity of Chairman of the
Board of Directors and shall continue to receive the compensation
and benefits provided for herein. For purposes of
Section 409A (as hereinafter defined), this change in
responsibilities is not intended to be a separation from service
during 2009 or the Term.
c.
In his capacity as
Chairman of the Board of Directors and Chief Executive Officer
until December 31, 2008, Executive shall perform such duties
and shall have such responsibilities as are normally associated
with such positions and as otherwise may be assigned to Executive
from time to time by the Board of Directors. In his capacity
as Chairman of the Board of Directors from and after
January 1, 2009, Executive shall report to the Board and
perform such duties and shall have such responsibilities as are
normally associated with such position and shall devote time to
overall strategic and organizational guidance, mergers and
acquisitions, new business development and maintaining contacts
with key customers and other business partners of the Company and
its subsidiaries with whom Executive has established personal
relationships; provided, however, that from and after
January 1, 2009, Executive will not (i) be an officer of
the Company or any of its subsidiaries or affiliates,
(ii) have employees reporting to him (other than his personal
assistant or in his capacity as a director) and (iii) be
responsible for any business unit or have any policy making
functions with respect to the Company or any of its subsidiaries or
affiliates (other than in his capacity as a director).
Subject to Section 5(d) and to Executive’s right to
continue to receive the compensation and benefits provided for
herein, Executive’s functions, duties and responsibilities
are subject to reasonable diminution from those provided above, as
the Board of Directors may in good faith determine after
consultation with Executive.
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d.
Executive hereby agrees to
accept such employment and to serve the Company to the best of his
ability (i) until December 31, 2008, in the capacities
referred to in Section 3.a above, devoting substantially all
of his business time to such employment or (ii) from and after
January 1, 2009 in his role as Chairman of the Board of
Directors; provided, however, that Executive shall be entitled to
(A) manage his personal investments and otherwise attend to
personal affairs, including family financial and legal affairs,
(B) serve on the boards of directors of other (but, prior to
January 1, 2010, not more than three) companies in addition to
the Company and its subsidiaries and affiliates, each in a manner
that does not conflict or unreasonably interfere with his
responsibilities hereunder and (C) from and after
January 1, 2009 in his role as Chairman of the Board of
Directors, in addition to the activities referred to in clauses
(A) and (B) above, engage in other professional and
personal activities in compliance with
Section 6.”
4. Amendments to
Section 4 of 2006 Agreement . Section 4
of the 2006 Agreement is hereby amended as follows:
a.
The following proviso is
hereby added to the end of the first sentence of
Section 4(a) of the 2006 Agreement:
“; provided, however, that, from and after
January 1, 2010, the Base Salary shall be computed in
accordance with the terms of second-to-last sentence of this
Section 4(a).”
b.
The following proviso is
hereby added to the end of the third sentence of
Section 4(a) of the 2006 Agreement:
“; provided, however, that the foregoing
shall not apply to Base Salary for years commencing on or after
January 1, 2010, which shall be computed in accordance with
the second-to-last sentence of this
Section 4(a).”
c.
The following sentence is
hereby added prior to the last sentence of
Section 4(a) of the 2006 Agreement:
“Notwithstanding the foregoing,
(x) the Base Salary for 2010 shall be equal to the product of
(I) one million dollars ($1,000,000.00) multiplied by
(II) the sum of 1 plus a fraction the numerator of which is
the difference between the CPI for December 2009 and the CPI
for December 2008 and the denominator of which is the CPI for
December 2008 (provided, that if such fraction is zero or a
negative number, the Base Salary for 2010 shall be the amount set
forth in (I) of this clause ( x ); (y) the Base
Salary for 2011 shall be equal to the product of (I) one
million dollars ($1,000,000.00) multiplied by (II) the sum of
1 plus a fraction the numerator of which is the difference between
the CPI for December 2010 and the CPI for December 2008
and the denominator of which is the CPI for December 2008
(provided, that if such fraction is zero or a negative number, the
Base Salary for 2011 shall be the same as the Base Salary for
2010); and (z) if the Term is extended past December 31,
2011 pursuant to Section 2 hereof, the Base Salary for
each
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such one-year extension term, unless otherwise
agreed in writing by Executive and the Company, shall be
(I) one million dollars ($1,000,000.00) multiplied by
(II) the sum of 1 plus a fraction the numerator of which is
the difference between the CPI for December of the year
immediately preceding such extension term and the CPI for
December 2008 and the denominator of which is the CPI for
December 2008 (provided, that if such fraction is zero or a
negative number, the Base Salary for such extension term shall be
the same as the Base Salary for the year immediately preceding such
extension term).”
d.
The following proviso is
hereby added to the end of the second sentence of
Section 4(b) of the 2006 Agreement:
“; provided, however, that from and after
January 1, 2010, Executive shall not be eligible to receive
incentive compensation in excess of the Target Bonus but shall in
all other respects be entitled to the benefits provided for in this
Section 4(b) even though he shall no longer be an officer
of the Company or any of its subsidiaries or
affiliates.”
e.
Section 4(c) of
the 2006 Agreement is hereby amended and restated to read in its
entirety as follows:
“(c) Eligibility for Annual Equity Awards and
Participation in Executive Compensation Plans .
Executive shall be eligible to receive an annual grant of stock
options or other equity awards with a value up to 155% of
Executive’s Base Salary, in the sole discretion of the
Compensation Committee, in accordance with the applicable plans and
programs for senior executives of the Company and subject to the
Company’s right to at any time amend or terminate any such
plan or program, so long as any such change does not adversely
affect any accrued or vested interest under any such plan or
program; provided, however, that any such annual equity awards made
to Executive during 2010 and 2011 (and during any extension terms
of this Agreement) shall, unless otherwise expressly agreed in
writing by the Company and Executive, be awarded entirely in the
form of restricted stock units with the vesting schedule (but in no
event longer than five years) and any minimum performance criteria
then generally provided for restricted stock units awarded to
senior executives under such plan or program and subject to the provisions
relating to accelerated vesting and forfeiture as provided in this
Agreement for Normal Course Awards (as hereinafter defined) and as
provided in the applicable award agreement and the Equity Plan (as
hereinafter defined). All equity awards made pursuant to this
Section 4(c) shall be Normal Course Awards. Without
limiting the foregoing, Executive shall be eligible to participate
in such plans and programs, and in other executive compensation
plans and programs which are made generally available by the
Company to its senior executives (in accordance with the terms of
such plans and programs and subject to the Company’s right to
at any time amend or terminate any such plan or program) in each
case on terms no less favorable to Executive than the most
favorable terms of participation of any executive of the
Company. For the avoidance of doubt, without limiting
Executive’s right to receive all equity awards made to
Executive after 2009 entirely in the form of restricted stock
units, as provided above, Executive’s participation in any
such equity award plan or program shall be deemed to be on terms no
less favorable to Executive than the most favorable terms of
participation of any executive of the Company if the absolute
number or amount of stock options, restricted
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stock units, or other equity awards awarded to
Executive is at least equal to the highest absolute number or
amount of stock options, restricted stock units or other equity
award (or, for awards made after 2009, the number of restricted
stock units equivalent to such highest absolute number or amount of
stock options or other equity award) awarded in respect of the same
period to (i) through Dec
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