Exhibit 10.26


 


Amendment to Employment Agreement


 


Amendment to Employment Agreement (this “Amendment”),
dated as of December 30, 2008, by and between Scientific Games
Corporation, a Delaware corporation (the “Company”), and Michael R. Chambrello
(“Executive”).


 


WHEREAS, Executive has been
employed pursuant to an Employment Agreement dated as of July 1, 2005 by
and between the Company and Executive (the “2005 Agreement”) as amended by a
letter agreement dated August 2, 2006 (the “August 2006 Amendment”)
and a letter agreement dated May 8, 2008 (the “May 2008 Amendment”
and, collectively with the 2005 Agreement and the August 2006 Amendment,
the “Employment Agreement”); and


 


WHEREAS, the Company and Executive desire to
amend the Employment Agreement as set forth herein to bring the Employment
Agreement into compliance with Section 409A of the Internal Revenue Code
of 1986 and the regulations and Treasury guidance thereunder; and


 


WHEREAS,
the amendments contemplated hereby are intended to bring the timing of, and
certain procedural aspects with respect to, certain payments under the
Employment Agreement into compliance with Section 409A but not to
otherwise affect Executive’s right to such payments.


 


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:


 


1.             Section 6(i) of the Employment
Agreement is hereby amended by inserting the following new sentence after the
first sentence thereof:


 


“The Company shall (i) provide Executive with
the proposed form of release referred to in the immediately preceding sentence
no later than two (2) days following the Termination Date, (ii) the
Executive shall have 21 days to consider the release and if he executes the
release, shall have seven days after execution of the release to revoke the
release, and, absent such revocation, the release shall become binding, and (iii) provided
Executive did not revoke the release,  payments contingent on the release (if any)
shall be paid no earlier than the eight (8) days after execution in
accordance with the applicable provisions herein.”


 


2.             Section 6(j)(i) of the Employment
Agreement is hereby amended to (a) delete the words “a lump sum payment
equal to the sum of” and replace such words with “the following amounts” and (b) add
the following sentences immediately prior to the last sentence thereof:


 


“The amounts referred to Section 6(j)(i)(A) and
(B) shall be payable in accordance with
the timing contemplated by Sections 6(e)(ii) and (iii), respectively; provided,
however, that, to the extent such amounts are exempt from Section 409A
and/or if such Change in Control constitutes a change in ownership, change in effective
control or a change in ownership of a substantial portion of the assets of the
Company under Regulation Section 1.409A-3(i)(5) (collectively, a “409A
Change in Control”), the foregoing amounts shall be paid in a lump sum as
soon as practicable, but in no event later than 30 days, after such termination.  The amounts referred to Section 6(j)(i)(C) and
(D) shall be payable in a lump
sum as soon as practicable, but in no event later than 30 days, after such
termination.


 


Section 6(j)(ii) of
the Employment Agreement is hereby amended to (i) delete the words “a lump
sum payment equal to the sum of” and (ii) add the following sentences at
the end thereof:


 


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“The
amounts referred
to Section 6(j)(i)(A) and (B) shall be payable in accordance with the timing contemplated
by Section 6(e)(ii) and (iii), respectively (except that such
payments shall be triggered by, and follow, the Change of Control and not the termination
of Executive’s employment); provided, however, that, to the
extent such amounts are exempt from Section 409A and/or if such Change in
Control constitutes a 409A Change in Control, the foregoing amounts shall be
paid in a lump sum as soon as practicable, but in no event
later than 30 days, after such Change of Control.  The amounts referred to Section 6(j)(i)(C) and
(D) shall be payable in a lump
sum as soon as practicable, but in no event later than 30 days, after such
Change of Control.


 


3.             The section of the May 2008 Amendment
titled “Timing of Certain Payments Under Section 6” is hereby amended to read:


 


“Payments pursuant to severance provisions in the
2005 Agreement, as modified by the May 2008 Amendment, if any, shall be
payable in accordance with the payment details described in Section 6 in the
2005 Agreement; provided, however, that if necessary to comply with Section 409A
of the Code, and applicable administrative guidance and regulations, and if
Executive is deemed on the date of termination to be a “specified employee”
within the meaning of that term under Section 409A of the Code, such
payments shall be made as follows: (1) no payments shall be made for a
six-months period following the date of termination, (2) an amount equal
to the aggregate sum that would have been otherwise payable during the initial
six-months period shall be paid in a lump sum six months following the date of
termination, and (3) during the period beginning six months following the
date of termination through the remainder of the termination payments period as
detailed in Section 6 of the 2005 Agreement, payments of the remaining
amount (if any) shall be payable in equal installments in accordance with the
Company’s standard payroll practices. In addition, notwithstanding any other
provision with respect to the timing of payments under this Agreement, if
necessary to comply with Section 409A of the Code, and applicable
administrative guidance and regulations, amounts payable following termination
of employment in a lump sum shall instead be paid six months following the date
of termination.”


 


4.             The May 2008 Amendment is hereby amended
to add the following language at the end thereof:


 


“Notwithstanding anything herein to the contrary, to
the extent any payments of money or other benefits due to Executive hereunder,
including but not limited to those pursuant Section 6(j)(i) and (ii),
could cause the application of an accelerated or additional tax under Section 409A
of the Code, such payments or other benefits shall be deferred if deferral will
make such payment or other benefits compliant under Section 409A of the
Code, or otherwise such payment or other benefits shall be restructured, to the
extent possible, in a manner determined by the Company that does not cause such
an accelerated or additional tax.  To the
extent any reimbursements or in-kind benefits due to Executive under this
Agreement constitute deferred compensation under Section 409A of the Code,
any such reimbursements or in-kind benefits shall be paid to Executive in a
manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv).  Each payment made under this Agreement shall
be designated as a “separate payment” within the meaning of Section 409A
of the Code.”


 


5.             Employment
Agreement.  Except as set forth in this Amendment, all
other terms and conditions of the Employment Agreement shall remain unchanged
and in full force and effect.


 


6.             Counterparts.  This
Amendment may be executed in one or more counterparts, each of which shall for
all purposes be deemed to be an original and all of which shall constitute the
same instrument.


 


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7.             Headings.  The
headings of the paragraphs herein are included solely for convenience of
reference and shall not control the meaning or interpretation of any provision
of this Amendment.


 


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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.


 


 


	
   

  	
  SCIENTIFIC GAMES CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ira H. Raphaelson

  
	
   

  	
  Name:

  	
  Ira H. Raphaelson

  
	
   

  	
  Title:

  	
  Vice President, General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Michael R. Chambrello

  
	
   

  	
  Michael R. Chambrello

  
				



 


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