Exhibit 10.46


 


Amendment to Employment and
Severance Benefits 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 Ira H. Raphaelson (“Executive”).


 


WHEREAS, Executive has been employed pursuant to an Employment and
Severance Benefits Agreement dated as of December 15, 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 as amended
further by a letter agreement dated October 6, 2008 (the “October 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 8(b)(iii) of the Employment
Agreement is hereby amended to replace the initial clause “Commencing on the
six month anniversary of the Termination Date” with “Commencing on the first
payroll following the Termination Date”.


 


2.             The second sentence of Section 8(c) is
hereby amended to (a) delete the words commencing with “it will pay to
Executive” and ending with the word “provided” and replacing such words with “it
shall reimburse Executive on an after-tax basis for the costs he incurs in
obtaining the benefits that are reasonably comparable to the benefits the
Company would otherwise provide” and (b) delete the portion of the
sentence after the semicolon and substitute a period for the semicolon.


 


3.             Section 21 of the Employment Agreement
is hereby amended by inserting the following three sentences after the first
sentence thereof:


 


“The Company shall provide Executive with the
proposed form of release referred to in the immediately preceding sentence no
later than two days following the Termination Date.  The Executive shall have 21 days to consider
the release and if he executes the release, shall have seven (7) days
after execution of the release to revoke the release, and, absent such
revocation, the release shall become binding. 
Provided Executive does not revoke the release, payments contingent on
the release (if any) shall be paid no earlier than eight (8) days after
execution thereof in accordance with the applicable provisions herein.”


 


4.             Clause 2 of the provisions of the October 2008
Amendment under the caption “Termination in connection with Change in Control”
is hereby amended by deleting the end of such clause 2 commencing with “in a
lump sum” and replacing such portion of clause 2 with the following:


 


“in
equal monthly installments over a period of twenty-four (24) months commencing
with the 


 


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first
payroll following the Termination Date;  provided,
however, to the extent that such amount is 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), the
foregoing amount shall be paid in a lump sum in accordance with the provisions
set forth under the caption “Timing of Certain Payments” below;”


 


5.             The provisions of the October 2008 Amendment
under the caption “Timing of Certain Payments” are hereby amended to (a) delete
the portion of the provision after the semicolon and substitute a period for
the semicolon and (b) add the following sentences at the end of the
provision:


 


“The Company makes no representations regarding the
tax implications of the compensation and benefits to be paid to you under the
Agreement, including, without limit, under Section 409A and applicable
guidance and regulations thereunder.  Notwithstanding
anything herein to the contrary, if (i) at the time of your “separation
from service” (as defined in Treas. Reg. Section 1.409A-1(h)) with the
Company other than as a result of your death, (ii) you are a “specified
employee” (as defined in Section 409A(a)(2)(B)(i) of the Code), (iii) one
or more of the payments or benefits received or to be received by you pursuant
to the Agreement would constitute deferred compensation subject to Section 409A,
and (iv) the deferral of the commencement of any such payments or benefits
otherwise payable hereunder as a result of such separation of service is
necessary in order to prevent any accelerated or additional tax under Section 409A
of the Code, then the Company will defer the commencement of the payment of any
such payments or benefits hereunder to the extent necessary (without any
reduction in such payments or benefits ultimately paid or provided to you) until
the date that is six (6) months following your separation from service
with the Company (or the earliest date as is permitted under Section 409A
of the Code).  Any payment deferred
during such six-month period shall be thereafter immediately paid in a lump
sum.  Any remaining payments or benefits
shall be made as otherwise scheduled under the Agreement.  Furthermore, to the extent any other payments
of money or other benefits due to you hereunder 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 you under the Agreement constitute
deferred compensation under Section 409A of the Code, any such
reimbursements or in-kind benefits shall be paid to you in a manner consistent
with Treas. Reg. Section 1.409A-3(i)(1)(iv).  Any cash payment made on an after-tax basis
that involves a reimbursement of taxes, including any that may be required
under Section 8(c) of the Agreement, may be made as soon as the
Company receives the information necessary for such purpose but in no event
later than the end of the calendar year following the year other taxes are
remitted to the taxing authority.  Each
payment made under the Agreement shall be designated as a “separate payment”
within the meaning of Section 409A of the Code.”


 


6.             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.


 


7.             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.


 


8.             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/ DeWayne Laird

  
	
   

  	
  Name:

  	
  DeWayne Laird

  
	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Ira H. Raphaelson

  
	
   

  	
  Ira H. Raphaelson

  
				



 


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