Document:

Exhibit 10.36

 

October 2,
2008

 

Larry
Potts

Vice
President, Chief Compliance Officer and Director of Security

Scientific
Games Corporation

750
Lexington Avenue

New
York, New York

 

Dear
Larry:

 

This
will confirm our understanding regarding certain amendments to the Employment
Agreement, dated as of August 2, 2006 (and effective as of January 1,
2006), between you and Scientific Games Corporation (the “Company”) (as amended
hereby, the “Agreement”).  Except as
expressly set forth herein, the terms of the Agreement shall remain in full
force and effect and are hereby ratified and confirmed in all respects.

 

Term.  The “Term” set forth in Section 2 of the
Agreement  shall be extended to December 31,
2011 (as may be extended in accordance with Section 2  of
the Agreement and subject to earlier termination in accordance with the
Agreement).

 

Base
Salary.  Effective January 1,
2009, your “Base Salary” shall be four hundred sixty-nine thousand five hundred
US dollars (US$469,500.00) per year, subject to increases thereof as may be
determined from time to time in the sole discretion of the Compensation
Committee of Scientific Games Corporation.

 

Termination
Upon Expiration of Agreement.  In the event that the Agreement
expires on or after December 31, 2011, you will receive the Standard
Termination Payments (as defined in Section 5(a) of the Agreement)
and:

 

A.                                                              if not already
paid to you and without duplication, the non-equity portion of your incentive
compensation for the completed calendar year after which such expiration
occurs, payable if, as and when such bonuses are awarded in the ordinary course
in such subsequent year, subject to payroll deductions; provided, however,
that if and to the extent necessary to comply with Section 409A(a)(2)(B)(i) of
the Code, and applicable administrative guidance and regulations, such payment
shall be made in a lump sum on the date that is six months plus one day
following the applicable expiration date; and

 

B.                                                                except to the
extent otherwise provided at the time of grant under the terms of any equity
award made to you, all stock options, deferred stock, restricted stock and
other equity-based awards held by you, if such termination occurs on or after December 31,
2011 not for “Cause,” will become fully vested and non-forfeitable (provided
that any such options will cease being exercisable 

 

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upon the earlier of (x) three months after the expiration date of
the Agreement and (y) the scheduled expiration date of such options), and,
in all other respects, all such options and other awards shall be governed by
the plans and programs and the agreements and other documents pursuant to which
the awards were granted; provided, however, that any
performance-based equity award in respect of which the performance criteria has
not been finally determined as having been met (or not met), will either vest
and be delivered upon such determination of such criteria being satisfied or
lapse in the event such criteria is not met.

 

Equity Award Grant.  The Company shall grant you ten thousand
(10,000) restricted stock units under the Scientific Games Corporation 2003
Incentive Compensation Plan, as amended and restated (the “Plan”), and an
individual equity agreement (in the form to be provided to you) to be entered
into by and between the Company and you (the “Equity Agreement”).  The Equity Agreement shall provide that the
equity award shall vest with respect to twenty percent (20%) of the shares of
common stock subject to such award on each of the first five anniversaries of
the date of grant, subject to any applicable provisions relating to accelerated
vesting and forfeiture as described in the Agreement, the Equity Agreement or
the Plan.

 

[remainder of page intentionally
left blank]

 

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Please
indicate your agreement to the foregoing by countersigning and returning an
original signed copy of this letter to me.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Scientific Games Corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ A. Lorne Weil

  
	
   

  	
  Name:

  	
  A. Lorne Weil

  
	
   

  	
  Title:

  	
  Chairman and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted and Agreed to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Larry Potts

  	
   

  
	
   

  	
  Larry Potts

  	
   

  
						

 

3Exhibit 10.37

 

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 Larry Potts (“Executive”).

 

WHEREAS, the Company and Executive entered
into an Employment Agreement dated as of January 1, 2006 (executed on August 2,
2006) by and between the Company and Executive, as amended by the letter
agreement dated October 2, 2008 (as so amended, 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 4(f) of the Employment
Agreement is hereby amended by adding the following three sentences at the end
thereof:

 

“To the extent any payments of money or other
benefits due to Executive hereunder could cause the application of an
acceleration 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 payments or other benefits shall be restructured, to the extent possible,
in a manner determined by the Company that does not cause such acceleration 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.”

 

2.             Section 5(f) of
the Employment Agreement is hereby amended by deleting the end of the first
sentence commencing with “and such amount” and replacing such portion of the
sentence with the following:

 

“and such amount shall be
payable over a period of twelve (12) months after termination in accordance
with Section 5(g) of this Agreement; provided, however,
to the extent that such foregoing 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, as well as the amount payable under Section 5(e)(iv) of
this Agreement, shall be paid in a lump sum in accordance with Section 5(g) of
this Agreement.”

 

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3.             Section 5(g) of
the Employment Agreement is hereby amended by substituting “Section 5(c)(ii),
5(e)(ii) or 5(f) (solely with respect to the amount determined by
reference to  Section 5(e)(ii) and
subject to the proviso in the first sentence of Section 5(f))” for “Sections
5(c)(ii) or 5(e)(ii)” in the first sentence of such section.

 

4.             Section 5(k) of
the Employment Agreement is hereby amended by inserting the following new
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.”

 

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.

 

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/ Larry Potts

  
	
   

  	
  Larry Potts

  
				

 

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