Document:

Exhibit 10.54

 

Amendment to Employment Agreement

 

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

 

WHEREAS, the Company and Executive entered into an Employment Agreement dated as of January 1, 2007 by and between the Company and Executive (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.”

 

 

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 sentence 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.

 

2

 

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 INTERNATIONAL, INC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ira Raphaelson
    
	
 
    	
 
    	
Name:
    	
Ira   Raphaelson
    
	
 
    	
 
    	
Title:
    	
VP,   General Counsel & Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/   James C. Kennedy
    
	
 
    	
 
    	
Name:
    	
James   C. Kennedy
    

 

3Exhibit 10.55

 

May 7, 2009

 

James Kennedy

Senior Vice President, Sales and Global Marketing

Scientific Games International, Inc.

1500 Bluegrasslakes Parkway

Alpharetta, Georgia

 

Dear Jim:

 

This will confirm our understanding regarding certain amendments to the Employment and Severance Benefits Agreement, dated ,  (effective as of January 1, 2007), between you and Scientific Games International, Inc. (the “Company”), as amended by the Letter Agreement, dated as of December 30, 2008, by and between you and 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.  Capitalized terms used herein but not defined herein shall have the meanings ascribed to them in the Agreement (except as otherwise modified hereby).

 

Term.  The “Term” set forth in Section 2 of the Agreement shall be extended to December 31, 2012 (as may be extended in accordance with Section 1  of the Agreement and subject to earlier termination in accordance with the Agreement).

 

Base Salary.  Effective January 1, 2010, your “Base Salary” shall be four hundred thousand US dollars (US$400,000) per year and effective January 1, 2011, your “Base Salary” shall be four hundred and twenty-five thousand US dollars (US$425,000) per year, subject to such future increases thereof as may be determined from time to time in the sole discretion of the Compensation Committee of the Company (“Compensation Committee”).

 

Termination Upon Expiration of Agreement.  In the event that the Agreement expires on or after December 31, 2012, you will receive the Accrued Obligations 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 Internal Revenue 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 on or after December 31, 2012 is not for Cause, will become fully vested and non-

 

 

forfeitable (provided that any such options will cease being exercisable upon the earlier of (x) three (3) 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.

 

Timing of Certain Payments.  Unless otherwise contemplated in the Agreement, all payments payable in connection with termination of your employment under the Agreement shall be made as soon as practicable after the Termination Date but in no event later than 30 days after the Termination Date; 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, any such payment shall be made in a lump sum on the date that is six months plus one day following the Termination Date.

 

Special Recognition Equity Award Grant.   In recognition of your additional responsibilities for supervising MDI sales and China marketing, the Company shall grant you twenty thousand (20,000) 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.

 

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 International, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Chambrello
    
	
 
    	
Name:
    	
Michael   Chambrello
    
	
 
    	
Title:
    	
President &   COO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted   and Agreed to:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   James Kennedy
    	
 
    	
 
    	
 
    
	
 
    	
James   Kennedy
    	
 
    	
 
    
						

 

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