Document:

Exhibit 10.58

 

June 17,
2008

 

Steven
W. Beason

Scientific
Games Corporation

750
Lexington Avenue

25th Floor

New
York, New York 10022

 

Re:          Contract Extension &
Modification

 

Dear
Mr. Beason:

 

Subject
to final approval of the Compensation Committee of the Board of Directors, it
is my pleasure to confirm Scientific Games Corporation’s (“SGC” or “Company”)
desire and your agreement to extend the term of your contract of August 8,
2005 as already modified by letter of January 17, 2006 and August 30,
2007 (the “2005 Agreement”) (Section 1) through August 31, 2011 on
the terms and conditions outlined therein except to the extent modified herein
(the “2008 Extension”):

 

Conforming Grant: To conform the transition of
your signon equity grants from the 2005 Agreement when the Company adjusted the
vesting schedule from three to five years, but subject to the approval of the
Company’s stockholders of an amendment to the 2003 Incentive Compensation Plan
(or a new equity compensation plan) that provides for a sufficient increase in
the number of shares of common stock of the Company available for equity
awards, during the Term, the Company shall grant to you an additional 5500
restricted stock units (RSUs) under the Scientific Games Corporation 2003
Incentive Compensation Plan (the “Award Plan”), as amended and restated and
individual equity agreements to be entered into by and between the Company and
Executive (the “Equity Agreements”).  The
equity agreements shall provide that 3300 of the RSUs will vest immediately
upon grant, 1100 to vest on the first anniversary of grant, 1100 to vest on the
second anniversary of grant, subject to certain provisions relating to
accelerated vesting and forfeiture as described in the 2005 Agreement, the 2008
Extension, the Equity Agreements or the Equity Plan.

 

Sign-on Incentive: As an incentive for your
agreement to the 2008 Extension but subject to the approval of the Company’s
stockholders of an amendment to the 2003 Incentive Compensation Plan (or a new
equity compensation plan) that provides for a sufficient increase in the number
of shares of common stock of the Company available for equity awards, during
the Term, the Company shall grant to you 10,000 restricted stock units (RSUs)
under the Scientific Games Corporation 2003 Incentive Compensation Plan (the “Award
Plan”), as amended and restated and individual equity agreements to be entered
into by and between the Company and Executive (the “Equity Agreements”).  The equity agreements shall provide that the
equity awards shall vest with respect to twenty percent 

 

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(20%) of the shares of common stock subject to such award on each of
the first five anniversaries of the Grant Date, subject to certain provisions
relating to accelerated vesting and forfeiture as described in the 2005
Agreement, the 2008 Extension, the Equity Agreements or the Equity Plan.

 

Section 6(e) (Equity Acceleration Upon Certain Events of
Termination). the following shall apply as additional severance
benefit under Sections 6(e) of the 2005 Agreement as modified herein:

 

vii)                               Except to the
extent otherwise provided at the time of grant under the terms of any equity
award made to Executive, all stock options, deferred stock, restricted stock
and other equity-based awards held by Executive at termination will become
fully vested and non-forfeitable, 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 all severance benefits under the 2005 Agreement
including those as modified by the 2008 Extension will be additionally subject
to the following provisions:

 

Taxes and Internal Revenue Code 409A.  The Company makes no representations
regarding the tax implications of the compensation and benefits to be paid to
Executive under this Agreement, including, without limitation, under Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), and applicable
administrative guidance and regulations. 
Internal Revenue Code Section 409A governs plans and arrangements
that provide “nonqualified deferred compensation” (as defined under the Code)
which may include, among others, nonqualified retirement plans, bonus plans,
stock option plans, employment agreements and severance agreements.  The Company reserves the right to provide
compensation and benefits under any plan or arrangement in amounts, at times
and in a manner that minimizes taxes, interest or penalties as a result of Section 409A.
In addition, in the event any benefits or amounts paid hereunder are deemed to
be subject to Section 409A, including payments under the 2005 Agreement
and this Agreement, Executive consents to the Company adopting such conforming
amendments as the Company deems necessary, in its reasonable discretion, to
comply with Section 409A (including, but not limited to, delaying payment
until six months and one day following termination of employment).

 

Timing of Certain Payments
Under 2005 Agreement and this Agreement  . 
Payments pursuant to the Severance Provisions as modified of the 2005
Agreement, if any, shall be payable in equal installments in accordance with
the Company’s standard payroll practices over a period of twelve (12) months
following the date of termination; provided, however, that if necessary to
comply with Section 409A of the Code, and applicable administrative
guidance and regulations, such payments shall be made as follows:  (1) no payments shall be made for a
six-month and one day period following the date of termination, (2) an
amount equal to the aggregate sum that would have been otherwise 

 

2

 

payable during the initial six-month and one day period shall be paid
in a lump sum six months and one day following the date of termination, and (3) during
the period beginning six months and one day following the date of termination
through the remainder of the twelve-month period, payment of the remaining
amount due 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 and one day
following the date of termination.

 

If this agreement comports with your understanding, please acknowledge
it by signing and dating one original and returning it to me, retaining the
other original for your files.

 

 

	
  Very
  Truly Yours,

  	
   

  
	
   

  	
   

  
	
  /s/
  Michael Chambrello

  	
   

  
	
   

  	
   

  
	
  Michael
  Chambrello

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged &
  Agreed:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Steven W. Beason

  	
   

  
	
  Steven
  W. Beason

  	
   

  

 

3Exhibit 10.59

 

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 Steven W. Beason (“Executive”).

 

WHEREAS, the Company and Executive entered
into an Employment Agreement dated as of August 8, 2005 (the “2005
Agreement”) by and between the Company and Executive as amended by the letter
agreement dated August 30, 2007 (the “August 2006 Amendment”) and as
further amended by the letter agreement dated June 17, 2008 (the “June 2008
Amendment” and, collectively with the 2005 Agreement and the August 2006
Amendment, the “Employment Agreement”);

 

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(j) 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 (2) days following the Termination Date.  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 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(k)(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(k)(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(k)(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(k)(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:

 

1

 

“The amounts referred to Section 6(k)(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(k)(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 June 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.”

 

4.             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.

 

5.             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.

 

6.             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 CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ira H. Raphaelson

  
	
   

  	
  Name:

  	
  Ira
  H. Raphaelson

  
	
   

  	
  Title:

  	
  Vice
  President, General Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Steven W. Beason

  
	
   

  	
  Name:
  Steven W. Beason

  
				

 

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