As filed with the Securities and Exchange Commission on August 7, 2014
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SCIENTIFIC GAMES CORPORATION
(Exact name of registrant as specified in its charter)
|
Delaware
|
|
81-0422894
|
750 Lexington Avenue, 25th Floor
New York, New York 10022
(Address of Principal Executive Offices)
Inducement Equity Award Agreement
(Full Title of the Plan)
Jack Sarno, Esq.
Scientific Games Corporation
750 Lexington Avenue, 25th Floor
New York, New York 10022
(Name and Address of Agent for Service)
(212) 754-2233
(Telephone Number, Including Area Code,
of Agent for Service)
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
|
Large accelerated filer o |
|
Accelerated filer x |
|
Non-accelerated filer o |
|
Smaller reporting company o |
|
|
|
|
|
(Do not check if smaller
|
|
|
CALCULATION OF REGISTRATION FEE
|
Title of Securities to
|
|
Amount to be
|
|
Proposed Maximum Offering
|
|
Proposed Maximum
|
|
Amount of
|
|
||||
|
Class A Common Stock, par value $0.01 per share (“Class A Common Stock”) |
|
161,181 |
(2) |
$ |
8.73 |
(3) |
$ |
1,407,110.13 |
|
$ |
181.24 |
|
|
|
Class A Common Stock, par value $0.01 per share (“Class A Common Stock”) |
|
85,935 |
(2) |
$ |
7.95 |
(3) |
$ |
683,183.25 |
|
$ |
87.99 |
|
|
|
(1) |
In accordance with Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”), this registration statement (this “Registration Statement”) shall be deemed to cover any additional shares of Class A Common Stock of Scientific Games Corporation (the “Registrant”) that may from time to time be offered or issued resulting from stock splits, stock dividends, recapitalizations or similar adjustments of the outstanding Class A Common Stock of the Registrant. |
||||||||||||
|
|
|
||||||||||||
|
(2) |
Consists of (a) 161,181 shares of Class A Common Stock issuable upon exercise of a stock option and (b) 85,935 shares of Class A Common Stock issuable upon vesting and settlement of restricted stock units, in each case, granted to M. Gavin Isaacs on June 9, 2014 pursuant to the Inducement Equity Award Agreement (the “Inducement Award Agreement”) in connection with the commencement of Mr. Isaacs’ employment with the Registrant as President and Chief Executive Officer. |
||||||||||||
|
|
|
||||||||||||
|
(3) |
Estimated, solely for the purpose of calculating the registration fee, pursuant to Rule 457 promulgated under the Securities Act, based on (i) with respect to the 161,181 shares of Class A Common Stock being registered that are issuable upon exercise of the stock option granted pursuant to the Inducement Award Agreement, the exercise price of such stock option of $8.73 per share of Class A Common Stock and (ii) with respect to the 85,935 shares of Class A Common Stock that are issuable upon vesting and settlement of the restricted stock units granted pursuant to the Inducement Award Agreement, the average of the high and low prices per share of the Class A Common Stock, as reported on the Nasdaq Global Select Market on August 6, 2014. |
||||||||||||
EXPLANATORY NOTE
On June 9, 2014, the Registrant made the following equity grants to Mr. Isaacs pursuant to the Inducement Award Agreement as an inducement to his entering into employment with the Registrant as President and Chief Executive Officer:
(i) a stock option to purchase 161,181 shares of the Registrant’s Class A Common Stock, at an exercise price of $8.73 per share of Class A Common Stock; and
(ii) 85,935 restricted stock units.
The foregoing grants were approved by the Registrant’s Board of Directors in reliance on NASDAQ Listing Rule 5635(c)(4), which exempts equity grants that are inducements material to the individual’s entering into employment with the Registrant from the general requirement of the NASDAQ Listing Rules that equity-based compensation plans and arrangements be approved by stockholders. This Registration Statement registers the shares of Class A Common Stock issuable upon exercise of the stock option and the shares of Class A Common Stock issuable upon vesting and settlement of the restricted stock units, in each case, granted pursuant to the Inducement Award Agreement.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information specified in Items 1 and 2 of Part I of the Form S-8 is omitted from this filing in accordance with the provisions of Rule 428 under the Securities Act and the introductory note to Part I of the Form S-8. The document(s) containing the information specified in Part I of Form S-8 will be sent or given to the recipient of the foregoing grants, as required by Rule 428 promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Act. Such documents need not be filed with the SEC either as part of this registration statement or as prospectuses or prospectus supplements pursuant to Rule 424. These documents and the documents incorporated by reference in the registration statement pursuant to Item 3 of Part II of this form, taken together, constitute a prospectus that meets the requirements of Section 10(a) of the Securities Act.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference .
The Registrant hereby incorporates by reference in this Registration Statement the following documents:
· the Registrant’s Annual Report on Form 10-K filed with the SEC on March 17, 2014, as amended on Form 10-K/A filed with the SEC on June 26, 2014 (as so amended, the “Annual Report”);
· all other reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), since the end of the fiscal year covered by the Annual Report; and
· the description of the Registrant’s Class A Common Stock set forth in the “Description of Capital Stock” contained in the Registrant’s registration statement on Form S-3 filed with the SEC on March 26, 2010, including any amendment or report filed for the purpose of updating such description.
All documents subsequently filed by the Registrant with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents.
For purposes of this Registration Statement, any document or any statement contained in a document incorporated or deemed to be incorporated herein by reference shall be deemed to be modified or superseded to the extent that a subsequently filed document or a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated herein by reference modifies or supersedes such document or such statement in such document. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities .
Not applicable.
Item 5. Interests of Named Experts and Counsel .
The validity of the shares of Class A Common Stock offered hereby has been passed upon for the Registrant by Jack B. Sarno, Vice President — Worldwide Legal Affairs and Corporate Secretary of the Registrant. Mr. Sarno owns 37,525 shares of Class A Common Stock, 78,740 shares of Class A Common Stock underlying unvested restricted stock units, and stock options to purchase 30,044 shares of Class A Common Stock.
Item 6. Indemnification of Directors and Officers .
Section 145 of the General Corporation Law of the State of Delaware (the “DGCL”) grants corporations the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful.
In the case of an action by or in the right of the corporation, Section 145 of the DGCL grants corporations the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Section 145 of the DGCL also empowers a corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation would have the power to indemnify such person against such liability under Section 145 of the DGCL.
Section 102(b)(7) of the DGCL allows a corporation to eliminate or limit the personal liability of directors to a corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase or redemption in violation of Delaware corporate law or obtained an improper personal benefit.
The bylaws of the Registrant provide for indemnification of the directors, officers, employees and other agents of the Registrant for such liabilities in such manner under such circumstances and to the extent permitted by Section 145 of the DGCL. The bylaws of the Registrant also provide that the Board of Directors of the Registrant may authorize the purchase and maintenance of insurance for the purpose of such indemnification.
The Registrant’s restated certificate of incorporation provides that a director of the Registrant shall not be liable to the Registrant or its stockholders for monetary damages for breach of fiduciary duty as a director, to the fullest extent permitted by the DGCL.
The Registrant maintains an insurance policy on behalf of itself and its subsidiaries, and on behalf of the directors and officers thereof, covering certain third-party claims which may be asserted against such entities, directors and/or officers.
Item 7. Exemption from Registration Claimed .
Not applicable.
Item 8. Exhibits .
The following exhibits are filed with or incorporated by reference into this Registration Statement (numbering corresponds to Exhibit Table in Item 601 of Regulation S-K):
|
Exhibit
|
|
Description |
|
Filed Herewith |
|
4.1 |
|
Restated Certificate of Incorporation of Scientific Games Corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002) |
|
|
|
4.2 |
|
Certificate of Amendment of the Restated Certificate of Incorporation of Scientific Games Corporation (incorporated by reference to Exhibit 3.1(b) to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007) |
|
|
|
4.3 |
|
Amended and Restated Bylaws of Scientific Games Corporation (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 1, 2010) |
|
|
|
4.4 |
|
Form of Inducement Equity Award Agreement between the Registrant and M. Gavin Isaacs |
|
x |
|
5.1 |
|
Opinion of Counsel as to validity of the shares of Class A Common Stock covered by this Registration Statement. |
|
x |
|
23.1 |
|
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm |
|
x |
|
23.2 |
|
Consent of Reconta Ernst & Young S.p.A., Independent Registered Public Accounting Firm |
|
x |
|
23.3 |
|
Consent of Ernst & Young Hua Ming LLP, Independent Registered Public Accounting Firm |
|
x |
|
23.4 |
|
Consent of KPMG Huazhen (Special General Partnership), Independent Auditors |
|
x |
|
23.5 |
|
Consent of Counsel (included in Exhibit 5.1) |
|
x |
Item 9. Undertakings .
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
|
(i) |
To include any prospectus required by section 10(a)(3) of the Securities Act; |
|
|
|
|
(ii) |
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
|
|
|
|
(iii) |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do not apply if the registration statement is on Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York on the 7 th day of August, 2014.
|
|
SCIENTIFIC GAMES CORPORATION |
|
|
|
|
|
|
|
By: |
/s/ Scott D. Schweinfurth |
|
|
Name: |
Scott D. Schweinfurth |
|
|
Title: |
Executive Vice President and Chief Financial Officer |
Pursuant to the requirements of the Securities Act of 1933, this Form S-8 Registration Statement has been signed below by the following persons in the capacities indicated on the 7 th day of August, 2014.
|
Signature |
|
Title |
|
|
|
|
|
/s/ M. Gavin Isaacs |
|
Chief Executive Officer and President |
|
M. Gavin Isaacs |
|
(Principal Executive Officer) |
|
|
|
|
|
/s/ Scott D. Schweinfurth |
|
Executive Vice President and Chief Financial Officer |
|
Scott D. Schweinfurth |
|
(Principal Financial Officer) |
|
|
|
|
|
/s/ Jeffrey B. Johnson |
|
Vice President, Finance, and Chief Accounting Officer |
|
Jeffrey B. Johnson |
|
(Principal Accounting Officer) |
|
|
|
|
|
/s/ David L. Kennedy |
|
Vice Chairman of the Board of Directors and Director |
|
David L. Kennedy |
|
|
|
|
|
|
|
/s/ Paul M. Meister |
|
Director |
|
Paul M. Meister |
|
|
|
|
|
|
|
/s/ Gerald J. Ford |
|
Director |
|
Gerald J. Ford |
|
|
|
|
|
|
|
/s/ Michael J. Regan |
|
Director |
|
Michael J. Regan |
|
|
|
|
|
|
|
/s/ Barry F. Schwartz |
|
Director |
|
Barry F. Schwartz |
|
|
|
|
|
|
|
/s/ Frances F. Townsend |
|
Director |
|
Frances F. Townsend |
|
|
|
|
|
|
|
/s/ Debra G. Perelman |
|
Director |
|
Debra G. Perelman |
|
|
EXHIBIT INDEX
|
Exhibit
|
|
Description |
|
Method of Filing |
|
4.1 |
|
Restated Certificate of Incorporation of Scientific Games Corporation |
|
Incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2002. |
|
4.2 |
|
Certificate of Amendment of the Restated Certificate of Incorporation of Scientific Games Corporation |
|
Incorporated by reference to Exhibit 3.1(b) to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 |
|
4.3 |
|
Amended and Restated Bylaws of Scientific Games Corporation |
|
Incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on November 1, 2010. |
|
4.4 |
|
Form of Inducement Equity Award Agreement between the Registrant and M. Isaacs |
|
Filed herewith. |
|
5.1 |
|
Opinion of Counsel as to the validity of the shares of Class A Common Stock covered by this Registration Statement |
|
Filed herewith. |
|
23.1 |
|
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm |
|
Filed herewith. |
|
23.2 |
|
Consent of Reconta Ernst & Young S.p.A., Independent Registered Public Accounting Firm |
|
Filed herewith. |
|
23.3 |
|
Consent of Ernst & Young Hua Ming LLP, Independent Registered Public Accounting Firm |
|
Filed herewith. |
|
23.4 |
|
Consent of KPMG Huazhen (Special General Partnership), Independent Auditors |
|
Filed herewith. |
|
23.5 |
|
Consent of Counsel (included in Exhibit 5.1) |
|
Filed herewith. |
Exhibit 4.4
Form of Equity Award Agreement
SCIENTIFIC GAMES CORPORATION
TERMS AND CONDITIONS OF
INDUCEMENT EQUITY AWARDS
THIS AGREEMENT, made as of the 9th day of June, 2014, between SCIENTIFIC GAMES CORPORATION (the “ Company ”) and Michael Gavin Isaacs (the “ Participant ”).
WHEREAS, the Compensation Committee of the Board of Directors of the Company (the “ Committee ”) administers the Company’s equity incentive compensation programs and is authorized to grant stock options, restricted stock units and other awards, including to newly hired employees; and
WHEREAS, the Participant was granted the option and the restricted stock units evidenced by this Agreement as of the date hereof as an inducement to the Participant to become an employee of the Company pursuant to Nasdaq Marketplace Rule 5635(c)(4);
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties agree as follows.
1. Grants . Pursuant and subject to the terms and conditions set forth herein, the Participant is granted on the date hereof:
(a) an option to purchase 161,181 shares of the Company’s Class A Common Stock, $.01 par value per share (the “ Common Stock ”) at an exercise price per share of $8.73 (representing the average of the high and low sales prices per share of the Common Stock on June 6, 2014, the trading day immediately preceding the date hereof) (the “ Option ”). The Option is a “Non-Qualified Stock Option” ( i.e. , it does not constitute an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986). Subject to the applicable provisions of the employment agreement dated as of June 9, 2014 between the Company and the Participant (the “ Employment Agreement ”), the Option will vest and become exercisable in the following installments:
|
Number of Shares |
|
Vesting Dates |
|
40,295 |
|
June 9, 2015 |
|
40,295 |
|
June 9, 2016 |
|
40,295 |
|
June 9, 2017 |
|
40,296 |
|
June 9, 2018 |
(b) 85,935 restricted stock units (representing a right to receive shares of Common Stock following satisfaction of the vesting period) (the “ Units ” and, together with the Option, the “ Awards ”). Subject to the applicable provisions of the Employment Agreement, the Units will vest in the following installments:
|
Number of Shares |
|
Vesting Dates |
|
21,483 |
|
June 9, 2015 |
|
21,484 |
|
June 9, 2016 |
|
21,484 |
|
June 9, 2017 |
|
21,484 |
|
June 9, 2018 |
2. Method of Exercise of Vested Option . The Option, to the extent vested, shall be exercisable in whole or in part by the Participant delivering notice to the Administrator (as defined below) in accordance with the terms of the Option. Payment for shares of Common Stock purchased upon the exercise of the Option, and any applicable withholding taxes, shall be made on the effective date of such exercise through any of the following means: (a) in cash, by certified check, bank cashier’s check or wire transfer; (b) through a brokered exercise with the Administrator under which a portion of the proceeds from a sale are withheld for such exercise price and applicable taxes; or (c) if permitted by the Company at the time of exercise, by surrendering shares of Common Stock. The notification to the Administrator shall be made in accordance with its procedures. The shares of Common Stock purchased upon the exercise of the Option shall be delivered as soon as practicable following exercise in accordance with the procedures established by the Company or the Administrator from time to time.
3. Distribution of Vested Units . As soon as administratively practicable after each applicable vesting date of the Units (generally within three (3) business days and in no event more than 15 business days), the Company will deliver to
the Participant a number of shares of Common Stock equal to the number of Units that vested as of an applicable vesting date less the number of shares, if any, withheld in satisfaction of applicable withholding taxes as discussed in Section 4(b).
4. Taxes . To the extent required by applicable federal, state, local or foreign law, the Participant shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise with respect to the Awards. The Company shall not be required to issue shares until such obligations are satisfied. The methods permitted by the Company for the payment of taxes are as follows:
(a) Option . In the case of the Option, the acceptable methods for making payment for taxes shall be the same as those for payment of the exercise price for the Option as discussed in Section 2 above. If shares of Common Stock are used to satisfy the applicable taxes, the taxes must be calculated at the Participant’s minimum applicable tax rates.
(b) Units . In the case of the Units, unless otherwise determined by the Committee, the Company will withhold from any shares deliverable upon the vesting of Units a number of shares sufficient to satisfy the minimum applicable withholding taxes; provided , however , that, unless otherwise determined by the Committee, the Participant will be permitted to elect, in accordance with procedures adopted from time to time by the Company, to pay the tax withholding amount in cash, in which case no shares will be withheld and the Participant will be required to pay the amount of the taxes in full by the vesting date, in cash, by certified check, bank cashier’s check or wire transfer.
5. Expiration of Awards; Effect of Termination .
(a) Units . Subject to the applicable provisions of the Employment Agreement:
(i) in the event the employment of the Participant terminates for any reason (other than by reason of death or Total Disability (as defined in the Employment Agreement)), all unvested Units shall be immediately forfeited; or
(ii) in the event the employment of the Participant terminates by reason of death or Total Disability, all unvested Units shall fully vest and become non-forfeitable as of the date of death or the date of such termination, as the case may be, and, in all other respects, all such Units shall be governed by the plans and programs and the agreements and other documents pursuant to which such Units were granted.
(b) Option . Subject to the applicable provisions of the Employment Agreement, the Option will expire on June 8, 2024 (the “ Scheduled Expiration Date ”). Subject to the applicable provisions of the Employment Agreement:
(i) in the event the employment of the Participant terminates for any reason (other than by reason of death or Total Disability), (A) the unvested portion of the Option shall immediately expire on the date of termination and (B) the portion of the Option that vested prior to such termination (other than a termination for “Cause” (as defined in the Employment Agreement)), in which event such vested portion of the Option shall be immediately forfeited) shall remain exercisable until the earlier of three (3) months after such termination and the Scheduled Expiration Date and, in all other respects, shall be governed by the plans and programs and the agreements and other documents pursuant to which the Option was granted; or
(ii) in the event the employment of the Participant terminates by reason of death or Total Disability, the unvested portion of the Option shall fully vest and become non-forfeitable as of the date of death or the date of such termination, as the case may be, and such unvested portion of the Option (together with the portion of the Option that vested prior to such death or termination) shall remain exercisable by the Participant (or, in the case of death, Participant’s executor or administrator or Beneficiary (as defined below)) until the earlier of (A) the first anniversary of such death or termination and (B) the Scheduled Expiration Date, as the case may be, and, in all other respects, the Option shall be governed by the plans and programs and the agreements and other documents pursuant to which such awards were granted.
For purposes of this Agreement, “ Beneficiary ” means the person, persons, trust, or trusts which have been designated by a Participant in his or her most recent written beneficiary designation filed with the Company to receive the benefits under the Awards upon such Participant’s death. If, upon a Participant’s death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means person, persons, trust, or trusts entitled by will or the laws of descent and distribution to receive such benefits. A Beneficiary or other person claiming any rights under the Awards from or through any Participant shall be subject to all terms and conditions of the Awards and any agreement applicable to such Participant and to any additional terms and conditions deemed necessary or appropriate by the Committee.
6. Administration .
(a) Authority of the Committee . The Committee has full and final authority, in each case subject to and consistent with the provisions of this Agreement, to administer the Option and the Units, determine all matters relating to the Option and the Units, construe and interpret the Option, the Units and this Agreement and correct defects, supply omissions, or reconcile inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary or
advisable for the administration of the Option and the Units. The Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of the Option or the Units that is not mandatory under this Agreement.
(b) Limitation of Liability . The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any executive officer, other officer or employee of the Company or a subsidiary thereof, the Company’s independent auditors, consultants, or any other agents assisting in the administration of the Option, the Units or this Agreement. Members of the Committee and any officer or employee of the Company or a subsidiary thereof acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Option or the Units, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination.
7. General Provisions .
(a) Compliance with Legal and Other Requirements . The Company may, to the extent deemed necessary or advisable by the Committee, postpone the issuance or delivery of Common Stock or payment of other benefits under the Option or the Units until completion of such registration or qualification of such Common Stock or other required action under any federal or state law, rule, or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Common Stock or other securities of the Company are listed or quoted, or compliance with any other obligation of the Company, as the Committee may consider appropriate, and may require the Participant to make such representations, furnish such information and comply with or be subject to such other conditions as the Company may consider appropriate in connection with the issuance or delivery of Common Stock or payment of other benefits in compliance with applicable laws, rules, and regulations, listing requirements, or other obligations.
(b) Transferability . Neither the Option nor the Units (nor any portion thereof) may be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of the Participant to any party, or assigned or transferred by the Participant otherwise than by will or the laws of descent and distribution, and the Option shall be exercised during the lifetime of the Participant only by the Participant or, if the Participant is incapacitated, by his guardian or legal representative. In the event that the Option is exercised by the Participant’s guardian or legal representative, the exercise of the Option shall not be effective unless and until the Company has received evidence satisfactory to it as to the authority of such guardian or legal representative. A Beneficiary or other person claiming any rights under the Agreement from or through the Participant shall be subject to all terms and conditions of this Agreement except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee.
(c) Adjustments . In the event that any dividend or other distribution (whether in the form of cash, Common Stock, or other property), recapitalization, forward or reverse split, reorganization, merger, consolidation, spin off, combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Common Stock such that an adjustment is determined by the Committee to be appropriate hereunder, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and kind of shares of Common Stock or other securities subject to or deliverable in respect of the outstanding Option or Units and (ii) the exercise price, grant price or purchase price relating to the Option, and/or make provision for payment of cash or other property in respect of the Option.
(d) Limitation on Rights Conferred . Neither this Agreement nor any action taken hereunder shall be construed as (i) giving the Participant the right to continue in the employ or service of the Company or a subsidiary thereof, (ii) interfering in any way with the right of the Company or a subsidiary thereof to terminate the Participant’s employment or service at any time, (iii) giving the Participant any claim to be granted any award under any option or benefit plan or to be treated uniformly with other participants and employees, or (iv) conferring on the Participant any voting, dividend or other rights of a stockholder of the Company unless and until shares of Common Stock covered by the Awards are issued to the Participant in connection with the exercise of the Option or the vesting of the Units in accordance with the applicable terms of the Awards.
(e) Fractional Shares . No fractional shares of Common Stock shall be issued or delivered pursuant to the Option or the Units. The Committee shall determine whether cash or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.
(f) Consideration for Grant . Participant shall not be required to pay any cash consideration for the grant of the Awards. In the case of the grant of Units, as to which cash consideration at the time of grant or vesting shall not be required, the Participant’s performance of services to the Company from the grant date to the date of vesting shall be deemed to be consideration for the grant, which services have a value at least equal to the aggregate par value of the shares being newly issued in connection with the grant.
(g) Insider Trading Policy Applicable . Participant acknowledges that sales of shares received with respect to the Awards will be subject to the Company’s policies regulating trading by directors, employees and consultants.
(h) Change in Control . The provisions set forth in the 2003 Incentive Compensation Plan as amended and restated on June 7, 2011 (as it may be further amended from time to time in accordance with such plan, the “ Plan ”), relating to a “Change in Control” (as defined in the Plan) shall be incorporated herein by reference and shall apply to the Awards to the same extent as if the Awards were granted under the Plan.
(i) 409A . The provisions set forth in the Plan relating to Section 409A of the Internal Revenue Code of 1986, as amended, shall be incorporated herein by reference and shall apply to the Awards to the same extent as if the Awards were granted under the Plan.
8 Delays or Omissions . No delay or omission to exercise any right, power or remedy accruing to any party hereto, upon any breach or default of any party under this Agreement, shall impair any such right, power or remedy of such party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in a writing signed by such party and shall be effective only to the extent specifically set forth in such writing.
9. Interpretation; Integration . This Agreement and the applicable provision of the Employment Agreement contain the entire understanding of the parties with respect to its subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein (or in the applicable provision of the Employment Agreement). This Agreement (together with the applicable provisions of the Employment Agreement) supersedes all prior agreements and understandings between the parties with respect to its subject matter.
10. Governing Law . This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without regard to the provisions governing conflict of laws.
11. Restrictive Covenant Condition . The Participant hereby acknowledges and agrees that the receipt of the Awards, including any right to exercise the Option, receive the shares of Common Stock following vesting of an award of the Units or retain the profit from the sale of shares of Common Stock subject to the Awards, is conditioned upon Participant’s compliance with the non-competition, non-solicitation, and non-disclosure provisions contained in the Employment Agreement (as such provisions may be supplemented from time to time) .
12. Data Privacy . For Participants in certain jurisdictions, the data privacy laws of such jurisdictions may require the Participants’ consent to the use and transfer of certain personal information necessary to administer the Awards. Accordingly, if applicable, the Participant hereby acknowledges and agrees that the Participant’s receipt of the Awards, including any right to exercise the Option, receive the shares of Common Stock following vesting of an award of the Units or retain the profit from the sale of shares of Common Stock subject to the Awards, is conditioned upon Participant’s consent to the use and transfer of such personal information pursuant to the consent previously executed by the Participant or, if the Participant has not previously executed such a consent, to the provisions of the consent form which accompanies this Agreement (as such form may be supplemented from time to time). Participant’s execution of this Agreement constitutes acceptance and ratification of this condition and the Participant’s consent to the use and transfer of certain personal information in connection with the Awards pursuant to the provisions of such consent form (as such form may be supplemented from time to time).
13. Administrator . The Company has retained Fidelity Stock Plan Services, LLC as a third-party administrator to assist in the administration and management of equity awards granted by the Company (the “ Administrator ” or “ Fidelity ”). A listing of the Awards may be viewed through the Administrator’s website at www.NetBenefits.com once the Participant has established an account with the Administrator. The Administrator shall handle the processing of exercises of the Option and vesting and settlement of the Units. The Company reserves the right to replace Fidelity as the Administrator at any time in the Company’s sole discretion.
14. Participant Acknowledgment . The Participant hereby acknowledges that all decisions, determinations and interpretations of the Committee in respect of this Agreement and the Awards shall be final and conclusive.
[ rest of page intentionally left blank ]
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer, and the Participant has hereunto signed this Agreement on his or her own behalf, thereby representing that he or she has carefully read and understands this Agreement as of the day and year first written above.
|
|
SCIENTIFIC GAMES CORPORATION |
|
|
|
|
|
|
|
|
|
|
|
By: |
|
|
|
Name: |
|
|
|
Title: |
|
|
|
|
|
|
|
|
|
|
|
PARTICIPANT: |
|
|
|
|
|
|
|
|
|
|
|
Michael Gavin Isaacs |
|
Exhibit 5.1
Scientific Games Corporation
750 Lexington Avenue, 25th Floor
New York, New York 10022
|
|
August 7, 2014 |
Scientific Games Corporation
750 Lexington Avenue, 25th Floor
New York, New York 10022
Ladies and Gentlemen:
I am the Vice President — Worldwide Legal Affairs and Corporate Secretary of Scientific Games Corporation, a Delaware corporation (the “Company”), and have acted as counsel to the Company in connection with its registration statement on Form S-8 (the “Registration Statement”) to be filed by the Company today with the Securities and Exchange Commission (the “SEC”) pursuant to the Securities Act of 1933, as amended (the “Securities Act”), relating to the registration of 247,116 shares (the “Shares”) of the Company’s Class A Common Stock, par value $0.01 per share (the “Common Stock”), which may be issued upon (i) exercise of stock options covering 161,181 Shares and (ii) vesting of 85,935 restricted stock units that, in each case, have been granted to M. Gavin Isaacs as an employment inducement award pursuant to an inducement equity award agreement between Mr. Isaacs and the Company (as the same may be further amended from time to time, the “Agreement”).
For purposes of rendering the opinion expressed below, I have participated in the preparation of the Registration Statement and have reviewed copies of the Agreement, the Certificate of Incorporation and Bylaws of the Company, corporate records of the Company and such other documents and records of the Company as I have deemed necessary or appropriate as a basis for such opinion. In rendering the opinion expressed below, I have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to me as originals and the conformity to the originals of all documents submitted to me as copies. In addition, I have assumed and have not verified the accuracy as to factual matters of each document I have reviewed.
Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is my opinion that the Shares have been duly authorized by all necessary corporate action of the Company and, upon the issuance thereof and payment therefor in accordance with the terms of the Agreement, will be validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the General Corporation Law of the State of Delaware.
I hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving such consent, I do not thereby admit that I am an “expert” within the meaning of the Securities Act or the rules and regulations of the SEC issued thereunder with respect to any part of the Registration Statement, including this exhibit.
I own 37,525 shares of Common Stock, 78,740 shares of Common Stock underlying unvested restricted stock units, and stock options to purchase 30,044 shares of Common Stock.
|
|
Very truly yours, |
|
|
|
|
|
/s/ Jack B. Sarno |
|
|
|
|
|
Jack B. Sarno |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form S-8 of our reports dated March 14, 2014, relating to the consolidated financial statements and financial statement schedule of Scientific Games Corporation and the effectiveness of Scientific Games Corporation’s internal control over financial reporting, appearing in the Form 10-K of Scientific Games Corporation for the year ended December 31, 2013.
/s/ DELOITTE & TOUCHE LLP
Atlanta, Georgia
August 7, 2014
Exhibit 23.2
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in this Registration Statement on Form S-8 pertaining to the Scientific Games Corporation Inducement Equity Award Agreement of our report dated February 28, 2014, with respect to the statement of financial position of Lotterie Nazionali S.r.l. as of December 31, 2013, and the related statements of comprehensive income, changes in equity, and cash flows for the year ended December 31, 2013, included in the Annual Report (Form 10-K) of Scientific Games Corporation for the year ended December 31, 2013, filed with the Securities and Exchange Commission.
|
/s/ Reconta Ernst & Young S.p.A. |
|
|
|
|
|
Rome, Italy |
|
|
August 6, 2014 |
|
Exhibit 23.3
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in this Registration Statement (Form S-8) pertaining to the Inducement Equity Award Agreement of Scientific Games Corporation of our report dated June 27, 2012, with respect to the financial statements of Beijing CITIC Scientific Games Technology Co., Ltd. included in Amendment No. 1 to the Annual report (Form 10-K/A) of Scientific Games Corporation for the year ended December 31, 2011, filed with the Securities and Exchange Commission.
/s/ Ernst & Young Hua Ming LLP
Beijing, People’s Republic of China
August 7, 2014
Exhibit 23.4
Consent of Independent Auditors
We consent to use of KPMG Huazhen ’ s report dated June 26, 2012, with respect to the statement of comprehensive income, changes in equity and cash flows of Beijing Guard Libang Technology Co., Ltd. for the year ended December 31, 2011, incorporated herein by reference.
/s/ KPMG Huazhen (Special General Partnership)
Beijing, People’s Republic of China
August 7, 2014