|
Item
5.02
|
Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
On
August 3, 2021, Inspired Gaming (UK) Limited (“IG UK”), a subsidiary of Inspired Entertainment, Inc. (the “Company”),
entered into new employment agreements (each, an “Employment Agreement” and together, the “Employment Agreements”)
with each of Stewart F.B. Baker, the Company’s Executive Vice President and Chief Financial Officer, and Carys Damon, the Company’s
Executive Vice President and General Counsel (each such individual, an “Executive” and together, the “Executives”).
The term of each Executive’s Employment Agreement is effective as of July 1, 2021 and replaces their prior employment agreements.
Under
the terms of the Employment Agreements, commencing January 1, 2022, each Executive will receive an annual base salary of $380,000 per
year (prior to January 1, 2022 the current salary shall continue to be paid), with a target annual bonus of not less than 100%, and a
maximum annual bonus of not more than 200%, of his or her base salary, subject to performance goals determined by the Compensation Committee
of the Board of Directors of the Company (the “Compensation Committee”). The annual bonus for each Executive will be consistent
with the Company’s short-term incentive plan and the award criteria applicable to other senior executives of the Company and its
subsidiaries. Each Executive also will be reimbursed for all reasonable travelling accommodation, entertainment and other similar out-of-pocket
expenses exclusively and reasonably incurred by him or her in the performance of his or her respective duties, in accordance with the
Company’s expense reimbursement policies. The Executives’ previous entitlement to an annual car allowance shall cease on
January 1, 2022.
In
consideration of each Executive’s agreement to enter into the Employment Agreement and remain with the Company and its subsidiaries,
each Executive was awarded a sign-on equity grant of 75,000 restricted stock units (“RSUs”) in the Company on August 4, 2021,
which will vest in full on December 31, 2024, provided that the Executive remains employed by the Company or its subsidiaries on such
date. If the Executive’s departure from the Company or its subsidiaries is the result of the Executive’s death or a change
of control event (as defined in the Employment Agreement), the RSUs will vest in accordance with the terms set forth in the Employment
Agreement.
Either
party may terminate the Employment Agreement by giving the other party not less than twelve months’ written notice, provided that
such notice, if given by the IG UK, may not expire prior to December 31, 2024 and provided the Company may in its discretion elect to
terminate with immediate effect by paying the salary and other amounts contractually due in respect of the notice period. In addition,
IG UK may terminate the Employment Agreement for cause and each Executive may terminate his or her respective Employment Agreement for
good reason, in each case as more particularly described in the Employment Agreement.
In
the event of the termination of the Executive’s employment without cause by IG UK or if the Executive terminates his or her employment
for good reason, then, among other things, the equity or equity-based awards then held by the Executive which have not fully vested as
of the date of termination (including any awards under the Company’s long-term incentive plan other than the sign-on equity grant)
shall continue to remain outstanding subject to future vesting in accordance with the award’s time, performance or other applicable
conditions to vesting.
Under
the Employment Agreements, each Executive is subject to certain restrictive covenants, including, among other things, non-solicitation
and non-competition restrictions for a period of twelve months after termination of his or her employment and confidentiality obligations.
The
Employment Agreements will be governed by and construed in accordance with the law of England and Wales.
In
determining to approve the Employment Agreement with each Executive, the Compensation Committee took into account the following factors,
among other factors it deemed relevant:
|
|
●
|
the
Compensation Committee’s desire to align the employment arrangements of the members of the Company’s Office of the Executive
Chairman (“OEC”) to the extent practicable, while taking into account the requirements of the various jurisdictions in
which the members of the OEC reside; and
|
|
|
●
|
each
Executive’s strong leadership and contributions to the management of the business of the Company and its subsidiaries through
the unprecedented COVID-19 pandemic and government mandated shutdown of significant portions of the venues where the Company’s
products are offered.
|
The
description of the Employment Agreements set forth above is qualified in its entirety by reference to the full text of the Employment
Agreements, copies of which are attached as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K and are incorporated herein
by reference.