UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D

 

Under the Securities Exchange Act of 1934

(Amendment No. 3)*

 

INSPIRED ENTERTAINMENT, INC.
(Name of Issuer)
 
Common Stock, Par Value $0.0001 Per Share
(Title of Class of Securities)
 
45782N108
(CUSIP Number)

 

A. Lorne Weil

250 West 57th Street, Suite 415

New York, New York 10107

(646) 565-3861

 

Carly Weil

3104 E. Camelback Road #2267

Phoenix, Arizona 85106

(917) 941-2082

 (Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
 
May 21, 2024
(Date of Event which Requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ☐

 

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

 

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

 

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

 

 

 

CUSIP No. 45782N108

 

1.

Names of Reporting Persons.

 

A. Lorne Weil

   
2. Check the Appropriate Box if a Member of a Group (See Instructions):
 

(a)

(b)

   
       
3.

SEC Use Only

 

4.

Source of Funds (See Instructions): OO

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e):

Not Applicable

 

6. Citizenship or Place of Organization: Canada

 

  Number of Shares 7. Sole Voting Power: 896,179  
  Beneficially Owned by      
  Each Reporting 8. Shared Voting Power: 1,955,537  
  Person With      
  9. Sole Dispositive Power: 896,179  
         
    10. Shared Dispositive Power: 1,955,537  
         

 

11. Aggregate Amount Beneficially Owned by Each Reporting Person: 2,851,716
   
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): ☐
   
13. Percent of Class Represented by Amount in Row (11): 10.2%
   
14. Type of Reporting Person (See Instructions): IN
   

 

 

 

 

CUSIP No. 45782N108

 

1.

Names of Reporting Persons.

 

Carly M. Weil

 

2. Check the Appropriate Box if a Member of a Group (See Instructions):
 

(a)

(b)

 

   
3.

SEC Use Only

 

4.

Source of Funds (See Instructions): OO

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e):

Not Applicable

 

6. Citizenship or Place of Organization: United States

 

  Number of Shares 7. Sole Voting Power: 0  
  Beneficially Owned by      
  Each Reporting 8. Shared Voting Power: 1,462,522  
  Person With      
  9. Sole Dispositive Power: 0  
         
    10. Shared Dispositive Power: 1,462,522  
         

 

11. Aggregate Amount Beneficially Owned by Each Reporting Person: 1,462,522
   
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): ☐
   
13. Percent of Class Represented by Amount in Row (11): 5.2%
   
14. Type of Reporting Person (See Instructions): IN
   

 

 

 

 

Item 1. Security and Issuer.

 

This Amendment No. 3 (this “Amendment”) amends and supplements the Schedule 13D filed by the Reporting Persons with the Securities and Exchange Commission (the “SEC”) on June 9, 2017, as amended by Amendment No. 1 to the Schedule 13D (“Amendment No. 1”) filed by certain of the Reporting Persons with the SEC on January 23, 2018 and Amendment No. 2 to the Schedule 13D (“Amendment No. 2”) filed by certain of the Reporting Persons with the SEC on November 29, 2021 (such Schedule 13D, as amended by Amendment No. 1 and Amendment No. 2, the “Schedule 13D”). The Schedule 13D, as amended by this Amendment, relates to the common stock, par value $0.0001 per share (“Common Stock”), of Inspired Entertainment, Inc., a corporation formed under the laws of the State of Delaware (the “Issuer”), whose principal executive offices are located at 250 West 57th Street, Suite 415, New York, New York 10107.

 

As further described herein, the Schedule 13D is hereby being amended to report the gifting of securities of the Issuer by A. Lorne Weil (“Lorne Weil”) for estate planning purposes, and (ii) the addition of Carly M. Weil as a Reporting Person.

 

Capitalized terms used herein and not otherwise defined in this Amendment shall have the meanings set forth in the Schedule 13D. Except as specifically set forth herein, the Schedule 13D remains unmodified.

 

Item 2. Identity and Background.

 

Item 2 to the Schedule 13D is hereby amended to add the following information:

 

Carly M. Weil is added as a Reporting Person to the Schedule 13D. The address for Carly M. Weil is 3104 E. Camelback Road #2267, Phoenix, Arizona 85106. Carly M. Weil is a U.S. Citizen. Carly Weil’s principal employment is Vice President of American Express located at 18850 North 56th Street, Phoenix, Arizona 85054.

 

During the last five years, Carly M. Weil has not been: (i) convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) and (ii) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

Hydra Industries Sponsor LLC (“Hydra Sponsor”) is removed as a Reporting Person. Hydra Sponsor’s beneficial ownership is less than 5% of the Issuer’s outstanding shares of Common Stock.

 

Item 3. Source and Amount of Funds or Other Consideration.

 

The information disclosed in Item 4 is incorporated herein by reference.

 

Item 4. Purpose of Transaction.

 

Item 4 to the Schedule 13D is hereby amended to add the following information:

 

On May 17, 2024, Lorne Weil transferred 1,156,364 restricted stock units (“RSUs”) and 911,810 performance stock units (“PSUs”) of the Issuer (collectively, the “Units”) to Hydralex Holdings LLC (“Hydralex Transferee”) in exchange for all of the membership interests in Hydralex Transferee, pursuant to that certain Restricted Stock Unit and Performance Stock Unit Transfer Agreement (the “Transfer Agreement”), effective May 17, 2024, by and among Lorne Weil, Hydralex Transferee, and the Issuer. Carly M. Weil serves as manager of the Hydralex Transferee and Lorne Weil is the sole member of Hydralex Transferee.

 

On May 21, 2024, Lorne Weil gifted 493,015 shares of Common Stock to Kathy Angele, his wife. Kathy Angele intends to gift the 493,015 shares of Common Stock to a limited liability company (the “Angele LLC”) in exchange for all of the membership interests of the Angele LLC. Carly M. Weil is expected to become the manager of the Angele LLC when such transfer occurs.

 

Pursuant to the Transfer Agreement, Hydralex Transferee agreed to be bound by the terms of the Issuer’s policy on trading in the Common Stock as if it were Lorne Weil, including the requirement to obtain pre-authorization before selling or transferring any Common Stock. Hydralex Transferee also agreed not to without the consent of the Issuer: (i) permit any person other than one or more trusts created by Lorne Weil to be a member of Hydralex Transferee; (ii) engage in any business activity or operations other than holding and selling securities of the Issuer subject to the Transfer Agreement; and (iii) directly or indirectly, purchase, acquire, sell, transfer, assign, tender in any tender or exchange offer, pledge, grant, encumber, hypothecate or otherwise dispose of securities of the Issuer in any manner. The Issuer agreed that the Common Stock transferred pursuant to the Transfer Agreement shall be treated as beneficially owned by Lorne Weil for purposes of the Issuer’s stock ownership guidelines.

 

In connection with the transactions set forth in this Item 4, Hydralex Transferee and Lorne Weil entered into a Voting Agreement (the “Voting Agreement”) pursuant to which Hydralex Transferee agreed to timely vote such number of shares of Issuer’s Common Stock that Hydralex Transferee may hold on the record date with respect to any annual or special meeting of stockholders of the Issuer, or authorize a proxy or proxies to timely vote such shares, on each matter submitted to a vote of the stockholders of the Issuer at such meeting, in proportion to the votes of all of the other stockholders of the Issuer represented in person or by proxy at such meeting with respect to such matter (i.e., mirror voting). The Voting Agreement terminates on the earlier of (i) the dissolution and liquidation of Hydralex Transferee in accordance with its terms, (ii) the sale or disposition of all of the Common Stock held by Hydralex Transferee to third parties in bona fide sale transactions with a third party or distributions to members of Hydralex Transferee, and (iii) the death of Lorne Weil. The Angele LLC and Kathy Angele are expected to enter into a similar voting agreement when the 493,015 shares of Common Stock gifted to Kathy Angele are transferred to the Angele LLC.

 

 

 

 

The descriptions of the Transfer Agreement and the Voting Agreement are qualified in their entirety by reference to the full text of such agreements, copies of which are attached as Exhibit 99.3 and Exhibit 99.4, respectively, to this Amendment and are incorporated herein by reference.

 

The securities described in this Schedule 13D are held for investment purposes. Except in Lorne Weil’s capacity as the Executive Chairman of the Issuer, no Reporting Person has any present plan or proposal which would relate to or result in any of the matters set forth in subparagraphs (a) - (j) of Item 4 of Schedule 13D except as set forth herein. The Reporting Persons reserve the right to increase or decrease their respective positions in the Issuer through, among other things, the purchase or sale of securities of the Issuer on the open market or in private transactions or otherwise on such terms and at such times as the Reporting Persons may deem advisable. The Reporting Persons reserve the right to change their intention with respect to all matters referred to in this Item 4.

 

Item 5. Interest in Securities of the Issuer.

 

(a) and (b) The information set forth on the cover pages of this Amendment No. 3 is incorporated herein by reference.

 

The aggregate percentage of shares of Common Stock reported owned by each person named herein is based upon 26,571,308 shares of Common Stock outstanding as of May 7, 2024, as reported in the Quarterly Report on Form 10-Q filed by the Issuer with the SEC on May 10, 2024. The number of shares that each Reporting Persons beneficially owns does not take into account shares of Common Stock held by the other stockholders party to the Stockholders Agreement, pursuant to which such stockholders have agreed, in certain circumstances, to vote for Hydra Sponsor’s designees to the board of directors of the Issuer as described in Item 6.

 

The information set forth on the cover pages of this Amendment No. 3 for each Reporting Person includes 1,462,522 Units (comprising 1,006,272 RSUs and 456,250 PSUs), which were part of special sign-on awards granted to Lorne Weil between 2017 and 2023 under the Issuer’s equity incentive plans, and which have satisfied the applicable vesting requirements. Settlement of such special sign-on awards shall not occur until Lorne Weil’s services with the Issuer terminate or in the event of his death or disability, or upon a Change in Control of the Issuer.

 

Lorne Weil’s remaining Units under the Issuer’s equity incentive plans comprise an aggregate of 150,092 unvested RSUs and 455,560 unvested PSUs. As such Units are not vested or scheduled to vest within 60 days of the date hereof, the Reporting Persons are not deemed to beneficially own such shares as of the date hereof for purposes of this Schedule 13D and such amounts are not included in the information set forth on the cover pages of this Amendment No. 3. Such unvested Units are as follows:

 

● 8,373 RSUs subject to an award granted on February 14, 2022 which are scheduled to vest on December 31, 2024;

 

● 25,117 PSUs subject to an award granted on February 14, 2022 as to which vesting was conditioned on attainment of pre-established performance criteria for 2022 (i.e., Adjusted EBITDA) and a time-based vesting schedule through December 31, 2024;

 

● 16,719 RSUs subject to an award granted on February 14, 2023 which are scheduled to vest in two equal installments on each of December 31, 2024 and December 31, 2025;

 

● 11,693 PSUs subject to an award granted on February 14, 2023 as to which vesting was conditioned on attainment of pre-established performance criteria for 2023 (i.e., Adjusted EBITDA) and a time-based vesting schedule through December 31, 2025;

 

● 40,000 RSUs subject to an award granted on March 8, 2024 which are scheduled to vest in three equal installments on each of December 31, 2024, December 31, 2025 and December 31, 2026;

 

● 40,000 PSUs subject to an award granted on March 8, 2024 as to which vesting is conditioned on attainment of pre-established performance criteria for 2024 (i.e., Adjusted EBITDA) and a time-based vesting schedule through December 31, 2026; and

 

● 85,000 RSUs and 378,750 PSUs subject to special sign-on awards granted pursuant to Lorne Weil’s Employment Agreement, dated October 9, 2020, as amended on June 21, 2021 and January 12, 2023 (as so amended and as may be further amended from time to time, the “Employment Agreement”). These special sign-on RSUs are scheduled to vest on December 31, 2024 and the special sign-on PSUs are subject to performance criteria, comprising (i) 187,500 PSUs conditioned on attainment of Adjusted EBITDA targets for the years 2024 to 2027 (62,500 for 2024, 41,666 for 2025, 41,667 for 2026 and 41,667 for 2027); and (ii) 191,250 PSUs subject to attainment of price targets (81,250 at $17.50, 78,750 at $20.00 and 31,250 at $22.50).

 

Under Lorne Weil’s Employment Agreement, in the event the Issuer elects to terminate Lorne Weil’s employment without cause, or if Lorne Weil terminates his employment for good reason, the unvested RSUs and PSUs (excluding sign-on awards) would remain outstanding subject to potential vesting in accordance with the time, performance or other conditions applicable to the awards; and, with respect to the sign-on awards, if Lorne Weil’s employment terminates prior to the end of the Employment Agreement, the unvested portion would lapse in circumstances other than death, a “change in control termination event” (as defined) or if the Company’s stock is no longer publicly traded, in which case, all or a portion of the outstanding balance would vest.

 

 

 

 

Carly M. Weil serves as manager of Hydralex Transferee and in such capacity has beneficial ownership over the Issuer securities held by Hydralex Transferee. Lorne Weil is the uncle of Carly M. Weil. Because of his relationships with Carly M. Weil and Kathy Angele, and his ownership of all of the membership interests of Hydralex Transferee, Lorne Weil may be deemed to share beneficial ownership with respect to the 493,015 shares of Common Stock gifted to his wife and with respect to the shares subject to the Units transferred to Hydralex Transferee which are reported in this Amendment as being beneficially owned by Carly M. Weil.

 

The information set forth on the cover page of this Amendment for Lorne Weil also includes 896,179 shares of Common Stock directly held by Hydra Sponsor, whose membership interests are owned by Lorne Weil and his children or trusts for their benefit. Lorne Weil, the managing member of Hydra Sponsor, has voting and dispositive power over such securities.

 

The filing of this Schedule 13D shall not be deemed an admission that the Reporting Persons are, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the beneficial owners of any securities of the Issuer that he or she do not directly own. Each of the Reporting Persons specifically disclaims beneficial ownership of the securities of the Issuer reported herein that he or she does not directly own, except to the extent of their pecuniary interest therein.

 

Each of the Reporting Persons disclaim being part of a group, within the meaning of section 13(d)(3) of the Exchange Act.

 

(c)None of the Reporting Persons has entered into any transactions in the Common Stock during the past sixty days except for the transactions described in Item 4 of this Amendment.

 

(d)Not applicable.

 

(e)Hydra Sponsor’s beneficial ownership ceased to be in excess of 5% of the Issuer’s outstanding shares of Common Stock as of November 23, 2021.

 

 

 

 

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

 

Item 6 of the Schedule 13D is hereby amended to add the following information:

 

Employment Agreement

 

On January 12, 2023, the Issuer entered into a Second Addendum to the Employment Agreement with Lorne Weil (the “Weil Addendum”) which extended the term of his employment with the Issuer to December 31, 2027 and provided for him to receive an aggregate of 250,000 PSUs upon approval of the Issuer’s 2023 Omnibus Incentive Plan by the Issuer’s stockholders which occurred on May 9, 2023 (comprising 125,000 PSUs conditioned on Adjusted EBITDA targets and 125,000 PSUs conditioned on stock price targets). The Employment Agreement specifies the vesting schedule and applicable criteria for vesting of the awards as described in Item 5. The description of the Weil Addendum is qualified in its entirety by reference to the full text of the Weil Addendum, a copy of which is attached as Exhibit 99.1 to this Amendment and is incorporated herein by reference.

 

In addition, except as otherwise set forth in this Amendment and elsewhere in the Schedule 13D (and all amendments thereto), there are no contracts, arrangements, understandings or similar relationships existing with respect to the securities of the Issuer between the Issuer and any of the Reporting Persons.

 

Item 7. Material to be Filed as Exhibits.

 

  99.1 Second Addendum, effective January 1, 2023, to the Employment Agreement dated October 9, 2020, as amended, by and between the Issuer and A. Lorne Weil (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K of the Issuer, filed with the SEC on January 17, 2023).

 

  99.2 Joint Filing Agreement by and between A. Lorne Weil and Carly M. Weil dated May 23, 2024 (filed herewith).
     
  99.3 Restricted Stock Unit and Performance Stock Unit Transfer Agreement effective May 17, 2024 by and among the A. Lorne Weil, Hydralex Transferee and the Issuer (filed herewith).
     
  99.4 Voting Agreement, dated May 17, 2024, by and between A. Lorne Weil and Hydralex Transferee (filed herewith).

 

 

 

 

SIGNATURES

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

DATE: May 23, 2024

 

  /s/ A. Lorne Weil
  A. Lorne Weil

 

  /s/ Carly Weil
  Carly Weil

 

Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations

(See 18 U.S.C. 1001)

 

 

 

 

Exhibit 99.2

 

JOINT FILING AGREEMENT

 

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the shares of common stock, $0.0001 par value per share, of Inspired Entertainment, Inc., and further agree that this Joint Filing Agreement shall be included as an exhibit to such joint filings.

 

The undersigned further agree that each party hereto is responsible for the timely filing of such Statement on Schedule 13D and any amendments thereto, and for the accuracy and completeness of the information concerning such party contained therein; provided, however, that no party is responsible for the accuracy or completeness of the information concerning any other party, unless such party knows or has reason to believe that such information is inaccurate.

 

This Joint Filing Agreement may be signed in counterparts with the same effect as if the signature on each counterpart were upon the same instrument.

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of May 23, 2024.

 

  /s/ A. Lorne Weil
  A. Lorne Weil

 

  /s/ Carly Weil
  Carly Weil

 

 

 

 

Exhibit 99.3

 

EXECUTION COPY

 

inspired entertainment, Inc.

 

Restricted stock unit and Performance stock Unit

TRANSFER AGREEMENT

 

This Restricted Stock Unit and Performance Stock Unit Transfer Agreement (this “Agreement”), effective May 17, 2024, (the “Effective Date”), is made and entered into by and among A. Lorne Weil (“Transferor”), Hydralex Holdings LLC (“Transferee”), and Inspired Entertainment, Inc., a Delaware corporation (the “Company”) (collectively, the “Parties”).

 

RECITALS

 

A. The Company has granted to Transferor 1,156,364 restricted stock units (“RSUs”) and 911,810 performance stock units (“PSUs”) under the Inspired Entertainment, Inc. 2023 Omnibus Incentive Plan, the Inspired Entertainment 2021 Omnibus Incentive Plan and the 2016 Second Long Term Incentive Plan (collectively, the “Plans”), as further described in Exhibit A hereto.

 

B. The RSUs and PSUs are subject to the terms and conditions of the Plans and, as applicable, the terms contained in award agreements and/or the Transferor’s employment agreement, as approved by the Compensation Committee of the Company’s Board of Directors (the “Committee”), which are referred to in this Agreement collectively as the “Award Agreements”, and are subject to such policies and procedures approved by the Committee in connection with the administration of the Plans and awards thereunder.

 

C. The RSU Agreements provide that the RSUs are subject to vesting based on Transferor’s continuous service with the Company (the “RSU Vesting Requirement”).

 

D. The PSU Award Agreements provide that the PSUs are subject to vesting based on both attaining performance goals and Transferor’s continuous service with the Company (the “PSU Vesting Requirement”).

 

E. As of the date hereof, 1,006,272 RSUs have satisfied the RSU Vesting Requirement (the “Vested RSUs”) and 456,250 PSUs have satisfied the PSU Vesting Requirement (the “Vested PSUs”).

 

F. Section 14 of each of the Plans provides that the Committee may, in its sole discretion, permit RSUs and PSUs to be transferred by Transferor to a family member or other third person or entity, for no consideration, subject to such rules as the Committee may adopt consistent with Award Agreement to preserve the purposes of the Plans.

 

G. Transferor has given the Committee advance written notice describing the terms and conditions of the proposed transfer and the Committee has determined that the proposed transfer can be made under the Plans subject to the terms and conditions set forth in this Agreement.

 

H. In accordance with the terms and conditions of the Award Agreements, Transferor desires to transfer 1,156,364 of the RSUs and 911,810 of the PSUs, as identified in Exhibit A (collectively, the “Transferred Units”) to Transferee in exchange for membership interests in Transferee, as indicated below subject to the terms and conditions of this Agreement.

 

1

 

 

I. As of the date of this Agreement, Transferor owns, outright, 493,015 Common Shares issued by the Company.

 

Now, therefore, the Parties hereby agree as follows:

 

1. TRANSFER OF UNITS.

 

1.1 On the Effective Date and subject to the terms and conditions of this Agreement, Transferor hereby transfers to Transferee for no consideration, and Transferee hereby acquires from Transferor, the Transferred Units. The Committee hereby consents to the foregoing transfers by Transferor of the Transferred Units to the Transferee on the terms and conditions set forth in this Agreement pursuant to Section 14 of each of the Plans.

 

1.2 As used in this Agreement, “Transferred Units” shall include all the Units transferred under this Agreement and all securities received (a) in replacement or settlement of the Units, (b) as a result of stock dividends or stock splits in respect of the Units and (c) as substitution for the Units in a recapitalization, merger, reorganization or the like.

 

2. REPRESENTATIONS AND WARRANTIES OF TRANSFEREE. Transferee represents and warrants to Transferor and the Company that:

 

2.1 No Consideration. No consideration is being furnished to Transferor in exchange for, or in connection with, transferring the Units pursuant to this Agreement.

 

2.2 Compliance with Underlying Agreements. Transferee hereby acknowledges and agrees that the Transferred Units were granted pursuant to the respective Plans and that they are subject to the terms and conditions of the respective Plans and the applicable Award Agreements (which include the provisions of Transferor’s employment agreement with the Company dated October 9, 2020, as clarified on April 12, 2021, and amended on June 21, 2021 and January 12, 2023 (the “Employment Agreement”)). Transferee further agrees and acknowledges that the Transferred Units shall remain subject to the terms of the respective Plans and the applicable Award Agreements in the same manner with respect to Transferee as if such Transferred Units had continued to be held by Transferor (copies of which are attached hereto as Exhibit B and Exhibit C, respectively).

 

2.3 Authority. Transferee has full legal right, power and authority to enter into and perform its obligations under this Agreement and to accept title to the Units pursuant to the terms and conditions of this Agreement. Transferee’s activities shall be limited to holding cash, Transferred Units, Common Shares and other publicly traded securities for investment purposes only or otherwise as specifically provided under this Agreement. Transferee shall not engage in any other activities, including but not limited to incurring any indebtedness or using the Common Shares as collateral for any indebtedness.

 

2

 

 

2.4 Rule 144. The Transferee acknowledges that the Common Shares to be issued upon settlement of the Transferred Units will, and Common Shares issued by the Company transferred by Transferor to Transferee may, contain a restrictive legend, as determined by the Company, until such time as legal counsel to the Company opines in a letter to the Company’s transfer agent that the Transferee has sold any such Common Shares in compliance with the conditions applicable to Rule 144 promulgated under the Securities Act of 1933, including, as applicable, the Rule 144 holding period requirement, the volume limitations condition and the “current reporting” condition applicable to former blank check companies under Rule 144(i). Transferee has been advised that Rule 144 may not be available with respect to certain of the Common Shares for a period of six (6) months after issuance, and in certain cases one (1) year.

 

2.5 Investment Intent. Any securities issued to Transferee pursuant to the settlement of the Units will be acquired solely for Transferee’s own account, for investment purposes only and not with a view to, or for resale in connection with, any distribution or public offering of such securities within the meaning of the Securities Act of 1933, as amended.

 

2.6 LLC Member. The sole members of the Transferee shall at all times be one or more trusts created under the Agreement, dated May 17, 2024, between A. Lorne Weil, as Settlor, and Brown Advisory Trust Company of Delaware, LLC, as Trustee (the “Trust Agreement”) (collectively, the “Trust”). Transferee represents and warrants that the trustee of the Trust has certified under penalties of perjury that the Trust qualifies as a “family member” under the instructions to SEC Form S-8 (a “Family Member”) for purposes of registering the transfer of the Transferred Units to the Transferee.

 

2.7 Transferee Operations. The Transferee covenants and agrees that, except as expressly provided in this Agreement or with the Committee’s advance written consent, it shall not (a) permit any person other than the Trust to be a sole member of the Transferee, (b) admit any new member of the Transferee other than a trust created under the Trust Agreement; (c) engage in any business activity or operations other than holding and selling securities of the Company subject to this Agreement (“Company Securities”), any other publicly traded securities, cash or cash equivalents, (d) incur any indebtedness or guaranty any obligation to third parties; (e) execute any proxy or other voting instruction with respect to the Company Securities, or any written consent with respect to the Company Securities in lieu of a meeting of stockholders of the Company (other than in accordance with Section 5), (f) directly or indirectly, purchase, acquire, sell, transfer, assign, tender in any tender or exchange offer, pledge, grant, encumber, hypothecate or otherwise dispose of Company Securities in any manner (collectively, “Transfer”), it being understock that the Company will not unreasonably withhold, condition, or delay consent to Rule 10b5-1 plans consistent with its Insider Trading Policy, (g) enter into any contract, option or other arrangement or understanding with respect to the Transfer of any Company Securities or any interest therein, including, without limitation, any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor transaction, collar transaction or any other similar transaction (including any option with respect to any such transaction) or combination of any such transactions, in each case involving any Company Securities (each of the foregoing, a “Derivative Transaction”), (h) deposit any Company Securities into a voting trust or enter into a voting agreement or arrangement or grant any proxy or power of attorney with respect thereto that is inconsistent with this Agreement (i) permit its operating agreement to be amended in any material respect other than to change the identity of beneficiaries that enables the Transferee and its members to remain a Family Member (as defined in Section 2.6 above; (j) knowingly take any action that would, or would reasonably be expected to, make any representation or warranty of the Transferee set forth in this Agreement untrue or incorrect or have the effect of preventing or delaying Transferee from performing any of its obligations under this Agreement, and (i) agree (whether or not in writing) to take any of the actions referred to in the foregoing clauses (a) through (h). Any purported action taken in violation of this Section shall be null and void.

 

3

 

 

2.8 Insider Trading Policy. Transferee acknowledges and agrees that Transferor is an “insider” for purposes of the Company’s policy on trading in the Common Shares (as defined in each of the Plans) and that Transferee is bound by the terms of such policy as if it were the Transferor, including the requirement to obtain pre-authorization before selling or transferring any Common Shares.

 

2.9 Securities Disclosure. Transferee acknowledges the Company has a class of securities registered with the Securities and Exchange Commission (“SEC”) pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and is a former shell company. Transferee agrees that it shall comply (at its own expense) with all obligations imposed upon it and its affiliates pursuant to the Exchange Act and the rules and regulations of the SEC promulgated pursuant thereto, including, without limitation, its obligation to make all required beneficial ownership filings in accordance with Regulation 13D-G and Section 16 of the Exchange Act.

 

2.10 Clawback Policy. Transferee acknowledges and agrees that Transferor is subject to any compensation recovery or “clawback” policies as may be in effect from time to time with respect to incentive compensation that may be earned by the Transferor from the Company and that Transferee is bound by the terms of any such policy.

 

2.11 Cooperation. Transferee shall reasonably cooperate with the Company, including but not limited to (i) providing information and documentation from time to time regarding the holdings, activities and structure of Transferee and the Trust as the Company determines in good faith to be necessary or appropriate to comply with applicable law, (ii) to enter into any agreement necessary for the Company or any of its affiliates to obtain or retain any regulatory approval, consent, license or other regulatory authorization or (iii) to ensure compliance with the terms of this Agreement and any Company policy referenced herein.

 

3. REPRESENTATIONS AND WARRANTIES OF Transferor. Transferor represents and warrants to the Company and Transferee that:

 

3.1 No Consideration. No consideration is being furnished to Transferor in exchange for transferring the Units pursuant to this Agreement.

 

3.2 Participant. Transferor is a “Participant,” as defined in each of the Plans.

 

3.3 Title. Transferor has valid title to the Transferred Units, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest other than pursuant to the Plan and the Award Agreements.

 

3.4 Consents. All consents, approvals, authorizations and orders required for the execution and delivery of this Agreement and the transfer of the Units under this Agreement have been obtained and are in full force and effect.

 

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3.5 Authority. Transferor has full legal right, power and authority to enter into and perform its obligations under this Agreement and to transfer the Units pursuant to the terms and conditions of this Agreement.

 

3.6 Taxes. Transferor shall continue to be solely liable for any tax liability with respect to the Transferred Units at all times, including but not limited to federal and state income and employment taxes, interest and penalties (collectively, the “Tax Liability”); provided, however, that the Company acknowledges and agrees that, in the instrument effectuating the transfer of the Transferred Units, Transferor and Transferee may agree that Transferee shall assume the responsibility of discharging the Tax Liability; and provided further, that, if Transferee assumes the responsibility of discharging the Tax Liability, the Parties agree that such assumption of liability shall not be treated as consideration for any purpose of this Agreement. Except as otherwise may be agreed to among the Parties in writing, the Company shall collect from Transferor applicable withholding taxes (as determined by the Company in accordance with applicable law and applicable Company procedures) on any compensation taxable to Transferor in connection with the Transferred Units. Any sell-to-cover transactions, if permitted under the terms of an applicable Award Agreement, are subject to the approval of the Company, including under the terms of the Insider Trading Policy, and any such instructions must be duly submitted to the Company by the Transferee in accordance with the Company’s applicable requirements.

 

3.7 Stock Ownership Guidelines. Common Shares transferred under this Agreement shall be treated as beneficially owned by Transferor for purposes of the Company’s stock ownership guidelines.

 

3.8 Additional Stock Transfers. Transferor agrees that any additional transfers of Company’s equity securities transferred from by the Transferor to the Transferee shall be subject to the voting provisions as set forth in Section 5 below.

 

4. transferee’s rightS and restrictions

 

4.1 No Additional Rights. The transfer of the Transferred Units does not create in Transferee, and shall not be construed to create, any greater rights than were held by Transferor under the terms of the respective Plans and the Employment Agreement. Except as hereafter amended, the Transferred Units remain subject to the terms of the respective Plans and Employment Agreement at the time of this transfer, including without limitation the terms controlling tax withholding, transfer, and termination.

 

4.2 Transferability. A Transferee may not transfer any portion of the Transferee’s rights, title or interest in the Transferred Units or the Common Shares received upon settlement of Transferred Units other than by will or the laws of descent and distribution, either with consideration to a third party or without consideration to a beneficiary of Transferee, without the express prior written consent of the Committee, which may be withheld for any or no reason in the Committee’s sole discretion.

 

4.3 Amendments. The power to consent to an amendment to this Agreement by the Company that impairs the rights of Transferee with respect to the Transferred Units shall lie exclusively with Transferee.

 

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4.4 Condition Precedent to Issuing Shares. No Common Shares shall be issued by the Company pursuant to the Transferred Units to the Transferee unless and until adequate provision has been made (whether by payment from Transferor or Transferee in accordance with Section 3.6), in the sole opinion of the Company, for any federal, state, local and foreign withholding obligations of the Company or an affiliate of the Company that may arise in connection with the Transferred Units.

 

4.5 Valuation. The Company is under no obligation at any time to aid Transferor or Transferee in establishing the value of the Transferred Unit for any purpose.

 

5. Voting Agreement

 

As a condition for entering into this Agreement, the Transferee shall enter into a Voting Agreement in substantially the same form as attached hereto as Exhibit D. Transferor shall provide such evidence of compliance with the Voting Agreement as may reasonably be requested by the Company.

 

6. GENERAL PROVISIONS.

 

6.1 Acknowledgment of Risks. Transferee acknowledges that the acquisition of the Transferred Units involves a risk in that Transferee may not be able to liquidate Transferee’s investment in the Common Shares at convenient times or at desired market prices, and that the transferability of the Transferred Units is extremely limited. Transferee represents that Transferee can bear the Tax Liability and economic risk of the investment in the acquisition of Common Shares to be received upon the settlement of the Transferred Units.

 

6.2 Tax Acknowledgments. Transferor and Transferee further acknowledge each has consulted with their own attorney and tax and estate planning professionals regarding the transfer of the Transferred Units pursuant to the terms and conditions of this Agreement. Transferor and Transferee have each reviewed with its own tax advisors the federal, state, local and foreign tax consequences of the transfer of the Transferred Units and the vesting and settlement thereof, including but not limited to federal and applicable state gift taxes and compliance with Section 409A of the Code. Transferor and Transferee are each relying solely on such advisors and not on any statements or representations of the Company or any counsel, advisor or agent of the Company. Transferee and Transferor assume sole responsibility for the Tax Liability or other liability that arise as a result of the transfer of the Transferred Units under this Agreement, the settlement of the Transferred Units, or any other liability that arises as a result of the Transferred Units.

 

6.3 Indemnity. Transferor individually and jointly with Transferee agrees to indemnify and hold the Company harmless against any and all liabilities resulting from any inaccuracy in or breach of any of the representations and warranties contained in this Agreement or resulting from the Company participating in effecting this Agreement.

 

6.4 Entire Agreement. The Plans and the Award Agreements are incorporated herein by reference. The Plans, the Employment Agreement, the Voting Agreement and this Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of Transferee and Transferor with respect to the subject matter hereof, and may not be modified by either party hereto except by means of a writing signed by both Transferee and Transferor, in accordance with the terms of the Plan, the Award Agreements and the Voting Agreement. No provisions in the trust agreement applicable to Transferee shall be binding on the Company.

 

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6.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

 

6.6 Severability. If any provision of this Agreement is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto. If such clause or provision cannot be so enforced, such provision shall be stricken from this Agreement and the remainder of this Agreement shall be enforced as if such invalid, illegal or unenforceable clause or provision had (to the extent not enforceable) never been contained in this Agreement. Notwithstanding the forgoing, if the value of this Agreement based upon the substantial benefit of the bargain for any party is materially impaired, which determination as made by the presiding court or arbitrator of competent jurisdiction shall be binding, then all parties agree to substitute such provision(s) through good faith negotiations.

 

6.7 Confidentiality. Each of Transferor and Transferee agrees that it will keep confidential and will not disclose or use for any purpose any information about the terms of this Agreement and the transactions contemplated hereby and any confidential information obtained from the Company in connection herewith, unless any such information (a) is known or becomes known to the public in general (other than as a result of a breach of this Agreement by the disclosing party), such as is required to comply with federal securities laws or (b) is or has been made known or disclosed to the disclosing party by a third party without a breach of any confidentiality obligations by such third party; provided, however, that either Transferor or Transferee may disclose such information (i) to its attorneys, accountants, consultants and other professionals to the extent necessary to obtain their services in connection with the transfer and ownership of the Units, provided that such persons agree to maintain the confidentiality of such information in accordance herewith; (ii) to any affiliate in the ordinary course of business, provided that such affiliate agrees to maintain the confidentiality of such information in accordance herewith; or (iii) as may be required by law, provided that the disclosing party promptly notifies the other parties hereto in advance of such disclosure and agrees to cooperate to take reasonable steps to minimize the extent of any such required disclosure.

 

6.8 Actions by the Transferee. Unless otherwise agreed to by the Parties, the managing member of the Transferee shall possess the sole power to take actions on behalf of the Transferee with respect to the Transferred Units, the shares of the Company’s common stock received on settlement of Transferred Units and this Agreement. Any written instruction from the managing member of the Transferee shall include representations that such action is duly authorized under the Transferee’s operating agreement and instructions received from Brown Advisory Trust Company of Delaware, LLC.

 

6.9 Termination Agreement. This Agreement shall terminate and have no further force or effect upon the earlier to occur of (i) the dissolution and liquidation of Transferee in accordance with its terms, (ii) the sale or disposition of all RSUs, PSUs, and Common Shares to third parties in bona fide sale transactions with a third party or distributions to members of Transferee, and (iii) the death of Transferor.

 

6.10 Effective Date. This Agreement shall become effective upon its execution by all parties here.

 

6.11 Governing Law. This Agreement shall be governed by the laws of the State of Delaware, except for that body of law pertaining to conflicts of laws.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized representative and Transferor and Transferee have each executed this Agreement, as of the Effective Date.

 

TRANSFEROR:      TRANSFEREE:
         
By: /s/ A. Lorne Weil   By: /s/ Carly M. Weil
Address:      Name: Carly M. Weil
      Title: Manager
      Address:   
         
         
COMPANY: INSPIRED ENTERTAINMENT, INC.        
       
By: /s/ Carys Damon      
Name: Carys Damon      
Its: General Counsel      
Address:  250 West 57th Street, Suite 415      
  New York, NY 10107      

 

Attachments

 

Exhibit A - Transferor’s Outstanding RSUs and PSUs and Transferred Units

Exhibit B - RSU Provisions for Transferred Units

Exhibit C - PSU Provisions for Transferred Units

Exhibit D - Voting Agreement

 

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EXHIBIT A

 

Transferor’s Outstanding RSUs and PSUs and Transferred Units

 

Restricted Stock Units

 

Grant Date  Total RSUs   Transferred RSUs   Transferred RSUs that are Vested RSUs 
December 21, 2017   926,272    926,272    926,272 
May 11, 2021   165,000    165,000    80,000 
February 14, 2022   8,373    8,373    0 
February 14, 2023   16,719    16,719    0 
March 8, 2024   40,000    40,000    0 

 

Performance Stock Units

 

Target
Type
  Grant Date  Total PSUs   Transferred PSUs   Transferred PSUs that are Vested PSUs 
(1)  May 11, 2021   187,500    187,500    125,000 
(2)  May 11, 2021   397,500    397,500    300,000 
(1)  February 14, 2022   25,117    25,117    0 
(1)  February 14, 2023   11,693    11,693    0 
(1)  May 9, 2023   125,000    125,000    0 
(2)  May 9, 2023   125,000    125,000    31,250 
(1)  March 8, 2024   40,000    40,000    0 

 

(1) Adjusted EBITDA

(2) Stock Price

 

 

 

 

EXHIBIT B

 

RSU Provisions

for Transferred Units

 

Restricted Stock Unit Award Agreement dated December 21, 2017

Restricted Stock Unit Award Agreement dated February 14, 2022

Restricted Stock Unit Award Agreement dated February 14, 2023

Restricted Stock Unit Award Agreement dated March 8, 2024

Section 6 of the Employment Agreement

 

 

 

 

EXHIBIT C

 

PSU Provisions

for Transferred Units

 

Performance Unit Award Agreement dated February 14, 2022

Performance Unit Award Agreement dated February 14, 2023

Performance Unit Award Agreement dated March 8, 2024

Section 6 of the Employment Agreement

 

 

 

 

EXHIBIT D

 

Voting Agreement

 

 

 

 

Exhibit 99.4

 

EXECUTION COPY

 

VOTING AGREEMENT

 

This Agreement is hereby this 17th day of May 2024 by and between A. Lorne Weil (“Weil”) and Hydralex Holdings LLC (the “LLC”). Capitalized terms used but not defined in this Agreement shall have the meanings ascribed thereto in Restricted Stock Unit and Performance Stock Units Transfer Agreement by and between the Company and LLC dated May 17, 2024 (the “Transfer Agreement”). As a condition for transferring equity awards granted by Inspired Entertainment, Inc. (“Inspired”) under the Transfer Agreement, the LLC hereby agrees with Weil, as follows:

 

1. Mirror Voting

 

(a) At each annual or special meeting of the stockholders of Inspired at which a vote will be taken after the date of this Agreement, the LLC will timely vote such number of shares of Inspired’s common stock that are held by LLC (collectively, the “Covered Shares”) as it may hold on the record date with respect to such meeting, or authorize a proxy or proxies to timely vote such shares, on each matter submitted to a vote of the stockholders at such meeting, in proportion to the votes of all of the other stockholders of Inspired represented in person or by proxy at such meeting with respect to such matter (i.e., mirror voting). In determining the vote of such other stockholders, abstentions or “broker non-votes” with respect to any matter shall not be deemed to have been voted with respect to such matter.

 

(b) The LLC hereby agrees to provide to the transfer agent and registrar of the common stock of Inspired (the “Transfer Agent’) with such information, authorizations and directions as the Transfer Agent may reasonably request in order to effectuate the purposes of clause (a) above.

 

(c) Nothing herein shall be deemed to bind a purchaser of the Covered Shares from the LLC following the transfer of such shares by the LLC in a bona fide sale transaction with a third party. The provisions of this Agreement shall continue to apply to the Covered Shares at all times, except as provided in the foregoing sentence of this paragraph 1(c) and in paragraph 2(n) hereof.

 

2. Other Agreements.

 

(a) Further Assurances. Weil and the LLC agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

 

(b) Notices. All notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally or sent by first class registered or certified mail or overnight courier service, (ii) by facsimile and (iii) by electronic mail, in each case to the address, facsimile number or email address as each party shall have provided to the other in connection with this Agreement. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.

 

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(c) Entire Agreement. This Agreement embodies the entire agreement and understanding between the LLC and Weil with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

 

(d) Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by all parties hereto.

 

(e) Waivers and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by both parties hereto. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

 

(f) Assignment. The rights and obligations under this Agreement may not be assigned by either of the parties hereto without the prior written consent of the other party; provided that the obligations of the LLC hereunder shall be binding upon any successor of the LLC.

 

(g) Benefit. All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in this Agreement shall be construed to create any rights or obligations except among the parties hereto, and no person or entity shall be regarded as a third-party beneficiary of this Agreement.

 

(h) Governing Law; Jurisdiction. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the laws of the State of Delaware applicable to contracts wholly performed within the borders of such state, without giving effect to the conflict of law principles thereof. The parties consent to exclusive jurisdiction and venue in the federal and state courts sitting in the State of Delaware, and waive any objection to such venue, including any objection based upon forum non conveniens or other grounds.

 

(i) Injunctive Relief. The LLC acknowledges and agrees that, in the event of a breach or threatened breach of this Agreement, Weil will suffer irreparable harm and will therefore be entitled to injunctive relief to enforce this Agreement.

 

(j) Severability. If any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent that such court deems it reasonable and enforceable, and as so limited shall remain in full force and effect. If such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement shall nevertheless remain in full force and effect.

 

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(k) No Waiver of Rights, Powers and Remedies. No failure or delay by either party hereto in exercising any right, power or remedy under this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy of such party.

 

(l) Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.

 

(m) Counterparts. This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. If signature is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

(n) Term. The obligations of the LLC hereunder shall terminate on the earlier of (i) the dissolution and liquidation of the LLC in accordance with its terms, (ii) the sale or disposition of all of the Covered Shares to third parties in bona fide sale transactions with a third party or distributions to members of the LLC, and (iii) the death of A. Lorne Weil.

 

(o) Disclosure. The parties hereto hereby acknowledge that (i) the terms of this Agreement will be publicly disclosed by Inspired, and (ii) this Agreement will be filed with the Securities and Exchange Commission as an exhibit to a Form 8-K of Inspired.

 

Remainder of this Page is Left Blank

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

Hydralex Holdings LLC  
     
/s/ Carly Weil  
By: Carly Weil, Manager  
     
/s/ A. Lorne Weil  
A. Lorne Weil  
     
Voting Agreement accepted by Inspired Entertainment, Inc.  
     
By: /s/ Carys Damon  
  Carys Damon  
Title: General Counsel  

 

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