Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
Additional Sign-On Awards for Timothy Throsby and Hamish McLennan
Prior to each of Timothy Throsby and Hamish McLennan joining the Board of Directors (the “Board”) of Scientific Games Corporation (the
“Company”) on October 1, 2020 and October 29, 2020, respectively, the Company and Messrs. Throsby and Hamish had preliminary discussions regarding potential sign-on awards as an inducement for them to join the Board in light of the business
opportunities and associated compensation that each would have to forgo. However, the terms of the awards, including the value, form and vesting conditions, were not discussed in detail at that time and were not determined until recently.
Accordingly, on February 4, 2021, the Board approved the grant, effective as of February 10, 2021, of 10,000 restricted stock units (“RSUs”) to each of Messrs. Throsby and McLennan, with such RSUs vesting immediately.
Entry into New Employment Agreement with Barry L. Cottle
On February 5, 2021, the Company entered into a new employment agreement with Barry L. Cottle, the Company’s President and Chief
Executive Officer (the “New Cottle Agreement”), which will become effective on June 1, 2021 (the “effective date”) upon the expiration of his current employment agreement. The term of the New Cottle Agreement is from the effective date until May 31,
2024, subject to automatic extension for an additional year at the end of the term and each anniversary thereof unless timely notice of non-renewal is given by either the Company or Mr. Cottle.
The New Cottle Agreement has substantially the same terms and conditions as Mr. Cottle’s current employment agreement, except as
described below.
Pursuant to the New Cottle Agreement, Mr. Cottle’s annual base salary will increase from $1,750,000 to $1,800,000, with his target bonus
and target long-term incentive opportunities remaining 100% and 250% of base salary, respectively. In connection with entering into the New Cottle Agreement, on June 9, 2021, the Company will grant to Mr. Cottle 50,000 RSUs, vesting in substantially
equal installments on each of May 31, 2022, 2023 and 2024.
Upon Mr. Cottle’s termination of employment by the Company without “Cause”, by Mr. Cottle for “Good Reason” (as such terms are defined in
the New Cottle Agreement) or as a result of the Company’s non-renewal of the New Cottle Agreement, he would be entitled to receive the payments and benefits provided for under his current employment agreement, except (i) his severance multiplier,
which is used to determine Mr. Cottle’s cash severance and continued benefits entitlements, will be increased from one to two, and (ii) any equity awards held by Mr. Cottle will continue to vest during the two-year period following his termination
date (subject to earlier vesting under certain circumstances). In the event Mr. Cottle retires after reaching age 65, all service-based vesting conditions for his annual equity awards will be deemed satisfied.
In exchange for the increased severance payments and benefits described above, Mr. Cottle’s restrictive covenants will be extended to
cover the two-year period following his termination of employment, and Mr. Cottle will, if requested by the Company, provide consulting services for such two-year period for no additional compensation.