UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 12, 2014

 

BALLY TECHNOLOGIES, INC.

(Exact name of Registrant as specified in its charter)

 

 

 

Registrant’s telephone number, including area code: (702) 897-7150

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 8.01.         Other Events.

 

On August 12, 2014, Bally Technologies, Inc. (the “Company”) distributed the following materials to its employees, copies of which are attached hereto as exhibits and incorporated herein by reference:

 

·                  Compensation and Benefits Frequently Asked Questions Related to the Agreement and Plan of Merger (Exhibit 99.1)

 

Forward Looking Statements

 

This communication may contain forward-looking statements. Forward-looking statements may be typically identified by such words as “may,” “will,” “should,” “would,” “expect,” “anticipate,” “plan,” “likely,” “believe,” “estimate,” “project,” “intend,” and other similar expressions among others. Although we believe the expectations reflected in any forward-looking statements are reasonable, they involve known and unknown risks and uncertainties, are not guarantees of future performance, and actual results, performance or achievements may differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements and any or all of our forward-looking statements may prove to be incorrect.  Consequently, no forward-looking statements may be guaranteed and there can be no assurance that the actual results or developments anticipated by such forward looking statements will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company or its business or operations. Factors which could cause our actual results to differ from those projected or contemplated in any such forward-looking statements include, but are not limited to, the following factors: (1) the risk that the conditions to the closing of the merger are not satisfied (including a failure of the shareholders of the Company to approve, on a timely basis or otherwise, the merger and the risk that regulatory approvals required for the merger are not obtained, on a timely basis or otherwise, or are obtained subject to conditions that are not anticipated); (2) litigation relating to the merger; (3) uncertainties as to the timing of the consummation of the merger and the ability of each of the Company and Scientific Games Corporation (“Scientific Games”) to consummate the merger; (4) risks that the proposed transaction disrupts the current plans and operations of the Company; (5) the ability of the Company to retain and hire key personnel; (6) competitive responses to the proposed merger; (7) unexpected costs, charges or expenses resulting from the merger; (8) the failure by Scientific Games to obtain the necessary debt financing arrangements set forth in the commitment letter received in connection with the merger; (9) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger; and (10) legislative, regulatory and economic developments. The foregoing review of important factors that could cause actual events to differ from expectations should not be construed as exhaustive and should be read in conjunction with statements that are included herein and elsewhere, including the risk factors included in the Company’s most recent Annual Report on Form 10-K for the year ended June 30, 2013, as supplemented by the risks described Part II, Item 1A of our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2014, and our more recent reports filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company can give no assurance that the conditions to the Merger will be satisfied. Except as required by applicable law, the Company undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

 

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Additional Information and Where to Find It

 

This communication is being made in respect of the proposed transaction involving the Company and Scientific Games. The proposed transaction will be submitted to the shareholders of the Company for their consideration. In connection with the proposed transaction, the Company will prepare a proxy statement to be filed with the SEC. The Company and Scientific Games also plan to file with the SEC other documents regarding the proposed transaction. THE COMPANY’S SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. When completed, a definitive proxy statement and a form of proxy will be mailed to the shareholders of the Company. The Company’s shareholders will be able to obtain, without charge, a copy of the proxy statement (when available) and other relevant documents filed with the SEC from the SEC’s website at http://www.sec.gov. The Company’s shareholders will also be able to obtain, without charge, a copy of the proxy statement and other relevant documents (when available) by going to the Company’s Investor Relations website page at http://investor.ballytech.com or by contacting Investor Relations by mail to Bally Technologies, Inc., Attn: Investor Relations, 6650 S. El Camino Road, Las Vegas, Nevada 89118.

 

Participants in Solicitation

 

The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company’s shareholders with respect to the meeting of shareholders that will be held to consider the proposed Merger. Information about the Company’s directors and executive officers and their ownership of the Company’s common stock is set forth in the proxy statement for the Company’s 2013 Annual Meeting of Shareholders, which was filed with the SEC on October 28, 2013. Shareholders may obtain additional information regarding the interests of the Company and its directors and executive officers in the proposed Merger, which may be different than those of the Company’s shareholders generally, by reading the proxy statement and other relevant documents regarding the proposed Merger, when it becomes available.  You may obtain free copies of this document as described in the preceding paragraph.

 

Item 9.01.         Financial Statements and Exhibits.

 

(d)  Exhibits.

 

99.1          Compensation and Benefits Frequently Asked Questions Related to the Agreement and Plan of Merger, distributed on August 12, 2014 by Bally Technologies, Inc.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

	Bally Technologies, Inc.
Date: August 12, 2014	By:	/S/ KATIE S. LEVER
		Katie S. Lever
		Senior Vice President, General Counsel and
		Secretary

 

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EXHIBIT INDEX

 

Exhibit Number		Description of Exhibit
99.1		Compensation and Benefits Frequently Asked Questions Related to the Agreement and Plan of Merger, distributed on August 12, 2014 by Bally Technologies, Inc.

 

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Exhibit 99.1

 

 

August 12, 2014

 

Compensation and Benefits — Frequently Asked Questions (FAQs)

Related to the Agreement and Plan of Merger

 

On August 1, 2014, Bally Technologies, Inc. (“Bally”) and Scientific Games Corporation (“SciGames”) entered into a definitive agreement (the “Merger Agreement”) to merge the two companies (the “Merger”).  We want to communicate the compensation and benefit arrangements for Bally employees for the period prior to closing of the Merger (“Closing”) and beyond.  We encourage you to refer to the following FAQs for information on the impact of the Merger on your compensation and benefits.

 

1.             Will my compensation and benefits be changed prior to Closing?

 

Until Closing, which is expected to occur in early calendar 2015, Bally and SciGames will continue to operate as separate, independent companies. Accordingly, the compensation and benefits programs currently provided by Bally will generally continue in the same manner through Closing.

 

2.             Will my compensation and benefits be changed after Closing?

 

Under the terms of the Merger Agreement, during the one-year period after Closing, base salaries and wage rates will be at least equal to those provided by Bally immediately prior to Closing.  In addition, during the one-year period after Closing, other compensation (excluding long-term equity and cash incentive opportunities) and benefits will be no less favorable in the aggregate than those provided by Bally immediately prior to Closing.  While no formal decisions have been made, we generally expect employees of both organizations to be treated the same over time.

 

3.             Will I be entitled to receive my normal bonus for fiscal year 2014?

 

Bally will pay fiscal year 2014 bonuses in the normal course based on actual performance through the end of the fiscal year 2014.  Fiscal year 2014 bonuses are expected to be paid in September 2014.

 

For employees in India, Bally will pay calendar year 2014 bonuses on the normal payment date in a manner consistent with past practice.

 

 

4.             How will Bally’s bonus plans for fiscal year 2015 be handled as a result of the Merger?

 

Bally expects to establish annual bonus programs for fiscal year 2015 that are generally consistent with past years.  Payment amounts will be based on actual quarterly performance and will be pro-rated based on the number of months elapsed during the period prior to Closing.  Bonus payments will be made several months after Closing to eligible employees who remain employed through Closing.  If your employment terminates prior to the payment date for any reason (other than a termination for cause), including by reason of a voluntary resignation, and you are otherwise eligible to receive a bonus, you will receive your bonus payment along with your final pay.  Eligible employees who remain employed following the Closing will then be eligible to participate in SciGames’ calendar year 2015 bonus plan for the remainder of calendar year 2015.

 

For employees in India, Bally may continue the calendar year 2014 bonus plan or adopt a substantially similar plan in respect of the 2015 calendar year.

 

5.             What will happen to my 401(k) account?

 

Your 401(k) account is held in a trust that can only be used to pay benefits to participants.  The assets in the trust cannot be used by Bally or SciGames for any other reason.  Your account remains your account and you can continue to make contributions and can direct your investments as long as you remain in Bally’s 401(k) plans.  In fact, we expect to complete the combination of the Bally and SHFL 401(k) plans in the next few weeks.  Following Closing, the newly combined Bally 401(k) plan and the SciGames 401(k) plan may eventually be combined.

 

6.             I am participating in the Bally Employee Stock Purchase Plan (ESPP). How will this be handled as a result of the Merger?

 

If you are currently participating in the Bally Employee Stock Purchase Plan, you may continue to contribute to your account, but you will not be able to increase your current payroll deductions or your current purchase elections from those that were in effect on August 1, 2014, the date we signed the Merger Agreement.  The shares of Bally stock that you purchase through the Bally Employee Stock Purchase Plan will be delivered to you in the normal course, and any accumulated cash remaining in your account immediately prior to Closing will be distributed to you.  At Closing, you will receive the merger consideration of $83.30 for each share of Bally stock that you hold on the date of Closing.  You will need to contact your tax advisor to determine the impact of this treatment on your situation.

 

7.             Will there be any new offerings under the Bally Employee Stock Purchase Plan?

 

No, there will be no further offerings under the current Bally Employee Stock Purchase Plan after the end of the current quarterly offering.  If you do not already participate in the current Bally Employee Stock Purchase Plan, you may not participate now.

 

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8.             I own shares of Bally stock. How will these be handled as a result of the Merger?

 

Upon Closing, you will receive the merger consideration of $83.30 for each of share of Bally stock that you hold on the date of Closing.  You will need to contact your tax advisor to determine the impact of this treatment on your situation.

 

9.             I have been granted Stock Options prior to August 1, 2014, the date of the Merger Agreement, under Bally’s long-term incentive plans. How will these be handled as a result of the Merger?

 

Until Closing, and subject to any blackout periods that may apply, you will be able to exercise any of your vested stock options.

 

Upon Closing, each of your vested and unvested stock options that were granted prior to August 1, 2014, and that are outstanding and unexercised on the date of Closing will be cancelled in exchange for a cash payment payable shortly after Closing, equal to $83.30, less the exercise price of the stock option and any applicable withholding taxes (in other words, all unvested stock options will accelerate at Closing, regardless of the terms of such stock options).  The mechanics of this cash payment will be determined in the coming months.

 

10.          I have been granted Restricted Stock or Restricted Stock Units prior to August 1, 2014, the date of the Merger Agreement, under Bally’s long-term incentive plans. How will these be handled as a result of the Merger?

 

Upon Closing, each of your vested and unvested shares of Restricted Stock or Restricted Stock Units that were granted prior to August 1, 2014, and that are outstanding on the date of Closing will be cancelled in exchange for a cash payment generally payable shortly after Closing equal to $83.30, less any applicable withholding taxes (in other words, all unvested awards will accelerate at Closing, regardless of the terms of such awards).  The mechanics of this cash payment will be determined in the coming months.

 

11.          Does Bally intend to make its discretionary equity awards and if so, when?

 

Under the terms of the Merger Agreement, our Board of Directors may make an annual grant of equity awards in November 2014 (the “November 2014 Awards”).  The November 2014 Awards will generally be similar in scope and amount as in prior years.  Individual grants may vary.  Any grants made under the November 2014 Awards will be made in lieu of any further annual awards from Bally.  If you are a U.S. employee who ordinarily receives discretionary equity awards, such awards will generally consist of Restricted Stock Units, and if you are a non-U.S. employee, depending on your country of residency, such awards may consist of cash equivalent awards or Restricted Stock, all of which will vest in four equal annual installments based on your continued employment through the applicable vesting date.  These grants will not accelerate and vest as a result of Closing.

 

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12.          How will any November 2014 Awards that I receive be handled as a result of the Merger?

 

Upon Closing, all of the equity grants made under the November 2014 Awards will be converted into restricted stock units (or shares of restricted stock, as applicable) relating to shares of Class A common stock of SciGames using a customary exchange ratio.

 

Following this conversion, the November 2014 Awards will continue to vest as scheduled based on your continued employment through the applicable vesting dates, except that if your employment is terminated without cause or if you resign for “good reason” (generally, as defined in Bally’s 2010 Long-Term Incentive Plan) within one year following Closing, you will be given service credit for vesting purposes for your months of service following Closing plus an additional 12 months.

 

For example, if your employment is terminated without cause in the third month following Closing, your November 2014 Awards that are scheduled to vest within the next 15 months (equal to three months for your service following Closing, plus an additional 12 months) will immediately vest upon your termination of employment.

 

13.          I was newly hired or promoted after August 1, 2014, the date of the Merger Agreement. How will any equity awards that I am entitled to receive in connection with my hiring or promotion be handled as a result of the Merger?

 

Any new-hire or promotion awards will generally consist of time-vesting Restricted Stock Units that vest in four equal annual installments based on your continued employment through the applicable vesting date.  Upon Closing, these awards will generally be treated in the manner described above in Question 12.

 

14.          I have generally been eligible to receive discretionary equity awards from Bally.  Will I continue to be eligible to receive annual equity awards from SciGames following Closing?

 

With respect to the first annual equity award cycle of SciGames immediately following Closing, SciGames has agreed to seek approval from its board of directors to grant equity awards to the recipients of November 2014 Awards (and, in SciGames’ sole discretion, certain other Bally employees) whose employment continues following Closing through the date of grant.

 

These awards will be made when SciGames makes its ordinary course annual equity grants to its own employees.  The size of any of these awards will be determined by SciGames’ Compensation Committee in its sole discretion.

 

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15.          What if my employment is terminated following Closing?

 

If you are a U.S. employee and your employment is terminated without cause within the one-year period following Closing, you will generally be eligible to receive the greater of:

 

·                  the severance payments and benefits provided in your employment agreement or other individual employment arrangement with Bally; or

 

·                  the following severance payments and benefits:

 

·                  two weeks of base pay per year of service (subject to a minimum of four weeks of base pay and a maximum of 26 weeks of base pay), paid on your regularly scheduled payroll dates and less any applicable tax withholdings; and

 

·                  outplacement services for a period of three months.

 

If you are a non-U.S. employee and your employment is terminated within the one-year period following Closing, you will generally be eligible to receive the severance payments and benefits that you would have normally received upon a termination of your employment by Bally prior to Closing.

 

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