8-K

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): April 8, 2008

MIDWAY GAMES INC.

(Exact Name of Registrant as Specified in Charter)

Delaware
(State or Other Jurisdiction of
Incorporation) 1-12367
(Commission File Number) 22-2906244
(I.R.S. Employer Identification
Number)

2704 West Roscoe Street, Chicago, Illinois 60618
(Address of Principal Executive Offices)            (Zip Code)

Registrant’s telephone number, including area code: (773) 961-2222

     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 (see General Instruction A.2. below):

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

     o 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 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

5.02(e) Compensatory Arrangements of Certain Officers

     Ryan G. O’Desky — Midway Games Inc. (the “Company”) agreed to provide Ryan G. O’Desky, Interim Chief Financial Officer and Vice President — Finance and Controller, severance payments under certain circumstances described in a Memorandum to Mr. O’Desky dated April 8, 2008 (the “O’Desky Memorandum”). The O’Desky Memorandum provides that in the event both (i) a Change of Control occurs within five (5) years after April 8, 2008 and (ii) within two (2) years after a Change of Control a Terminating Condition occurs, then Mr. O’Desky will be entitled to a severance amount equal to six (6) months’ salary following termination of his employment with the Company. Any such severance amount would be based upon Mr. O’Desky’s base annual salary upon the date of termination and would be paid in normal payroll intervals. Midway’s Board of Directors may, in its discretion, authorize additional severance.

     For purposes of the O’Desky Memorandum, a “Change of Control” means (a) for any reason an individual other than Matthew V. Booty is installed as Chief Executive Officer of the Company, (b) the acquisition by any person or group, other than Permitted Holders, of substantially all the assets of the Company or more than 50% of the capital stock having the right to vote for the election of the members of the Board of Directors of the Company, or (c) the consummation of a business combination involving the Company in which the holders of a majority of the Company’s outstanding stock immediately prior to the consummation of the business combination and any Permitted Holders cease to hold a majority of the outstanding capital stock having the right to vote for the election of the members of the Board of Directors of the Company or equivalent governing body of the surviving or resulting entity. For purposes of this definition, the following are “Permitted Holders”: Sumner M. Redstone, members of his family, and National Amusements, Inc. and any entities owned or controlled, directly or indirectly, by them.

     For purposes of the O’Desky Memorandum, a “Terminating Condition” occurs when either (a) Mr. O’Desky’s employment is terminated by the Company without cause, (b) Mr. O’Desky gives the Company a written resignation from his employment after, without his consent, the business facility at which he is required to perform his duties to the Company is relocated more than fifty (50) miles from the present business location, or (c) Mr. O’Desky gives the Company a written resignation from his employment after, without his consent, either he is placed in a position with the Company of lesser stature than his present position with the Company as Vice President — Finance and Controller (rather than Interim Chief Financial Officer) or is assigned duties with the Company inconsistent with such position or duties which, if performed, would result in a significant diminution in the nature or scope of powers, authority, functions or duties inherent in such position on April 8, 2008 or he is assigned by the Company performance requirements and working conditions which are at variance with the performance requirements and working conditions in effect on April 8, 2008 in such position, provided that such assigned duties, performance requirements and/or working conditions are not associated with his achieving a position of greater stature, authority and/or responsibility than his present position with the Company as Vice President — Finance and Controller.

     Martin Spiess -Midway Games Limited, a wholly-owned subsidiary of the Company, agreed to provide Martin Spiess, Executive Vice President, International, for Midway Games Limited with (i) severance payments in the event of his termination without cause as described in a Memorandum to Mr. Spiess dated April 8, 2008 (the “Spiess Memorandum”), and (ii) a Sales Incentive Bonus Plan as described in a Memorandum to Mr. Spiess also dated April 8, 2008 (the “Bonus Plan”).

     The Spiess Memorandum provides that if Midway Games Limited terminates his employment without cause he will be entitled to a severance payment equal to nine (9) months’ salary following his termination (this payment would be in addition to the three (3) months’ notice of termination (or pay in lieu of notice) to which Mr. Spiess is otherwise entitled). Any such severance amount would be based upon Mr. Spiess’ base annual salary upon the date of termination and would be paid in normal payroll intervals. The Spiess Memorandum replaces and supersedes any and all prior and contemporaneous agreements with respect to severance payments, whether written or oral, between Midway Games Limited, the Company or its affiliates and Mr. Spiess, including, without limitation, the severance payments referenced in the letter offering Mr. Spiess employment with Midway Games Limited.

     Under the terms of the Bonus Plan Mr. Spiess is eligible for a bonus based on (a) that portion of the Company’s net revenues for 2008 attributed to the sale of products in territories other than North America, South America, United States territories and possessions and

military bases, and east Asia plus (b) that portion of the Company’s net revenues for 2008 attributed to the sale of video game products for platforms other than mobile telephones, PDAs and the like, in territories other than North and South America, U.S. territories and possessions and military bases, and east Asia by third parties under license from the Company or its affiliates. Mr. Spiess’ bonus will be calculated by multiplying his annual salary during 2008 (without deduction of tax or National Insurance Contributions and excluding bonus awards, amounts related to the exercise of stock options or the sale of restricted stock, contributions to employee benefit plans, commissions, tax “gross-ups” on commuting expenses, and any other benefits to which he may be entitled) by a pre-determined percentage based on meeting certain net sales thresholds.

     The foregoing descriptions of the O’Desky Memorandum, the Spiess Memorandum and the Bonus Plan are qualified in their entirety by reference to such documents which are filed as Exhibits 99.1, 99.2 and 99.3 respectively to this Current Report on Form 8-K and which are incorporated herein by reference. Portions of the Bonus Plan, Exhibit 99.3, have been omitted pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

Item 9.01 — Financial Statements and Exhibits.

9.01(d) Exhibits

Exhibit No.	Description
99.1*	Midway Games Inc. Memorandum to Ryan O’Desky Regarding Terms of Employment dated April 8, 2008
99.2*	Midway Games Limited Memorandum to Martin Spiess Regarding Terms of Employment dated April 8, 2008
99.3*	Midway Games Limited Memorandum to Martin Spiess Regarding Sales Incentive Bonus Plan dated April 8, 2008. Portions of this exhibit have been omitted pursuant to a request for confidential treatment in accordance with Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
*  Indicates a management contract or compensatory plan or arrangement.

SIGNATURE

     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.

	MIDWAY GAMES INC.
April 11, 2008	By:	/s/ Matthew V. Booty
		Matthew V. Booty
		Interim Chief Executive Officer and President

EX-99.1

Exhibit 99.1

[Midway Games Inc. Letterhead]

M E M O R A N D U M

To:	Ryan G. O’Desky
From:	Matthew V. Booty
Date:	April 8, 2008
Re:	Terms of Your Employment

     This confirms our discussions as follows:

     Although your employment with Midway Games Inc. (“Midway”) will continue to be “employment at will,” in the event both (i) a Change of Control occurs within five (5) years after the date of this letter and (ii) within two (2) years after the Change of Control a Terminating Condition occurs, then you will be entitled to a severance amount equal to six (6) months’ salary following termination of your employment with Midway. Any such severance amount would be based upon your base annual salary upon the date of termination and would be paid to you in normal payroll intervals. Midway’s Board of Directors may, in its discretion, authorize additional severance.

     For purposes hereof, a “Change of Control” means (a) for any reason an individual other than myself is installed as Chief Executive Officer of Midway Games Inc. (the “Company”), (b) the acquisition by any person or group, other than Permitted Holders, of substantially all the assets of the Company or more than 50% of the capital stock having the right to vote for the election of the members of the Board of Directors of the Company, or (c) the consummation of a business combination involving the Company in which the holders of a majority of the Company’s outstanding stock immediately prior to the consummation of the business combination and any Permitted Holders cease to hold a majority of the outstanding capital stock having the right to vote for the election of the members of the Board of Directors of the Company or equivalent governing body of the surviving or resulting entity. For purposes of this definition, the following are “Permitted Holders”: Sumner M. Redstone, members of his family, and National Amusements, Inc. and any entities owned or controlled, directly or indirectly, by them.

     For purposes hereof, a Terminating Condition occurs when either (a) your employment is terminated by Midway without cause, (b) you give Midway a written resignation from your employment after, without your consent, the business facility at which you are required to perform your duties to Midway is relocated more than fifty (50) miles from the present business location at which you are performing your duties to Midway, or (c) you give Midway a written resignation from your employment after, without your consent, either you are placed in a position with Midway of lesser stature than your present position with Midway as Vice President — Finance and Controller (rather than Interim Chief Financial Officer) or are assigned duties with Midway inconsistent with such position or duties which, if performed, would result in a significant diminution in the nature or scope of powers, authority, functions or duties inherent in such position on the date hereof or you are assigned by Midway performance requirements and working conditions which are at variance with the performance requirements and working conditions in effect on the date hereof in such position, provided that such assigned duties, performance requirements and/or working conditions are not associated with your achieving a position of greater stature, authority and/or responsibility than your present position with Midway as Vice President — Finance and Controller.

     The foregoing supersedes in their entirety any and all severance payment terms previously offered to you by Midway or its affiliates, whether accepted by you or otherwise

* * *

If you agree that this memo accurately reflects our understanding, please so indicate by signing below.

Accepted and agreed:	/s/ Ryan G. O’Desky
	Ryan G. O’Desky
Dated:	April 8, 2008

EX-99.2

Exhibit 99.2

[Midway Games Limited Letterhead]

M E M O R A N D U M

To:	Martin Spiess
From:	Matt Booty
Date:	April 8, 2008
Re:	Terms of Your Employment

The purpose of this memo is to document our understanding regarding modifications to your terms of employment with Midway Games Limited (the “Company”). We have agreed as follows:

If the Company terminates your employment without cause you will be entitled to a separation payment equal to nine (9) months’ salary following your termination (this payment would be in addition to the three (3) months’ notice of termination (or pay in lieu of notice) to which you are otherwise entitled). Any such separation amount would be based upon your base annual salary upon the date of termination and would be paid to you in normal payroll intervals.

This memo replaces and supersedes all previous schemes or plans of the Company under which you may be entitled to receive separation payments. In addition, this memo supersedes and replaces any and all prior and contemporaneous agreements with respect to separation payments, whether written or oral, between the Company or its affiliates and you, including, without limitation, the separation payments referenced in the letter offering you employment with the Company.

* * *

If you agree that this memo accurately reflects our understanding, please so indicate by signing below.

Accepted and agreed:	/s/ Martin Spiess
	Martin Spiess
Dated:	April 9, 2008

EX-99.3

Exhibit 99.3

“[ * ]” denotes confidential information omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment under Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

[Midway Games Limited Letterhead]

M E M O R A N D U M

To:	Martin Spiess
From:	Matt Booty
Date:	April 8, 2008
Re:	Personal 2008 Sales Incentive Bonus Plan

The purpose of this memo is to document our understanding regarding the special bonus plan that Midway Games Limited (the “Company”) has agreed to provide to you for the calendar year 2008. We have agreed as follows:

1. Bonus Calculation. Your bonus will be calculated by multiplying your Base Salary by the highest percentage determined based on the conditions set out in the rows of the following table:

If Net Sales is
[*]
[*]
[*]
[*] then Bonus Percentage is
[*]
[*]
[*]
[*]

provided, however, that each of the foregoing Net Sales thresholds shall be adjusted as follows for each of the products set forth on the 2008 sales projections attached hereto as Exhibit A, if any, that is not released in at least one European country by December 31, 2008:

For the [*] threshold, [*] of that product’s Total 2008 Projection shall be subtracted; and
For the [*] threshold, [*] of that product’s Total 2008 Projection shall be subtracted; and
For the [*] threshold, [*] of that product’s Total 2008 Projection shall be subtracted.

“Base Salary” shall mean your annual salary (without deduction of tax or National Insurance Contributions) paid to you during 2008, excluding bonus awards, amounts related to the exercise of stock options or the sale of restricted stock, contributions to employee benefit plans, commissions, tax “gross-ups” on commuting expenses, and any other contractual benefits (such as your car allowance) to which you may be entitled.

*Information has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

“Net Sales” shall mean (a) that portion of Midway Games Inc.’s net sales for 2008 (as stated in Midway Games Inc.’s audited consolidated financial statements for 2008) attributed to the sale of products in territories other than North America, South America, U.S. territories and possessions and military bases, and east Asia (e.g., Japan, South Korea, Viet Nam), plus (b) that portion of Midway Games Inc.’s net revenues for 2008 (as stated in Midway Games Inc.’s audited consolidated financial statements for 2008) attributed to the sale of video game products for platforms other than mobile telephones, PDAs and the like, in territories other than North and South America, U.S. territories and possessions and military bases, and east Asia by third parties under license from Midway Games Inc. or its affiliates.

A product’s “Total 2008 Projection” shall mean the amount set forth for that product under the “EU Net Sales” column of Exhibit A. A product is designated by title and platform. “Catalog” does not constitute a product.

2. Payment of Bonus. As soon as practicable after calculation of your bonus (expected to be approximately [*]) your bonus shall be distributed to you. Any bonus to be paid shall be subject to applicable taxes (including, without limitation, any applicable government deductions such as National Insurance Contributions) before payment.

3. Eligibility. Notwithstanding any other provisions of this memo, you will not be entitled to payment of any bonus pursuant to this memo if you:

(i)	are not actively employed by the Company on the date of payment of the bonus;
(ii)	have given to or received from the Company notice of termination of your employment;
(iii)	are on garden leave;
(iv)	have been continuously absent from the office for more than four (4) weeks on sick leave; or
(v)	are on unpaid leave of more than two (2) weeks with the Company’s agreement.

4. Entire Agreement. This memo replaces and supersedes all previous schemes or plans of the Company under which you may be entitled to receive bonuses. In addition, this memo supersedes and replaces any and all prior and contemporaneous agreements with respect to bonuses, whether written or oral, between the Company or its affiliates and you, including, without limitation, the performance bonus referenced in the letter offering you employment with the Company. Any decision by the Company to not exercise one or more of its rights under this memo shall not be deemed a waiver of its right to exercise such rights in the future.

* * *

If you agree that this memo accurately reflects our understanding, please so indicate by signing below.

Accepted and agreed:	/s/ Martin Spiess
	Martin Spiess
Dated:	April 9, 2008

*Information has been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.