Exhibit 10.15

 

SCIENTIFIC GAMES CORPORATION

 

FROZEN SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

(as amended and restated effective January 1, 2009)

 

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Table of Contents

 

 

 

Page

 

 

 

ARTICLE I

INTRODUCTION

1

1.1

Purpose; Old Plan

1

1.2

2005 Plan

1

1.3

Complete Discontinuance of Plan

1

1.4

Consolidated Plan Document and “Roadmap”

2

1.5

Construction

2

1.6

Amendments to Comply with Regulations

2

1.7

Coordination with CEO Employment Agreement

2

 

 

 

ARTICLE II

DEFINITIONS

3

2.1

“Beneficiary”

3

2.2

“Board of Directors”

3

2.3

“Change of Control”

3

2.4

“Code”

4

2.5

“Committee”

4

2.6

“Company”

4

2.7

“Disability”

4

2.8

“ERISA”

4

2.9

“Final Earnings”

4

2.10

“Grandfathered Benefit”

4

2.11

“Interest”

5

2.12

“Member”

5

2.13

“New Plan Benefit”

5

2.14

“Old Plan”

5

 

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Table of Contents

(continued)

 

 

Page

 

 

 

2.15

“Old Plan Benefit”

5

2.16

“Old Plan Discount Rate”

6

2.17

“Plan”

6

2.18

“Regulations”

6

2.19

“Separation from Service”

6

2.20

“Specified Employee”

7

2.21

“Subsidiary”

7

2.22

“Threatened Change of Control”

7

2.23

“Total Frozen Benefit”

7

2.24

“Trust”

7

 

 

 

ARTICLE III

PAYMENT OF BENEFITS

8

3.1

Old Plan Benefit Payable on Retirement

8

3.2

New Plan Benefit Payable upon Separation from Service

8

3.3

Disability

8

3.4

Distributions to Specified Employees Based on Separation from Service

8

3.5

Death

8

3.6

Beneficiaries

9

3.7

Withholding for Taxes

10

3.8

Acceleration Generally Prohibited

10

3.9

Vesting

10

3.10

Delay under Section 162(m)

10

 

 

 

ARTICLE IV

PLAN ADMINISTRATION

11

4.1

Committee

11

 

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Table of Contents

(continued)

 

 

Page

 

 

 

4.2

Committee Authority

11

4.3

Indemnification

11

4.4

Change of Control

11

 

 

 

ARTICLE V

CLAIMS PROCEDURE

11

5.1

Administrator of Claims Procedure

11

5.2

Claims

12

5.3

Denial of Claims

12

5.4

Appeal of Denial of Claims

12

5.5

Appeal

13

5.6

Written Decision on Appeal

13

5.7

Resolution of Disputes

13

 

 

 

ARTICLE VI

GENERAL

14

6.1

Unsecured Creditor Status

14

6.2

Source of Payment

14

6.3

Effect of Plan on Compensation

14

6.4

Nontransferable

14

6.5

Amendment of Plan

14

6.6

Prohibition against Acceleration

15

6.7

No Employment Rights

15

6.8

Binding Effect

15

6.9

Governing Law

15

6.10

Severability

15

6.11

Titles

16

 

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Table of Contents

(continued)

 

 

Page

 

 

 

ARTICLE VII

GRANTOR TRUST

16

7.1

Grantor Trust

16

7.2

Situs of Assets

17

7.3

Trust Agreement Governs

17

 

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SCIENTIFIC GAMES CORPORATION

 

FROZEN SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

ARTICLE I

 

INTRODUCTION

 

1.1              PURPOSE; OLD PLAN.  IN ORDER TO RETAIN THE SERVICES OF AND
PROVIDE REWARDS AND INCENTIVES TO MEMBERS OF A SELECT GROUP OF MANAGEMENT
EMPLOYEES WHO CONTRIBUTE TO THE SUCCESS OF SCIENTIFIC GAMES CORPORATION (THE
“COMPANY”), THE COMPANY ADOPTED A SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(“PLAN”) EFFECTIVE SEPTEMBER 7, 2000 TO PROVIDE SUPPLEMENTAL RETIREMENT BENEFITS
TO SELECT MEMBERS OF MANAGEMENT AND HIGHLY COMPENSATED EMPLOYEES WHO BECAME
MEMBERS THEREOF.  THE PLAN WAS THEREAFTER AMENDED AND RESTATED EFFECTIVE
NOVEMBER 1, 2003 (THE “OLD PLAN”), AND CONTINUED TO BE ADMINISTERED IN
ACCORDANCE WITH THE TERMS OF SUCH RESTATEMENT, WITHOUT FURTHER CHANGE, THROUGH
DECEMBER 31, 2004.  EFFECTIVE AS OF THE CLOSE OF BUSINESS ON DECEMBER 31, 2004,
THE BENEFITS PAYABLE UNDER THE OLD PLAN WERE LIMITED IN OPERATION TO BENEFITS
THAT WERE EARNED AND VESTED ON THAT DATE WITHIN THE MEANING OF REGULATIONS AND
GUIDANCE ISSUED UNDER SECTION 409A OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (“SECTION 409A”).

 

1.2              2005 PLAN.  EFFECTIVE JANUARY 1, 2005, A REPLACEMENT PLAN (THE
“NEW PLAN”) WAS ADOPTED IN ORDER TO PROVIDE BENEFITS SUBSTANTIALLY SIMILAR TO
THOSE PROVIDED UNDER THE OLD PLAN ON TERMS INTENDED TO COMPLY WITH SECTION 409A
AND WITH REGULATIONS AND OTHER GUIDANCE THEREUNDER APPLICABLE TO DEFERRALS AFTER
DECEMBER 31, 2004 (“REGULATIONS”), WITHOUT DUPLICATION OF BENEFITS PROVIDED
UNDER THE OLD PLAN.  MEMBERS OF THE OLD PLAN WHO HAD NOT BOTH ATTAINED AGE
FIFTY-FIVE (55) AND COMPLETED TEN (10) YEARS OF SERVICE (AS THEREIN DEFINED) ON
OR BEFORE DECEMBER 31, 2004 HAD NO VESTED BENEFITS UNDER THE OLD PLAN AND SHALL,
ACCORDINGLY, RECEIVE THEIR SUPPLEMENTAL RETIREMENT INCOME BENEFITS SOLELY UNDER
SUCH NEW PLAN.

 

1.3              COMPLETE DISCONTINUANCE OF PLAN.  NO BENEFITS BECAME PAYABLE
UNDER THE PLAN DURING THE CALENDAR YEAR 2005.  PURSUANT TO ACTION OF THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS TAKEN DECEMBER 15, 2005, THE
PLAN WAS AMENDED PERMANENTLY TO TERMINATE FURTHER BENEFIT ACCRUALS THEREUNDER
(INCLUDING FOR THIS PURPOSE ANY EMPLOYMENT AGREEMENTS PREVIOUSLY TREATED AS PART
OF THE PLAN) EFFECTIVE AS OF DECEMBER 31, 2005 AND TO MAKE RELATED CHANGES,
INCLUDING (A) REDEFINITION OF THE COMPENSATION TAKEN INTO ACCOUNT IN DETERMINING
THE FROZEN PLAN BENEFIT AS OF DECEMBER 31, 2005, (B) CREDITING ALL MEMBERS WITH
FIFTEEN YEARS OF SERVICE FOR PURPOSES OF THE BENEFIT FORMULA, (C) FULL VESTING
OF ALL MEMBERS, (D) PROVISION FOR ALL BENEFITS TO BE PAID IN THE FORM ELECTED BY
THEM PRIOR TO DECEMBER 31, 2004 UNDER THE OLD PLAN, NAMELY A SINGLE LUMP SUM,
(E) PROHIBITION OF ALL FUTURE BENEFIT ENHANCEMENTS OF ANY TYPE WHATEVER
(INCLUDING THOSE THAT MIGHT BE BASED ON A CHANGE OF CONTROL TERMINATION), AND
(F) PROVISION FOR ALL BENEFIT INCREASES RESULTING FROM SUCH COMMITTEE ACTION TO
BE PROVIDED UNDER TERMS FULLY COMPLIANT WITH SECTION 409A, INCLUDING WITHOUT
LIMITATION THE REQUIREMENT FOR A SIX-MONTH DELAY IN MAKING OF DISTRIBUTIONS TO
SPECIFIED EMPLOYEES ON ACCOUNT OF SEPARATION FROM SERVICE.

 

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1.4              CONSOLIDATED PLAN DOCUMENT AND “ROADMAP”.  IN ORDER TO REFLECT
AND PROVIDE FOR THE CHANGES MADE ABOVE AND COMPLY WITH THE FINAL REGULATIONS
UNDER SECTION 409A, THE PLAN IS HEREBY AMENDED AND RESTATED TO READ AS SET FORTH
BELOW, EFFECTIVE AS OF JANUARY 1, 2009, EXCEPT AS OTHERWISE PROVIDED, AND SHALL
BE KNOWN AS THE SCIENTIFIC GAMES CORPORATION FROZEN SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN.  ALTHOUGH CONTAINED WITHIN A SINGLE DOCUMENT, THE PLAN SET
FORTH HEREIN COMPRISES TWO SEPARATE PLANS FOR PURPOSES OF SECTION 409A, NAMELY –

 

(A)             A PLAN PROVIDING SOLELY THE GRANDFATHERED BENEFIT (AS DEFINED IN
SECTION 2.10), WHICH AS INCREASED BY INTEREST AT THE OLD PLAN DISCOUNT RATE (AS
DEFINED IN SECTION 2.16), PROVIDES FOR THE OLD PLAN BENEFIT (AS DEFINED IN
SECTION 2.15), TO BE PAYABLE ON RETIREMENT UNDER THE TERMS OF THE OLD PLAN (AS
SET FORTH IN SECTION 3.1) OR ON DISABILITY OR DEATH, AND

 

(b)            a plan providing the New Plan Benefit (as defined in Section
2.13), consisting of the Total Frozen Benefit (as defined in Section 2.23), as
increased by 4% interest under Section 2.11, or, for a Member entitled to
payment of an Old Plan Benefit, the portion of such Total Frozen Benefit in
excess of such Old Plan Benefit, to be payable in either case on Separation from
Service (as defined in Section 2.19), Disability, death, or a specified payment
date pursuant to Section 1.7, on terms compliant with Section 409A and the
Regulations.

 

1.5              CONSTRUCTION.  THIS PLAN SHALL BE ADMINISTERED AND INTERPRETED
IN ACCORDANCE WITH SECTION 409A AND THE REGULATIONS TO THE EXTENT SUBJECT
THERETO (I.E., EXCEPT WITH RESPECT TO “GRANDFATHERED BENEFITS” PAYABLE IN
ACCORDANCE WITH THE OLD PLAN AS DESCRIBED ABOVE).  NO PROVISION HEREOF SHALL BE
CONSTRUED IN ANY MANNER THAT WOULD VIOLATE SECTION 409A OR THE REGULATIONS, NOR,
TO THE MAXIMUM EXTENT PERMITTED BY LAW, SHALL ANY PROVISION OF THE PLAN
INCONSISTENT WITH SECTION 409A OR THE REGULATIONS BE VALID OR GIVEN ANY EFFECT
WHATEVER.

 

1.6              AMENDMENTS TO COMPLY WITH REGULATIONS.  NOTWITHSTANDING ANY
RESTRICTION ON THE GENERAL RIGHT TO AMEND SET FORTH IN ARTICLE VI, THE COMPANY
RESERVES THE RIGHT TO MAKE ANY AND ALL SUCH AMENDMENTS AS IT MAY DEEM NECESSARY
OR ADVISABLE FOR COMPLIANCE WITH SECTION 409A AND THE REGULATIONS.

 

1.7              COORDINATION WITH EMPLOYMENT AGREEMENTS.  NOTWITHSTANDING ANY
OTHER PROVISION OF THE PLAN, (A) THE ENTIRE BENEFIT ACCRUED UNDER THE PLAN BY
THE MEMBER SERVING AS CHIEF EXECUTIVE OFFICER OF THE COMPANY AS OF JANUARY 1,
2006, PURSUANT TO AN EMPLOYMENT AGREEMENT WITH THE COMPANY EFFECTIVE AS OF SUCH
DATE, SHALL BE PAYABLE SOLELY AS A NEW PLAN BENEFIT (AND NO PORTION THEREOF
SHALL CONSTITUTE A GRANDFATHERED BENEFIT OR OLD PLAN BENEFIT), AND THE
DATE(S) OF PAYMENT THEREOF, OTHER THAN BY REASON OF DISABILITY OR DEATH, SHALL
BE THE SPECIFIED DATES OF PAYMENT (WITHIN THE MEANING OF SECTION 409A) SET FORTH
IN THE APPLICABLE AMENDMENT TO SUCH EMPLOYMENT AGREEMENT EXECUTED ON OR BEFORE
DECEMBER 31, 2008 PURSUANT TO TRANSITION RULES ALLOWING SUBSTITUTION OF A
SPECIFIED PAYMENT DATE FOR TERMINATION OF EMPLOYMENT AS THE APPLICABLE PAYMENT
EVENT, AND (B) THE PORTION OF THE BENEFIT ACCRUED UNDER THE PLAN AS OF
JANUARY 1, 2006 BY ANY OTHER MEMBER AND NOT CONSTITUTING A GRANDFATHERED BENEFIT
SHALL, IN THE EVENT THAT AN AGREEMENT WITH SUCH MEMBER SUBSTITUTES A SPECIFIED
PAYMENT DATE FOR TERMINATION OF EMPLOYMENT AS THE DATE OF PAYMENT FOR SUCH
BENEFIT, BE PAID SOLELY AT SUCH SPECIFIED PAYMENT DATE, WITHOUT REGARD TO THE
DATE OF THE MEMBER’S TERMINATION OF EMPLOYMENT.

 

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ARTICLE II

 

DEFINITIONS

 

As used herein, the following words and phrases shall have the meanings
specified below unless a different meaning is clearly required by the context:

 

2.1              THE TERM “BENEFICIARY” SHALL MEAN ANY PERSON OR PERSONS
ENTITLED TO RECEIVE BENEFITS UNDER THE PLAN FOLLOWING A MEMBER’S DEATH PURSUANT
TO SECTIONS 3.5 AND 3.6.

 

2.2              THE TERM “BOARD OF DIRECTORS” SHALL MEAN THE BOARD OF DIRECTORS
OF SCIENTIFIC GAMES CORPORATION, OR ANY DULY AUTHORIZED COMMITTEE THEREOF.

 

2.3              THE TERM “CHANGE OF CONTROL” SHALL MEAN THE OCCURRENCE OF ANY
OF THE FOLLOWING:

 

(A)          ANY “PERSON” AS DEFINED IN SECTION 3(A)(9) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”), AND AS USED IN SECTIONS
13(D) AND 14(D) THEREOF, INCLUDING A “GROUP” AS DEFINED IN SECTION 13(D) OF THE
EXCHANGE ACT BUT EXCLUDING THE COMPANY AND ANY SUBSIDIARY AND ANY EMPLOYEE
BENEFIT PLAN SPONSORED OR MAINTAINED BY THE COMPANY OR ANY SUBSIDIARY (INCLUDING
ANY TRUSTEE OF SUCH PLAN ACTING AS TRUSTEE), DIRECTLY OR INDIRECTLY, BECOMES THE
“BENEFICIAL OWNER” (AS DEFINED IN RULE 13D-3 UNDER THE EXCHANGE ACT) OF
SECURITIES OF THE COMPANY REPRESENTING AT LEAST 40% OF THE COMBINED VOTING POWER
OF THE COMPANY’S THEN OUTSTANDING SECURITIES;

 

(B)         THE STOCKHOLDERS OF THE COMPANY APPROVE A MERGER, CONSOLIDATION,
RECAPITALIZATION OR REORGANIZATION OF THE COMPANY, OR THE CONSUMMATION OF ANY
SUCH TRANSACTIONS IF STOCKHOLDER APPROVAL IS NOT OBTAINED, OTHER THAN ANY SUCH
TRANSACTION WHICH WOULD RESULT IN AT LEAST 60% OF THE TOTAL VOTING POWER
REPRESENTED BY THE VOTING SECURITIES OF THE COMPANY OR THE SURVIVING ENTITY
OUTSTANDING IMMEDIATELY PRIOR TO SUCH TRANSACTION BEING BENEFICIALLY OWNED BY
PERSONS WHO TOGETHER BENEFICIALLY OWNED AT LEAST 80% OF THE COMBINED VOTING
POWER OF THE SECURITIES OF THE COMPANY OUTSTANDING IMMEDIATELY PRIOR TO SUCH
TRANSACTION; PROVIDED THAT, FOR PURPOSES OF THIS PARAGRAPH (B), SUCH CONTINUITY
OF OWNERSHIP (AND PRESERVATION OF RELATIVE VOTING POWER) SHALL BE DEEMED TO BE
SATISFIED IF THE FAILURE TO MEET SUCH 60% THRESHOLD IS DUE SOLELY TO THE
ACQUISITION OF VOTING SECURITIES BY AN EMPLOYEE BENEFIT PLAN OF THE COMPANY OR
SUCH SURVIVING ENTITY;

 

(C)          THE STOCKHOLDERS OF THE COMPANY APPROVE A PLAN OF COMPLETE
LIQUIDATION OF THE COMPANY OR AN AGREEMENT FOR THE SALE OR DISPOSITION BY THE
COMPANY OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS (OR ANY TRANSACTION HAVING A
SIMILAR EFFECT); OR

 

(D)         DURING ANY PERIOD OF TWO CONSECUTIVE YEARS, INDIVIDUALS WHO AT THE
BEGINNING OF SUCH PERIOD CONSTITUTE THE BOARD OF DIRECTORS (THE “BOARD”),
TOGETHER WITH ANY NEW DIRECTOR (OTHER THAN A DIRECTOR DESIGNATED BY A PERSON WHO
HAS ENTERED INTO AN AGREEMENT WITH THE COMPANY TO EFFECT A TRANSACTION DESCRIBED
IN PARAGRAPH (A), (B), OR (C) OF THIS SECTION 2.3 ) WHOSE ELECTION BY THE BOARD
OR NOMINATION FOR ELECTION BY THE COMPANY’S STOCKHOLDERS WAS APPROVED

 

3

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by a vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board.

 

2.4              THE TERM “CODE” SHALL MEAN THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED, PROVIDED THAT REFERENCES TO SECTIONS OF THE CODE SHALL, IF
APPLICABLE, INCLUDE CORRESPONDING PROVISIONS OF ANY SUBSEQUENT INTERNAL REVENUE
CODE.

 

2.5              THE TERM “COMMITTEE” SHALL MEAN THE COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS.

 

2.6              The term “Company” shall mean Scientific Games Corporation, its
successors and assigns, any Subsidiary authorized by the Board to participate in
this Plan with respect to its employees (to the extent required or appropriate
for such purpose), and any organization into which the Company may be merged or
consolidated or to which all or substantially all of its assets may be
transferred.

 

2.7              The term “Disability” shall mean (a) with respect to the New
Plan Benefit, any medically determinable physical or mental impairment which can
be expected to result in death or to last for a continuous period of not less
than twelve (12) months and which renders the Member unable to engage in any
substantial gainful activity or by reason of which the Member receives income
replacement benefits for a period of not less than three months under an
accident and health plan of the Company; provided that notwithstanding the
foregoing, a determination of total disability by the Social Security
Administration shall be conclusive proof of Disability, and (b) with respect to
the Old Plan Benefit, Total and Permanent Disability as defined in the Old Plan
(i.e., disability that entitles a Member to disability benefits under the
Company’s long term disability plan in effect at the time the Member becomes
disabled or if the Company does not maintain a long-term disability plan,
inability of the Member to perform the usual and customary duties of his
occupation which is likely to be permanent or of long duration).

 

2.8              THE TERM “ERISA” SHALL MEAN THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED.

 

2.9              The term “Final Earnings” shall mean the total of a Member’s
annual rate of base salary and maximum target bonus amount as of December 31,
2005, determined without regard to any deduction of pre-tax contributions under
Code Section 401(k) plans, flexible benefit (cafeteria) plans described in Code
Section 125, and qualified transportation fringes described in Code Section
132(f)(4), and before deferrals of compensation under any elective deferred
compensation plans.

 

2.10            The term “Grandfathered Benefit” shall (subject to Section 1.7)
mean the present value as of December 31, 2004 of the benefit earned and vested
in respect of a Member on such date under the Old Plan, calculated as the amount
that the Member could have received as a lump sum distribution if he voluntarily
terminated his employment with the Company without cause on December 31, 2004
and received such distribution as soon as possible

 

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THEREAFTER.  THE BENEFIT THEN EARNED AND VESTED SHALL BE DETERMINED UNDER THE
TERMS OF THE OLD PLAN, AS MODIFIED BY ANY EMPLOYMENT AGREEMENT IN EFFECT ON
OCTOBER 3, 2004 PROVIDING FOR ANY DIFFERENT BASIS FOR CALCULATING SUCH AMOUNT,
AND THE PRESENT VALUE THEREOF SHALL BE DETERMINED USING THE OLD PLAN DISCOUNT
RATE.

 

2.11            The term “Interest” shall mean interest at an annual rate of
four percent (4%), credited and compounded annually up to the day prior to the
date of payment (or other applicable date of reference).

 

2.12            The term “Member” shall mean any individual who was a Member of
the Old Plan on December 31, 2004.

 

2.13            The term “New Plan Benefit” shall mean a Member’s Total Frozen
Benefit increased by Interest from January 1, 2006 as provided in Section 2.10;
provided, however, that

 

(a)                If the Member received a distribution of his Old Plan Benefit
prior to payment of his New Plan Benefit, (i) Interest shall be credited on the
Member’s Total Frozen Benefit from January 1, 2006 to the date as of which the
Old Plan Benefit was paid, (ii) the amount of Old Plan Benefit paid, as
increased by Interest similarly computed, shall be deducted from the Member’s
Total Frozen Benefit as of such date, and (iii) the remaining balance of the
Member’s Total Frozen Benefit (including such Interest) shall then be increased
by Interest under Section 2.11 to the applicable date provided therein, and

 

(b)                If distribution of a Member’s New Plan Benefit is to be made
prior to distribution of the Member’s Old Plan Benefit, the Member’s New Plan
Benefit shall be the amount of the Member’s Total Frozen Benefit as of December
31, 2005, increased by Interest from January 1, 2006 under Section 2.11 to the
applicable date provided therein, reduced (but not below zero) by the amount of
the Member’s Grandfathered Benefit increased by interest to such date at the Old
Plan Discount Rate.

 

(c)                Notwithstanding anything herein go the contrary, a Member’s
New Plan Benefit, including associated calculations of Interest, shall be
appropriately adjusted in the event of any intervening distribution in respect
of such New Plan Benefit made on a specified payment date under Section 1.7, or
under Section 3.8.

 

2.14            The term “Old Plan” shall mean the Scientific Games Corporation
Supplemental Executive Retirement Plan originally established effective
September 7, 2000, as amended and restated effective November 1, 2003 and in
effect thereafter in respect of benefits earned and vested on December 31, 2004.

 

2.15            The term “Old Plan Benefit” shall (subject to Section 1.7) mean
a Member’s Grandfathered Benefit (if any), increased by interest at the Old Plan
Discount Rate from December 31, 2004 to the last day of the month immediately
preceding the date scheduled for payment thereof under Section 3.1 (or other
applicable provision hereof).  The amount of each Member’s Old Plan Benefit as
of December 31, 2004 is set forth in Schedule 1.

 

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2.16            THE TERM “OLD PLAN DISCOUNT RATE” SHALL MEAN THE DISCOUNT RATE
IN EFFECT UNDER SECTION 2.12 OF THE OLD PLAN ON DECEMBER 31, 2004, NAMELY, “AN
INTEREST RATE EQUAL TO THE AVERAGE YIELD OF A 30-YEAR U.S. TREASURY SECURITY FOR
THE MONTH PRIOR TO THE MONTH IN WHICH TERMINATION OF EMPLOYMENT OCCURS, OR IN
THE EVENT A 30-YEAR U.S. TREASURY SECURITY IS UNAVAILABLE AT SUCH TIME, THEN THE
NEXT LONGEST LONG-TERM U. S. TREASURY SECURITY THEN AVAILABLE.” SINCE 30-YEAR
TREASURY SECURITIES WERE NOT THEN AVAILABLE, THE INTEREST RATE APPLICABLE UNDER
SUCH PROVISION IS THE RATE ON 20-YEAR TREASURY SECURITIES FOR NOVEMBER 2004 (THE
MONTH BEFORE THE DEEMED TERMINATION ON DECEMBER 31, 2004), WHICH WAS 4.89%.

 

2.17            THE TERM “PLAN” SHALL MEAN AND INCLUDE EACH OF:

 

(A)          THE OLD PLAN FOR PERIODS THROUGH DECEMBER 31, 2004, AND THEREAFTER
SOLELY WITH RESPECT TO THE OLD PLAN BENEFIT, AND

 

(B)         A NEW PLAN PROVIDING ALL BENEFITS UNDER THE SCIENTIFIC GAMES
CORPORATION FROZEN SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN SET FORTH HEREIN OTHER
THAN THOSE PROVIDED UNDER THE OLD PLAN.

 

2.18            THE TERM “REGULATIONS” SHALL MEAN REGULATIONS AND OTHER GUIDANCE
ISSUED BY THE TREASURY OR INTERNAL REVENUE SERVICE UNDER SECTION 409A.

 

2.19            THE TERM “SEPARATION FROM SERVICE” SHALL MEAN SEPARATION FROM
SERVICE WITHIN THE MEANING OF THE REGULATIONS, OTHER THAN BY REASON OF DEATH,
DETERMINED BY REFERENCE TO THE PRESUMPTIVE RULE OF TREASURY REG.
§ 1.409A-1(H)(L) (UNDER WHICH A REASONABLE EXPECTATION OF A PERMANENT REDUCTION
IN THE LEVEL OF SERVICES TO NO MORE THAN 20% OF THE AVERAGE LEVEL DURING THE
PRIOR 36-MONTH OR OTHER APPLICABLE PERIOD IS PRESUMED TO RESULT IN A SEPARATION
FROM SERVICE), OR, IF THE MEMBER CONTINUES OR IS EXPECTED TO PERFORM SERVICES AS
SUCH AN INDEPENDENT CONTRACTOR, SEPARATION FROM SERVICE WITHIN THE MEANING OF
THE APPLICABLE PROVISIONS OF TREASURY REG. § 1.409A-1(H).  FOR PURPOSES OF THE
FOREGOING,

 

(A)          LEAVES, ETC.  A MEMBER’S EMPLOYMENT RELATIONSHIP SHALL BE TREATED
AS CONTINUING WHILE HE OR SHE IS ON MILITARY LEAVE, SICK LEAVE, OR OTHER BONA
FIDE LEAVE OF ABSENCE (SUCH AS TEMPORARY EMPLOYMENT BY THE GOVERNMENT) IF THE
PERIOD OF SUCH LEAVE DOES NOT EXCEED SIX MONTHS, OR IF LONGER, SO LONG AS THE
MEMBER’S RIGHT TO REEMPLOYMENT WITH THE COMPANY (OR A SUBSIDIARY) IS PROVIDED
EITHER BY STATUTE OR BY CONTRACT.  IF THE PERIOD OF LEAVE EXCEEDS SIX MONTHS AND
THE MEMBER’S RIGHT TO REEMPLOYMENT IS NOT PROVIDED EITHER BY STATUTE OR BY
CONTRACT, THE EMPLOYMENT RELATIONSHIP IS DEEMED TO TERMINATE IMMEDIATELY
FOLLOWING SUCH SIX-MONTH PERIOD.

 

(B)         SALE OF A DIVISION OR OTHER SUBSTANTIAL ASSETS.  NOTWITHSTANDING THE
FIRST PARAGRAPH OF THIS SECTION 2.19, A SEPARATION FROM SERVICE SHALL NOT OCCUR
FOR PURPOSES OF THIS PLAN TO THE EXTENT THAT THE COMMITTEE DETERMINES OTHERWISE
IN ACCORDANCE WITH TREASURY REG. § 1.409A-1(H)(4).

 

(C)          TRANSFERS WITHIN CONTROLLED GROUP. A MEMBER SHALL NOT BE TREATED AS
TERMINATING EMPLOYMENT, RETIRING OR OTHERWISE SEPARATING FROM SERVICE FOR
PURPOSES OF THE PLAN

 

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SOLELY BY REASON OF A TRANSFER TO EMPLOYMENT BETWEEN THE COMPANY AND A
SUBSIDIARY, OR BETWEEN TWO SUBSIDIARIES.

 

(D)         SALE OF SUBSIDIARY.  IN THE EVENT OF A SUBSIDIARY CHANGE IN CONTROL
EVENT, DISTRIBUTION SHALL BE MADE TO EACH MEMBER WHO CONTINUES TO BE EMPLOYED BY
THE AFFECTED SUBSIDIARY IMMEDIATELY FOLLOWING SUCH EVENT (AND WHO HAD NOT
PREVIOUSLY INCURRED A SEPARATION FROM SERVICE) AS IF THE MEMBER HAD THEREUPON
INCURRED SEPARATION FROM SERVICE, EXCEPT THAT NO SIX-MONTH DELAY SHALL BE
REQUIRED PURSUANT TO SECTION 3.4.  FOR THIS PURPOSE, THE TERM “SUBSIDIARY CHANGE
IN CONTROL EVENT” MEANS A CHANGE IN CONTROL EVENT WITH RESPECT TO A SUBSIDIARY
WITHIN THE MEANING OF THE REGULATIONS, PURSUANT TO WHICH THE COMPANY CEASES TO
HAVE DIRECT OR INDIRECT OWNERSHIP OF AT LEAST FIFTY-ONE PERCENT (51%) OF THE
VALUE OF THE TOTAL EQUITY OR TOTAL COMBINED VOTING POWER IN RESPECT OF THE
SUBSIDIARY.

 

2.20            THE TERM “SPECIFIED EMPLOYEE” MEANS “SPECIFIED EMPLOYEE” AS
DETERMINED PURSUANT TO PROCEDURES ADOPTED BY THE COMPANY IN ACCORDANCE WITH THE
REGULATIONS FOR PURPOSES OF ITS NONQUALIFIED DEFERRED COMPENSATION PLANS SUBJECT
TO SECTION 409A.

 

2.21            THE TERM “SUBSIDIARY” SHALL MEAN A SUBSIDIARY OR AFFILIATE THAT
IS A MEMBER OF THE SAME CONTROLLED GROUP AS THE COMPANY WITHIN THE MEANING OF
SECTION 414(B) OR (C) OF THE CODE.

 

2.22            THE TERM “THREATENED CHANGE OF CONTROL” SHALL MEAN:

 

(A)          THE ISSUANCE OF A PROXY STATEMENT BY THE COMPANY WITH RESPECT TO AN
ELECTION OF DIRECTORS FOR WHICH THERE IS PROPOSED ONE OR MORE DIRECTORS WHO ARE
NOT RECOMMENDED BY THE BOARD OF DIRECTORS OF THE COMPANY OR ITS NOMINATING
COMMITTEE, WHERE THE ELECTION OF SUCH PROPOSED DIRECTOR OR DIRECTORS WOULD
RESULT IN A CHANGE OF CONTROL AS DEFINED IN SECTION 2.3; OR

 

(B)         THE ANNOUNCEMENT BY ANY PERSON OF AN INTENTION TO TAKE ACTIONS WHICH
MIGHT REASONABLY RESULT IN A CHANGE OF CONTROL AS DEFINED IN SECTION 2.3.

 

2.23            THE TERM “TOTAL FROZEN BENEFIT” SHALL MEAN THE LUMP SUM PRESENT
VALUE ON DECEMBER 31, 2005, CALCULATED USING A DISCOUNT RATE OF FOUR AND
ONE-HALF PERCENT (4-1/2%) PER ANNUM, OF A FIXED ANNUITY COMMENCING JANUARY 1,
2006 AND PAYABLE ANNUALLY FOR FIFTEEN (15) CONSECUTIVE YEARS IN AN ANNUAL AMOUNT
EQUAL TO FORTY-FIVE PERCENT (45%) OF A MEMBER’S FINAL EARNINGS, OR IF
APPLICABLE, SUCH OTHER AMOUNT AS MAY BE DETERMINED IN ACCORDANCE WITH AN
EMPLOYMENT AGREEMENT BETWEEN THE MEMBER AND THE COMPANY AS IN EFFECT ON
DECEMBER 31, 2005 (AND WITHOUT REGARD TO ANY PROVISION OF SUCH AN AGREEMENT
PROVIDING FOR ANY ADJUSTMENT AFTER DECEMBER 31, 2005), AS SET FORTH IN SCHEDULE
1 ESTABLISHED BY THE COMMITTEE (WHICH SHALL BE A PART OF THIS PLAN).

 

2.24            THE TERM “TRUST” SHALL MEAN ANY DOMESTIC TRUST ESTABLISHED IN
ACCORDANCE WITH ARTICLE VII.

 

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The words and phrases defined in this Article when used in this Plan with an
initial capital letter shall have the meanings specified in this Article, unless
a different meaning is clearly required by the context.  Any words herein used
in the masculine shall be read and construed in the feminine where they would so
apply.  Words in the singular shall be read and construed as though used in the
plural in all cases where they would so apply.

 

ARTICLE III

 

PAYMENT OF BENEFITS

 

3.1              OLD PLAN BENEFIT PAYABLE ON RETIREMENT.  IN THE EVENT THAT A
MEMBER HAD ATTAINED AGE FIFTY-FIVE (55) AND COMPLETED AT LEAST TEN (10) YEARS OF
FULL-TIME EMPLOYMENT WITH THE COMPANY ON DECEMBER 31, 2004, THE MEMBER SHALL BE
ENTITLED TO RECEIVE PAYMENT OF HIS OLD PLAN BENEFIT ON THE FIRST DAY OF THE
MONTH NEXT FOLLOWING THE TERMINATION OF THE MEMBER’S FULL-TIME EMPLOYMENT
(WITHIN THE MEANING OF SUCH TERM UNDER THE OLD PLAN, AND THUS INCLUDING A
TRANSFER TO EMPLOYMENT FOR WHICH THE MEMBER IS NOT PAID ON A FULL-TIME BASIS),
BUT WITHOUT DUPLICATION OF ANY DISABILITY BENEFIT UNDER SECTION 3.3.

 

3.2              NEW PLAN BENEFIT PAYABLE UPON SEPARATION FROM SERVICE.  IN THE
EVENT OF A SEPARATION FROM SERVICE OF A MEMBER (OTHER THAN A MEMBER ENTITLED TO
A DISABILITY BENEFIT UNDER SECTION 3.3), THE MEMBER SHALL BE ENTITLED TO
RECEIVE, ON OR AS SOON AS PRACTICABLE AFTER THE FIRST DAY OF THE MONTH NEXT
FOLLOWING SUCH EVENT, A SINGLE LUMP SUM PAYMENT IN AN AMOUNT EQUAL TO THE
MEMBER’S NEW PLAN BENEFIT, SUBJECT TO SECTION 3.4 IF THE MEMBER IS A SPECIFIED
EMPLOYEE.

 

3.3              DISABILITY.  IN THE EVENT OF A MEMBER’S DISABILITY, THE MEMBER
SHALL BE ENTITLED TO RECEIVE, ON THE FIRST DAY OF THE MONTH NEXT FOLLOWING SUCH
EVENT, A SINGLE LUMP SUM PAYMENT IN AN AMOUNT EQUAL TO THE MEMBER’S NEW PLAN
BENEFIT PLUS THE AMOUNT OF HIS OLD PLAN BENEFIT (IF THE MEMBER WAS ENTITLED TO
ANY SUCH BENEFIT AND SUCH BENEFIT WAS NOT PREVIOUSLY PAID AND IS NOT
CONCURRENTLY PAYABLE UNDER SECTION 3.1).

 

3.4              DISTRIBUTIONS TO SPECIFIED EMPLOYEES BASED ON SEPARATION FROM
SERVICE.  IF DISTRIBUTION OF MEMBER’S NEW PLAN BENEFIT BECOMES DUE UNDER
SECTION 3.2 AND THE MEMBER IS A SPECIFIED EMPLOYEE AS OF THE DATE OF HIS
SEPARATION FROM SERVICE, SUCH DISTRIBUTION SHALL BE NOT BE MADE PRIOR TO THE
EXPIRATION OF SIX MONTHS FROM THE DATE OF SEPARATION; PROVIDED, HOWEVER, THAT
THIS SECTION 3.4 SHALL NOT PRECLUDE EARLIER DISTRIBUTION UNDER SECTION 3.5 IN
THE EVENT OF THE MEMBER’S DEATH PRIOR TO PAYMENT HEREUNDER.

 

3.5              DEATH.

 

(A)          DEATH PRIOR TO BENEFIT COMMENCEMENT DATE.  IN THE EVENT OF THE
DEATH OF A MEMBER PRIOR TO THE DATE ON WHICH PAYMENT IN RESPECT OF HIS NEW PLAN
BENEFIT IS SCHEDULED TO COMMENCE UNDER SECTIONS 3.2 THROUGH 3.4 AND/OR HIS OLD
PLAN BENEFIT IS SCHEDULED TO COMMENCE UNDER SECTION 3.1 (“BENEFIT COMMENCEMENT
DATE”), THE MEMBER’S BENEFICIARY SHALL BE ENTITLED TO RECEIVE A LUMP SUM PAYMENT
ON THE FIRST DAY OF THE SECOND MONTH FOLLOWING SUCH DEATH IN AN AMOUNT EQUAL TO
THE (I) MEMBER’S NEW PLAN BENEFIT, INCLUDING WHERE APPLICABLE INTEREST FROM

 

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THE DATE OF THE MEMBER’S DEATH TO THE LAST DAY OF THE MONTH IMMEDIATELY
PRECEDING THE DATE OF PAYMENT TO THE MEMBER’S BENEFICIARY, PLUS (II) IF
APPLICABLE, THE MEMBER’S OLD PLAN BENEFIT.

 

(B)                                 DEATH AFTER BENEFIT COMMENCEMENT DATE.  IN
THE EVENT THAT A MEMBER SHALL DIE ON OR AFTER SUCH BENEFIT COMMENCEMENT DATE (AS
DEFINED IN SECTION 3.5(A)), AND THE PAYMENT DUE AS OF SUCH BENEFIT COMMENCEMENT
DATE WAS NOT MADE BECAUSE OF ADMINISTRATIVE DELAYS OR ANY OTHER REASON, SUCH
PAYMENT SHALL BE MADE TO THE EXECUTOR OR PERSONAL REPRESENTATIVE OF THE MEMBER’S
ESTATE.

 

3.6                                                         BENEFICIARIES.

 

(A)                                  BENEFICIARY DESIGNATION.  A MEMBER SHALL
DESIGNATE A BENEFICIARY TO RECEIVE BENEFITS BECOMING DUE PURSUANT TO
SECTION 3.5(A) ON THE BENEFICIARY DESIGNATION FORM PRESCRIBED BY THE COMMITTEE. 
IF MORE THAN ONE BENEFICIARY IS NAMED, THE SHARE AND/OR PRECEDENCE OF EACH
BENEFICIARY SHALL BE INDICATED.  A MEMBER SHALL HAVE THE RIGHT TO CHANGE THE
BENEFICIARY BY SUBMITTING TO THE COMMITTEE A NEW BENEFICIARY DESIGNATION FORM.

 

(B)                                 PROPER BENEFICIARY.  IF THE COMMITTEE HAS
ANY DOUBT AS TO THE PROPER BENEFICIARY TO RECEIVE PAYMENTS HEREUNDER, THE
COMMITTEE SHALL HAVE THE RIGHT TO WITHHOLD SUCH PAYMENTS UNTIL THE MATTER IS
FINALLY ADJUDICATED.  HOWEVER, ANY PAYMENT MADE BY THE COMMITTEE, IN GOOD FAITH
AND IN ACCORDANCE WITH THIS PLAN, SHALL FULLY DISCHARGE THE COMPANY FROM ALL
FURTHER OBLIGATIONS WITH RESPECT TO THAT PAYMENT.

 

(C)                                  MINOR OR INCOMPETENT BENEFICIARY.  IN
MAKING ANY PAYMENTS TO OR FOR THE BENEFIT OF ANY MINOR OR AN INCOMPETENT
BENEFICIARY, THE COMMITTEE, IN ITS SOLE AND ABSOLUTE DISCRETION, MAY, BUT NEED
NOT, MAKE A PAYMENT TO A LEGAL OR NATURAL GUARDIAN OR OTHER RELATIVE OF A MINOR
OR COURT APPOINTED COMMITTEE OF SUCH INCOMPETENT.  ALTERNATIVELY, IT MAY MAKE A
PAYMENT TO ANY ADULT WITH WHOM THE MINOR OR INCOMPETENT TEMPORARILY OR
PERMANENTLY RESIDES.  THE RECEIPT BY A GUARDIAN, COMMITTEE, RELATIVE OR OTHER
PERSON SHALL BE A COMPLETE DISCHARGE TO THE COMPANY.  NEITHER THE COMPANY NOR
THE COMMITTEE SHALL HAVE ANY RESPONSIBILITY TO SEE TO THE PROPER APPLICATION OF
ANY PAYMENTS SO MADE.

 

(D)                                 NO BENEFICIARY DESIGNATION.  IF A MEMBER
FAILS TO DESIGNATE A BENEFICIARY AS PROVIDED IN SECTION 3.6(A) ABOVE, OR IF ALL
DESIGNATED BENEFICIARIES PREDECEASE THE MEMBER OR DIE PRIOR TO COMPLETE
DISTRIBUTION OF THE MEMBER’S BENEFITS, THEN THE MEMBER’S DESIGNATED BENEFICIARY
SHALL BE DEEMED TO BE HIS SURVIVING SPOUSE.  IF THE MEMBER HAS NO SURVIVING
SPOUSE, THE BENEFITS REMAINING UNDER THE PLAN TO BE PAID TO A BENEFICIARY SHALL
BE PAYABLE TO THE EXECUTOR OR PERSONAL REPRESENTATIVE OF THE MEMBER’S ESTATE.

 

(E)                                  OLD PLAN DESIGNATIONS.  IN THE EVENT THAT A
MEMBER HAD A BENEFICIARY DESIGNATION IN EFFECT UNDER SECTION 4.6(A) OF THE OLD
PLAN IN EFFECT ON DECEMBER 31, 2004, THE BENEFICIARY OR BENEFICIARIES SO
DESIGNATED SHALL BE THE MEMBER’S BENEFICIARY UNDER THE PLAN AS HEREIN RESTATED
(WITH RESPECT TO BOTH THE MEMBER’S OLD PLAN BENEFIT AND NEW PLAN BENEFIT) UNLESS
AND UNTIL THE MEMBER SHALL DESIGNATE ANOTHER BENEFICIARY IN ACCORDANCE WITH
SECTION 3.6(A) ABOVE.

 

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3.7                                                         WITHHOLDING FOR
TAXES.  TO THE EXTENT REQUIRED BY THE LAW IN EFFECT AT THE TIME PAYMENTS ARE
MADE, THE COMPANY SHALL WITHHOLD FROM PAYMENTS MADE HEREUNDER ANY TAXES REQUIRED
TO BE WITHHELD BY THE FEDERAL OR ANY STATE OR LOCAL GOVERNMENT.

 

3.8                                                         ACCELERATION
GENERALLY PROHIBITED.  NO ACCELERATION OF PAYMENTS UNDER THE PLAN SHALL BE
PERMITTED EXCEPT AS AUTHORIZED BY THE REGULATIONS.  WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, DISTRIBUTION OF A MEMBER’S NEW PLAN BENEFITS MAY BE
ACCELERATED BY THE COMMITTEE IN ANY OF THE FOLLOWING CIRCUMSTANCES:

 

(A)                                  ETHICS OR CONFLICT OF INTEREST
REQUIREMENTS.  DISTRIBUTION MAY BE ACCELERATED AS MAY BE NECESSARY TO COMPLY
WITH ETHICS OR CONFLICT OF INTEREST REQUIREMENTS IN ACCORDANCE WITH TREASURY
REG. § 1.409A-3(J)(4)(III).

 

(B)                                 PAYMENT OF EMPLOYMENT TAXES.  DISTRIBUTION
MAY BE ACCELERATED IN ORDER TO PAY (I) THE FEDERAL INSURANCE CONTRIBUTIONS ACT
(FICA) TAX IMPOSED UNDER SECTION 3101, SECTION 3121(A) AND SECTION 3121(V)(2) OF
THE CODE ON DEFERRALS UNDER THE PLAN (THE “FICA AMOUNT”), (II) FEDERAL, STATE,
LOCAL OR FOREIGN WAGE WITHHOLDING TAXES ON THE FICA AMOUNT, AND (III) ADDITIONAL
WAGE WITHHOLDING TAXES ATTRIBUTABLE TO THE PYRAMIDING OF WAGES SUBJECT TO
WITHHOLDING AND TAXES.  ACCELERATION SHALL BE PERMITTED UNDER THIS PARAGRAPH
(B) ONLY TO THE EXTENT THAT COMMITTEE DETERMINES THAT SUCH TAX OBLIGATIONS
CANNOT BE READILY MET FROM OTHER SOURCES, AND THE TOTAL PAYMENT UNDER THIS
PARAGRAPH (B) SHALL NOT EXCEED THE AGGREGATE OF THE FICA AMOUNT AND RELATED
INCOME TAX WITHHOLDING.

 

3.9                                                         VESTING.  A MEMBER’S
RIGHT TO HIS OLD PLAN BENEFIT (IF ANY) AND NEW PLAN BENEFIT SHALL BE FULLY
VESTED AND NONFORFEITABLE AT ALL TIMES.

 

3.10                                                   DELAY UNDER
SECTION 162(M).  A PAYMENT UNDER THE PLAN MAY BE DELAYED TO THE EXTENT THAT THE
COMPANY REASONABLY ANTICIPATES THAT IF THE PAYMENT WERE MADE AS SCHEDULED, THE
COMPANY’S DEDUCTION WITH RESPECT TO SUCH PAYMENT WOULD NOT BE PERMITTED BY
REASON OF SECTION 162(M) OF THE CODE, PROVIDED THAT THE PAYMENT IS MADE EITHER
(A) DURING THE COMPANY’S FIRST TAXABLE YEAR IN WHICH IT IS REASONABLY
ANTICIPATED THAT THE DEDUCTION OF SUCH PAYMENT WILL NOT BE BARRED BY CODE
SECTION 162(M) OR (B) DURING THE PERIOD BEGINNING WITH THE DATE OF THE MEMBER’S
SEPARATION FROM SERVICE AND ENDING ON THE LATER OF THE LAST DAY OF THE TAXABLE
YEAR OF THE COMPANY IN WHICH THE MEMBER SEPARATES FROM SERVICE OR THE 15TH DAY
OF THE THIRD MONTH FOLLOWING SUCH SEPARATION FROM SERVICE, AND ALL SIMILARLY
SITUATED MEMBERS ARE TREATED ON A REASONABLY CONSISTENT BASIS, AND PROVIDED
FURTHER THAT WHERE ANY PAYMENT SCHEDULED TO BE MADE ON A SPECIFIED PAYMENT DATE
TO A PARTICULAR MEMBER IN A TAXABLE YEAR IS DELAYED IN ACCORDANCE WITH THIS
SECTION 3.10, THE DELAY IN PAYMENT WILL BE TREATED AS A SUBSEQUENT DEFERRAL
ELECTION UNLESS ALL SCHEDULED PAYMENTS TO THAT MEMBER THAT COULD BE DELAYED
UNDER THIS SECTION 3.10 ARE ALSO DELAYED.  WHERE THE PAYMENT IS DELAYED TO A
DATE ON OR AFTER SEPARATION FROM SERVICE, THE PAYMENT WILL BE CONSIDERED A
PAYMENT UPON A SEPARATION FROM SERVICE FOR PURPOSES OF THE PLAN, INCLUDING FOR
PURPOSES OF SECTION 3.2. NO ELECTION MAY BE PROVIDED TO THE MEMBER WITH RESPECT
TO THE TIMING OF THE PAYMENT UNDER THIS SECTION 3.10. INTEREST SHALL CONTINUE TO
ACCRUE IN ACCORDANCE WITH SECTION 2.10 DURING THE PERIOD OF ANY SUCH DELAY
(INCLUDING ANY PERIOD DURING WHICH HE COMPANY IS DETERMINING WHETHER SUCH A
DELAY IS NECESSARY OR APPROPRIATE).

 

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ARTICLE IV

 

PLAN ADMINISTRATION

 

4.1                                                         COMMITTEE.  THE
COMMITTEE SHALL ADMINISTER THE PLAN AND KEEP RECORDS OF INDIVIDUAL MEMBER
BENEFITS.

 

4.2                                                         COMMITTEE
AUTHORITY.  THE COMMITTEE SHALL HAVE THE POWER AND AUTHORITY IN ITS SOLE
DISCRETION TO ADOPT RULES RELATING TO THE PLAN, TO INTERPRET THE PLAN AND SUCH
RULES, AND TO MAKE ANY OTHER DETERMINATIONS IN THE ADMINISTRATION OF THE PLAN,
INCLUDING WITHOUT LIMITATION ALL DETERMINATIONS WITH RESPECT TO FACTUAL MATTERS
AND QUESTIONS OF CONSTRUCTION, PROVIDED THAT NO SUCH RULE SHALL CHANGE ANY
EXPRESS PROVISION OF THE PLAN OR PROVIDE FOR ANY INCREASE IN BENEFITS
HEREUNDER.  THE COMMITTEE MAY EMPLOY SUCH COUNSEL, ACCOUNTANTS, ACTUARIES, AND
OTHER AGENTS AS IT SHALL DEEM ADVISABLE.  THE COMPANY SHALL PAY THE COMPENSATION
OF SUCH COUNSEL, ACCOUNTANTS, ACTUARIES, AND OTHER AGENTS AND ANY OTHER EXPENSES
INCURRED BY THE COMMITTEE IN THE ADMINISTRATION OF THE PLAN.

 

4.3                                                         INDEMNIFICATION. 
THE COMPANY SHALL INDEMNIFY AND SAVE HARMLESS EACH MEMBER OF THE COMMITTEE, AND
EACH EMPLOYEE, DIRECTOR OR OFFICER OF THE COMPANY OR OF ANY OF ITS SUBSIDIARIES,
FROM AND AGAINST ANY AND ALL LOSS, LIABILITY, CLAIM, DAMAGE, COST AND EXPENSE
WHICH MAY ARISE BY REASON OF, OR BE BASED UPON, ANY MATTER CONNECTED WITH OR
RELATED TO THE ADMINISTRATION OF THE PLAN (INCLUDING, BUT NOT LIMITED TO, ANY
AND ALL EXPENSES WHATSOEVER REASONABLY INCURRED IN INVESTIGATING, PREPARING OR
DEFENDING AGAINST ANY LITIGATION, COMMENCED OR THREATENED, OR IN SETTLEMENT OF
ANY SUCH CLAIM WHATSOEVER), UNLESS SUCH PERSON SHALL HAVE ACTED IN BAD FAITH OR
BEEN GUILTY OF WILLFUL MISCONDUCT IN RESPECT OF HIS DUTIES, ACTIONS OR OMISSIONS
IN RESPECT OF THE PLAN.

 

4.4                                                         CHANGE OF CONTROL. 
NOTWITHSTANDING ANY PROVISION OF THE PLAN TO THE CONTRARY, IN THE EVENT OF A
CHANGE OF CONTROL, THE TRUSTEE OF THE TRUST CREATED PURSUANT TO ARTICLE VII
SHALL ASSUME AND SUCCEED TO ALL POWERS OF THE COMMITTEE HEREUNDER AS THEY APPLY
TO THE DETERMINATION AND PAYMENT OF BENEFITS (INCLUDING, WITHOUT LIMITATION, THE
AMOUNT AND TIME AND FORM OF PAYMENT THEREOF) TO OR IN RESPECT OF ANY MEMBER OR
BENEFICIARY.  HOWEVER, A MEMBER OR BENEFICIARY MAY CONSENT, BY WRITTEN
APPLICATION, TO THE COMMITTEE RETAINING ITS AUTHORITY TO DETERMINE THE PLAN
BENEFITS OF SUCH MEMBER OR BENEFICIARY.

 

ARTICLE V

 

CLAIMS PROCEDURE

 

5.1                                                         ADMINISTRATOR OF
CLAIMS PROCEDURE.  THE COMMITTEE SHALL ADMINISTER THE CLAIMS PROCEDURE UNDER
THIS PLAN.

 

(1)               THE BUSINESS ADDRESS AND TELEPHONE NUMBER OF THE COMMITTEE IS:

 

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Compensation Committee

Scientific Games Corporation

750 Lexington Avenue

New York, New York  10022

(212) 754-2233

 

(2)               THE COMPANY SHALL HAVE THE RIGHT TO CHANGE THE ADDRESS AND
TELEPHONE NUMBER OF THE COMMITTEE.  THE COMPANY SHALL GIVE THE MEMBERS WRITTEN
NOTICE OF ANY CHANGE IN THE ADDRESS AND TELEPHONE NUMBER OF THE COMMITTEE.

 

5.2                                                         CLAIMS.  BENEFITS
SHALL BE PAID IN ACCORDANCE WITH THE PROVISIONS OF THIS PLAN.  THE MEMBER OR
BENEFICIARY (HEREINAFTER REFERRED TO AS THE “CLAIMANT”) SHALL MAKE A WRITTEN
REQUEST FOR THE BENEFITS PROVIDED UNDER THIS PLAN.  THIS WRITTEN CLAIM SHALL BE
MAILED OR DELIVERED TO THE COMMITTEE.

 

5.3                                                         DENIAL OF CLAIMS. 
IF THE CLAIM IS DENIED, EITHER WHOLLY OR PARTIALLY, NOTICE OF THE DECISION SHALL
BE DELIVERED OR MAILED TO THE CLAIMANT WITHIN A REASONABLE TIME PERIOD NOT TO
EXCEED MORE THAN NINETY (90) DAYS AFTER THE RECEIPT OF THE CLAIM BY THE
COMMITTEE, OR ONE HUNDRED EIGHTY (180) DAYS AFTER THE RECEIPT OF THE CLAIM IF
SPECIAL CIRCUMSTANCES REQUIRE AN EXTENSION OF TIME (IN WHICH EVENT WRITTEN
NOTICE OF THE EXTENSION SHALL BE FURNISHED TO THE CLAIMANT PRIOR TO THE END OF
THE INITIAL 90-DAY PERIOD, WHICH INDICATES THE SPECIAL CIRCUMSTANCES REQUIRING
AN EXTENSION OF TIME AND THE DATE BY WHICH THE COMMITTEE EXPECTS TO RENDER THE
DETERMINATION ON REVIEW).  THE NOTICE SHALL SET FORTH THE FOLLOWING INFORMATION
IN A MANNER CALCULATED TO BE UNDERSTOOD BY CLAIMANT:

 

(1)               THE SPECIFIC REASONS FOR THE DENIAL;

 

(2)               THE SPECIFIC REFERENCE TO PERTINENT PLAN PROVISIONS ON WHICH
THE DENIAL IS BASED;

 

(3)               A DESCRIPTION OF ANY ADDITIONAL MATERIAL OR INFORMATION
NECESSARY FOR THE CLAIMANT TO PERFECT THE CLAIM AND AN EXPLANATION OF WHY SUCH
MATERIAL OR INFORMATION IS NECESSARY; AND

 

(4)               A DESCRIPTION OF THE PROCEDURES TO FOLLOW TO APPEAL THE
DETERMINATION, AND THE TIME LIMITS APPLICABLE THERETO, INCLUDING A STATEMENT OF
THE CLAIMANT’S RIGHT TO BRING A CIVIL SUIT UNDER SECTION 502(A) OF ERISA
FOLLOWING AN ADVERSE DETERMINATION ON REVIEW AND (IF APPLICABLE) A DESCRIPTION
OF THE ARBITRATION PROCEDURE THAT MAY BE SUBSTITUTED THEREFOR PURSUANT TO
SECTION 5.7.

 

5.4                                                         APPEAL OF DENIAL OF
CLAIMS.  THE CLAIMS PROCEDURE UNDER THE PLAN SHALL ALLOW THE CLAIMANT A
REASONABLE OPPORTUNITY TO APPEAL A DENIED CLAIM AND TO GET A FULL AND FAIR
REVIEW OF THAT DECISION FROM THE COMMITTEE BASED ON THE PROVISIONS OF THE
GOVERNING PLAN DOCUMENTS.

 

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(1)               THE CLAIMANT SHALL EXERCISE HIS RIGHT OF APPEAL BY SUBMITTING
A WRITTEN REQUEST FOR A REVIEW OF THE DENIED CLAIM TO THE COMMITTEE WITHIN SIXTY
(60) DAYS AFTER RECEIPT BY THE CLAIMANT OF THE WRITTEN NOTICE OF DENIAL.

 

(2)               THE CLAIMANT SHALL HAVE THE FOLLOWING RIGHTS UNDER THIS APPEAL
PROCEDURE:

 

A.                                   TO REVIEW AND RECEIVE FREE COPIES OF ALL
DOCUMENTS, RECORDS AND OTHER INFORMATION RELEVANT TO THE CLAIMANT’S CLAIM FOR
BENEFITS, INCLUDING DOCUMENTS THAT WERE CREATED OR RECEIVED BY THE COMMITTEE
DURING THE APPEALS PROCESS; AND

 

B.                                     TO SUBMIT ISSUES, COMMENTS, DOCUMENTS,
RECORDS, AND OTHER INFORMATION RELATING TO THE CLAIM.

 

5.5                                                         APPEAL.  THE
DECISION ON THE REVIEW OF THE DENIED CLAIM SHALL BE PROVIDED BY THE COMMITTEE NO
LATER THAN SIXTY (60) DAYS AFTER THE RECEIPT OF THE REQUEST FOR REVIEW, OR
WITHIN NINETY (120) DAYS AFTER THE RECEIPT OF THE REQUEST FOR REVIEW IF SPECIAL
CIRCUMSTANCES REQUIRE AN EXTENSION OF TIME (IN WHICH EVENT WRITTEN NOTICE OF THE
EXTENSION SHALL BE FURNISHED TO THE CLAIMANT PRIOR TO THE END OF THE INITIAL
60-DAY PERIOD, WHICH INDICATES THE SPECIAL CIRCUMSTANCES REQUIRING AN EXTENSION
OF TIME AND THE DATE BY WHICH THE COMMITTEE EXPECTS TO RENDER THE DETERMINATION
ON REVIEW).

 

5.6                                                         WRITTEN DECISION ON
APPEAL.  THE COMMITTEE’S DECISION ON REVIEW SHALL BE MADE IN WRITING IN A MANNER
CALCULATED TO BE UNDERSTOOD BY THE CLAIMANT AND PROVIDED TO THE CLAIMANT WITHIN
THE SPECIFIED TIME PERIOD.  IN THE CASE OF AN ADVERSE DETERMINATION, THE
DECISION ON REVIEW SHALL CONTAIN (A) THE SPECIFIC REASONS FOR THE DECISION,
(B) SPECIFIC REFERENCE TO THE PROVISIONS OF THE PLAN ON WHICH THE DECISION IS
BASED, (C) A STATEMENT THAT THE CLAIMANT IS ENTITLED TO REVIEW AND RECEIVE FREE
COPIES OF ALL DOCUMENTS, RECORDS AND OTHER INFORMATION RELEVANT TO THE CLAIM,
AND (D) A STATEMENT OF THE CLAIMANT’S RIGHT TO BRING AN ACTION UNDER SECTION
502(A) OF ERISA, AND (IF APPLICABLE) A DESCRIPTION OF THE ARBITRATION PROCEDURE
THAT MAY BE SUBSTITUTED THEREBY PURSUANT TO SECTION 5.7.

 

5.7                                                         RESOLUTION OF
DISPUTES.

 

(A)                                  ANY DISPUTE ARISING OUT OF THIS PLAN PRIOR
TO A CHANGE OF CONTROL THAT REMAINS NOTWITHSTANDING EXHAUSTION OF ALL PROCEDURES
DESCRIBED ABOVE SHALL, IF AGREED TO BY THE MEMBER OR BENEFICIARY, AS APPLICABLE,
AND THE COMMITTEE, BE DETERMINED BY ARBITRATION UNDER THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION THEN IN EFFECT (IN WHICH CASE BOTH PARTIES SHALL BE
BOUND BY THE ARBITRATION AWARD) OR BY LITIGATION.  WHETHER THE DISPUTE IS TO BE
SETTLED BY ARBITRATION OR LITIGATION, THE VENUE FOR THE ARBITRATION OR
LITIGATION SHALL BE NEW YORK.

 

(B)                                 AFTER A CHANGE OF CONTROL, ALL DISPUTES
SHALL BE DETERMINED BY THE TRUSTEE OF THE TRUST IN ACCORDANCE WITH THE CLAIMS
PROCEDURES SET FORTH IN SECTIONS 5.2 THROUGH 5.6 (EXCEPT THAT POWERS AND
OBLIGATIONS OF THE COMMITTEE SHALL BE EXERCISED BY THE TRUSTEE), AND IN
ACCORDANCE WITH THE PROVISIONS OF THE APPLICABLE TRUST AGREEMENT.

 

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ARTICLE VI

 

GENERAL

 

6.1                                                         UNSECURED CREDITOR
STATUS.  NOTHING CONTAINED IN THIS PLAN AND NO ACTION TAKEN PURSUANT TO THE
PROVISIONS OF THIS PLAN SHALL CREATE OR BE CONSTRUED TO CREATE A TRUST OF ANY
KIND OR A FIDUCIARY RELATIONSHIP BETWEEN THE COMPANY AND THE MEMBER, HIS SPOUSE
OR ANY OTHER PERSON.  ANY FUNDS WHICH MAY BE INVESTED BY THE COMPANY TO INSURE
ITSELF AGAINST ANY AND ALL FINANCIAL LOSSES WHICH THE COMPANY MAY INCUR UNDER
THE PROVISIONS OF THIS PLAN SHALL CONTINUE FOR ALL PURPOSES TO BE A PART OF THE
GENERAL FUNDS OF THE COMPANY, AND NO PERSON OTHER THAN THE COMPANY, SHALL, BY
VIRTUE OF THE PROVISIONS OF THIS PLAN, HAVE ANY INTEREST IN SUCH FUNDS.  TO THE
EXTENT THAT ANY PERSON ACQUIRES A RIGHT TO RECEIVE PAYMENT FROM THE COMPANY
UNDER THIS PLAN, SUCH RIGHT SHALL BE NO GREATER THAN THE RIGHT OF ANY GENERAL
UNSECURED CREDITOR OF THE COMPANY.  SCIENTIFIC GAMES CORPORATION AND ANY
SUBSIDIARY EMPLOYING A MEMBER SHALL BE JOINTLY AND SEVERALLY LIABLE FOR ALL
AMOUNTS PAYABLE TO SUCH MEMBER (OR HIS BENEFICIARY) UNDER THE PLAN (AND THE TERM
“COMPANY” IN THIS SECTION 6.1, SECTION 6.2 AND SECTION 6.8(B) SHALL FOR SUCH
PURPOSE INCLUDE ANY SUCH SUBSIDIARY).  AMOUNTS PAYABLE TO A MEMBER EMPLOYED
SOLELY BY SCIENTIFIC GAMES CORPORATION (OR HIS BENEFICIARY) SHALL BE THE SOLE
OBLIGATION OF SCIENTIFIC GAMES CORPORATION.

 

6.2                                                         SOURCE OF PAYMENT. 
ALL BENEFITS UNDER THE PLAN SHALL BE PAID BY THE COMPANY OUT OF ITS GENERAL
ASSETS, AND ANY RIGHTS OF A MEMBER OR BENEFICIARY UNDER THE PLAN SHALL BE MERE
UNSECURED CONTRACTUAL RIGHTS.  THE COMPANY AND THE MEMBERS INTEND THAT ANY
ARRANGEMENTS MADE TO ASSIST THE COMPANY TO MEET OBLIGATIONS UNDER THE PLAN SHALL
BE UNFUNDED FOR TAX PURPOSES AND FOR PURPOSES OF TITLE I OF ERISA, AND NO TRUST,
SECURITY, ESCROW, OR SIMILAR ACCOUNT SHALL BE ESTABLISHED IN CONNECTION WITH THE
PLAN.  THE COMPANY SHALL, HOWEVER, ESTABLISH A “RABBI TRUST” AS PROVIDED IN
ARTICLE VII TO ASSIST IN MEETING ITS OBLIGATION TO PAY BENEFITS UNDER THE PLAN,
AND AMOUNTS PAID FROM ANY SUCH RABBI TRUST SHALL DISCHARGE THE OBLIGATIONS OF
THE COMPANY HEREUNDER TO THE EXTENT OF THE PAYMENTS.  ANY TRUST SO CREATED SHALL
BE CONSISTENT WITH THE TERMS OF THE MODEL TRUST DESCRIBED IN REVENUE PROCEDURE
92-64 AND SECTION 409A(B) OF THE CODE.  NO MEMBER OR BENEFICIARY SHALL HAVE A
PREFERRED CLAIM ON OR BENEFICIAL OWNERSHIP INTEREST IN THE ASSETS OF SUCH RABBI
TRUST.

 

6.3                                                         EFFECT OF PLAN ON
COMPENSATION.  THIS PLAN DOES NOT INVOLVE A REDUCTION IN SALARY FOR THE MEMBERS
OR A FOREGOING OF AN INCREASE IN FUTURE SALARY BY THE MEMBERS.

 

6.4                                                         NONTRANSFERABLE. 
EXCEPT AS PROVIDED BY THE LAWS OF DESCENT AND DISTRIBUTION OR PROVIDED BY WILL
OR INSOFAR AS THIS PROVISION MAY BE CONTRARY TO APPLICABLE LAW, NO SALE,
TRANSFER, ALIENATION, ASSIGNMENT, PLEDGE, COLLATERALIZATION, OR ATTACHMENT OF
ANY BENEFITS UNDER THIS PLAN SHALL BE VALID OR RECOGNIZED BY THE COMMITTEE.

 

6.5                                                         AMENDMENT OF PLAN. 
THE COMPANY RESERVES THE RIGHT AT ANY TIME AND FROM TIME TO TIME, WITHOUT THE
CONSENT OF MEMBERS, ACTIVE OR RETIRED, BENEFICIARIES OR ANY PERSON OR PERSONS
CLAIMING THROUGH THEM, BY ACTION OF ITS BOARD OF DIRECTORS TO TERMINATE, MODIFY
OR AMEND, IN WHOLE OR IN PART, ANY OR ALL OF THE PROVISIONS OF THE PLAN,
INCLUDING SPECIFICALLY THE RIGHT TO MAKE ANY SUCH AMENDMENTS EFFECTIVE
RETROACTIVELY; PROVIDED THAT NO SUCH ACTION SHALL

 

14

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AFFECT ANY OF (A) THE AMOUNT OF THE TOTAL FROZEN BENEFIT OF ANY MEMBER OR
BENEFICIARY AS OF THE DATE OF SUCH ACTION, (B) THE RATE FOR CREDITING INTEREST
ON THE NEW PLAN BENEFIT COMPONENT THEREOF, NOR THE OLD PLAN DISCOUNT RATE
EMPLOYED FOR CREDITING INTEREST ON THE GRANDFATHERED BENEFIT, (C) THE OLD PLAN
BENEFIT OR NEW PLAN BENEFIT SUBSEQUENTLY PAYABLE UPON ANY DISTRIBUTION EVENT
UNDER THE PLAN, OR (D) THE MEMBER’S FULL VESTED AND NONFORFEITABLE RIGHTS
THEREIN, NOR ADVERSELY AFFECT THE RIGHTS PROVIDED TO ANY MEMBER OR BENEFICIARY
UNDER ANY PROVISION OF THIS PLAN IN THE EVENT OF A CHANGE OF CONTROL OR AFTER A
CHANGE OF CONTROL HAS OCCURRED UNLESS SUCH MEMBER OR BENEFICIARY HAS CONSENTED
THERETO IN WRITING, NOR SHALL ANY SUCH AMENDMENT OR OTHER ACTION BE VALID OR
GIVEN ANY EFFECT WHATEVER IF AND TO THE EXTENT IT IS INCONSISTENT WITH
SECTION 409A OR THE REGULATIONS.

 

6.6                                                         PROHIBITION AGAINST
ACCELERATION.  IN NO EVENT SHALL ANY AMENDMENT OR TERMINATION OF THE PLAN RESULT
IN (A) ANY ACCELERATION OF THE PAYMENT OF A MEMBER’S NEW PLAN BENEFIT EXCEPT AS
PERMITTED UNDER THE REGULATIONS, OR (B) IN ANY MATERIAL MODIFICATION OF THE OLD
PLAN THAT WOULD SUBJECT THE OLD PLAN BENEFIT TO SECTION 409A, UNLESS THE
AFFECTED MEMBER CONSENTS THERETO IN WRITING AND THE COMMITTEE CONCLUDES UPON
ADVICE OF COUNSEL THAT SUCH MATERIAL MODIFICATION WOULD NOT RESULT IN ANY
RETROACTIVE VIOLATION OF SECTION 409A, NOR SHALL ANY PURPORTED SUCH AMENDMENT OR
TERMINATION IN VIOLATION OF SUCH LIMITATIONS BE VALID OR BE GIVEN ANY AFFECT
WHATEVER.

 

6.7                                                         NO EMPLOYMENT
RIGHTS.  NOTHING CONTAINED IN THIS PLAN SHALL BE DEEMED TO GIVE ANY MEMBER OR
EMPLOYEE THE RIGHT TO BE RETAINED IN THE SERVICE OF THE COMPANY OR ANY
SUBSIDIARY OR TO INTERFERE WITH THE RIGHT OF THE COMPANY OR ANY SUBSIDIARY TO
DISCHARGE ANY MEMBER OR EMPLOYEE AT ANY TIME REGARDLESS OF THE EFFECT WHICH SUCH
DISCHARGE SHALL HAVE UPON HIM AS A MEMBER OF THE PLAN.

 

6.8                                                         BINDING EFFECT.

 

(A)                                  THIS PLAN SHALL BE BINDING UPON AND INURE
TO THE BENEFIT OF THE COMPANY, ITS SUCCESSORS AND ASSIGNS AND EACH MEMBER AND
BENEFICIARY.

 

(B)                                 THE COMPANY SHALL NOT MERGE INTO, BE
ACQUIRED BY, OR CONSOLIDATE WITH ANY OTHER COMPANY, OR TRANSFER SUBSTANTIALLY
ALL OF ITS ASSETS TO ANOTHER COMPANY, UNLESS AND UNTIL SUCH OTHER COMPANY AGREES
TO ASSUME ALL RIGHTS AND OBLIGATIONS SET FORTH IN THIS PLAN.

 

6.9                                                         GOVERNING LAW.  THIS
PLAN SHALL BE GOVERNED BY THE LAWS OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES
OF CONFLICT OF LAWS EXCEPT WHERE SUCH LAWS ARE SUPERSEDED BY ERISA, IN WHICH
ERISA SHALL CONTROL.

 

6.10                                                   SEVERABILITY.  IN CASE
ANY PROVISION OF THIS PLAN SHALL BE HELD ILLEGAL OR INVALID FOR ANY REASON, SUCH
ILLEGALITY OR INVALIDITY SHALL NOT AFFECT THE REMAINING PARTS OF THIS PLAN AND
THIS PLAN SHALL BE CONSTRUED AND ENFORCED AS IF SUCH ILLEGAL AND INVALID
PROVISIONS HAD NEVER BEEN INSERTED HEREIN.

 

15

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6.11                                                   TITLES.  THE TITLES TO
ARTICLES AND HEADINGS OF SECTIONS OF THIS PLAN ARE FOR CONVENIENCE OF REFERENCE
AND IN CASE OF ANY CONFLICT THE TEXT OF THE PLAN, RATHER THAN SUCH TITLES AND
HEADINGS, SHALL CONTROL.

 

ARTICLE VII

 

GRANTOR TRUST

 

7.1                                                         GRANTOR TRUST.

 

(A)                                  INCLUSION OF PLAN IN GRANTOR TRUST. 
EFFECTIVE NOVEMBER 1, 2003, THE COMPANY ESTABLISHED A TRUST TO ASSIST IN MEETING
THE COMPANY’S OBLIGATIONS UNDER THE OLD PLAN AND MADE AN INITIAL DEPOSIT INTO A
FUND ESTABLISHED TO HOLD THE PRINCIPAL AND EARNINGS THEREON AND ANY ADDITIONAL
DEPOSITS TO THE TRUST (THE “FUND”).  THE TRUST IS INTENDED TO QUALIFY AS A
“GRANTOR TRUST”, WITHIN THE MEANING OF SUBPART E, PART I, SUBCHAPTER J, CHAPTER
1, SUBTITLE A OF THE CODE.  EFFECTIVE AS OF JANUARY 1, 2005, SUCH TRUST, AS IT
MAY BE AMENDED, SHALL CONTINUE FOR THE PURPOSE OF ASSISTING THE COMPANY IN
MEETING ITS OBLIGATIONS UNDER BOTH THE OLD PLAN AND NEW PLAN COMPONENTS OF THE
PLAN.

 

(B)                                 DISCRETIONARY DEPOSITS IN TRUST.  PRIOR TO A
CHANGE OF CONTROL OR THREATENED CHANGE OF CONTROL, THE COMPANY SHALL MAKE SUCH
ADDITIONAL DEPOSITS TO THE TRUST AS IT, IN ITS SOLE DISCRETION, DEEMS
DESIRABLE.  NOTWITHSTANDING THE FOREGOING, THE COMPANY HAS NO OBLIGATION TO MAKE
SUCH, OR ANY, ADDITIONAL DEPOSITS TO THE TRUST PRIOR TO A CHANGE OF CONTROL OR
THREATENED CHANGE OF CONTROL.

 

(C)                                  CONTRIBUTIONS UPON THREATENED CHANGE OF
CONTROL.  UPON A THREATENED CHANGE OF CONTROL, THE COMPANY SHALL, AS SOON AS
POSSIBLE, BUT IN NO EVENT LATER THAN THIRTY (30) DAYS FOLLOWING THE OCCURRENCE
OF A THREATENED CHANGE OF CONTROL NOR LATER THAN THE DATE OF AN ACTUAL CHANGE OF
CONTROL, MAKE A CONTRIBUTION TO THE TRUST IN AN AMOUNT THAT IS SUFFICIENT, WHEN
ADDED TO THE EXISTING CORPUS OF THE TRUST, TO PROVIDE THE TRUST WITH NET ASSETS
IN AN AMOUNT NOT LESS THAN 100% OF THE AMOUNT OF THE TOTAL FROZEN BENEFIT OF ALL
THEN MEMBERS (OR THEIR BENEFICIARIES), INCREASED BY INTEREST TO THE DATE THAT
THE THREATENED CHANGE OF CONTROL OCCURRED (THE “CHANGE DATE PLAN BENEFIT”), NOR
MORE THAN 120% OF SUCH CHANGE DATE PLAN BENEFIT.  ANY ADDITIONAL CONTRIBUTION
UNDER THIS SECTION 7.1(C) SHALL BECOME IRREVOCABLE UPON A SUBSEQUENT ACTUAL
CHANGE OF CONTROL.  IN THE EVENT THAT A CHANGE OF CONTROL DOES NOT OCCUR WITHIN
ONE YEAR OF A THREATENED CHANGE OF CONTROL, THE COMPANY SHALL HAVE THE RIGHT TO
RECOVER ANY ADDITIONAL CONTRIBUTIONS MADE UNDER THIS SECTION 7.1(C), LESS A PRO
RATA SHARE OF ANY INVESTMENT LOSSES OF THE TRUST, UPON WRITTEN REQUEST TO THE
TRUSTEE, TO THE EXTENT THAT THE CORPUS OF THE TRUST, EXCEEDS THE GREATER OF
(I) 100% OF THE BALANCE OF THE TOTAL FROZEN BENEFIT OF ALL THE MEMBERS (OR THEIR
BENEFICIARIES) INCREASED BY INTEREST TO THE DATE OF PAYMENT PURSUANT TO SUCH
REQUEST, OR (II) THE AMOUNT OF TRUST CORPUS THAT WOULD EXIST HAD SUCH
CONTRIBUTION NOT BEEN MADE.

 

(D)                                 CONTRIBUTIONS UPON CHANGE OF CONTROL.  UPON
A CHANGE OF CONTROL THE COMPANY SHALL, AS SOON POSSIBLE BUT IN NO EVENT LATER
THAN THIRTY (30) DAYS FOLLOWING THE OCCURRENCE OF THE CHANGE OF CONTROL, MAKE A
CONTRIBUTION TO THE TRUST IN AN AMOUNT THAT IS SUFFICIENT, WHEN ADDED TO THE
EXISTING CORPUS OF THE TRUST, TO PROVIDE NO LESS THAN 100%, BUT NO

 

16

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MORE THAN 120%, OF THE TOTAL FROZEN BENEFIT OF ALL THEN MEMBERS (OR THEIR
BENEFICIARIES), INCREASED BY INTEREST TO THE DATE SUCH CHANGE OF CONTROL OCCURS.

 

(E)                                  ADDITIONAL POST-CHANGE CONTRIBUTIONS.  IN
THE EVENT OF A MEMBER’S TERMINATION OF EMPLOYMENT WITHIN THE MEANING OF
SECTION 3.1, SEPARATION FROM SERVICE, DISABILITY OR DEATH SUBSEQUENT TO A CHANGE
OF CONTROL, THE COMPANY SHALL, AS SOON AS POSSIBLE, BUT IN NO EVENT LATER THAN
THIRTY (30) DAYS FOLLOWING SUCH EVENT, MAKE A CONTRIBUTION TO THE TRUST IN SUCH
AMOUNT (IF ANY) AS IS NECESSARY, WHEN ADDED TO THE EXISTING CORPUS OF THE TRUST,
TO PROVIDE NO LESS THAN 100% BUT NO MORE THAN 120% OF THE TOTAL FROZEN BENEFIT
OF ALL THEN MEMBERS (OR THEIR BENEFICIARIES), INCREASED BY INTEREST TO THE DATE
SUCH DISTRIBUTION EVENT OCCURS.

 

7.2                                                         SITUS OF ASSETS.  AT
NO TIME SHALL ANY ASSETS OF THE TRUST BE HELD OR LOCATED OUTSIDE OF THE UNITED
STATES, AND SUCH TRUST SHALL AT ALL TIMES COMPLY WITH THE REQUIREMENTS OF
SECTION 409A(B) OF THE CODE.

 

7.3                                                         TRUST AGREEMENT
GOVERNS.

 

The provisions of the Trust Agreement under the Trust shall govern following a
Change of Control in the event of any inconsistency between such provisions and
the foregoing provisions of the Plan.

 

17

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IN WITNESS WHEREOF, pursuant to action taken by the Compensation Committee of
the Board on December 15, 2005, and thereafter on December 29, 2008, the
undersigned has executed this amended and restated Plan document on behalf of
the Company (and each Subsidiary) this 31st day of December, 2008.

 

Attest:

 

Scientific Games Corporation

 

 

 

 

 

 

 

 

/s/ Jack B. Sarno

 

By:

/s/ DeWayne E. Laird

Jack B. Sarno

 

Name:

DeWayne E. Laird

 

 

Title:

Vice President

 

18

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Schedule 1

 

SCIENTIFIC GAMES CORPORATION

 

FROZEN SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

Total Frozen Benefit as of December 31, 2005

 

 

 

Assumed
Years of Service

 

Final
Earnings

 

Annual Benefit
(15 Years)

 

Present Value
of Annual
Benefit (1)

 

 

 

 

 

 

 

 

 

 

 

Weil

 

N/A

 

N/A

 

$

877,947

 

$

9,853,046

 

Huntley

 

15

 

$

750,150

 

$

337,567

 

$

3,788,461

 

Schloss(1)

 

15

 

$

750,150

 

$

337,567

 

$

3,788,461

 

Laird

 

15

 

$

529,380

 

$

238,221

 

$

2,675,513

 

 

(1)                                  BASED ON 4.50% DISCOUNT RATE

 

Old Plan Benefit (Grandfathered Benefit) as of December 31, 2004

 

 

 

Years of
Service at
12/31/04

 

Final Average
Compensation (as
defined in Plan
10/3/04-12/31/04)

 

Annual Benefit
(15 Years)

 

Present Value
of Annual
Benefit at
12/31/04 (2)

 

 

 

 

 

 

 

 

 

 

 

Weil(2)

 

N/A

 

N/A

 

N/A

 

N/A

 

Huntley

 

15

 

$

486,586

 

218,964

 

$

2,401,731

 

Schloss

 

12

 

$

520,600

 

197,500

 

$

2,056,618

 

Laird(3)

 

8

 

N/A

 

N/A

 

N/A

 

 

(2)                                  BASED ON DISCOUNT RATE DETERMINED UNDER
PLAN DOCUMENT IN EFFECT OCTOBER 3 – DECEMBER 31, 2004, NAMELY 4.89%, COMPRISING
THE INTEREST RATE FOR NOVEMBER 2004 ON 20-YEAR TREASURY SECURITIES (AS THE
LONGEST MATURITY TREASURY SECURITY THEN EXISTING IN LIGHT OF THE TREASURY
DISCONTINUANCE OF 30-YEAR MATURITIES).  ACTUAL OLD PLAN BENEFIT WILL BE THE
PRESENT VALUE AT 12/31/04 SHOWN ABOVE, INCREASED BY INTEREST AT THIS SAME RATE
TO THE LAST DAY OF THE MONTH PRECEDING THE DATE SCHEDULED FOR PAYMENT, PER
SECTION 2.15.

 

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(1) Entire benefit paid in 2007 pursuant to termination of employment/separation
from service.

 

(2) ENTIRE BENEFIT PAYABLE UNDER THE NEW PLAN.

 

(3) NOT VESTED ON 12/31/04, HENCE NO GRANDFATHERED BENEFIT.

 

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