Exhibit 10.2

 

SEPARATION AGREEMENT

 

                This Separation Agreement (this “Agreement”) is made and entered
into as of the Execution Date (as defined below), by and between DeWayne E.
Laird (“Executive”) and Scientific Games Corporation, a Delaware corporation
(the “Company” and, together with Executive, the “Parties”).

 

                WHEREAS, Executive has been employed as Vice President and Chief
Financial Officer of the Company pursuant to an Employment Agreement, dated as
of November 1, 2002, by and between Executive and the Company, as amended by
letter agreements dated as of August 2, 2006 and October 7, 2008 and as further
amended by an amendment dated as of December 30, 2008 (as so amended, the
“Employment Agreement”);

 

                WHEREAS, the Company and the Executive have agreed to accelerate
Executive’s scheduled retirement from December 31, 2009 to June 26, 2009 as part
of which Executive wishes to resign his various positions with the Company and
its affiliates to pursue other opportunities; and

 

                WHEREAS, the Company and Executive desire to enter into this
Agreement regarding Executive’s separation from employment with the Company;

 

                NOW THEREFORE, in consideration of the recitals and the mutual
promises, covenants and agreements set forth herein, the Parties covenant and
agree as follows:

 

1.             Transition; Termination of Employment.  Executive shall cease
serving as Chief Financial Officer of the Company as of the close of business on
March 31, 2009.  Until June 26, 2009 (the “Separation Date”), Executive shall
provide reasonable assistance to the Company and the incoming Chief Financial
Officer of the Company in connection with a smooth and orderly transition of his
responsibilities, and perform such other duties as reasonably requested by the
Company in connection therewith. Without limiting the generality of the
foregoing, unless otherwise requested by the Company, Executive shall:

 

(a)   oversee the preparation, review and completion of the 2009 first quarter
consolidated financial statements of the Company (and take such customary
actions and execute such customary documents in connection therewith);

 

(b)   oversee and deliver customary reports with respect to the Company’s 2009
first quarter financial results to the Board of Directors of the Company and the
Audit Committee thereof, and assist in the preparation of the 2009 first quarter
earnings press release;

 

(c)   oversee the preparation of the Company’s Quarterly Report on Form 10-Q for
the 2009 first quarter;

 

(d)   execute a representation letter to the Chief Executive Officer, Corporate
Controller and incoming Chief Financial Officer of the Company with respect to
the Company’s 2009 first quarter financial statements, the Company’s Quarterly
Report on Form 10-Q for the 2009 first quarter and such other matters as are
covered by the certifications of

 

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the chief financial officer contemplated by Rule 13a-14(A) under the Securities
Exchange Act of 1934 and 18 U.S.C. Section 1350 (as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002) to be filed as exhibits to such
Form 10-Q, such letter to be in form and substance reasonably acceptable to the
Company;

 

(e)   participate in the conference call with respect to the Company’s 2009
first quarter earnings; and

 

(f)    be reasonably available during normal business hours to work on special
projects as assigned by the Chief Executive Officer or the Board of Directors of
the Company.

 

Subject to Executive’s duties set forth herein, Executive will not be required
to maintain regular office hours from April 1, 2009 to the Separation Date. 
Executive’s employment with the Company shall terminate as of the close of
business on the Separation Date (at which time he shall be deemed to have
resigned from all officer and director positions of the Company and its
subsidiaries) and all existing and prior employment agreements between the
Parties, whether oral or written, including the Employment Agreement, shall
automatically terminate and be of no further force or effect as of the
Separation Date, except that Sections 10.1 through 10.10 and Section 12 shall
survive such termination and continue in full force and effect in accordance
with their respective terms.

 

2.             Consideration to Executive.  Except for any payments or benefits
Executive has accrued or vested in pursuant to Executive’s participation in the
Company’s 401(k) Plan or the Employee Stock Purchase Plan, which shall be
subject to the terms and conditions set forth in such plans, Executive
acknowledges and agrees that the payments described in this Section 2 fulfill
any and all of the Company’s obligations due to Executive under any agreement or
bonus, incentive compensation, severance or separation plan or allowance or any
other compensation or benefit plan or arrangement maintained by the Company or
any of its subsidiaries (including the Employment Agreement), and Executive
specifically acknowledges and agrees that Executive is entitled to no other
compensation or benefits from the Company or any of its subsidiaries of any kind
or nature whatsoever, except to the extent expressly provided in this Agreement.

 

In consideration of the covenants undertaken herein by Executive, and for other
good and valuable consideration, receipt of which is hereby acknowledged, and in
full and complete consideration for Executive’s promises, covenants and
agreements set forth in this Agreement, the Company shall provide the following
to Executive:

 

(a)   any accrued but unpaid base salary of Executive for services rendered to
the Separation Date, payable in accordance with the Company’s regular payroll
policies (and subject to applicable withholdings);

 

(b)   an amount in respect of accrued and unpaid vacation as of the Separation
Date, payable within 30 days of the Separation Date (and subject to applicable
withholdings);

 

(c)   reimbursement in accordance with the Company’s policies of any unpaid
reasonable business expenses and disbursements incurred by Executive prior to
the Separation Date; provided, however, that Executive must submit vouchers for
any such

 

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expenses in accordance with the Company’s standard procedures on or prior to the
Separation Date;

 

(d)   US$438,960, representing a pro-rated bonus for 2009 at “maximum
opportunity,” payable within 30 days of the Separation Date (and subject to
applicable withholdings);

 

(e)   US$350,000 representing a special separation payment, payable on
December 29, 2009;

 

(f)    US$3,128,982.33, which represents the total value of Executive’s benefit
under the Company’s Frozen Supplemental Executive Retirement Plan (as amended
and restated effective January 1, 2009) (the “SERP”), calculated by increasing
Executive’s Total Frozen Benefit (as defined in the SERP) of US$2,675,513 by
interest at an annual rate of 4% credited and compounded annually from
December 31, 2005 to (but not including) the payment date, payable on
December 29, 2009 (subject to applicable withholdings);

 

(g)   except for the performance-conditioned restricted stock units awarded to
Executive in February 2009 (the vesting of which shall be conditioned on the
Compensation Committee’s determination in 2010 that the applicable performance
condition has been satisfied, or otherwise such award shall be cancelled) or to
the extent otherwise provided at the time of grant under the terms of any equity
award made to Executive, all unvested stock options, restricted stock units,
restricted stock and other equity-based awards held by Executive immediately
prior to the Separation Date (including the special grant of restricted stock
units awarded to Executive in February 2007) will become fully vested and
non-forfeitable as of the Separation Date, and, in all other respects, all such
options and other awards shall be governed by the plans and programs and the
agreements and other documents pursuant to which the awards were granted (it
being understood that such options shall be exercisable for 90 days following
the Separation Date or until their earlier expiration in accordance with their
terms);

 

(h)   if Executive elects to continue COBRA coverage under the Company’s group
health plan in accordance with COBRA, 65% of the monthly premiums for such
coverage for a period of nine (9) months (based on Executive’s current coverage
elections), such amount to be paid by the Company directly to the provider and
provided Executive pays the remaining 35% of such premiums during such period
(thereafter, Executive will be responsible for paying the entire COBRA premium).

 

For the avoidance of doubt, in the event of Executive’s death prior to the time
when all payments under this Section 2 have been made, Executive’s estate shall
receive such payments not already paid to Executive in accordance with this
Section 2.

 

The Company makes no representations or warranties regarding the tax
implications of the compensation and benefits to be paid to Executive under this
Agreement, including, without limitation, under Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), and applicable administrative
guidance and regulations.  Section 409A of the Code governs plans and
arrangements that provide “nonqualified deferred compensation” (as

 

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defined under the Code) which may include, among others, nonqualified retirement
plans, bonus plans, stock option plans, employment agreements and severance
agreements.  To the extent any payments of money or other benefits due to
Executive under this Agreement could cause the application of an acceleration or
additional tax under Section 409A of the Code, such payments or other benefits
shall be deferred if deferral will make such payment or other benefits compliant
under Section 409A of the Code, or otherwise such payments or other benefits
shall be restructured, to the extent possible, in a manner determined by the
Company that does not cause such acceleration or additional tax.  To the extent
any reimbursements or in-kind benefits due to Executive under this Agreement
constitute deferred compensation under Section 409A of the Code, any such
reimbursements or in-kind benefits shall be paid to Executive in a manner
consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv).  Each payment made under
this Agreement shall be designated as a “separate payment” within the meaning of
Section 409A of the Code.

 

3.             General Release of Claims.

 

(a)   In consideration for the benefits specified in Section 2 hereof, certain
of which Executive hereby acknowledges are not otherwise owed to Executive,
Executive hereby understands and agrees that Executive is knowingly and
voluntarily releasing, waiving and forever discharging, to the fullest extent
permitted by law, on Executive’s own behalf and on behalf of Executive’s agents,
assignees, attorneys, heirs, executors, administrators and anyone else claiming
by or through Executive (collectively referred to as the “Releasors”):

 

(i)     the Company, its affiliates, subsidiaries, predecessors, successors or
assigns, and any of its or their past or present stockholders, members or other
equity holders, and any of its or their respective past or present directors,
executives, officers, insurers, attorneys, employees, consultants, agents,
employee benefits plans and trustees, fiduciaries, and administrators of those
plans (collectively referred to as the “Released Parties”),

 

(ii)    of and from any and all claims under local, state or federal law or
equity, whether known or unknown, asserted and unasserted, that Executive and/or
the other Releasors have or may have against Released Parties as of the
Effective Date (as defined below), including but not limited to all matters
relating to or in any way arising out of any aspect of Executive’s employment
with the Company, separation from employment with the Company, or Executive’s
treatment by the Company while in the Company’s employ, and all other claims,
charges, complaints, liens, demands, causes of action, obligations, damages
(including consequential, punitive or exemplary damages), liabilities or the
like of whatever nature (including, without limitation, attorneys’ fees and
costs) (collectively “Claims”), including but not limited to all Claims for:

 

(A)          salary and other compensation or benefits, including, but not
limited to, overtime if applicable, incentive compensation and other bonuses,
severance pay, vacation pay or any benefits under the Employee Retirement Income
Security Act of 1974, as amended or any other applicable local, state or federal
law;

 

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(B)           discrimination, harassment or retaliation based upon race, color,
national origin, ancestry, religion, marital status, sex, sexual orientation,
citizenship status, pregnancy or any pregnancy related disability, family
status, leave of absence (including but not limited to the Family Medical Leave
Act or any other federal, state or local leave laws), handicap (including but
not limited to The Rehabilitation Act of 1973), medical condition or disability,
or any other characteristic covered by law under Title VII of the Civil Rights
Act of 1964, as amended, the Civil Rights Act of 1991, the Americans with
Disabilities Act, as amended, Sections 1981 through 1988 of the Civil Rights Act
of 1866, and any other federal, state, or local law prohibiting discrimination
in employment, the Worker Adjustment and Retraining Notification Act, or any
other federal, state or local law concerning plant shutdowns, mass layoffs,
reductions in force or other business restructuring;

 

(C)           discrimination, harassment or retaliation based upon age under the
Age Discrimination in Employment Act as amended by the Older Workers Benefit
Protection Act of 1990 (the “ADEA”), or under any other federal, state, or local
law prohibiting age discrimination;

 

(D)          matters arising under the Sarbanes-Oxley Act of 2002 and any other
federal, state or local whistleblower laws;

 

(E)           breach of implied or express contract (whether written or oral),
breach of promise, misrepresentation, fraud, estoppel, waiver or breach of any
covenant of good faith and fair dealing, including without limitation breach of
any express or implied covenants of any employment agreement that may be
applicable to Executive;

 

(F)           defamation, negligence, infliction of emotional distress,
violation of public policy, wrongful or constructive discharge, or any
employment-related tort recognized under any applicable local, state, or federal
law;

 

(G)           any violation of any Fair Employment Practices Act, Equal Rights
Act; Civil Rights Act; Minimum Fair Wages Act; or Payment of Wages Act; or any
comparable federal, state or local law;

 

(H)          any violation of the New York State Human Rights Law, New York
Labor Act, New York Equal Pay Act, New York City Human Rights Law, New York
Civil Rights Law, New York Rights of Persons with Disabilities Law, New York
Sexual Orientation Non-Discrimination Act, New York Equal Rights Law, the New
York State Workers’ Compensation and Disability Benefit Laws (including the
retaliation provisions thereof), and New York City Administrative Code and
Charter, or any comparable federal, state or local law;

 

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(I)            costs, fees, or other expenses, including attorneys’ fees; and

 

(J)            any other claim, charge, complaint, lien, demand, cause of
action, obligation, damages, liabilities or the like of any kind whatsoever,
including, without limitation, any claim that this Agreement was induced or
resulted from any fraud or misrepresentation by Company.

 

Excluded from the release set forth in this Section 3(a) are: (i) any Claims or
rights to enforce this Agreement against the Company; (ii) any Claims that may
arise after the Effective Date; and (iii) any Claims that Executive cannot
lawfully release.  Notwithstanding anything to the contrary contained herein,
also excluded from the release set forth in this Section 3(a) is Executive’s
right to file a charge with an administrative agency (including the Equal
Employment Opportunity Commission and the National Labor Relations Board) or
participate in any agency investigation.  Executive is, however, hereby waiving
Executive’s right to recover money or other damages in connection with any such
charge or investigation.  Executive is also hereby waiving Executive’s right to
recover money in connection with a charge filed by any other individual or by
the Equal Employment Opportunity Commission, National Labor Relations Board or
any other federal, state or local agency.

 

(b)   The Released Parties, for good consideration which they hereby acknowledge
receiving, hereby release Executive from any and all claims, demands, causes of
action, liability or the like which they had, now have or may claim to have
against Executive, as of the Effective Date, whether known or unknown (it being
understood and agreed that excluded from the release set forth in this
Section 3(b) are (i) any claims or rights to enforce this Agreement against
Executive, (ii) any claims that may arise after the Effective Date and (iii) any
claims that the Company cannot lawfully release).

 

4.             Additional Agreements by Employee.

 

(a)   BY AGREEING TO THE RELEASE CONTAINED IN THIS AGREEMENT EXECUTIVE HEREBY
KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHTS (KNOWN OR UNKNOWN) TO BRING OR
PROSECUTE A LAWSUIT OR MAKE ANY LEGAL CLAIM AGAINST THE RELEASED PARTIES WITH
RESPECT TO ANY OF THE CLAIMS DESCRIBED IN SECTION 3 HEREOF.  Executive agrees
that the release set forth herein will bar all claims or demands of every kind,
known or unknown, referred in Section 3 hereof and further agrees that no
non-governmental person, organization or other entity acting on Executive’s
behalf has in the past or will in the future file any lawsuit, arbitration or
proceeding asserting any claim that is waived or released under this Agreement.
If Executive’s initiates, files or pursues a lawsuit, arbitration or other
proceeding asserting any Claim waived or released in this Agreement,
(i) Executive will pay for all costs, including reasonable attorneys’ fees,
incurred by the Released Parties in defending against such Claim (unless such
Claim is a charge with the Equal Employment Opportunity Commission or the
National Labor Relations Board); (ii) Executive gives up any right to individual
damages in connection with any administrative, arbitration or court proceeding
with respect to Executive’s employment with and/or separation from the Company;
and (iii) if Executive is awarded money damages, Executive will assign to the
Released Parties

 

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Executive’s right and interest to all such money damages.  Notwithstanding the
foregoing, this paragraph does not limit Executive’s right to challenge the
validity of this Agreement in a legal proceeding under the Older Workers Benefit
Protection Act, 29 U.S.C. § 626(f), with respect to claims under the ADEA.  This
paragraph also is not intended to and shall not limit the right of a court to
determine, in its discretion, that the Company is entitled to restitution,
recoupment or setoff of any payments made to Executive by the Company should
this Agreement be found to be invalid as to the release of claims under the
ADEA.

 

(b)   Executive agrees that Executive shall not solicit, encourage, assist or
participate (directly or indirectly) in bringing any Claims or actions against
any of the Released Parties by other current or former employees, officers or
third parties, except as compelled by subpoena or other court order or legal
process, and only after providing the Company with prior notice of any such
subpoena, order or legal process and an opportunity to timely contest such
process.

 

(c)   Executive represents, warrants and agrees that Executive has not filed any
administrative, judicial or other form of complaint or initiated any claim,
charge, complaint, suit or legal or other proceeding against any of the Released
Parties, and that Executive will not make such a filing at any time hereafter
based on any events, actions or omissions occurring prior to the Effective
Date.  Executive understands and agrees that this Agreement will be pleaded as a
full and complete defense to any such claim, charge, complaint, suit or
proceeding which is or may be instituted, prosecuted or maintained by Executive,
Executive’s agents, assignees, attorneys, heirs, executors, administrators and
anyone else claiming by or through Executive.

 

5.             Affirmations.  In signing this Agreement, Executive hereby
affirms that:

 

(a)   Executive has been paid and/or has received all leave (paid or unpaid),
compensation, wages, overtime, if applicable, bonuses, commissions, severance
pay, and/or benefits to which Executive may be entitled and that no other
amounts and/or benefits are due to Executive except as specifically provided in
this Agreement;

 

(b)   Executive is not eligible to receive payments or benefits under any other
Company and/or other Released Party’s severance pay policy, plan, practice or
arrangement;

 

(c)   Executive has no known workplace injuries or occupational diseases that
Executive has not reported to the Company in writing and Executive either has
been provided or Executive has not been denied any leave requested under the
Family and Medical Leave Act or under any applicable Company policy or any
local, state, or federal law;

 

(d)   Executive has not complained of and Executive is not aware of any
fraudulent activity or any act(s) which would form the basis of a claim of
fraudulent or illegal activity by the Company or any other Released Party that
Executive has not reported to the Company in writing;

 

(e)   On or about the Separation Date, or within a reasonable time thereafter,
the Company provided Executive with timely and adequate notice of Executive’s
right to

 

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continue group insurance benefits under COBRA (unless such notice was not
required to be given because, on the day before the Separation Date, Executive
did not receive group health insurance benefits through the Company and thus are
not a qualified beneficiary within the meaning of COBRA); and

 

(f)    Executive acknowledges and agrees that if Executive breaches the
provisions of this Agreement, then the Company will have the right to seek an
appropriate remedy against Executive, which may include, but not be limited to,
injunctive relief, the return of any payments, reimbursements or benefits
Executive has received under any provision of this Agreement, other monetary
damages, and the payment of the Company’s attorneys’ fees.

 

6.             Executive’s Cooperation.

 

(a)   Executive agrees that Executive will provide reasonable assistance to
ensure a smooth transition of Executive’s responsibilities and will cooperate
with the Company, its subsidiaries and its affiliates with respect to matters or
issues which took place or arose during Executive’s tenure with the Company,
specifically including without limitation any attorney retained by any of them
or any other representative acting on their behalf, in connection with any
pending or future internal investigation or judicial, administrative or
regulatory matter, proceeding or investigation.  The Parties acknowledge and
agree that such cooperation may include, but shall not be limited to, Executive
making herself available for meetings, interviews, statements, testimony or the
signing of affidavits, and providing to the Company any documents or information
in Executive’s possession or under Executive’s control relating to any such
litigation, regulatory matter or investigation, provided that any such meeting,
interviews, statements or testimony do not unduly interfere with Executive’s
work schedule or other post-Company duties.  The Company shall reimburse
Executive promptly after Executive submits receipts or other documents
reasonably acceptable to the Company for actual out-of-pocket expenses
reasonably incurred and approved by the Company in connection with Executive’s
performance under this Section 6 and otherwise in accordance with the Company’s
reimbursement policy; provided, however, that Executive shall not be entitled to
any expense reimbursement for a reasonable amount of time spent testifying or
otherwise cooperating in any matter in which Executive is a defendant in the
proceeding or a named subject or target of the litigation, regulatory matter or
investigation.

 

(b)   Executive represents and warrants that Executive has and will accurately,
completely and truthfully disclose to the Company any and all materials and
information requested, including without limitation in connection with any
pending or future internal investigation or judicial, administrative or
regulatory matter, proceeding or investigation involving conduct in which
Executive was involved or had knowledge in connection with Executive’s
employment with the Company.  In the event of a material breach of this
Section 6, Executive agrees that the Company may, in its sole discretion, elect
to terminate this Agreement and render it null and void as of the Separation
Date or any time thereafter, and that in such event, Executive shall be required
to reimburse the Company in full any payments, reimbursements or benefits
Executive has received under any provision of this Agreement.

 

(c)   Nothing in this Agreement diminishes or otherwise reduces the continuing
nature

 

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of the Executive’s right to indemnification under Section 12 of his Employment
Agreement relating to acts and omissions during the period of his employment.

 

7.             Confidentiality of Agreement.  The Parties agree that it is a
material condition of this Agreement that Executive shall keep the terms of this
Agreement strictly and completely confidential and that Executive will not
directly or indirectly make or issue any private statement, press release or
public statement, or communicate or otherwise disclose to any executive or
employee of the Company (past, present or future) or to a member of the general
public, the negotiations leading to, or the terms, amounts or facts of or
underlying this Agreement, except as may be required by law or compulsory
process; provided, however, that Executive may disclose the terms of this
Agreement to Executive’s immediate family, attorneys, and accountants or other
financial advisors so long as they agree to abide by the foregoing
confidentiality restriction.

 

8.             Return of Company Property.  Executive agrees that Executive has
or will surrender to the Company all Company credit cards, parking cards,
security badges, cell phones, pagers, Blackberries, computer equipment and
expense accounts, and that Executive will submit all outstanding travel
vouchers, business expenses and the like no later than the Separation Date. 
Executive further agrees that Executive has returned or will return to the
Company, on or before the Separation Date, and will not keep, maintain or permit
any copy of, any Company property, including without limitation any documents,
papers, files or records in any media (whether stored on Company or personal
property) which may be in Executive’s possession, custody or control.

 

9.             Non-Admissions.  The Parties hereto recognize that, by entering
into this Agreement, the Company does not admit, and does specifically deny, any
violation of any local, state, federal, or other law, whether regulatory, common
or statutory.  The Parties further recognize that (a) this Agreement has been
entered into in release and compromise of any claims which might be asserted by
Executive in connection with Executive’s employment by the Company or
Executive’s resignation from employment, and to avoid the expense and burden of
any litigation related thereto, and (b) the amounts payable to Executive
hereunder are in addition to anything of value to which he is already entitled.

 

10.           Rights After Breach.  Executive agrees that, in the event
Executive materially breaches any provision of this Agreement or otherwise
engages in any other act or omission that has caused or may reasonably be
expected to cause injury to the interest or business reputation of the Company,
in addition to rights otherwise set forth in this Agreement: (a) the Company
shall have the right to (i) offset or reduce or discontinue any payments,
reimbursements or benefits he otherwise would be entitled to receive under the
provisions of this Agreement; and (ii) demand repayment of or reimbursement for,
and Executive shall immediately repay or reimburse the Company upon demand, any
or all payments, reimbursements or benefits paid or provided to Executive under
the provisions of this Agreement; and (b) the Released Parties shall be entitled
to file counterclaims against Executive in the event of Executive’s breach of
the covenant not to sue and may recover from Executive any repayment or
reimbursement not made to the Company, as required by Section 10(a) hereof, as
well as any and all other resulting actual or consequential damages, including
reasonable attorneys’ fees and costs.

 

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11.           Waiver of Breach.  One or more waivers of a breach of any
covenant, term or provision of this Agreement by any Party shall not be
construed as a waiver of a subsequent breach of the same covenant, term or
provision, nor shall it be considered a waiver of any other then existing or
subsequent breach of a different covenant, term or provision

 

12.           Enforcement and Arbitration.

 

(a)   This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be wholly
performed within that State, without regard to its conflict of laws provisions. 
The Executive and the Company agree that, except for any claim that is
non-arbitrable under applicable law, final and binding arbitration shall be the
exclusive forum for any dispute or controversy between them, including, without
limitation, disputes arising under or in connection with this Agreement,
Executive’s employment with, and/or separation from, the Company; provided,
however, that the Company shall be entitled to commence an action in any court
of competent jurisdiction for injunctive relief in connection with any alleged
actual or threatened violation of any provision of Sections 10.1 through 10.10
of the Employment Agreement (which provisions survive the termination of the
Employment Agreement, pursuant to Section 1 of this Agreement).  Judgment may be
entered on the arbitrators’ award in any court having jurisdiction.  For
purposes of entering such judgment or seeking injunctive relief with regard to
Sections 10.1 through 10.10 of the Employment Agreement, the Company and
Executive hereby consent to the jurisdiction of any or all of the following
courts: (i) the United States District Court for the Southern District of New
York; (ii) the Supreme Court of the State of New York, New York County; or
(iii) any other court having jurisdiction; provided, that damages for any
alleged violation of Sections 10.1 through 10.10 of the Employment Agreement, as
well as any claim, counterclaim or cross-claim brought by the Executive or any
third-party in response to, or in connection with any court action commenced by
the Company seeking said injunctive relief shall remain exclusively subject to
final and binding arbitration as provided for herein.  The Company and Executive
hereby waive, to the fullest extent permitted by applicable law, any objection
which either may now or hereafter have to such jurisdiction, venue and any
defense of inconvenient forum.  Thus, except for the claims carved out above,
this Agreement includes all common-law and statutory claims (whether arising
under federal state or local law), including, but not limited to, any claim for
breach of contract, fraud, fraud in the inducement, unpaid wages, wrongful
termination, and gender, age, national origin, sexual orientation, marital
status, disability, or any other protected status.

 

(b)   Any arbitration under this Agreement shall be filed exclusively with the
American Arbitration Association in New York, New York before three arbitrators,
in accordance with the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association in effect at the time of submission to
arbitration.  The Company and Executive hereby agree that a judgment upon an
award rendered by the arbitrators may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law.  The Company shall pay
all costs uniquely attributable to arbitration, including the administrative
fees and costs of the arbitrators.  Subject to the last sentence of this
Section 12(b), each party shall pay that party’s own costs and attorney fees, if
any, unless the arbitrators rule otherwise.  The Executive understands that he
is giving up no substantive rights, and this

 

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Agreement simply governs forum.  The prevailing party in any dispute,
controversy or claim arising out of or related to this Agreement (and/or the
surviving provisions of the Employment Agreement) shall be entitled to recover
its reasonable costs and attorney fees.

 

(c)   BY SIGNING THIS AGREEMENT, EXECUTIVE AND THE COMPANY ACKNOWLEDGE THAT THE
RIGHT TO A COURT TRIAL AND TRIAL BY JURY IS OF VALUE, AND KNOWINGLY AND
VOLUNTARILY WAIVE THAT RIGHT FOR ANY DISPUTE SUBJECT TO THE TERMS OF THE
ARBITRATION PROVISIONS SET FORTH IN THIS SECTION 12.

 

13.           Severability.  If any provision or term of this Agreement, other
than the Executive’s release set forth herein, is held to be illegal, invalid or
unenforceable, such provision or term shall be fully severable; this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised part of this Agreement; and the remaining
provisions of this Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance from this Agreement.  Furthermore, in lieu of each such illegal,
invalid or unenforceable provision or term, there shall be added automatically
as a part of this Agreement another provision or term as similar to the illegal,
invalid or unenforceable provision, as may be possible and that is legal, valid
and enforceable.

 

14.           Entire Agreement.  This Agreement constitutes the entire Agreement
of the Parties, and supersedes all prior and contemporaneous negotiations, prior
drafts of this Agreement and other agreements, oral or written, including
whatever rights, if any, Executive may have had under the Employment Agreement
(except to the extent otherwise specifically provided hereby).  All prior and
contemporaneous negotiations, prior drafts of this Agreement and other
agreements are deemed incorporated and merged into this Agreement and are deemed
to have been abandoned if not so incorporated.  No representations, oral or
written, are being relied upon by either Party in executing this Agreement other
than the express representations of this Agreement.  This Agreement cannot be
changed or terminated unless by express written agreement of the Parties.  This
Agreement may be executed by each Party in separate counterparts, each of which
shall be deemed an original and constitute one document.

 

15.           Revocation and Effective Date.  Executive may accept this
Agreement by delivering to the Company’s General Counsel, Ira H. Raphaelson, 750
Lexington Avenue, 25th Floor, NY, NY 10022, a faxed copy of this Agreement and
the letter in the form attached to this Agreement as Exhibit A, both signed by
Executive no later than 5:00 p.m. Eastern Time on the date that is twenty-one
(21) days after this Agreement is initially delivered to Executive, unless a
later date and time is mutually agreed  (the date, if any, on which Executive
executes and delivers a copy of this Agreement being the “Execution Date”), as
long as Executive or his counsel delivers to the Company’s Counsel within a
reasonable time thereafter an original of this Agreement executed by Executive
on or before the Effective Date.  Executive acknowledges that if Executive does
not accept this Agreement in the manner described above, it will be withdrawn
and of no effect.  If Executive accepts this Agreement before the end of the
twenty-one (21) days permitted, Executive represents that Executive has done so
voluntarily and with the advice of Executive’s attorney.  Executive may revoke
Executive’s acceptance of this Agreement within seven (7) days of the Execution
Date by delivery of written notice to the Company’s General

 

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Counsel, Ira H. Raphaelson, by 5:00 p.m. on the seventh day following the
Execution Date of this Agreement.  Executive acknowledges and agrees that, if
Executive revokes Executive’s acceptance of this Agreement, Executive shall
receive none of the benefits provided hereunder and this Agreement shall be null
and void, having have no further force or effect, and that this Agreement will
not be admissible as evidence in any judicial, administrative or arbitral
proceeding or trial.  Executive further acknowledges that if the Company’s
General Counsel does not receive from Executive written notice of Executive’s
revocation prior to the expiration of seven (7) days of the Execution Date,
Executive shall have forever waived Executive’s right to revoke this Agreement,
and it shall thereafter have full force and effect as of the eighth (8th) day
after the Execution Date (the “Effective Date”).

 

16.           Joint Drafting.  In recognition of the fact that the Parties
hereto had an opportunity to negotiate the language of, and draft, this
Agreement, the Parties acknowledge and agree that there is no single drafter of
this Agreement and therefore, the general rule that ambiguities are to be
construed against the drafter is, and shall be, inapplicable.  If any language
in this Agreement is found or claimed to be ambiguous, each Party shall have the
same opportunity to present evidence as to the actual intent of the Parties with
respect to any such ambiguous language without any inference or presumption
being drawn against any Party.

 

17.           Headings.  The headings used herein are for reference only and
shall not affect the construction of this Agreement.

 

18.           Acknowledgment.

 

(a)   By executing this Agreement, Executive acknowledges that (i) Executive has
had at least twenty-one (21) days to consider the terms of this Agreement, and
has either considered this Agreement and its terms for that period or has
knowingly and voluntarily waived Executive’s right to do so; (ii) Executive has
been advised by the Company pursuant to this Agreement to consult with an
attorney regarding the terms of this Agreement; (iii) Executive has consulted
with an attorney or, in the alternative, waives Executive’s right to do so,
regarding the terms of this Agreement; (iv) any and all questions regarding the
terms of this Agreement have been asked and answered to Executive’s complete
satisfaction; (v) Executive has read this Agreement, Executive has no
contractual right or claim to the benefits described herein and acknowledges
that the consideration provided for hereunder is in addition to anything of
value to which Executive already is entitled; (vi) the consideration provided
for herein is good and valuable; and (vii) Executive is entering into this
Agreement voluntarily, of Executive’s own free will, and without any coercion,
undue influence, threat or intimidation of any kind or type whatsoever. 
Executive further acknowledges and agrees that any revisions to this Agreement
made prior to the Effective Date are not material and shall not be deemed to
affect the amount of time Executive has to consider this Agreement, and
Executive hereby voluntarily waives additional time for review, if any, with
respect to any such revisions.

 

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(b)   Executive hereby acknowledges and confirms that Executive has read all
thirteen (13) pages of this Separation Agreement and hereby freely and
voluntarily assents to all the terms and conditions in this Agreement, and signs
the same as Executive’s own free act with the full intent of accepting the
benefits contemplated hereby in return for releasing the Released Parties (as
defined above) from all Claims.

 

 

/s/ DeWayne E. Laird

 

Date:  March 27, 2009

DeWayne E. Laird

 

 

 

 

 

 

 

 

SCIENTIFIC GAMES CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ Ira H. Raphaelson

 

Date:  March 27, 2009

Name: 

Ira H. Raphaelson

 

 

Title:

Vice President, General Counsel and Secretary

 

 

 

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                        , 2009

 

Mr. Joseph Wright, Jr.

Chief Executive Officer

Scientific Games Corporation

750 Lexington Avenue

25th Floor

New York, NY 10022

 

Dear Joe:

 

After many years of service to Scientific Games Corporation and its predecessor
entities, I have decided it is time to pursue other professional challenges and
opportunities effective close of business on June 30, 2009.  If possible, I
would like to announce my plans immediately and begin the orderly transition of
my responsibilities.  I hereby resign my various officer, director and trustee
positions in Scientific Games Corporation, its subsidiaries, affiliates and
benefit plans.

 

 

Sincerely,

 

 

DeWayne E. Laird

 

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