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 


 

















 


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 


 


3

















 


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;


 


5

















 


(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 


 


6

















 


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 


 


7

















 


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 


 


8

















 


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 


 


10

















 


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 


 


11

















 


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.


 


12

















 


(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

  	
   

  	
   

  
					



 


13

















 


                        ,
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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