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Exhibit 10.13    
    


 
 

SCIENTIFIC GAMES CORPORATION
  
    2003 Incentive Compensation Plan    
    



	Section
 
	 	 
	 	 
	 	Page

	1.	 	Purpose	 	1
	

2.	
 	

Definitions	
 	

1
	

3.	
 	

Administration	
 	

3
	 	 	(a)	 	Authority of the Committee	 	3
	 	 	(b)	 	Manner of Exercise of Committee Authority	 	3
	 	 	(c)	 	Limitation of Liability	 	4
	

4.	
 	

Shares Available Under the Plan	
 	

4
	 	 	(a)	 	Number of Shares Available for Delivery	 	4
	 	 	(b)	 	Share Counting Rules	 	4
	

5.	
 	

Eligibility; Per-Person Award Limitations	
 	

4
	 	 	(a)	 	Grants to Eligible Persons	 	4
	 	 	(b)	 	Annual Per-Person Award Limitations	 	4
	

6.	
 	

Specific Terms of Awards	
 	

5
	 	 	(a)	 	General	 	5
	 	 	(b)	 	Options	 	5
	 	 	(c)	 	Stock Appreciation Rights	 	6
	 	 	(d)	 	Restricted Stock	 	6
	 	 	(e)	 	Deferred Stock	 	7
	 	 	(f)	 	Bonus Stock and Awards in Lieu of Obligations	 	7
	 	 	(g)	 	Dividend Equivalents	 	7
	 	 	(h)	 	Other Stock-Based Awards	 	8
	

7.	
 	

Performance Awards, Including Annual Incentive Awards	
 	

8
	 	 	(a)	 	Performance Awards Generally	 	8
	 	 	(b)	 	Performance Awards Granted to Covered Employees	 	8
	 	 	(c)	 	Annual Incentive Awards Granted to Designated Covered Employees	 	9
	 	 	(d)	 	Exemptions from Section 16(b) Liability	 	10
	

8.	
 	

Certain Provisions Applicable to Awards	
 	

10
	 	 	(a)	 	Stand-Alone, Additional, Tandem, and Substitute Awards	 	10
	 	 	(b)	 	Term of Awards	 	10
	 	 	(c)	 	Form and Timing of Payment under Awards; Deferrals	 	11
	 	 	(d)	 	Additional Award Forfeiture Provisions	 	11
	 	 	(e)	 	Exemptions from Section 16(b) Liability	 	11
	

9.	
 	

Change in Control	
 	

11
	 	 	(a)	 	Effect of "Change in Control"	 	11
	 	 	(b)	 	Definition of "Change in Control"	 	12
	 	 	(c)	 	Definition of "Change in Control Price"	 	12
	

10.	
 	

General Provisions	
 	

12
	 	 	(a)	 	Compliance with Legal and Other Requirements	 	12
	 	 	(b)	 	Limits on Transferability; Beneficiaries	 	12
	 	 	 	 	 	 	 





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	 	 	(c)	 	Adjustments	 	13
	 	 	(d)	 	Taxes	 	13
	 	 	(e)	 	Changes to the Plan and Awards	 	13
	 	 	(f)	 	Limitation on Rights Conferred under Plan	 	14
	 	 	(g)	 	Unfunded Status of Awards; Creation of Trusts	 	14
	 	 	(h)	 	Certain Limitations Relating to Accounting Treatment of Awards	 	14
	 	 	(i)	 	Nonexclusivity of the Plan	 	14
	 	 	(j)	 	Payments in the Event of Forfeitures; Fractional Shares	 	14
	 	 	(k)	 	Awards to Participants Outside the United States	 	14
	 	 	(l)	 	Governing Law	 	15
	 	 	(m)	 	Preexisting Plan	 	15
	 	 	(n)	 	Plan Effective Date and Termination	 	15




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SCIENTIFIC GAMES CORPORATION
  
    2003 Incentive Compensation Plan    
    



        1.     Purpose.    The purpose of this 2003 Incentive Compensation Plan (the "Plan") is to assist Scientific Games
Corporation, a Delaware corporation (the "Company"), and its subsidiaries in attracting, retaining, motivating and rewarding executives, directors, employees, and other persons who provide services to
the Company and/or its subsidiaries, to provide for equitable and competitive compensation opportunities, to encourage long-term service, to recognize individual contributions and reward
achievement of Company goals, and promote the creation of long-term value for stockholders by closely aligning the interests of participants with those of stockholders. The Plan authorizes
stock-based and cash-based performance incentives for participants, to encourage such persons to expend their maximum efforts in the creation of stockholder value. The Plan is also
intended to qualify certain compensation awarded under the Plan for tax deductibility under Section 162(m) of the Internal Revenue Code to the extent deemed appropriate by the Committee which
administers the Plan. 


        2.     Definitions.    For purposes of the Plan, the following terms shall be defined as set forth below, in addition
to such terms defined in Section 1 hereof: 


        (a)   "Annual
Incentive Award"  means a type of Performance Award granted to a Participant under Section 7(c) representing a conditional right to receive
cash, Stock or other Awards or payments, as determined by the Committee, based on performance in a performance period of one fiscal year or a portion thereof. 


        (b)   "Award"  means
any award of an Option, SAR (including Limited SAR), Restricted Stock, Deferred Stock, Stock granted as a bonus or in lieu of another award,
Dividend Equivalent, Other Stock-Based Award, or Performance Award (including an Annual Incentive Award) together with any other right or interest granted to a Participant under the Plan. 



        (c)   "Beneficiary"  means
the person, persons, trust, or trusts which have been designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under the Plan upon such Participant's death or to which Awards or other rights are transferred if and to the extent permitted
under Section 10(b) hereof. If, upon a Participant's death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means person, persons, trust, or
trusts entitled by will or the laws of descent and distribution to receive such benefits. 



        (d)   "Beneficial
Owner"  shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act and any successor to such Rule. 


        (e)   "Board"  means
the Company's Board of Directors. 


        (f)    "Change
in Control"  means Change in Control as defined with related terms in Section 9 of the Plan. 


        (g)   "Change
in Control Price"  means the amount calculated in accordance with Section 9(c) of the Plan. 



        (h)   "Code"  means
the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and regulations
thereto. 


        (i)    "Committee"  means
a committee of two or more directors designated by the Board to administer the Plan; provided, however, that directors appointed as
members of the Committee shall not be employees of the Company or any subsidiary. In appointing members of the Committee, the Board will consider whether a member is or will be a Qualified Member, but
such members are not required to be Qualified Members at the time of appointment or during their term of service on the Committee. 





 



        (j)    "Covered
Employee"  means a person designated by the Committee as likely to be a "covered employee," as defined under Code Section 162(m), with
respect to a specified fiscal year or other performance period. 


        (k)   "Deferred
Stock"  means a conditional right, granted to a Participant under Section 6(e) hereof, to receive Stock, at the end of a specified deferral
period. 


        (l)    "Dividend
Equivalent"  means a conditional right, granted to a Participant under Section 6(g), to receive cash, Stock, other Awards, or other property
equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments. 


        (m)  "Effective
Date"  means the date of approval of the Plan by stockholders of the Company. 


        (n)   "Eligible
Person"  means each executive officer and other officer or full-time employee of the Company or of any subsidiary, including each such
person who may also be a director of the Company, each non-employee director of the Company, each other person who provides substantial services to the Company and/or its subsidiaries and
who is designated as eligible by the Committee, and any person who has been offered employment by the Company or a subsidiary or affiliate, provided that such prospective employee may not receive any
payment or exercise any right relating to an Award until such person has commenced employment with the Company or a subsidiary. An employee on leave of absence may be considered as still in the employ
of the Company or a subsidiary for purposes of eligibility for participation in the Plan. 


        (o)   "Exchange
Act"  means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions and rules
thereto. 


        (p)   "Fair
Market Value"  means the fair market value of Stock, Awards, or other property as determined by the Committee or under procedures established by the
Committee. Unless otherwise determined by the Committee, the Fair Market Value of Stock shall be the average of the high and low sales prices of Stock on a given date or, if there are no sales on that
date, on the latest previous date on which there were sales, reported for composite transactions in securities listed on the principal trading market on which Stock is then listed. 


        (q)   "Incentive
Stock Option" or "ISO"  means any Option intended to be and designated as an incentive stock option within the meaning of Code Section 422
or any successor provision thereto that may be granted to Eligible Persons who are employees. 


        (r)   "Limited
SAR"  means a conditional right granted to a Participant under Section 6(c) hereof. 


        (s)   "Option"  means
a conditional right, granted to a Participant under Section 6(b) hereof, to purchase Stock or other Awards at a specified price during
specified time periods. 


        (t)    "Other
Stock-Based Awards"  means Awards granted to a Participant under Section 6(h) hereof. 


        (u)   "Participant"  means
a person who has been granted an Award under the Plan which remains outstanding, including a person who is no longer an Eligible Person. 


        (v)   "Performance
Award"  means a conditional right, granted to a Participant under Section 7, to receive cash, Stock or other Awards or payments, as
determined by the Committee, based upon performance criteria specified by the Committee. 


        (w)  "Preexisting
Plan"  mean the Company's 1997 Incentive Compensation Plan, as amended and restated. 


        (x)   "Qualified
Member"  means a member of the Committee who is a "non-employee director" within the meaning of Rule 16b-3(b)(3)
and an "outside director" within the meaning of Regulation 1.162-27(c) under Code Section 162(m). 


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        (y)   "Restricted
Stock"  means Stock granted to a Participant under Section 6(d) hereof, that is subject to certain restrictions and to a risk of
forfeiture. 


        (z)   "Rule 16b-3"  means
Rule 16b-3, as from time to time in effect and applicable to the Plan and Participants, promulgated
by the Securities and Exchange Commission under Section 16 of the Exchange Act. 


        (aa)  "Stock"  means
the Company's Class A Common Stock, $.01 par value, and such other securities as may be substituted (or resubstituted) for Stock
pursuant to Section 10(c) hereof. 


        (bb)  "Stock
Appreciation Rights" or "SAR"  means a conditional right granted to a Participant under Section 6(c) hereof. 


3.    Administration.  


        (a)    Authority of the Committee.    Except as otherwise provided below, the Plan shall be administered by the
Committee. The Committee shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants, grant Awards,
determine the type, number, and other terms and conditions of, and all other matters relating to, Awards, prescribe Award agreements (which need not be identical for each Participant) and rules and
regulations for the administration of the Plan, construe and interpret the Plan and Award agreements and correct defects, supply omissions, or reconcile inconsistencies therein, and to make all other
decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. The foregoing notwithstanding, the Board shall perform the functions of the Committee
for purposes of granting Awards under the Plan to non-employee directors, and may perform any function of the Committee under the Plan for any other purpose, including for the purpose of
ensuring that transactions under the Plan by Participants who are then subject to Section 16 of the Exchange Act in respect of the Company are exempt under Rule 16b-3. In any
case in which the Board is performing a function of the Committee under the Plan, each reference to the Committee herein shall be deemed to refer to the Board, except where the context otherwise
requires. Any action of the Committee shall be final, conclusive and binding on all persons, including the Company, its subsidiaries, Participants, Beneficiaries, transferees under
Section 10(b) hereof, or other persons claiming rights from or through a Participant, and stockholders. 


        (b)    Manner of Exercise of Committee Authority.    At any time that a member of the Committee is not a Qualified
Member, (i) any action of the Committee relating to an Award intended by the Committee to qualify as "performance-based compensation" within the meaning of Code Section 162(m) and
regulations thereunder may be taken by a subcommittee, designated by the Committee or the Board, composed solely of two or more Qualified Members, and (ii) any action relating to an Award
granted or to be granted to a Participant who is then subject to Section 16 of the Exchange Act in respect of the Company may be taken either by such a subcommittee or by the Committee but with
each such member who is not a Qualified Member abstaining or recusing himself or herself from such action, provided that, upon such abstention or recusal, the Committee remains composed of two or more
Qualified Members. Such action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such non-Qualified Member(s), shall be the action of the Committee
for purposes of the Plan. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the
Committee. The Committee may delegate to officers or managers of the Company or any subsidiary or affiliate, or committees thereof, the authority, subject to such terms as the Committee shall
determine, to perform such functions, including administrative functions, as the Committee may determine, to the fullest extent permitted under Section 157 of the Delaware General Corporation
Law. The Committee may appoint agents to assist it in administering the Plan. 


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        (c)    Limitation of Liability.    The Committee and each member thereof, and any person acting pursuant to authority
delegated by the Committee, shall be entitled, in good faith, to rely or act upon any report or other information furnished by any executive officer, other officer or employee of the Company or a
subsidiary or affiliate, the Company's independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee, any person acting pursuant to
authority delegated by the Committee, and any officer or employee of the Company or a subsidiary or affiliate acting at the direction or on behalf of the Committee or a delegee shall not be personally
liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect
to any such action or determination. 


4.    Shares Available Under the Plan.  


        (a)    Number of Shares Available for Delivery.    Subject to adjustment as provided in Section 10(c) hereof,
the total number of shares of Stock reserved and available for delivery in connection with Awards under the Plan shall be 6.5 million plus the number of shares that, under the Preexisting Plan,
remain available at the Effective Date or thereafter would become available under the terms of the Preexisting Plan. Any shares of Stock delivered under the Plan shall consist of authorized and
unissued shares or treasury shares. 


        (b)    Share Counting Rules.    The Committee may adopt reasonable counting procedures to ensure appropriate counting,
avoid double counting (as, for example, in the case of tandem or substitute awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares
previously counted in connection with an Award. Shares subject to an Award that is canceled, expired, forfeited, settled in cash or terminated without a delivery of shares to the Participant will
again be available for Awards, and shares withheld in payment of the exercise price or taxes relating to an Award and shares equal to the number surrendered in payment of any exercise price or taxes
relating to an Award shall be deemed to constitute shares not delivered to the Participant and shall be deemed to again be available for Awards under the Plan. For purposes of determining the number
of Shares that become available as of the Effective Date under the Preexisting Plan, the share counting rules of the Preexisting Plan will apply and the share counting rules of this Plan shall apply
with respect to Awards granted under this Plan with respect to such shares. In addition, in the case of any Award granted in substitution for an award of a company or business acquired by the Company
or a subsidiary or affiliate, shares issued or issuable in connection with such substitute Award shall not be counted against the number of shares reserved under the Plan, but shall be available under
the Plan by virtue of the Company's assumption of the plan or arrangement of the acquired company or business. This Section 4(b) shall apply to the number of shares reserved and available for
ISOs only to the extent consistent with applicable regulations relating to ISOs under the Code. 


5.    Eligibility; Per-Person Award Limitations.  



        (a)    Grants to Eligible Persons.    Awards may be granted under the Plan only to Eligible Persons. 


        (b)    Annual Per-Person Award Limitations.    In each calendar year during any part of which the Plan is
in effect, an Eligible Person may be granted Awards under each of Sections 6(b), 6(c), 6(d), 6(e), 6(f), 6(g), and 6(h) (including Performance Awards under Section 7 based on Awards authorized
by each referenced subsection) relating to a number of shares of Stock up to his or her Annual Limit. A Participant's Annual Limit, in any year during any part of which the Participant is then
eligible under the Plan, shall equal 1.5 million shares plus the amount of the Participant's unused Annual Limit relating to the same type of Award as of the close of the previous year, subject
to adjustment as provided in Section 10(c). In the case of a cash-denominated Award for which the limitation set forth in the preceding sentence would not operate as an effective
limitation satisfying Treasury Regulation 1.162-27(e)(4) (including a cash Performance Award under Section 7), an Eligible Person 


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may
not be granted Awards authorizing the earning during any calendar year of an amount that exceeds the Participant's Annual Limit, which for this purpose shall equal $3 million plus the
amount of the Participant's unused cash Annual Limit as of the close of the previous year (this limitation is separate and not affected by the number of Awards granted during such calendar year
subject to the limitation in the preceding sentence). For this purpose, (i) "earning" means satisfying performance conditions so that an amount becomes payable, without regard to whether it is
to be paid currently or on a deferred basis or continues to be subject to any service requirement or other non-performance condition, and (ii) a Participant's Annual Limit is used
to the extent a cash amount or number of shares may be potentially earned or paid under an Award, regardless of whether such amount or shares are in fact earned or paid. 



6.    Specific Terms of Awards.  


        (a)    General.    Awards may be granted on the terms and conditions set forth in this Section 6. In addition,
the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10(e)), such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Awards in the event of termination of employment by the Participant and terms permitting a Participant
to make elections
relating to his or her Award. The Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of an Award that is not mandatory under the Plan.
The Committee shall require the payment of lawful consideration for an Award to the extent necessary to satisfy the requirements of the Delaware General Corporation Law, and may otherwise require
payment of consideration for an Award except as limited by the Plan. 


        (b)    Options.    The Committee is authorized to grant Options to Participants on the following terms and conditions: 



        (i)    Exercise Price.    The exercise price per share of Stock purchasable under an Option shall be determined by the
Committee, provided that such exercise price shall be not less than the Fair Market Value of a share of Stock on the date of grant of such Option except as provided under Section 6(f) or 8(a)
hereof. In addition, in connection with a merger, consolidation or reorganization of the Company or any of its subsidiaries, the Committee may grant Options with an exercise price per share less than
the market value of the Common Stock on the date of grant if such Options are granted in exchange for, or upon conversion of, options to purchase capital stock of any other entity which is a party to
such merger, consolidation or reorganization. 


        (ii)   Time and Method of Exercise.    The Committee shall determine the time or times at which or the circumstances
under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the methods by which such exercise price may be
paid or deemed to be paid, the form of such payment (subject to Section 10(h)), including, without limitation, cash, Stock, other Awards or awards granted under other plans of the Company or
any subsidiary or affiliate, or other property (including through broker-assisted "cashless exercise" arrangements, to the extent permitted by applicable law), and the methods by or forms in which
Stock will be delivered or deemed to be delivered in satisfaction of Options to Participants (including deferred delivery of shares representing the Option "profit," at the election of the Participant
or as mandated by the Committee, with such deferred shares subject to any vesting, forfeiture or other terms as the Committee may specify). 


        (iii)    ISOs.    The terms of any ISO granted under the Plan shall comply in all respects with the
provisions of Code Section 422. Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to ISOs (including any SAR in tandem therewith) shall be interpreted, amended
or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any ISO under Code Section 422, unless the Participant has first 



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consented
to the change that will result in such disqualification. ISOs may be granted only to employees of the Company or any of its subsidiaries. To the extent that the aggregate Fair Market Value
(determined as of the time the Option is granted) of the Stock with respect to which ISOs granted under this Plan and all other plans of the Company and any subsidiary are first exercisable by any
employee during any calendar year shall exceed the maximum limit (currently, $100,000), if any, imposed from time to time under Code Section 422, such Options shall be treated as Options that
are not ISOs. 




        (c)    Stock Appreciation Rights.    The Committee is authorized to grant SARs to Participants on the following terms
and conditions: 



        (i)    Right to Payment.    A SAR shall confer on the Participant to whom it is granted a right to receive, upon
exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise (or, in the case of a "Limited SAR," the Fair Market Value determined by reference to the
Change in Control Price, as defined under Section 9(c) hereof) over (B) the grant price of the SAR as determined by the Committee. 


        (ii)   Other Terms.    The Committee shall determine at the date of grant or thereafter, the time or times at which
and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the method of exercise, method of
settlement, form of consideration payable in settlement, method by or forms in which Stock will be delivered or deemed to be delivered to Participants, whether or not a SAR shall be in tandem or in
combination with any other Award, and any other terms and conditions of any SAR. Limited SARs that may only be exercised in connection with a Change in Control or other event as specified by the
Committee may be granted on such terms, not inconsistent with this Section 6(c), as the Committee may determine. SARs and Limited SARs may be either freestanding or in tandem with other Awards. 




        (d)    Restricted Stock.    The Committee is authorized to grant Restricted Stock to Participants on the following
terms and conditions: 



        (i)    Grant and Restrictions.    Restricted Stock shall be subject to such restrictions on transferability, risk of
forfeiture and other restrictions, if any, as the Committee may impose, which restrictions may lapse separately or in combination at such times, under such circumstances (including based on
achievement of performance goals and/or future service requirements), in such installments or otherwise, as the
Committee may determine at the date of grant or thereafter. Except to the extent restricted under the terms of the Plan and any Award agreement relating to the Restricted Stock, a Participant granted
Restricted Stock shall have all of the rights of a stockholder, including the right to vote the Restricted Stock and the right to receive dividends thereon (subject to any mandatory reinvestment or
other requirement imposed by the Committee). During the restricted period applicable to the Restricted Stock, subject to Section 10(b) below, the Restricted Stock may not be sold, transferred,
pledged, hypothecated, margined, or otherwise encumbered by the Participant. 


        (ii)   Forfeiture.    Except as otherwise determined by the Committee, upon termination of employment during the
applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited and reacquired by the Company; provided that the Committee may provide, by rule or
regulation or in any Award agreement, or may determine in any individual case, that restrictions or forfeiture conditions relating to Restricted Stock shall be waived in whole or in part in the event
of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted Stock. 


        (iii)    Certificates for Stock.    Restricted Stock granted under the Plan may be evidenced in such
manner as the Committee shall determine. If certificates representing Restricted Stock are 



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registered
in the name of the Participant, the Committee may require that such certificates bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted
Stock, that the Company retain physical possession of the certificates, and/or that the Participant deliver a stock power to the Company, endorsed in blank, relating to the Restricted Stock. 


        (iv)    Dividends and Splits.    As a condition to the grant of an Award of Restricted Stock, the
Committee may require that any cash dividends paid on a share of Restricted Stock be automatically reinvested in additional shares of Restricted Stock or applied to the purchase of additional Awards
under the Plan. Unless otherwise determined by the Committee, Stock distributed in connection with a Stock split or Stock dividend, and other property distributed as a dividend, shall be subject to
restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed. 




        (e)    Deferred Stock.    The Committee is authorized to grant Deferred Stock to Participants, which are rights to
receive Stock at the end of a specified deferral period, subject to the following terms and conditions: 



        (i)    Award and Restrictions.    Settlement of an Award of Deferred Stock shall occur upon expiration of the deferral
period specified for such Deferred Stock by the Committee (or, if permitted by the Committee, as elected by the Participant). In addition, Deferred Stock shall be subject to such restrictions (which
may include a risk of forfeiture) as the Committee may impose, if any, which restrictions may lapse at the expiration of the deferral period or at earlier specified times (including
based on achievement of performance goals and/or future service requirements), separately or in combination, in installments or otherwise, as the Committee may determine. 


        (ii)   Forfeiture.    Except as otherwise determined by the Committee, upon termination of employment during the
applicable deferral period or portion thereof to which forfeiture conditions apply (as provided in the Award agreement evidencing the Deferred Stock), all Deferred Stock that is at that time subject
to deferral (other than a deferral at the election of the Participant) shall be forfeited; provided that the Committee may provide, by rule or regulation or in any Award agreement, or may determine in
any individual case, that restrictions or forfeiture conditions relating to Deferred Stock shall be waived in whole or in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of Deferred Stock. 


        (iii)    Dividend Equivalents.    Unless otherwise determined by the Committee at date of grant,
Dividend Equivalents on the specified number of shares of Stock covered by an Award of Deferred Stock shall be either (A) paid with respect to such Deferred Stock at the dividend payment date
in cash or in shares of unrestricted Stock having a Fair Market Value equal to the amount of such dividends, or (B) deferred with respect to such Deferred Stock and the amount or value thereof
automatically deemed reinvested in additional Deferred Stock, other Awards or other investment vehicles, as the Committee shall determine or permit the Participant to elect. 




        (f)    Bonus Stock and Awards in Lieu of Obligations.    The Committee is authorized to grant Stock as a bonus, or to
grant Stock or other Awards in lieu of obligations of the Company or a subsidiary or affiliate to pay cash or deliver other property under the Plan or under other plans or compensatory arrangements,
subject to such terms as shall be determined by the Committee. 


        (g)    Dividend Equivalents.    The Committee is authorized to grant Dividend Equivalents to a Participant, entitling
the Participant to receive cash, Stock, other Awards, or other property equivalent to all or a portion of the dividends paid with respect to a specified number of shares of Stock. Dividend Equivalents
may be awarded on a free-standing basis or in connection with another Award. The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or shall be
deemed to have been reinvested in additional Stock, Awards, or other investment vehicles, and 


7





 



subject
to restrictions on transferability, risks of forfeiture and such other terms as the Committee may specify. 


        (h)    Other Stock-Based Awards.    The Committee is authorized, subject to limitations under applicable law, to grant
to Participants such other Awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, as deemed by the Committee to be
consistent with the purposes of the Plan, including, without limitation, convertible or exchangeable debt
securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon performance of the Company or any other factors designated by
the Committee, and Awards valued by reference to the book value of Stock or the value of securities of or the performance of specified subsidiaries. The Committee shall determine the terms and
conditions of such Awards. Stock delivered pursuant to an Award in the nature of a purchase right granted under this Section 6(h) shall be purchased for such consideration, paid for at such
times, by such methods, and in such forms, including, without limitation, cash, Stock, other Awards, or other property, as the Committee shall determine. 


7.    Performance Awards, Including Annual Incentive Awards


        (a)    Performance Awards Generally.    The Committee is authorized to grant Performance Awards on the terms and
conditions specified in this Section 7. Performance Awards may be denominated as a cash amount, number of shares of Stock, or specified number of other Awards (or a combination) which may be
earned upon achievement or satisfaction of performance conditions specified by the Committee. In addition, the Committee may specify that any other Award shall constitute a Performance Award by
conditioning the right of a Participant to exercise the Award or have it settled, or the timing thereof, upon achievement or satisfaction of such performance conditions as may be specified by the
Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to
reduce or increase the amounts payable under any Award subject to performance conditions, except as limited under Sections 7(b) and 7(c) in the case of a Performance Award intended to qualify as
"performance-based compensation" under Code Section 162(m). 



        (b)    Performance Awards Granted to Covered Employees.    If the Committee determines that a Performance Award to be
granted to an Eligible Person who is designated by the Committee as a Covered Employee should qualify as "performance-based compensation" for purposes of Code Section 162(m), the grant,
exercise and/or settlement of such Performance Award shall be contingent upon achievement of a preestablished performance goal and other terms set forth in this Section 7(b). 



        (i)    Performance Goals Generally.    The performance goal for such Performance Awards shall consist of one or more
business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 7(b). The performance goal
shall be objective and shall otherwise meet the requirements of Code Section 162(m) and regulations thereunder (including Treasury Regulation 1.162-27 and successor
regulations thereto), including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being "substantially uncertain." The
Committee may determine that such Performance Awards shall be granted, exercised and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be
achieved as a condition to grant, exercise and/or settlement of such Performance Awards. Performance goals may differ for Performance Awards granted to any one Participant or to different
Participants. 


        (ii)   Business Criteria.    One or more of the following business criteria for the Company, on a consolidated basis,
and/or for specified subsidiaries or affiliates or other business units or lines of business of the Company shall be used by the Committee in establishing performance goals for 



8





 

such
Performance Awards: (1) earnings per share (basic or fully diluted); (2) revenues; (3) earnings, before or after taxes, from operations (generally or specified operations),
before or after interest expense, depreciation, amortization, incentives, or extraordinary or special items; (4) cash flow, free cash flow, cash flow return on investment (discounted or
otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (5) return on net assets, return on assets, return on investment, return on capital, return on equity;
(6) economic value created; (7) operating margin or operating expense; (8) net income; (9) Stock price or total stockholder return; and (10) strategic business
criteria, consisting of one or more objectives based on meeting specified market penetration, geographic business expansion goals, cost targets, customer satisfaction, employee satisfaction,
management of employment practices and employee benefits, supervision of litigation and information technology, and goals relating to acquisitions or divestitures of subsidiaries, affiliates or joint
ventures. The targeted level or levels of performance with respect to such business criteria may be established at such levels and in such terms as the Committee may determine, in its discretion,
including in absolute terms, as a goal relative to performance in prior periods, or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies. 


        (iii)    Performance Period; Timing for Establishing Performance Goals; Per-Person
Limit.    Achievement of performance goals in respect of such Performance Awards shall be measured over a performance period of up to one year or more than one year,
as specified by the Committee. A performance goal shall be established not later than the earlier of (A) 90 days after the beginning of any performance period applicable to such
Performance Award or (B) the time 25% of such performance period has elapsed. In all cases, the maximum Performance Award of any Participant shall be subject to the limitation set forth in
Section 5(b). 


        (iv)  Performance Award Pool.    The Committee may establish a Performance Award pool, which shall be an unfunded
pool, for purposes of measuring performance of the Company in connection with Performance Awards. The amount of such Performance Award pool shall be based upon the achievement of a performance goal or
goals based on one or more of the business criteria set forth in Section 7(b)(ii) during the given performance period, as specified by the Committee in accordance with
Section 7(b)(i). The Committee may specify the amount of the Performance Award pool as a percentage of any of such business criteria, a percentage thereof in excess of a threshold amount, or as
another amount which need not bear a strictly mathematical relationship to such business criteria. 


        (v)   Settlement of Performance Awards; Other Terms.    Settlement of such Performance Awards shall be in cash,
Stock, other Awards or other property, in the discretion of the Committee. The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with
such Performance Awards, but may not exercise discretion to increase any such amount payable to a Covered Employee in respect of a Performance Award subject to this Section 7(b). Any settlement
which changes the form of payment from that originally specified shall be implemented in a manner
such that the Performance Award and other related Awards do not, solely for that reason, fail to qualify as "performance-based compensation" for purposes of Code Section 162(m). The Committee
shall specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant or other event (including a Change in Control)
prior to the end of a performance period or settlement of such Performance Awards; any resulting payments need not qualify as performance-based compensation under Section 162(m) if the
authorization of such non-qualifying payments would not otherwise disqualify the Performance Award apart from the termination or change in control. 




        (c)    Annual Incentive Awards Granted to Designated Covered Employees.    The Committee may grant a Performance Award
in the form of an Annual Incentive Award to an Eligible Person who is 


9





 

designated
by the Committee as likely to be a Covered Employee. Such Annual Incentive Award will be intended to qualify as "performance-based compensation" for purposes of Code Section 162(m),
and therefore its grant, exercise and/or settlement shall be contingent upon achievement of preestablished performance goals and shall comply with the other requirements set forth in
Section 7(b). 


        (d)    Written Determinations.    Determinations by the Committee as to the establishment of performance goals, the
amount potentially payable in respect of Performance Awards, the level of actual achievement of the specified performance goals relating to Performance Awards and the amount of any final Performance
Award shall be recorded in writing in the case of Performance Awards intended to qualify under Section 162(m). Specifically, the Committee shall certify in writing, in a manner conforming to
applicable regulations under Section 162(m), prior to settlement of each such Award granted to a Covered Employee, that the performance objective relating to the Performance Award and other
material terms of the Award upon which settlement of the Award was conditioned have been satisfied. 


8.    Certain Provisions Applicable to Awards.  


        (a)    Stand-Alone, Additional, Tandem, and Substitute Awards.    Subject to Section 10(e), Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, any other Award or any award granted under
another plan of the Company, any subsidiary or affiliate, or any business entity to be acquired by the Company or a subsidiary or affiliate, or any other right of a Participant to receive payment from
the Company or any subsidiary or affiliate. Awards granted in addition to or in tandem with other Awards or awards may be granted either as of the same time as or a different time from the grant of
such other Awards or awards. Subject to Section 10(h), the Committee may determine that, in granting a new Award, the in-the-money value of any surrendered Award or
award may be applied
to reduce the exercise price of any Option, grant price of any SAR, or purchase price of any other Award. 



        (b)    Term of Awards.    The term of each Award shall be for such period as may be determined by the Committee;
provided that in no event shall the term of any Option or SAR exceed a period of ten years (or, in the case of an ISO, such shorter term as may be required under Code Section 422). 


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        (c)    Form and Timing of Payment under Awards; Deferrals.    Subject to the terms of the Plan and any applicable
Award agreement, payments to be made by the Company or a subsidiary upon the exercise of an Option or other Award or settlement of an Award may be made in Stock, other Awards, or other property, and
may be made in a single payment or transfer, in installments, or on a deferred basis. The settlement of any Award may be accelerated in the discretion of the Committee or upon occurrence of one or
more specified events (in addition to a Change in Control). Installment or deferred payments may be required by the Committee (subject to Section 10(e) of the Plan, including the consent
provisions thereof in the case of any deferral of an outstanding Award not provided for in the original Award agreement) or permitted at the election of the Participant on terms and conditions
established by the Committee. Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of
Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock. Any payment deferred pursuant to this Section 8(c) shall represent only an unfunded,
unsecured promise by the Company to pay the amount credited thereto to the Participant in the future. 



        (d)    Additional Award Forfeiture Provisions.    The Committee may condition a Participant's right to receive a grant
of an Award, to exercise the Award, to retain Stock acquired in connection with an Award, or to retain the profit or gain realized by a Participant in connection with an Award, including cash received
upon sale of Stock acquired in connection with an Award, upon compliance by the Participant with specified conditions relating to non-competition, confidentiality of information relating
to the Company, non-solicitation of customers, suppliers, and employees of the Company, cooperation in litigation, non-disparagement of the Company and its officers, directors
and affiliates, and other restrictions upon or covenants of the Participant, including during specified periods following termination of employment or service to the Company. 


        (e)    Exemptions from Section 16(b) Liability.    With respect to a Participant who is then subject to the
reporting requirements of Section 16(a) of the Exchange Act in respect of the Company, the Committee shall implement transactions under the Plan and administer the Plan in a manner that will
ensure that each transaction with respect to such a Participant is exempt from liability under Rule 16b-3 or otherwise not subject to liability under Section 16(b), except
that this provision shall not limit sales by such a Participant, and such a Participant may elect to engage in other non-exempt transactions under the Plan. The Committee may authorize the
Company to repurchase any Award or shares of Stock deliverable or delivered in connection with any Award (subject to Section 10(h)) in order to avoid a Participant who is subject to
Section 16 of the Exchange Act incurring liability under Section 16(b). Unless otherwise specified by the Participant, equity securities or derivative securities acquired under the Plan
which are disposed of by a Participant shall be deemed to be disposed of in the order acquired by the Participant. 


9.    Change in Control.  



        (a)    Effect of "Change in Control."    In the event of a "Change in Control," the following provisions shall apply
unless otherwise provided in the Award agreement: 



        (i)    Any
Award carrying a right to exercise that was not previously exercisable and vested shall become fully exercisable and vested as of the time of the Change in Control; 


        (ii)   If
any optionee holds an Option immediately prior to a Change in Control that was not previously exercisable and vested in full throughout the 60-day period
preceding the Change in Control, he shall be entitled to elect, during the 60-day period following the Change in Control, in lieu of acquiring the shares of Stock covered by the portion of
the Option that was not vested and exercisable within such 60-day period, to receive, and the Company shall be obligated to pay, in cash the excess of the Change in Control Price over the
exercise price of such Option, multiplied by the number of shares of Stock covered by such portion of the Option; 


        (iii)  The
restrictions, deferral of settlement, and forfeiture conditions applicable to any other Award granted under the Plan shall lapse and such Awards shall be deemed
fully vested as of the time of the Change in Control, except to the extent of any waiver by the Participant and subject to applicable restrictions set forth in Section 10(a) hereof; and 



11





 




        (iv)  With
respect to any outstanding Award subject to achievement of performance goals and conditions under the Plan, such performance goals and other conditions will be
deemed to be met if and to the extent so provided by the Committee in the Award agreement relating to such Award. 




        (b)    Definition of "Change in Control."    A "Change in Control" shall mean the occurrence of any of the following: 



        (i)    when
any "person" as defined in Section 3(a)(9) of 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% percent (or such greater percentage as the Committee may specify in connection with the grant of any Award) of the combined voting power of the Company's then-outstanding
securities; or 


        (ii)   the
occurrence of a transaction requiring stockholder approval for the acquisition of the Company by an entity other than the Company or a subsidiary by merger or
otherwise or for the purchase by an entity other than the Company or a subsidiary of substantially all of the assets of the Company. 




        (c)    Definition of "Change in Control Price."    The "Change in Control Price" means an amount in cash equal to the
higher of (i) the amount of cash and fair market value of property that is the highest price per share paid (including extraordinary dividends) in any transaction triggering the Change in
Control, or (ii) the highest Fair Market Value per share at any time during the 60-day period preceding the Change in Control. 


10.    General Provisions.  


        (a)    Compliance with Legal and Other Requirements.    The Company may, to the extent deemed necessary or advisable
by the Committee, postpone the issuance or delivery of Stock or payment of other benefits under any Award until completion of such registration or qualification of such Stock or other required action
under any federal or state law, rule, or regulation, listing or other required action with respect to any stock exchange or automated quotation system upon which the Stock or other securities of the
Company are listed or quoted, or compliance with any other obligation of the Company, as the Committee may consider appropriate, and may require any Participant to make such representations, furnish
such information and comply with or be subject to such other conditions as it may consider appropriate in connection with the issuance or delivery of Stock or payment of other benefits in compliance
with applicable laws, rules, and regulations, listing requirements, or other obligations. The foregoing notwithstanding, in connection with a Change in Control, the Company shall take or cause to be
taken no action, and shall undertake or permit to arise no legal or contractual obligation, that results or would result in any postponement of the issuance or delivery of Stock or payment of benefits
under any Award or the imposition of any other conditions on such issuance, delivery or payment, to the extent that such postponement or other condition would represent a greater burden on a
Participant than existed on the 90th day preceding the Change in Control. 


        (b)    Limits on Transferability; Beneficiaries.    No Award or other right or interest of a Participant under the
Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party, or assigned or transferred by such Participant otherwise
than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant, and such Awards or rights that may be exercisable shall be exercised during the lifetime of
the Participant only by the Participant or his or her guardian or legal representative, except that Awards and other rights (other than ISOs and SARs in tandem therewith) may be transferred to one or
more Beneficiaries or other transferees during the lifetime of the Participant, and may be exercised by such transferees in accordance with the terms of such Award, but only if and to the extent such
transfers are permitted by the Committee pursuant to the express terms of an Award agreement (subject to any terms and conditions which the Committee may impose thereon). A Beneficiary, transferee, or
other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any Award agreement applicable to such Participant, except
as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee. 


12





 



        (c)    Adjustments.    In the event that any large, special and non-recurring dividend or other
distribution (whether in the form of cash or property other than Stock), recapitalization, forward or reverse split, Stock dividend, reorganization, merger, consolidation, spin-off,
combination, repurchase, share exchange, liquidation, dissolution or other similar corporate transaction or event affects the Stock such that an adjustment is determined by the Committee to be
appropriate under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (A) the number and kind of shares of Stock which may be delivered in
connection with Awards granted thereafter, (B) the number and kind of shares of Stock by which annual per-person Award limitations are measured under Section 5(b),
(C) the number and kind of shares of Stock subject to or deliverable in respect of outstanding Awards and (D) the exercise price, grant price or purchase price relating to any Award or,
if deemed appropriate, the Committee may make provision for a payment of cash or property to the holder of an outstanding Option (subject to Section 10(h)). In addition, the Committee is
authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including Performance Awards and performance goals and any hypothetical funding pool relating
thereto) in recognition of unusual or nonrecurring events (including, without limitation, events described in the preceding sentence, as well as acquisitions and dispositions of businesses and assets)
affecting the Company, any subsidiary or affiliate or other business unit, or the financial statements of the Company or any subsidiary or affiliate, or in response to changes in applicable laws,
regulations, accounting principles, tax rates and regulations or business conditions or in view of the Committee's assessment of the business strategy of the Company, any subsidiary or affiliate or
business unit thereof, performance of comparable organizations, economic and business conditions, personal performance of a Participant, and any other circumstances deemed relevant; provided that no
such adjustment shall be authorized or made if and to the extent that the existence of such authority (A) would cause Options, SARs, or Performance Awards granted under Section 7 to
Participants designated by the Committee as Covered Employees and intended to qualify as "performance-based compensation" under Code Section 162(m) and regulations thereunder to otherwise fail
to qualify as "performance-based compensation" under Code Section 162(m) and regulations thereunder, or (B) would cause the Committee to be deemed to have authority to change the
targets, within the meaning of Treasury Regulation 1.162-27(e)(4)(vi), under the performance goals relating to Options or SARs granted to Covered Employees and intended to qualify
as "performance-based compensation" under Code Section 162(m) and regulations thereunder. 


        (d)    Taxes.    The Company and any subsidiary is authorized to withhold from any Award granted, any payment relating
to an Award under the Plan, including from a distribution of Stock, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or potentially payable in connection
with any Award, and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax
obligations relating to any Award. This authority shall include authority to withhold or receive Stock or other property and to make cash payments in respect thereof in satisfaction of a Participant's
tax obligations, either on a mandatory or elective basis in the discretion of the Committee. 


        (e)    Changes to the Plan and Awards.    The Board may amend, alter, suspend, discontinue, or terminate the Plan or
the Committee's authority to grant Awards under the Plan without the consent of stockholders or Participants, except that any amendment or alteration to the Plan shall be subject to the approval of
the Company's stockholders not later than the annual meeting next following such Board action if such stockholder approval is required by any federal or state law or regulation or the rules of any
stock exchange or automated quotation system on which the Stock may then be listed or quoted, and the Board may otherwise, in its discretion, determine to submit other such changes to the Plan to
stockholders for approval; provided that, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such Participant under any previously
granted and outstanding Award. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate any Award theretofore granted and any Award agreement
relating thereto; provided that the Committee shall have no authority to waive or modify any Award term after the Award has been granted to the extent the waived or modified term would be mandatory
under the Plan for any Award newly granted at the date of the waiver or modification; and provided further, that, without the consent of an affected Participant, no such Committee action may
materially and adversely affect the rights of such Participant under such Award. Without the prior approval of stockholders, the Committee will not amend or replace previously granted Options in a
transaction that constitutes a "repricing." For this purpose, a "repricing" means: (1) amending the terms of an Option after it is granted to lower its exercise price, except pursuant to
Section 10(c) hereof; (2) any other action that is treated as a repricing under generally accepted accounting principles; and 


13





 



(3) canceling
an Option at a time when its strike price is equal to or greater than the fair market value of the underlying Stock, in exchange for another Option, Restricted Stock, or other
equity, unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction. A cancellation and exchange described in
clause (3) of the preceding sentence will be considered a repricing regardless of whether the Option, Restricted Stock or other equity is delivered simultaneously with the cancellation,
regardless of whether it is treated as a repricing under generally accepted accounting principles, and regardless of whether it is voluntary on the part of the Option holder. 


        (f)    Limitation on Rights Conferred under Plan.    Neither the Plan nor any action taken hereunder shall be
construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or a subsidiary,
(ii) interfering in any way with the right of the Company or a subsidiary to terminate any Eligible Person's or Participant's employment or service at any time, (iii) giving an Eligible
Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and employees, or (iv) conferring on a Participant any of the rights of
a stockholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award. 


        (g)    Unfunded Status of Awards; Creation of Trusts.    The Plan is intended to constitute an "unfunded" plan for
incentive and deferred compensation. With respect to any payments not yet made to a Participant or obligation to deliver Stock pursuant to an Award, nothing contained in the Plan or any Award shall
give any such Participant any rights that are greater than those of a general creditor of the Company; provided that the Committee may authorize the creation of trusts and deposit therein cash, Stock,
other Awards or other property, or make other arrangements to meet the Company's obligations under the Plan. Such trusts or other arrangements shall be consistent with the "unfunded" status of the
Plan unless the Committee otherwise determines with the consent of each affected Participant. The trustee of such trusts may be authorized to dispose of trust assets and reinvest the proceeds in
alternative investments, subject to such terms and conditions as the Committee may specify and in accordance with applicable law. 



        (h)    Certain Limitations Relating to Accounting Treatment of Awards.    At any time that the Company is accounting
for stock-denominated Awards (other than SARs) under Accounting Principles Board Opinion 25
("APB 25"), the Company intends that, with respect to such Awards, the compensation measurement date for accounting purposes shall occur at the date of grant or the date performance conditions are met
if an Award is fully contingent on achievement of performance goals, unless the Committee specifically determines otherwise. Therefore, other provisions of the Plan notwithstanding, in order to
preserve this fundamental objective of the Plan, if any authority granted to the Committee hereunder or any provision of the Plan or an Award agreement would result, under APB 25, in "variable"
accounting or a measurement date other than the date of grant or the date such performance conditions are met with respect to such Awards, if the Committee was not specifically aware of such
accounting consequence at the time such Award was granted or provision otherwise became effective, such authority shall be limited and such provision shall be automatically modified and reformed to
the extent necessary to preserve the accounting treatment of the award intended by the Committee, subject to Section 10(e) of the Plan. 


        (i)    Nonexclusivity of the Plan.    Neither the adoption of the Plan by the Board nor its submission to the
stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem
desirable including incentive arrangements and awards which do not qualify under Code Section 162(m). 


        (j)    Payments in the Event of Forfeitures; Fractional Shares.    Unless otherwise determined by the Committee, in
the event of a forfeiture of an Award with respect to which a Participant paid cash or other consideration, the Participant shall be repaid the amount of such cash or other consideration. No
fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, other Awards or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated. 


        (k)    Awards to Participants Outside the United States.    The Committee may modify the terms of any Award under the
Plan made to or held by a Participant who is then resident or primarily employed outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that such
Award shall conform to laws, regulations, and customs of the country in which the Participant is then resident or primarily employed, or so that the value and other benefits of the Award to the
Participant, as affected by foreign tax laws and other restrictions applicable as a result of the Participant's residence or 


14





 



employment
abroad shall be comparable to the value of such an Award to a Participant who is resident or primarily employed in the United States. An Award may be modified under this
Section 11(k) in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation or result in actual
liability under Section 16(b) for the Participant whose Award is modified. 


        (l)    Governing Law.    The validity, construction and effect of the Plan, any rules and regulations under the Plan,
and any Award agreement shall be determined in accordance with the Delaware General Corporation Law, the contract and other laws of the State of New York without giving effect to principles of
conflicts of laws, and applicable federal law. 


        (m)    Preexisting Plan.    Upon stockholder approval of the Plan as provided under Section 11(n), no further
grants of Awards will be made under the Preexisting Plan. 


        (n)    Plan Effective Date and Termination.    The Plan was adopted by the Board of Directors on April 24, 2003
and shall become effective upon its approval by the Company's stockholders by the affirmative vote of the holders of a majority of the voting securities of the Company entitled to be cast in person or
by proxy at the Company's 2003 annual meeting of stockholders.1 Unless earlier terminated by action of the Board of Directors, the Plan will remain in effect until such time as no Stock
remains available for delivery under the Plan and the Company has no further rights or obligations under the Plan with respect to outstanding Awards under the Plan. 




	1
	The
Plan was approved by the Company's stockholders on June 23, 2003. 


15









QuickLinks



Exhibit 10.13


SCIENTIFIC GAMES CORPORATION 2003 Incentive Compensation Plan



SCIENTIFIC GAMES CORPORATION 2003 Incentive Compensation Plan