EXHIBIT 10.1


SCIENTIFIC GAMES CORPORATION


INDUCEMENT
STOCK OPTION GRANT AGREEMENT 


FOR STEVEN
WAYNE BEASON


THIS AGREEMENT, made as of the 8th day of August,
2005, between SCIENTIFIC GAMES CORPORATION (the “Company”) and STEVEN WAYNE BEASON (the “Participant”).


WHEREAS, the Compensation Committee (the “Committee”)
administers the Company’s equity incentive compensation programs and is
authorized to grant stock options and other awards, including to newly hired
employees; and


WHEREAS, the Participant was granted the option
evidenced by this Agreement as of the date hereof as an inducement to the
Participant to become an employee of the Company or a subsidiary of the Company
as of that date;


NOW, THEREFORE, in consideration of the premises
and the mutual covenants hereinafter set forth, the parties hereto hereby agree
as follows.


1.       Grant of Options. Pursuant to, and
subject to, the terms and conditions set forth herein, the Participant is
hereby granted an option (the “Option”) to purchase 275,000 shares of the
Company’s Class A Common Stock, $.01 par value per share (the “Common Stock”).  The Option does not constitute an “incentive
stock option” within the meaning of Section 422 of the Internal Revenue Code of
1986.


2.       Grant Date.  The Grant Date of the Option granted hereby
is August 8, 2005.


3.       Definitions.  For purposes of this Agreement, the following
terms shall be defined as set forth below:


(a)     “Beneficiary” means the person, persons,
trust, or trusts which may be designated by the Participant in a written
beneficiary designation filed with the Committee to receive the benefits
specified hereunder upon the Participant’s death. If, upon the Participant’s
death, there is no designated Beneficiary or surviving designated Beneficiary,
then the term Beneficiary means the person, persons, trust, or trusts entitled
by will or the laws of descent and distribution to receive such benefits.


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


(c)     “Fair Market Value” means the fair market
value of Common Stock, as determined by the Committee or under procedures
established by the Committee. Unless otherwise determined by the Committee, the
Fair Market Value of Common Stock shall be the average of the high and low
sales prices of the Common 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 the Common Stock is then listed.


4.       Vesting Dates. This Option shall vest and become
exercisable in the following installments:


 


	
  Number of Shares

  	
   

  	
  Dates

  	
   

  
	
  91,667

  	
   

  	
  August 8, 2006

  	
   

  
	
  91,667

  	
   

  	
  August 8, 2007

  	
   

  
	
  91,666

  	
   

  	
  August 8, 2008 (the “Last Vesting Date”)

  	
   

  



 


5.       Exercise Price. The exercise price per share of each
share with respect to which this Option is granted is $29.18, which is not less
than the Fair Market Value of a share of Common Stock on the Grant Date.


6.       Expiration Date; Effect of Termination
of Employment.


(a)     Subject to the provisions of this Agreement
and the Employment Agreement between the Participant and Scientific Games
International, Inc., a subsidiary of the Company, dated as of August 8, 2005
(the “Employment


 





















 


Agreement”), the Option granted hereby shall expire on August 8, 2015
(the “Expiration Date”).


 


(b)     Subject to the provisions of this Agreement
and the Employment Agreement, in the event the employment of the Participant is
terminated:


(i)                   for any reason other than for “Cause” (as defined in
the Employment Agreement) or due to the Participant’s death or permanent
disability (as defined in the Company’s long-term disability plan), the Option,
to the extent that it was exercisable immediately prior to the time of
termination of employment, shall remain exercisable until the earlier of (x) the
close of business on the 90th day after termination of employment and (y) the
Expiration Date, and the Option, to the extent that it was not exercisable immediately
prior to the time of termination of employment, shall expire at the close of
business on the date of termination of employment;


(ii)                due to the Participant’s death or disability, the
Option, to the extent that it was exercisable immediately prior to death or
termination of employment, shall remain exercisable by the Participant or the
Participant’s executor or administrator or Beneficiary (as the case may be) until
the earlier of (x) the first anniversary of the Participant’s death or
termination of employment and (y) the Expiration Date, and the Option, to the
extent that it was not exercisable immediately prior to death or termination of
employment, shall expire at the close of business on the date of death or termination
of employment; or


(iii)             for “Cause,” the Option shall expire at the commencement
of business on the date of termination of employment.


7.       Method of Exercise. The Option
shall be exercisable in whole or in part by delivering notice to the Company’s
principal office in the manner specified by the Company. Payment for shares of
Common Stock purchased upon the exercise of the Option shall be made on the
effective date of such exercise either: (i) in cash, by certified check, bank
cashier’s check or wire transfer; or (ii) in such other form as shall be
acceptable to the Committee. Certificates for shares of Common Stock purchased
upon the exercise of an Option shall be issued in the name of the Participant
or his Beneficiary, as the case may be, and delivered to the Participant or his
Beneficiary, as the case may be, as soon as practicable following the effective
date of exercise of the Option.


8.       Administration.


                (a)     Authority of the Committee. 
The Committee has full and final authority, in each case subject to and
consistent with the provisions of this Agreement, to administer the Option,
determine all matters relating to the Option, construe and interpret the Option
and this Agreement 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
Option.  The Committee shall retain full
power and discretion to accelerate, waive or modify, at any time, any term or
condition of the Option that is not mandatory under this Agreement.


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


9.       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
Common Stock or payment of other benefits under the Option until completion of
such registration or qualification of such Common 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 Common 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 the Participant to make
such representations, furnish such information and comply with or be subject to
such other conditions as the Company may consider appropriate in connection
with the issuance or delivery of Common Stock or payment of other benefits in
compliance with applicable laws, rules, and regulations, listing requirements,
or other obligations.


 


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                (b)     Transferability.  The Option may not be pledged, hypothecated
or otherwise encumbered or subject to any lien, obligation or liability of the
Participant to any party, or assigned or transferred by the Participant
otherwise than by will or the laws of descent and distribution, and the Option
shall be exercised during the lifetime of the Participant only by the
Participant or, if the Participant is incapacitated, by his guardian or legal
representative. In the event that the Option is exercised by the Participant’s
guardian or legal representative, the exercise of the Option shall not be
effective unless and until the Company has received evidence satisfactory to it
as to the authority of such guardian or legal representative. A Beneficiary or
other person claiming any rights under the Agreement from or through the
Participant shall be subject to all terms and conditions of this Agreement
except as otherwise determined by the Committee, and to any additional terms
and conditions deemed necessary or appropriate by the Committee.


                (c)     Adjustments.  In the event that any dividend or other
distribution (whether in the form of cash, Common Stock, or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange,
liquidation, dissolution or other similar corporate transaction or event
affects the Common Stock such that an adjustment is determined by the Committee
to be appropriate hereunder then the Committee shall, in such manner as it may
deem equitable, adjust any or all of (i) the number and kind of shares of
Common Stock or other securities subject to or deliverable in respect of the
outstanding Option and (ii) the exercise price, grant price or purchase price
relating to the Option, and/or make provision for payment of cash or other
property in respect of the Option.


                (d)     Limitation on Rights Conferred.  Neither this Agreement nor any action taken
hereunder shall be construed as (i) giving the Participant the right to
continue 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 the Participant’s employment or service at any time,
(iii) giving the Participant any claim to be granted any award under any
option or benefit Plan or to be treated uniformly with other participants and
employees, or (iv) conferring on the Participant any of the rights of a
stockholder of the Company unless and until the Participant is duly issued or
transferred shares of Common Stock in accordance with the terms of the Option.


                (e)     Fractional Shares.  No fractional shares of Common Stock shall be
issued or delivered pursuant to the Option. 
The Committee shall determine whether cash 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.


                10.     Taxes.
The Company and any subsidiary is authorized to withhold from the Option, any
payment relating to the Option, including from a distribution of Common Stock,
or any payroll or other payment to the Participant, amounts of withholding and
other taxes due or potentially payable in connection with the Option, and to
take such other action as the Committee may deem advisable to enable the
Company and the Participant to satisfy obligations for the payment of
withholding taxes and other tax obligations relating to the Option.  This authority shall include authority to
withhold or receive Common 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.


                11.     Securities Matters. 
The exercise of the Option granted hereby shall be effective only at
such time as counsel to the Company shall have determined that the issuance and
delivery of shares of Common Stock pursuant to such exercise is in compliance
with all applicable laws, regulations of governmental authority and
requirements of any securities exchange on which shares of Common Stock are
traded. The Committee may, in its sole discretion, defer the effectiveness of
any exercise of the Option in order to allow the issuance of shares of Common
Stock pursuant thereto to be made pursuant to registration or an exemption from
registration or other methods for compliance available under federal or state
securities laws. The Committee shall inform the Participant in writing of its
decision to defer the effectiveness of the exercise of the Option. During the
period that the effectiveness of the exercise of the Option has been deferred,
the Participant may, by written notice, withdraw such exercise and obtain the
refund of any amount paid with respect thereto.


                12.     Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party hereto upon any breach or default
of any party under this Agreement, shall impair any such right, power or remedy
of such party, nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring.  Any waiver, permit, consent
or approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in a writing signed by such
party and shall be effective only to the extent specifically set forth in such
writing.


                13.     Integration. This Agreement, and the other documents
referred to herein or delivered pursuant hereto which form a part hereof, and
the Employment Agreement contain the entire understanding of the parties with
respect to its subject matter.  There are
no restrictions, agreements, promises, representations, warranties, covenants
or undertakings with 


 


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respect to the subject
matter hereof other than those expressly set forth herein and in the Employment
Agreement.  This Agreement and the
Employment Agreement supersede all prior agreements and understandings between
the parties with respect to its subject matter.


                14.     Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without regard to the provisions governing conflict of laws.


                15.     Participant Acknowledgment.  The Participant hereby acknowledges that all
decisions, determinations and interpretations of the Committee in respect of
this Agreement and the Option shall be final and conclusive.


IN WITNESS WHEREOF, the
Company has caused this Agreement to be duly executed by its duly authorized
officer, and the Participant has signed this Agreement on his own behalf,
thereby representing that he has carefully read and understands this Agreement,
as of the day and year first written above.


 


	
   

  	
  SCIENTIFIC GAMES
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Martin E.
  Schloss

  
	
   

  	
  Vice President,
  General Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PARTICIPANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Steven Wayne Beason

  



 


 


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