EXHIBIT 10.2
SCIENTIFIC GAMES CORPORATION
INDUCEMENT STOCK OPTION GRANT AGREEMENT
FOR MICHAEL CHAMBRELLO
THIS AGREEMENT, made as of the 1st day of July, 2005, between SCIENTIFIC GAMES
CORPORATION (the "Company") and MICHAEL CHAMBRELLO (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 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 1,000,000 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
JULY 1, 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 CUMULATIVE INSTALLMENTS:
Number of Shares
Dates
333,333
July 1, 2006
333,333
July 1, 2007
333,334
July 1, 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 $27.01, 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