Document:

Exhibit 10.1

 

This EMPLOYMENT AGREEMENT (this “Agreement”) is made
as of May 1, 2008 (the “Effective Date”), by and between SCIENTIFIC GAMES
CORPORATION, a Delaware corporation (the “Company”), and Joseph R. Wright, Jr.
(“Executive”).

 

W I T N
E S S E T H:

 

WHEREAS, Executive has been a member of the Board of
Directors of the Company (the “Board of Directors”) since 2004; and

 

WHEREAS, the Company and Executive desire to enter
into this Agreement under which Executive will serve the Company in the
capacities set forth herein on the terms and subject to the conditions set
forth in this Agreement;

 

NOW, THEREFORE, in
consideration of the premises and the mutual benefits to be derived herefrom
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

 

1.             Employment
Term.  The Company hereby agrees to
employ Executive, and Executive hereby accepts employment with the Company, in
accordance with and subject to the terms and conditions set forth herein.  The term of employment of Executive under
this Agreement (the “Term”) shall be the period commencing on the Effective
Date and ending on December 31, 2011, as may be extended in accordance
with this Section 1 and subject to earlier termination in accordance with Section 4.  The Term shall be extended automatically
without further action by either party by one additional year (added to the end
of the Term), and then on each succeeding annual anniversary thereafter (each such initial and succeeding year-long
extension (if any), an “Extension Term”), unless either party shall have
given written notice to the other party at least ninety (90) days prior to the
date upon which such extension would otherwise have become effective electing
not to further extend the Term (a “Nonrenewal Notice”), in which case Executive’s
employment shall terminate on the date of expiration of the then current Term
(whether it be the initial Term or the then current Extension Term), unless
earlier terminated in accordance with Section 4.  Except to the extent (if any) that the
context specifically requires otherwise, references to the Term hereafter in
this Agreement shall include the initial Term and any Extension Term.  In the event that Executive’s employment
terminates because the Company shall have given a timely Nonrenewal Notice to
Executive, in accordance with the preceding sentence, then, notwithstanding
anything to the contrary set forth herein, Executive shall upon such
termination be entitled to receive the compensation and benefits set forth in Section 4(e) as
if Executive’s employment had been terminated by the Company without Cause, or
by Executive for Good Reason, as of the date of expiration of the Term
(including, as the case may be, the date of expiration of the Extension Term
during which the Nonrenewal Notice is given).

 

2.             Offices and Duties.

 

(a)           For so long as
Executive continues as a director of the Company during the Term and subject to
the appointment to such position by the Board of Directors, Executive shall
serve as Vice Chairman of the Board of Directors, unless the Board of Directors
appoints him as Chairman of the Board of Directors.

 

 

 

 

(b)           From the Effective
Date until December 31, 2008, Executive shall serve as an officer or
director of any subsidiary or affiliate of the Company if elected or appointed
to any such position by the shareholders or by the board of directors of such
subsidiary or affiliate, as the case may be.

 

(c)           From and after January 1, 2009 until the end of the Term, Executive
shall serve as Chief Executive Officer of the Company, and as an officer or director
of any subsidiary or affiliate of the Company if elected or appointed to any
such position by the shareholders or by the board of directors of such
subsidiary or affiliate, as the case may be.

 

(d)           In such capacities,
Executive shall perform such duties and shall have such responsibilities as are
normally associated with such positions and as otherwise may be assigned to
Executive from time to time by the Board of Directors.  Subject to Section 4(e) and to Executive’s right to continue
to receive the compensation and benefits provided for herein, Executive’s
functions, duties and responsibilities are subject to reasonable changes as the
Board of Directors may in good faith determine after consultation with Executive. 
At all times during the Term, Executive shall report solely and directly
to the Board of Directors.

 

(e)           Executive hereby
agrees to accept such employment and to serve the Company to the best of his
ability in such capacities, devoting substantially all of his business time to
such employment; provided, however, that Executive shall be entitled to (i) manage
his personal investments and otherwise attend to personal affairs, including
family financial and legal affairs, (ii) continue his service as a member
of the boards of the entities listed in Schedule 1 attached to this Agreement, (iii) teach,
lecture or perform other public-service activities, and (iv) serve on the
boards of directors of up to three additional public corporations or other
entities with the approval of the Board (which approval will not be
unreasonably withheld), each in a manner that does not materially conflict or
unreasonably interfere with his responsibilities hereunder.

 

3.             Compensation and Benefits.

 

(a)           Base
Salary.  The Company shall
pay Executive a base salary (the “Base Salary”) at a minimum rate of (i) one
million U.S. Dollars (US$1,000,000) per annum from the Effective Date until December 31,
2008 (pro-rated for 2008), (ii) one million two hundred and fifty thousand
U.S. Dollars (US$1,250,000) per annum from January 1, 2009 until December 31,
2009 and (iii) one million five hundred thousand U.S. Dollars
(US$1,500,000) per annum from January 1, 2010 until the end of the Term,
subject to such increase(s) as may be determined in the discretion of the
Compensation Committee of the Board of Directors (the “Compensation Committee”).  The Base Salary shall be payable biweekly
(except to the extent deferred under a deferred compensation plan) in
accordance with the Company’s regular payroll practices and subject to such
deductions or amounts to be withheld as required by applicable law and
regulations. In the event that the Company, in its sole discretion, from time
to time determines to increase the Base Salary, such increased amount shall,
from and after the effective date of the increase, constitute the “Base Salary”
for purposes of this Agreement.

 

(b)           Annual Incentive Compensation.  Executive shall have the opportunity
annually to be paid annual incentive compensation in amounts determined by the
Compensation 

 

 

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Committee
in accordance with the applicable annual incentive compensation plan of the
Company as in effect from time to time. Under such plan, Executive shall have
the opportunity to earn a target bonus equal to 100% of Base Salary (the “Target
Bonus”) as annual incentive compensation at Target Opportunity and a maximum
bonus equal to 200% of Base Salary as annual incentive compensation at Maximum
Opportunity. “Target Opportunity” and “Maximum Opportunity” shall have the
meaning ascribed to them in the applicable annual incentive compensation plan.
Notwithstanding anything contained in this Agreement to the contrary, Executive
shall be paid a minimum annual incentive compensation equal to (i) $666,667
for fiscal year 2008 and (ii) $500,000 for fiscal year 2009.

 

(c)           Eligibility for Annual Long-Term Incentive Equity-Based
and/or Cash-Based Awards. 
During 2009 and in each year thereafter during the Term, Executive shall be
eligible to receive an annual grant of long-term incentive compensation in the
form of equity-based compensation or cash-based compensation, or a combination
of both, in the sole discretion of the Compensation Committee but commensurate
with Executive’s position as Chief Executive Officer of the Company, in
accordance with the applicable plans and programs for senior executives of the
Company and subject to the Company’s right to at any time amend or terminate
any such plan or program, so long as any such change does not adversely affect
any accrued or vested interest under any such plan or program.

 

(d)           Incentive
Equity Awards.

 

(i)            On
April 15, 2008, the Company granted to Executive as a sign-on bonus (the “2008
Special Grant”) 220,000 restricted stock units and 500,000 options (with an
exercise price of $25.69), subject to forfeiture in the event (and, in the case
of clause (B) below, to the extent) either of the following conditions
subsequent is not satisfied:  (A) this
Agreement is executed by the parties hereto by May 1, 2008; and (B) the
Company’s stockholders approve an amendment to the 2003 Incentive Compensation
Plan (or a new equity compensation plan) that provides for a sufficient
increase in the number of shares of common stock of the Company available for
the 2008 Special Grant by the applicable vesting date (in the case of
restricted stock units) or the date of exercise (in the case of options).  Subject to the approval of the Company’s
stockholders of an amendment to the 2003 Incentive Compensation Plan (or a new
equity compensation plan) that provides for a sufficient increase in the number
of shares of common stock of the Company available for equity awards, during
the Term, the Company shall grant to Executive no later than May 1, 2009
(the “2009 Special Grant”) and April 30, 2010 (the “2010 Special Grant” and, collectively with the 2008 Special Grant
and the 2009 Special Grant, the “Special Equity Grants” and each, individually,
a “Special Equity Grant,” with the respective date each Special Equity Grant is made being the
“Grant Date” thereof) at least 50,000 restricted stock units and at least
50,000 options as part of (and not in addition to)_the compensation outlined in
Section 3(c) above.  Each Special Equity Grant shall be granted
under and subject to the terms and conditions of the Company’s 2003 Incentive
Compensation Plan, as amended and restated, or an applicable successor plan (in
either case, the “Equity Plan”) and a
restricted stock unit and option agreement in the form attached hereto as Exhibit A to be entered
into with respect to such Special
Equity Grant by and between the Company and Executive (each, an “Equity Agreement”); provided, however, that the parties hereby
agree, and the Equity Agreements shall respectively provide, that the
options comprising the Special Equity Grants shall have an exercise price equal
to 100% of the fair market value of the common stock of the 

 

 

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Company on the applicable Grant Date thereof, that all vested
restricted stock units shall receive dividend equivalents, and that each
Special Equity Grant shall vest with respect to one-fourth (1/4) of the total
award on each anniversary of the applicable Grant Date thereof, subject to certain provisions
relating to accelerated vesting and forfeiture as described in this Agreement,
the applicable Equity Agreement and the Equity Plan; provided, further, however, that, notwithstanding anything to the
contrary set forth in the Equity Plan, in the Equity Agreements, in this
Agreement or in any other Company plan or policy, it is hereby agreed that this
Agreement (or any written amendment hereto signed by Executive and the Company
that expressly states that it supersedes this proviso) and the Equity Agreement
in the form of Exhibit A hereto contain the only provisions
regarding forfeiture that shall apply to the Special Equity Grants.  In each case, the applicable Equity Agreement
shall provide that delivery to Executive of shares of Company common stock
subject to vested restricted stock
units under the applicable Special Equity Grant shall occur on the earliest
date on which such shares may be so delivered (A) without becoming
subject to taxes, interest or penalties as a result of Section 409A (“Section 409A”)
of the Internal Revenue Code of 1986, as amended (the “Code”) and applicable
administrative guidance and regulations, and
(B) without affecting any compensation deduction applicable thereto as a
result of Section 162(m) (“Section 162(m)”), but,
notwithstanding (A) and (B) above, in no event shall such shares be delivered (x) later
than six (6) months plus one (1) day after the date of termination of
Executive’s employment (the date of termination of Executive’s employment,
regardless of the ground or reason therefore, being referred to in this
Agreement as the “Termination Date”), nor (y) sooner than five (5) days
after the Termination Date.  In the event
and to the extent that the Company’s stockholders do not approve an
amendment to the 2003 Incentive Compensation Plan (or a new equity compensation
plan) that provides for a sufficient increase in the number of shares of common
stock of the Company available for equity awards to cover the delivery of the
applicable number of shares underlying the Special Equity Grants by the vesting
date (in the case of restricted stock units) or the date of exercise (in the
case of options) (or sufficient shares are not otherwise available as of such
date), the Company shall be obligated to grant to Executive, on the same basis
and at the same time with respect to such Special Equity Grant, a cash-settled
restricted stock unit as replacement of restricted stock units and an
appropriate cash-based award in replacement of options, that provides to
Executive the exact same after-tax economic equivalent of each Special Equity
Grant (the “Replacement Awards”), subject to applicable withholding.

 

(ii)           Notwithstanding
anything to the contrary set forth in this Agreement, in the Equity Agreements
or in the Equity Plan, in the event that Executive’s employment is terminated (A) by
the Company without Cause, (B) by Executive for Good Reason (including,
without limitation, a deemed termination by the Company without Cause due to a
Failed Termination for Cause (as defined in Section 4(c) pursuant to Section 4(c)),
or (C) by Executive without Good Reason on or after May 1, 2011, if
such termination of employment occurs before all stock options or restricted
stock units included in the Special Equity Grants (or the Replacement Awards,
if applicable) have vested (except by reason of forfeiture pursuant to the
terms of Section 4(k)), then all such unvested stock options shall fully vest and become exercisable as of the Termination
Date (and any such options shall remain exercisable until the scheduled
expiration date) and all such restricted stock units shall fully vest
and become non-forfeitable as of the Termination Date and, in each case,
Executive shall be entitled to the benefits thereof, as provided in Section 4(e).

 

 

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e.             Expense
Reimbursement.  The Company shall promptly reimburse
Executive for all reasonable and necessary travel, business entertainment and
other business expenses incurred by Executive in connection with the
performance of Executive’s duties under this Agreement, on a timely basis upon
submission by Executive of vouchers therefore in accordance with the Company’s
standard procedures.

 

f.              Use
of Company Aircraft. 
Executive shall have use of the Company’s “Flight Options” fractional
ownership aircraft as agreed with the CEO during 2008 and thereafter Executive
shall have use of such aircraft, or any substitute or replacement private
aircraft wholly or partially owned, leased, or chartered by the Company or
otherwise made available by the Company to any executive officers of the
Company (collectively, the “Company Plane”) for personal use, provided that
such personal use shall not interfere with the business use of the Company
Plane.  Family members and/or other
guests may accompany Executive on Company Plane flights, whether such flights
are for personal use, business use or a combination thereof, as seating
permits.  When using the Company Plane
for a flight that is exclusively for personal use, Executive shall reimburse
the Company for the out-of-pocket cost to the Company of such flight as
invoiced by Flight Options LLC or a successor owner, charterer, lessor or
servicer of the Company Plane, as the case may be (the “Invoiced Amount”).  When using the Company Plane on a flight that
has a bona fide business-related purpose (whether or not such business-related
purpose is the sole purpose of such flight), Executive shall reimburse the
Company for any personal use in respect of such flight in an amount that is
computed in accordance with the provisions of Section 274(e) of the
Code and regulations promulgated thereunder and any applicable interpretations
by the U.S. Internal Revenue Service (the “IRS Amount”); provided, however,
that if the IRS Amount is greater than the Invoiced Amount for such flight,
then Executive shall reimburse the Company for the Invoiced Amount, instead of
the IRS Amount, for such flight.

 

g.             Other
Benefits.  Executive
shall be entitled to participate, without discrimination or duplication, in any
and all medical insurance, group health, disability, life, accidental death,
dismemberment insurance, 401(k) or other retirement, deferred
compensation, profit sharing, stock ownership and such other plans and programs
which are made generally available by the Company to its other senior
executives in accordance with the terms of such plans and programs and subject
to the Company’s right to at any time amend or terminate any such plan or
program; provided, however, that Executive shall be eligible to participate in
such insurance, benefit, fringe benefit and perquisite plans and programs on
terms and conditions at least as favorable to Executive as the most favorable
terms and conditions offered to any other employee of the Company.  Executive shall be entitled to participate in
any and all perquisites programs and arrangements which are made generally
available by the Company to its other senior executives in accordance with the
terms of such programs/arrangements and subject to the Company’s right to at
any time amend or terminate any such plan or program; provided, however, that
Executive shall at all times during the Term be entitled to (i) use of an
appropriate automobile provided by the Company and (ii) first-class air transportation,
ground transportation and hotel accommodations for all reasonable and necessary
business travel. Executive shall be entitled to paid vacation, holidays, and
any other time off in accordance with the Company’s policies in effect from
time to time.

 

 

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h.                                      Taxes.  Payment of all compensation and benefits to
Executive specified in this Section 3 and in Section 4 shall be
subject to all legally required and customary withholdings.  The Company makes no representations
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 Code and applicable administrative guidance and regulations.  Section 409A governs plans and
arrangements that provide “nonqualified deferred compensation” (as defined
under the Code) which may include, among others, nonqualified retirement plans,
bonus plans, stock option plans, employment agreements and severance agreements.  The
Company reserves the right (but is not required) to provide compensation and
benefits under any plan or arrangement in amounts, at times and in a manner
that minimizes taxes, interest or penalties as a result of Section 409A.
In addition, in the event any benefits or amounts paid hereunder are deemed to
be subject to Section 409A, including payments under Section 4,
Executive consents to the Company adopting such conforming amendments as the
Company or Executive deems necessary, in its or his reasonable discretion, to
comply with Section 409A (including, but not limited to, delaying payment
until six (6) months following termination of employment).  Any installment payments made to Executive
under this Agreement are to be treated as a series of separate payments in
accordance with the Section 409A rules. 
The Company and Executive agree that they will cooperate in good faith
to ensure that all compensation paid to Executive by the Company, whether
directly or indirectly, fully complies with Section 409A and the
regulations promulgated thereunder so that Executive is never subject to any
tax, interest or penalties under Section 409A.

 

i.                                         Registration.  The Company will use its best efforts to file
with the Securities and Exchange Commission and thereafter maintain the
effectiveness of one or more registration statements registering under the
Securities Act of 1933, as amended, the offer and sale of shares by the Company
to Executive pursuant to stock options or other equity-based awards granted to
Executive under Company plans and this
Agreement.

 

j.                                         Assistants.  Consistent with the Company’s payroll
policies, the Company will engage as full-time employees on Executive’s behalf,
Helen Fletcher as an executive assistant (or her replacement as selected by
Executive in his sole discretion) and Robert Lum as a driver (or his
replacement as selected by Executive in his sole discretion).

 

4.                                       Termination of Employment.  Executive’s employment hereunder may be
terminated prior to the end of the Term under the following circumstances:

 

(a)                                  Termination by Executive for Other than Good
Reason.  Executive may
terminate his employment hereunder for any reason or no reason upon 45  days’
prior written notice to the Company referring to this Section 4(a);
provided, however, that a termination of Executive’s employment for “Good
Reason” shall not constitute a termination by Executive for other than Good
Reason pursuant to this Section 4(a). 
In the event Executive terminates his employment for other than Good
Reason, Executive shall be entitled only to the following compensation and
benefits (collectively,
the “Standard Termination Payments”):

 

(i)            Any
accrued but unpaid Base Salary (as determined pursuant to Section 3(a))
for services rendered to the Termination Date, payable on the next regular
payday following the Termination Date;

 

 

6

 

 

(ii)           All
vested nonforfeitable amounts owing or accrued at the Termination Date under compensation and benefit plans,
programs, and arrangements set forth or referred to in Section 3 hereof in
which Executive theretofore participated will be paid under the terms and
conditions of such plans, programs, and arrangements (and agreements and
documents thereunder);

 

(iii)          Reasonable business expenses and disbursements
incurred by Executive prior to such termination will be reimbursed in
accordance with Section 3(e);

 

(iv)          Except as provided in Section 5.6,
all stock options and other equity awards will be governed by the terms of the
plans and programs under which the options or other awards were granted; and

 

(v)           Executive may elect continued participation after
termination in the Company’s health and medical coverage for himself and his
spouse and dependent children after such coverage would otherwise end until
such time as Executive becomes eligible for Medicare; provided, however, that
in the event of such election, Executive shall pay the Company each year (on a
monthly basis) an amount equal to the then-current annual COBRA premium being
paid (or payable) by any other former employee of the Company.

 

(b)                                 Termination by Reason of Death.  If Executive dies during the Term,
the Company shall pay to the last beneficiary designated by Executive by
written notice to the Company or, failing such designation, to Executive’s
estate, the following amounts:

 

(i)            The Standard Termination
Payments (as defined in Section 4(a));

 

(ii)           A lump sum payment equal to (A) Executive’s
annual Base Salary, plus (B) Executive’s Target Bonus for the year of
termination, payable in accordance with Section 4(g); and

 

(iii)          A pro rata portion of Executive’s Target Bonus for
the year of termination through the date of death, payable in accordance with Section 4(g).

 

(c)                                  Termination by the Company for Cause.  The Company may terminate Executive’s
employment hereunder for Cause by giving a Cause Termination Notice (as defined
below) in accordance with and subject to the provisions of this Section 4(c).  For purposes of this Agreement, the term “Cause”
shall mean Executive’s gross misconduct (as defined herein) or willful and
material breach of Section 5.1(a) (other than the first sentence
thereof), 5.1(b), 5.2 (other than the first and penultimate sentences thereof)
or 5.3.  “Gross misconduct” shall mean (i) Executive’s
conviction (including conviction on a nolo contendere plea) in a court of law
of a felony, or (ii) Executive’s willful and continued failure
substantially to perform his material duties under this Agreement.  For purposes of this Agreement, an act or
failure to act on Executive’s part shall be considered “willful” if it was done
or omitted to be done by him knowingly, purposefully and not in good faith and
shall not include, without limitation, any act or failure to act resulting from
any disagreement or difference of views between Executive and one or more
directors or officers of the Company or any of its affiliates with respect to
any matter(s) relating to the business, affairs or operations of the
Company and/or any of its affiliates (including, without limitation, with
respect to any management, business or operational matter, 

 

 

7

 

 

strategy, plan, proposal,
initiative or decision, any issue regarding the hiring, firing, appointment or
removal of any director, officer, employee, agent, consultant, advisor or
contractor, any proposed transaction, venture, affiliation or alliance, or any
change in business, structure, organization, management or operations).  Executive may not be terminated for Cause
unless and until there shall have been delivered to him, within 90 days after the Company first had actual knowledge of the most
recent conduct or event comprising an element of the alleged ground for
termination for Cause (it not being necessary that all elements comprising the
alleged ground for termination for Cause have occurred within such 90 day
period), a copy of a resolution duly adopted by
the Board of Directors by a vote of Directors constituting a majority of the
Board of Directors (excluding Executive) at a meeting of the Board of Directors
at which a quorum is physically present in person and which is called and held
for such purpose (after giving Executive reasonable notice of the specific
grounds for such termination including a reasonably detailed statement of the
facts and circumstances claimed as the basis for such termination and, except
if a felony conviction is the grounds for termination, 30 days to correct such
grounds, and affording Executive and his counsel the opportunity to be heard
before the Board of Directors) finding that, in the good faith opinion of the
Board of Directors, Executive was guilty of conduct constituting Cause (the “Cause
Resolution”).  The Company’s delivery of
the Cause Resolution to Executive shall be accompanied or followed by delivery
by the Company to Executive of a written notice of termination for Cause
referring to this Section 4(c), stating the grounds for such termination
(which shall be the same grounds as set forth in the Cause Resolution) and
specifying the effective date of such termination for Cause, which date shall
be no earlier than 31 days after the date on which Executive receives such
written notice of termination for Cause (the “Cause Termination Notice”),
provided that at any time prior to the effective date of such termination, the
Board of Directors may, in accordance with the next sentence, relieve Executive
of all or a portion of his duties and treat him as a suspended employee of the
Company, and until the Termination Date Executive shall be entitled to continue
to receive all compensation and benefits under this Agreement as if he had not
been suspended or given notice of termination (and such suspension for the
avoidance of doubt shall not constitute “Good Reason” for purposes of this
Agreement).  Any such suspension shall be
effected either (i) pursuant to the Cause Resolution or (ii) pursuant
to a resolution otherwise approved (which approval need not be by meeting on
formal notice) either by a majority of the Board of Directors (excluding
Executive) or, if a majority of the Board of Directors cannot reasonably be
convened promptly in person or by telephone, by a majority of the Executive
Committee of the Board of Directors (excluding Executive), in each case
determining, in the good faith opinion of the participants, that Executive was
guilty of conduct constituting Cause and that prompt suspension of Executive is
reasonably required in the best interests of the Company, which resolution is
confirmed within 10 days by a Cause Resolution. 
Notwithstanding any such suspension, Executive shall be afforded such
opportunity as may be reasonable under the circumstances to correct grounds for
termination as contemplated by the fifth sentence of this Section 4(c) until
the expiration of the 30-day period provided therein.

 

If
Executive disputes the Company’s allegation of Cause by initiating arbitration
pursuant to Section 12 and the arbitration panel finds that the Company
properly terminated Executive’s employment for Cause in accordance with the
provisions of this Section 4(c), Executive shall, within 30 days of the
arbitration award, repay the amount (if any) by which (A) the amounts
provided to him by the Company in respect of periods commencing after the
termination date of his employment set forth in the Cause Termination Notice,
including but not limited to salary 

 

 

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continuation and the value
of all benefits provided to Executive in respect of periods commencing after
his termination date, exceed (B) the amounts to which he is entitled under
this Agreement upon a termination for Cause. 
If the amount in (A) does not exceed the amount in (B), the Company
may reduce any amounts owed to Executive by the amount in (A).  If the arbitration panel does not find that
the Company properly terminated Executive’s employment for Cause in accordance
with the provisions of this Section 4(c) (a “Failed Termination for
Cause”), then (x) Executive’s employment shall be deemed to have been
terminated by the Company without Cause as of the date (the “Deemed Termination
Date”) which is 31 days after the date on which the Cause Resolution and the
Cause Termination Notice were delivered to Executive; (y) the Company
shall provide Executive with the payments and benefits set forth in Section 4(e) hereof
as if the Company had terminated Executive without Cause as of the Deemed
Termination Date, provided that any amounts previously paid to Executive by the
Company as a suspended employee in respect of periods commencing on or after
the Deemed Termination Date shall be credited against amounts owed to Executive
under Section 4(e) hereof; and (z) the Company shall pay (or
reimburse, if already paid by Executive) all reasonable expenses actually
incurred by Executive in connection with contesting such Failed Termination for
Cause.

 

In the event that Executive’s
employment is terminated by the Company for Cause in accordance with this Section 4(c), Executive shall be
entitled to receive only the Standard Termination Payments (as defined in Section 4(a)).

 

The
Company hereby acknowledges and agrees that, as of the date on which this
Agreement is executed by the Company, the Company is not aware of grounds for
terminating Executive for Cause.

 

(d)           Termination By Reason of Total Disability.  The Company may terminate
Executive’s employment by reason of “Total Disability” (as defined below).  Executive and the Company agree that
Executive may not reasonably be expected to be able to perform his duties and
the essential functions of his office in the event of Executive’s “Total
Disability.” For purposes of this Agreement, “Total Disability” shall mean
Executive’s failure to perform the duties and responsibilities contemplated
under this Agreement for a period of more than 180 days during any consecutive
12-month period due to physical or mental incapacity or impairment as determined by a physician or physicians selected
by the Company and reasonably acceptable to Executive, unless, within 30 days
after Executive has received written notice from the Company of a proposed
termination due to such failure (as determined in accordance with the foregoing
provisions of this sentence) which notice shall include a copy of the findings
of such physician or physicians and shall refer to this Section 4(d),
Executive shall have returned to the full performance of his duties hereunder
and shall have presented to the Company a written certificate of Executive’s
good health by a physician selected by Executive and reasonably acceptable to
the Company.  In the event that
Executive’s employment is terminated by reason of Total Disability, the Company
shall pay the following amounts, and make the following other benefits
available, to Executive:

 

(i)            The Standard Termination Payments (as defined in Section 4(a));

 

 

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(ii)           A lump sum payment equal to (A) Executive’s
annual Base Salary, plus (B) Executive’s Target Bonus for the year of
termination, payable in accordance with Section 4(g);

 

(iii)          A pro rata portion of Executive’s Target Bonus for
the year of termination through the Termination Date, payable in accordance
with Section 4(g); and

 

(iv)          If Executive elects to continue medical coverage
under the Company’s group health plan in accordance with COBRA, the Company
shall pay the monthly premiums for such coverage for a period of 18 months.

 

(e)           Termination by the Company Without Cause or by Executive for
Good Reason. 
The Company may terminate Executive’s
employment at any time, without Cause, for any reason or no reason, and
Executive may terminate his employment hereunder for “Good Reason” (as defined
below).  For purposes of this Agreement, “Good
Reason” shall mean that without Executive’s prior written consent, any of the
following shall have occurred, within 60 days after Executive first had actual
knowledge of the most recent conduct or event comprising an element of the
alleged ground for termination for Good Reason (it not being necessary that all
elements comprising the alleged ground for termination for Good Reason have
occurred within such 60-day period):  (I) a
material change (A) that is adverse to Executive, in Executive’s
positions, titles, offices, or duties as provided in Section 2, except, in
such case, in connection with the termination of Executive’s employment for
Cause, Total Disability or death, or (B) represented by any of the
following: (w) the failure to promote Executive to the position of Chief
Executive Officer of the Company by January 1, 2009, (x) the failure
to re-elect Executive as a member of the Board of Directors, (y) the
failure to appoint Executive to, or the removal of Executive from, the position
of either Chairman or Vice Chairman of the Board of Directors, or (z) a
change in Executive’s reporting arrangement so that he no longer reports solely
and directly to the Board of Directors; (II) an assignment of any
significant duties to Executive which are materially inconsistent with
Executive’s positions or offices held under Section 2; (III) a
decrease in Base Salary or material decrease in Executive’s compensation
opportunities or in the aggregate benefits provided
under this Agreement; (IV) any other material failure by the Company to
perform any material obligation under, or material breach by the Company of any
material provision of, this Agreement; (V) a
relocation of the principal executive offices of the Company more than
thirty-five (35) miles from their existing location in New York, NY, or a
change in the location of Executive’s office to a location other than the
Company’s principal executive offices; or (VI) any failure to secure the
agreement of any successor corporation or other entity to the Company to fully
assume the Company’s obligations under this Agreement in a form reasonably
acceptable to Executive; provided, however, that a termination by
Executive for Good Reason under any of clauses (I) — (VI) of this Section 4(e) shall
be effective only if, within 30 days
following delivery of a written notice by Executive to the Company that
Executive is terminating his employment for Good Reason and setting forth in
reasonable detail the facts and circumstances allegedly constituting Good
Reason, the Company has failed to cure the circumstances giving rise to Good
Reason.  In the event that Executive’s
employment is terminated (A) by the Company without Cause or (B) by
Executive for Good Reason (as to (A) and (B), including, without
limitation, a deemed termination by the Company without Cause or by Executive
for Good Reason pursuant to the delivery by the Company of a Nonrenewal Notice
in accordance with Section 2; and as to (A), including, without
limitation, a deemed termination 

 

10

 

by
the Company without Cause due to a Failed Termination for Cause pursuant to Section 4(c)),
the Company shall pay the following amounts, and make the following other
benefits available, to Executive (such payments and benefits, the “Section 4(e) Payments
and Benefits”):

 

(i)            The Standard Termination Payments (as defined in Section 4(a));

 

(ii)           A lump sum payment equal to the product of (A) two
and one-half (2.5) and (B) the sum of (I) Executive’s annual Base
Salary, plus (II) Executive’s Target Bonus for the year of termination,
payable within thirty (30) days of the Termination Date; and

 

(iii)          Between January 1 and March 15 following
the end of the fiscal year in which the Termination Date occurs, in lieu of the
incentive compensation for the year in which such termination occurs (but in
addition and not in lieu of the Severance Bonus Amount),  the pro rata portion of any annual bonus
which would have been payable to Executive had Executive remained in employment
with the Company during the entire year in which the Termination Date occurred
(such pro rata calculation to be determined by multiplying a fraction, the
numerator of which is the number of whole months in such year prior to the
Termination Date and the denominator of which is 12, times the annual bonus
which would have been payable to Executive had Executive remained employed with
the Company);

 

(iv)          Stock options held by Executive at termination,
including, without limitation, stock options provided under the Special Equity
Grants, if not then vested and exercisable, will become fully vested and
exercisable at the date of such termination, except to the extent otherwise
specifically provided under the terms of any Non-Ordinary Course Grant or Award
made to Executive after the Effective Date,
and any such options shall remain exercisable until the scheduled expiration
date, and, in other respects, all such options shall be governed by the plans
and programs and the agreements and other documents pursuant to which such
options were granted;

 

(v)           Except to the extent otherwise specifically provided
under the terms of any Non-Ordinary Course Grant or Award made to Executive
after the Effective Date, all deferred stock, restricted stock and other
equity-based awards, including, without limitation, such equity-based awards
provided under the Special Equity Grants, will become fully vested and
non-forfeitable, all restrictions and conditions with respect to such awards
shall lapse, and all such awards and arrangements shall be settled upon such
termination, without regard to any stated period of deferral or other
restrictions or conditions remaining in respect of such awards; provided,
however, (A) if necessary to comply with Section 409A(a)(2)(B)(i) of
the Code, and applicable administrative guidance and regulations, such
settlement shall be made six (6) months plus one (1) day following the Termination Date and (B) with respect to any such awards that were
granted prior to the date hereof, such settlement shall be the later of the
date determined by the foregoing and January 1, 2009;

 

(vi)          Executive shall receive an
amount equal to the amount accrued under any deferred compensation plan or
agreement in effect at the Termination Date in which Executive is a participant
or party, less required withholding taxes under Section 3(h), such amount
to be paid in a lump sum in accordance with Section 4(g) hereof and
to be equal to Executive’s account balance on the Termination Date of Executive’s
employment if the deferred 

 

11

 

compensation amount is in
the form of an account balance or, if the deferred compensation amount is not
in the form of an account balance, the present value of the deferred
compensation on the Termination Date calculated using a discount rate (the “Discount
Rate”) equal to the yield, at the time of determination, for U.S. Treasury
securities having a maturity of 30 years; provided, that with respect to any
such amounts that were accrued prior to the date hereof, such amounts shall be
paid on the later of the date determined by the foregoing and January 1,
2009; and

 

(vii)         If Executive elects to continue medical coverage
under the Company’s group health plan in accordance with COBRA, the Company
shall pay the monthly premiums for such coverage for a period of 18 months.

 

Notwithstanding the foregoing, if a reduction in Base Salary
or other level of compensation was a basis for Executive’s termination for Good
Reason, the Base Salary or other level of compensation in effect before such
reduction shall be used to calculate payments under this Section 4(e). 
For the avoidance of doubt, nothing in this paragraph is intended to
broaden the definition of Good Reason contained above.

 

For purposes of this Agreement, a “Non-Ordinary-Course Grant
or Award” shall mean any grant or award conferring the right to acquire
equity-based securities of the Company, other than a “Normal Course Award”, and
a “Normal Course Award” shall mean and be limited to a grant or award to
acquire equity-based securities of the Company made under the annual equity
incentive program of the Company’s management incentive compensation program,
or under any amended, replacement or supplemental plan or program that is
established to take the place of, modify, or supplement such equity incentive
program (as the same may be hereafter amended, replaced or supplemented), or to
reinstitute such a plan or program, in order to carry out the Company’s regular
program of equity grants to senior executives generally.

 

(f)            Termination in Connection with Change in
Control.

 

(i)            In the event Executive’s employment is terminated by
the Company without Cause or by Executive for Good Reason and the termination
occurs during the two-year period immediately following a Change in Control,
this Section 4(f) and not Section 4(e) shall apply, and
Executive shall receive the “Section 4(e) Payments
and Benefits” (as defined above),
except that the multiple set forth in Section 4(e)(ii)(A) shall be
three (3) and not two and one-half (2.5).

 

(ii)           In the event Executive’s
employment is terminated by the Company without Cause or by Executive for Good
Reason and the termination occurs “In Anticipation of a Change in Control” and
the Change in Control actually occurs within six (6) months after the
termination, unless the relevant facts and circumstances clearly demonstrate
that the possibility that such Change in Control would occur was remote as of
the date of such termination, Executive shall receive the amounts and benefits
provided for in Section 4(f)(i), less any amounts paid to Executive
pursuant to Section 4(e).

 

(iii)          A “Change in Control” shall be deemed to have
occurred if:  (A) any “person” as
defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and as used in sections 13(d) and 14(d) thereof,
including a “group” as 

 

12

 

defined in Section 13(d) of the Exchange
Act but excluding the Company and any subsidiary or affiliate and any employee
benefit plan sponsored or maintained by the Company or any subsidiary or
affiliate (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% of the
combined voting power of the Company’s then-outstanding securities; (B) the
stockholders of the Company approve a merger, consolidation, recapitalization,
or reorganization of the Company, or a reverse stock split of any class of
voting securities of the Company, or the consummation of any such transaction
if stockholder approval is not obtained, other than any such transaction which
would result in at least 60% of the total voting power represented by the
voting securities of the Company or the surviving entity outstanding
immediately after such transaction being beneficially owned by persons who
together beneficially owned at least 80% of the combined voting power of the
voting securities of the Company outstanding immediately prior to such
transaction; provided that, for purposes of this Section 4(f)(iii)(B), such continuity of
ownership (and preservation of relative voting power) shall be deemed to be
satisfied if the failure to meet such 60% threshold is due solely to the
acquisition of voting securities by an employee benefit plan of the Company or
such surviving entity or of any subsidiary of the Company or such surviving entity;
(C) the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of
all or substantially all of its assets (or any transaction having a similar
effect), or the Company sells all or substantially all of the stock of the
Company to any person or entity other than an affiliate of the Company; or (D) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors, together with any new director (other
than a director designated by a person who has entered into an agreement with
the Company to effect a transaction described in subsection (A), (B), or (C) hereof)
whose election by the Board of Directors or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority of the Board of
Directors.

 

(iv)          For purposes of this Section 4(f) a
termination shall be considered “In Anticipation of a Change in Control” if (A) the
termination occurs after:  (1) the
issuance of a proxy statement by the Company with respect to an election of
directors for which there is proposed one or more directors who are not
recommended by the Board of Directors or its nominating committee where the
election of such proposed director or directors would result in a Change in
Control; or (2) the announcement by any person of an intention to take
actions which might reasonably result in a Change in Control; and (B) the
Change in Control actually occurs within six (6) months after the termination
unless the relevant facts and circumstances clearly demonstrate that the
possibility that a Change in Control would occur was remote as of the date of
such termination.

 

(g)           Timing of Certain Payments Under Section 4.  Unless otherwise expressly provided in this Section 4(g) or
in the other provisions of this Agreement, all payments pursuant to this Section 4
shall be made as soon as practicable after the Termination Date but in no event
later than 30 days after the Termination Date; provided, however, that if and
to the extent necessary to comply with Section 409A(a)(2)(B)(i) of
the Code, and applicable 

 

13

 

administrative guidance and regulations, a payment pursuant to this Section 4
shall be made in a lump sum on the date that is six months plus one day
following the Termination Date.

 

(h)           No Obligation to Mitigate.  Executive shall not be required to seek other
employment or otherwise to mitigate Executive’s damages upon any termination of
employment; provided, however, that, to the extent Executive receives from a
subsequent employer health or other insurance benefits substantially similar to
the benefits referred to in Section 4, any such benefits to be provided by the Company to Executive
following the termination of his employment shall be correspondingly reduced.

 

(i)            Set-Off.  Amounts required to be paid by the Company to
Executive pursuant to this Agreement shall not be subject to offset with
respect to any amounts Executive otherwise owes the Company except for any
amounts that are owed to the Company by Executive due to his receipt of funds
as a result of his fraudulent activity.

 

(j)            No Other Benefits or Compensation.  Except as
may be provided under this Agreement, under any other written agreement between
Executive and the Company, or under the terms of any plan or policy applicable
to Executive, Executive shall have no right to receive any other compensation
from the Company, or to participate in any other plan, arrangement or benefit
provided by the Company, with respect to any future period after such
termination or resignation.

 

(k)           Release of Employment Claims; Compliance
with Section 5. Executive
agrees, as a condition to receipt of any termination payments and benefits
provided for in this Section 4
(other than the Standard Termination Payments), that Executive will execute a
general release agreement, in a form reasonably satisfactory to the Company,
releasing any and all claims arising out of Executive’s employment (other than
enforcement of this Agreement) and Executive will not in the future seek
employment at the Company or any of its subsidiaries or affiliates.  The Company’s obligation to make any
termination payments and benefits provided for in this Section 4 (other than the Standard Termination Payments, all of which shall be paid by the Company)
shall immediately cease if a
court of competent jurisdiction or an arbitral tribunal determines that Executive (x) willfully and materially breached Sections 5.1, 5.2, 5.3, 5.4, or
5.8 and (y) failed to cure such breach within 30 days after his receipt of
written notice from the Board of Directors, attaching a copy of a resolution duly adopted by the Board of Directors by a vote of
Directors constituting a majority of the Board of Directors (excluding
Executive) at a meeting of the Board of Directors at which a quorum is
physically present in person, in which resolution the Board of Directors sets
forth such breach in reasonable detail and expressly elects the remedy
provided in this Section 4(k), and which notice is delivered to Executive
within 90 days after the Company first had knowledge of such breach (the
foregoing, collectively, a “Section 4(k) Notice of Breach”) (and
which cure by Executive, in the case of a breach of Section 5.4, may be
effected, without limitation, by correction or retraction of the disparaging
statements).  During
the pendency of any court or arbitration proceeding regarding such a
determination, the Company shall pay into escrow with a third-party bank or
trust company the amount of any payments or benefits provided for in this Section 4
(other than the Standard Termination Payments) pursuant to an escrow agreement
in form reasonably acceptable to Executive which provides that the amount of
such payments or benefits (together with interest earned thereon), upon the
conclusion of such proceeding, shall be returned to the Company if 

 

14

 

Executive is determined by
such proceeding to have willfully and materially breached any of such Sections
and otherwise shall be paid to Executive. 
If a court of
competent jurisdiction or arbitral tribunal does not find that Executive
willfully and materially breached one of the Sections referred to above, then
the Company shall pay (or reimburse, if already paid by Executive) all
reasonable expenses actually incurred by Executive in connection with
contesting such alleged breach.

 

(l)            The
provisions of this Section 4 shall survive the termination of Executive’s
employment.

 

5.             Noncompetition; Nonsolicitation; Nondisclosure; Miscellaneous
Provisions.

 

5.1           Noncompetition; Nonsolicitation.

 

(a)           Executive acknowledges the highly
competitive nature of the Company’s business and that access to the Company’s
confidential records and proprietary information renders Executive special and
unique within the Company’s industry.  In
consideration of the amounts that may hereafter be paid to Executive pursuant
to this Agreement (including, without limitation, Sections 3 and 4), Executive
agrees that during the Term (including any extensions thereof) and during the
Covered Time (as defined in Section 5.1(e)), Executive, alone or with
others, will not, directly or indirectly, engage (as owner, investor, partner,
stockholder, employer, employee, consultant, advisor, director or otherwise) in
any Competing Business.  For purposes of
this Section 5, “Competing Business” shall mean any business (i) involving design and production of instant lottery tickets and the
management of related marketing and distribution programs; manufacture, sale,
operation or management of on-line lottery systems (Lotto-type games);
involving development and commercialization of licensed and other proprietary
game entertainment for all lottery product channels; involving provision of
wagering (whether pari-mutuel (pooled) or otherwise) or venue management
services for racetracks and off-track betting facilities; production of prepaid
cellular phone cards; or any other business in which the Company is then or was
within the previous twenty-four months engaged or in which the Company, to
Executive’s actual knowledge, intends to engage during the Term or the Covered Time; and (ii) which
Competing Business is conducted or planned to be conducted anywhere in the
United States or in any other geographic
area in which such business was conducted or planned to be conducted by the
Company; provided, further, that this Section 5.1(a) shall
not restrict Executive from engaging in (and the term “Competing Business”
shall not include) any business in which the Company no longer engages or plans
to engage; and provided further that activities of the Company, or activities
engaged in by Executive for or on behalf of the Company, are not restricted by
this Section 5.1(a) and shall not constitute a “Competing Business.”  Ownership of (i) the securities of any
entity for which a Competing Business represents less than 10% of net sales or
net income (as determined in accordance with generally accepted accounting
principles) for the most recent fiscal year (or if such entity has not
completed a fiscal year, net sales or net income projected for its first fiscal
year) or (ii) not more than two percent of the equity securities of any
company having securities listed on an exchange or regularly traded in the over-the-counter
market shall not, of itself, be deemed inconsistent with this Section 5.1(a).  Nothing herein shall require Executive to
sell or otherwise dispose of any securities of any entity if the acquisition of
such securities did not violate the terms of this Section 5.1(a) at
the time of such acquisition.

 

15

 

(b)           In further consideration of the
amounts that may hereafter be paid to Executive pursuant to this Agreement
(including, without limitation, Sections 3 and 4), Executive agrees that during
the Term (including any extensions thereof) and during the Covered Time
Executive shall not, directly or indirectly, (i) solicit or attempt to
induce any of the employees, agents, consultants or representatives of the
Company to terminate his, her, or its relationship with the Company; (ii) solicit
or attempt to induce any of the employees, agents, consultants or
representatives of the Company to become employees, agents, consultants or
representatives of any other person or entity; (iii) solicit or attempt to
induce any customer, vendor or distributor of the Company to curtail or cancel
any business with the Company; or (iv) hire any person who, to Executive’s
actual knowledge, is, or was within 180 days prior to such hiring, an employee
of the Company.

 

(c)           During the Term (including any
extensions thereof) and during the Covered Time, Executive agrees that upon the
earlier of Executive’s (i) negotiating with any Competitor (as defined
below) concerning the possible employment of Executive by the Competitor, (ii) responding
to (other than for the purpose of declining) an offer of employment from a
Competitor, or (iii) becoming employed by a Competitor, (x) Executive
will provide copies of Section 5 to the Competitor, and (y) in the
case of any circumstance described in (iii) above occurring during the
Covered Time, and in the case of any circumstance described in (i) or (ii) above
occurring during the Term or during the Covered Time, Executive will promptly
provide notice to the Company of such circumstances.  Executive further agrees that the Company may
provide notice to a Competitor of Executive’s obligations under this Agreement.
For purposes of this Agreement, “Competitor” shall mean any entity (other than
the Company) that engages, directly or indirectly, in the United States in any
Competing Business.

 

(d)           Executive understands that the
restrictions in this Section 5.1 may limit Executive’s ability to earn a
livelihood in a business similar to the business of the Company but
nevertheless agrees and acknowledges that the consideration provided under this
Agreement (including, without limitation, Sections 3 and 4) is sufficient to
justify such restrictions. In consideration thereof and in light of Executive’s
education, skills and abilities, Executive agrees that Executive will not
assert in any forum that such restrictions prevent Executive from earning a
living or otherwise should be held void or unenforceable.

 

(e)           For purposes of this Section 5.1,
“Covered Time” shall mean the period beginning on the Termination Date and
ending twenty-four (24) months after the Termination Date.

 

5.2          Proprietary Information;
Inventions.

 

(a)           Executive acknowledges that during
the course of Executive’s employment with the Company Executive necessarily
will have access to and make use of (and during any employment of him by the
Company prior to the Term has had access to and made use of) proprietary
information and confidential records of the Company. Executive covenants that Executive
shall not during the Term or at any time thereafter, directly or indirectly,
use for Executive’s own purpose or for the benefit of any person or entity
other than the Company, nor otherwise disclose to any individual or entity, any
such proprietary information, unless such disclosure has been authorized in
writing by the Company.  The term “proprietary
information” 

 

16

 

means: (i) the
software products, programs, applications, and processes utilized by the
Company; (ii) the name and/or address of any customer or vendor of the
Company or any information concerning the transactions or relations of any
customer or vendor of the Company with the Company; (iii) any information
concerning any product, technology, or procedure employed by the Company but
not generally known to its customers or vendors or competitors, or under
development by or being tested by the Company but not at the time offered
generally to customers or vendors; (iv) any information relating to the
Company’s computer software, computer systems, pricing or marketing methods,
sales margins, cost of goods, cost of material, capital structure, operating
results, borrowing arrangements or business plans; (v) any information
identified as confidential or proprietary in any line of business engaged in by
the Company; (vi) any information that, to Executive’s actual knowledge,
the Company ordinarily maintains as confidential or proprietary; (vii) any
business plans, budgets, advertising or marketing plans; (viii) any
information contained in any of the Company’s written or oral policies and
procedures or manuals; (ix) any information belonging to customers,
vendors or any other person or entity which the Company, to Executive’s actual
knowledge, has agreed to hold in confidence; and (x) all written, graphic,
electronic data and other material containing any of the foregoing. Executive
acknowledges that information that is not novel or copyrighted or patented may
nonetheless be proprietary information.  The term “proprietary information” shall not
include information generally known or available to the public or generally
known or available to the industry (without Executive’s breach of this Section 5.2
or Section 5.3 hereof) or information that becomes available to Executive
on an unrestricted, non-confidential basis from a source other than the Company
or its directors, officers, employees, or agents (without breach of any
obligation of confidentiality of which Executive has actual knowledge at the time
of the relevant disclosure by Executive). 
Notwithstanding the foregoing and Section 5.3 hereof, Executive may
disclose or use proprietary information or confidential records solely to the
extent (A) such disclosure or use may be required or appropriate in the
performance of his duties as a director or employee of the Company, (B) required
to do so by a court of law, by any governmental agency having supervisory
authority over the business of the Company or by any administrative or
legislative body (including a committee thereof) with apparent jurisdiction to
order him to divulge, disclose or make accessible such information (provided
that in such case Executive shall first give the Company prompt written notice
of any such legal requirement, disclose no more information than is so required
and cooperate fully with all efforts by the Company to obtain a protective
order or similar confidentiality treatment for such information), (C) such
information or records becomes generally known to the public or trade without
his violation of this Agreement, or (D) disclosed to Executive’s spouse,
attorney and/or his personal tax and financial advisors to the extent
reasonably necessary to advance Executive’s tax, financial and other personal
planning (each an “Exempt Person”); provided, however, that any disclosure or
use of any proprietary information or confidential records by an Exempt Person
shall be deemed to be a breach of this Section 5.2 or Section 5.3 by
Executive.

 

(b)           Executive agrees that all processes,
technologies and inventions (collectively, “Inventions”), including new
contributions, improvements, ideas and discoveries, whether patentable or not,
conceived, developed, invented or made by Executive during the Term (and during
any employment by the Company prior to the Term) shall belong to the Company,
provided that such Inventions grew out of Executive’s work with the Company,
are related in any manner to the business (commercial or experimental) of the
Company or are conceived or made on the Company’s time or with the use of the
Company’s facilities or 

 

17

 

materials. Executive shall
further:  (i) promptly disclose such
Inventions to the Company; (ii) assign to the Company, without additional
compensation, all patent and other rights to such Inventions for the United
States and foreign countries; (iii) sign all papers necessary to carry out
the foregoing; and (iv) give testimony in support of Executive’s
inventorship.  If any Invention is
described in a patent application or is disclosed to third parties, directly or
indirectly, by Executive within two years after the termination of Executive’s
employment by the Company, it is to be presumed that the Invention was
conceived or made during the Term. Executive agrees that Executive will not
assert any rights to any Invention as having been made or acquired by Executive
prior to the date of this Agreement.

 

5.3  Confidentiality and Surrender of Records.  Executive shall not during the Term
or at any time thereafter (irrespective of the circumstances under which
Executive’s employment by the Company terminates), directly or indirectly
publish, make known or in any fashion disclose any confidential records to, or
permit any inspection or copying of confidential records by, any individual or
entity other than in the course of such individual’s or entity’s employment or
retention by the Company, nor shall Executive retain, and Executive will
deliver promptly to the Company, any of the same following termination of Executive’s
employment hereunder for any reason or upon request by the Company.  For purposes hereof, “confidential records”
means those portions of correspondence, memoranda, files, manuals, books,
lists, financial, operating or marketing records, magnetic tape, or electronic
or other media or equipment of any kind in Executive’s possession or under
Executive’s control or accessible to Executive which contain any proprietary
information.  All confidential records
shall be and remain the sole property of the Company during the Term and
thereafter.

 

5.4          Nondisparagement.  During the Term and thereafter (i) Executive
shall not disparage in any material respect the Company, any of the Company’s
businesses, any of the Company’s officers, directors or employees, or the
reputation of any of the foregoing persons or entities, and (ii) the
Company and current executives and members of the Board of Directors shall not
disparage in any material respect Executive or the reputation of
Executive.  Notwithstanding the provisions
of Sections 4(k) and 5.6, a breach of this Section 5.4 by Executive
occurring more than two (2) years after the Termination Date shall not
constitute grounds for cessation of payments and benefits pursuant to Section 4(k) or
for forfeiture of options pursuant to Section 5.6 (provided that the
Company may pursue any other available rights and remedies with respect to such
breach).  After the expiration of the
Term and the Covered Time, the foregoing prohibition shall continue to apply as
to circumstances and matters arising during or relating to the period of
Executive’s employment by the Company and the Covered Time, but shall not apply
to circumstances or matters newly arising after the Covered Time.  Notwithstanding the foregoing, nothing in
this Agreement shall preclude the Company (or its executives and members of the
Board of Directors) or Executive from making what it or he reasonably believes
in good faith to be truthful statements that are required by applicable law,
regulation or legal process or in connection with any investigation by the
Company or any governmental authority
or are reasonably required to describe the conduct, decisions, or policies of
the Company or any of its affiliates, or their respective businesses, officers,
directors or employees.

 

5.5          No Other Obligations.  Executive represents that Executive
is not precluded or limited in Executive’s ability to undertake or perform the
duties described herein by any 

 

18

 

contract, agreement or restrictive covenant.  Executive covenants that Executive shall not
employ the trade secrets or proprietary information of any other person in
connection with Executive’s employment by the Company without such person’s
authorization.

 

5.6          Forfeiture of Outstanding Equity
Awards. 
The provisions of Section 4
notwithstanding, if a court of competent jurisdiction or an arbitral tribunal
determines that Executive (x) willfully and materially breached Sections
5.1, 5.2, 5.3, 5.4 or 5.8 and (y) failed to cure such breach
within 30 days after his receipt of written notice from the Board of Directors,
attaching a copy of a resolution duly adopted
by the Board of Directors by a vote of Directors constituting a majority of the
Board of Directors (excluding Executive) at a meeting of the Board of Directors
at which a quorum is physically present in person, in which resolution the
Board of Directors sets forth such breach in reasonable detail and
expressly elects the remedy provided in this Section 5.6, and which notice
is delivered to Executive within 90 days after the Company first had knowledge
of such breach (the foregoing, collectively, a “Section 5.6 Notice of
Breach”) (and which cure by Executive, in the case of a breach of Section 5.4,
may be effected, without limitation, by correction or retraction of the
disparaging statements), then all options, restricted stock units and other equity awards
(whether granted prior to, contemporaneously with, or subsequent to this
Agreement) granted by the Company and held by Executive or a transferee of
Executive shall be immediately forfeited and thereupon such equity awards shall
be cancelled, such forfeiture to be effective at the later of the time of such
failure to comply or Executive’s termination of employment.  If a court of competent jurisdiction or
arbitral tribunal finds that the Company is entitled to cause the forfeiture of
Executive’s equity awards in accordance with the foregoing terms of this Section 5.6,
Executive shall be required to forfeit such equity awards immediately.  If any equity award is exercised or vests
after delivery of the Section 5.6 Notice of Breach and if such forfeiture
subsequently occurs pursuant to the foregoing terms of this Section 5.6,
Executive shall be required to return to the Company all shares acquired upon
such exercise or vesting; provided further that if Executive has sold any
shares he acquired upon such exercise or vesting, Executive shall pay to the
Company an amount equal to the difference between the aggregate sale price of the
shares sold and the aggregate exercise price paid by Executive for such
shares.  If a court of competent
jurisdiction or arbitral tribunal does not find that the Company is entitled to
cause such forfeiture in accordance with the foregoing terms of this Section 5.6,
the Company shall pay (or reimburse, if already paid by Executive) all
reasonable expenses actually incurred by Executive in connection with
contesting such attempted forfeiture.

 

5.7
Enforcement. 
Executive acknowledges and agrees that, by virtue of Executive’s
position, services and access to and use of confidential records and
proprietary information, any violation by Executive of any of the undertakings
contained in this Section 5 would cause the Company immediate, substantial
and irreparable injury for which it has no adequate remedy at law.  Accordingly, Executive agrees and consents to
the entry of an injunction or other equitable relief by a court of competent
jurisdiction restraining any violation or threatened violation of any undertaking
contained in this Section 5. 
Executive waives posting of any bond otherwise necessary to secure such
injunction or other equitable relief. 
Rights and remedies provided for in this Section 5 are cumulative
and shall be in addition to rights and remedies otherwise available to the
parties hereunder or under any other agreement or applicable law.

 

5.8
Cooperation with Regard to Litigation.  Executive agrees to cooperate reasonably with
the Company, during the Term and thereafter, by being available to testify on
behalf of the 

 

19

 

Company in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative. 
In addition, except to the extent that Executive has or intends to
assert in good faith an interest or position adverse to or inconsistent with
the interest or position of the Company, Executive agrees to cooperate
reasonably with the Company, during the Term and thereafter to assist the
Company in any such action, suit, or proceeding by providing information and
meeting and consulting with the Board of Directors or its representatives or
counsel, or representatives or counsel to the Company, in each case, as
reasonably requested by the Company.  The
Company agrees to pay (or reimburse, if already paid by Executive) all
reasonable expenses actually incurred in connection with Executive’s
cooperation and assistance including, without limitation, reasonable fees and
disbursements of counsel, if any, chosen by Executive if Executive reasonably
determines in good faith, on the advice of counsel, that the Company’s counsel
may not ethically represent Executive in connection with such action, suit or
proceeding due to actual or potential conflicts of interests.  Notwithstanding the provisions of Sections 4(k) and
5.6, a breach of this Section 5.6 occurring more than seven (7) years
after the Termination Date shall not constitute grounds for cessation of
payments and benefits pursuant to Section 4(k) or forfeiture of
options pursuant to Section 5.6 (provided that the Company may pursue any
other available rights and remedies with respect to such breach).

 

5.9 Survival.  The provisions of this Section 5 shall
survive the termination of Executive’s employment.

 

5.10
Company. 
For purposes of this Section 5, references to the “Company” shall
include both the Company and each subsidiary and/or affiliate of the Company.

 

6.             Code of Conduct. 
Executive acknowledges that he has read the Company’s “Code of Business
Conduct for Directors, Officers and Employees (as revised and adopted by the
Board of Directors, February 23, 2006)” and agrees to conduct himself in
accordance with it, as it may be amended or supplemented from time to time, it
being understood that any termination of employment of Executive shall occur
pursuant to and in accordance with Section 4.

 

7.             Indemnification.  During the Term and all periods after the
expiration of this Agreement or termination of Executive’s employment for any
reason, the Company shall indemnify Executive to the full extent permitted
under the Company’s Certificate of Incorporation or By-Laws and pursuant to any
other agreements or policies in effect from time to time. To the extent
permitted under the Company’s Certificate of Incorporation and By-Laws and
applicable law, the Company shall advance expenses for which indemnification
may be claimed as such expenses are incurred, subject to any requirement that
Executive provide an undertaking to repay such advances if it is ultimately
determined that Executive is not entitled to indemnification; provided,
however, that any determination required to be made with respect to whether
Executive’s conduct complies with the standards required to be met as a
condition of indemnification or advancement of expenses under applicable law
and the Company’s Certificate of Incorporation, By-Laws, or other agreement,
shall be made by independent counsel mutually acceptable to Executive and the
Company (except to the extent otherwise required by law).  Any provision contained herein
notwithstanding, this Agreement shall not limit or reduce, and the Company hereby
agrees to provide to Executive, any and all rights to indemnification Executive
would otherwise have, to the full extent permitted under applicable law.  In addition, the 

 

20

 

Company
will maintain directors’ and officers’ liability insurance in effect and
covering acts and omissions of Executive. For purposes of this Section 7,
references to the “Company” shall include both the Company and each of its
subsidiaries and/or affiliates for which Executive has acted, acts or will in
the future act in any capacity.  The
provisions of this Section 7 shall survive the termination of Executive’s
employment.

 

8.             Assignability; Binding Effect.  Neither this Agreement nor the
rights or obligations hereunder of the parties hereto shall be transferable or
assignable by Executive, except in accordance with the laws of descent and
distribution and as specified below.  The
Company may assign this Agreement and the Company’s rights and obligations
hereunder, and shall assign this Agreement and such rights and obligations, to
any Successor (as hereinafter defined) which, by operation of law or otherwise,
continues to carry on substantially the business of the Company prior to the
event of succession, and the Company shall, as a condition of the succession,
require such Successor to agree in writing to assume the Company’s obligations
and be bound by this Agreement.  For
purposes of this Agreement, “Successor” shall mean any person that succeeds to,
or has the practical ability to control, the Company’s business directly or
indirectly, by merger or consolidation, by purchase or ownership of voting
securities of the Company or all or substantially all of the Company’s assets,
or otherwise.  The Company may also
assign this Agreement and the Company’s rights and obligations hereunder to any
subsidiary or affiliate of the Company, provided that upon any such assignment
the Company shall remain liable for the obligations to Executive
hereunder.  This Agreement shall be
binding upon and inure to the benefit of Executive, Executive’s heirs,
executors, administrators, and beneficiaries, and shall be binding upon and
inure to the benefit of the Company and its successors and assigns.

 

9.             Complete Understanding; Amendment; Waiver.  This Agreement constitutes the
complete understanding between the parties with respect to the employment of
Executive and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof,
and no statement, representation, warranty or covenant has been made by either
party with respect thereto except as expressly set forth herein.  This Agreement shall not be modified, amended
or terminated except by a written instrument signed by each of the
parties.  Any waiver of any term or
provision hereof, or of the application of any such term or provision to any
circumstances, shall be in writing signed by the party charged with giving such
waiver.  Waiver by either party of any
breach hereunder by the other party shall not operate as a waiver of any other
breach, whether similar to or different from the breach waived.  No delay by either party in the exercise of
any rights or remedies shall operate as a waiver thereof, and no single or
partial exercise by either party of any such right or remedy shall preclude
other or further exercise thereof.

 

10.           Severability.  If any provision of this Agreement or the
application of any such provision to any person or circumstances shall be
determined by any court of competent jurisdiction or arbitration panel to be
invalid or unenforceable to any extent, the remainder of this Agreement, or the
application of such provision to such person or circumstances other than those
to which it is so determined to be invalid or unenforceable, shall not be
affected thereby, and each provision hereof shall be enforced to the fullest
extent permitted by law.  If any
provision of this Agreement, or any part thereof, is held to be invalid or
unenforceable because of the scope or duration of or the area covered by such
provision, the parties hereto agree that the court or 

 

21

 

arbitration
panel making such determination shall reduce the scope, duration and/or area of
such provision (and shall substitute appropriate provisions for any such
invalid or unenforceable provisions) in order to make such provision
enforceable to the fullest extent permitted by law and/or shall delete specific
words and phrases, and such modified provision shall then be enforceable and
shall be enforced.  The parties hereto
recognize that if, in any judicial or arbitral proceeding, a court or
arbitration panel shall refuse to enforce any of the separate covenants contained
in this Agreement, then that invalid or unenforceable covenant contained in
this Agreement shall be deemed eliminated from these provisions to the extent
necessary to permit the remaining separate covenants to be enforced. In the
event that any court or arbitration panel determines that the time period or
the area, or both, are unreasonable and that any of the covenants is to that
extent invalid or unenforceable, the parties hereto agree that such covenants
will remain in full force and effect, first, for the greatest time period, and
second, in the greatest geographical area that would not render them
unenforceable.

 

11.           Survivability.  The provisions of this Agreement which by
their terms call for performance subsequent to termination of Executive’s
employment hereunder shall so survive such termination, whether or not such
provisions expressly state that they shall so survive.

 

12.           Governing Law; Arbitration.

 

(a)           Governing Law.  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 or where
the parties are located at the time a dispute arises.

 

(b)           Arbitration.  Executive and the Company agree that, except
for claims for Workers’ Compensation, Unemployment Compensation, and any other
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, and/or termination of employment,
with 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 Section 5.  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 Section 5, 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 Section 5, as well as any claim, counterclaim or crossclaim
brought by 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 or venue and any defense of inconvenient
forum.  Thus, except for the claims
carved out above, this agreement to arbitrate 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 

 

22

 

gender,
age, national origin, sexual orientation, marital status, disability, or any
other protected status.

 

(c)           Notwithstanding any provision in this Section 12,
Executive shall be entitled to seek in any court of competent jurisdiction
specific performance of Executive’s right (which is hereby acknowledged and
agreed to by the Company) to be paid all compensation, benefits and other
amounts required to be paid during the pendency of any dispute or controversy
arising under or in connection with this Agreement, which, to the extent such
amounts are paid by the Company shall be credited against the total amounts
otherwise finally determined to be owed to Executive pursuant to this
Agreement.

 

(d)           All
reasonable costs and expenses (including, without limitation, reasonable fees
and expenses of counsel) incurred by Executive in seeking to enforce rights
pursuant to this Agreement shall be paid by the Company on behalf of Executive
(or, if already paid by Executive, reimbursed to Executive by the Company) to
the extent that Executive prevails in enforcing such rights before a court of
competent jurisdiction or arbitral tribunal.

 

(e)           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 Section 12(d) hereof, each party shall pay that
party’s own costs and attorney fees, if any. 
Executive understands that he is giving up no substantive rights, and
this Agreement simply governs forum.  The
arbitrators shall apply the same standards a court would apply to award any
damages, attorney fees or costs. 
Executive shall not be required to pay any fee or cost that he would not
otherwise be required to pay in a court action, unless so ordered by the arbitrators.

 

(f)            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 THIS ARBITRATION
PROVISION.

 

13.           Titles and Captions; Section References.  All section/paragraph titles or
captions in this Agreement are for convenience only and in no way define,
limit, extend or describe the scope or intent of any provision hereof.  All references to “Sections” in this
Agreement refer to the application section of this Agreement unless the context
indicates otherwise.

 

14.           Joint Drafting.  In recognition of the fact that the parties
hereto had an equal 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 

 

23

 

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.

 

15.           Notices.  Whenever under this Agreement it becomes
necessary to give notice, such notice shall be in writing, signed by the party
or parties giving or making the same, and shall be served on the person or
persons for whom it is intended or who should be advised or notified, by
Federal Express or other similar overnight service or by certified or
registered mail, return receipt requested, postage prepaid and addressed to
such party at the address set forth below or at such other address as may be
designated by such party by like notice:

 

To the Company:

 

Scientific
Games Corporation

750
Lexington Avenue

New York,
N.Y. 10022

Attention:
General Counsel

 

To Executive:

 

Joseph
R. Wright, Jr.

 

At
the address reflected in the Company’s records.

 

With
a copy to:

 

Stewart Reifler, Esq.

Vedder Price P.C.

1633 Broadway

New York, New York 10019

 

16.           Reimbursement of Expenses of
Executive in Negotiating Agreement.  All reasonable costs and expenses (including,
without limitation, reasonable fees and disbursements of counsel) incurred by
Executive in connection with the negotiation, preparation, execution, and/or
delivery of this Agreement and related documents, and any subsequent amendment
to this Agreement and related documents, shall be paid on behalf of Executive (or,
if already paid by Executive, reimbursed to Executive) promptly by the Company,
and which shall not exceed thirty thousand US
Dollars (US$30,000) with respect to the negotiation, preparation, execution, and/or delivery
of this Agreement and related documents.

 

17.           Controlling Agreement.  If any provision of any agreement,
plan, program, policy, arrangement or other written document between or
relating to the Company and Executive conflicts with any provision of this
Agreement, the provision of this Agreement shall control and prevail.

 

18.           Counterparts.  This Agreement may be executed in two or more counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Agreement.  Delivery of an executed counterpart of a 

 

24

 

signature page to this Agreement by facsimile transmission shall be
as effective as delivery of a manually executed counterpart of this Agreement.

 

[rest of this page intentionally
left blank]

 

25

 

IN WITNESS WHEREOF, each of the parties hereto has
duly executed this Agreement on May 14, 2008, to be deemed effective as of
the date first above written.

 

	
   

  	
  SCIENTIFIC GAMES CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ira H. Raphaelson

  
	
   

  	
  Name:

  	
  Ira
  H. Raphaelson

  
	
   

  	
  Title:

  	
  Vice
  President, General Counsel and

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  /s/ Joseph R. Wright, Jr.

  
	
   

  	
  Name: Joseph R. Wright, Jr.

  

 

26

 

EXHIBIT A

 

[form of equity grant]

 

 

27

 

SCHEDULE 1

 

1.               Member of Board of Directors
of Terremark Worldwide, Inc. (non-executive vice chairman of the board)

 

2.               Member of Board of Directors
of Federal Signal Corporation

 

3.               Member of The Department of
Defense’s Business Board

 

4.               Member of The Department of
Defense’s Science Board Task Force on Interoperability

 

5.               Member of The New York
Economic Club

 

6.               Member of National Security Telecommunications Advisory Committee

 

7.               Member
of Council on Foreign Relations

 

28Exhibit 10.2

 

 

Amendment to Employment Agreement

 

This Amendment to Employment Agreement (this “Amendment”) is made as of
May 1, 2008 (the “Effective Date”) between Scientific Games Corporation, a
Delaware corporation (“SGC” or the “Company”), and A. Lorne Weil (“Executive”)
(collectively the “Parties”).

 

WHEREAS, Executive has
been employed pursuant to an Employment Agreement effective as of January 1,
2006 between the Parties (the “2006 Agreement”) as clarified by a letter
agreement dated as of August 2, 2007 by the Parties regarding amounts
payable under the Company’s Key Executive Deferred Compensation Plan (the “EDCP
Payment Letter”);

 

WHEREAS, Executive has previously been employed by the Company and its
predecessor entities since 1990 under various written and oral agreements;

 

WHEREAS, Section 3(b)(ii) of the 2006 Agreement contemplates
the possibility of Executive providing notice on or before September 1,
2008 of his intention to relinquish the position of Chief Executive Officer but
continue in the position of Chairman of the Board of Directors of SGC with the
same compensation and benefits provided for therein from January 1, 2009
through at least December 31, 2009 and that receipt or giving of such
notice and subsequent change in position shall not constitute “Cause” or “Good
Reason” within the meaning of Section 5 of the 2006 Agreement;

 

WHEREAS, Executive hereby confirms his giving of notice to the Company
pursuant to Section 3(b)(ii) of the 2006 Agreement of his intention
to serve only as Chairman of the Board of SGC effective on January 1, 2009
for the remainder of the initial term of the 2006 Agreement (as such term is
extended hereby until December 31, 2011 or may be automatically extended
thereafter pursuant to Section 2 of the 2006 Agreement as amended by Section 2
hereof);

 

WHEREAS, the Company wishes to take advantage and be assured of the
availability of Executive’s experience, expertise and leadership for a period
extending beyond the initial term of the 2006 Agreement;

 

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 

1.        2006 Agreement Remains In Effect; Definitions.  Except as specifically
provided herein, all terms of the 2006 Agreement shall remain in effect.  References to “this Agreement,” “herein,” “hereof,”
“hereby” and words of similar import in the 2006 Agreement shall refer to the
2006 Agreement as amended by this Amendment and by the EDCP Payment Letter, all
of which shall be read together as a single agreement.  References in the 2006 Agreement to Sections,
Subsections, paragraphs and clauses thereof shall refer to those Sections,
Subsections, paragraphs and clauses as the same are amended by the terms of
this Amendment.  As amended by this
Amendment and the EDCP Payment Letter, the 2006 Agreement is hereby ratified,
confirmed and continued by the Parties. 
Capitalized terms that are used but not defined in this Amendment shall
have the meanings given to them in the 2006 Agreement (as amended by this
Amendment).  The 2006 Agreement, as
amended by the EDCP Payment Letter and this Amendment, is referred to herein as
the “Amended Employment Agreement”.

 

2.        Amendment
to Section 2 of 2006 Agreement. 
The second sentence of Section 2 

 

 

 

 

of the 2006 Agreement is
hereby amended by replacing “December 31, 2009” with “December 31,
2011”.

 

3.        Amendments
to Section 3 of 2006
Agreement.  Section 3
of the 2006 Agreement is hereby
amended and restated in its entirety to read as follows:

 

“3.                        Offices
and Duties

 

a.                               From January 1, 2006
through December 31, 2008, Executive will serve as Chief Executive Officer
of the Company and as Chairman of the Board of Directors of the Company (the “Board
of Directors”), and as an officer or director of any subsidiary or affiliate of
the Company if elected or appointed to any such position by the shareholders or
by the board of directors of such subsidiary or affiliate, as the case may be.

 

b.                               Effective
as of January 1, 2009, Executive will relinquish the role of Chief
Executive Officer of the Company and shall continue to be employed by the Company and provide
services in the capacity of Chairman of the Board of Directors and shall
continue to receive the compensation and benefits provided for herein.   For purposes of Section 409A (as
hereinafter defined), this change in responsibilities is not intended to be a
separation from service during 2009 or the Term.

 

c.                               In
his capacity as Chairman of the Board of Directors and Chief Executive Officer
until December 31, 2008, Executive shall perform such duties and shall
have such responsibilities as are normally associated with such positions and
as otherwise may be assigned to Executive from time to time by the Board of
Directors.  In his capacity as Chairman
of the Board of Directors from and after January 1, 2009, Executive shall
report to the Board and perform such duties and shall have such
responsibilities as are normally associated with such position and shall devote
time to overall strategic and organizational guidance, mergers and
acquisitions, new business development and maintaining contacts with key customers
and other business partners of the Company and its subsidiaries with whom
Executive has established personal relationships; provided, however, that from
and after January 1, 2009, Executive will not (i) be an officer of
the Company or any of its subsidiaries or affiliates, (ii) have employees
reporting to him (other than his personal assistant or in his capacity as a
director) and (iii) be responsible for any business unit or have any
policy making functions with respect to the Company or any of its subsidiaries
or affiliates (other than in his capacity as a director).  Subject to Section 5(d) and to
Executive’s right to continue to receive the compensation and benefits provided
for herein, Executive’s functions, duties and responsibilities are subject to
reasonable diminution from those provided above, as the Board of Directors may
in good faith determine after consultation with Executive.

 

 

 

 

2

 

 

d.                               Executive hereby agrees to
accept such employment and to serve the Company to the best of his ability (i) until
December 31, 2008, in the capacities referred to in Section 3.a
above, devoting substantially all of his business time to such employment or (ii) from
and after January 1, 2009 in his role as Chairman of the Board of
Directors; provided, however, that Executive shall be entitled to (A) manage
his personal investments and otherwise attend to personal affairs, including
family financial and legal affairs, (B) serve on the boards of directors
of other (but, prior to January 1, 2010, not more than three) companies in
addition to the Company and its subsidiaries and affiliates, each in a manner
that does not conflict or unreasonably interfere with his responsibilities
hereunder and (C) from and after January 1, 2009 in his role as
Chairman of the Board of Directors, in addition to the activities referred to
in clauses (A) and (B) above, engage in other professional and
personal activities in compliance with Section 6.”

 

4.     Amendments
to Section 4 of 2006 Agreement. 
Section 4 of the 2006 Agreement is hereby amended as
follows:

 

a.                       The
following proviso is hereby added to the end of the first sentence of Section 4(a) of
the 2006 Agreement:

 

“; provided, however, that,
from and after January 1, 2010, the Base Salary shall be computed in
accordance with the terms of second-to-last sentence of this Section 4(a).”

 

b.        The following proviso is hereby added to the end of the third sentence of
Section 4(a) of the 2006 Agreement:

 

“; provided, however, that the foregoing
shall not apply to Base Salary for years commencing on or after January 1,
2010, which shall be computed in accordance with the second-to-last sentence of
this Section 4(a).”

 

c.        The following sentence is hereby added prior to the last sentence of Section 4(a) of
the 2006 Agreement:

 

“Notwithstanding the foregoing, (x) the
Base Salary for 2010 shall be equal to the product of (I) one million
dollars ($1,000,000.00) multiplied by (II) the sum of 1 plus a fraction
the numerator of which is the difference between the CPI for December 2009
and the CPI for December 2008 and the denominator of which is the CPI for December 2008
(provided, that if such fraction is zero or a negative number, the Base Salary
for 2010 shall be the amount set forth in (I) of this clause (x); (y) the Base Salary for 2011 shall be equal to the
product of (I) one million dollars ($1,000,000.00) multiplied by (II) the
sum of 1 plus a fraction the numerator of which is the difference between the
CPI for December 2010 and the CPI for December 2008 and the
denominator of which is the CPI for December 2008 (provided, that if such
fraction is zero or a negative number, the Base Salary for 2011 shall be the
same as the Base Salary for 2010); and (z) if the Term is extended past December 31,
2011 pursuant to Section 2 hereof, the Base Salary for each 

 

 

 

3

 

 

such one-year extension term, unless
otherwise agreed in writing by Executive and the Company, shall be (I) one
million dollars ($1,000,000.00) multiplied by (II) the sum of 1 plus a
fraction the numerator of which is the difference between the CPI for December of
the year immediately preceding such extension term and the CPI for December 2008
and the denominator of which is the CPI for December 2008 (provided, that
if such fraction is zero or a negative number, the Base Salary for such
extension term shall be the same as the Base Salary for the year immediately
preceding such extension term).”

 

d.        The following proviso is hereby added to the end of the second sentence
of Section 4(b) of the 2006 Agreement:

 

“; provided, however, that from and after January 1,
2010, Executive shall not be eligible to receive incentive compensation in
excess of the Target Bonus but shall in all other respects be entitled to the
benefits provided for in this Section 4(b) even though he shall no
longer be an officer of the Company or any of its subsidiaries or affiliates.”

 

e.        Section 4(c) of
the 2006 Agreement is hereby amended and restated to read in its entirety as
follows:

 

“(c)    Eligibility for Annual Equity Awards and
Participation in Executive Compensation Plans.  Executive shall be eligible to receive an
annual grant of stock options or other equity awards with a value up to 155% of
Executive’s Base Salary, in the sole discretion of the Compensation Committee,
in accordance with the applicable plans and programs for senior executives of
the Company and subject to the Company’s right to at any time amend or
terminate any such plan or program, so long as any such change does not
adversely affect any accrued or vested interest under any such plan or program;
provided, however, that any such annual equity awards made to Executive during
2010 and 2011 (and during any extension terms of this Agreement) shall, unless otherwise
expressly agreed in writing by the Company and Executive, be awarded entirely
in the form of restricted stock units with the vesting schedule (but in no
event longer than five years) and any minimum performance criteria then
generally provided for restricted stock units awarded to senior executives
under such plan or
program and subject to the provisions relating to accelerated vesting and
forfeiture as provided in this Agreement for Normal Course Awards (as
hereinafter defined) and as provided in the applicable award agreement and the
Equity Plan (as hereinafter defined). 
All equity awards made pursuant to this Section 4(c) shall be
Normal Course Awards.  Without limiting
the foregoing, Executive shall be eligible to participate in such plans and programs,
and in other executive compensation plans and programs which are made generally
available by the Company to its senior executives (in accordance with the terms
of such plans and programs and subject to the Company’s right to at any time
amend or terminate any such plan or program) in each case on terms no less
favorable to Executive than the most favorable terms of participation of any
executive of the Company.  For the
avoidance of doubt, without limiting Executive’s right to receive all equity awards
made to Executive after 2009 entirely in the form of restricted stock units, as
provided above, Executive’s participation in any such equity award plan or
program shall be deemed to be on terms no less favorable to Executive than the
most favorable terms of participation of any executive of the Company if the
absolute number or amount of stock options, restricted 

 

 

 

 

4

 

 

stock units, or other equity awards awarded to Executive is at least
equal to the highest absolute number or amount of stock options, restricted
stock units or other equity award (or, for awards made after 2009, the number
of restricted stock units equivalent to such highest absolute number or amount
of stock options or other equity award) awarded in respect of the same period
to (i) through December 31, 2009, any executive of the Company
(regardless of the percentage of Executive’s Base Salary, incentive
compensation or any other compensation or benefit represented by such award) and (ii) after 2009, any executive of the
Company whose compensation is comparable to or less than Executive’s
compensation in respect of such period.”

 

f.        In clause (B) of paragraph 4(d)(iii) of
the 2006 Agreement, the phrase “all such vested restricted stock units shall
fully vest and become non-forfeitable ...” is hereby amended to read “all such
unvested restricted stock units shall fully vest and become non-forfeitable ...”.

 

5.     Definition of “Good Reason”.  Clause (I) of Section 5(d) of
the 2006 Agreement is hereby amended and restated to read in its entirety as
follows:

 

“(I) a material change,
adverse to Executive, in Executive’s positions, titles, offices, or duties as
provided in Section 3, including, without limitation, the failure of the
stockholders of the Company to re-elect Executive to the Board of Directors or
the failure of the Board of Directors of the Company to maintain Executive as
Chairman of the Board of Directors, except, in such case, in connection with
the termination of Executive’s employment for Cause, Total Disability or death;”

 

6.     Accelerated Vesting of Equity.  Notwithstanding anything to the contrary set forth in the 2006 Agreement,
any applicable award agreement or the Equity Plan, (a) stock options
held by Executive as of December 31, 2009, if not then vested and
exercisable, shall become fully vested and exercisable as of December 31,
2009, and any such options shall remain exercisable until the scheduled
expiration date, and, in other respects, all such options shall be governed by
the plans and programs and the agreements and other documents pursuant to which
such options were granted and (b) all deferred stock, restricted stock and
other equity-based awards held by Executive as of December 31, 2009, if
not then vested, will become fully vested and non-forfeitable, and all
restrictions and conditions with respect to such awards shall lapse, and,
except as provided in Section 7 of this Amendment with respect to delivery
of the restricted stock units comprising the Special RSU Grants, all such
awards and arrangements will be settled as of such date without regard to any
stated period of deferral or other restrictions or conditions remaining in
respect of such awards; provided, however, if necessary to comply with Section 409A(a)(2)(B)(i) of
the Code, and applicable administrative guidance and regulations, such
settlement shall be made on the date that is six months plus one day following
the Termination Date.

 

7.     Delivery of Special RSU Grants.

 

a.                       Extended Delivery Schedule.  With regard to the Special
RSU Grants, the Parties agree that delivery to Executive of shares of Company
common stock subject to vested restricted stock units under each such Special
RSU 

 

 

 

 

5

 

 

Grant shall be deferred until,
and paid on or as soon as practicable after, the first business day immediately
following the end of the Term on December 31, 2011 but in no event later
than the tenth business day immediately following such end of the Term (it
being understood that, prior to (but not after) the end of 2009, the portions
of the Special RSU Grants that are not yet vested pursuant to the vesting
schedule set forth in the 2006 Agreement and the applicable RSU Agreement will
be subject to the provisions on accelerated vesting and forfeiture set forth in
the 2006 Agreement and the applicable RSU Agreement until they vest pursuant to
such vesting schedule).

 

b.                       Coordination with Special RSU Grant Provisions.  Section 7(a) hereof shall apply
notwithstanding any provision of the Special RSU Grants (or the 2006 Agreement)
providing for delivery to be made by reason of separation from service or
termination of employment, but shall be subject to any terms of the Special RSU
Grants currently in effect, under which delivery is made upon death or
disability or, a change in control event if such event occurs prior to any
other delivery event under the Special RSU Grant, as the case may be.

 

8.     Amendments to Section 5 of 2006 Agreement.

 

a.        Section 5(d)(ii) Payment.  The
Company agrees to pay Executive on July 1, 2011 a fixed amount
equal to the sum of Executive’s Base Salary and Target Bonus for 2009, plus
interest on such amount at a rate of 6% per annum from January 1, 2010 up
to (but not including) the date of payment (subject to applicable
withholding).  Section 5(d)(ii) of
the 2006 Agreement is hereby deleted in its entirety and replaced by the
notation “(ii) [RESERVED]”, and Executive shall not be entitled to any
payments contemplated thereby (other than the payment described in the
immediately preceding sentence of this Section 8(a)).

 

b.       Treatment of
Certain Other Payments.  The payments referred to in
Sections 8a and 11 of this Amendment, as well as, from and after December 31,
2009 (if Executive’s employment by the Company has not terminated in accordance
with the Amended Employment Agreement on an effective Termination Date prior to
December 31, 2009), the payments referred to in Sections 6 and 7 of this
Amendment, shall be included in the amounts payable pursuant to Section 5(a)(ii) of
the 2006 Agreement and shall be included in the term “Standard Termination
Payments” as defined and used in the 2006 Agreement; provided, however, that,
to the extent there is any inconsistency between the terms of the 2006
Agreement and the terms of this Amendment with respect to the date or dates on
which any such payments are to be made, the timing of such payment(s) shall
be governed by the terms of this Amendment applicable such timing; provided,
further, that, without limiting the terms of the preceding proviso with respect
to timing of payments, this Section 8.b shall not have the effect of
excluding from Section 5(a)(ii) of the 2006 Agreement or from the
definition of “Standard Termination Payment” any payment referred to in Section 6
or 7 of this Amendment that would otherwise be included in such Section 5(a)(ii) and
such definition (or any other provision of Section 5 of the 2006
Agreement) prior to December 31, 2009 under the terms of the 2006
Agreement.

 

 

 

 

 

6

 

 

9.     Additional Clarification of References in Section 4
of 2006 Agreement Regarding Taxes and Section 409A.  Section 4(i) of the 2006 Agreement
is hereby amended and restated to read in its entirety as follows:

 

“(i)               Taxes. 
Payment of all compensation and benefits to Executive specified in this
Agreement shall be subject to all legally required withholdings.  The Parties agree that the references to Section 409A
in Section 4 of this Agreement shall be construed, and any additional post-termination
payments shall be made, subject to the following:  The Company makes no representations
regarding the tax implications of the compensation and benefits to be paid to
Executive under this Agreement, including, without limitation, under Section 409A
and applicable administrative guidance and regulations (the “Regulations”). Section 409A
governs plans and arrangements that provide “nonqualified deferred compensation”
(as defined in Section 409A and the Regulations) which may include, among
others, nonqualified retirement plans, bonus plans, stock option plans,
employment agreements and severance agreements. 
The Company reserves the right to provide compensation and benefits
under any plan or arrangement in amounts, at times and in a manner that minimizes
taxes, interest or penalties as a result of Section 409A.  In addition, in the event any benefits or
amounts paid under this Agreement are deemed to be subject to Section 409A,
including payments under Section 5 of this Agreement, Executive consents
to the Company adopting such conforming amendments as the Company deems
necessary, in its reasonable discretion, to comply with Section 409A,
including, but not limited to the following:

 

a.                       the term “termination of employment,” when used to
refer to an event that causes  payments
to be made other than for death or disability (as defined in the Regulations (“Disability”)),
may be amended so that it means “separation from service” within the meaning
of  Treasury Reg. § 1.409A-1(h)(1),
including the presumptive rule thereunder;

 

b.                       any payments made by reason of “separation from
service” may be deferred until  six
months and one day following separation from service;

 

c.                       (i)  the Company will provide Executive with the
proposed form of release pursuant to Section 5(j) of this Agreement
no later than two days following the Termination Date, and (ii) Executive
will have 21 days to consider the release and, if he executes the release, will
have 7 days after execution to revoke the release, failing which the release
shall become binding, and (iii) payments contingent on such release (if
any) shall be paid eight (8) days after execution (subject to clause 4(i)b
above);

 

d.                       the definition of “change in control,” where it
remains a trigger for the payment of deferred compensation, may be revised to
comply with the definition of “Change of Control” in the Regulations; and

 

e.                       any cash payment made on an after-tax basis that
involves a reimbursement of taxes, including without limitation any that may be
required under Section 5(d)(vii) of this Agreement or Section 11
of the 

 

 

 

 

7

 

 

Amendment to Employment
Agreement dated as of May 1, 2008 between the Company and Executive (the “May 2008
Amendment”), may be made as soon as the Company receives the information
necessary for such purpose, but in no event later than the end of the calendar
year following the year the taxes are remitted to the taxing authority.

 

The provisions of this Section 4(i) shall
apply to all payments and benefits made pursuant to the May 2008
Amendment.”

 

10.      Benefits and Perquisites
Retained during Extended Term. 
Throughout the Term as extended by (and as subject to further extensions
pursuant to) this Amendment, and notwithstanding the change in Executive’s
responsibilities after 2008, Executive will continue to have use of office
space and assistant at the Company’s headquarters in Manhattan and to be
entitled to participate, without discrimination or duplication, in Company
benefit, insurance, retirement, expense reimbursement and other plans, policies
and programs, as provided in Sections 4(c), 4(e), 4(g), 4(h) and 5 of the
2006 Agreement (as amended hereby) and elsewhere, and shall continue to have
use of the Company’s fractional ownership aircraft on the terms and subject to
the conditions set forth in Section 4(f) of the 2006 Agreement,
provided that use of such aircraft shall be coordinated with the Company
beginning in 2009.  In the event that the
terms of any such plans, policies or programs preclude Executive’s
participation with the same Federal income tax treatment as is available for
full-time executives generally, the Company may in its discretion meet its
obligations hereunder by means of alternative arrangements similar to those
contemplated by Section 5(d)(vii) of the 2006 Agreement which
arrangements provide Executive with the benefits to which he would be entitled
under such plans, policies or programs pursuant to the above-mentioned sections
of the 2006 Agreement.

 

11.      SERP and Deferred
Compensation Plan.

 

a.                       Payment Schedule. 
Notwithstanding timing of payment and other provisions of Section 4(h) of
the 2006 Agreement and various provisions relating to timing of payment of
deferred compensation in Section 5 of the 2006 Agreement, and subject to
the requirements of Section 409A as provided for herein, Executive’s SERP
Benefit and amounts accrued as of the relevant date under the Company’s Key
Executive Deferred Compensation Plan and/or any other deferred compensation
plan or agreement of the Company or its subsidiaries or affiliates
(collectively, the “EDCP”) will be paid out in lump sum(s) as follows:

 

(i)                     SERP Benefit:

 

(A) 50% of the
benefit accrued as of December 31, 2005, increased by interest in
accordance with Section 4(h) of the 2006 Agreement to the date of
payment, on November 1, 2009;

 

(B) 25% of the
benefit accrued as of December 31, 2005, increased by interest in
accordance with Section 4(h) of the 2006 Agreement to date of
payment, on November 1, 2010, and

 

 

 

 

 

8

 

 

(C) 25% of the
benefit accrued as of December 31, 2005, increased by interest in
accordance with Section 4(h) of the 2006 Agreement to date of
payment, on November 1, 2011;

 

(ii)      EDCP Amounts:

 

(A) 50% of the
account balance as of October 31, 2009 to be paid on November 1,
2009;

 

(B) 50% of the
account balance remaining as of October 31, 2010, to be paid on November 1,
2010, and

 

(C) 100% of the
account balance remaining as of October 31, 2011, to be paid on November 1,
2011.

 

b.        Coordination with EDCP and SERP Provisions.  Section 11a hereof shall apply
notwithstanding any provision of the SERP or EDCP (or the 2006 Agreement)
providing for payment to be made by reason of 
separation from service or termination of employment, but shall be
subject to any terms of the SERP or EDCP (or the 2006 Agreement) currently in
effect, under which payments are made upon death or Disability or, in the case
of the EDCP, a change in control event if such event occurs prior to any other payment
event under the SERP or EDCP (or the 2006 Agreement), as the case may be.

 

c.        EDCP Payment Procedures.   Payment under the
EDCP shall be made in the manner set forth in Paragraphs 3 and 4 and the final
unnumbered paragraph of the EDCP Payment Letter, applied by substituting the
applicable respective dates of  payment
specified in Sections 11a or 11b hereof, or any extended payment date resulting
from the application of Section 12 hereof, for the date of termination of
employment and by disregarding (as no longer applicable by reason of the
substitution of a fixed payment date for the prior payment terms based on
termination of employment) paragraphs 1 and 2 of the EDCP Payment Letter
(including, without limitation, the references to paragraph 2 in the parenthetical
clause at the end of paragraph 3 of the EDCP Payment Letter, which clause shall
be disregarded as no longer applicable).

 

12.      Section 162(m).

 

a.        Further Deferral under the Regulations. Notwithstanding
anything in Section 11 hereof or any other provision of this Amendment to
the contrary, in the event that Executive’s total compensation is required to
be reported to stockholders under the Exchange Act by reason of him being among
the four highest compensated officers for the taxable year (other than the
chief executive officer), and therefore the Company would be denied a deduction
for Executive’s SERP and EDCP payments or any other payments of deferred
compensation (as defined in Section 409A and the Regulations) under Section 162(m) of
the Code (“Section 162(m)”), then such payments will be deferred until the
Company first determines that Executive is no longer an employee whose
compensation is required to be so reported (but in no event later than the
earlier of (i) the first date on which the Company makes a
filing with the Securities and 

 

 

 

 

9

 

 

Exchange Commission pursuant to the Exchange Act or
the rules and regulations promulgated thereunder that does not include
Executive among the employees whose compensation is so reported and (ii) January 1
of the year immediately following the year in which Executive’s employment by
Company is terminated).  In such event,
the crediting of interest on amounts payable on the SERP Benefit in accordance
with Section 4(h) of the 2006 Agreement shall continue until payment,
and account balances under the EDCP shall continue to be adjusted and/or
credited with interest as contemplated by the EDCP Payment Letter.

 

b.        Pro-rata Bonus on Termination to Remain Performance-Based.
Notwithstanding any other provision of the 2006 Agreement or this Agreement,
the pro-rata bonus calculated for Executive upon a termination (other than for
death or disability) pursuant to Section 5(a)(iv) and Section 5(d)(iii) of
the 2006 Agreement shall only be payable to the extent that such bonus would
have been payable had Executive remained in employment during the entire year
in which the termination occurs and the performance goals, if any, are
met.  Such pro-rata bonus shall be payable
between January 1 and March 15 following the end of the fiscal year
in which the termination occurs.

 

13.      Indemnification.  Notwithstanding any subsequent change in the
Company’s certificate of incorporation or bylaws or policy of insurance, the
Parties agree that the indemnification provided under Section 8 of the
2006 Agreement (as amended hereby) shall be no less favorable to Executive than
the scope and nature of the indemnification that is available under Section 8
of the 2006 Agreement and under the Company’s certificate of incorporation and
bylaws and insurance, as each is in effect as of the date of this Amendment;
and the terms of this Section 13 shall constitute contractual rights of
Executive and contractual obligations of the Company independent of, and in
addition to, any rights of Executive and obligations of the Company under the
Company’s certificate of incorporation and bylaws and any other plans, policies
or programs of the Company and its subsidiaries and affiliates.

 

14.      Car and Driver.
 The Company will make available the use
of a car and driver to Executive during the remainder of 2008 and 2009.

 

15.      Restrictive Covenants.  The Parties confirm that the provisions of Section 6
of the 2006 Agreement shall continue during the Term as extended hereby and any
further extension thereof and that the non-competition and other
post-employment provisions of Section 6 of the 2006 Agreement shall
continue for two years following the end of such Term (as the same may be so
extended).

 

16.      Governing Law.  This Amendment 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 or where the parties are located at the time a
dispute arises.

 

17.      Titles and Captions.  All paragraph titles or captions in this
Amendment are for convenience only and in no way define, limit, extend or
describe the scope or intent of any provision hereof.

 

18.      Reimbursement of Expenses
of Executive in Negotiating Agreement.  All 

 

 

 

 

10

 

 

reasonable costs and expenses (including, without
limitation, reasonable fees and disbursements of counsel) incurred by Executive
in connection with the negotiation, preparation, execution, or delivery of this
Amendment shall be paid on behalf of Executive (or, if already paid by
Executive, reimbursed to Executive) promptly by the Company in an amount up to
thirty thousand U.S. Dollars ($30,000).

 

19.      Counterparts.  This Amendment may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same instrument.  Delivery of an executed counterpart of a
signature page to this Amendment by facsimile transmission shall be as
effective as delivery of a manually executed counterpart of this Amendment.

 

IN WITNESS WHEREOF, each
of the parties hereto has duly executed this Amendment on May 12, 2008, to
be deemed effective as of the date first above written.

 

 

	
   

  	
  SCIENTIFIC GAMES
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ira H. Raphaelson

  
	
   

  	
  Name:

  	
  Ira H. Raphaelson

  
	
   

  	
  Title:

  	
  Vice President, General
  Counsel and

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ A. Lorne Weil

  
	
   

  	
  Name:

  	
  A. Lorne Weil

  

 

 

 

 

 

 

11

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