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SUPERSEDING EMPLOYMENT, SEPARATION, AND GENERAL RELEASE AGREEMENT

Release Agreement

SUPERSEDING EMPLOYMENT, SEPARATION, AND GENERAL RELEASE AGREEMENT You are currently viewing:
This Release Agreement involves

SCIENTIFIC GAMES CORPORATION | SCIENTIFIC GAMES INTERNATIONAL, INC

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Title: SUPERSEDING EMPLOYMENT, SEPARATION, AND GENERAL RELEASE AGREEMENT
Date: 8/11/2008
Industry: CASINO     Sector: SERVIC

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Exhibit 10

Exhibit 10.7

 

SUPERSEDING

EMPLOYMENT, SEPARATION, AND GENERAL RELEASE AGREEMENT

 

This Superseding Employment, Separation, Non-Competition and General Release Agreement (this “Agreement”) is made and entered into as of the 1st day of July, 2008 (“Effective Date”), by and between SCIENTIFIC GAMES INTERNATIONAL, INC., a Delaware corporation (the “Company”), which is a subsidiary of SCIENTIFIC GAMES CORPORATION, a Delaware corporation (“SGC”), and William J. Huntley (“Executive”).

 

W I T N E S S E T H

 

WHEREAS, Executive has been employed pursuant to various agreements most recently superseded by an Employment Agreement with the Company entered into as of August 1, 2006 and now in effect (“Employment Agreement”);

 

WHEREAS, the Company and Executive desire that this Agreement modify and supersede the Employment Agreement to the extent specifically provided for herein;

 

WHEREAS, the Company and Executive agreed that he would begin transitioning some of his management responsibilities in 2007 without prejudice to his rights under the Employment Agreement;

 

WHEREAS, the Company and Executive wish to modify the terms of Executive’s Employment Agreement so that the Company may retain the benefit of Executive’s historic knowledge of and perspective on matters at the Company and that Executive may obtain certain benefits not presently available under the Employment Agreement; and

 

WHEREAS, Executive and the Company wish to settle and resolve all potential disputes, actions, lawsuits, charges and claims that the Executive has or may have against the Company and that the Company may have against him to the fullest extent permitted by law and without any admission of liability or wrongdoing on either part.

 

NOW THEREFORE, in consideration of the recitals and the mutual promises, covenants and agreements set forth herein, the parties covenant and agree as follows:

 

1.    Term.  This Agreement shall consist of two periods as follows:

 

a.             a transition period beginning July 1, 2008 and ending February 1, 2009 (“Transition Period”); and

 

b.             a severance period following the conclusion of the Transition Period (“Severance Period”).

 

2.    Consideration to Executive.  Except for any payments or benefits Executive may receive during the Initial Period pursuant to his participation in the Company’s benefit plans, programs and arrangements, including group insurance benefits, 401(k) plan, stock ownership plans, and

 



 

such other plans and programs generally provided to employees, and subject to the terms and conditions set forth therein, Executive acknowledges and agrees that the payments described in this Agreement fulfill any and all of the Company’s obligations to him under any contract, bonus, incentive compensation, severance or separation plan or any other plan or arrangement, and Executive specifically acknowledges and agrees that he is entitled to no other compensation payments or benefits from the Company of any kind or nature whatsoever, except as otherwise expressly provided in this Agreement.  Notwithstanding the foregoing, Executive is not waiving or releasing any claims to any vested benefits.

 

In consideration of the covenants undertaken herein by Executive, and for other good and valuable consideration, receipt of which is hereby acknowledged, and in full and complete consideration for Executive’s promises, covenants and agreements set forth in this Agreement, the Company shall provide the following:

 

a.

 

During the Transition Period:

 

 

 

 

 

i.

 

Base Salary. Executive’s Base Salary shall continue during the Initial Period at the rate of Five Hundred and Fifty Thousand Dollars ($550,000) per annum, payable 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;

 

 

 

 

 

ii.

 

Incentive Compensation. Executive will remain eligible for incentive compensation at the rate set forth in Paragraph 4(b) of the Employment Agreement as determined by the Compensation Committee of the Board of Directors and paid in accordance with the procedures under such program no later than March 31, 2009 which, for the avoidance of doubt, includes the cash component of Executive’s 2008 bonus;

 

 

 

 

 

iii.

 

Equity, Health and Welfare Benefits. Executive shall be entitled to participate in the MICP and in all medical insurance, group health, disability, life, 401(k) and other benefits and plans as generally provided by the Company to its executive employees; and

 

 

 

 

 

iv.

 

Expense Reimbursement. The Company shall reimburse Executive for reasonable business expenses associated with travel under this Agreement attendant to requests for same and in accordance with the policies and procedures of the Company.

 

 

 

 

 

 

 

 

 

b.           Separation Benefits. At 11:59 pm.on February 1, 2009, Executive’s employment shall terminate and he shall be entitled to receive the following “Separation Benefits” which monies will be paid within thirty (30) days of termination of employment unless specifically required to be paid at a later time as set forth below to comply with Internal Revenue Code, as amended  (“IRC”) Section 409A, and subject to such deductions or amounts to be withheld as required by applicable law and regulations:

 

2



 

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i.

 

any accrued but unpaid Base Salary for services rendered to the date of termination will be paid in accordance with the Company’s regular payroll policies;

 

 

 

ii.

 

all vested nonforfeitable amounts owing or accrued at the date of termination under the Company’s benefit plans, programs and arrangements in which Executive theretofore participated will be paid under the terms and conditions of such plans, programs and arrangements (and agreements and documents thereunder), including but not limited to unused vacation;

 

 

 

iii.

 

reasonable business expenses incurred by Executive prior to termination of employment shall be reimbursed in accordance with the Company’s standard policies and procedures; provided, however, that Executive must submit vouchers for any such expenses in accordance with the Company’s standard procedures within ten (10) business days of his last day of employment;

 

 

 

iv.

 

all outstanding equity interests (restricted stock units and options) which have been granted to Executive shall immediately be vested, deliverable and exercisable in accordance with and otherwise governed by SGC’s stock option plans, including exercise within ninety (90) days of vesting;

 

 

 

v.

 

$2,881,806.25 representing the value of the SERP on December 31, 2004, which sum is grandfathered under IRS Section 409A, subject to applicable tax withholding;

 

 

 

vi.

 

six months and one day after date of Executive’s termination of employment, an additional sum of $1,556,365.09,representing the difference between: (i) the value of the SERP on February 1, 2009; and (ii) the amount paid to Executive under Section 2(b)(v) above. The valuation of the SERP as of the date of termination shall be based upon prior valuation of $3,788,461 as of December 31, 2005, adjusted from that date by an amount calculated at 4% simple, annual interest through February 1, 2009; and

 

 

 

vii.

 

the sum of nine hundred and thirty thousand five hundred dollars ($930,500.00) consisting of: