UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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SCIENTIFIC GAMES CORPORATION
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April 26, 2021
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of Scientific Games Corporation to be held at 2:30 p.m. PDT, with access beginning at 2:00 p.m., on Wednesday, June 9, 2021. This year’s annual meeting will be a virtual meeting of stockholders. We have designed the format of the virtual annual meeting to ensure that stockholders are afforded the same rights and opportunities to participate as they would at an in-person meeting, using online tools to ensure stockholder access and participation. In order to attend the meeting, you must pre-register at http://viewproxy.com/ScientificGamesCorp/2021/ by June 8, 2021 at 11:59 p.m. EDT. You will be able to attend the annual meeting and vote during the annual meeting via a live webcast by visiting http://viewproxy.com/ScientificGamesCorp/2021/vm.
At the meeting, we will be electing ten members of our Board of Directors and conducting an advisory vote to approve named executive officer compensation. We will also be seeking the ratification of the amendment, dated as of June 16, 2020, to our amended and restated regulatory compliance protection rights plan, extending the term of the plan, which was designed to strengthen our ability to secure and maintain our good standing with respect to our licenses, contracts, franchises and other regulatory approvals, as well as approval of an amendment and restatement to our 2003 Incentive Compensation Plan to increase the shares authorized for issuance and an amendment to our Employee Stock Purchase Plan to expand the employees who are able to participate. Finally, we will be asking our stockholders to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm. These matters are described in detail in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.
Whether or not you plan to attend the annual meeting, we encourage you to vote and submit your proxy in advance of the meeting using one of the advance voting methods described in the accompanying materials.
We look forward to hosting you at the annual meeting.

Sincerely,
COTTLESIGNATURE1.JPG
Barry L. Cottle
President and Chief Executive Officer

The accompanying Proxy Statement is dated April 26, 2021, and is first being mailed to our stockholders about or before April 28, 2021.




SCIENTIFIC GAMES CORPORATION
6601 Bermuda Road
Las Vegas, NV 89119
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
Notice is hereby given that the annual meeting of stockholders of Scientific Games Corporation (the “Company”) will be held at 2:30 p.m. PDT on Wednesday, June 9, 2021, solely online via the Internet via a live webcast, for the following purposes:
1.To elect ten members of the Company’s Board of Directors to serve for the ensuing year and until their respective successors are duly elected and qualified.
2.To approve, on an advisory basis, the compensation of the Company’s named executive officers.
3.To ratify an amendment of the Company’s regulatory compliance protection rights plan to extend the term of the plan, which was previously adopted in an effort to protect stockholder value by strengthening the Company’s ability to secure and maintain the Company’s good standing with respect to its licenses, contracts, franchises and other regulatory approvals.
4.To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.
5.To approve an amendment and restatement of the Company’s 2003 Incentive Compensation Plan to increase the number of shares of stock authorized for issuance thereunder.
6.To approve an amendment of the Company’s 2016 Employee Stock Purchase Plan to expand the employees who are eligible to participate therein.
7.To consider and act upon any other matter that may properly come before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on April 12, 2021 (the “record date”) are entitled to receive notice of and to vote at the meeting and any adjournment thereof.
Access to the Virtual Meeting. The virtual meeting will begin promptly at 2:30 p.m. PDT. Online access to the virtual meeting will open 30 minutes prior to the start of the annual meeting to allow time for attendees to log in and test their device’s audio system.
Log-in Instructions. In order to attend the annual meeting, you must pre-register at http://viewproxy.com/ScientificGamesCorp/2021/ by June 8, 2021 at 11:59 p.m. EDT.
Submitting Questions. Questions may be submitted during registration.
Voting Prior to or at the Annual Meeting. An online portal is available to stockholders at www.proxyvote.com where stockholders of record as of the record date can view and download our proxy materials and 2020 Annual Report and vote their shares in advance of the annual meeting. Stockholders of record as of the record date may vote their shares during the annual meeting (up until the closing of the polls) by following the instructions provided during the meeting.
Technical Assistance. Technical assistance is available by e-mailing virtualmeeting@viewproxy.com or dialing the toll-free number 1-866-612-8937.
Whether or not you plan to attend the annual meeting, the Company urges stockholders of record as of the record date to vote and submit their proxy in advance of the meeting using one of the advance voting methods (see page 1 of the accompanying Proxy Statement for additional details).



Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to be held on June 9, 2021:

The Proxy Statement and 2020 Annual Report will be available about
or before April 28, 2021, 2021 through the Investors link on our website at
www.scientificgames.com or through www.proxyvote.com.

Dated: April 26, 2021
By Order of the Board of Directors
IMAGE2.JPG

Michael C. Eklund
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary



TABLE OF CONTENTS

Appendix A:
Appendix B:
Appendix C:
Appendix D:
Appendix E:
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SCIENTIFIC GAMES CORPORATION
6601 Bermuda Road
Las Vegas, NV 89119
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation by the Board of Directors (the “Board”) of Scientific Games Corporation (“Scientific Games,” the “Company,” “we” or “us”) of proxies to be voted at the annual meeting of stockholders to be held at 2:30 p.m. PDT on Wednesday, June 9, 2021, solely online via the Internet via a live webcast, and any adjournment or postponement of the meeting, for the purposes set forth in the Notice of Annual Meeting of Stockholders.
Notice and Access to Proxy Materials
We expect our proxy materials, including this Proxy Statement and our 2020 Annual Report, to be made available to stockholders about or before April 28, 2021 through the Investors link on our website at www.scientificgames.com or through www.proxyvote.com. In accordance with the rules of the Securities and Exchange Commission (“SEC”), most stockholders will not receive printed copies of these proxy materials unless they request them. Instead, most stockholders will receive by mail a “Notice of Internet Availability of Proxy Materials” that contains instructions as to how they can view our materials online, how they can request copies be sent to them by mail or electronically by email and how they can vote online (the “Notice”).
Stockholders Entitled to Vote
All stockholders of record at the close of business on April 12, 2021 are entitled to vote at the meeting. At the close of business on April 12, 2021, 96,038,687 shares of common stock were outstanding. Each share is entitled to one vote on all matters that properly come before the meeting.
Voting Procedures
    You may vote your shares by proxy without attending the meeting. You may vote your shares by proxy over the Internet by following the instructions provided in the Notice, or, if you receive printed proxy materials, you can also vote by mail or telephone pursuant to instructions provided on the proxy card. If you are voting over the Internet or by telephone, you will need to provide the control number that is printed on the Notice or proxy card that you receive.
If you are the record holder of your shares, you may also vote your shares during the annual meeting (up until the closing of the polls) by following the instructions provided during the annual meeting. If you are not the record holder of your shares (i.e., they are held in “street” name by a broker, bank or other nominee), you must first obtain a proxy issued in your name from the record holder giving you the right to vote the shares at the meeting.
Meeting Format
The 2021 annual meeting of stockholders will be a virtual meeting format due to public meeting restrictions and continued health concerns related to the COVID-19 pandemic. Stockholders will only be able to access the annual meeting virtually. The Company has designed the format of the virtual annual meeting to ensure that stockholders are afforded the same rights and opportunities to participate as they would at an in-person meeting, using online tools to ensure stockholder access and participation. More information about the virtual annual meeting, including how to participate, is provided here in this Proxy Statement and on www.scientificgames.com.
Voting Matters
Stockholders are being asked to vote on the following matters at the annual meeting:

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Proposal Board’s Recommendation
Proposal 1: Election of Directors (page 4)
FOR each Nominee
The Board and the Nominating and Corporate Governance Committee believe that the ten director nominees possess a combination of qualifications, experience and judgment necessary for a well-functioning Board and the effective oversight of the Company.



Proposal 2: Approval, on an Advisory Basis, of the Compensation of the Company’s Named Executive Officers (page 50)
FOR
The Company has designed its executive compensation program to attract and retain executive talent, foster excellent business performance and align compensation with the long-term interests of our stockholders. The Board and the Compensation Committee value stockholders’ opinions and will take into account the outcome of the advisory vote when considering future executive compensation decisions.



Proposal 3: Ratification of an Amendment to Extend the Term of the Company’s Regulatory Compliance Protection Rights Plan (page 52)
FOR
The Company entered into an amendment, on June 16, 2020, to extend the term of the Company’s amended and restated regulatory compliance protection rights plan, which was previously adopted in an effort to protect stockholder value by strengthening the Company’s ability to secure and maintain its good standing with respect to its licenses, contracts, franchises and other regulatory approvals. As a matter of good corporate practice, stockholders are being asked to ratify the amendment extending the term of the Company’s regulatory compliance protection rights plan.

Proposal 4: Ratification of the Appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s Independent Registered Public Accounting Firm (page 57)
FOR
The Audit Committee has appointed Deloitte to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2021. As a matter of good corporate governance, stockholders are being asked to ratify the Audit Committee’s appointment of Deloitte.
Proposal 5: Approval of an amendment and restatement of the Company’s 2003 Incentive Compensation Plan (as currently amended and restated, the “2003 Plan”) (page 59)
FOR
The Board and the Compensation Committee have approved an amendment and restatement of the 2003 Plan to increase the number of shares available under the 2003 Plan by 3,500,000 shares. The Company is asking stockholders to approve the amendment and restatement of the 2003 Plan so that the Company will be able to continue to, among other things, attract, retain, motivate and reward executives, employees, directors and other persons who provide services to the Company and encourage long-term service by such individuals.
Proposal 6: Approval of an amendment of the Company’s 2016 Employee Stock Purchase Plan (the “ESPP”) (page 69)
FOR
The Board and the Compensation Committee have approved an amendment and restatement of the ESPP that, among other things, expands the employees who are entitled to participate therein. The Company is asking stockholders to approve this expansion of the ESPP because the Company believes that the ESPP helps the Company retain and motivate eligible employees and helps further align the interests of eligible employees with those of the Company’s stockholders.
All valid proxies received prior to the meeting will be voted in accordance with the instructions specified by the stockholder. If a proxy card is returned without instructions, the persons named as proxy holders on your proxy card will vote in accordance with the above recommendations of the Board.
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With respect to any other matter that properly comes before the meeting, the proxy holders will vote as recommended by the Board or, if no recommendation is given, in their own discretion.
Changing Your Vote
A stockholder may revoke a proxy at any time prior to its being voted by delivering written notice to the Corporate Secretary of the Company, by delivering a properly executed later-dated proxy (including over the Internet or by telephone), or by voting at the meeting.
Quorum
The presence, including by proxy (regardless of whether the proxy has authority to vote on all matters), of the holders of a majority of the shares entitled to vote at the meeting constitutes a quorum for the transaction of business.
Vote Required
Assuming a quorum is present, directors will be elected (Proposal 1) by a plurality of the votes cast in person or by proxy at the meeting.
Each of the other proposals requires the affirmative vote of a majority of the shares entitled to vote represented at the meeting.
Effect of Withheld Votes or Abstentions
If you “WITHHOLD” your vote in the election of directors or “ABSTAIN” (rather than vote “FOR” or “AGAINST”) with respect to any other proposal, your shares will count as present for purposes of determining whether a quorum is present. Withholding your vote with respect to any of the director nominees will have no effect on the outcome of the election of directors (Proposal 1), and abstaining will have the effect of a vote against the other proposals (Proposals 2, 3, 4, 5 and 6).
Effect of Broker Non-Votes
A broker “non-vote” occurs when a broker or nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or nominee does not have discretionary voting power on that item and has not received specific instructions from the beneficial owner. If any broker “non-votes” occur at the meeting, the broker “non-votes” will count for purposes of determining whether a quorum is present, will have no effect on the outcome of the election of directors (Proposal 1) and will have the effect of a vote against the advisory vote on approval of named executive officer compensation (Proposal 2), the ratification of an amendment to extend the term of our regulatory compliance protection rights plan (Proposal 3), approval of an amendment and restatement to our 2003 Plan to increase the shares authorized for issuance thereunder (Proposal 5) and approval of an amendment of our ESPP to expand the employees entitled to participate therein (Proposal 6). A broker or other nominee holding shares for a beneficial owner may not vote these shares with respect to the election of directors (Proposal 1), the advisory vote on approval of named executive officer compensation (Proposal 2), the ratification of an amendment to extend the term of our regulatory compliance protection rights plan (Proposal 3), approval of an amendment and restatement to our 2003 Plan to increase the shares authorized for issuance thereunder (Proposal 5) or approval of an amendment of our ESPP to expand the employees entitled to participate therein (Proposal 6) without specific instructions from the beneficial owner as to how to vote with respect to such proposals. Brokers and other nominees will have discretionary voting power to vote without instructions from the beneficial owner on the ratification of the appointment of our independent registered public accounting firm (Proposal 4) and, accordingly, your shares may be voted by your broker or nominee on Proposal 4 without your instructions.
Our Relationship with SciPlay Corporation
On May 7, 2019, SciPlay Corporation (“SciPlay”) completed an initial public offering (the “IPO”) of an 18.0% minority interest in our Social gaming business, after giving effect to the underwriters’ partial exercise of their over-allotment option on June 4, 2019. SciPlay has two classes of common stock: Class A common stock, which is traded on The NASDAQ Stock Market under the symbol “SCPL”, and Class B common stock. As of December 31, 2020, we owned all of the outstanding Class B common stock, which represents approximately 81.9% of SciPlay’s total outstanding shares of common stock and approximately 97.8% of the combined voting power of both classes of SciPlay’s outstanding common stock. Accordingly, we continue to control shares representing a majority of the combined voting power in SciPlay and continue to have a controlling financial interest in SciPlay subsequent to the IPO.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Board is elected by our stockholders to oversee the management of the business and affairs of the Company. The Board serves as the ultimate decision-making body of the Company, except for those matters reserved for or shared with stockholders. The Board appoints our executives, who are charged with conducting the business and affairs of the Company, subject to oversight by the Board.
Nominees For Election
On April 27, 2020, the Board decreased the size of the Board from eleven to ten directors, effective simultaneously with the election of directors at the 2020 annual meeting. The Board has nominated for election as a director to the Board the ten persons named below to serve for a one-year term until the next annual meeting of stockholders of the Company and until their successors have been duly elected and qualified or until their earlier death, resignation or removal. Except for Ms. Shanks, each of the director nominees served as a director during 2020 and is presently serving as a director. Ms. Shanks was recommended for consideration by the Nominating and Corporate Governance Committee by Messrs. Odell and Cottle.
On September 14, 2020, the Company announced that a group of long-term institutional investors, including highly credentialed gaming industry investor Caledonia Investments, reached an agreement to acquire a 34.9% stake in the Company from MacAndrews & Forbes Incorporated (“MacAndrews & Forbes”) at a price of $28.00 per share (the “MafCo Transaction”). The MafCo Transaction was completed on October 27, 2020, with no investor owning more than 9.9% of the Company’s shares as a result. In connection with the MafCo Transaction, the Company implemented a series of governance changes and enhancements, including refreshment of the Board. The existing stockholders’ agreement with MacAndrews & Forbes was terminated in connection with the transaction and all rights held by MacAndrews & Forbes, other than registration rights, are no longer in effect. As a result, MacAndrews & Forbes no longer holds any rights to appoint directors to our Board.
The reconstituted Board currently consists of all directors elected at the Company’s 2020 annual meeting, other than the MacAndrews & Forbes representatives, as well as four new directors. Former Aristocrat Chief Executive Officer Jamie Odell, along with former Aristocrat Chief Financial Officer Antonia Korsanos, were elected to the Board effective as of September 16, 2020 as Executive Chair and Executive Vice Chair, respectively, and were joined on the Board by the former Chief Executive Officer of Barclays Bank Plc. and President of Barclays International, Timothy Throsby, and Chairman of REA Group Limited, HT&E Limited, and Rugby Australia Limited and Deputy Chairman of Magellan Financial Group, Hamish McLennan, who were appointed as independent directors effective October 1, 2020 and October 29, 2020, respectively.
The Board recommends that you vote in favor of the election of each of the nominees named below as directors of the Company for the ensuing year, and the persons named as proxies on the enclosed proxy card will vote the proxies received by them for the election of each of the nominees unless otherwise specified on those proxy cards. All of the nominees have indicated a willingness to serve as directors. However, if any nominee becomes unavailable to serve before the election, proxies may be voted for a substitute nominee selected by the Board, or the Board may decide to reduce the number of directors.
The name, age (as of April 2, 2021), business experience and certain other information regarding each of the nominees for director are set forth below.
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Name

Age

Position with the Company

Director Since
Jamie R. Odell 62 Director (Executive Chair) 2020
Barry L. Cottle 59 Director; President and Chief Executive Officer 2018
Antonia Korsanos 51 Director (Executive Vice Chair) 2020
Jack A. Markell 60 Director 2019
Hamish R. McLennan 54 Director 2020
Michael J. Regan 78 Director 2006
Timothy Throsby 54 Director 2020
Maria T. Vullo 57 Director 2019
Kneeland C. Youngblood 65 Director 2018
Virginia E. Shanks 60 Nominee N/A
Jamie R. Odell has served as Executive Chair of the Board since September 2020 and has served as a consultant to the Company with the title of Special Advisor to the Chairman and CEO since May 2019. He previously served as Chief Executive Officer and Managing Director of Aristocrat Leisure Limited (“Aristocrat”) from May 2009 to February 2017. Prior to joining Aristocrat, Mr. Odell held senior executive roles in the global beverage industry.
Barry L. Cottle has served as President and Chief Executive Officer since June 2018. Mr. Cottle has also served as Executive Chairman of the Board of Directors of SciPlay since April 2019 (see “Our Relationship with SciPlay Corporation” for information on our relationship with SciPlay). Mr. Cottle joined the Company as Chief Executive, SG Interactive, in August 2015 to lead the strategy and growth plans of the Interactive group. Before joining the Company, Mr. Cottle served as Vice Chairman of Deluxe Entertainment Services Group Inc. from February 2015 until August 2015 while concurrently serving as Senior Vice President of Technology at MacAndrews & Forbes from February 2015 until August 2017, where he helped drive digital innovation. Prior to that, he was the Chief Revenue Officer and Executive Vice President - Games for Zynga Inc. from January 2012 until October 2014, where he led corporate and business development, strategic partnerships, distribution, marketing and advertising and ultimately the Social Casino group. Previously, Mr. Cottle served as the Executive Vice President - Interactive for Electronic Arts Inc. from August 2007 to January 2012. Earlier in his career, Mr. Cottle served as the Founder/Chief Executive Officer of Quickoffice, Inc.; Chief Operating Officer of Palm, Inc.; and Senior Vice President of Disney TeleVentures, a division of The Walt Disney Company dedicated to creating interactive online/TV experiences.
Antonia Korsanos has served as Executive Vice Chair of the Board since September 2020 and has served as a consultant to the Company with the title of Advisor to the CEO since July 2019. Previously, Ms. Korsanos served as the Chief Financial Officer of Aristocrat Leisure Limited (“Aristocrat”) from 2009 to 2018 and Company Secretary from 2011 to 2018. Prior to joining Aristocrat, Ms. Korsanos held senior leadership roles in the consumer goods industry, including at Goodman Fielder and Kellogg’s. Ms. Korsanos has served as a director of Crown Resorts Limited since May 2018, Treasury Wine Estates Limited since April 2020, and Webjet Limited since June 2018. Ms. Korsanos previously served as a director of Ardent Leisure Group Limited from September 2018 to June 2020.
Jack A. Markell served as the 73rd Governor of Delaware from 2009 to 2017. During his tenure, Governor Markell was focused on improving Delaware’s schools and positioning its citizens for future prosperity by launching and scaling important workforce development efforts. Governor Markell served as Chair of the National Governors Association and the Democratic Governors Association. Governor Markell previously was elected three times as Delaware’s State Treasurer prior to becoming Governor of the State. Prior to public service, Governor Markell had a career in business, banking and consulting, including serving as Senior Vice President for Corporate Development at Nextel Communications, Inc. Governor Markell’s other professional experience includes working in a senior management position at Comcast Corporation, as an associate at McKinsey and Company and as a banker at First Chicago Corporation. Governor Markell has also been a member of the board of directors of Graham Holdings Company since 2017, and FS Credit Real Estate Income Trust, Inc. since 2018. Governor Markell also serves on the board of directors of Jobs for America’s Graduates, Upstream USA, Vemo Education and Symbiont.io Inc. and serves as a member of the board of trustees of the Annie E. Casey Foundation, Delaware State University and Strada Education Network.
Hamish R. McLennan has served as Chairman of REA Group Limited, a $20 billion global digital advertising company, since April 2012, Chairman of HT&E Limited, a media and entertainment company operating radio, digital and outdoor businesses, since October 2018, and Chairman of Rugby Australia Limited, the governing body of rugby union in
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Australia, since May 2020. He has also served as Deputy Chairman of Magellan Financial Group, a globally-focused equity fund, since June 2019, where he has served as a non-executive director since March 2016, and as a director of Claim Central Consolidated, a global digital claims solutions business, since September 2020. Mr. McLennan is an experienced media and marketing executive, previously serving as Executive Chairman and Chief Executive Officer at Network Ten Holdings, an Australian entertainment and news content company, from 2013 to 2015, Executive Vice President for News Corporation, a global diversified media and information services company, in Sydney and New York from 2012 to 2013, and Global Chairman and Chief Executive Officer of Young & Rubicam, a division of WPP, the world’s largest communications services group, from 2006 to 2011.
Michael J. Regan is a former Vice Chairman and Chief Administrative Officer of KPMG LLP and was the lead audit partner for many Fortune 500 companies during his 40-year tenure with KPMG. Mr. Regan has been a member of the board of directors of Lifetime Brands, Inc., a global provider of kitchenware, tableware and other home products, since 2012. Mr. Regan also served as a member of the board of directors of DynaVox Inc. from 2011 to January 2015.
Timothy Throsby previously served as President of Barclays Corporate & International and Chief Executive of Barclays Corporate and Investment Bank from 2017 to 2019. Prior to joining Barclays, Mr. Throsby held senior executive roles with JPMorgan Chase Bank. He has had an extensive career in banking and private equity, working for Credit Suisse and Macquarie before joining Goldman Sachs in 1995 as a Managing Director and Co-Head of Equity Derivatives Asia and Japan. In 2002, he moved to Lehman Brothers to head the Asia and Japan Equities Division, before relocating to New York in 2004 to run the global equity derivatives business, convertibles and risk arbitrage. In 2005, he became President of Citadel Asia and Japan where he ran their Asian business, located in Hong Kong.
Maria T. Vullo has served as Vice Chairman and Chief Legal Officer of Emigrant Bank and Emigrant BanCorp, Inc., the largest privately held bank in the U.S., since September 2020. Ms. Vullo has also served as Chief Executive Officer of Vullo Advisory Services, PLLC, an advisory firm specializing in financial services. Ms. Vullo’s other professional experience includes being Regulator-in-Residence at the Fintech Innovation Lab NYC and an Adjunct Professor at Fordham Law School. She previously served as the Superintendent of the New York State Department of Financial Services (the “DFS”) from 2016 to 2019 where she was responsible for the regulation of New York’s financial services industry. Ms. Vullo managed an agency staff of 1,400 employees with a budget in excess of $250 million. Prior to assuming the role of DFS Superintendent, Ms. Vullo was a litigation partner for 20 years with Paul, Weiss, Rifkind, Wharton & Garrison LLP. She is an experienced trial and appellate litigator in civil, criminal and regulatory matters. In addition, Ms. Vullo served as Executive Deputy Attorney General for Economic Justice under Attorney General Andrew Cuomo in New York State. In that role, Ms. Vullo supervised the Bureaus of Investor Protection, Real Estate Finance, Antitrust, Consumer Protection, and Internet. Ms. Vullo was twice nominated by the New York State Commission on Judicial Nomination to be an Associate Judge of the New York Court of Appeals. Ms. Vullo has also served as a Director of Emigrant Bank since July 2019, as a Director of DayForward Life Insurance Company since 2020, and also has served as a member of numerous nonprofit boards where she has assumed leadership positions.
Kneeland C. Youngblood has served as a founding partner of Pharos Capital Group, LLC, a private equity firm that invests in the healthcare service sector since 1998. Mr. Youngblood has served as a director of Mallinckrodt plc, a specialty pharmaceutical company, since June 2013. He also serves on the board of TPG Pace Beneficial Corporation and TPG Pace Technology Corporation, which are Special Purpose Acquisition Companies. He is also a member of the Council on Foreign Relations. Mr. Youngblood has previously served on the boards of directors of TPG Pace Holdings Corp. (from June 2017 to November 2019), Pace Holdings Corp. (from 2015 to 2017), Starwood Hotels & Resorts Worldwide, Inc. (from 2001 to 2012), The Gap, Inc. (from 2006 to 2012) and Burger King Holdings, Inc. (from 2004 to 2010). He also previously served as a trustee of the Dallas Police and Fire Pension System (2017 to 2019).
Virginia E. Shanks, nominee, most recently served as the Strategic Advisor for Penn National Gaming, Inc., a casino entertainment company, until December 2019, following its acquisition of Pinnacle Entertainment Inc. (“Pinnacle”). Previously, Ms. Shanks served as the Executive Vice President and Chief Administrative Officer of Pinnacle, a casino entertainment company from July 2013 to October 2018, and as Executive Vice President and Chief Marketing Officer from October 2010 to June 2013. At Pinnacle, Ms. Shanks was responsible for all company-wide marketing strategies and had oversight of food and beverage, hotel operations, guest service, information technology and gaming operations. Prior to joining Pinnacle in 2010, Ms. Shanks was the Chief Marketing Officer for Multimedia Games, from 2008 to 2010, where she led product strategy, project management and investor relations. Before joining Multimedia Games, Ms. Shanks held senior executive positions for more than 25 years at Caesars Entertainment Corporation (predecessor to Caesars Entertainment, Inc.), where she was responsible for setting overall corporate brand strategy and overseeing sports and entertainment marketing, strategic alliances, consumer insights, retail, public relations and nationwide casino promotions. Ms. Shanks also
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serves on the board of directors for Altria Group, Inc. since 2017 and the board of trustees for EPR Properties since 2019. She has previously served on the board of directors for Global Gaming Women, an independent non-profit organization whose mission is to support, inspire and influence the development of women in the gaming industry, and Make-A-Wish Southern Nevada.
Qualifications of Directors
Our directors are responsible for overseeing the management of the Company’s business and affairs, which requires highly skilled and experienced individuals. The Nominating and Corporate Governance Committee is responsible for evaluating and making recommendations to the Board concerning the appropriate size and needs of the Board with the objective of maintaining the necessary experience, skills and independence on the Board. Other than the minimum age requirement specified in the Nevada Revised Statutes, the Nominating and Corporate Governance Committee and the Board do not have specific qualifications that must be met by a candidate for director. However, the Nominating and Corporate Governance Committee and the Board believe that there are general qualifications that are applicable to all directors and other skills and experience that should be represented on the Board as a whole, but not necessarily by each director. The Nominating and Corporate Governance Committee and the Board consider the experience and qualifications of prospective directors individually and in the context of the Board’s overall composition, and make no distinction in the evaluation of nominees recommended by our directors or executive officers, third parties or our stockholders in accordance with the provisions contained in our Amended and Restated Bylaws.
In its assessment of prospective directors, the Nominating and Corporate Governance Committee and the Board generally consider, among other factors, the individual’s character and integrity, experience, judgment, independence and ability to work collegially, as well as the ability of a potential nominee to devote the time and effort necessary to fulfill his or her responsibilities as a director. The Nominating and Corporate Governance Committee and the Board also assess particular qualifications, attributes, skills and experience that they believe are important to be represented on the Board as a whole, in light of the Company’s business. These include a high level of financial literacy, relevant chief executive officer or similar leadership experience, gaming, lottery, social and digital gaming industry experience, experience with global operations, exposure to the development and marketing of technology and consumer products and legal and regulatory experience.
As a matter of practice, the Nominating and Corporate Governance Committee and the Board also consider the diversity of the backgrounds and experience of prospective directors as well as their personal characteristics (e.g., gender, ethnicity, age) in evaluating, and making decisions regarding, Board composition, in order to facilitate Board deliberations that reflect a broad range of perspectives. The Nominating and Corporate Governance Committee and the Board believe that the Board is comprised of a diverse group of individuals.
The Nominating and Corporate Governance Committee and the Board believe that each nominee has valuable individual skills and experiences that, taken together, provide the variety and depth of knowledge, judgment and vision necessary for the effective oversight of the Company. As indicated in the foregoing biographies, the nominees have extensive experience in a variety of fields, including gaming, lottery, social and digital gaming (Messrs. Odell and Cottle, Mses. Korsanos and Shanks), global operations (all directors), technology (Messrs. Odell, Cottle and Markell and Mses. Korsanos and Shanks, consumer products and marketing (Messrs. Odell, Cottle and McLennan and Mses. Korsanos and Shanks), legal and regulatory (Mr. Markell and Mses. Shanks and Vullo), investment and financial services (Messrs. Markell, Throsby and Youngblood and Mses. Korsanos and Vullo) and public accounting (Mr. Regan), each of which the Board believes provides valuable knowledge about important elements of our business. Most of our nominees have leadership experience at major companies or organizations that operate inside and outside the United States and/or experience on other companies’ boards, which provides an understanding of ways other companies address various business matters, strategies, corporate governance and other issues. As indicated in the foregoing biographies, the nominees have each demonstrated significant leadership skills, including as a chief executive officer (Messrs. Odell, Cottle, McLennan and Throsby), as a chief administrative officer of a major accounting firm (Mr. Regan), as a chief administrative officer of a casino entertainment company (Ms. Shanks), as chief financial officer (Ms. Korsanos), as the Governor of the State of Delaware (Mr. Markell) and as the Superintendent of the New York State Department of Financial Services (Ms. Vullo). Messrs. Markell and Youngblood and Ms. Vullo have extensive public policy, government or regulatory experience, which can provide valuable insight into issues faced by companies in regulated industries such as the Company. Mr. Cottle has served as a senior executive and director of other gaming and entertainment companies, which service has given him deep knowledge of the Company and its businesses and directly relevant management experience. Mr. Youngblood has experience managing and advising a number of public and private companies. The Nominating and Corporate Governance Committee and the Board believe that these skills and experiences, together with their other qualities, qualify each nominee to serve as a director of the Company.
THE BOARD RECOMMENDS A VOTE “FOR” EACH OF THE TEN NOMINEES
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Corporate Governance
Overview. The Company is committed to good corporate governance, which we believe promotes the long-term interests of our stockholders and strengthens Board and management accountability. Highlights of our corporate governance structure and policies include:
Corporate Governance Highlights
• Annual election of all directors • Code of Business Conduct (and related training)
• Seven independent director nominees • Director and officer stock ownership guidelines
• Entirely independent Board committees (other than Compliance Committee) • Executive compensation based on pay-for-performance philosophy
• Regular executive sessions of independent directors • Cash and equity compensation clawback policy
• Separate Executive Chair and Chief Executive Officer roles • Anti-hedging and anti-pledging policies
• Lead Independent Director
• Stockholder right to call special meetings
• Regular Board and committee self-evaluations
• Stockholder right to act by written consent
• Risk management oversight by the Board and committees • Absence of an “anti-takeover” rights plan and other “anti-takeover” provisions
• Consideration of diversity in decisions regarding Board composition
• Board oversight of diversity, equity and inclusion initiatives
• New Board leadership and refreshment, including four new directors in 2020 and two new committee chairs in 2021
Director Independence. The Board has adopted Director Independence Guidelines as a basis for determining that individual directors are independent under the standards of the NASDAQ Stock Market. This determination, which is made annually, helps assure the quality of the Board’s oversight of management and reduces the possibility of damaging conflicts of interest. Under these standards, a director will not qualify as independent if:
(1)    the director has been employed by the Company (or any subsidiary) at any time within the past three years, other than service as an interim executive officer for a period of less than one year;
(2)    the director has an immediate family member who has been employed as an executive officer of the Company (or any subsidiary) at any time within the past three years;
(3)    the director or an immediate family member of the director has accepted any compensation (including any political contribution to a director or family member) from the Company (or any subsidiary) in excess of $120,000 during any period of 12 consecutive months within the past three years other than (a) for Board or Board committee service, (b) in the case of the family member, as compensation for employment other than as an executive officer, (c) benefits under a tax-qualified retirement plan or non-discretionary compensation or (d) compensation for service as an interim executive officer for a period of less than one year;
(4)    the director or an immediate family member of the director is a partner, controlling shareholder or executive officer of an organization (including a charitable organization) that made payments to, or received payments from, the Company for property or services in the current year or in any of the past three years that exceed the greater of 5% of the recipient’s consolidated gross revenues or $200,000, other than (a) payments arising solely from investments in the Company’s securities or (b) payments under non-discretionary charitable contribution matching programs;
(5)    the director or an immediate family member of the director is employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the Company served on the compensation committee of such other entity; or
(6)    the director or an immediate family member of the director is a current partner of the Company’s outside auditor, or was a partner or employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years.
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In applying these standards, the Board determined that each of Messrs. Markell, McLennan, Regan, Throsby and Youngblood, and Mses. Shanks and Vullo, qualify as independent directors, and none has a business or other relationship that would interfere with the director’s exercise of independent judgment. Messrs. Odell and Cottle and Ms. Korsanos do not qualify as independent directors.
The full text of the Board’s Director Independence Guidelines, including information on the additional independence requirements applicable to Board committee members, can be accessed through the Investors — Corporate Governance link on our website at www.scientificgames.com.
Corporate Governance Guidelines. The Board has adopted Corporate Governance Guidelines that outline the structure, role and functioning of the Board and address various governance matters including director independence, the Board selection process, length of Board service, Board meetings and executive sessions of independent directors, Board and committee performance evaluations and management succession planning. The full text of these guidelines can be accessed through the Investors Corporate Governance link on our website at www.scientificgames.com.
Board Leadership Structure. As described above, all of the director nominees qualify as independent directors, other than Mr. Odell, our Executive Chair, Mr. Cottle, our President and Chief Executive Officer, and Ms. Korsanos, our Executive Vice Chair. The Audit, Compensation and Nominating and Corporate Governance Committees are comprised entirely of independent directors. The Compliance Committee is comprised of independent directors, a non-independent director and an industry consultant. The Board has the flexibility to select the leadership structure that is most appropriate for the Company and its stockholders and has determined that the Company and its stockholders are best served by not having a formal policy regarding whether the same individual should serve as both Executive Chair of the Board and Chief Executive Officer. This approach allows the Board to elect the most qualified director as Executive Chair of the Board, while maintaining the ability to separate the Executive Chair of the Board and Chief Executive Officer roles when deemed appropriate. The Executive Chair of the Board and Chief Executive Officer roles are currently held by two different individuals.
Ms. Korsanos serves as the Executive Vice Chair of the Board. Mr. Cohen currently serves as Vice Chair of the Board, and the Board has also designated Mr. Cohen as the lead independent director. The Nominating and Corporate Governance Committee will recommend, for approval by the Board, a new lead independent director following the termination of Mr. Cohen’s directorship. The lead independent director responsibilities include presiding over regularly held executive sessions of independent directors, facilitating communication between the independent directors and the Chief Executive Officer and coordinating the activities of the independent directors. The lead independent director also provides assistance to the Board and the committees of the Board in their evaluations of management’s performance, and carries out other duties assigned by the Board from time to time in areas of governance and oversight.
The Board believes its current leadership structure is appropriate because it effectively allocates authority, responsibility and oversight between management and the independent members of the Board.
Board’s Role in Risk Oversight. The Board is responsible for overseeing management in the execution of its responsibilities and for assessing the Company’s approach to risk management, including ensuring that sufficiently robust risk and compliance policies and procedures are in place and are functioning properly to bring key risk and compliance matters to the Board’s attention. The Board exercises these responsibilities on an ongoing basis as part of its meetings and through the Board’s committees, each of which examines various components of enterprise risk as part of its responsibilities. An overall review of risk is inherent in the Board’s consideration of the Company’s strategies, such as product and market concentration, competition, acquisitions and divestitures and business transformation and other matters presented to the Board, including operational risks, such as information technology, cybersecurity, personnel and supply chain; financial risks, such as financial reporting, valuation, market and liquidity risks, as described below; and environmental, social and governance risks, such as sustainability, social responsibility, diversity, equity and inclusion, management structure and employee compensation. The Board’s role in risk oversight is consistent with the Company’s leadership structure, with the Chief Executive Officer and other members of senior management having responsibility for managing the Company’s risk exposure, and the Board and its committees providing oversight of those efforts.
The Company has implemented internal processes and controls to identify and manage risks and to communicate with the Board regarding risk management. These include an enterprise risk management program, regular internal management meetings that identify risks and discuss risk management, a Code of Business Conduct (the “Code”) (and related training), a strong ethics and compliance function that includes suitability reviews of customers, partners, vendors and other persons/entities with which the Company does business, regular cybersecurity, data flow and data privacy assessments, such as evaluation of network security measures and data protection safeguards, an internal and external audit process, such as testing controls, and internal approval and signature authority processes and legal department review of contracts. In
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connection with these processes and controls, management regularly communicates with the Board, Board committees and individual directors regarding identified risks and the management of these risks. Individual directors often communicate directly with senior management on matters relating to risk management. In particular, the Board committee chairs regularly communicate with members of senior management, including the Chief Executive Officer, to discuss potential risks in connection with accounting and audit matters, compensation matters, compliance matters and financing-related matters.
The Board committees, which meet regularly and report to the full Board, play significant roles in carrying out the Board’s risk oversight function. In particular, the Audit Committee oversees risks related to the Company’s financial statements, the financial reporting process and accounting. The Audit Committee also oversees the internal audit function and regularly meets in private with both the Vice President of Internal Audit (who reports functionally to the Audit Committee and administratively to the Chief Financial Officer) and representatives of the Company’s independent auditing firm. The Compensation Committee evaluates risks associated with the Company’s compensation programs and succession planning for executive officers and other senior management and discusses with management procedures to identify and mitigate such risks. See “Executive Compensation - Compensation Discussion and Analysis - Compensation Program as it Relates to Risk” below. The Compliance Committee is active in overseeing the Company’s program with respect to compliance with the laws applicable to the Company’s business, including gaming laws, as well as compliance with the Code and related policies by employees, officers, directors and other representatives of the Company. In addition, the Compliance Committee oversees a compliance review process, which is designed to ensure that the vendors, consultants, customers and business partners of the Company are “suitable” or “qualified” as those terms are used by applicable gaming and lottery authorities, and regularly meets separately with the Senior Vice President, Chief Compliance Officer and Director of Corporate Security (who reports functionally to the Chief Executive Officer and has a direct reporting line to the Compliance Committee). The Nominating and Corporate Governance Committee oversees risks related to composition, succession and structure of the Board.
Diversity, Equity and Inclusion. Diversity, equity and inclusion are embedded in the Company’s core value of team spirit, by which the Company collaborates as one diverse and inclusive team with an upbeat, inventive passion for building great entertainment. In support of this core value, in 2019, the Board established a special committee of the Board (the “Diversity, Equity and Inclusion Special Committee”) to oversee a broad review of the Company’s diversity, equity and inclusion policies and practices and compliance with its responsibilities as an equal opportunity employer and to make recommendations related thereto to the Board. Effective as of December 31, 2020, the Board assumed the oversight responsibilities previously delegated to the Diversity, Equity and Inclusion Special Committee. As a result of such efforts, the Company has formulated a diversity, equity and inclusion strategic plan and established a Diversity, Equity and Inclusion Council and task force in 2020 to make key decisions, review progress, communicate results and identify areas that require further development. As the Diversity, Equity and Inclusion Board representative, Mr. Youngblood reports to the Board at each Board meeting on the Company’s diversity, equity and inclusion strategic plan, culture and other matters related to diversity, equity and inclusion for the Company.
Board Meetings. The Board held a total of five meetings during 2020, including three at which executive sessions were held with no members of management present. During 2020, all incumbent directors attended at least 75% of the total number of meetings of the Board and committees of the Board on which they served.
Board Committees. The Board has four standing committees: the Audit Committee; the Compensation Committee; the Compliance Committee; and the Nominating and Corporate Governance Committee. All committees are comprised solely of independent directors with the exception of the Compliance Committee, which is comprised of three independent directors, as well as Mr. Cottle and Patricia Becker, a gaming industry consultant.
Mr. Peter A. Cohen, who is a member of the Board, the Audit Committee and the Compensation Committee is not being nominated for re-election. Mr. Cohen’s directorship will expire simultaneously with the election of directors at the annual meeting, at which time he will no longer be a member of the Audit Committee or the Compensation Committee. The Board has approved charters for each Board committee, which can be accessed through the Investors - Corporate Governance link on our website at www.scientificgames.com. The current membership of each committee is as shown in the table below.
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Audit Committee Compensation Committee Compliance Committee Nominating and Corporate Governance Committee
Michael J. Regan (Chair) Peter A. Cohen (Chair) Kneeland C. Youngblood (Chair) Michael J. Regan (Chair)
Peter A. Cohen Hamish R. McLennan Barry L. Cottle Hamish R. McLennan
Timothy Throsby Kneeland C. Youngblood Jack A. Markell Maria T. Vullo
Maria T. Vullo Timothy Throsby



Patricia Becker

Audit Committee. The Audit Committee is responsible for hiring the Company’s independent registered public accounting firm and for overseeing the accounting, auditing and financial reporting processes of the Company. In the course of performing its functions, the Audit Committee reviews, with management and our independent registered public accounting firm, the Company’s internal accounting controls, the financial statements, the report and recommendations of our independent registered public accounting firm, the scope of the audit and the qualifications and independence of the auditor. The Audit Committee also oversees the Company’s internal audit function. The Board has determined that each member of the Audit Committee is independent under the listing standards of the NASDAQ Stock Market, the independence standards under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the Company’s Director Independence Guidelines, and that Mr. Regan qualifies as an “audit committee financial expert” within the meaning of Item 407(d)(5) of Regulation S-K of the rules of the SEC. The Audit Committee held five meetings during 2020.
Compensation Committee. The Compensation Committee sets the compensation of the President and Chief Executive Officer and other senior executives of the Company, administers the equity incentive plans and executive compensation programs of the Company, determines eligibility for, and awards under, such plans and programs and makes recommendations to the Board with regard to the adoption of new employee benefit plans and equity incentive plans and with respect to the compensation program for non-employee directors. The Board has determined that each member of the Compensation Committee is independent under the listing standards of the NASDAQ Stock Market and the Company’s Director Independence Guidelines and qualifies as a “non-employee director” for purposes of Rule 16b-3 under the Exchange Act. The Compensation Committee held seven meetings during 2020.
Compliance Committee. The Compliance Committee is responsible for providing oversight of the Company’s program with respect to compliance with laws and regulations applicable to the business of the Company, including gaming and anticorruption laws, and with respect to compliance with the Code by employees, officers, directors and other representatives of the Company. The Compliance Committee held four meetings during 2020.
Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is responsible for identifying individuals who are qualified to become directors, recommending nominees for membership on the Board and on committees of the Board, reviewing and recommending corporate governance principles, procedures and practices and overseeing the annual self-assessments of the Board and its committees. The Board has determined that each member of the Nominating and Corporate Governance Committee is independent under the listing standards of the NASDAQ Stock Market and the Company’s Director Independence Guidelines. The Nominating and Corporate Governance Committee held four meetings during 2020.
Other than the minimum age requirement specified in the Nevada Revised Statutes, the Nominating and Corporate Governance Committee does not have specific qualifications that must be met by a candidate for director and will consider individuals suggested as candidates by our stockholders in accordance with the provisions contained in our Amended and Restated Bylaws. Each notice of nomination submitted in this manner must contain the information specified in our Amended and Restated Bylaws, including, but not limited to, information with respect to the beneficial ownership of our common stock held by the proposing stockholder and any voting or similar agreement the proposing stockholder has entered into with respect to our common stock. To be timely, the notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the first anniversary of the date of the prior year’s annual meeting of stockholders. If the annual meeting of stockholders is advanced by more than 30 days, or delayed by more than 60 days, from the anniversary of the preceding year’s annual meeting of stockholders, notice by the stockholder, to be timely, must be received no earlier than the 120th day prior to the annual meeting of stockholders and no later than the later of (i) the 90th day prior to the annual meeting of stockholders and (ii) the tenth day following the day on which we publicly announce the date of the annual meeting of stockholders if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting.
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Each notice of nomination should include the nominee’s qualifications and other relevant biographical information and provide confirmation of the nominee’s consent to serve as a director. The Nominating and Corporate Governance Committee will review the candidate’s background, experience and abilities, and the contributions the candidate can be expected to make to the collective functioning of the Board and the needs of the Board at the time. In prior years, candidates have been identified through recommendations made by directors, the President and Chief Executive Officer and third parties. The Nominating and Corporate Governance Committee anticipates that it would use these sources as well as stockholder recommendations to identify candidates in the future.
Stockholder Communications with Directors. Stockholders may communicate with the Board or an individual director by sending a letter to the Board or to a director’s attention care of the Corporate Secretary of the Company at Scientific Games Corporation, 6601 Bermuda Road, Las Vegas, NV 89119. The Corporate Secretary will open, log and deliver all such correspondence (other than advertisements, solicitations or communications that contain offensive or abusive content) to directors on a periodic basis, generally in advance of each Board meeting.
Attendance at Stockholders’ Meetings. The Company encourages directors to attend the annual stockholders’ meeting. Last year, two of the ten directors standing for election attended the annual meeting.
Compensation Committee Interlocks and Insider Participation. None of the Compensation Committee members (i) has ever been an officer or employee of the Company or (ii) was a participant in a Related Person Transaction (as defined in “Certain Relationships and Related Person Transactions”) in 2020. None of the Company’s executive officers, other than Mr. Cottle, serves, or in 2020 served, as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving, or who in 2020 served, as a member of the Board or the Compensation Committee. Mr. Cottle serves, and in 2020 served, as an executive officer and member of the Board of Directors of both our Company and SciPlay.
Code of Business Conduct. The Board has adopted the Code, which applies to all of our officers, directors and employees. The Code sets forth fundamental principles of integrity and business ethics and is intended to ensure ethical decision making in the conduct of professional responsibilities. Among the areas addressed by the Code are standards concerning conflicts of interest, confidential information and compliance with laws, regulations and policies. The full text of the Code can be accessed through the Investors - Corporate Governance link on our website at www.scientificgames.com.
Director Compensation
The following describes the compensation paid to each of our directors in 2020, excluding the compensation of Mr. Cottle, our President and Chief Executive Officer during 2020, whose compensation is disclosed in the section entitled “Executive Compensation”.
Non-Employee Director Compensation. The compensation program for Eligible Directors (as defined below) consists of annual retainers and equity awards (the “Eligible Director compensation program”). In 2020, under the Eligible Director compensation program, Eligible Directors were entitled to receive:
(1)an annual retainer for service on the Board of $75,000;
(2)an annual retainer (in lieu of fees per committee meeting) of $10,000 ($15,000, in the case of the Audit Committee) for service on a committee;
(3)an annual retainer for the chairs of the Compensation Committee, the Compliance Committee, the Nominating and Corporate Governance Committee and the Diversity, Equity and Inclusion Special Committee of $20,000 (and an annual retainer for the chair of the Audit Committee of $35,000); and
(4)an annual grant of restricted stock units (“RSUs”) with a grant date value of $160,000 and a four-year vesting schedule, provided such Eligible Director satisfied the Board’s attendance requirement for the prior calendar year, as discussed below.
In addition, in consideration of the significant time and effort expended by the members of the non-standing Special Committee established in connection with the MafCo Transaction and the additional duties and responsibilities associated with their services on such committee, Mr. Cohen, as chair, received a one-time cash retainer of $60,000 and a monthly fee of $12,500, and each other member (Messrs. Regan and Youngblood) received a one-time cash retainer of $40,000 and a monthly fee of $10,000. In 2020, the Special Committee held 11 meetings, which included discussions with outside advisors relating to the MafCo Transaction.
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New Eligible Directors generally receive stock options for 10,000 shares of our common stock (with a four-year vesting schedule), in lieu of the annual grant of RSUs, upon joining the Board. If elected to the Board at the Annual Meeting, Ms. Shanks will receive this grant shortly following the Annual Meeting. Messrs. McLennan and Throsby received this grant shortly following their elections to the Board. In addition, prior to their elections to the Board, the Company and Messrs. McLennan and Throsby had preliminary discussions regarding potential sign-on awards as an inducement for them to join the Board in light of the business opportunities and associated compensation that each would have to forgo. These awards consisted of 10,000 RSUs each, with immediate vesting, and were granted to Messrs. McLennan and Throsby on February 10, 2021. For 2020, “Eligible Directors” consisted of all directors other than Messrs. Cottle, Haddrill and Odell and Ms. Korsanos, who were instead compensated based on their employment (in the case of Mr. Cottle) or consulting agreement (in the case of Messrs. Haddrill and Odell and Ms. Korsanos) with the Company, as applicable. The compensation for Mr. Cottle is discussed in the section entitled “Executive Compensation”, and the compensation for each of Messrs. Haddrill and Odell and Ms. Korsanos is described below.
The elements of the Eligible Director compensation program are periodically evaluated and determined by the Compensation Committee, which takes into account competitive director compensation data provided by its independent compensation consultant, Compensation Advisory Partners LLC, or CAP, for companies in a peer group of comparably sized companies in related industries as well as a general industry group of comparably sized companies. The Compensation Committee uses the comparative data provided by CAP as a general indicator of relevant market conditions, but does not set specific benchmark targets for total director compensation or for individual elements of the Eligible Director compensation program. No changes were made to the Eligible Director compensation program for 2020, with the exception of the special fees provided to the members of the non-standing Special Committee. In early 2021, following its periodic evaluation of the Eligible Director compensation program, including a review of the competitive director compensation data provided by CAP, the Compensation Committee modified the Eligible Director compensation program for the first time since 2014 by: (1) increasing the annual cash retainer to $90,000 and the annual equity grant to $210,000; (2) providing that annual equity grants, beginning with the 2021 grant, would vest in full after one year; (3) providing for an annual cash retainer of $35,000 for the Lead Independent Director; and (4) allowing each Eligible Director to elect to receive all or a portion of his or her cash retainers in the form of additional equity awards instead.
Awards of stock options and RSUs are subject to forfeiture if an Eligible Director leaves the Board prior to the scheduled vesting date for any reason, except that the vesting of such awards would accelerate in full upon an Eligible Director ceasing to serve on the Board due to death or disability.
The number of RSUs awarded to each Eligible Director in respect of his or her annual grant for 2020 was determined by dividing the grant date value of $160,000 by the average of the high and low sales prices of our common stock on the trading day immediately prior to the grant date and rounding down to the nearest whole number. As a result, 8,372 RSUs were awarded to each Eligible Director in 2020 (other than Messrs. McLennan and Throsby, both of whom joined the Board after the annual grant date for 2020). Mr. Haddrill was also awarded 8,372 RSUs in 2020 in accordance with the terms of his amended consulting agreement with the Company, discussed below.
Eligible Directors with unexcused absences exceeding 25% of the meetings held by the Board and committees on which they served in the prior year are not eligible to receive an annual award of RSUs except that Eligible Directors with less than six months of service in the prior year are not subject to such threshold with respect to the first grant made after becoming a director. All Eligible Directors serving at the time of grant (June 2020) satisfied the attendance requirements applicable for the 2020 annual awards.
Compensation Arrangements with Mr. Odell and Ms. Korsanos. Prior to being elected to the Board, Mr. Odell and Ms. Korsanos served as consultants to the Company and were compensated for such services pursuant to their consultant agreements with the Company. Since Mr. Odell and Ms. Korsanos were expected to continue to provide such services following their election to the Board, and such services were expected to increase, it was determined that Mr. Odell and Ms. Korsanos should continue to be compensated for their consulting services to the Company, and should not participate in the Eligible Director compensation program. At the time of their elections to the Board, pursuant to their consulting agreements, Mr. Odell and Ms. Korsanos were entitled to receive an annual consulting fee of $600,000 and $350,000, respectively, subject to certain reductions in 2020 due to the COVID-19 pandemic, as described below. In recognition of the fact that the consulting services provided by Mr. Odell and Ms. Korsanos were expected to increase substantially following the MafCo Transaction, their consulting agreements were amended effective October 1, 2020 to increase the annual fees to $900,000 and $600,000, respectively. In addition, in recognition of such services and the value unlocked by the consummation of the MafCo Transaction, in which Mr. Odell and Ms. Korsanos played critical roles, and to further align their interests with stockholders and drive stock price growth, each of Mr. Odell and Ms. Korsanos received a one-time grant of 662,933 stock
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options, vesting over three-years. However, half of the then-unvested portion of such stock options will vest earlier if the volume-weighted average price of our common stock is at least $50.00 for 25 out of 30 consecutive trading days, and all of the then-unvested portion of such stock options will vest earlier if the volume-weighted average price of our common stock is at least $75.00 for 25 out of 30 consecutive trading days.
Compensation Arrangements with Mr. Haddrill. During 2020, in lieu of participating in the Eligible Director compensation program, Mr. Haddrill was compensated for his service through his resignation on July 24, 2020 as Vice Chairman pursuant to a consulting agreement, effective as of February 26, 2018, with the Company. Mr. Haddrill’s consulting agreement originally provided that in exchange for certain consulting services, including in connection with his continued service as Vice Chairman of the Board, from February 26, 2018 through December 31, 2018, Mr. Haddrill would receive consulting fees of $125,000 per month. The Company and Mr. Haddrill subsequently amended his consulting agreement on January 11, 2019 and April 29, 2019, extending it through December 31, 2020. Pursuant to the amended terms, for his continued provision of services, Mr. Haddrill received consulting fees of $41,666.66 per month, prorated for any partial month, and was eligible for an annual award of equity in accordance with the Eligible Director compensation program outlined above. Mr. Haddrill resigned from the Board as of July 24, 2020 but continued to be compensated for his consulting services pursuant to his consulting agreement through December 31, 2020.
Impact of COVID-19 on Director Compensations for 2020. In light of the COVID-19 pandemic and the resulting widespread, adverse impact on our business, the Board determined to temporarily reduce the cash compensation payable to non-employee directors from May 1, 2020 through August 31, 2020 by 50%, including compensation payable to Mr. Haddrill pursuant to his consulting agreement. As Mr. Odell and Ms. Korsanos were not members of the Board at such time, they were not subject to this reduction, but each of Mr. Odell and Ms. Korsanos agreed to reduce their consulting fees by 50% for the period beginning on April 5, 2020 and ending July 31, 2020.
In addition, 30,000 stock options that had been granted to each of Mr. Odell and Ms. Korsanos in 2019 under their consulting agreements were subject to vesting criteria based on the achievement of financial goals with respect to the one-year period ending June 30, 2021. As a result, vesting was based only on the Company’s performance during the final year of the awards’ lifecycle, which coincided with the COVID-19 pandemic, and would not be smoothed out over a multi-year period. In light of this, after evaluating the significant and adverse impact of the COVID-19 pandemic on the business environment in which the Company operates, the Compensation Committee determined that the performance goals could no longer be achieved, and the stock options no longer had any meaningful retentive or incentive value. Therefore, the Compensation Committee removed the performance goals, but retained the time-vesting criteria so that the awards would continue to provide retentive value to the Company, conditioned on Mr. Odell and Ms. Korsanos agreeing to forfeit 50% of the award, to which each of them agreed.
Director Compensation for 2020. The table below shows the compensation earned by each of our directors for 2020; other than Mr. Cottle, whose compensation is reflected in the Summary Compensation Table below.
Name Fees Earned or Paid in Cash ($)
Stock Awards ($)(1)
Option Awards ($)(2)
Total
($)
Jamie R. Odell (5)
 575,000 (3)
15,094,984 15,669,984 
Ronald O. Perelman (6)
43,750 (4)
159,989 203,739 
Antonia Korsanos (5)
 354,167 (3)
15,094,984 15,449,151 
Peter A. Cohen
194,726 (4)
159,989 354,715 
Richard M. Haddrill (5)(6)
  416,667 (3)
159,989 576,656 
Jack A. Markell
81,882 (4)
159,989 241,871 
Hamish R. McLennan
17,110 (4)
218,716 235,826 
Paul M. Meister
33,056 (4)
159,989 193,045 
Michael J. Regan
174,812 (4)
159,989 334,801 
Barry F. Schwartz (6)
63,965 (4)
159,989 223,954 
Timothy Throsby
24,328 (4)
230,543 254,871 
Frances F. Townsend (6)
67,083 (4)
159,989 227,072 
Maria T. Vullo
94,382 (4)
159,989 254,371 
Kneeland C. Youngblood
176,075 (4)
159,989 336,064 
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_____________    
(1)Reflects the grant date fair value of RSUs awarded during 2020 to all Eligible Directors (other than Messrs. McLennan and Throsby, both of whom joined the Board after the annual grant date for 2020) and Mr. Haddrill, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”). The grant date fair value of the RSUs was determined by multiplying the number of shares subject to the award by the average of the high and low sales prices of our common stock on the trading day immediately prior to the grant date. For additional information, see Note 17 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. The value of the sign-on RSUs received by Messrs. McLennan and Throsby in connection with their elections to the Board is not included because the terms of the awards were not finalized, and the grant date did not occur, until February 2021, and therefore the value will be reported in the Company’s proxy statement for the 2022 annual meeting of stockholders (the “2022 Proxy Statement”), in accordance with applicable SEC rules.
(2)Reflects the grant date fair value of stock options awarded to Messrs. Throsby and McLennan in connection with their election to the Board in October 2020 and the stock options awarded to Mr. Odell and Ms. Korsanos in respect of their consulting services, in each case, computed in accordance with FASB ASC Topic 718. The fair value of the stock options is estimated on the date of grant using the Black-Scholes option pricing model. For a discussion of valuation assumptions, see Note 17 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.
(3)Reflects the consulting fees for Messrs. Odell and Haddrill and Ms. Korsanos as described above.
(4)Reflects annual retainers earned by Eligible Directors for 2020, except that in the case of Messrs. Perelman, McLennan, Meister, Schwartz and Throsby and Ms. Townsend, the amounts are pro-rated to reflect the portion of the year the individual spent on the Board. In the case of any Eligible Director who changes committee assignments during the year, the applicable retainers are subject to a pro-rata adjustment to reflect the amount of time spent on the applicable committee during the year.
(5)As described above, during 2020, Messrs. Odell and Haddrill and Ms. Korsanos did not receive any additional compensation in respect of his or her services as a director.
(6)Mr. Haddrill resigned from the Board, effective as of July 24, 2020, and each of Messrs. Perelman and Schwartz and Ms. Townsend resigned from the Board, effective as of September 16, 2020.
The table below shows the number of stock options and unvested RSUs held by each of our directors as of December 31, 2020; except for Mr. Cottle, whose stock options and unvested RSUs are reflected in the Outstanding Equity Awards at Fiscal Year-End Table below:
Name

Stock Options (in shares) RSUs
Jamie R. Odell
677,933 (1)
7,500 (2)
Ronald O. Perelman (8)
Antonia Korsanos
677,933 (1)
7,500 (2)
Peter A. Cohen
17,104 (3)
Richard M. Haddrill (9)
Jack A. Markell
10,000 (4)
8,372 (5)
Hamish McLennan
10,000 (4)
(6)
Paul M. Meister (10)
Michael J. Regan
17,104 (3)
Barry F. Schwartz (8)
Timothy Throsby
10,000 (4)
(6)
Frances F. Townsend (8)
Maria T. Vullo
10,000 (4)
8,372 (5)
Kneeland C. Youngblood
10,000 (4)
14,155 (7)
_____________
(1)Reflects two grants of stock options to each of Mr. Odell and Ms. Korsanos. 15,000 of the stock options held by each of Mr. Odell and Ms. Korsanos were granted on May 16, 2019 and August 26, 2019, respectively, with an exercise price of $20.74 and $17.26, respectively, and will vest and become exercisable on May 15, 2021 and August 21, 2021, respectively. Each of these awards was part of a grant that originally consisted of 30,000 performance-conditioned stock options, however, as described above, as a result of the COVID-19 pandemic, the performance condition was removed, conditioned on Mr. Odell and Ms. Korsanos agreeing to forfeit 50% of the award, to which each of them agreed. The remaining 662,933 stock options held by each of Mr. Odell and Ms. Korsanos were granted on September 28, 2020, have an exercise price of $35.42, and will vest and become exercisable in three installments of 220,977 options on September 28, 2021 and 220,978 options on each of September 28, 2022 and 2023.
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All or a portion of the 662,933 stock options held by each of Mr. Odell and Ms. Korsanos are subject to earlier vesting in the event certain specified stock-price thresholds are achieved, as described in more detail in “Compensation Arrangements with Mr. Odell and Ms. Korsanos” above.
(2)Reflects RSUs granted to Mr. Odell and Ms. Korsanos in respect of their consulting services before their election to the Board, which will vest in three equal installments as to 2,500 shares on each of May 15, 2021, 2022 and 2023 in the case of Mr. Odell and August 21, 2021, 2022 and 2023 in the case of Ms. Korsanos.
(3)Reflects RSUs as described in more detail below:
Grant Date Unvested Quantity Vesting Schedule
June 19, 2017 1,555 Four-year vesting; 1,555 shares to vest on June 19, 2021
June 13, 2018 1,394 Four-year vesting; 697 shares to vest on each of June 13, 2021 and 2022
June 12, 2019 5,783 Four-year vesting; 1,928 shares to vest on June 12, 2021, 1,927 shares to vest on June 12, 2022 and 1,928 shares to vest on June 12, 2023
June 10, 2020 8,372 Four-year vesting; 2,093 shares to vest on each of June 10, 2021, 2022, 2023 and 2024
(4)Reflects stock options granted to Mr. Youngblood on August 6, 2018, Mr. Markell and Ms. Vullo on June 14, 2019, Mr. Throsby on October 7, 2020 and Mr. McLennan on November 11, 2020 in connection with the applicable director’s joining the Board, each with a four-year vesting schedule and an exercise price of $37.35, $20.92, $35.81 and $34.12, respectively. The first two installments of Mr. Youngblood’s stock options vested and became exercisable on the first two anniversaries of the date of grant and the balance is scheduled to vest and become exercisable in two equal installments on the third and fourth anniversaries of the date of grant. The first installment of Mr. Markell and Ms. Vullo’s stock options vested and became exercisable on the first anniversary of the date of grant and the balance is scheduled to vest and become exercisable in three equal installments on the second, third and fourth anniversaries of the date of grant. Messrs. McLennan and Throsby’s stock options will vest and become exercisable on the first four anniversaries of their date of grant.
(5)For Mr. Markell and Ms. Vullo, reflects 8,372 RSUs granted on June 10, 2020, with 2,093 shares to vest on each of June 10, 2021, 2022, 2023 and 2024.
(6)The sign-on RSUs received by Messrs. McLennan and Throsby in connection with their elections to the Board are not reflected here because the terms of the awards were not finalized, and the grant date did not occur, until February 2021, and therefore they were not outstanding on December 31, 2020.
(7)For Mr. Youngblood, reflects 5,783 RSUs granted on June 12, 2019, with 1,928 shares to vest on June 12, 2021, 1,927 shares to vest on June 12, 2022 and 1,928 shares to vest on June 12, 2023, and 8,372 RSUs granted on June 10, 2020, with 2,093 shares to vest on each of June 10, 2021, 2022, 2023 and 2024.
(8)Messrs. Perelman and Schwartz and Ms. Townsend’s directorships ended on September 16, 2020, at which time all their remaining RSUs vested, and none of them had any outstanding stock options or RSUs as of December 31, 2020.
(9)Mr. Haddrill’s directorship ended on July 24, 2020, at which time all his remaining RSUs vested. Mr. Haddrill had no outstanding stock options or RSUs as of December 31, 2020.
(10)Mr. Meister’s directorship ended on June 10, 2020, at which time all his remaining RSUs vested. Mr. Meister had no outstanding stock options or RSUs as of December 31, 2020.
Director Stock Ownership Guidelines
The stock ownership guidelines are intended to align the financial interests of our officers and directors with the interests of our stockholders. Under the guidelines, directors (including our Executive Chair and Executive Vice Chair), other than our President and Chief Executive Officer, who is subject to the officer stock ownership requirements, are required to own the lesser of (i) the number of shares of our common stock equal to five times the director’s annual retainer divided by the preceding 200-day average closing price of such shares and (ii) 15,000 shares of our common stock. Shares of our common stock held directly or indirectly, including shares acquired upon the exercise of stock options, shares held within retirement and deferred compensation plans, time-vesting RSUs to be settled in shares and shares owned by immediate family members will count for purposes of the policy, whereas outstanding (vested or unvested) stock options and performance-conditioned RSUs will not count. Each covered director has five years to comply from the date the director became subject to the policy. At present, all of our covered directors are in compliance with the ownership guidelines. Mr. Youngblood (who joined the Board in August 2018) will have until August 2023 to satisfy the required level of ownership, Mr. Markell and Ms. Vullo (who each joined the Board in June 2019) will have until June 2024 to satisfy the required level of ownership, Mr. Odell and Ms. Korsanos (who each joined the Board in September 2020) will have until September 2025 to satisfy the required level of ownership and Messrs. McLennan and Throsby (who each joined the Board in October 2020) will have until October 2025 to satisfy the required level of ownership.
DELINQUENT SECTION 16(A) REPORTS
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Section 16(a) of the Exchange Act requires our officers and directors, and persons who beneficially own more than ten percent of our common stock, to file initial reports of ownership and reports of changes in their ownership with the SEC. Based on a review of the copies of the reports that our directors, officers and ten percent holders filed with the SEC and on the representations made by such persons, we believe all applicable filing requirements were met during 2020.

SECURITY OWNERSHIP
The following table sets forth certain information as to the security ownership of each person known to us to be the beneficial owner of more than five percent of the outstanding shares of our common stock, each of our directors and director nominees, each of our named executive officers and all of our directors and executive officers as a group. The number of shares and the percentages of beneficial ownership set forth below are calculated as of March 23, 2021, unless otherwise noted, based on outstanding shares of 95,932,077. Except as otherwise indicated, the stockholders listed in the table below have sole voting and investment power with respect to the shares indicated.

Shares of Common Stock of the Company
Name and Address of Beneficial Owner
Number (1)
Percent (1)
Caledonia (Private) Investments Pty Limited
Level 10, 131 Macquarie Street
Sydney, NSW, 2000, Australia
9,381,347 (2)
9.8  %
Fine Capital Partners, L.P.
1350 Avenue of the Americas, Suite 1610
New York, New York 10019
9,123,726 (3)
9.5  %
The Vanguard Group – 23-1945930
100 Vanguard Blvd.
Malvern, PA 19355
7,101,262 (4)
7.4  %
BlackRock, Inc.
55 East 52nd Street
New York, New York 10055
6,375,526 (5)
6.6  %
Jamie R. Odell 5,000  *
Barry L. Cottle 309,793  *
Peter A. Cohen 278,449  *
Antonia Korsanos 2,500  *
Jack A. Markell 2,500  *
Hamish R. McLennan
28,700 (6)
*
Michael J. Regan 83,096  *
Virginia E. Shanks (7)
—  —  %
Timothy Throsby 10,000  *
Maria T. Vullo 2,500  *
Kneeland C. Youngblood 6,927  *
Michael C. Eklund —  —  %
Michael A. Quartieri (8)
29,648  *
James Sottile 39,691  *
Matthew Wilson 64,337  *
Michael F. Winterscheidt 28,522  *
All current directors and executive officers as a group (consisting of 16 persons) (9)
944,845  1.0  %
_____________
*    Represents less than 1% of the outstanding shares of common stock.
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(1)In accordance with SEC rules, this column includes shares that a person has a right to acquire within 60 days of March 23, 2021 through the exercise or conversion of stock options, RSUs or other securities. Such securities are deemed to be outstanding for the purpose of calculating the percentage of outstanding securities owned by such person but are not deemed to be outstanding for the purpose of calculating the percentage owned by any other person. The securities reported for the directors and named executive officers listed in the table above include shares subject to the following awards as to which the equivalent number of underlying shares may be acquired through exercise or conversion within 60 days of March 23, 2021:
Mr. Odell – 2,500 RSUs; Mr. Markell and Ms. Vullo - 2,500 stock options; Mr. Youngblood - 5,000 stock options; Mr. Quartieri – 29,648 stock options; Mr. Cottle - 130,315 stock options; Mr. Sottile - 22,634 stock options; Mr. McHugh - 17,862 stock options and 9,737 RSUs; Mr. Richardson - 10,084 stock options.
(2)Based on a Schedule 13G filed with the SEC on February 16, 2021 by Caledonia (Private) Investments Pty Limited, reporting beneficial ownership as of December 31, 2020. The Schedule 13G states that Caledonia (Private) Investments Pty Limited has sole voting power and sole dispositive power with respect to 9,381,347 shares.
(3)Based on an amendment to Schedule 13G filed with the SEC on February 12, 2021 by Fine Capital Partners, L.P., Fine Capital Advisors, LLC, Ms. Debra Fine and Adom Partners, L.P., reporting beneficial ownership as of December 31, 2020. The Schedule 13G states that each such person with the exception of Adom Partners, L.P. has shared voting power and shared dispositive power with respect to 9,123,726 shares and Adom Partners, L.P. has shared voting and shared dispositive power with respect to 5,119,364 shares.
(4)Based on an amendment to Schedule 13G filed with the SEC on February 10, 2021 by The Vanguard Group – 23-1945930, reporting beneficial ownership as of December 31, 2020. The Schedule 13G states that The Vanguard Group – 23-1945930 has shared voting power with respect to 113,936 shares, sole dispositive power with respect to 6,942,552 shares and shared dispositive power with respect to 158,710 shares.
(5)Based on an amendment to Schedule 13G filed with the SEC on February 1, 2021 by BlackRock, Inc., reporting beneficial ownership as of December 31, 2020. The Schedule 13G states that BlackRock, Inc. has sole voting power with respect to 6,292,212 shares and sole dispositive power with respect to 6,375,526 shares.
(6)Includes 5,000 shares held by Linyanti Holdings Pty Limited ATF McLennan Superannuation Fund, a retirement fund of which Mr. McLennan is the beneficiary, and 4,000 shares of common stock held by Londolozi Pty Limited ATF Londolozi Family Trust, of which Mr. McLennan serves as trustee.
(7)Ms. Shanks is not presently serving as a director.
(8)Mr. Quartieri was succeeded as Executive Vice President and Chief Financial Officer of the Company, effective June 1, 2020. Mr. Quartieri’s beneficial ownership was determined as of the most recent date that was practicable for the Company, which was June 1, 2020 for the number of shares of our common stock held by Mr. Quartieri, and March 23, 2021 for the number of stock options held by Mr. Quartieri.
(9)Includes 190,895 shares issuable upon exercise of stock options and 12,237 shares issuable upon vesting of RSUs as to which the equivalent number of underlying shares may be acquired through exercise or conversion within 60 days of March 23, 2021.
The following table sets forth certain information regarding beneficial ownership of the equity securities of SciPlay by:
each of our directors and named executive officers, individually; and
all of our directors and executive officers, as a group.
The number of shares and the percentages of beneficial ownership set forth below are calculated as of March 23, 2021 based on outstanding shares of Class A common stock of 24,383,474 and Class B common stock of 103,547,021. Except as otherwise indicated, the stockholders listed in the table below have sole voting and investment power with respect to the shares indicated.
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Shares Beneficially Owned
% of Total Voting Power (1)

Class A

Class B
Name of Beneficial Owner
Number (1)
Percent (1)

Number (1)
Percent (1)
Directors and Named Executive Officers:






Jamie R. Odell —  — 

—  —  — 
Barry L. Cottle 318,001  *

—  —  *
Peter A. Cohen —  — 

—  —  — 
Antonia Korsanos —  — 

—  —  — 
Jack A. Markell —  — 

—  —  — 
Hamish R. McLennan —  — 

—  —  — 
Michael J. Regan —  — 

—  —  — 
Virginia E. Shanks (2)
—  — 

—  —  — 
Timothy Throsby —  — 

—  —  — 
Maria T. Vullo —  — 

—  —  — 
Kneeland C. Youngblood —  — 

—  —  — 
Michael C. Eklund —  — 

—  —  — 
Michael A. Quartieri —  — 

—  —  — 
Patrick J. McHugh —  — 

—  —  — 
James Sottile 6,125  *

—  —  *
Michael F. Winterscheidt 3,125  *

—  —  *
All current directors and executive officers as a group (consisting of 16 persons) (3)
327,251  * —  —  *
________________
* Represents less than 1% of the outstanding shares of Class A common stock or Class B common stock, as applicable.
(1)In accordance with SEC rules, this column includes shares that a person has a right to acquire within 60 days of March 23, 2021 through the exercise or conversion of stock options, RSUs or other securities. Such securities are deemed to be outstanding for the purpose of calculating the percentage of outstanding securities owned by such person but are not deemed to be outstanding for the purpose of calculating the percentage owned by any other person. The securities reported for the directors and named executive officers listed in the table above include shares subject to the following awards as to which the equivalent number of underlying shares may be acquired through exercise or conversion within 60 days of March 23, 2021: Messrs. Sottile and Winterscheidt - 1,563 RSUs each.
(2)Ms. Shanks is not presently serving as a director.
(3)Includes 3,126 shares issuable upon vesting of RSUs as to which the equivalent number of underlying shares may be acquired through conversion within 60 days of March 23, 2021.
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Introduction
This Compensation Discussion and Analysis provides a detailed description of our executive compensation philosophy and program, the compensation decisions made by the Compensation Committee and the matters considered in making such decisions. The Company’s executive compensation program is administered by the Compensation Committee, referred to in this section as the “Committee.” The Committee is responsible for determining the compensation of the Company’s President and Chief Executive Officer and other executive officers of the Company, and for overseeing the Company’s executive compensation program.
Our executive compensation program is designed to attract, reward and retain our executive officers. This Compensation Discussion and Analysis focuses on the compensation of our “named executive officers” for the fiscal year ended December 31, 2020, who were:
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Executive Position
Barry L. Cottle President and Chief Executive Officer
Michael C. Eklund (1)
Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
Michael A. Quartieri (1)
Former Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
James Sottile Executive Vice President and Chief Legal Officer
Matthew Wilson Executive Vice President and Group Chief Executive, Gaming
Michael F. Winterscheidt Senior Vice President and Chief Accounting Officer
________________
(1)Mr. Eklund succeeded Mr. Quartieri as Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary, effective as of June 1, 2020. On June 1, 2020, in order to provide for a smooth and orderly transition, Mr. Quartieri became an advisor to Mr. Cottle through June 30, 2020, and then provided consulting services to the Company through December 31, 2020.
As used in this Compensation Discussion and Analysis and the tables and narratives that follow, “SGICP” refers to our annual management incentive compensation program.
Executive Summary
Scientific Games is a leading developer of technology-based products and services and associated content for the worldwide gaming, lottery, social and digital gaming industries. Our portfolio of revenue-generating activities primarily includes supplying gaming machines and game content, casino-management systems and table game products and services to licensed gaming entities; providing instant and draw-based lottery products, lottery systems and lottery content and services to lottery operators; providing social casino game solutions to retail consumers; and providing a comprehensive suite of digital real money gaming and sports wagering solutions, distribution platforms, content, products and services. We also gain access to technologies and pursue global expansion through strategic acquisitions and equity investments.
We report our results of operations in four business segments - Gaming, Lottery, SciPlay and Digital - representing our different products and services. In connection with the IPO, certain of our named executive officers received SciPlay equity awards and certain information in this Compensation Discussion and Analysis and in the Executive Compensation Tables that follow includes SciPlay equity awards.
Our 2020 executive compensation program reflected key business priorities relating to operational and financial considerations, including the continued innovation to provide best in class content and systems and support growth in our gaming, lottery, social and digital product lines and services worldwide, creation of cash flow available to reduce our debt, while continuing to invest in our business, and realization of ongoing cost savings. In addition, our 2020 executive compensation program also reflected certain strategic decisions made by the Committee in response to the unprecedented challenges from the widespread, adverse impact of the COVID-19 pandemic on our business, which are described in more detail below.
During 2020, the Company also introduced exciting new products and services in the gaming and digital space to better position it for improved results in the future and create value for stockholders.
Impact of COVID-19 on Executive Compensation
In March 2020, the World Health Organization declared the rapidly spreading COVID-19 outbreak a pandemic. In response to the COVID-19 pandemic, governments across the world implemented a number of measures to prevent its spread, including, but not limited to, the temporary closure of a substantial number of gaming operations establishments and disruptions to lottery operations, travel restrictions and cancellation of sporting events, which affected our business segments in a number of ways. These measures and other effects of the pandemic have, and continue to, negatively impact our results of operations, cash flows and financial condition, and the ultimate magnitude and length of time that the disruptions from the COVID-19 pandemic will continue remain uncertain. As a result of the widespread, adverse impact of the COVID-19 pandemic on our business, and taking into account its uncertain magnitude and duration, the Committee took several actions designed to balance the needs to conserve cash and preserve the long-term viability of the Company by retaining and appropriately motivating key employees:
In order to support the Company’s efforts to conserve cash, each of our executive officers proposed, and the Committee accepted, a temporary reduction in his base salary, beginning on April 5, 2020 (June 1, 2020 in the case of Mr. Eklund). The reduction for Messrs. Cottle and Wilson was 100% (subsequently changed to 50% for Mr.
20


Wilson), 50% for each other named executive officer (other than Mr. Winterscheidt) and 20% for Mr. Winterscheidt. These reductions were continued through July 31, 2020 (or September 30, 2020 in the case of Mr. Eklund), but Messrs. Cottle and Wilson’s reductions were changed to 50% beginning on July 1, 2020 to generally align their reductions with the rest of the executive team.
When establishing the 2020 SGICP, the Committee determined that the uncertain magnitude and duration of the COVID-19 pandemic on the Company’s business meant that clear and meaningful performance goals based on our traditional SGICP metrics that would properly incentivize executives could not be implemented. However, the Committee believed that annual incentives still served a valuable retentive and incentive purpose, and should still be tied to Company performance, and therefore implemented the 2020 SGICP with simplified metrics, where the payouts were based on one performance goal. As a result of the simplified structure, and to further the Company’s cash conservation efforts, the Committee determined that achievement of target performance would only result in a 25% payout of target bonuses, and that payout above this level would be solely in the discretion of the Committee. In early 2021, the Committee determined that target performance had been met, and 2020 SGICP bonuses were paid at 25% of target.
As previously disclosed in our proxy statement filed with the SEC on April 28, 2020 (the “2020 Proxy Statement”), in light of the uncertainty due to the COVID-19 pandemic and the difficulty of establishing reasonable metrics for a multi-year performance period in light of such uncertainties, rather than grant awards with the expectation of having to waive or revise the metrics at a later date, the Committee determined that it was in the best interests of the Company to grant 2020 equity awards that consisted solely of time-vesting RSUs. Based on the volatility of the Company’s stock price at the time of grant, and what the Committee believed was an artificially deflated price, the Committee also determined to reduce the number of awards that would have been granted based on the Company’s standard practice for determining grant date value by setting the value at $20, the closing price of the common stock on February 26, 2020, which was greater than the closing price of the common stock on the grant date. The Committee believed that these actions resulted in grants that provided meaningful motivation to the executive team and aligned their interests with stockholders, while limiting share dilution and potential windfalls that would result from a temporarily depressed share price. For the 2021 grants, the Company returned to its practice of granting performance-conditioned awards, and increased the proportion of performance-conditioned awards to two-thirds of the executive’s total target award value.
In August 2020, the Committee determined that, as a result of the COVID-19 pandemic, the performance goal with respect to the 2019 performance-conditioned stock options was no longer capable of being achieved, and that the options therefore no longer served their purpose of retaining and properly incentivizing the named executive officers. The Committee therefore adjusted the performance goal for the options, as described in more detail below, to provide for a goal that was capable of being achieved in light of the COVID-19 pandemic and its effect on the Company’s business. In taking this action, the Committee considered it appropriate that the awards should retain a performance-vesting requirement to remain consistent with the original intent of the awards. Since the awards were stock options, they also provided senior executives with an incentive to increase the value of the Company’s share price, since the exercise price represented a greater than 10% premium to the share price when the awards were modified, and this incentive would not exist if the performance goal was incapable of being achieved.
In 2020, the Committee also modified three sign-on equity awards, held by Messrs. Cottle, Eklund and Wilson, since it had been determined that the performance goals were no longer capable of being achieved due to the COVID-19 pandemic. In the case of each of the awards, achievement of the performance goals depended either solely on the Company’s performance during the final 12 months of the performance period or on the Company achieving strong results over the entire performance period and would not be smoothed out over a multi-year period. Therefore, the Committee removed the performance goals for these awards, but retained the time-vesting criteria so that the awards would continue to provide retentive value to the Company, in each case, conditioned on the applicable executive agreeing to forfeit 50% of his award, to which each of the executives agreed.
The Committee believes these actions were appropriate in light of the COVID-19 pandemic and its impact on our business, and that they appropriately balance conserving cash and appropriately retaining executives and incentivizing them to achieve the Company’s goals to the benefit of stockholders.
Other Compensation Program Highlights for 2020
The following is a summary of the other highlights of the Company’s executive compensation program:
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Executive pay is substantially at risk because it largely consists of one or more types of performance-based compensation that vary in value based on our stock price, or that can only be earned upon achievement of pre-approved financial targets. The amount of 2020 at-risk pay as a percentage of total compensation for our President and Chief Executive Officer and the average for the other named executive officers is shown below:
Executive
At-Risk Pay (1)
Mr. Cottle 61%
Other Named Executive Officers 74%
(1)Calculated based off total compensation, as reported in the “Summary Compensation Table”. At-Risk Pay consists of the grant date value of equity awards granted to the applicable executive and the value of the annual incentive compensation actually paid to the applicable executive.
2020 SGICP annual cash bonuses to our named executive officers (excluding Mr. Eklund, who did not participate in the 2020 SGICP) paid out at 25.0% of target based on achievement of consolidated adjusted EBITDA (herein referred to as “Consolidated AEBITDA”, a non-GAAP financial measure with reconciliation provided to consolidated net loss in Appendix A, which is the same metric we use for external financial reporting purposes). Even though target performance was achieved, payouts were based on the reduced payout scale approved by the Committee to reflect the simplified SGICP structure in 2020 as a result of the COVID-19 pandemic. Mr. Quartieri’s payout was pro-rated to reflect the amount of time he was employed in 2020.
SGICP annual cash bonuses have varied over the past five years as shown below.
Actual SGICP Annual Cash Bonus as a % of Target Bonus Opportunity
Employees with Company-wide Responsibilities
2016 2017 2018 2019 2020
73.0% 99.9% 25.5% 20.0% 25.0%
    Commitment to Good Governance and Best Practices
As part of its ongoing review of our executive compensation program, the Committee considers the results of our last “say on pay” proposal (approved by approximately 73.23% of the votes cast at the 2020 annual meeting of stockholders). While the majority of our stockholders supported our executive compensation program, we understand that the primary driver of our below average say-on-pay vote was related to concerns regarding the structure of our annual and long-term incentive programs, in particular the guaranteed minimum payout under our 2019 SGICP and the proportion of our annual equity incentive awards that are subject to performance goals. Unfortunately, the impact of COVID-19 on our business, as described above, restricted our ability to make significant changes to our compensation program, although we did remove the guaranteed minimum payout as a feature under the 2020 SGICP, and in 2021, two-thirds of our named executive officers’ annual equity incentive awards were subject to performance goals. In addition, we have reached out to several of our stockholders to discuss our executive compensation program, the related concerns raised by a proxy voting advisory firm last year and the steps the Company has taken to address the low 2020 “say on pay” vote, along with other topics raised by stockholders.
To ensure its commitment to good governance of our executive compensation program, the Committee and the Board adopted a number of policies that they believe should be viewed favorably by our stockholders. Those actions include the following:
No guaranteed salary increases. Our named executive officers are not entitled to contractual inflation-based salary increases.
Challenging financial objectives for annual cash bonus. Performance metrics support important business priorities. In general, no SGICP cash bonus was payable unless at least 85% of the targeted amount was achieved, and the payout percentage at the target threshold was only 25% of an executive’s target bonus opportunity. As a result of this rigorous payout scale, 2020 bonus payouts for executives were only 25%.
Inclusion of performance-conditioned equity awards. Vesting of certain equity awards is generally contingent on attaining certain performance goals. For awards granted in 2021, the proportion of awards subject to performance goals was increased to two-thirds.
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Stock ownership guidelines. The Company’s stock ownership guidelines apply to our directors, President and Chief Executive Officer and executive officers who report directly to our President and Chief Executive Officer. The guidelines encourage a long-term perspective in managing the Company and further align the interests of our executive officers and directors with the interests of stockholders. See “- Corporate Governance Policies - Stock Ownership Guidelines” below for additional information.
Clawback policy. The Company’s “clawback” policy subjects cash and equity incentive compensation paid to senior executives (including the named executive officers) to recovery in the event that the Company’s financial statements are restated due to fraud or gross misconduct by the applicable executives. See “- Corporate Governance Policies - Clawback Policy” below for additional information.
No hedging and no pledging policies. The Company prohibits employees and directors from engaging in hedging transactions and from holding the Company’s securities in a margin account or pledging the Company’s securities as collateral for a loan. See “- Corporate Governance Policies- No Hedging and No Pledging Policies” below for additional information.
Independent compensation consulting firm. The Committee benefits from its use of an independent compensation consulting firm, CAP, which provides no other services to the Company.
Periodic risk assessment. The Committee has concluded that our executive compensation program does not encourage behaviors that would create risks reasonably likely to have a material adverse effect on the Company.
No excise tax gross-ups. We do not agree to pay excise tax gross-ups.
No loans to executive officers. We do not make personal loans to our executive officers.
Objectives and Components of Compensation Program
The objectives of our executive compensation program are to attract and retain executive talent, to encourage and reward excellent performance by executives whose contributions drive the success of the Company and to create value for our stockholders. The program is structured to provide compensation packages that are competitive with the marketplace, to reward executives based on Company and, in certain circumstances, individual performance, to encourage long-term service and to align the interests of management and stockholders through incentives that encourage annual and long-term results.
The principal components of the Company’s executive compensation program consist of base salaries, annual performance-based incentive compensation and long-term incentive compensation. The Company also has employment agreements and other arrangements with named executive officers that include severance and change of control protections. The following is a description of the Company’s compensation elements and the objectives they are designed to support:
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Element of Compensation Rationale Linkage to Compensation Objective
Base Salary
Provides fixed level of compensation
Attracts and retains executive talent
Annual Incentive Compensation
(cash bonuses)
Target level of annual incentive compensation provides an attractive total cash opportunity that incentivizes achievement of the Company’s financial goals by tying payouts to Company financial performance, with actual annual incentive compensation payouts depending upon Company and, in certain circumstances, individual performance
Fosters excellent business performance

Aligns executive and stockholder interests by linking all or a portion of compensation to the annual performance of the Company

Attracts and retains executive talent
Long-Term Incentive Compensation
Target level of long-term incentive compensation provides a market-competitive equity opportunity

Conditioning certain equity awards upon achievement of multi-year financial performance targets or defined levels of share price appreciation aligns executive pay with stockholder interests

Time-vesting RSUs promote executive retention
Aligns executive and stockholder interests by linking a portion of compensation to long-term Company performance

Fosters excellent business performance that creates value for stockholders

Attracts and retains executive talent

Encourages long-term service
Severance and Change of Control Protections
Severance provisions under employment agreements provide benefits to ease an employee’s transition in the event of an unexpected employment termination by the Company due to changes in the Company’s employment needs

Change in control protections encourage employees to remain focused on the best interests of the Company in the event of rumored or actual fundamental corporate changes
Attracts and retains executive talent

Encourages long-term service
Base Salary
The base salaries of the Company’s executive officers are reviewed on an annual basis in light of the competitive marketplace, the executive officer’s responsibilities, experience and contributions and internal equity considerations. Internal equity in this context means ensuring that executives in comparable positions are rewarded comparably. In order to support the Company’s efforts to conserve cash in light of the COVID-19 pandemic, each of our named executive officers proposed, and the Committee accepted, a temporary reduction in his base salary, beginning on April 5, 2020 (June 1, 2020 in the case of Mr. Eklund). The reduction for Messrs. Cottle and Wilson was 100% (subsequently changed to 50% for Mr. Wilson), 50% for each other named executive officer (other than Mr. Winterscheidt) and 20% for Mr. Winterscheidt. These reductions were continued through July 31, 2020 (or September 30, 2020 in the case of Mr. Eklund), but Messrs. Cottle and Wilson’s reductions were changed to 50% beginning on July 1, 2020 to generally align their reductions with the rest of the executive team. After the expiration of these reductions, Mr. Sottile received a base salary increase of $100,000, from $600,000 to $700,000, effective as of August 1, 2020.
Annual Incentive Compensation
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When establishing the 2020 SGICP, the Committee determined that the uncertain magnitude and duration of the COVID-19 pandemic on the Company’s business meant that clear and meaningful performance goals based on our traditional SGICP metrics that would properly incentivize executives could not be implemented. However, the Committee believed that annual incentives still served a valuable retentive and incentive purpose, and should still be tied to Company performance, and therefore implemented the 2020 SGICP with a simplified structure.
In order to conserve cash in connection with the COVID-19 pandemic, and in recognition of the simplified metrics for the 2020 SGICP (as described below), the Committee determined that the payout opportunities under the 2020 SGICP should be reduced as compared to prior years. Therefore, under the 2020 SGICP, achievement of targeted financial performance would result in a payout of only 25% of a named executive officer’s normal target bonus opportunity, which is equal to the threshold level of payout in prior years. Achievement of 85% of target would result in a payout of 20% of an executive’s normal target bonus opportunity, with payout determined based on linear interpolation for achievement between 85% and 100% of target, while achievement of less than 85% of target would not result in any payout. Any additional payout for achievement above target performance was solely in the discretion of the Committee, subject to a maximum of 50% of an executive’s normal target bonus opportunity in all circumstances. Thus, the potential payout curve was significantly reduced from prior years, when payouts could generally range from 25% to 200% of an executive’s normal target bonus opportunity.
This payout structure was approved in order to competitively reward executives for the achievement of targeted goals, but with both the goals and the potential payouts adjusted in light of the COVID-19 pandemic. Based on the 2020 annual cash bonus payout structure, the named executive officers had the following bonus opportunities.
Executive
Threshold Annual Bonus Opportunity
(% of Base Salary)
Target Annual Bonus Opportunity
(% of Base Salary)
Mr. Cottle 20% 25%
Mr. Eklund (1)
—% —%
Mr. Quartieri (2)
15% 19%
Mr. Sottile 15% 19%
Mr. Wilson (4)
15% 19%
Mr. Winterscheidt
10% 13%
________________
(1)Mr. Eklund was not entitled to receive an annual bonus with respect to 2020 in light of the cash sign-on award he is eligible to receive in 2021 under his employment agreement.
(2)Mr. Quartieri’s employment with the Company terminated on May 21, 2020. Pursuant to the agreements entered into in connection with his separation, Mr. Quartieri remained eligible to receive a pro rata bonus.
(3)Because Mr. Sottile’s base salary increased from $600,000 to $700,000 on August 1, 2020, his annual bonus opportunity is based on a blended base salary rate.
(4)Mr. Wilson’s annual bonus opportunities is pro-rated from his hire date of March 1, 2020.
As described above, as a result of the uncertain magnitude and duration of the COVID-19 pandemic, the Committee determined that payouts under the 2020 SGICP would be based on the achievement of Consolidated AEBITDA only, and that this structure would apply uniformly to all of the Company’s business segments. A reconciliation of Consolidated AEBITDA to consolidated net loss is provided in Appendix A. The Consolidated AEBITDA target for 2020 and the associated payout opportunities for each named executive officer are shown below.
Target Achievement Payout (as % of Target)
Financial Target
(Consolidated AEBITDA)(1)
< 85% —% $—
85% 20% $621 million
100% 25% $731 - $812 million
________________
(1)Consolidated AEBITDA is a non-GAAP financial measure that is reconciled to net loss as the most directly comparable GAAP measure, as set forth in Appendix A.

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If performance exceeded the upper threshold of the financial target ($812 million of Consolidated AEBITDA), then any payout above 25% of an executive’s target bonus opportunity would be in the sole discretion of the Committee, subject to a maximum of 50% of an executive’s target bonus opportunity in all circumstances.
Annual Cash Bonus Results
The SGICP result for 2020 is shown in the table below. The Consolidated AEBITDA result was in the target range, resulting in a 25.0% payout of normal target bonus opportunity for each of our named executive officers.
2020
($ millions)
85% Target Achievement (20% Payout) 100% Target Achievement (25% payout)
SGICP Result (1)
Results
(% of Target Achievement)
Payout
(% of Target Bonus Opportunity)
Consolidated AEBITDA $621 $731 -$812 $800 100% 25%
________________
(1)Refer to Appendix A for reconciliation of Consolidated AEBITDA, which is a non-GAAP financial measure.

Summary
In summary, the Committee approved annual cash bonuses for 2020 for the eligible named executive officers as shown below:
Executive Actual Annual Bonus Award
Award as a % of Target Annual Bonus Opportunity (1)
Award as a % of Base Salary
Mr. Cottle $437,500 25.0% 25.0%
Mr. Eklund $— —% —%
Mr. Quartieri (2)
$62,935 12.4% 9%
Mr. Sottile (3)
$120,338 25.0% 19%
Mr. Wilson $117,572 25.0% 19%
Mr. Winterscheidt
$59,375 25.0% 13%
________________
(1)As described above, the Committee adjusted the payout curve for the 2020 SGICP so that the payout at target performance would only result in a payout of 25% of the executive’s normal target bonus amount.
(2) Mr. Quartieri’s employment with the Company terminated on May 21, 2020. Pursuant to the agreements entered into in connection with his separation, Mr. Quartieri received a pro rata bonus.
(3) Because Mr. Sottile’s base salary increased from $600,000 to $700,000 on August 1, 2020, his annual bonus opportunity is based on a blended base salary rate.
Long-Term Incentive Compensation
Annual Equity Awards
The Company’s executive officers received annual long-term incentive compensation awards, comprised of time-vesting RSUs for 2020 grants, which link their compensation to the long-term performance of the Company, align their interests with stockholders and encourage long-term service. Under the current equity award opportunity guidelines, eligible executives have a target annual equity award opportunity equal to a designated percentage of their base salary (with the actual award determined on or prior to the grant date, in the discretion of the Committee). Long-term incentive opportunities are the largest component of variable compensation for the executives, which appropriately ties a significant proportion of their compensation to the long-term performance of the business. The target annual equity award opportunities for 2020 are shown below:
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Executive (1)
Target Equity Award Opportunity for 2020
(% of Salary)
Mr. Cottle 250%
Mr. Quartieri 125%
Mr. Wilson 125%
Mr. Sottile 125%
Mr. Winterscheidt 70%
________________
(1)Mr. Eklund did not receive an annual equity award during 2020 in light of the sign-on equity grant he received upon his commencement of employment.
As previously disclosed in the 2020 Proxy Statement, in light of the uncertainty due to the COVID-19 pandemic and the difficulty of establishing reasonable metrics for a multi-year performance period in light of such uncertainties, rather than grant awards with the expectation of having to waive or revise the metrics at a later date, the Committee determined that it was in the best interests of the Company to grant 2020 equity awards that consisted solely of time-vesting RSUs. Based on the volatility of the Company’s stock price at the time of grant, and what the Committee believed was an artificially deflated price, the Committee also determined to reduce the number of awards that would have been granted based on the Company’s standard practice for determining grant date value by setting the value at $20, the closing price of the common stock on February 26, 2020. The Committee believed that these actions resulted in grants that provided meaningful motivation to the executive team and aligned their interests with stockholders, while limiting share dilution and potential windfalls that would result from a temporarily depressed share price. For the 2021 grants, the Company returned to its practice of granting both performance-conditioned awards and time-vesting awards, and increased the proportion of performance-conditioned awards to two-thirds of the executive’s total target award value.
Information regarding the 2020 annual equity awards is set forth below:
Executive Date of Grants
Time-Vesting RSUs (1)
Vesting Schedule of Time-Vesting RSUs (2)
Mr. Cottle 04/03/2020 218,750 4 years
Mr. Quartieri 04/03/2020 42,187 4 years
Mr. Sottile 04/03/2020 37,500 4 years
Mr. Wilson 04/03/2020 39,187 4 years
Mr. Winterscheidt 04/03/2020 16,625 4 years
________________
(1)Mr. Eklund did not receive an annual equity award during 2020 in light of the sign-on equity grant he received upon his commencement of employment.
(2) Awards vest in four equal annual installments beginning on March 20, 2021.
Other Equity Awards
2020 Sign-On Awards
In connection with Mr. Eklund’s appointment as Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary and his commencement of employment with the Company, the Company granted to Mr. Eklund sign-on equity awards consisting of 60,000 time-vesting RSUs with 26,667 vesting on June 1, 2021 and the remainder vesting in equal installments on each of June 1, 2022 and 2023, and 150,000 performance-conditioned RSUs vesting on March 31, 2023, subject to the achievement of certain performance targets. In connection with Mr. Wilson’s appointment as Executive Vice President and Group Chief Executive, Gaming and his commencement of employment with the Company, the Company granted to Mr. Wilson sign-on equity awards consisting of (i) 110,162 performance-conditioned RSUs vesting 50% on each of July 31, 2022 and 2023, subject to the achievement of certain performance targets, (ii) 38,556 RSUs with immediate vesting and (iii) 44,064 time-vesting RSUs, vesting on March 1, 2021. As described in “Other Actions with Respect to Equity Awards” below, the performance-conditioned RSUs granted to each of Mr. Eklund and Mr. Wilson were modified by canceling 50% of the award and eliminating the performance-vesting conditions on the remaining 50% (therefore converting the awards to time-vesting RSUs).
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Retention Awards
In early 2020, in light of historically low bonus payouts as a result of challenging performance metrics that required exceptional performance to achieve any payout (e.g., in 2019, greater than 95% achievement against target was required to achieve an above-threshold payout), the Committee determined that it was appropriate to grant special retention awards to equity-eligible employees generally. Therefore, each of Messrs. Quartieri, Sottile and Winterscheidt received an award of 10,101, 8,979 and 4,739 time-vesting RSUs, respectively, vesting 60% on March 20, 2021 and 40% on March 20, 2022. Mr. Cottle was excluded from this grant. In September 2020, to recognize Mr. Sottile’s key contribution to the MafCo Transaction, which unlocked substantial value for the Company’s stockholders, the Committee approved a special retention award of 10,000 time-vested RSUs for Mr. Sottile, which will vest one-third on each of September 28, 2021, 2022 and 2023. In November 2020, the Committee approved a one-time retention award of 7,500 time-vested RSUs for Mr. Winterscheidt, which will vest one-third on each of November 25, 2021, 2022 and 2023.
Other Actions with Respect to Equity Awards
In addition to the sign-on awards granted to Messrs. Eklund and Wilson described above, in 2018, in connection with his appointment as President and Chief Executive Officer, the Company granted to Mr. Cottle a sign-on equity award of 200,000 RSUs, vesting on June 1, 2021, subject to the Company’s achievement of certain performance targets measured through May 31, 2021. In 2020, the Committee determined that the performance goals under these awards were no longer capable of being achieved due to the COVID-19 pandemic. Since achievement of the performance goals for these awards depended either solely on the Company’s performance during the final 12 months of the performance period or on the Company achieving strong results over the entire performance period and would not be smoothed out over a multi-year period, the Committee determined that such performance goals should be removed, with any time-vesting criteria remaining in place, so that the awards would continue to provide retentive value to the Company. However, in each case, the Committee determined that removal of the performance goals should be conditioned on the applicable executive agreeing to forfeit 50% of his award, to which each of Messrs. Cottle, Eklund and Wilson agreed.
In August 2020, the Committee also determined that, as a result of the COVID-19 pandemic, the performance goal with respect to the 2019 performance-conditioned stock options was no longer capable of being achieved, and that the options therefore no longer served their purpose of retaining and properly incentivizing the named executive officers. The Committee therefore adjusted the performance goal for the options to provide for a goal that was capable of being achieved in light of the COVID-19 pandemic and its effect on the Company’s business. The modified awards provided that the performance criteria would be achieved, and the awards vest on the time-vesting schedule, if Consolidated AEBITDA of $621 million was achieved for any of fiscal years 2020, 2021 or 2022. In taking this action, the Committee considered it appropriate that the awards should retain a performance-vesting requirement to remain consistent with the original intent of the awards. Since the awards were stock options, they also provided senior executives with an incentive to increase the value of the Company’s share price, since the exercise price represented a greater than 10% premium to the share price when the awards were modified, and this incentive would not exist if the performance goal was incapable of being achieved. The Committee determined that the Consolidated AEBITDA goal was achieved with respect to fiscal year 2020 in early 2021, and the awards will now vest on the time-vesting schedule.
As previously disclosed in the 2020 Proxy Statement, in 2019 Mr. Cottle and SciPlay entered into an agreement whereby SciPlay granted Mr. Cottle an award of 750,000 performance-conditioned RSUs (the “Social Award RSUs”) with respect to shares of SciPlay Class A common stock, which replaced a cash-based long-term incentive award we had previously granted to Mr. Cottle and subsequently canceled. The performance period for the Social Award RSUs ended on December 31, 2020, and in early 2021, the Compensation Committee of the SciPlay Board of Directors (the “SciPlay Compensation Committee”) determined that the Social Award RSUs would vest at 65.9% of target, resulting in 494,250 RSUs with respect to shares of SciPlay Class A common stock vesting. In accordance with the terms of the Social Award RSUs, the Committee had the opportunity to review SciPlay’s determination of the level of performance achieved and consult with SciPlay prior to any determination regarding the level of vesting being made.
Retirement Plans
Executive officers are eligible to participate in our 401(k) retirement plan under the same rules that apply to other employees. Historically the Company has made a matching contribution of 100% of the first 1% of contributions and 50% of the next 5% of contributions (for a match of up to 3.5% of eligible compensation), however, in order to conserve cash in connection with the COVID-19 pandemic, the Company decided to temporarily eliminate matching contributions under the 401(k) beginning in May 2020.
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Other 2020 Compensation
Although Mr. Wilson and the Company entered into an employment agreement on July 6, 2019, Mr. Wilson was prevented from commencing employment with the Company until March 1, 2020 because of his non-competition obligations to his previous employer. Therefore, in order to ensure that it secured Mr. Wilson’s services, the Company agreed to provide Mr. Wilson with certain compensation during his non-compete period provided he did not accept another job. For a portion of this period, MacAndrews & Forbes and the Company arranged for Mr. Wilson to provide services to a portfolio company of MacAndrews & Forbes, Vericast, with the Company reimbursing Vericast for the amounts it paid to Mr. Wilson up to the amount the Company agreed to pay. During 2020, these payments amounted to $83,400 in the aggregate. The Company also paid Mr. Wilson a $400,000 sign-on cash bonus following his start date with the Company.
The Company also agreed to provide Mr. Eklund with a $500,000 sign-on cash bonus in connection with this commencement of employment with the Company, however the bonus will generally not be payable until the first anniversary of Mr. Eklund’s start date (and therefore is not included in the Summary Compensation Table below but will be reported in the Summary Compensation Table in the 2022 Proxy Statement, in accordance with applicable SEC rules). Mr. Eklund’s bonus will be reduced by any 2020 incentive compensation Mr. Eklund receives from his prior employer that exceeds $100,000 and is in lieu of any 2020 incentive compensation from the Company.
On May 18, 2020, the Company entered into an amendment to its employment agreement with Mr. Winterscheidt, Senior Vice President and Chief Accounting Officer, to provide Mr. Winterscheidt with a cash retention award, payable $125,000 on November 30, 2020 and $50,000 on February 28, 2021, subject to Mr. Winterscheidt’s continued employment with the Company through the applicable date.
Corporate Governance Policies
Stock Ownership Guidelines
The Committee approved stock ownership guidelines requiring our directors, President and Chief Executive Officer and executive officers who report to our President and Chief Executive Officer to acquire and maintain a meaningful ownership interest in the Company. These guidelines are intended to encourage a long-term perspective in managing the Company and to further align the interests of our executive officers and directors with the interests of our stockholders. Covered individuals are required to own the lesser of (i) a number of shares of our common stock equal to a specified multiple of annual base salary (or in the case of directors, other than our President and Chief Executive Officer, annual cash retainer for Board service) divided by the preceding 200-day average closing price of such shares and (ii) a fixed number of shares of our common stock. The stock ownership requirement varies based on position, as shown in the table below. Shares of our common stock held directly or indirectly, including shares acquired upon the exercise of stock options, shares held within retirement and deferred compensation plans, time-vesting RSUs to be settled in shares and shares owned by immediate family members will count for purposes of the policy, whereas outstanding (vested or unvested) stock options and performance-conditioned RSUs will not count. Covered individuals will have five years to comply from the date the individual became subject to the policy or to an increased level under the policy. We expect covered individuals who do not meet the ownership requirements to retain at least 50% of the shares of our common stock that vest or are acquired upon exercise of stock options, net of applicable taxes, until the ownership requirements are met.
Job Level

Minimum Required Ownership Interest
President and Chief Executive Officer Lesser of five times annual base salary and 475,000 shares
Group Chief Executives and Chief Financial Officer Lesser of two times annual base salary and 70,000 shares
Other Executive Officers Reporting to the President and Chief Executive Officer Lesser of annual base salary and 25,000 shares
The following table summarizes the ownership of our named executive officers against these guidelines as of December 31, 2020. All of our current named executive officers are in compliance with our guidelines.
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Lesser Of

Name (1)
Ownership Requirement
(# of Shares Based on Multiple of Salary)
Ownership Requirement
(# of Shares/ Units)
Current Ownership
(# of Shares/ Units)
Mr. Cottle (2)
378,300 475,000 545,117
Mr. Eklund (3)
64,900 70,000 135,000
Mr. Sottile (4)
30,300 25,000 71,527
Mr. Wilson (5)
64,900 70,000 152,644
________________
(1)Mr. Winterscheidt is not subject to the guidelines.
(2)Mr. Cottle became subject to the guidelines upon becoming President and Chief Executive Officer of the Company on June 1, 2018 and will have until June 2023 to satisfy the requirements.
(3)Mr. Eklund became subject to the guidelines upon becoming Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary on May 21, 2020 and will have until May 2025 to satisfy the requirements.
(4)Mr. Sottile became subject to the guidelines upon becoming Executive Vice President and Chief Legal Officer of the Company on September 4, 2018 and will have until September 2023 to satisfy the requirements.
(5)Mr. Wilson became subject to the guidelines upon becoming Executive Vice President and Group Chief Executive, Gaming, on March 1, 2020 and will have until March 2025 to satisfy the requirements.
Clawback Policy
The Committee and the Board have previously approved a cash and equity compensation “clawback” policy. Under the policy, the Committee may, in its discretion, take any one or more of the following actions in the event of a restatement of our financial statements that the Committee determines was due to an executive’s fraud or gross misconduct:
cancel the executive’s outstanding incentive compensation awards (defined as annual cash bonus and equity compensation, whether or not vested);
disqualify the executive from receiving future incentive compensation awards;
recoup incentive compensation paid or awarded to the executive from and after the date that is one year before the events giving rise to the restatement were discovered; and/or
recoup the executive’s gains from the sale of shares awarded as incentive compensation or the exercise of stock options from and after the date that is one year before the events giving rise to the restatement were discovered.
The Committee and the Board review and consider updates to this policy from time to time. In addition, to the extent that the SEC adopts final rules for clawback policies that require changes to our policy, we will revise our policy accordingly.
No Hedging and No Pledging Policies
The Committee also approved a policy prohibiting employees, officers and directors from hedging or engaging in similar transactions or arrangements designed to protect against declines in the market price of our securities (including the securities of the Company’s affiliates) and a policy prohibiting employees, officers and directors from holding the Company’s securities in a margin account or pledging the Company’s securities as collateral for a loan. In particular, employees, officers and directors may not:
purchase or sell options (e.g., puts, calls and collars) relating to our securities;
purchase or sell other derivative securities designed to hedge or offset any decrease in the market value of our securities;
engage in short sales of the Company’s securities, including a “sale against the box”; or
have standing orders regarding the Company’s securities unless used only for a very brief period of time, except for purchases and sales under a Rule 10b5-1 trading plan that is approved by the Company’s Chief Legal Officer;
hold the Company’s securities in a margin account; or
pledge the Company’s securities as collateral for a loan.
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Peer Group
As a general matter, the Committee uses compensation data derived from a peer group of companies as a general indicator of relevant market conditions for both executives’ and non-employee directors’ compensation, but does not set specific benchmark targets for total executive or non-employee director compensation or for individual elements of executive or non-employee director compensation.
In 2019, the Committee, in consultation with its independent consultant, CAP, approved a peer group of 15 companies for fiscal year 2019, which the Committee continued to use in 2020. The peer group is comprised of Activision Blizzard, Inc., Alliance Data Systems Corporation, Boyd Gaming Corporation, Cadence Design Systems, Inc., Cardtronics plc, Crane Co., Daktronics, Inc., Diebold Nixdorf, Inc., Electronic Arts Inc., Everi Holdings Inc., Global Payments Inc., IAC/InterActiveCorp, International Game Technology PLC, Penn National Gaming, Inc. and Take-Two Interactive Software, Inc. As measured following the fourth quarter of fiscal 2020, the Company’s trailing 12-month revenue was at the 30th percentile of the peer group, while our market capitalization was at the 38th percentile.
Role of Management
The Committee works directly with our Chief Human Resources Officer on our executive compensation program and receives recommendations from the President and Chief Executive Officer regarding the compensation of executive officers, other than with respect to the President and Chief Executive Officer’s own compensation. The Committee has the authority to follow these recommendations or make different determinations in its sole discretion.
Role of Compensation Consultant
The Committee has the sole authority to select and retain outside compensation consultants or any other consultants, legal counsel or other experts to provide independent advice and assistance in connection with the execution of its responsibilities. The Committee has engaged CAP to provide such independent advice, including:
attending scheduled meetings of the Committee and providing advice and context on matters discussed in the meetings;
periodically reviewing and recommending updates to our compensation peer group;
conducting competitive compensation reviews with respect to senior executives and non-employee directors;
advising on long-term incentive programs generally, as well as on alternatives to historical equity grants;
advising the Committee on legal and regulatory developments;
advising on certain policies, including policies relating to stock ownership guidelines, compensation clawbacks and hedging prohibitions;
advising on the design of annual incentives under the SGICP; and
assisting in the review of the Company’s compensation policies and practices, with a focus on incentive programs, from a risk management perspective.
CAP generally attends meetings of the Committee, is available to participate in executive sessions and communicates directly with the Committee’s Chairman or the Committee’s other members outside of meetings. CAP was retained by and reports directly to the Committee, which determines the scope of requested services and approves fee arrangements for its work, and CAP does not provide any other services to, or receive any other fees from, the Company without the prior approval of the Committee’s Chairman.
In 2020, the Committee reviewed the independence of CAP in light of the criteria set forth in the final rules relating to compensation consultant independence that were issued by the SEC in June 2012. Based on this review, the Committee is satisfied that no conflicts of interest exist that interfere with the independence of CAP, and CAP is fully able to provide to the Committee independent advice regarding executive and non-employee director compensation.
Compensation Program as it Relates to Risk
The Company’s management and the Committee, with the assistance of CAP, periodically review the Company’s compensation policies and practices, focusing particular attention on incentive programs, so as to ensure that they do not encourage excessive risk-taking by the Company’s employees. Specifically, this review includes the SGICP (in which
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executives generally participate), the Company’s business segment bonus and commission plans (in which other employees participate) and the Company’s long-term incentive plan. As discussed above, the SGICP is generally designed to reward achievement of annual results when measured against performance metrics, whereas the annual equity incentive program is designed to link a portion of compensation to long-term Company performance. Management and the Committee do not believe that the Company’s compensation program creates risks that are reasonably likely to have a material adverse impact on the Company for the following reasons:
our incentive programs appropriately balance short- and long-term incentives, with a significant percentage of total compensation for the senior executive team provided in the form of incentive compensation focused on the Company’s long-term performance;
the SGICP has historically used multiple financial performance metrics that encourage executives and other employees to focus on the overall health of the business rather than on a single financial measure; for 2020, in light of the COVID-19 pandemic and its impact on the Company’s business, the Committee determined that, under the circumstances, a single financial performance metric was the appropriate design;
a qualitative assessment of individual performance is generally a component of individual compensation payments;
annual cash bonuses under the SGICP and business segment plans are capped;
the Committee approved stock ownership guidelines applicable to senior executives and directors, a clawback policy with respect to cash and equity incentive compensation and a hedging and pledging policy prohibiting transactions designed to protect against declines in the market price of our common stock or where our common stock is used as collateral for a loan;
executive officers and certain other key employees with access to material nonpublic information must obtain permission from the Company’s Chief Legal Officer to trade in shares of our common stock, even during an open trading period;
Board and management processes are in place to oversee risk associated with the SGICP and business segment plans, including periodic business performance reviews by management and regular bonus accrual updates to the Committee; and
the Company’s risk management processes - including the Company’s enterprise risk management program, Code (and related training), strong ethics and compliance function that includes suitability reviews of customers and other persons and entities with which the Company does business, internal approval processes and legal department review of contracts - mitigate the potential for undue risk-taking.
Employment Agreements; Severance and Change in Control Arrangements
We typically enter into employment agreements with our executive officers. The agreements specify duties and minimum compensation commitments. The agreements also provide for severance benefits in certain circumstances and impose restrictive covenants that relate to, among other things, confidentiality and competition. The Committee believes that employment agreements with our executive officers are generally desirable as a means to attract executive talent, encourage long-term service, obtain a measure of assurance as to the executive’s continued employment in light of prevailing market competition, impose restrictive covenants and, where practicable, provide severance and other terms and conditions comparable to those provided to similarly situated executives.
The severance protection provided under employment agreements assists the Company in attracting and retaining executives and is designed to ease an executive’s transition in the event of an unexpected termination by the Company due to changes in the Company’s employment needs. Severance provisions that are included in the agreements do not generally enhance an employee’s current income, and therefore are generally independent of the direct compensation decisions made by the Committee from year to year.
Some of the employment agreements with our named executive officers provide for enhanced severance payments if the named executive officer’s employment is terminated in connection with a change in control (as defined in the applicable employment agreement). The Committee views these enhanced severance provisions as appropriate because they encourage executives to remain focused on the Company’s business in the event of rumored or actual fundamental corporate changes, allow executives to assess potential change in control transactions objectively without regard to the potential impact on their
32


own job security and are not triggered in connection with a change in control unless an executive’s employment is terminated without “cause” or the executive terminates for “good reason” within certain timeframes.
The Company has change in control provisions in the 2003 Plan such that unvested stock options, RSUs and other equity awards would generally accelerate upon a change in control (as defined in the 2003 Plan). These provisions apply to all 2003 Plan participants. The Committee believes that these provisions are appropriate given that an employee’s position could be adversely affected by a change in control even if he or she is not terminated.
In 2020, as a result of the announcement that MacAndrews & Forbes was exploring a possible sale of our common stock that it held, the Company conducted a review of its change in control protections, and determined that, in order to retain key executives and maintain their focus during any uncertainty that would result from such a sale, it was appropriate to adopt the Change in Control Protection Plan (the “CIC Plan”). The CIC Plan is only triggered upon an acquisition by a third-party of 30% or more of our common stock, and only provides for double-trigger benefits. The terms of the CIC Plan are described in more detail below under “Potential Payments Upon Termination or Change in Control”.
We entered into an employment agreement in December 2015 with Mr. Quartieri in connection with his commencement as Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary. In connection with Mr. Quartieri’s separation of employment from the Company and his commitment to offer certain transition services to the Company following his separation, we entered into an amendment to his employment agreement and a consulting agreement with him. In connection with their commencement as Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary and Executive Vice President and Group Chief Executive, Gaming, respectively, we entered into employment agreements with each of Messrs. Eklund and Wilson, as well as a subsequent amendment to Mr. Eklund’s employment agreement. During 2020, we also entered into various amendments to our employment agreements with our named executive officers to reflect temporary reductions in base salary, merit increases in base salary and Mr. Winterscheidt’s cash retention award. The terms of these agreements and amendments are described below in “Summary Compensation Table” and “Potential Payments Upon Termination or Change in Control”, as applicable.
Tax Deductibility of Executive Compensation
In implementing the Company’s executive compensation program, the Committee’s general policy is to consider any significant effects of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), which limits a public company’s tax deduction for compensation in excess of $1 million paid to named executive officers. While the Committee generally seeks to take advantage of favorable tax treatment in implementing the Company’s executive compensation program, the Committee’s ability to do so has been greatly reduced under the Tax Cuts and Jobs Act of 2017. As a result, the Committee has authorized compensation that does not qualify for tax deductibility in order to continue to provide a competitive compensation program that is aligned with stockholder interests.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with the Company’s management. Based on that review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Compensation Committee



Peter A. Cohen, Chairman
Hamish McLennan
Kneeland C. Youngblood
Summary Compensation Table
The table below shows the compensation of our President and Chief Executive Officer, our current Chief Financial Officer, our former Chief Financial Officer and our other three most highly compensated executive officers who were serving as executive officers as of December 31, 2020. These six individuals are the named executive officers for 2020.
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Name and Principal Position Year
Salary
($) (1)
Bonus
($) (2)
Stock Awards
($) (3)
Option Awards
($) (4)
Non-Equity Incentive Plan Compensation
($) (5)
All Other Compensation
($) (6)
Total
($)
Barry L. Cottle 2020 1,329,327  —  1,750,000  —  437,500  97,772  3,614,599 
President and 2019 1,750,000  350,000  13,458,332  2,916,658  —  99,241  18,574,231 
Chief Executive Officer 2018 1,406,731  —  18,659,996  1,709,970  750,312  85,008  22,612,017 
Michael C. Eklund 2020 305,769  —  4,243,050  —  —  62,648  4,611,467 
Executive Vice President, — 
Chief Financial Officer, Treasurer and Corporate Secretary — 
Michael A. Quartieri 2020 288,173  257,633  418,304  —  62,935  403,871  1,430,916 
Former Executive Vice 2019 672,115  101,250  331,243  562,488  —  9,800  1,676,896 
President, Officer, Treasurer and Corporate Secretary 2018 600,000  —  249,988  499,926  114,750  9,625  1,474,289 
James Sottile 2020 565,385  —  713,732  —  120,338  24,427  1,423,882 
Executive Vice President and Chief Legal Officer 2019 600,000  90,000  289,983  379,990  —  9,800  1,369,773 
Matthew Wilson 2020 500,441  400,000  3,813,453  —  117,572  83,400  4,914,866 
Executive Vice President, Group Chief Executive, Gaming — 
Michael F. Winterscheidt 2020 462,211  125,000  472,412  —  59,375  6,117  1,125,115 
Senior Vice President and 2019 467,837  96,784  432,499  —  —  9,800  1,006,920 
Chief Accounting Officer 2018 432,846  —  297,493  —  55,271  7,860  793,470 
________________
(1)The amounts in the “salary” column reflect base salary amounts paid during the applicable year to the named executive officers, after taking effect of the temporary salary reductions in 2020 as described in “Impact of COVID-19 on Executive Compensation” above.
(2)The amounts in the “bonus” column for 2020 reflect (i) for Mr. Quartieri, a 2020 cash bonus paid in recognition of Mr. Quartieri’s work helping the Company meet the challenges posed by the COVID-19 pandemic, (ii) for Mr. Wilson, his sign-on cash bonus and (iii) for Mr. Winterscheidt, the first portion of his retention cash bonus. For 2019, amounts reflect (i) for all executives, the annual cash incentive paid in respect of 2019, which is treated as a bonus since the amount paid, after taking into account the Committee’s decision to reduce bonus payouts, reflects the Committee’s decision to provide the default minimum funding at 25% of target awards and (ii) for Mr. Winterscheidt only, a one-time cash bonus of $50,000.
(3)The amounts in the “stock awards” column reflect the aggregate grant date fair value of RSUs awarded during the applicable year to the named executive officers, computed in accordance with FASB ASC Topic 718. The fair value of the RSUs granted by the Company was determined by multiplying the number of shares subject to the award by the average of the high and low sales prices of our common stock on the trading day immediately prior to the grant date. For additional information, see Note 17 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. However, as described in “Impact of COVID-19 on Executive Compensation” above, for purposes of determining the number of RSUs granted in connection with our annual equity award grants, as a result of the volatility of our common stock at the time of grant and what the Committee determined was an artificially deflated price as a result of the COVID-19 pandemic, the Committee used an assumed stock price of $20, the closing price of our common stock on February 26, 2020. For 2019, includes certain awards granted to our named executive officers by SciPlay in respect of services to be provided to SciPlay, which, in accordance with SEC rules, we are required to include in our Summary Compensation Table and related executive compensation disclosure. Although we modified certain RSUs in 2020, as discussed above, the incremental value associated with such modifications was negative, and therefore is not reflected in the above.
(4)The amounts in the “option awards” column reflect the aggregate grant date fair value of the stock options awarded during the applicable year to the named executive officers, computed in accordance with FASB ASC Topic 718. The fair value of the stock options is estimated on the date of grant using the Black-Scholes option pricing model. For a discussion of valuation assumptions, see Note 17 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020. Although we modified certain stock options in 2020, as discussed above, the incremental value associated with such modifications was negative, and therefore is not reflected in the above.
(5)The amounts in the “non-equity incentive plan compensation” column reflect the annual performance bonuses awarded under the SGICP. In the case of Mr. Quartieri, the amount is pro-rated to reflect the amount of time he was an employee of the Company in 2020. Mr. Eklund did not participate in the SGICP in 2020 in light of the cash sign-on award he is eligible to receive in 2021 under his employment agreement.
(6)The amounts in the “all other compensation” column for 2020 include the following:
a.Company contributions to the Company’s 401(k) plan for Messrs. Cottle ($9,975), Quartieri ($8,996), Sottile ($9,277) and Winterscheidt ($6,117).
b.For Mr. Cottle, costs associated with leased office space for him in Los Angeles ($ 36,707), with the reimbursement of travel expenses incurred in commuting from our main office to his home in Los Angeles ($51,090). For Mr. Eklund, costs associated with the reimbursement of moving expenses ($38,658) and with the reimbursement of travel expenses incurred in commuting from our main office to his home in Austin prior to his relocation ($23,990). For Mr. Sottile, costs associated with the reimbursement of expenses incurred in commuting from our main office to his home in New York ($15,150).
c.For Mr. Quartieri, payments of $394,875 made in respect of his consulting services.
34


d.For Mr. Wilson, payments made during the period he was unable to provide services to us as a result of a non-compete obligation with respect to his prior employer ($83,400).
For earlier years, consisted solely of contributions to the Company’s 401(k) plan, other than for Mr. Cottle, for whom the amounts in 2019 and 2018 also included costs associated with leased office space for him in Los Angeles ($30,400 and $27,800, respectively) and with the reimbursement of travel expenses incurred in commuting from our main office to his home in Los Angeles ($59,041 and 47,583, respectively). For 2019, the amount for each of Messrs. Quartieri and Winterscheidt also includes a 401(k) matching contribution true-up in respect of fiscal 2019 that was paid in September 2020.

Grants of Plan-Based Awards for Fiscal Year 2020
The table below provides information regarding the SGICP awards and RSUs granted to the named executive officers during 2020.

Estimated Future Payouts Under Non-Equity Incentive Plan Awards
($) (1)
Estimated Future Payouts Under Equity Incentive Plan Awards (2)
All Other Stock Awards: Number of Shares of Stock or Units or Units Grant Date Fair Value of Stock and Option Awards


Threshold Target Maximum Target
Name Grant Date ($) ($) ($) (#)
(#) (3)
($) (4)
Barry L. Cottle 350,000 437,500 875,000
4/03/2020 218,750 1,750,000
Michael C. Eklund 6/08/2020 150,000 3,030,750
6/08/2020 60,000 1,212,300
Michael A. Quartieri (5)
50,348 62,935 125,870
4/03/2020 42,187 337,496
4/03/2020 10,101 80,808
James Sottile 96,270 120,338 240,676
4/03/2020 37,500 300,000
4/03/2020 8,979 71,832
9/28/2020 10,000 341,900
Matthew Wilson 94,057 117,572 235,143
3/01/2020 110,162 1,999,991
3/01/2020 44,064 799,982
3/01/2020 38,556 699,984
4/03/2020 39,187 313,496
Michael F. Winterscheidt 47,500 59,375 118,750
4/03/2020 16,625 133,000
4/03/2020 4,739 37,912
11/25/2020 7,500 301,500
________________
(1)The amounts shown under the “estimated future payouts under non-equity incentive plan awards” column represent the performance-based annual cash bonus opportunity approved for 2020 for each of the named executive officers. The actual amounts awarded under the program for 2020 are shown in the Summary Compensation Table above under the “non-equity incentive plan compensation” column.
(2)The amounts shown under the “estimated future payouts under equity incentive plan awards” column include the award of performance-conditioned RSUs granted under the 2003 Plan to each of Messrs. Eklund and Wilson in connection with their commencement of employment with the Company. As noted above, Messrs. Eklund and Wilson each subsequently agreed to forfeit 50% of these awards in exchange for removing the performance goals in light of the determination that the goals were no longer capable of being achieved as a result of the COVID-19 pandemic. For additional information regarding these awards, see “Compensation Discussion and Analysis - Objectives and Components of Compensation Program - Long-Term Incentive Compensation”. Although we modified certain equity awards in 2020, as discussed above, the incremental value associated with such modifications was negative, and therefore such value is not reflected in this table.
(3)The amounts shown under the “all other stock awards” column reflect annual grants of time-vesting RSU awards that vest in four equal installments on each of March 20, 2021 and the first three anniversaries of that date for each of Messer. Cottle, Quartieri, Sottile, Wilson and Winterscheidt. For additional information regarding these awards, see “Compensation Discussion and Analysis - Objectives and Components of Compensation Program - Long-Term Incentive Compensation - Annual Equity Awards.” The amounts shown in this column also include, in the case of Messrs. Quartieri, Sottile and Winterscheidt, broad-based special retention grants of time-vesting RSUs that vest 60% on March 20, 2021 and 40% on March 20, 2022, in the case of Mr. Sottile only, a grant of time-vesting RSUs in recognition of his efforts in connection with the MafCo Transaction that vest in three equal installments on each of September 28, 2021 and the first two anniversaries of that date and, in the case of Mr. Winterscheidt only, a retention grant of time-vesting RSUs that vest in three equal installments on each of November 25, 2021 and the first two anniversaries of that date. In the case of Messrs. Eklund and Wilson, the amounts shown in this column also include sign-on equity awards, the vesting terms of which
35


are described above in “Compensation Discussion and Analysis - Objectives and Components of Compensation Program - Long-Term Incentive Compensation - Other Equity Awards – 2020 Sign-On Awards”. For additional information regarding all awards other than the annual equity awards, see “Compensation Discussion and Analysis - Objectives and Components of Compensation Program - Long-Term Incentive Compensation - Other Equity Awards.”
(4)The amounts shown as the “grant date fair value” of the awards were computed in accordance with FASB ASC Topic 718. The fair value was determined by multiplying the number of shares subject to the award by the average of the high and low sales prices of our common stock on the trading day immediately prior to the grant date. For a discussion of valuation assumptions, see Note 17 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.
(5)All of Mr. Quartieri’s equity awards reflected here were forfeited in connection with his termination of employment.

Outstanding Equity Awards at Fiscal Year-End
The table below provides information with respect to the stock options and RSUs held by the named executive officers as of December 31, 2020.
36





Option Awards Stock Awards
Name Security Grant Date Number of Securities Underlying Unexercised Options
 (#) Exercisable
Number of Securities Underlying Unexercised Options
(#) Unexercisable
($) Equity Incentive Plan Awards Number of Securities Underlying Unexercised Unearned Options (#) Option Exercise Price
($/Sh)
Option Expiration Date Number of Shares or Units of Stock That Have Not Vested
(#)
Market Value of Shares or Units of Stock That Have Not Vested
($) (1)
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($) (1)
Barry L. Cottle SGMS 06/01/2018
14,207 (2)
14,208 (2)
—  59.35  05/31/2028 —  —  —  — 
SGMS 06/01/2018 —  — 
28,415 (3)
59.35  05/31/2028 —  —  —  — 
SGMS 06/01/2018 —  —  —  —  — 
100,000 (4)
4,149,000  —  — 
SGMS 06/01/2018 —  —  —  —  — 
33,334 (5)
1,383,028  —  — 
SGMS 06/01/2018 —  —  —  —  — 
7,203 (6)
298,852  —  — 
SGMS 03/20/2019
29,027(7)
87,082 (7)
—  22.69  03/20/2029 —  —  —  — 
SGMS 03/20/2019 —  — 
116,109 (8)
22.69  03/20/2029 —  —  —  — 
SGMS 03/20/2019 —  —  —  —  — 
48,204 (9)
1,999,984  —  — 
SCPL 05/07/2019 —  —  —  —  —  —  — 
750,000 (10)
10,387,500 
SGMS 04/03/2020 —  —  —  —  — 
218,750 (11)
9,075,938  —  — 
Michael A. Quartieri SGMS 03/30/2018
 12,025 (12)
—  —  41.13  03/29/2028 —  —  —  — 
SGMS 03/30/2018
12,025 (13)
—  —  41.13  03/29/2028 —  —  —  — 
SGMS 03/09/2017
 5,598 (14)
—  —  22.69  03/08/2027 —  —  —  — 
Michael C. Eklund SGMS 06/08/2020 —  —  —  —  — 
75,000 (15)
3,111,750  —  — 
SGMS 06/08/2020 —  —  —  —  — 
60,000 (16)
2,489,400  —  — 
James Sottile SGMS 09/04/2018
2,503 (17)
2,503 (17)
—  30.33  09/03/2028 —  —  —  — 
SGMS 09/04/2018
2,503 (18)
2,503 (18)
—  30.33  09/03/2028 —  —  —  — 
SGMS 09/04/2018 —  —  —  —  — 
1,344 (19)
55,763  —  — 
SGMS 09/04/2018 —  —  —  —  — 
2,198 (20)
91,195  —  — 
SGMS 03/20/2019
3,781 (7)
11,346 (7)
—  22.69  03/20/2029 —  —  —  — 
SGMS 03/20/2019 —  — 
15,127 (8)
22.69  03/20/2029 —  —  —  — 
SGMS 03/20/2019 —  —  —  —  — 
6,280 (9)
260,557  —  — 
SCPL 08/05/2019 —  —  —  —  — 
4,688 (21)
64,929  —  — 
SGMS 04/03/2020 —  —  —  —  — 
37,500 (11)
1,555,875  —  — 
SGMS 04/03/2020 —  —  —  —  — 
8,979 (22)
372,539  —  — 
SGMS 09/28/2020 —  —  —  —  — 
10,000 (23)
414,900  —  — 
SGMS 03/01/2020 —  —  —  —  — 
55,081 (24)
2,285,311  —  — 
Matthew Wilson SGMS 03/01/2020 —  —  —  —  — 
44,064 (25)
1,828,215  —  — 
SGMS 04/03/2020 —  —  —  —  — 
39,187 (11)
1,625,869  —  — 
Michael F.
Winterscheidt
SGMS 03/09/2017 —  —  —  —  — 
3,444 (26)
142,892  —  — 
SGMS 03/30/2018 —  —  —  —  — 
3,617 (19)
150,069  —  — 
SGMS 03/20/2019 —  —  —  —  — 
10,991 (9)
456,017  —  — 
SCPL 08/05/2019 —  —  —  —  — 
4,688 (21)
64,929  —  — 
SGMS 04/03/2020 —  —  —  —  — 
16,625 (11)
689,771  —  — 
SGMS 04/03/2020 —  —  —  —  — 
4,739 (22)
196,621  —  — 
SGMS 11/25/2020 —  —  —  —  — 
7,500 (27)
311,175  —  — 
________________
(1)The value shown was calculated, in the case of awards of RSUs granted by the Company, by multiplying the number of RSUs by the closing price of our common stock on December 31, 2020 ($41.49). In the case of RSUs granted by SciPlay, the value shown was calculated by multiplying the number of RSUs by the closing price of SciPlay’s Class A common stock on December 31, 2020 ($13.85).
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(2)These stock options were awarded with a four-year vesting schedule. The first and second installments vested and became exercisable on each of June 1, 2019 and June 1, 2020. The balance is scheduled to vest in two annual installments beginning on June 1, 2021.
(3)These stock options were scheduled to become exercisable in four equal annual installments beginning on June 1, 2019, subject to the Company’s 60-trading day average closing price of the Company’s common stock meeting or exceeding 120% of the strike price of the stock options prior to June 1, 2022. The stock price hurdle has not yet been achieved, and therefore all options remain unvested.
(4)These RSUs, granted to Mr. Cottle as part of his appointment as President and Chief Executive Officer, were originally scheduled to cliff vest at the end of a three-year performance period from June 1, 2018 to May 31, 2021, contingent upon the achievement of defined levels of Consolidated AEBITDA improvement over such three-year period. As described above, as a result of the impact of COVID-19 on the Company’s business, this award was modified to remove the performance condition, conditioned on Mr. Cottle agreeing to forfeit 50% of the award, such that the remaining 100,000 RSUs will now cliff-vest on June 1, 2021.
(5)These RSUs are part of a grant that was awarded with a three-year vesting schedule. The first and second installments vested on each of June 1, 2019 and 2020. The RSUs shown in the table are scheduled to vest on June 1, 2021.
(6)These RSUs are part of a grant that was awarded with a four-year vesting schedule. The first and second installments vested on each of June 1, 2019 and June 1, 2020. The RSUs shown in the table are scheduled to vest in two annual installments beginning on June 1, 2021.
(7)These stock options were awarded with a four-year vesting schedule. The first installment vested and became exercisable on March 20, 2020. The balance is scheduled to vest in three annual installments beginning on March 20, 2021.
(8)These stock options were scheduled to become exercisable in four annual installments beginning on March 20, 2020, subject to the Company’s achievement of a Consolidated AEBITDA goal, which as described above, was modified as a result of the impact of the COVID-19 pandemic. In early 2021, the Committee determined that the Consolidated AEBITDA goal was achieved.
(9)These RSUs are part of a grant that was awarded with a four-year vesting schedule. The first installment vested on March 20, 2020. The RSUs shown in the table are scheduled to vest in three annual installments beginning on March 20, 2021.
(10)The Social Award RSUs are scheduled to cliff vest at the end of 2020, contingent upon the achievement of defined levels of SciPlay revenue and STIP AEBITDA for SciPlay’s 2020 fiscal year. In early 2021, the SciPlay Compensation Committee determined the applicable level of performance, and the Social Award RSUs vested with respect to 494,250 shares of SciPlay Class A common stock.
(11)These RSUs are scheduled to vest in four equal annual installments beginning on March 20, 2021.
(12)These stock options were awarded with a four-year vesting schedule. The first and second installments vested and became exercisable on March 20, 2019 and 2020. The balance was fully vested in connection with Mr. Quartieri’s termination of employment as described in more detail in “Potential Payments upon Termination or Change in Control- Mr. Quartieri”.
(13)These stock options were scheduled to become exercisable in four annual installments beginning on March 20, 2019, subject to the 60-trading day average closing price of the Company’s common stock meeting or exceeding 120% of the strike price of the stock options prior to March 20, 2022. The performance goal with respect to these stock options was achieved on June 25, 2018, and the first and second installments vested and became exercisable on each of March 20, 2019 and March 20, 2020. The balance was fully vested in connection with Mr. Quartieri’s termination of employment as described in more detail in “Potential Payments upon Termination or Change in Control- Mr. Quartieri”.
(14)These stock options were awarded with a four-year vesting schedule. The first installment vested and became exercisable on March 20, 2020. The balance was forfeited in connection with Mr. Quartieri’s termination of employment as described in more detail in “Potential Payments upon Termination or Change in Control- Mr. Quartieri”.
(15)These RSUs, granted to Mr. Eklund as part of his commencement as Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary, were originally scheduled to cliff vest on June 8, 2023, contingent upon the achievement of defined levels of Consolidated AEBITDA improvement during the period one-year period beginning on April 1, 2022 and ending on March 31, 2023. As described above, as a result of the impact of COVID-19 on the Company’s business, this award was modified to remove the performance condition, conditioned on Mr. Eklund agreeing to forfeit 50% of the award, such that the remaining 75,000 RSUs will now cliff-vest on June 8, 2023.
(16)These RSUs are scheduled to vest 26,677 on June 1, 2021 and the balance vest in two equal annual installments beginning on June 1, 2022.
(17)These stock options were awarded with a four-year vesting schedule. The first and second installments vested and became exercisable on March 20, 2019 and March 20, 2020. The balance is scheduled to vest in two annual installments beginning on March 20, 2021.
(18)These stock options were scheduled to become exercisable in four annual installments beginning on March 20, 2019, subject to the 60-trading day average closing price of the Company’s common stock meeting or exceeding 120% of the strike price of the stock options prior to March 20, 2022. The stock price hurdle has been achieved, and therefore the first two installments of the options have vested. The balance is scheduled to vest in two annual installments beginning on March 20, 2021.
(19)These RSUs are part of a grant that was awarded with a four-year vesting schedule. The first and second installments vested on each of March 20, 2019 and March 20, 2020. The RSUs shown in the table are scheduled to vest in two annual installments beginning on March 20, 2021.
(20)These RSUs are part of a grant that was awarded with a three-year vesting schedule. The first and second installment vested on August 31, 2019 and August 31, 2020. The RSUs shown in the table are scheduled to vest on August 31, 2021.
(21)These RSUs are part of a grant that was awarded by SciPlay with a four-year vesting schedule. The first installment vested on May 7, 2020. The RSUs shown in the table are scheduled to vest in three annual installments beginning on May 7, 2021. These awards will settle in shares of SciPlay Class A common stock.
(22)These RSUs are scheduled to vest 60% on March 20, 2021 and 40% on March 20, 2022.
(23)These RSUs are scheduled to vest in three equal annual installments beginning on September 28, 2021.
(24)These RSUs, granted to Mr. Wilson as part of his commencement as Executive Vice President, Group Chief Executive, Gaming, were originally scheduled to vest in two installments on each of July 31, 2022 and 2023, contingent upon the achievement of defined levels of Consolidated AEBITDA and revenue improvement for the Gaming division during the one-year period ending on each of June 30, 2022 and 2023, respectively. As described above, as a result of the impact of COVID-19 on the Company’s business, this award was modified to remove the performance condition, conditioned on Mr. Wilson agreeing to forfeit 50% of the award, such that the award will now vest in two equal annual installments beginning on July 31, 2022.
(25)These RSUs are scheduled to vest on March 1, 2021.
(26)These RSUs are part of a grant that was awarded with a four-year vesting schedule. The first, second and third installments vested on each of March 20, 2018, March 20, 2019 and March 20, 2020. The RSUs shown in the table are scheduled to vest on March 20, 2021.
(27)These RSUs are scheduled to vest in three equal annual installments beginning on November 25, 2021.

Option Exercises and Stock Vested for Fiscal Year 2020
The table below provides information for the named executive officers with respect to stock options that were exercised and RSUs that vested during 2020.
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Option Awards

Stock Awards
Name Number of Shares Acquired on Exercise
(#)
Value Realized on Exercise
($) (1)

Number of Shares Acquired on Vesting
(#) (2)
Value Realized on Vesting
($) (3)
Barry L. Cottle

53,003 650,474
Michael C. Eklund

Michael A. Quartieri 148,202 3,369,560

19,921 147,468
James Sottile

6,525 78,454
Matthew Wilson

38,556 699,984
Michael F. Winterscheidt 12,976 99,670
________________
(1)Value based on the average of the high and low sale prices of our common stock as of the trading day immediately prior to the date upon which the stock options were exercised.
(2)In the case of Messrs. Sottile and Winterscheidt, includes 1,562 shares of SciPlay Class A common stock.
(3)Value based on the average of the high and low sale prices of our common stock or SciPlay’s Class A common stock, as applicable, as of the trading day immediately prior to the date upon which the RSUs vested.
Potential Payments Upon Termination or Change in Control
For the named executive officers in 2020, other than Mr. Quartieri, the information below describes and quantifies certain compensation that would become payable pursuant to the terms of their employment agreements, their equity award agreements and the CIC Plan under the various termination events described below. For Mr. Quartieri, who ceased to be employed with the Company during 2020, in accordance with applicable SEC rules, the information describes what became payable in connection with his actual termination of employment. In each case, the applicable arrangements were the result of arm’s length negotiations and were approved by the Committee and/or the Board.
Employment Agreements and Equity Award Agreements with Current Named Executive Officers and CIC Plan. The following disclosure applies to the named executive officers who were executives as of December 31, 2020, and therefore does not apply to Mr. Quartieri. For purposes of the disclosure that follows, a “Qualifying Termination: means the executive’s employment was terminated by the Company without “cause” or by him for “good reason” (as such terms are defined in the applicable agreement or the CIC Plan, as applicable), and an executive’s “Severance Bonus Amount” is equal to the highest annual incentive compensation paid to him in respect of the two most recent fiscal years but not more than his target bonus for the then-current fiscal year.
The employment agreement with each of Messrs. Cottle, Eklund and Sottile in effect as of December 31, 2020 provides that if the applicable executive experienced a Qualifying Termination, the executive would have been entitled to receive: (i) a pro rata bonus for the year of termination; (ii) an amount equal to the sum of his base salary and Severance Bonus Amount (in the case of Mr. Cottle, multiplied by two if the Qualifying Termination occurs within one year after a “change in control” (as defined in Mr. Cottle’s employment agreement)), generally payable over a period of 12 or 24 months, as applicable; and (iii) payment of COBRA premiums for up to 12 months if the executive elects to continue medical coverage under the Company’s group health plan in accordance with COBRA.
Notwithstanding the foregoing, the employment agreement with Mr. Eklund, as amended, and as in effect on December 31, 2020, provides that if his employment is terminated by the Company without “cause” prior to June 1, 2022, he will instead be entitled to receive: (i) a pro rata bonus for the year of termination; (ii) cash severance equal to two times the sum of his base salary and Severance Bonus Amount, multiplied by a fraction, the numerator of which is the number of days in the period beginning on the day following such termination of employment and ending on May 31, 2023, inclusive, and the denominator of which is 730; (iii) accelerated vesting of the 75,000 RSUs and the 60,000 RSUs granted to him as part of his appointment as Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary (described above in “Compensation Discussion and Analysis - Objectives and Components of Compensation Program - Long-Term Incentive Compensation - Other Equity Awards – 2020 Sign-On Awards) and his sign-on cash award of $500,000, in each case, to the extent outstanding and unvested, provided that, the timing for the payment of Mr. Eklund’s sign-on cash award will remain unchanged if such termination occurs on or after January 1, 2021; and (iv) payment of COBRA premiums for up to 12 months if Mr. Eklund elects to continue medical coverage under the Company’s group health plan in accordance with COBRA.
39


The employment agreement with Mr. Wilson, in effect as of December 31, 2020, provides that if Mr. Wilson experienced a Qualifying Termination, Mr. Wilson would have been entitled to receive: (i) a pro rata bonus for the year of termination; (ii) an amount equal to two times his base salary, payable over a period of 24 months; (iii) a pro-rated portion of the 44,064 RSUs and the 55,081 RSUs granted to him as part of his appointment as Executive Vice President and Group Chief Executive, Gaming, which are described above in “Compensation Discussion and Analysis - Objectives and Components of Compensation Program - Long-Term Incentive Compensation - Other Equity Awards – 2020 Sign-On Awards” and (iv) payment of COBRA premiums for up to 18 months if Mr. Wilson elects to continue medical coverage under the Company’s group health plan in accordance with COBRA.
The employment agreement with Mr. Winterscheidt in effect as of December 31, 2020 provides that if Mr. Winterscheidt experienced a Qualifying Termination, he would have been entitled to receive an amount equal to his base salary, payable over a period of 12 months.
In the event of the death of a named executive officer, his beneficiary or estate would have been entitled to receive any benefits that would have been payable under any life insurance benefit of his for which the Company pays premiums. In the event of the termination of a named executive officer due to his “total disability” (as such term is defined in the applicable agreement), such named executive officer would have been entitled to receive disability payments pursuant to a disability plan sponsored or maintained by the Company.
Upon a Qualifying Termination occurring on December 31, 2020, Mr. Cottle would have remained eligible to receive a pro-rated portion of the 100,000 RSUs granted to him as part of his appointment as President and Chief Executive Officer, which are described above in footnote (4) to the Outstanding Equity Awards at Fiscal Year End Table. The award agreement with respect to Mr. Cottle’s Social Award RSUs provides that, in the event Mr. Cottle’s employment with the Company and SciPlay terminated without “cause” or for “good reason” (each, as defined in such agreement), Mr. Cottle would remain eligible to fully vest in the Social Award RSUs, based on actual performance achieved. In the event of a “change in control” of SciPlay (as defined in the SciPlay Long-Term Incentive Plan, which, as long as the Company remains a majority stockholder of SciPlay in respect of voting rights, includes a “change in control” of the Company, as defined in the 2003 Plan), the Social Award RSUs would vest based on the level of performance determined by the SciPlay Compensation Committee, provided that, if Mr. Cottle’s employment with SciPlay had terminated without cause or for good reason prior to such change in control, the Social Award RSUs would vest at target (regardless of whether or not Mr. Cottle’s employment with the Company is terminated).
Under the terms of our and SciPlay’s standard equity award agreements, unvested stock options and RSUs held by an employee (including a named executive officer), other than the Social Award RSUs, would generally vest upon the termination of such employee’s employment by reason of death or “disability” (as such term is defined in the applicable award agreement).
Each employment agreement also contains, among other things, covenants imposing on the named executive officer certain obligations with respect to confidentiality and proprietary information and restricting his ability to engage in certain activities in competition with the Company during the term of his employment and for a period of 12 months after termination (in the case of Mr. Wilson, for a period of 24 months after termination). Incentive-based compensation and benefits provided under the agreement will be subject to recovery under the Company’s “clawback” policy, described above under “Compensation Discussion and Analysis - Corporate Governance Policies - Clawback Policy”.
Under the CIC Plan, if a named executive officer’s employment is terminated by the Company without “cause” or by the executive for “good reason” within 18 months of a “change in control” (each as defined in the CIC Plan), the executive would be entitled to receive: (i) a pro rata bonus for the year of termination based on actual performance; (ii) cash severance equal to the sum of his base salary and Severance Bonus Amount, multiplied by two in the case of Messrs. Cottle, and Wilson and one and a half in the case of Messrs. Eklund, Sottile and Winterscheidt, payable in a lump sum unless Section 409A of the Internal Revenue Code would require a different payment timing; (iii) payment of COBRA premiums for up to the length of the severance period if the applicable named executive officer elects to continue medical coverage under the Company’s group health plan in accordance with COBRA; and (iv) accelerated vesting of all equity awards granted by the Company or SciPlay, with the level of achievement of any performance-based vesting criteria determined by the Committee or the SciPlay Compensation Committee, as applicable. For purposes of the CIC Plan, “change in control” is generally defined as a third-party, excluding MacAndrews & Forbes and its affiliates, acquiring at least 30% of the Company’s common stock. The CIC Plan provides that, upon a termination of employment, the named executive officer would receive benefits under either CIC Plan or his employment agreement, whichever provides the greater benefit.
40


The CIC Plan and the employment agreements with the named executive officers, other than Mr. Winterscheidt’s employment agreement, provide that if the payments and benefits to be provided under the CIC Plan or the executive’s employment agreement, as applicable, were subject to the excise tax under Section 4999 of the Internal Revenue Code, a “best net” cutback will apply, such that the applicable executive would have received either the full amount of such payments and benefits or payments and benefits with a value equal to one dollar less than the threshold that would subject such executive to such excise tax, whichever would have resulted in a greater after-tax amount.
The amounts described below are estimates, and the actual amounts to be paid can only be determined at the time of the executive’s separation. The amounts described below would be in addition to amounts the individual would receive in respect of previously earned amounts, such as balances under the 401(k) plan and previously vested equity or bonus awards, as to which neither the named executive officer’s employment agreement nor the plans provide for enhanced benefits or payments upon termination. The values shown below for equity awards that would have accelerated had the specified termination event occurred on the last day of the year were calculated by multiplying the number of shares subject to the acceleration by the closing price of our common stock or SciPlay’s Class A common stock, as applicable, on the last trading day of the year, which was $41.49 and $13.85, respectively (and, in the case of stock options, reducing the value, but not below zero, by the exercise price for such options).
41


Mr. Cottle
The following describes the estimated amounts Mr. Cottle would have received if the termination event specified occurred on December 31, 2020:

Voluntary
Resignation
Termination
for Cause
Termination
Without
Cause or for
Good Reason
Termination
Without
Cause or for
Good Reason
(w/ Change in
Control)(a)
Termination
Due to
Death
Termination
Due to
Disability
Cash Payments






Base Salary — 

—  $
1,750,000 (b)
$
3,500,000 (c)
— 

— 
Severance Bonus Amount — 

—  $
750,312 (b)(d)
$
1,500,624 (e)
— 

— 
Bonus for Year of Termination — 

—  $
437,500 (f)
$
437,500 (f)
— 

— 
Total Cash Payments — 

—  $ 2,937,812  $ 5,438,124 

— 

— 
Benefits & Perquisites



Health and Welfare Benefits — 

—  $
 16,094 (g)
$
 32,189 (g)
$
3,500,000 (g)
— 
Total Benefits & Perquisites — 

—  $ 16,094  $ 32,189 

$ 3,500,000 

— 
Long-Term Incentive Compensation


“Spread” Value of Accelerated SGMS Options — 

—  —  $
3,819,991 (h)
$
3,819,991 (h)
$
3,819,991 (h)
Value of Accelerated SGMS RSUs — 

—  $
3,577,377 (h)
$
16,906,802 (h)
$
16,906,802 (h)
$
16,906,802 (h)
Value of Accelerated SCPL RSUs — 

—  $
6,845,363 (i)
$
6,845,363 (i)
—  — 
Total Value of Accelerated Equity Awards — 

—  $ 10,422,740  $ 27,572,156 

$ 20,726,793 

$ 20,726,793 
Total Value of Payments and Benefits — 

—  $ 13,376,646  $ 33,042,469 

$ 24,226,793 

$ 20,726,793 
________________
(a)Either a Qualifying Termination upon or within one year immediately following a change in control for the purposes of Mr. Cottle’s employment agreement and the 2003 Plan or termination without cause or for good reason upon or within 18 months following a change in control for purposes of the CIC Plan.
(b)Paid over 12 months.
(c)Amount reflects two times base salary. Paid in a lump sum upon termination if permitted under Section 409A of the Internal Revenue Code, otherwise paid over 24 months.
(d)Amount reflects Severance Bonus Amount. Amount shown is actual 2018 bonus.
(e)Amount reflects two times Severance Bonus Amount. Amount shown is two times actual 2018 bonus. Paid in a lump sum upon termination if permitted under Section 409A of the Internal Revenue Code, otherwise paid over 24 months.
(f)Amount reflects pro-rata bonus that would have been received for the year of termination (amount shown is actual 2020 bonus). Paid in a lump sum.
(g)Amount reflects (i) the cost of continued health coverage under the Company’s insurance under COBRA for 12 months (or 24 months if the termination is without cause or for good reason upon or within 18 months following a change in control for purposes of the CIC Plan) or (ii) in the event of termination due to death, proceeds from life insurance for which the Company pays the premiums.
(h)In the case of a termination without cause or for good reason, absent a change in control, reflects vesting of a pro-rata portion of the 100,000 RSUs granted to Mr. Cottle upon his appointment as President and Chief Executive Officer. In the case of a change in control for purposes of the 2003 Plan, termination without cause or for good reason upon or within 18 months following a change in control for purposes of the CIC Plan (and that did not constitute a change in control under the 2003 Plan) or termination due to death or disability, reflects full vesting of all Scientific Games equity awards upon the change in control or applicable termination event (assuming achievement of all applicable performance criteria at “target” levels).
(i)Reflects vesting of Social Award RSUs based on actual achievement as of December 31, 2020, as described in “Compensation Discussion and Analysis - Objectives and Components of Compensation Program - Long-Term Incentive Compensation - Other Actions with Respect to Equity Awards”.


42


Mr. Eklund
The following describes the estimated amounts Mr. Eklund would have received if the termination event specified occurred on December 31, 2020:

Voluntary
Resignation
Termination
for Cause
Termination
Without
Cause or for
Good Reason
Termination
Without
Cause or for
Good Reason
(w/ Change in
Control)(a)
Termination
Due to
Death
Termination
Due to
Disability
Cash Payments






Base Salary — 

—  $
1,812,329 (b)
$
1,812,329 (c)
— 

— 
Severance Bonus Amount — 

— 
(d)
(e)
— 

— 
Bonus for Year of Termination — 

—  $
500,000 (f)
$
500,000 (f)
— 

— 
Total Cash Payments — 

—  $ 2,312,329  $ 2,312,329 

— 

— 
Benefits & Perquisites



Health and Welfare Benefits — 

—  $
 16,272 (g)
$
16,272 (g)
$
1,500,000 (g)
— 
Total Benefits & Perquisites — 

—  $ 16,272  $ 16,272 

$ 1,500,000 

— 
Long-Term Incentive Compensation


Value of Accelerated SGMS RSUs — 

—  $
5,601,150 (h)
$
5,601,150 (h)
$
5,601,150 (h)
$
5,601,150 (h)
Total Value of Accelerated Equity Awards — 

—  $ 5,601,150  $ 5,601,150 

$ 5,601,150 

$ 5,601,150 
Total Value of Payments and Benefits — 

—  $ 7,929,751  $ 7,929,751 

$ 7,101,150 

$ 5,601,150 
________________
(a)Either a change in control for purposes of the 2003 Plan or a termination without cause or for good reason upon or within 18 months following a change in control for purposes of the CIC Plan. Mr. Eklund’s employment agreement does not provide for enhanced severance in the event of a change in control.
(b)Amount reflects 24 months of base salary, multiplied by a fraction, the numerator of which is the number of days from December 31, 2020 through May 31, 2023, inclusive, and the denominator of which is 730. If Mr. Eklund’s termination was for good reason, this amount would have been only one times base salary ($750,000). Paid over 12 months.
(c)Amount reflects 24 months of base salary, multiplied by a fraction, the numerator of which is the number of days from December 31, 2020 through May 31, 2023, inclusive, and the denominator of which is 730. Paid in a lump sum upon termination if permitted under Section 409A of the Internal Revenue Code, otherwise paid over 12 months. If Mr. Eklund’s termination was for good reason and he received benefits under the CIC Plan, this amount would have been only 18 months of base salary ($1,125,000). This amount will be reduced to 12 months of base salary ($750,000) in the event of a change in control for purposes of the 2003 Plan that is not a change in control for purposes of the CIC Plan and if Mr. Eklund’s termination is for good reason.
(d)Amount reflects Severance Bonus Amount, which would have been zero as of December 31, 2020, subject to the same multiplier as would apply to base salary. Paid over 12 months.
(e)Amount reflects Severance Bonus Amount, which would have been zero as of December 31, 2020, subject to the same multiplier as would apply to base salary. Paid in a lump sum upon termination if permitted under Section 409A of the Internal Revenue Code, otherwise paid over 12 months.
(f)Amount reflects vesting of Mr. Eklund’s cash sign-on award. If Mr. Eklund’s termination was for good reason, this amount would not have been payable.
(g)Amount reflects (i) the cost of continued health coverage under the Company’s insurance under COBRA for 12 months (or 18 months if Mr. Eklund had received severance under the CIC Plan) or (ii) in the event of termination due to death, proceeds from life insurance for which the Company pays the premiums.
(h)In the case of a termination without cause only, reflects vesting of all Mr. Eklund’s sign-on equity awards. In the case of a change in control for purposes of the 2003 Plan, termination without cause or for good reason upon or within 18 months following a change in control for purposes of the CIC Plan (and that did not constitute a change in control under the 2003 Plan) or termination due to death or disability, reflects full vesting of all Scientific Games equity awards upon the change in control or applicable termination event (assuming achievement of all applicable performance criteria at “target” levels).

43


Mr. Sottile
The following describes the estimated amounts Mr. Sottile would have received if the termination event specified occurred on December 31, 2020:

Voluntary
Resignation
Termination
for Cause
Termination
Without
Cause or for
Good Reason
Termination
Without
Cause or for
Good Reason
(w/ Change in
Control)(a)
Termination
Due to
Death
Termination
Due to
Disability
Cash Payments






Base Salary — 

—  $
700,000 (b)
$
1,050,000 (c)
— 

— 
Severance Bonus Amount — 

—  $
90,000 (d)
$
135,000 (e)
— 

— 
Bonus for Year of Termination — 

—  $
120,338 (f)
$
120,338 (f)
— 

— 
Total Cash Payments — 

—  $ 910,338  $ 1,305,338 

— 

— 
Benefits & Perquisites



Health and Welfare Benefits — 

—  $
 11,191 (g)
$
16,787 (g)
$
1,400,000 (g)
— 
Total Benefits & Perquisites — 

—  $ 11,191  $ 16,787 

$ 1,400,000 

— 
Long-Term Incentive Compensation


“Spread” Value of Accelerated SGMS Options — 

—  —  $
553,559 (h)
$
553,559 (h)
$
553,559 (h)
Value of Accelerated SGMS RSUs — 

—  —  $
2,750,828 (h)

$
2,750,828 (h)

$
2,750,828 (h)
Value of Accelerated SCPL RSUs — 

—  —  $
64,929 (h)

$
64,929 (h)

$
64,929 (h)
Total Value of Accelerated Equity Awards —  —  —  $ 3,369,316  $ 3,369,316  $ 3,369,316 
Total Value of Payments and Benefits —  —  $ 921,529  $ 4,691,441  $ 4,769,316  $ 3,369,316 
________________
(a)Either a change in control for purposes of the 2003 Plan or a termination without cause or for good reason upon or within 18 months following a change in control for purposes of the CIC Plan. Mr. Sottile’s employment agreement does not provide for enhanced severance in the event of a change in control.
(b)Paid over 12 months.
(c)Amount reflects 18 months of base salary. Paid in a lump sum upon termination if permitted under Section 409A of the Internal Revenue Code, otherwise paid over 12 months. This amount will be reduced to 12 months of base salary in the event of a change in control for purposes of the 2003 Plan that is not a change in control for purposes of the CIC Plan.
(d)Amount reflects Severance Bonus Amount. Amount shown is actual 2019 bonus.
(e)Amount reflects one and a half times Severance Bonus Amount, which is based on actual 2019 bonus. Paid in a lump sum upon termination if permitted under Section 409A of the Internal Revenue Code, otherwise paid over 12 months.
(f)Amount reflects pro-rata bonus that would have been received for the year of termination (amount shown is actual 2020 bonus). Paid in a lump sum.
(g)Amount reflects (i) the cost of continued health coverage under the Company’s insurance under COBRA for 12 months or 18 months if the termination is without cause or for good reason upon or within 18 months following a change in control for purposes of the CIC Plan or (ii) in the event of termination due to death, proceeds from life insurance for which the Company pays the premiums.
(h)In the case of a change in control for purposes of the 2003 Plan, termination without cause or for good reason upon or within 18 months following a change in control for purposes of the CIC Plan (and that did not constitute a change in control under the 2003 Plan) or termination due to death or disability, reflects full vesting of all Scientific Games and SciPlay equity awards upon the change in control or applicable termination event (assuming achievement of all applicable performance criteria at “target” levels).


44


Mr. Wilson
The following describes the estimated amounts Mr. Wilson would have received if the termination event specified occurred on December 31, 2020:

Voluntary
Resignation
Termination
for Cause
Termination
Without
Cause or for
Good Reason
Termination
Without
Cause or for
Good Reason
(w/ Change in
Control)(a)
Termination
Due to
Death
Termination
Due to
Disability
Cash Payments






Base Salary — 

—  $
1,500,000 (b)
$
1,500,000 (c)
— 

— 
Severance Bonus Amount — 

—  — 
(d)
— 

— 
Bonus for Year of Termination — 

—  $
117,572 (c)
$
117,572 (e)
— 

— 
Total Cash Payments — 

—  $ 1,617,572  $ 1,617,572 

— 

— 
Benefits & Perquisites



Health and Welfare Benefits — 

—  $
24,141 (g)
$
32,189 (f)
$
1,500,000 (f)
— 
Total Benefits & Perquisites — 

—  $ 24,141  $ 32,189 

$ 1,500,000 

— 
Long-Term Incentive Compensation


Value of Accelerated SGMS RSUs — 

—  $