SEC Form DEF 14A filed by Scientific Games Corp

4/29/22 4:10:31 PM ET

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DEF 14A 1 tm229895-2_def14a.htm DEF 14A tm229895-2_def14a - none - 34.2657592s

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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. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐

Preliminary Proxy Statement

☐

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒

Definitive Proxy Statement

☐

Definitive Additional Materials

☐

Soliciting Material under §240.14a-12

Light & Wonder, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒

No fee required.

☐

Fee paid previously with preliminary materials.

☐

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11

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April 29, 2022

Dear Stockholder:

You are cordially invited to attend the annual meeting of stockholders of Light & Wonder, Inc. to be held at 2:30 p.m. PDT, with access beginning at 2:00 p.m., on Wednesday, June 8, 2022. 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/LightWonderInc/2022/ by June 7, 2022 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/LightWonderInc/2022/vm.

At the meeting, we will be electing nine members of our Board of Directors and conducting an advisory vote to approve named executive officer compensation. We will also 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,

				Barry L. Cottle President and Chief Executive Officer

The accompanying Proxy Statement is dated April 29, 2022, and is first being made available to our stockholders on or about April 29, 2022.

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LIGHT & WONDER, INC.
6601 Bermuda Road
Las Vegas, NV 89119

NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS

Notice is hereby given that the annual meeting of stockholders of Light & Wonder, Inc. (the “Company”) will be held at 2:30 p.m. PDT on Wednesday, June 8, 2022, solely online via the Internet via a live webcast, for the following purposes:

To elect nine members of the Company’s Board of Directors to serve for the ensuing year and until their respective successors are duly elected and qualified.

To approve, on an advisory basis, the compensation of the Company’s named executive officers.

To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2022.

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 11, 2022 (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/LightWonderInc/2022/ by June 7, 2022 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 2021 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 [email protected] 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 8, 2022:

The Proxy Statement and 2021 Annual Report will be available on or
about April 29, 2022 through the Investors link on our website at
www.lnw.com or through www.proxyvote.com.

	Dated: April 29, 2022			By Order of the Board of Directors
				Constance P. James Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary

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	General Information					1
	Proposal 1: Election of Directors					4
	Nominees for Election					4
	Corporate Governance					8
	Director Compensation					13
	Security Ownership					18
	Executive Compensation					21
	Compensation Discussion and Analysis					21
	Compensation Committee Report					36
	Summary Compensation Table					37
	Grants of Plan-Based Awards for Fiscal Year 2021					39
	Outstanding Equity Awards at Fiscal Year-End					41
	Option Exercises and Stock Vested for Fiscal Year 2021					44
	Potential Payments Upon Termination or Change in Control					45
	Pay Ratio Disclosure					56
	Equity Compensation Plan Information					57
	Certain Relationships and Related Person Transactions					58
	Proposal 2: Approval, on an Advisory Basis, of the Compensation of the Company’s Named Executive Officers					59
	Report of the Audit Committee					61
	Proposal 3: Ratification of the Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm					62
	Fees Paid to Our Independent Registered Public Accounting Firm					62
	Other Matters					64
	Stockholder Proposals for the Next Annual Meeting					65
	Appendix A: Reconciliations of Non-GAAP Financial Measures					A-1

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LIGHT & WONDER, INC.
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 Light & Wonder, Inc. (“Light & Wonder,” 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 8, 2022, 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 2021 Annual Report, to first be made available to stockholders on or about April 29, 2022 through the Investors link on our website at www.lnw.com/investors/ 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 11, 2022 are entitled to vote at the meeting. At the close of business on April 11, 2022, 97,737,784 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 2022 annual meeting of stockholders will be a virtual meeting format as holding an in-person meeting may present an unacceptable risk to health and safety. 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.lnw.com.

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Voting Matters

Stockholders are being asked to vote on the following matters at the annual meeting:

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 nine director nominees possess a combination of qualifications, experience and judgment necessary for a well-functioning Board and the effective oversight of the Company.			FOR each Nominee
Proposal 2: Approval, on an Advisory Basis, of the Compensation of the Company’s Named Executive Officers (page 59)			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 the Appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s Independent Registered Public Accounting Firm (page 62)			FOR
The Audit Committee has appointed Deloitte to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2022. As a matter of good corporate governance, stockholders are being asked to ratify the Audit Committee’s appointment of Deloitte.

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.

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

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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 and 3).

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). 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) or the advisory vote on approval of named executive officer compensation (Proposal 2). 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 3) and, accordingly, your shares may be voted by your broker or nominee on Proposal 3 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, 2021, we owned all of the outstanding Class B common stock, which represents approximately 80.8% of SciPlay’s total outstanding shares of common stock and approximately 97.7% 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

The Board has nominated for election as a director to the Board the nine 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. Each of the director nominees served as a director during 2021 and is presently serving as a director.

The reconstituted Board currently consists of all directors elected at the Company’s 2021 annual meeting, other than Jack Markell, who resigned from the Board on December 31, 2021 in connection with his appointment as the U.S. Representative to the Organisation for Economic Co-operation and Development, with the rank of Ambassador.

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 1, 2022), business experience and certain other information regarding each of the nominees for director are set forth below.

Name	Age	Position with the Company	Director Since
Jamie R. Odell	63	Director (Executive Chair)	2020
Barry L. Cottle	60	Director; President and Chief Executive Officer	2018
Antonia Korsanos	52	Director (Executive Vice Chair)	2020
Hamish R. McLennan	55	Director	2020
Michael J. Regan	79	Director	2006
Virginia E. Shanks	61	Director	2021
Timothy Throsby	55	Director	2020
Maria T. Vullo	58	Director	2019
Kneeland C. Youngblood	66	Director	2018

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”), a global gaming content and technology company and mobile games publisher, 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 Chair 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

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Technology at MacAndrews & Forbes, a diversified holding company, 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 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 Treasury Wine Estates Limited since April 2020. Ms. Korsanos previously served as a director of Ardent Leisure Group Limited from September 2018 to June 2020, Crown Resorts Limited since from May 2018 to October 2021 and Webjet Limited from June 2018 to March 2021.

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 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 (“KPMG”) 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.

Virginia E. Shanks 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 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.

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

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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, an investment fund, where he ran their Asian business, located in Hong Kong.

Maria T. Vullo is the Chief Executive Officer of Vullo Advisory Services, PLLC, an advisory firm specializing in financial services regulatory consulting. Ms. Vullo also serves as Regulator-in-Residence at the Fintech Innovation Lab NYC and is an Adjunct Professor of Law at Fordham Law School. Ms. Vullo’s professional experience also includes serving as Vice Chairman and Chief Legal Officer of Emigrant Bank and Emigrant BanCorp, Inc., the largest privately held bank in the U.S., from September 2020 to June 2021, and as a Director from July 2019 to June 2021. In addition, Ms. Vullo 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 in the New York State Attorney General’s Office. 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 DayForward Life Insurance Company since 2020, and as a member of numerous nonprofit boards where she has assumed leadership positions.

Kneeland C. Youngblood has served as a Founding Partner/ Chairman and CEO of Pharos Capital Group, LLC, a private equity firm that invests in the healthcare service sector since 1998. Mr. Youngblood serves on the board of Core Scientific (listed 2022). He has served on the board of six TPG Pace SPACs since 2015. Mr. Youngblood has previously served on the boards of Starwood Hotels & Resorts Worldwide, Inc. (from 2001 to 2012), The Gap, Inc. (from 2006 to 2012), Burger King Holdings, Inc. (from 2004 to 2010) and Mallinckrodt Pharmaceuticals (2013-2022). He also previously served as a trustee of Texas Teachers Retirement System, the Dallas Employee Retirement System and the Dallas Police and Fire Pension Fund. He is a Trustee of Caltech and a member of the Council on Foreign Relations.

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, 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.

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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 and Cottle and Mses. Korsanos and Shanks), consumer products and marketing (Messrs. Odell, Cottle and McLennan and Mses. Korsanos and Shanks), legal and regulatory (Mses. Shanks and Vullo), investment and financial services (Messrs. 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) and as the Superintendent of the New York State Department of Financial Services (Ms. Vullo). Mr. 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 NINE 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 • Six independent director nominees • Entirely independent Board committees (other than Compliance Committee) • Regular executive sessions of independent directors • Separate Executive Chair and Chief Executive Officer roles • Lead Independent Director • Regular Board and committee self-evaluations • Risk management oversight by the Board and committees • Consideration of diversity in decisions regarding Board composition			• Code of Business Conduct (and related training) • Director and officer stock ownership guidelines • Executive compensation based on pay-for-performance philosophy • Cash and equity compensation clawback policy • Anti-hedging and anti-pledging policies • Stockholder right to call special meetings • Stockholder right to act by written consent • Absence of an “anti-takeover” rights plan and other “anti-takeover” provisions • Board oversight of diversity, equity and inclusion initiatives

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

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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.

In applying these standards, the Board determined that each of Messrs. 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.lnw.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.lnw.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. In 2021, the Board designated Mr. Youngblood as the lead independent director. 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.

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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 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 who reports functionally to the Chief Legal 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.

Environmental, Social and Governance. The Company is committed to serving as a responsible corporate steward, purpose driven in actions, while operating with the best interest of employees, partners, players and communities. Building a diverse and inclusive workplace for all employees through equity and belonging is the foundation of the Company’s sustainable and thriving culture. Environmental, Social and Governance (“ESG”) priorities are an integral part of shaping the culture and underscores the Company’s commitment to be an employer of choice and a positive influence in the industry and the communities in which we operate. In 2021, the Company established a Corporate Social Responsibility program and defined four main pillars that have been developed and integrated across the organization to include: Philanthropy; Diversity, Equity, and Inclusion; Environmental Sustainability; and Responsible Gaming. The full text of these guidelines can be accessed through the Investors Corporate Governance link on our website at www.lnw.com.

Diversity, Equity and Inclusion. Diversity, equity and inclusion (“DEI”) are embedded in the Company’s five core values which are focused on fostering a highly inclusive culture and celebrating our unique and diverse global perspectives. The Company collaborates as one diverse and inclusive team with a passion for building new worlds of play that produce the extraordinary. The Company formulated a diversity, equity and inclusion strategic plan and established a DEI Council and a DEI Task Force. The DEI Council oversees efforts by upholding accountability measures, ensuring continued commitment and momentum, and actively advocates for inclusive practices. The DEI Task Force manages and executes the workstreams with the intention to embed diversity, equity and inclusion into all human capital functions of the organization. The DEI Task Force consists of four workstreams which include: Culture, Retention & Belonging; Talent Acquisition; Learning & Development; and Pay Equity. In support of the Company’s core values, the Board asserts oversight and assumes responsibility to review the Company’s diversity, equity and inclusion policies and practices and compliance with its responsibilities as an equal opportunity employer. As the DEI Board

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representative, Mr. Youngblood is part of the DEI Council and reports to the Board at each Board meeting on the Company’s progress and performance compared to diversity, equity and inclusion strategic plan, culture and other matters related to diversity, equity and inclusion for the Company.

Board Diversity Matrix (as of April 29, 2022)
Total Number of Directors	9
	Female		Male		Non-Binary		Not Disclosed
Part I: Gender Identity
Directors		3		6		—		—
Part II: Demographic Background
African American or Black		—		1		—		—
Alaskan Native or Native American		—		—		—		—
Asian		—		—		—		—
Hispanic or Latinx		—		—		—		—
Native Hawaiian or Pacific Islander		—		—		—		—
White		2		3		—		—
Two or More Races or Ethnicities		—		—		—		—
LGBTQ+	—
Demographic background not disclosed	3

Board Meetings. The Board held a total of nine meetings during 2021, including four at which executive sessions were held with no members of management present. During 2021, 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.

The Board has approved charters for each Board committee, which can be accessed through the Investors — Corporate Governance link on our website at www.lnw.com. The current membership of each committee is as shown in the table below.

	Audit Committee			Compensation Committee			Compliance Committee			Nominating and Corporate Governance Committee
	Michael J. Regan (Chair) Timothy Throsby Maria T. Vullo			Hamish R. McLennan Kneeland C. Youngblood			Kneeland C. Youngblood (Chair) Barry L. Cottle Virginia Shanks Timothy Throsby Patricia Becker			Michael J. Regan (Chair) Hamish R. McLennan Maria T. Vullo

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

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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 2021.

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 five meetings during 2021.

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 2021.

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 2021.

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.

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 Light & Wonder, Inc., 6601 Bermuda Road, Las Vegas, NV 89119. The Corporate Secretary

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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, eight of the nine 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 2021. None of the Company’s executive officers, other than Mr. Cottle, serves, or in 2021 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 2021 served, as a member of the Board or the Compensation Committee. Mr. Cottle serves, and in 2021 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, including DEI and human rights. The full text of the Code can be accessed through the Investors — Corporate Governance link on our website at www.lnw.com.

Director Compensation

The following describes the compensation paid to each of our directors in 2021, excluding the compensation of Mr. Cottle, our President and Chief Executive Officer during 2021, 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 2021, under the Eligible Director compensation program, Eligible Directors were entitled to receive:

(1)

an annual retainer for service on the Board of $90,000;

(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 and the Nominating and Corporate Governance Committee of $20,000 (and an annual retainer for the chair of the Audit Committee of $35,000);

(4)

an annual retainer of $35,000 for the Lead Independent Director; and

(5)

an annual grant of restricted stock units (“RSUs”) with a grant date value of $210,000, vesting on the first anniversary of the grant date, provided such Eligible Director satisfied the Board’s attendance requirement for the prior calendar year, as discussed below.

Eligible Directors may elect to receive all or a portion of his or her cash retainers in the form of additional equity awards instead of cash. In 2021, none of the Eligible Directors elected to receive additional shares in lieu of cash retainers.

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. 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 2021, “Eligible Directors” consisted of all directors other than Messrs. Cottle and Odell and Ms. Korsanos, who were instead compensated based on their employment (in the case of Mr. Cottle) or consulting (in the case of Mr. Odell and Ms. Korsanos) agreement with the Company, as applicable. The

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compensation for Mr. Cottle is discussed in the section entitled “Executive Compensation”, and the compensation for each of Mr. 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. 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 and annual equity grant to the values described above; (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 for the Lead Independent Director, as described above; and (4) allowing each Eligible Director to elect to receive all or a portion of his or her cash retains 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 2021 was determined by dividing the grant date value of $210,000 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, 2,763 RSUs were awarded to each Eligible Director in 2021 (other than Ms. Shanks, who joined the Board after the annual grant date for 2021).

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 2021) satisfied the attendance requirements applicable for the 2021 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. Mr. Odell and Ms. Korsanos therefore receive annual consulting fees of $900,000 and $600,000, respectively, and do not receive any cash retainers or annual equity grants under the Eligible Director compensation program. In addition, in recognition of the value of the consulting services provided by Mr. Odell and Ms. Korsanos and the value unlocked by the acquisition in October 2020 by a group of long-term institutional investors of a 34.9% stake in the Company from MacAndrews & Forbes Incorporated (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 options. These stock options were subject to a three-year vesting schedule, with half of the then-unvested stock options vesting earlier if the volume-weighted average price of our common stock was at least $50.00 for 25 out of 30 consecutive trading days, and all of the then-unvested such stock options vesting earlier if the volume-weighted average price of our common stock was at least $75.00 for 25 out of 30 consecutive trading days. These stock price hurdles were achieved on May 28, 2021 and October 21, 2021, respectively, and therefore all of the stock options granted to Mr. Odell and Ms. Korsanos are now vested.

Director Compensation for 2021. The table below shows the compensation earned by each of our directors for 2021; other than Mr. Cottle, whose compensation is reflected in the Summary Compensation Table below.

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Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)(1)		Option Awards ($)(2)		Total ($)
Jamie R. Odell(5)		900,000(3)		—		—		900,000
Antonia Korsanos(5)		600,000(3)		—		—		600,000
Kneeland C. Youngblood		159,542(4)		209,961		—		369,503
Peter A. Cohen(6)		70,667(4)		—		—		70,667
Jack A. Markell(7)		105,576(4)		209,961		—		315,537
Hamish R. McLennan(8)		110,000(4)		678,411		—		788,411
Michael J. Regan		145,000(4)		209,961		—		354,961
Virginia Shanks(9)		56,112(4)		—		480,043		536,155
Timothy Throsby(8)		115,000(4)		678,411		—		793,411
Maria T. Vullo		115,000(4)		209,961		—		324,961

(1)

Reflects the grant date fair value of RSUs awarded during 2021 to all Eligible Directors (other than Ms. Shanks, who joined the Board after the annual grant date for 2021). The grant date fair values are computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”) and were 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, 2021.

(2)

Reflects the grant date fair value of stock options awarded to Ms. Shanks in connection with her election to the Board on June 9, 2021, 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, 2021.

(3)

Reflects the consulting fees for Mr. Odell and Ms. Korsanos as described above.

(4)

Reflects annual retainers earned by Eligible Directors for 2021, except that in the case of Mr. Cohen and Ms. Shanks, 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 2021, Mr. Odell and Ms. Korsanos did not receive any additional compensation in respect of his or her services as a director.

(6)

Mr. Cohen decided not to stand for reelection at the 2021 annual meeting of stockholders and his directorship expired on June 9, 2021.

(7)

As a result of Mr. Markell’s appointment by the President of the United States to coordinate the Afghan resettlement effort, “Operation Allies Welcome,” effective September 3, 2021 (the “Presidential Appointment”), Mr. Markell did not participate in any decisions of or made on behalf of the Company as a member of the Board or a committee thereof, or receive cash retainers that otherwise would have been paid to him pursuant to the Eligible Director compensation program. Following Mr. Markell’s resignation as a member of the Board and the Compensation Committee, in each case, effective December 31, 2021, in order to serve as the U.S. Representative to the Organisation for Economic Co-operation and Development, with the rank of Ambassador, Mr. Markell received the amounts payable to him pursuant to the Eligible Director compensation program during the Presidential Appointment, which amounts are reflected above.

(8)

In the case of Messrs. McLennan and Throsby, includes sign-on RSUs with a grant date value of $468,450, which were granted to Messrs. McLennan and Throsby in connection with their elections to the Board in 2020. Therefore, this compensation relates to 2020, but in accordance with applicable SEC rules, is required to be reported in 2021, the year the terms were finalized.

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(9)

Ms. Shanks joined the Board, effective as of June 9, 2021.

The table below shows the number of stock options and unvested RSUs held by each of our directors as of December 31, 2021; 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)		5,000(2)
Antonia Korsanos		677,933(1)		5,000(2)
Kneeland C. Youngblood		10,000(3)		12,897(4)
Peter A. Cohen(8)		—		—
Jack A. Markell(9)		10,000(3)		—
Hamish McLennan		10,000(3)		2,763(5)
Michael J. Regan		—		13,594(6)
Timothy Throsby		10,000(3)		2,763(5)
Virginia Shanks		10,000(3)		—
Maria T. Vullo		10,000(3)		9,042(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 which vested and became exercisable on May 15, 2021 and August 21, 2021, respectively. The remaining 662,933 stock options held by each of Mr. Odell and Ms. Korsanos were granted on September 28, 2020, each with a three-year vesting schedule (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”) and an exercise price of $35.42. One half of each of these stock option grants vested and become exercisable on each of May 28, 2021 and October 21, 2021 due to the achievement of the stock-price-thresholds on such dates.

(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 two equal installments as to 2,500 shares on each of May 15, 2022 and 2023 in the case of Mr. Odell and August 21, 2022 and 2023 in the case of Ms. Korsanos.

(3)

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, Mr. McLennan on November 11, 2020 and Ms. Shanks on June 11, 2021 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, $34.12 and $74.16, respectively. The first three installments of Mr. Youngblood’s stock options vested and became exercisable on the first three anniversaries of the date of grant and the balance is scheduled to vest and become exercisable on the fourth anniversary of the date of grant. The first two installments of Mr. Markell’s stock options vested and became exercisable on the first two anniversaries of the grant date and the balance vested upon the termination of his directorship on December 31, 2021. The first two installments of Ms. Vullo’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 Messrs. McLennan and Throsby’s stock options vested and become exercisable on the first anniversary of the applicable 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 applicable date of grant. Ms. Shanks’ stock options will vest and become exercisable on the first four anniversaries of their date of grant.

(4)

For Mr. Youngblood, reflects 3,855 RSUs granted on June 12, 2019, with 1,927 shares to vest on June 12, 2022 and 1,928 shares to vest on June 12, 2023, 6,279 RSUs granted on June 10, 2020, with 2,093 shares to vest on each of June 10, 2022, 2023 and 2024; and 2,763 RSUs granted on June 9, which will vest in full on June 9, 2022.

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(5)

For Messrs. McLennan and Throsby, reflects 2,763 RSUs granted on June 9, 2021, which will vest in full on June 9, 2022.

(6)

For Mr. Regan, reflects RSUs as described in more detail below:

Grant Date	Unvested Quantity		Vesting Schedule
June 13, 2018		697	Four-year vesting; 697 shares to vest on June 13, 2022
June 12, 2019		3,855	Four-year vesting; 1,927 shares to vest on June 12, 2022 and 1,928 shares to vest on June 12, 2023
June 10, 2020		6,279	Four-year vesting; 2,093 shares to vest on each of June 10, 2022, 2023 and 2024
June 9, 2021		2,763	One-year vesting; 2,763 shares to vest on June 9, 2022

(7)

For Ms. Vullo, reflects 6,279 RSUs granted on June 10, 2020, with 2,093 shares to vest on each of June 10, 2022, 2023 and 2024; and 2,763 RSUs granted on June 9, 2021, which will vest in full on June 9, 2022.

(8)

Mr. Cohen’s directorship ended on June 9, 2021, at which time all his remaining RSUs vested. Mr. Cohen did not have any outstanding stock options or RSUs as of December 31, 2021.

(9)

Mr. Markell’s directorship ended on December 31, 2021, at which time all his remaining RSUs and unvested stock options vested.

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. 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 Ms. Shanks (who joined the Board in June 2021) will have until June 2026 to satisfy the required level of ownership.

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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 April 11, 2022, unless otherwise noted, based on outstanding shares of 97,737,784. 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)
BlackRock, Inc. 55 East 52nd Street New York, New York 10055		10,186,006(2)		10.4%
Fine Capital Partners, L.P. 1350 Avenue of the Americas, Suite 1610 New York, New York 10019		9,354,622(3)		9.6%
Caledonia (Private) Investments Pty Limited Level 10, 131 Macquarie Street Sydney, NSW, 2000, Australia		9,282,787(4)		9.5%
The Vanguard Group – 23-1945930 100 Vanguard Blvd. Malvern, PA 19355		9,162,944(5)		9.4%
Jamie R. Odell		685,433		*
Barry L. Cottle		589,140		*
Antonia Korsanos		682,933		*
Hamish R. McLennan		65,213(6)		*
Michael J. Regan		94,225		*
Virginia E. Shanks		—		—%
Timothy Throsby		15,263		*
Maria T. Vullo		11,949		*
Kneeland C. Youngblood		18,304		*
Michael C. Eklund(7)		17,561		*
Constance P. James		17,365		*
Patrick McHugh(8)		87,653		*
James Sottile		71,078		*
Matthew Wilson		82,595		*
All current directors and executive officers as a group (consisting of 12 persons)(9)		2,333,498		2.4%

Represents less than 1% of the outstanding shares of common stock.

(1)

In accordance with SEC rules, this column includes shares that a person has a right to acquire within 60 days of April 11, 2022 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 April 11, 2022:

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Mr. Odell — 2,500 RSUs and 677,933 stock options; Ms. Vullo — 4,856 RSUs and 5,000 stock options; Mr. Youngblood — 4,856 RSUs and 7,500 stock options; Mr. Cottle — 20,269 RSUs and 216,784 stock options; Mr. Sottile — 32,702 stock options; Mr. McHugh — 26,156 stock options; Ms. Korsanos — 2,500 RSUs and 677,933 stock options; Mr. McLennan — 2,763 RSUs and 2,500 stock options; Mr. Throsby — 2,763 RSUs and 2,500 stock options.

(2)

Based on an amendment to Schedule 13G filed with the SEC on January 27, 2022 by Blackrock, Inc., reporting beneficial ownership as of December 31, 2021. The Schedule 13G states that Blackrock, Inc. has sole voting power with respect to 10,088,313 shares and sole dispositive power with respect to 10,186,006 shares.

(3)

Based on an amendment to Schedule 13G filed with the SEC on February 11, 2022 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, 2021. 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 9,354,622 shares and Adom Partners, L.P. has shared voting and shared dispositive power with respect to 5,188,364 shares. It also states that Ms. Debra Fine has sole voting and sole dispositive power with respect to 13,000 shares.

(4)

Based on an amendment to Schedule 13G filed with the SEC on February 15, 2022 by Caledonia (Private) Investments Pty Limited, reporting beneficial ownership as of December 31, 2021. The Schedule 13G states that Caledonia (Private) Investments Pty Limited has sole voting power with respect to 9,282,787 shares and sole dispositive power with respect to 9,282,787 shares.

(5)

Based on an amendment to Schedule 13G filed with the SEC on February 10, 2022 by The Vanguard Group — 23-1945930, reporting beneficial ownership as of December 31, 2021. The Schedule 13G states that The Vanguard Group — 23-1945930 has shared voting power with respect to 182,913 shares, sole dispositive power with respect to 8,904,446 shares and shared dispositive power with respect to 258,498 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 35,250 shares of common stock held by Londolozi Pty Limited ATF Londolozi Family Trust, of which Mr. McLennan serves as trustee.

(7)

Mr. Eklund was succeeded as Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary of the Company, effective September 16, 2021. Mr. Eklund’s beneficial ownership was determined as of the most recent date that was practicable for the Company, which was October 14, 2021 for the number of shares of our common stock held by Mr. Eklund.

(8)

As Executive Vice President and Group Chief Executive, Lottery, Mr. McHugh’s employment with the Company ceased upon the sale of the Lottery business on April 4, 2022.

(9)

Includes 1,622,852 shares issuable upon exercise of stock options and 40,507 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 April 11, 2022.

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 April 11, 2022 based on outstanding shares of Class A common stock of 24,661,195 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		*		—		—		*
Antonia Korsanos		—		—		—		—		—
Hamish R. McLennan		—		—		—		—		—
Michael J. Regan		—		—		—		—		—
Virginia E. Shanks		—		—		—		—		—
Timothy Throsby		—		—		—		—		—
Maria T. Vullo		—		—		—		—		—
Kneeland C. Youngblood		—		—		—		—		—
Michael C. Eklund(2)		—		—		—		—		—
Constance P. James		—		—		—		—		—
Patrick J. McHugh(3)		—		—		—		—		—
James Sottile		7,687		*		—		—		*
All current directors and executive officers as a group (consisting of 12 persons)(4)		325,688		*		—		—		*

Represents less than 1% of the outstanding shares of Class A common stock or Class B common stock, as applicable.

(1)

(2)

Mr. Eklund was succeeded as Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary of the Company, effective September 16, 2021. Mr. Eklund’s beneficial ownership was determined as of the most recent date that was practicable for the Company, which was October 15, 2021 for the number of shares of our common stock held by Mr. Eklund.

(3)

As Executive Vice President and Group Chief Executive, Lottery, Mr. McHugh’s employment with the Company ceased upon the sale of the Lottery business on April 4, 2022.

(4)

Includes 1,562 shares issuable upon vesting of RSUs as to which the equivalent number of underlying shares may be acquired through conversion within 60 days of April 11, 2022.

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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, 2021, who were:

Executive			Position
Barry L. Cottle			President and Chief Executive Officer
Constance P. James(1)			Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
Michael C. Eklund(1)			Former Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary
Patrick J. McHugh(2)			Former Executive Vice President and Group Chief Executive, Lottery
James Sottile			Executive Vice President and Chief Legal Officer
Matthew Wilson			Executive Vice President and Group Chief Executive, Gaming

(1)

Ms. James succeeded Mr. Eklund as Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary, effective as of October 15, 2021, and Mr. Eklund’s employment with the Company terminated as of such date.

(2)

As Executive Vice President and Group Chief Executive, Lottery, Mr. McHugh’s employment with the Company ceased upon the sale of the Lottery business on April 4, 2022.

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

Light & Wonder is a leading developer of technology-based products and services and associated content for the worldwide gaming, social and digital gaming industries. Our portfolio of revenue-generating activities primarily includes supplying game content and gaming machines, casino-management systems and table game products and services to licensed gaming entities; providing social casino and other mobile games to retail customers; and providing a comprehensive suite of digital real money gaming, distribution platforms, content, products and services to various gaming entities. We also gain access to technologies and pursue global expansion through strategic acquisitions. Following the development of our new business strategy by our reconstituted Board, we announced our intention, and subsequently entered into definitive agreements, to sell our Lottery and Sports Betting businesses (the “Divestitures”), whose revenue generating activities include providing instant and draw-based lottery products, lottery systems and lottery content and services to lottery operators along with providing sports wagering solutions to various gaming entities. The sale of our Lottery business was completed on April 4, 2022, with the exception of one entity organized in Austria and its subsidiaries, the sale of which is subject to obtaining the required regulatory approval.

Accordingly, excluding our Lottery and Sports Betting businesses, we report our results of operations in three business segments — Gaming, SciPlay and iGaming (former Digital business segment, excluding Sports Betting) — representing our different products and services.

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Our 2021 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 to support growth in our 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.

Compensation Program Highlights for 2021

The following is a summary of the highlights of the Company’s executive compensation program:

•

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 2021 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		87%
Other Current Named Executive Officers		76%

(1)

Calculated based off total compensation, as reported in the “Summary Compensation Table”, excluding amounts included in the “All Other Compensation” column. 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.

•

Despite the ongoing uncertainty of the COVID-19 pandemic and its impact on our business, we generally returned to our ordinary course compensation programs for 2021, including utilizing three different performance metrics in our 2021 SGICP, to avoid undue emphasis on any one metric, and granting performance-based equity awards as a significant portion (two-thirds) of our annual equity compensation.

•

2021 SGICP annual bonuses to our named executive officers (as further discussed below) paid out between 136.5% and 147.0% of target based on achievement of three performance metrics — revenue, cash adjusted EBITDA (“SGICP AEBITDA”) and adjusted free cash flow (“SGICP free cash flow”). SGICP free cash flow was measured on a company-wide (“Combined”) basis for all executives, while each of revenue and SGICP AEBITDA was measured on a Combined basis for all executives and on a business segment basis for those executives who managed a business segment. SGICP AEBITDA (both on a Combined and business segment basis) and SGICP free cash flow are non-GAAP financial measures with reconciliation provided in Appendix A. Mr. Eklund’s payout was pro-rated to reflect the amount of time he was employed in 2021.

•

SGICP annual bonuses have varied over the past five years as shown below.

Actual SGICP Annual Bonus as a % of Target Bonus Opportunity
Employees with Company-wide Responsibilities
2017	2018		2019		2020		2021
99.9%		25.5%		20.0%		25.0%		139.9%

•

In order to appropriately motivate and retain management, the Committee approved 2021 annual equity awards at the full target opportunity for named executive officers. 2020 and 2019 annual equity awards were also made at the full target opportunity (however, in 2020, 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).

•

For awards granted in 2021, we returned to our practice of granting awards subject to performance goals and increased the proportion of the total award subject to performance goals to two-thirds. Half

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of the performance-based awards are subject to a total shareholder return target and the remaining half are subject to an AEBITDA target.

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 67.42% of the votes cast at the 2021 annual meeting of stockholders). While the majority of our stockholders supported our executive compensation program, we understand that our below average say-on-pay vote was partly related to concerns regarding our long-term incentive program, in particular the modification or removal of performance conditions from legacy awards and the fact we did not grant performance-based awards in 2020, in both cases, due to the impact of the COVID-19 pandemic. We addressed these concerns in our 2021 long-term incentive program, by not only returning to our practice of granting performance-based awards, but significantly increasing the portion of long-term incentive awards that were performance-based to two-thirds of the total grant value provided to executives, and using two performance metrics, total shareholder return and AEBITDA. We also modified the structure of our 2021 performance-based awards so that the awards will only cliff-vest at the end of the three-year performance period, assuming the applicable performance criteria have been achieved. One feature we retained however is that the awards do not provide for a “performance multiplier”, so that no more than the target number of shares subject to the award may vest and pay out, regardless of the level of performance achieved. 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 2021 “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 bonus and performance-based equity awards. Performance metrics support important business priorities, and in 2021 we used three metrics to avoid undue emphasis on any one performance goal. In general, no SGICP 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. To strengthen alignment of our executives’ interests with the long-term interest of our stockholders, the Committee determined that annual bonus payouts for the executives would be entirely in the form of Company equity.

•

Inclusion of performance-conditioned equity awards. Vesting of certain equity awards is generally contingent on attaining certain performance goals. For awards granted in 2021, we returned to our practice of granting awards subject to performance goals and increased the proportion of such awards to two-thirds of the total grant value provided to executives. We also split the awards between two different performance goals, to ensure appropriate alignment between incentive compensation and our long-term business goals.

•

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.

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•

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:

Element of Compensation	Rationale	Linkage to Compensation Objective
Base Salary	• Provides fixed level of compensation	• Attracts and retains executive talent
Annual Incentive Compensation	• Target level of annual incentive compensation provides an attractive total incentive 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 (time- and performance-vesting RSUs)	• 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	• 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

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Element of Compensation	Rationale	Linkage to Compensation Objective
	appreciation aligns executive pay with stockholder interests • Time-vesting RSUs promote executive retention	• 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 2021, Mr. Cottle received a base salary increase of $50,000, from $1,750,000 to $1,800,000, effective June 1, 2021. In connection with her promotion to Chief Financial Officer, Ms. James received a base salary increase from $500,000 to $750,000, effective October 15, 2021.

Annual Incentive Compensation

Despite the ongoing uncertainty of the COVID-19 pandemic and its impact on our business, in 2021, the Committee determined that it was appropriate, and in the best interests of the Company and its stockholders, to generally return to our pre-pandemic annual incentive compensation plan design with respect to the 2021 SGICP, with one important difference: in order to continue conserving cash as a result of the uncertainties created by the ongoing COVID-19 pandemic and to strengthen alignment of our executives’ interests with the long-term interest of our stockholders, the Committee determined that annual bonus payouts for the executives would be entirely in the form of Company equity.

The Committee reviews the design of the SGICP each year with a view to realizing desired corporate objectives and in light of management’s recommendation as to financial targets and payout structure. In recent years, this review has focused on structuring an annual bonus payout scale that the Committee deems appropriate in light of our growth objectives, our commitment to pay down debt and our interest in managing incentive compensation costs. For 2021, the Committee approved an annual bonus payout structure under which achievement of targeted financial performance would generally result in the payout of the executive officer’s target bonus opportunity. In general, achievement of 85% or 130% or greater of financial targets would result in payouts of 25% and 200%, respectively, of an executive’s target bonus opportunity. Achievement of below 85% of a financial target would result in no payout with respect to that metric.

For 2021, annual bonuses under the SGICP for our executives with Company-wide responsibilities were earned based on the Company’s performance, relative to pre-determined financial targets based on revenue, SGICP AEBITDA and SGICP free cash flow, in each case, measured solely on a Combined basis. For executives who oversee a business segment, annual bonuses were determined based on a combination of overall Company metrics measured on a Combined basis and business segment financial targets, as set forth in more detail below. SGICP AEBITDA and SGICP free cash flow are non-GAAP metrics, and a reconciliation of

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these metrics is provided in Appendix A. In all cases, annual bonuses were not guaranteed, even if the financial goals were achieved, and the Committee retained discretion to adjust bonus payouts if it thought circumstances, including an executive’s individual performance, warranted it.

Based on the 2021 SGICP 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)		Maximum Annual Bonus Opportunity (% of Base Salary)
Mr. Cottle		25%		100%		200%
Ms. James(1)		(1)		(1)		(1)
Mr. McHugh		19%		75%		150%
Mr. Sottile		19%		75%		150%
Mr. Wilson		19%		75%		150%
Mr. Eklund(2)		19%		75%		150%

(1)

As a result of Ms. James’ salary increase on February 6, 2021 and her promotion to Chief Financial Officer of the Company on October 15, 2021, her annual bonus was calculated as follows: (a) based on a target percentage of 50% through October 14, 2021 and a target percentage of 75% for the remainder of the year; (b) based on an annual salary rate of $460,000 through February 6, 2021, an annual salary rate of $500,000 from February 7, 2021 through October 14, 2021 and an annual salary rate of $750,000 for the remainder of the year; and (c) based on a combination of Combined and Gaming business segment results through October 14, 2021 and solely on Combined results for the remainder of the year.

(2)

Mr. Eklund’s annual bonus was prorated as a result of his termination.

The tables below set forth the specific financial targets used to measure the Company’s performance and determine payouts under the 2021 SGICP:

Combined:

		Annual Bonus Payout as Percentage of Target Award
		Threshold 25%			Target 100%			110%			125%			175%			Max 200%
Revenue	Target ($) (millions)		$	2,724		$	3,205		$	3,365		$	3,526		$	3,846		$	4,167
	% of Target			85%			100%			105%			110%			120%			130%
SGICP AEBITDA	Target ($) (millions)		$	995		$	1,170		$	1,229		$	1,287		$	1,404		$	1,521
	% of Target			85%			100%			105%			110%			120%			130%
SGICP Free Cash Flow(1)	Target ($) (millions)		$	296		$	348		$	365		$	383		$	418		$	452
	% of Target			85%			100%			105%			110%			120%			130%

(1)

The SGICP free cash flow metric was established subject to an automatic adjustment based on the level of capital expenditures for 2021, to screen out any impact that capital expenditure decisions may have had on the determination of annual bonus payouts. The targets presented above are based on the actual capital expenditures for 2021.

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Gaming:

		Annual Bonus Payout as Percentage of Target Award
		Threshold 25%			Target 100%			110%			125%			175%			Max 200%
Revenue	Target ($) (millions)		$	1,036		$	1,219		$	1,280		$	1,341		$	1,463		$	1,585
	% of Target			85%			100%			105%			110%			120%			130%
SGICP AEBITDA	Target ($) (millions)		$	479		$	563		$	591		$	619		$	676		$	732
	% of Target			85%			100%			105%			110%			120%			130%

Lottery:

		Annual Bonus Payout as Percentage of Target Award
		Threshold 25%			Target 100%			110%			125%			175%			Max 200%
Revenue	Target ($) (millions)		$	857		$	1,008		$	1,058		$	1,109		$	1,210		$	1,310
	% of Target			85%			100%			105%			110%			120%			130%
SGICP AEBITDA	Target ($) (millions)		$	388		$	456		$	479		$	502		$	547		$	593
	% of Target			85%			100%			105%			110%			120%			130%

For employees with Company-wide responsibilities, which included Messrs. Cottle, Sottile and Eklund and, after her promotion to Chief Financial Officer, Ms. James, annual bonus amounts were determined based solely on performance, i.e., achievement against the three Combined metrics set forth above, with each subject to a 33.3% weighting. For leaders of a business segment, which included Messrs. McHugh and Wilson and, prior to her promotion to Chief Financial Officer, Ms. James, annual bonus amounts were determined based on the average of Company performance against the Combined metric and achievement against the applicable metric for the business segment for which the leader is primarily responsible, other than SGICP free cash flow, which was determined solely based on achievement against the Combined metric. Therefore, each of revenue and SGICP AEBITDA was subject to a 16.6% weighting (both on a Combined and business segment basis), while SGICP free cash flow was subject to a 33.3% weighting.

Annual Bonus Results

SGICP results for 2021 for each of the metrics described above are shown in the table below.

	2021 ($ millions)
	100% Target Achievement (100% payout)			SGICP Results(1)			Results (% of Target Achievement)		Payout %		Consolidated Weighted Payout (% of Target Bonus)(2)		Gaming Weighted Payout (% of Target Bonus)(3)		Lottery Weighted Payout (% of Target Bonus)(4)
Revenue (Combined basis)		$	3,205		$	3,307(5)		103.2%		106.4%		35.5%		17.6%		17.6%
SGICP AEBITDA (Combined basis)		$	1,170		$	1,311		112.1%		135.3%		45.0%		22.5%		22.5%
SGICP Free Cash Flow (Combined basis)		$	348		$	422		121.3%		178.1%		59.4%		59.4%		59.4%
Gaming Revenue		$	1,219		$	1,321		108.4%		120.2%		N/A		20.0%		N/A
Gaming SGICP AEBITDA		$	563		$	665		118.1%		165.4%		N/A		27.5%		N/A
Lottery Revenue		$	1,008		$	1,035(5)		102.7%		105.4%		N/A		N/A		17.6%
Lottery SGICP AEBITDA		$	456		$	488		107.0%		115.9%		N/A		N/A		19.4%
	Weighted Total:											139.9%		147.0%		136.5%

(1)

Refer to Appendix A for reconciliation of SGICP AEBITDA and SGICP free cash flow metrics, which are non-GAAP financial measures.

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(2)

Weighted payout for executives with Company-wide responsibilities, which includes Messrs. Cottle, Sottile and Eklund and, following her promotion to Chief Financial Officer, Ms. James.

(3)

Weighted payout for executives with responsibility for the Gaming business segment, which includes Mr. Wilson and, prior to her promotion to Chief Financial Officer, Ms. James.

(4)

Weighted payout for executives with responsibility for the Lottery business segment, which includes Mr. McHugh.

(5)

For SGICP purposes, the Committee adjusted the level of performance achieved by reducing actual Combined results by $3 million and Lottery revenue results by $2 million.

Summary

In summary, approved annual bonuses for 2021 for the named executive officers as shown below:

Executive	Actual Annual Bonus Award			Award as a % of Target Annual Bonus Opportunity		Award as a % of End of Year Base Salary
Mr. Cottle		$	2,489,054		139.9%		139.9%
Ms. James(1)		$	469,909		145.2%		62.7%
Mr. McHugh		$	614,250		136.5%		102.4%
Mr. Sottile		$	734,475		139.9%		104.9%
Mr. Wilson		$	826,875		147.0%		110.3%
Mr. Eklund(2)		$	618,771		139.9%		82.5%

(1)

As a result of Ms. James’ salary increase on February 6, 2021 and her promotion to Chief Financial Officer on October 15, 2021, her annual bonus was calculated as follows: (a) based on a target percentage of 50% through October 14, 2021 and a target percentage of 75% for the remainder of the year; (b) based on an annual salary rate of $460,000 through February 6, 2021, an annual salary rate of $500,000 from February 7, 2021 through October 14, 2021 and an annual salary rate of $750,000 for the remainder of the year; and (c) based on a combination of Combined and Gaming business segment results through October 14, 2021 and solely based on Combined results for the remainder of the year.

(2)

Mr. Eklund’s annual bonus was prorated as a result of his termination.

Other than with respect to Mr. Eklund, whose annual bonus was paid in cash, all annual bonus amounts for the executives were paid in the form of Company equity, with the cash value of the executive’s bonus converted into shares of our common stock based on the average of the high and low trading prices of our common stock on March 15, 2022 and rounding down to the nearest whole number.

Long-Term Incentive Compensation

Annual Equity Awards

The Company’s executive officers received annual long-term incentive compensation awards, comprised of time-vesting and time- and performance-vesting RSUs, 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 2021 are shown below:

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Executive	Target Equity Award Opportunity for 2021 (% of Salary)
Mr. Cottle		250%
Ms. James(1)		74%
Mr. Wilson		125%
Mr. Sottile		125%
Mr. McHugh		125%
Mr. Eklund(2)		125%

(1)

At the time annual grants were determined for 2021, Ms. James was Chief Financial Officer of the Gaming business segment. Although the structure of her equity awards was determined by the Committee, since she was not an executive officer, the grant date value of her equity awards was determined by senior management and approved by Mr. Cottle, within the parameters established by the Committee.

(2)

In accordance with the terms of his separation agreement, Mr. Eklund’s 2021 annual equity awards were forfeited upon his separation of employment from the Company.

As previously disclosed in our proxy statement filed with the SEC on April 28, 2021 (the “2021 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. For the 2021 grants, the Company returned to its practice of granting both performance-conditioned awards and time-vesting awards, and set the proportion of performance-conditioned awards to two-thirds of the executive’s total target award value. All awards were granted in the form of RSUs. Approximately half of the performance-conditioned awards vest subject to the Company’s achievement of total shareholder return targets relative to the S&P 400 average total shareholder return (“TSR RSUs”). The balance of the performance-conditioned awards vest subject to the Company’s achievement of certain AEBITDA targets (“AEBITDA RSUs”). The combination of TSR RSUs and AEBITDA RSUs is designed to incentivize achievement of long-term financial goals and strong stock price performance above that of the broader market. Performance-conditioned awards pay out at 50% at target if threshold performance is achieved, and the maximum payout (100% of target) occurs if target performance is achieved. There is no additional payout for performance above target.

Information regarding the 2021 annual equity awards is set forth below:

Executive	Date of Grants(1)		Time-Vesting RSUs(2)		TSR RSUs(3)		AEBITDA RSUs(3)
Mr. Cottle		03/22/2021		33,536		33,536		—
Mr. Cottle		06/25/2021		—		—		33,537
Ms. James		03/22/2021		2,823		2,823		—
Ms. James		06/25/2021		—		—		2,823
Mr. Eklund(4)		03/22/2021		7,186		7,186		—
Mr. Eklund(4)		06/25/2021		—		—		7,187
Mr. McHugh		03/22/2021		5,749		5,749		—
Mr. McHugh		06/25/2021		—		—		5,749
Mr. Sottile		03/22/2021		6,707		6,707		—
Mr. Sottile		06/25/2021		—		—		6,707
Mr. Wilson		03/22/2021		7,186		7,186		—
Mr. Wilson		06/25/2021		—		—		7,187

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(1)

Given the continued uncertainty due to the COVID-19 pandemic, the Committee determined that it would be in the best interests of the Company and stockholders to delay the grant of the AEBITDA RSUs by three months in order to develop a three-year AEBITDA goal that the Committee felt would be challenging, but realistically achievable. This was to ensure that the awards would neither be too easily earned or impossible to earn, which would significantly diminish their value as incentive compensation. The Committee however fixed the number of AEBITDA RSUs to be granted based on the grant date value on March 22, 2021, the date other annual awards were granted, so that the executives would still be subject to changes in the value of the Company’s stock between the originally intended grant date and the actual grant date.

(2)

Awards vest in three annual installments beginning on March 20, 2022.

(3)

Awards vest on March 20, 2024 contingent on achievement of performance conditions by December 31, 2023. Vesting will be between 50% and 100% of the target number of awards if at least performance threshold is achieved, otherwise the awards will be forfeited. The number of awards shown in the table is based on target performance.

(4)

In accordance with the terms of his separation agreement, Mr. Eklund’s 2021 annual equity awards were forfeited upon his separation of employment from the Company.

Other Equity Awards

In connection with Ms. James’ promotion to the position of Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary, effective as of October 14, 2021, Ms. James received an award of 10,000 RSUs on November 11, 2021, vesting in three installments on the first three anniversaries of such promotion. Each of Messrs. Cottle and Sottile also received a grant of RSUs in connection with their agreements to extend the terms of their employment with us, vesting in three installments on the first three anniversaries of such extension (May 31, 2021 in the case of Mr. Cottle and August 31, 2021 in the case of Mr. Sottile). Mr. Cottle received 50,000 RSUs in connection with his extension, while Mr. Sottile received 10,000 RSUs.

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). The matching contribution was temporarily eliminated in May 2020 as part of our cash conservation efforts in connection with the COVID-19 pandemic, but was reinstated in March 2021.

Other 2021 Compensation

In connection with the sale of the Lottery business segment, in order to retain and incentivize Mr. McHugh through the successful completion of such sale, the Committee approved the Senior Executive Divestiture Retention Program (“SEDRP”), which provided that, if such sale was consummated, then Mr. McHugh would generally be entitled to receive, subject to his continued employment: (i) a retention and incentive payment with a value determined based on the value realized by the Company in connection with such sale (with no payment if the value realized by the Company did not exceed a specified threshold amount) (the “SEDRP Bonus”), which, based on the value realized by the Company, equaled $7,380,000, or approximately 0.1% of the value realized by the Company; (ii) a bonus equal to 50% of Mr. McHugh’s annual base salary if the Company had also entered into definitive agreements to renew certain business contracts; and (iii) a bonus equal to 50% of Mr. McHugh’s annual base salary relating to the retention of Mr. McHugh’s direct reports. All of the foregoing amounts may be paid in the form of cash, Company equity, the vesting of equity awards that would otherwise be forfeited in connection with the sale of the Lottery business or any combination of the foregoing. The Committee determined that the SEDRP Bonus would be paid through the vesting of equity awards that would have otherwise been forfeited to the maximum extent possible, with the remainder paid in cash.

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Corporate Governance Policies

Stock Ownership Guidelines

The Committee previously 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
Chief Financial Officer and Group Chief Executives			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, 2021. All of our current named executive officers are in compliance with our guidelines.

	Lesser Of
Name	Ownership Requirement (# of Shares Based on Multiple of Salary)		Ownership Requirement (# of Shares/ Units)		Ownership (# of Shares/ Units)
Mr. Cottle		149,346		475,000		543,815
Ms. James		24,891		70,000		40,187
Mr. McHugh		19,913		70,000		86,927
Mr. Sottile		11,616		25,000		79,926
Mr. Wilson		24,891		70,000		155,995

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

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•

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”;

•

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.

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 2021 (the “2021 Peer Group”). The 2021 Peer Group was 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. In November 2021, the Committee determined that, following the Divestitures, the peer group should be refreshed to primarily focuses on gaming and content creators in order to align with the Company’s streamlined business portfolio following the Divestitures. The Committee, in consultation with CAP, thereby determined in November 2021 that Alliance Data Systems Corporation, Cadence Design Systems, Inc., Cardtronics plc, Crane Co., Daktronics, Inc., Diebold Nixdorf, Inc. and Global Payments Inc. should be removed, and Aristocrat Leisure Limited, Caesars Entertainment, Inc., DraftKings Inc., MGM Resorts International, Playtika Holding Corp., Wynn Resorts, Limited, and Zynga, Inc. be added (the “Refreshed Peer Group”), although the Committee may continue to use the 2021 Peer Group, in whole or in part, until both Divestitures have been completed. As measured following the third quarter of fiscal 2021, the Company’s trailing 12-month revenue was at the 21st percentile and 32nd percentile, while our market capitalization was at the 47th percentile and 20th percentile of the 2021 Peer Group and the refreshed peer group, respectively.

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

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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. Because Ms. James was not an executive officer prior to October 2021, decisions regarding Ms. James’ compensation prior to such date were made by the relevant members of senior management, subject to the framework established by the Committee for senior employees of the Company.

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 2021, 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 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;

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•

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;

•

a qualitative assessment of individual performance is generally a component of individual compensation payments;

•

annual 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 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

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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”.

During 2021, we also entered into new employment agreements with Messrs. Cottle and Sottile and an amendment to our employment agreement with Mr. McHugh. The agreement with Mr. Cottle extended the term of his employment through May 31, 2024 on substantially the same terms and conditions as Mr. Cottle’s prior employment agreement, except that Mr. Cottle’s severance terms were revised to provide (i) that, on a qualifying termination, Mr. Cottle’s severance multiplier would increase to two and Mr. Cottle will receive two years of additional vesting for his equity awards and (ii) in the event Mr. Cottle retires on or after age 65, all service-based vesting conditions on his annual equity awards will be deemed satisfied. In exchange for the foregoing, and the base salary increase describe above, Mr. Cottle agreed to an extension of his restrictive covenants from one to two-years post-termination and to provide, for no additional compensation, consulting services during the two-year period following his termination of employment.

The new agreement with Mr. Sottile extended the term of his employment through August 31, 2024 on substantially the same terms and conditions as Mr. Sottile’s prior employment agreement, except that Mr. Sottile’s severance terms were revised to provide (i) that, on a qualifying termination, Mr. Sottile will receive one year of additional vesting for his equity awards, (ii) that Mr. Sottile’s termination of employment as a result of the Company’s non-renewal of his employment agreement will be considered a termination without “cause” entitling Mr. Sottile to severance and (iii) in the event Mr. Sottile retires on or after age 65, all service-based vesting conditions on his annual equity awards will be deemed satisfied.

The amendment to Mr. McHugh’s employment agreement extended the term of his employment through December 31, 2024, increased his annual long-term incentive target amount to 125% of Mr. McHugh’s base salary and provided that, in the event Mr. McHugh retires on or after age 65, all service-based vesting conditions on his annual equity awards will be deemed satisfied.

In connection with her commencement as Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary, we entered into an employment agreement with Ms. James. In connection with Mr. Eklund’s separation of employment from the Company, we entered into a separation agreement with him. 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.

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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, 2021.

Compensation Committee

Hamish McLennan

Kneeland C. Youngblood

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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, 2021. These six individuals are the named executive officers for 2021.

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 President and Chief Executive Officer		2021		1,778,847		—		9,151,065		—		2,489,054		66,534		13,485,500
		2020		1,329,327		—		1,750,000		—		437,500		97,772		3,614,599
		2019		1,750,000		350,000		13,458,332		2,916,658		—		99,241		18,574,231
Constance P. James Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary		2021		543,462		—		1,245,088		—		469,909		79,892		2,338,351


Michael C. Eklund Former Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary		2021		605,770		334,426		1,190,332		—		618,771		1,857,836		4,607,135
		2020		305,769		—		4,243,050		—		—		62,648		4,611,467

Patrick J. McHugh(7) Former Executive Vice President, Group Chief Executive, Lottery		2021		600,000		—		952,236		—		614,250		8,010		2,174,496
		2020		509,615		—		378,000		—		112,500		9,975		1,010,090
		2019		495,720		75,000		208,317		416,666		—		9,302		1,205,005
James Sottile Executive Vice President and Chief Legal Officer		2021		700,001		—		1,834,714		—		734,475		75,230		3,344,420
		2020		565,385		—		713,732		—		120,338		24,427		1,423,882
		2019		600,000		90,000		289,983		379,990		—		9,800		1,369,773
Matthew Wilson Executive Vice President, Group Chief Executive, Gaming		2021		750,000		—		1,190,332		—		826,875		1,741		2,768,948
		2020		500,441		400,000		3,813,453		—		117,572		83,400		4,914,866

(1)

The amounts in the “salary” column reflect base salary amounts paid during the applicable year to the named executive officers, including, for 2020, after taking effect of the temporary salary reductions in connection with the COVID-19 pandemic.

(2)

For 2021, the amount in the “bonus” column for Mr. Eklund reflects his cash sign-on award, which was payable upon the first anniversary of his employment with the Company in an amount equal to $500,000, less the amount of 2020 incentive compensation Mr. Eklund received from his prior employer that exceeded $100,000, and was in lieu of any 2020 incentive compensation from the Company. For 2020 for Mr. Wilson, reflects his sign-on cash bonus. For 2019, amounts reflect 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.

(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, 2021. However, for purposes of determining the number of awards to be granted to employees generally: (i) in 2021, as described in “Compensation Discussion and Analysis — Objectives and Components of Compensation Program — Long-Term Incentive Compensation — Annual Equity Awards” above, although the AEBITDA RSUs were granted on Jun 25, 2021, since the Committee

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wanted to ensure that AEBITDA goals that were challenging, but realistically achievable, were developed, the number of AEBITDA RSUs was determined based on the March 22, 2021 grant value to use a consistent grant value across all the components of the 2021 equity awards; and (ii) in 2020, 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, was determined based on 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.

(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, 2021.

(5)

The amounts in the “non-equity incentive plan compensation” column reflect the annual performance bonuses awarded under the SGICP. When determining the payouts under the SGICP in early 2022, the Committee determined that SGICP payouts for the executive officers would be in the form of the Company’s common stock.

(6)

The amounts in the “all other compensation” column for 2021 include the following:

Company contributions to the Company’s 401(k) plan for Ms. James ($8,174) and Messrs. Eklund ($6,097), McHugh ($8,010), Sottile ($8,781) and Wilson ($1,741).

For Mr. Cottle, costs associated with leased office space for him in Los Angeles, California ($39,720), with the reimbursement of travel expenses incurred as a result of travel to Los Angeles, California, which the Company determined based on the facts and circumstances qualified as a perquisite ($26,814).. For Mr. Eklund, costs associated with the reimbursement of travel expenses incurred in commuting from our main office to his home in Austin, Texas ($19,098). For Mr. Sottile, costs associated with the reimbursement of expenses incurred in commuting from our main office to his home in Silver Spring, Maryland ($66,449).

For Ms. James and Mr. Eklund, costs associated with the reimbursement of relocation expenses ($54,255 and $63,432, respectively) and the reimbursement of certain taxes associated with such expenses ($17,463 and $22,392, respectively).

For Mr. Eklund, costs of continued medical coverage under the Company’s group health plan of $40,926 and severance of $1,705,891.

For 2020, consists solely of contributions to the Company’s 401(k) plan, other than, with respect to Mr. Cottle, costs associated with leased office space for him in Los Angeles, California ($36,707) and with the reimbursement of travel expenses incurred in commuting from our main office to his home in Los Angeles, California ($51,090); for Mr. Eklund, costs associated with the reimbursement of relocation expenses ($38,658) and with the reimbursement of travel expenses incurred in commuting from our main office to his home in Austin, Texas ($23,990); and for Mr. Sottile, costs associated with the reimbursement of expenses incurred in commuting from our main office to his home in Silver Spring, Maryland ($15,150).

For 2019, consisted solely of contributions to the Company’s 401(k) plan, other than for Mr. Cottle, for whom the amounts in 2019 also included costs associated with leased office space for him in Los Angeles, California ($30,400) and with the reimbursement of travel expenses incurred in commuting from our main office to his home in Los Angeles, California ($59,041).

(7)

As Executive Vice President and Group Chief Executive, Lottery, Mr. McHugh’s employment with the Company ceased upon the sale of the Lottery business on April 4, 2022.

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Grants of Plan-Based Awards for Fiscal Year 2021

The table below provides information regarding the SGICP awards and RSUs granted to the named executive officers during 2021.

	Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1)								Estimated Future Payouts Under Equity Incentive Plan Awards(2)		All Other Stock Awards: Number of Shares of Stock or Units or Units		Grant Date Fair Value of Stock and Option Awards
			Threshold		Target		Maximum		Target				Grant Date Fair Value of Stock and Option Awards
Name	Grant Date		($)		($)		($)		(#)		(#)(3)		($)(4)
Barry L. Cottle		—		450,000		1,800,000		3,600,000		—		—		—
		03/22/2021		—		—		—		—		33,536		1,458,313
		03/22/2021		—		—		—		33,536		—		1,458,313
		06/01/2021		—		—		—		—		50,000		3,596,250
		06/25/2021		—		—		—		33,537		—		2,638,188
Constance P. James		—		80,908		323,629		647,258		—		—		—
		03/22/2021		—		—		—		—		2,823		122,758
		03/22/2021		—		—		—		2,823		—		122,758
		06/25/2021		—		—		—		2,823		—		222,071
		11/11/2021		—		—		—		—		10,000		777,500
Michael C. Eklund(5)		—		187,500		750,000		1,500,000		—		—		—
		03/22/2021		—		—		—		—		7,186		312,483
		03/22/2021		—		—		—		7,186		—		312,483
		06/25/2021		—		—		—		7,187		—		565,365
Patrick J. McHugh		—		112,500		450,000		900,000		—		—		—
		03/22/2021		—		—		—		—		5,749		249,995
		03/22/2021		—		—		—		5,749		—		249,995
		06/25/2021		—		—		—		5,749		—		452,245
James Sottile		—		131,250		525,000		1,050,000		—		—		—
		03/22/2021		—		—		—		—		6,707		291,654
		03/22/2021		—		—		—		6,707		—		291,654
		06/25/2021		—		—		—		6,707		—		527,606
		09/02/2021		—		—		—		—		10,000		723,800
Matthew Wilson		—		140,625		562,500		1,125,000		—		—		—
		03/22/2021		—		—		—		—		7,186		312,483
		03/22/2021		—		—		—		7,186		—		312,483
		06/25/2021		—		—		—		7,187		—		565,365

(1)

The amounts shown under the “estimated future payouts under non-equity incentive plan awards” column represent the performance-based annual bonus opportunity approved for 2021 for each of the named executive officers. The actual amounts awarded under the program for 2021 are shown in the Summary Compensation Table above under the “non-equity incentive plan compensation” column. For Ms. James, the amount is based on a blended rate as described in “Compensation Discussion and Analysis — Objectives and Components of Compensation Program — Annual Incentive Compensation”. For Mr. Eklund, does not reflect the proration of his annual bonus as a result of his separation from the Company. When determining the payouts under the SGICP in early 2022, the

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Committee determined that SGICP payouts for the executive officers would be in the form of the Company’s common stock.

(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, consisting of TSR RSUs and AEBITDA RSUs. The TSU RSUs are scheduled to vest on March 20, 2024, subject to the Company’s achievement by December 31, 2023 of a total shareholder return performance condition targets relative to the S&P 400 average total shareholder return. AEBITDA RSUs are scheduled to vest on March 20, 2024, subject to the Company’s achievement by December 31, 2023 of certain AEBITDA targets. For additional information regarding these awards, see “Compensation Discussion and Analysis — Objectives and Components of Compensation Program — Long-Term Incentive Compensation”.

(3)

The amounts shown under the “all other stock awards” column reflect annual grants of time-vesting RSU awards that vest in three equal installments on each of March 20, 2022 and the first two anniversaries of that date for each of the named executive officers. 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 in this column also include, in the case of Messrs. Cottle and Sottile, include RSUs granted in connection with the applicable executive extending his employment agreement term and in the case of Ms. James, includes RSUs granted in connection with her promotion, each of which vests in three annual installments on the first three anniversaries of his or her extension or promotion, as applicable.

(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, 2021. Although the AEBITDA RSUs were granted on Jun 25, 2021, since the Committee wanted to ensure that AEBITDA goals that were challenging, but realistically achievable, were developed, the number of AEBITDA RSUs was determined based on the March 22, 2021 grant value to use a consistent grant value across all the components of the 2021 equity awards, and therefore the value reflected in the table above does not reflect the value used by the Committee in determining annual compensation.

(5)

All of Mr. Eklund’s equity awards reflected here were forfeited in connection with his separation from the Company.

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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, 2021. Mr. Eklund did not hold any equity awards as of December 31, 2021.

					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		LNW		06/01/2018		21,311(2)		7,104(2)		—		59.35		05/31/2028		—		—		—		—
		LNW		06/01/2018		21,311(3)		7,104(3)		—		59.35		05/31/2028		—		—		—		—
		LNW		06/01/2018		—		—		—		—		—		3,602(4)		240,722		—		—
		LNW		03/20/2019		58,054(5)		58,055(5)		—		22.69		03/20/2029		—		—		—		—
		LNW		03/20/2019		58,054(6)		58,055(6)		—		22.69		03/20/2029		—		—		—		—
		LNW		03/20/2019		—		—		—		—		—		32,136(7)		2,147,649		—		—
		LNW		04/03/2020		—		—		—		—		—		164,063(8)		10,964,331		—		—
		LNW		03/22/2021		—		—		—		—		—		33,536(9)		2,241,211		—		—
		LNW		03/22/2021		—		—		—		—		—		—		—		33,536 (10)		2,241,211
		LNW		06/01/2021		—		—		—		—		—		50,000(11)		3,341,500		—		—
		LNW		06/25/2021		—		—		—		—		—		—		—		33,537(12)		2,241,278
Constance P. James		LNW		12/02/2019		—		—		—		—		—		2,433(13)		162,598		—		—
		LNW		04/03/2020		—		—		—		—		—		10,350(8)		691,691		—		—
		LNW		11/09/2020		—		—		—		—		—		6,667 (15)		445,556		—		—
		LNW		03/22/2021		—		—		—		—		—		2,823(9)		188,662		—		—
		LNW		03/22/2021		—		—		—		—		—		—		—		2,823(10)		188,662
		LNW		06/25/2021		—		—		—		—		—		—		—		2,823(12)		188,662
		LNW		11/11/2021		—		—		—		—		—		10,000(16)		668,300		—		—
Patrick J. McHugh		LNW		03/20/2014		1,276(17)		—		—		16.03		03/20/2024		—		—		—		—
		LNW		03/20/2018		—		—		—		—		—		1,606(18)		107,329		—		—
		LNW		03/20/2019		8,293(5)		8,294(5)		—		22.69		03/20/2029		—		—		—		—
		LNW		03/20/2019		8,293(6)		8,294(6)		—		22.69		03/20/2029		—		—		—		—
		LNW		03/20/2019		—		—		—		—		—		4,591(7)		306,817		—		—
		LNW		04/03/2020		—		—		—		—		—		3,900(19)		260,637		—		—
		LNW		04/03/2020		—		—		—		—		—		28,125(8)		1,879,594		—		—
		LNW		03/22/2021		—		—		—		—		—		5,749(9)		384,206		—		—
		LNW		03/22/2021		—		—		—		—		—		—		—		5,749(10)		384,206
		LNW		06/25/2021		—		—		—		—		—		—		—		5,749(12)		384,206
James Sottile		LNW		09/04/2018		3,754(20)		1,252(20)		—		30.33		09/03/2028		—		—		—		—
		LNW		09/04/2018		3,754(21)		1,252(21)		—		30.33		09/03/2028		—		—		—		—
		LNW		09/04/2018		—		—		—		—		—		672(22)		44,910		—		—
		LNW		03/20/2019		7,563(5)		7,564(5)		—		22.69		03/20/2029		—		—		—		—
		LNW		03/20/2019		7,563(6)		7,564(6)		—		22.69		03/20/2029		—		—		—		—
		LNW		03/20/2019		—		—		—		—		—		4,187(7)		279,818		—		—
		SCPL		08/05/2019		—		—		—		—		—		3,125(23)		43,063		—		—
		LNW		04/03/2020		—		—		—		—		—		28,125(8)		1,879,594		—		—
		LNW		04/03/2020		—		—		—		—		—		3,592(19)		240,054		—		—
		LNW		09/28/2020		—		—		—		—		—		6,667 (24)		445,556		—		—
		LNW		03/22/2021		—		—		—		—		—		6,707(9)		448,229		—		—
		LNW		03/22/2021		—		—		—		—		—		—		—		6,707(10)		448,229
		LNW		06/25/2021		—		—		—		—		—		—		—		6,707(12)		448,229
		LNW		09/02/2021		—		—		—		—		—		10,000(25)		668,300		—		—
Matthew Wilson		LNW		03/01/2020		—		—		—		—		—		55,081(26)		3,681,064		—		—
		LNW		04/03/2020		—		—		—		—		—		29,391(8)		1,964,201		—		—
		LNW		03/22/2021		—		—		—		—		—		7,186(9)		480,241		—		—
		LNW		03/22/2021		—		—		—		—		—		—		—		7,186(10)		480,241
		LNW		06/25/2021		—		—		—		—		—		—		—		7,187(12)		480,308

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(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, 2021 ($66.83). 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, 2021 ($13.78).

(2)

These stock options were awarded with a four-year vesting schedule. The first, second and third installments vested and became exercisable on each of June 1, 2019, June 1, 2020 and June 1, 2021. The balance is scheduled to vest on June 1, 2022.

(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 been achieved, and therefore the first three installments of the options have vested. The balance is scheduled to vest on June 1, 2022.

(4)

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 June 1, 2019, June 1, 2020 and June 1, 2021. The RSUs shown in the table are scheduled to vest on June 1, 2022.

(5)

These stock options were awarded with a four-year vesting schedule. The first and second installments vested and became exercisable on each of March 20, 2020 and March 20, 2021. The balance is scheduled to vest in two annual installments beginning on March 20, 2022.

(6)

These stock options were scheduled to become exercisable in four annual installments beginning on March 20, 2020, subject to the Company’s achievement of an AEBITDA goal, which was modified as a result of the impact of the COVID-19 pandemic. In early 2021, the Committee determined that the AEBITDA goal was 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, 2022.

(7)

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, 2020 and March 20, 2021. The RSUs shown in the table are scheduled to vest in two annual installments beginning on March 20, 2022.

(8)

These RSUs are part of a grant that was awarded with a four-year vesting schedule. The first installment vested on March 20, 2021. The RSUs shown in the table are scheduled to vest in three annual installments beginning on March 20, 2022.

(9)

These RSUs are scheduled to vest in three annual installments beginning on March 20, 2022.

(10)

These TSR RSUs are scheduled to vest on March 20, 2024, subject to the Company’s achievement by December 31, 2023 of a total shareholder return performance condition targets relative to the S&P 400 average total shareholder return.

(11)

These RSUs are scheduled to vest in three annual installments beginning on May 31, 2022.

(12)

These AEBITDA RSUs are scheduled to vest on March 20, 2024, subject to the Company’s achievement by December 31, 2023 of an AEBITDA target.

(13)

These RSUs are part of a grant that was awarded with a two-year vesting schedule. The first installment vested on December 2, 2021. The RSUs shown in the table are scheduled to vest on December 2, 2022.

(14)

These RSUs are scheduled to vest in three equal installments beginning on March 20, 2022.

(15)

These RSUs are part of a grant that was awarded with a three-year vesting schedule. The first installment vested on September 25, 2021. The RSUs shown in the table are scheduled to vest in two annual installments beginning on September 25, 2022.

(16)

These RSUs are scheduled to vest in three annual installments beginning on October 14, 2022.

(17)

These stock options were awarded with a four-year vesting schedule. All options have vested.

(18)

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, 2019, March 20, 2020 and March 20, 2021. The RSUs shown in the table are scheduled to vest on March 20, 2022.

(19)

These RSUs are part of a grant that was awarded with a two-year vesting schedule. The first installment vested on March 20, 2021. The RSUs shown in the table are scheduled to vest on March 20, 2022.

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(20)

These stock options were awarded with a four-year vesting schedule. The first, second and third installments vested and became exercisable on March 20, 2019, March 20, 2020 and March 20, 2021. The RSUs shown in the table are scheduled to vest on March 20, 2022.

(21)

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 three installments of the options have vested. The balance is scheduled to vest on March 20, 2022.

(22)

(23)

These RSUs are part of a grant that was awarded by SciPlay with a four-year vesting schedule. The first two installments vested on each of May 7, 2020 and May 7, 2021. The RSUs shown in the table are scheduled to vest in two annual installments beginning on May 7, 2022. These awards will settle in shares of SciPlay Class A common stock.

(24)

These RSUs are part of a grant that was awarded with a three-year vesting schedule. The first installment vested on September 28, 2021. The RSUs shown in the table are scheduled to vest in two annual installments beginning on September 28, 2022.

(25)

These RSUs are scheduled to vest in three annual installments beginning on August 31, 2022.

(26)

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 AEBITDA and revenue improvement for the Gaming division during the one-year period ending on each of June 30, 2022 and 2023, respectively. 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.

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Option Exercises and Stock Vested for Fiscal Year 2021

The table below provides information for the named executive officers with respect to stock options that were exercised and RSUs that vested during 2021.

	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)(1)		Value Realized on Vesting ($)(2)
Barry L. Cottle		—		—		701,940		22,499,123
Constance P. James		—		—		9,216		573,698
Michael C. Eklund		—		—		135,000		10,649,637
Patrick J. McHugh		—		—		31,699		1,476,836
James Sottile		—		—		24,621		1,225,059
Matthew Wilson		—		—		53,860		2,446,804

(1)

In the case of Messrs. Cottle and Sottile, includes 494,250 and 1,563, respectively, shares of SciPlay Class A common stock.

(2)

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.

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Potential Payments Upon Termination or Change in Control

For the named executive officers in 2021, other than Mr. Eklund, 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. Eklund, who ceased to be employed with the Company during 2021, 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, 2021, and therefore does not apply to Mr. Eklund. 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 such executive in respect of the two most recent fiscal years but not more than such executive’s target bonus for the then-current fiscal year.

The employment agreement with each of Messrs. Cottle, McHugh and Sottile and Ms. James in effect as of December 31, 2021 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 such executive’s base salary and Severance Bonus Amount (in the case of Mr. Cottle, multiplied by two), generally payable over a period of 12 or 24 months, as applicable; and (iii) payment of COBRA premiums for up to 12 months (in the case of Mr. Cottle, 18 months) if the executive elects to continue medical coverage under the Company’s group health plan in accordance with COBRA. In the event Messrs. Cottle, McHugh or Sottile retire after reaching age 65, all service-based vesting conditions for such executive’s annual equity awards will be deemed satisfied, subject to the achievement of any applicable performance criteria.

The employment agreements of each of Messrs. Cottle and Sottile also provides that in connection with a Qualifying Termination, any equity awards held by such executive will continue to vest, in the case of Mr. Cottle, during the two-year period, and in the case of Mr. Sottile, during the one-year period, in each case, following such executive’s termination date (subject to earlier vesting under certain circumstances). Mr. Cottle’s agreement also provides that he will provide consulting services to the Company for up to two years following his termination for no additional compensation.

The employment agreement with Mr. Wilson, in effect as of December 31, 2021, 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 55,081 RSUs granted to him as part of his appointment as Executive Vice President and Group Chief Executive, Gaming; 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.

In the event of the death of a named executive officer, such executive’s beneficiary or estate would have been entitled to receive any benefits that would have been payable under any life insurance benefit of such executive’s for which the Company pays premiums. In the event of the termination of a named executive officer due to such executive’s “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.

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) 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

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such executive’s ability to engage in certain activities in competition with the Company during the term of such executive’s employment and for a period of 12 months after termination (in the case of Messrs. Cottle and 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”.

Our CIC Plan covers certain executive officers who were serving in specified positions on the date the CIC Plan was adopted, including Messrs. Cottle, McHugh, Sottile and Wilson. 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. McHugh and Sottile, 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 such executive’s employment agreement, whichever provides the greater benefit. Ms. James is not a participant in the CIC Plan.

The CIC Plan and the employment agreements with the named executive officers 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 $66.83 and $13.78, respectively (and, in the case of stock options, reducing the value, but not below zero, by the exercise price for such options).

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Mr. Cottle

The following describes the estimated amounts Mr. Cottle would have received if the termination event specified occurred on December 31, 2021:

	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		—		—		$	3,600,000(b)		$	3,600,000(c)			—			—
Severance Bonus Amount		—		—		$	875,000(b)(d)		$	875,000(e)			—			—
Bonus for Year of Termination		—		—		$	2,489,054(f)		$	2,489,054(f)			—			—
Total Cash Payments		—		—		$	6,964,054		$	6,964,054			—			—
Benefits & Perquisites
Health and Welfare Benefits		—		—		$	61,121(g)		$	81,495(g)		$	3,600,000(g)			—
Total Benefits & Perquisites		—		—		$	61,121		$	81,495		$	3,600,000			—
Long-Term Incentive Compensation
“Spread” Value of Accelerated LNW Options		—		—		$	5,231,371(h)		$	5,231,371(h)		$	5,231,371(h)		$	5,231,371(h)
Value of Accelerated LNW RSUs		—		—		$	13,419,732(h)		$	23,417,901(h)		$	23,417,901(h)		$	23,417,901(h)
Total Value of Accelerated Equity Awards		—		—		$	18,651,103		$	28,649,272		$	28,649,272		$	28,649,272
Total Value of Payments and Benefits		—		—		$	25,676,278		$	35,694,821		$	32,249,272		$	28,649,272

(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)

Amount reflects 24 months of base salary. The first half will be paid over 12 months and the remainder paid over the subsequent 12 months to the extent permitted under Section 409A of the Internal Revenue Code, otherwise paid in a lump sum.

(c)

Amount reflects 24 months of 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 2020 bonus.

(e)

Amount reflects two times Severance Bonus Amount. Amount shown is two times actual 2020 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 2021 bonus). Paid in a lump sum.

(g)

Amount reflects (i) the cost of continued health coverage under the Company’s insurance under COBRA for 18 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 continued vesting of outstanding equity awards held by Mr. Cottle through the second anniversary of his termination date. In the case of a change in control for purposes of the 2003 Plan, termination

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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 Light & Wonder equity awards upon the change in control or applicable termination event. All applicable performance criteria are assumed to be achieved at “target” levels.

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Ms. James

The following describes the estimated amounts Ms. James would have received if the termination event specified occurred on December 31, 2021:

	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		—		—		$	750,000(b)		$	750,000(b)			—			—
Severance Bonus Amount		—		—		$	63,263(b)(c)		$	63,263(b)(c)			—			—
Bonus for Year of Termination		—		—		$	469,909(d)		$	469,909(d)			—			—
Total Cash Payments		—		—		$	1,283,172		$	1,283,172			—			—
Benefits & Perquisites
Health and Welfare Benefits		—		—		$	40,926(e)		$	40,926(e)		$	1,500,000(e)			—
Total Benefits & Perquisites		—		—		$	40,926		$	40,926		$	1,500,000			—
Long-Term Incentive Compensation
Value of Accelerated LNW RSUs		—		—		$	—		$	2,534,131(f)		$	2,534,131(f)		$	2,534,131(f)
Total Value of Accelerated Equity Awards		—		—		$	—		$	2,534,131		$	2,534,131		$	2,534,131
Total Value of Payments and Benefits		—		—		$	1,324,098		$	3,858,229		$	4,034,131		$	2,534,131

(a)

Solely a change in control for purposes of the 2003 Plan since Ms. James is not a participant in the CIC Plan. Ms. James’ employment agreement does not provide for enhanced severance in the event of a change in control.

(b)

Paid over 12 months.

(c)

Amount reflects Severance Bonus Amount. Amount shown is actual 2020 bonus.

(d)

Amount reflects pro-rata bonus that would have been received for the year of termination (amount shown is actual 2021 bonus). Paid in a lump sum.

(e)

Amount reflects (i) the cost of continued health coverage under the Company’s insurance under COBRA for 12 months or (ii) in the event of termination due to death, proceeds from life insurance for which the Company pays the premiums.

(f)

In the case of a change in control for purposes of the 2003 Plan or termination due to death or disability, reflects full vesting of all Light & Wonder equity awards upon the change in control or applicable termination event. All applicable performance criteria are assumed to be achieved at “target” levels.

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Mr. McHugh

The following describes the estimated amounts Mr. McHugh would have received if the termination event specified occurred on December 31, 2021. However, Mr. McHugh’s employment with the Company ceased upon the sale of the Lottery Business on April 4, 2022, and therefore Mr. McHugh is no longer entitled to receive the amounts reflected in the table below from the Company, other than to the extent provided for under the SEDRP, as described above. Instead, as a result of such cessation of employment and the consummation of the sale of the Lottery business, Mr. McHugh received the amounts provided for under the SEDRP, including the SEDRP Bonus, as described above.

	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		—		—		$	600,000(b)		$	900,000(c)			—			—
Severance Bonus Amount		—		—		$	112,500(b)(d)		$	168,750(e)			—			—
Bonus for Year of Termination		—		—		$	614,250(f)		$	614,250(f)			—			—
Total Cash Payments		—		—		$	1,326,750		$	1,683,000			—			—
Benefits & Perquisites
Health and Welfare Benefits		—		—		$	40,926(g)		$	61,388(g)		$	1,200,000(g)			—
Total Benefits & Perquisites		—		—		$	40,926		$	61,388		$	1,200,000			—
Long-Term Incentive Compensation
“Spread” Value of Accelerated LNW Options		—		—			—		$	732,195(h)		$	732,195(h)		$	732,195(h)
Value of Accelerated LNW RSUs		—		—			—		$	3,706,995(h)		$	3,706,995(h)		$	3,706,995(h)
Total Value of Accelerated Equity Awards		—		—			—		$	4,439,190		$	4,439,190		$	4,439,190
Total Value of Payments and Benefits(i)		—		—		$	1,367,676		$	6,183,578		$	5,639,190		$	4,439,190

(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. McHugh’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 2020 bonus.

(e)

Amount reflects one and a half times Severance Bonus Amount, which is based on actual 2020 bonus. 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 the Severance Bonus Amount 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.

(f)

Amount reflects pro-rata bonus that would have been received for the year of termination (amount shown is actual 2021 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

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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 Light & Wonder equity awards upon the change in control or applicable termination event. All applicable performance criteria are assumed to be achieved at “target” levels.

(i)

Amounts do not include any payments or benefits Mr. McHugh would be entitled to solely under the SEDRP as such amounts were dependent on the final value received by the Company in its sale of the Lottery business, which was not completed by December 31, 2021. See “Compensation Discussion and Analysis — Objectives and Components of Compensation Program — Other 2021 Compensation” for an estimate of this amount” as of the date of this filing.

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Mr. Sottile

The following describes the estimated amounts Mr. Sottile would have received if the termination event specified occurred on December 31, 2021:

	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		—		—		$	120,338(b)(d)		$	180,507(e)			—			—
Bonus for Year of Termination		—		—		$	734,475(f)		$	734,475(f)			—			—
Total Cash Payments		—		—		$	1,554,813		$	1,964,982			—			—
Benefits & Perquisites
Health and Welfare Benefits		—		—		$	12,252(g)		$	18,378(g)		$	1,400,000(g)			—
Total Benefits & Perquisites		—		—		$	12,252		$	18,378		$	1,400,000			—
Long-Term Incentive Compensation
“Spread” Value of Accelerated LNW Options		—		—		$	425,271(h)		$	759,146(h)		$	759,146(h)		$	759,146(h)
Value of Accelerated LNW RSUs		—		—		$	1,646,291(h)		$	4,902,917(h)		$	4,902,917(h)		$	4,902,917(h)
Value of Accelerated SCPL RSUs		—		—			—		$	43,063(h)		$	43,063(h)		$	43,063(h)
Total Value of Accelerated Equity Awards		—		—		$	2,071,562		$	5,705,126		$	5,705,126		$	5,705,126
Total Value of Payments and Benefits		—		—		$	3,638,627		$	7,688,486		$	7,105,126		$	5,705,126

(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)

(d)

Amount reflects Severance Bonus Amount. Amount shown is actual 2020 bonus.

(e)

(f)

Amount reflects pro-rata bonus that would have been received for the year of termination (amount shown is actual 2021 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 termination without cause or for good reason, absent a change in control, reflects continued vesting of LNW outstanding equity awards held by Mr. Sottile through the first anniversary of his termination date. 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

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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 Light & Wonder and SciPlay equity awards upon the change in control or applicable termination event. All applicable performance criteria are assumed to be achieved at “target” levels.

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Mr. Wilson

The following describes the estimated amounts Mr. Wilson would have received if the termination event specified occurred on December 31, 2021:

	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		—		—			—		$	235,144(d)			—			—
Bonus for Year of Termination		—		—		$	826,875(e)		$	826,875(e)			—			—
Total Cash Payments		—		—		$	2,326,875		$	2,562,019			—			—
Benefits & Perquisites
Health and Welfare Benefits		—		—		$	61,121(f)		$	81,495(f)		$	1,500,000(f)			—
Total Benefits & Perquisites		—		—		$	61,121		$	81,495		$	1,500,000			—
Long-Term Incentive Compensation
Value of Accelerated LNW RSUs		—		—		$	2,388,211(g)		$	7,086,052(g)		$	7,086,052(g)		$	7,086,052(g)
Total Value of Accelerated Equity Awards		—		—		$	2,388,211		$	7,086,052		$	7,086,052		$	7,086,052
Total Value of Payments and Benefits		—		—		$	4,776,207		$	9,729,566		$	8,586,052		$	7,086,052

(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. Wilson’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. Paid over 24 months.

(c)

Amount reflects 24 months of base salary. Paid in a lump sum upon termination if severance benefits are provided under the CIC Plan and if permitted under Section 409A of the Internal Revenue Code, otherwise paid over 24 months.

(d)

Amount reflects two times Severance Bonus Amount. Amount shown is based on actual 2020 bonus. Paid in a lump sum. This amount will only be payable in the event of a termination in connection with a change in control for purposes of the CIC Plan.

(e)

Amount reflects pro-rata bonus that would have been received for the year of termination (amount shown is actual 2021 bonus). Paid in a lump sum.

(f)

Amount reflects (i) the cost of continued health coverage under the Company’s insurance under COBRA for 18 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.

(g)

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 outstanding sign-on awards (55,081 RSUs) granted to Mr. Wilson upon his appointment as Executive Vice President and Group Chief Executive, Gaming. 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 Light & Wonder equity awards upon the change in control or applicable termination event. All applicable performance criteria are assumed to be achieved at “target” levels.

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Mr. Eklund

On September 16, 2021, Mr. Eklund and the Company agreed that Mr. Eklund’s employment with the Company would terminate on October 15, 2021, and in connection with such agreement, Mr. Eklund and the Company entered into a separation agreement. The agreement provided that Mr. Eklund would receive: (i) cash payments totaling $1,705,891; (ii) remain eligible to receive a pro rata bonus for 2021; (iii) vest in all time-vesting RSUs granted on June 8, 2020; 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.

The following describes the amounts Mr. Eklund received as a result of his termination of employment with the Company on October 15, 2021 pursuant to the terms of the separation agreement:

	Termination Without Cause or for Good Reason
Cash Payments
Severance		$	1,705,891(a)
Bonus for Year of Termination		$	618,771(b)
Total Cash Payments		$	2,324,662
Benefits & Perquisites
Health and Welfare Benefits		$	40,926(c)
Total Benefits & Perquisites		$	40,926
Long-Term Incentive Compensation
Value of Accelerated LNW RSUs		$	9,197,472(d)
Total Value of Accelerated Equity Awards		$	9,197,472
Total Value of Payments and Benefits		$	11,563,060

(a)

Paid over 42 bi-weekly pay periods.

(b)

Paid in a lump sum.

(c)

Amount reflects payment of 12 months of COBRA premiums.

(d)

Represents the value of Mr. Eklund’s RSUs that vested in connection with his termination, valued based on the closing price of our common stock on his termination date of October 15, 2021 ($84.90). All other RSUs held by Mr. Eklund were forfeited.

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Pay Ratio Disclosure

Under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company is required to provide the ratio of the annual total compensation of Mr. Cottle, the Company’s President and Chief Executive Officer, to the annual total compensation of the median employee of the Company and its consolidated subsidiaries (the “Pay Ratio Disclosure”). The pay ratio included in this Pay Ratio Disclosure is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. For 2021, the estimated annual total compensation of the median employee of the Company and its consolidated subsidiaries (other than the President and Chief Executive Officer) was $56,305. Mr. Cottle’s annual total compensation for 2021 was $13,485,500, as detailed in the Summary Compensation Table and its accompanying footnotes. Based on this information, the ratio of the compensation of the President and Chief Executive Officer to the annual total compensation of the median employee was 239 to 1 in 2021.

SEC rules permit the identification of our median employee once every three years provided there has been no change in our employee population or employee compensation arrangements that we believe would significantly impact our pay ratio disclosure. Accordingly, we have calculated our disclosure based on the median employee identified as of December 31, 2020. For details on our process for identifying the median employee, please see “CEO Pay Ratio” in our annual Proxy Statement filed with the SEC on April 26, 2021.

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EQUITY COMPENSATION PLAN INFORMATION

The following table provides information about the shares of our common stock that may be issued upon the exercise of stock options, warrants and other stock rights under all of our equity compensation plans as of December 31, 2021.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted average exercise price of outstanding options, warrants and rights(3) (b)			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) (c)
Equity compensation plans approved by security holders(1)		4,775,239		$	32.70		6,968,832
Equity compensation plans not approved by security holders(2)		—			—		69,157
Total		4,775,239		$	32.70		7,037,989

(a)

The “Equity compensation plans approved by security holders” includes 5,331,402 shares of common stock that may be issued under the 2003 Plan and 1,637,430 shares of common stock that may be issued under the Company’s 2016 Employee Stock Purchase Plan.

(b)

The “Equity compensation plans not approved by security holders” consists of our 1995 Equity Incentive Plan (discussed below).

(c)

The weighted average exercise price of outstanding awards does not take into account the shares issuable upon vesting of RSUs which have no exercise price. At December 31, 2020, there was a total of 2,740,249 shares subject to RSUs which were outstanding under the 2003 Plan. Had those RSUs been included in calculating the weighted average exercise price (treating them in effect as options with an exercise price of $0), the weighted average exercise price for awards under security holder-approved plans would have been $14.32.

1995 Equity Incentive Plan. The 1995 Equity Incentive Plan (the “1995 Plan”), which was originally adopted by our Board in May 1995, authorizes grants of non-qualified options, deferred stock and other stock-related awards to employees who are not executive officers or directors. As of December 31, 2021, no shares were subject to outstanding awards under the 1995 Plan and 69,157 shares remained available for grant under the 1995 Plan. The 1995 Plan is administered by the Compensation Committee, which is authorized to select the participants, determine the type of awards to be granted and the number of shares of common stock to which awards will relate, specify times at which awards will be exercisable, set other terms and conditions of such awards, interpret and specify rules and regulations relating to the 1995 Plan and make all other determinations that may be necessary or advisable for the administration of the 1995 Plan. The Board may amend, suspend, discontinue or terminate the 1995 Plan or the Compensation Committee’s authority to grant awards thereunder without stockholder approval, except as required by law or regulation or under the NASDAQ Stock Market rules which would require stockholder approval for material modifications of the 1995 Plan.

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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

The Company has written policies and procedures relating to related person transactions. The Audit Committee, with assistance from the Chief Legal Officer, is responsible for reviewing and approving related person transactions that are subject to SEC disclosure requirements under Item 404 of Regulation S-K (each a “Related Party Transaction”), including transactions in which the Company is a participant, the amount exceeds $120,000 and a related person has a direct or indirect material interest. A related person includes a director, executive officer, nominee for election as a director, person holding more than 5% of our stock and any immediate family member of any of the foregoing persons, or any entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person has a 5% or greater beneficial ownership interest. The Company’s policy is not to enter into a Related Party Transaction unless both the Audit Committee and the Board approve the transaction as specified in the Audit Committee’s charter. Other transactions with related persons as well as certain material changes in previously approved relationships may also require legal department or compliance department approval under our policies and procedures.

Ms. James, our Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary, effective as of October 15, 2021, received the following compensation and benefits in her former position at the Company since the beginning of 2020: (1) aggregate base salary payments of $421,077 and $341,538 in respect of 2020 and 2021, respectively; (2) an annual performance bonus award under the SGICP in respect of 2020, with a payout of $63,263 in early 2021; (3) a cash sign-on bonus in 2020 of $175,000; (4) annual grants of equity awards in 2020 and 2021 with aggregate fair market values of $110,400 and $467,602, respectively; (5) an equity award grant in 2020 with a fair market value of $353,300; and (6) other compensation and benefits, including relocation benefits in connection with Ms. James’ commencement of employment, of $53,722 in the aggregate. Other than such compensation arrangements, Ms. James has no interest in any transaction that would require disclosure pursuant to Item 404(a) of Regulation S-K.

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PROPOSAL 2
APPROVAL, ON AN ADVISORY BASIS, OF THE
COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

The Company is seeking an advisory vote on executive compensation from stockholders, commonly known as the say-on-pay vote, as required by Section 14A of the Exchange Act. The advisory vote on executive compensation is a non-binding vote to approve the compensation of the Company’s named executive officers, as described in the “Compensation Discussion and Analysis” section, the tabular disclosure regarding such compensation and the accompanying narrative disclosure set forth in this Proxy Statement. In 2017, the Board considered the recommendation of stockholders and determined to conduct an annual say-on-pay vote until the next required advisory vote on the frequency of say-on-pay votes. Accordingly, the next say-on-pay vote is expected to occur at our 2023 annual meeting of stockholders.

The Company’s executive compensation program is designed to attract, motivate and retain highly qualified executive officers who are able to achieve corporate objectives and create stockholder value. The Compensation Committee believes the Company’s executive compensation program reflects a strong pay-for-performance philosophy and is well aligned with the long-term interests of our stockholders.

Highlights of our executive compensation program include:

•

At-risk pay. 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 depend on achievement of pre-approved financial targets.

•

SGICP bonus program reviewed annually; payouts based on rigorous financial performance targets. The Compensation Committee reviews the bonus program design each year with a view to realizing desired corporate objectives. In recent years, this review has focused on structuring a payout scale that the Compensation Committee has deemed appropriate in light of our growth objectives, our focus on paying down debt and our interest in managing incentive compensation costs. In 2021, we used three metrics to avoid undue emphasis on any one performance goal. In general, no SGICP 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.

•

Use of Performance-conditioned Restricted Stock Units. In 2021, we returned to our practice of granting equity awards subject to performance goals and, increased the proportion of such awards in relation to the total number annual equity incentive awards, such that, Mr. Cottle and the other named executive officers, were awarded two-thirds of their annual equity grant in the form of performance-conditioned RSUs. Approximately half of such performance-conditioned RSUs vest subject to the Company’s achievement of total shareholder return targets relative to the S&P 400 average total shareholder return. The balance of performance-conditioned RSUs vest subject to the Company’s achievement of a certain AEBITDA target.

•

No deferred compensation. We do not offer a deferred compensation plan.

•

Stock ownership guidelines. Since 2013, we have had stock ownership guidelines in place for our President and Chief Executive Officer, his executive officer direct reports and non-employee directors in order 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 stockholders. See “Compensation Discussion and Analysis — Corporate Governance Policies — Stock Ownership Guidelines” above for additional information.

•

Clawback policy. Since 2013, we have had in place a “clawback” policy subjecting 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 “Compensation Discussion and Analysis — Corporate Governance Policies — Clawback Policy” above for additional information.

•

No hedging and no pledging policies. Since 2013, we have had a policy prohibiting employees and directors from engaging in hedging transactions, and in 2021 we adopted a policy prohibiting employees and directors from holding the Company’s securities in a margin account or pledging them

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as collateral for a loan. See “Compensation Discussion and Analysis — Corporate Governance Policies — No Hedging Policies” above for additional information.

•

Independent compensation consulting firm. The Compensation Committee benefits from its utilization of an independent compensation consulting firm, which provides no other services to the Company.

The “Compensation Discussion and Analysis” section above provides a more detailed discussion of our executive compensation program.

Stockholders are being asked to vote on the following resolution:

RESOLVED, that the stockholders of Light & Wonder, Inc. approve the compensation of the Company’s named executive officers for 2021, as disclosed under SEC rules, including as disclosed in the Compensation Discussion and Analysis, the compensation tables and related materials included in the Company’s 2022 Proxy Statement.

This advisory vote on executive compensation is not binding on the Board or the Compensation Committee. However, the Board and/or Compensation Committee will take into account the result of the vote when determining future executive compensation arrangements.

THE BOARD RECOMMENDS A VOTE “FOR” THIS PROPOSAL TO APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

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REPORT OF THE AUDIT COMMITTEE

The Audit Committee operates under a written charter adopted by the Board that is available on the Company’s website at www.lnw.com.

The Audit Committee oversees the accounting, auditing and financial reporting processes of the Company. As part of its oversight responsibilities, the Audit Committee reviewed and discussed the Company’s financial statements for the year ended December 31, 2021 with management and Deloitte & Touche LLP, or Deloitte, the independent registered public accounting firm for the Company. The Committee also discussed and reviewed with Deloitte all communications required under generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (the “PCAOB”), including the matters required to be discussed by Deloitte with the Audit Committee under PCAOB Auditing Standard No. 1301, Communications with Audit Committees, and SEC Rule 2-07 of Regulation S-X.

In addition, Deloitte provided to the Audit Committee a formal written statement describing all relationships between Deloitte and its affiliates and the Company and its affiliates as defined by the rules and regulations of the SEC that might bear on Deloitte’s independence as required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence. The Audit Committee reviewed and discussed with Deloitte any matters that could have impacted Deloitte’s objectivity and independence from the Company and management, including the provision of non-audit services to the Company. Nothing came to the Audit Committee’s attention as a result of its review of Deloitte’s statement or its discussions with Deloitte that would indicate that Deloitte lacked such objectivity or independence. Based on these reviews and discussions and in reliance thereon, the Audit Committee recommended to the Board that the audited financial statements for the Company be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 for filing with the SEC.

Audit Committee

Michael J. Regan, Chairman
Timothy Throsby
Maria T. Vullo

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PROPOSAL 3
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP
AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed Deloitte & Touche LLP as our independent registered public accounting firm (“independent auditor”) for the fiscal year ending December 31, 2022, and stockholders are being asked to ratify such appointment at the annual meeting.

Representatives of Deloitte & Touche LLP are expected to be present at the meeting, will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions from stockholders.

Approval of the proposal to ratify the appointment of the independent auditor requires the affirmative vote of a majority of the shares entitled to vote represented at the meeting. If the appointment is not ratified by stockholders, the Audit Committee will reconsider such appointment and may choose in its sole discretion to confirm the appointment of Deloitte & Touche LLP or to engage a different firm to serve as the Company’s independent auditor.

Fees Paid to Our Independent Registered Public Accounting Firm

On May 7, 2019, SciPlay completed the IPO for an 18.0% minority interest in our Social gaming business. Subsequent to the IPO, we continue to control shares representing a majority of the combined voting power in SciPlay and continue to have a controlling financial interest in, and consolidate, SciPlay. Aggregate fees billed to us for the fiscal years ended December 31, 2021 and 2020 by our and SciPlay’s independent auditors, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates separated for each registrant were approximately:

	2021 Fees (in millions)									2020 Fees (in millions)
	Light & Wonder			SciPlay			Consolidated			Light & Wonder			SciPlay			Consolidated
Audit Fees:		$	5.7		$	0.7		$	6.4		$	5.5		$	0.8		$	6.3
Audit-Related Fees:		$	7.3		$	0.3		$	7.6		$	0.1		$	—		$	0.1
Tax Fees:		$	2.4		$	0.3		$	2.7		$	1.2		$	0.4		$	1.6
All Other Fees:		$	—		$	—		$	—		$	—		$	—		$	—

Light & Wonder

The Audit Fees listed above were billed in connection with the audit of our annual consolidated financial statements, the reviews of our interim consolidated financial statements included in our quarterly reports on Form 10-Q, Sarbanes-Oxley Section 404 attestation, statutory audits of foreign subsidiary financial statements and recurring gaming related regulatory audits and attestation services. 2021 Audit-Related Fees listed above were primarily billed in connection with professional services associated with audit, review and other procedures related to the divestiture of our Lottery and Sports Betting businesses. 2020 Audit-Related Fees listed above were billed in connection with professional services performed in connection with comfort letters and consents, primarily associated with efforts to support financing transactions. The Tax Fees listed above were billed for tax compliance, planning and advice, and for 2021, also included advisory services associated with the Lottery and Sports Betting businesses and transactions related to the divestiture of these businesses. All of the fees set forth in the table above were pre-approved by the Audit Committee in accordance with the procedures described below.

SciPlay

The Audit Fees listed above were billed in connection with the audit of SciPlay’s annual consolidated financial statements included in SciPlay’s annual reports on Form 10-K and the reviews of SciPlay’s interim consolidated financial statements included in SciPlay’s quarterly reports on Form 10-Q. Audit-Related Fees listed above were billed for consent in connection with a Form S-8, and for 2021 also for advisory services associated with merger and acquisitions. The Tax Fees listed above were primarily billed for tax compliance and advice.

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Pre-Approval Policy for Services Performed by our Independent Registered Public Accounting Firm

The Audit Committee has responsibility for the appointment, compensation and oversight of the work of the independent auditor. As part of this responsibility, the Audit Committee must pre-approve all permissible services to be performed by the independent auditor.

The Audit Committee has adopted an auditor pre-approval policy that sets forth the procedures and conditions pursuant to which pre-approval may be given for services performed by the independent auditor. Under the policy, the Audit Committee must give prior approval for any amount or type of service within four categories — audit, audit-related, tax services or, to the extent permitted by law, other services — that the independent auditor provides. Prior to the annual engagement, the Audit Committee may grant general pre-approval for independent auditor services within these four categories at maximum pre-approved fee levels. During the year, circumstances may arise when it may become necessary to engage the independent auditor for additional services not contemplated in the original pre-approval and, in those instances, such service will require separate pre-approval by the Audit Committee if it is to be provided by the independent auditor. For any pre-approval, the Audit Committee will consider whether such services are consistent with the SEC’s rules on auditor independence, whether the auditor is best-positioned to provide the most cost-effective and efficient service and whether the service might enhance the Company’s ability to manage or control risk or improve audit quality. The Audit Committee may delegate to one or more of its members authority to approve a request for pre-approval, provided the member reports any approval so given to the Audit Committee at its next scheduled meeting.

THE BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2022

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OTHER MATTERS

We are not aware of any matter other than those described in this Proxy Statement that will be acted upon at the annual meeting. In the event that any other matter properly comes before the meeting for a vote of stockholders, the persons named as proxies in the enclosed form of proxy will vote in accordance with their best judgment on such other matter.

We will pay the costs of proxy solicitation. Proxies are being solicited primarily by mail, but, in addition, our officers and employees may solicit proxies in person, by telephone or electronically.

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STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING

Proxy Statement Proposals

Pursuant to Rule 14a-8 under the Exchange Act, if a stockholder wants to submit a proposal for inclusion in our proxy materials for the 2023 annual meeting of stockholders, it must be received at our principal executive offices, 6601 Bermuda Road, Las Vegas, Nevada 89119, Attention: Corporate Secretary, not less than 120 days before the anniversary of the date this Proxy Statement is released to stockholders, unless the date of the 2023 annual meeting of stockholders is more than 30 days before or after June 9, 2022, in which case the proposal must be received a reasonable time before we begin to print and mail our proxy materials. Since this Proxy Statement will first be made available to our stockholders on or about April 29, 2022, the proposal must be received not later than December 30, 2022. In order to avoid controversy, stockholders should submit proposals by means, including electronic means, which permit them to prove the date of delivery.

Other Proposals and Nominations

For any proposal or director nomination that is not submitted for inclusion in next year’s proxy statement pursuant to the process set forth above, but is instead sought to be presented directly at the 2023 annual meeting of stockholders, stockholders are advised to review our Amended and Restated Bylaws as they contain requirements with respect to advance notice of stockholder proposals and director nominations. 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. Accordingly, any such stockholder proposal or director nomination must be received between February 8, 2023 and the close of business on March 10, 2023 for the 2023 annual meeting of stockholders. In the event that the 2023 annual meeting of stockholders is convened more than 30 days prior to or delayed by more than 60 days after June 8, 2023, notice by the stockholder, to be timely, must be received no earlier than the 120th day prior to the 2023 annual meeting of stockholders and no later than the later of (i) the 90th day prior to the 2023 annual meeting of stockholders and (ii) the tenth day following the day on which we publicly announce the date of the 2023 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.

All proposals should be sent to our principal executive offices at 6601 Bermuda Road, Las Vegas, Nevada 89119, Attention: Corporate Secretary.

These advance notice provisions are in addition to, and separate from, the requirements that a stockholder must meet in order to have a proposal included in the proxy statement under the rules of the SEC.

A proxy granted by a stockholder will give discretionary authority to the proxies to vote on any matters introduced pursuant to the above advance notice bylaw provisions, subject to applicable rules of the SEC.

Copies of our Amended and Restated Bylaws can be accessed through the Investors — Corporate Governance — Bylaws link on our website at www.lnw.com, or are available by request to the Corporate Secretary at the address set forth above.

Your cooperation in giving this matter your immediate attention and in returning your proxy promptly will be appreciated.

				By Order of the Board of Directors

				Constance P. James
	Dated: April 29, 2022			Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary

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Appendix A

Reconciliations of Non-GAAP Financial Measures

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). As described in the “Executive Compensation” section, annual bonuses awarded to executive officers in respect of 2021 were determined based on our achievement against certain non-GAAP financial metrics as described in more detail in “Compensation Discussion and Analysis — Objectives and Components of Compensation Program — Annual Incentive Compensation”, with reconciliation to the most directly comparable GAAP measure provided below.

SGICP AEBITDA, as used herein, is a non-GAAP financial measure that combines Consolidated AEBITDA (representing our continuing operations), AEBITDA from discontinued operations and EBITDA from equity investments included in continuing operations, with further SGICP-related adjustments and adjustments from the Compensation Committee, as set forth in the tables below.

Consolidated AEBITDA, AEBITDA from discontinued operations and EBITDA from equity investments are non-GAAP financial measures that are reconciled to, respectively, net income from continuing operations, net income from discontinued operations, net of tax, and earnings from equity investments.

SGICP free cash flow, as used herein, is a non-GAAP financial measure and is reconciled to net cash provided by operating activities as the most directly comparable GAAP measure, with Compensation Committee adjustments, as set forth in the tables below.

These non-GAAP financial measures should not be considered in isolation of, as a substitute for, or superior to, the consolidated financial information prepared in accordance with GAAP, and should be read in conjunction with the Company’s financial statements filed with the SEC.

A-1

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RECONCILIATION OF CONSOLIDATED AEBITDA — CONTINUING OPERATIONS, AEBITDA FROM DISCONTINUED OPERATIONS AND COMBINED AEBITDA

(unaudited, $ in millions)	Year Ended December 31, 2021
Reconciliation of Net Income Attributable to the Company to Consolidated AEBITDA — Continuing Operations
Net income attributable to the Company		$	371
Net income attributable to noncontrolling interest			19
Net income from discontinued operations, net of tax			(366)
Net income from continuing operations			24
Restructuring and other			167
Depreciation, amortization and impairments			398
Other income, net			(28)
Interest expense			478
Income tax benefit			(318)
Stock-based compensation			113
Gain on remeasurement of debt			(41)
Consolidated AEBITDA — continuing operations(1)		$	793
Reconciliation of Net Income from Discontinued Operations, Net of tax to AEBITDA from Discontinued Operations
Net income from discontinued operations, net of tax		$	366
Income tax benefit			72
Restructuring and other			10
Depreciation, amortization and impairments			79
EBITDA from equity investments			80
Earnings from equity investments			(42)
Stock-based compensation and other, net			(35)
AEBITDA from discontinued operations(2)		$	530
EBITDA from equity investments — continuing operations			8
Combined AEBITDA(3)		$	1,331

(1)

Effective third quarter of 2021, Gaming business segment and Consolidated AEBITDA — continuing operations presentations have been recast to exclude EBITDA from equity investments. Refer to Consolidated AEBITDA — continuing operations definition and Gaming business segment AEBITDA Change description as provided in our fourth quarter and full year 2021 earnings release for further details.

(2)

AEBITDA from discontinued operations, a non-GAAP measure, is derived based on the historical records and includes only those direct costs that are allocated to discontinued operations.

(3)

Combined AEBITDA consists of Consolidated AEBITDA — continuing operations, AEBITDA from discontinued operations and EBITDA from equity investments included in continuing operations.

A-2

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RECONCILIATION OF EARNINGS FROM EQUITY INVESTMENTS TO EBITDA FROM EQUITY INVESTMENTS

(unaudited, $ in millions)	Year Ended December 31, 2022
	Continuing Operations			Discontinued Operations
Earnings from equity investments		$	5		$	42
Add: Income tax expense			—			10
Add: Depreciation, amortization and impairments			1			31
Add: Interest income, net and other			2			(3)
EBITDA from equity investments		$	8		$	80
Combined EBITDA from equity investments					$	88

RECONCILIATION OF OPERATING INCOME (LOSS) TO LOTTERY AEBITDA

(unaudited, $ in millions)	Year Ended December 31, 2021
	Total Discontinued Operations			Other			Lottery
Operating income (loss)		$	337(1)		$	(15)		$	352
Depreciation, amortization and impairments									42
Restructuring and other									5
Stock based compensation and other									17
EBITDA from equity investments									80
AEBITDA								$	496

(1)

This amount conforms to the presentation found in Note 2 to the Consolidated Financial Statements in our Annual Report on Form 10-K.

Note: The basis of accounting and presentation of financial statements by the Lottery business and discontinued operations may, in the future and in connection with their divestiture and planned divestiture, respectively, differ materially from those of the Company, including as presented herein or in our fourth quarter and full year 2021 earnings release furnished with our Current Report on Form 8-K dated March 1, 2022.

A-3

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RECONCILIATION OF GAMING, LOTTERY AND COMBINED AEBITDA TO SGICP AEBITDA

(unaudited, $ in millions)	Year Ended December 31, 2021
	Gaming			Lottery			Combined
AEBITDA		$	659		$	496		$	1,331
SGICP adjustments(1)			6			(7)			(21)
Compensation Committee adjustments			—			(1)			1
SGICP AEBITDA		$	665		$	488		$	1,311

(1)

Represents reduction for bonus and capitalized labor.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO SGICP FREE CASH FLOW

(unaudited, $ in millions)	Year Ended December 31, 2021
Net cash provided by operating activities		$	685
Less: Capital expenditures			(265)
Less: Distributions from equity method investments, net of additions			20
Less: Payments on license obligations			(53)
Change in restricted cash impacting working capital			56
Free cash flow		$	443
Compensation Committee adjustments			(21)
SGICP free cash flow		$	422

A-4

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SCAN TO VIEW MATERIALS & VOTE LIGHT & WONDER, INC. 6601 BERMUDA ROAD LAS VEGAS, NV 89119 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to http://viewproxy.com/LightWonderInc/2022/vm You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D84581-P72469 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY LIGHT & WONDER, INC. The Board of Directors recommends you vote FOR proposal 1: For Withhold All All For All Except To withhold authority to vote for any individual nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. 1. To elect nine members of the Board of Directors to serve for the ensuing year and until their respective successors are duly elected and qualified. Nominees: ! ! ! 01) Jamie R. Odell 02) Barry L. Cottle 03) Antonia Korsanos 04) Hamish R. McLennan 05) Michael J. Regan 06) Virginia E. Shanks 07) Timothy Throsby 08) Maria T. Vullo 09) Kneeland C. Youngblood The Board of Directors recommends you vote FOR proposals 2 and 3: For Against Abstain 2. To approve, on an advisory basis, the compensation of the Company's named executive officers. ! ! ! 3. To ratify the appointment of Deloitte & Touche LLP as the Company's independent registered public accounting firm for the fiscal year ending December 31, 2022. NOTE: To consider and act upon any other matter that may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. D84582-P72469 LIGHT & WONDER, INC. 6601 Bermuda Road, Las Vegas, NV 89119 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF STOCKHOLDERS - JUNE 8, 2022 The undersigned hereby appoints Constance P. James and James Sottile, or either of them, as Proxy or Proxies of the undersigned with full power of substitution to act for the undersigned and to vote the full number of shares of the Common Stock of Light & Wonder, Inc. that the undersigned is entitled to vote at the virtual Annual Meeting of Stockholders of Light & Wonder, Inc. to be held online via a live webcast at 2:30 p.m. PT on Wednesday, June 8, 2022, and at any adjournments or postponements thereof, in accordance with the instructions set forth on this proxy card, and in their discretion, with respect to all other matters that may properly come before the meeting. Any proxy heretofore given by the undersigned with respect to such shares is hereby revoked. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the recommendation of the Board of Directors. (Continued and to be signed on reverse side)

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Date	Price Target	Rating	Analyst
3/11/2022	$13.00 → $55.00	Neutral	Susquehanna
3/3/2022	$45.00 → $52.00	Underperform	Credit Suisse
3/2/2022	$71.00 → $67.00	Hold	Deutsche Bank
11/10/2021	$39.00 → $45.00	Underperform	Credit Suisse
11/3/2021	$84.00 → $90.00	Buy → Hold	Stifel
10/19/2021	$98.00	Buy	Berenberg
8/10/2021	$92.00 → $100.00	Buy	Craig-Hallum
8/10/2021	$36.00 → $39.00	Underperform	Credit Suisse

SEC Form DEF 14A filed by Scientific Games Corp

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SEC Form 4: Regan Michael J converted options into 2,624 shares, increasing direct ownership by 3% to 96,849 units

SEC Form 4: Youngblood Dr Kneeland converted options into 1,927 shares, increasing direct ownership by 18% to 12,731 units

SEC Form 4: Vullo Maria T converted options into 4,856 shares, increasing direct ownership by 232% to 6,949 units

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Susquehanna reiterated coverage on Scientific Games with a new price target

Credit Suisse reiterated coverage on Scientific Games with a new price target

Deutsche Bank reiterated coverage on Scientific Games with a new price target

$SGMS Large Ownership Changes

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SEC Form SC 13G/A filed by Scientific Games Corp (Amendment)

SEC Form SC 13G filed

SEC Form SC 13G/A filed

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$SGMS Market Insights

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$SGMS Press Releases

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Light & Wonder to Report First Quarter 2022 Results on Tuesday, May 10, 2022

Scientific Games Provides Business Strategy Update and Reports Fourth Quarter and Full Year 2021 Results

Scientific Games to Provide a Business Strategy Update and Report Fourth Quarter and Full Year 2021 Results on Tuesday, March 1, 2022

Scientific Games Awarded New, 10-year Contract With Ecuador National Lottery

Here's How Much You Would Have Made Owning Scientific Games Stock In The Last 10 Years

Shares of several companies in the hotels, restaurants & leisure sector are trading lower as stocks continue to fall amid concerns over the potential economic impacts of Fed rate hikes and the Russia-Ukraine conflict. Traders also weigh recent earnings reports.

Kaleyra Announces CEO Transition Plan and Significant Board Enhancements

Gambling.com Group Welcomes Michael Quartieri to Board of Directors

Light & Wonder Announces Completion of Legal Entity Name and Ticker Symbol Changes

$SGMS Leadership Updates

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OpenBet Appoints DAZN and American Gaming Association Execs To Reimagine Sports Betting Entertainment

Scientific Games Appoints Connie James as Chief Financial Officer

SciPlay Announces Formation of Special Committee and Appointment of Advisors

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