EXHIBIT 10.3

SEVERANCE AND GENERAL RELEASE AGREEMENT
(“AGREEMENT”)

For good and valuable consideration, receipt of which is hereby acknowledged,
and in order to resolve and settle finally, fully and completely all matters or
disputes that now or may exist between them, as set forth below, the parties
agree as follows:

1.

Parties.  The parties to this Agreement are Stephen W. Morro, his heirs,
representatives, successors and assigns (hereinafter referred to collectively as
“Executive”), and International Game Technology, a Nevada corporation
(hereinafter referred to as the “Company”).

2.

Termination Of Employment.  The parties agree that Executive will resign his
employment with the Company effective January 6, 2009 (the “Termination Date”).
 All salary and insurance benefits shall remain in effect through such date.  

3.

Severance Package.  The Company will provide Executive with the following
severance package (the “Severance Package”):

a.

Severance Pay.  The Company will pay to Executive on the Termination Date a
lump-sum amount equal to $600,000, less applicable withholding taxes and other
customary payroll deductions.

b.

Insurance Benefits.  For 18 months after the Termination Date Executive will be
covered by COBRA, and the Company will pay all costs associated with such
coverage.  Thereafter, Executive will be covered at the expense of Executive by
the Company’s medical benefits plan as in effect from time to time.  If the
terms of the Company’s medical benefits plan preclude Executive’s participation,
Executive will cooperate with the Company and the Company may, in its sole
discretion, use its best efforts to obtain alternative and comparable coverage
for Executive and Executive shall be responsible for paying the full premiums
for such coverage.  In either case, the provisions of this Section 3b will
terminate in the event Executive is covered by any medical benefits plan of
another employer.

c.

Stock Options/RSA Vesting.  All unvested stock options and restricted stock
grants awarded to Executive on or before the Termination Date shall cease to
vest on the Termination Date.  Following the Termination Date, all terms and
conditions of all agreements between the Company and Executive applicable to
Executive’s vested stock options and restricted stock grants shall remain in
full force and effect.

d.

Non-Competition.  All restrictive covenant provisions which (i) are contained in
any agreements between the Executive and the Company prior to the Termination
Date, and (ii) restrict Executive’s ability to engage in competitive activities
against the Company or its affiliates, shall remain in full force and effect
until one year following the Termination Date.

e.

Bonus Payment.  Executive acknowledges that he has received his 2008 bonus and
cash share award payments under the terms of the bonus and cash share plans.

4.

No Additional Compensation Owed.  The parties agree that, except as expressly
set forth in this Agreement, no further compensation, including, but not limited
to, salary, bonus, benefits,

1

--------------------------------------------------------------------------------

stock, stock options, cash sharing, or other payments (collectively,
“Compensation”) shall be due from or paid by the Company to Executive.
 Additionally, Executive hereby waives and relinquishes all claims to further
employment and Compensation from the Company, except as specified in this
Agreement.

5.

Release Of Claims.  In consideration of the Severance Package, Executive and the
Company release, discharge, and forever hold the other and any of their parents,
predecessors, heirs, assigns, successors, subsidiaries, affiliates or related
companies, officers, directors, employees and/or representatives (hereinafter
referred to collectively as the “Releasees”) harmless from any and all claims,
demands or suits, whether civil or criminal, at law or in equity, known or
unknown, fixed or contingent, liquidated or unliquidated, arising or existing on
or at any time prior to the execution of this Agreement (the ”Claims”).  The
Claims include, without limitation, Claims relating to or arising out of (i)
Executive’s employment with the Company, (ii) Executive’s separation from
employment with the Company, and (iii) all Claims, known or unknown, that have
been asserted, or that could be asserted, by the other against any Releasee,
including but not limited to Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, and the Americans with
Disabilities Act, in each case, as amended.

6.

No Admission Of Liability.  This Agreement shall not in any way be construed as
an admission by the Company or any Releasee of any acts of wrongdoing or
violation of any statute, law, or legal right.

7.

Return Of Property.  Executive shall immediately return all equipment, manuals,
property, and documents in his possession that belong to, relate to, or refer to
the Company or any of its affiliates, including all files, programs, and
passwords stored electronically or otherwise.

8.

Confidentiality.  Executive will keep the fact, terms, and amount of this
Agreement completely confidential and will not disclose any information
concerning this Agreement or the terms of the underlying settlement unless
lawfully compelled to do so.  Executive recognizes that this confidentiality
provision is material to the Company’s decision to enter into this Agreement.

9.

No Disparagement.  The parties agree that they shall not make any false or
disparaging comments or statements regarding each other..  For purposes of this
Agreement, a disparaging comment or statement is one that tends to injure the
reputation or standing of the other with investors, potential investors, rating
or regulatory entities, or the general public, or which tends to adversely
effect the regard or esteem in which those persons or entities hold either
party.

10.

Proprietary Information.  At all times in the future, Executive shall remain
bound by Sections 1(A), 1(C) and 1(F) of that certain Invention and Secrecy
Agreement (“Invention Agreement”) signed by Executive on February 27, 2006, a
copy of which is attached hereto as Exhibit A.

11.

Confidential Information.  

a.

Executive, in the performance of Executive’s services on behalf of the Company,
has access to, received and been entrusted with confidential information,
including but not  limited to development, marketing, organizational, financial,
management, administrative, production, distribution and sales information,
data, specifications and processes presently owned or at any

2

--------------------------------------------------------------------------------

time in the future developed by the Company or its agents or consultants, or
used presently or at any time in the future in the course of its business that
is not otherwise part of the public domain (collectively, the “Confidential
Material”).  All such Confidential Material is considered secret and was made
available to Executive in confidence.  Executive represents that he has held all
such information confidential and will continue to do so.

b.

Executive shall not, directly or indirectly for any reason whatsoever disclose
or use such Confidential Material, unless such Confidential Material ceases
(through no fault of Executive’s) to be confidential because it has become part
of the public domain or he is otherwise obligated to disclose such information
by the lawful order of any competent jurisdiction.  All records, files,
drawings, documents, equipment and other tangible items, wherever, located,
relating in any way to the Confidential Material or otherwise to the business of
the Company which Executive prepares, uses or encounters shall be and remain the
sole and exclusive property of the Company and shall be included in the
Confidential material.  On or before the Termination Date, Executive shall
promptly deliver to the Company any and all of the Confidential Material, not
previously delivered to the Company, that may be or at any previous time has
been in Executive’s possession or under Executive’s control.

c.

Executive hereby acknowledges that the sale or unauthorized use or disclosure of
any of the Confidential material by any means whatsoever shall constitute
“Unfair Competition”.  Executive agrees that Executive shall not engage in
Unfair Competition at any time.

12.

Non-Interference.  Except as otherwise agreed to by the parties in writing,
Executive promises and agrees that he will not, during the twelve (12) months
after the Termination Date, directly (or with knowledge or intent, indirectly)
interfere with any of the relationships of Company with any of its customers.  

13.

Soliciting Employees.  Executive promises and agrees that he will not, during
the eighteen (18) months following the Termination Date, directly or indirectly
solicit any employee of the Company who earned annually $25,000 or more as an
employee of the Company during the last six months of his or her own employment
to work for any business, individual, partnership, firm, or corporation.

14.

Litigation and Investigation Assistance.  Executive agrees to cooperate in the
defense of the Company and any of its affiliates against any threatened or
pending litigation or in any investigation or proceeding by any governmental
agency or body that relates to any events or actions which occurred during or
prior to the term of Executive’s employment with the Company.  Furthermore,
Executive agrees to cooperate in the prosecution of any claims and lawsuits
brought by the Company that are currently outstanding or that may in the future
be brought relating to matters, which occurred during or prior to the term of
Executive’s employment with the Company.  After the Termination Date, except as
requested by the Company or as required by law, Executive shall not comment upon
any (i) threatened or pending claim or litigation (including investigations or
arbitrations) involving the Company or any of its affiliates.

15.

No Assignment Of Claims.  Executive represents that he has not transferred or
assigned, to any person or entity, any claim involving the Company or any of its
affiliates, or any portion thereof, or interest therein.

3

--------------------------------------------------------------------------------

16.

Binding Effect Of Agreement.  This Agreement shall be binding upon the Company
and upon Executive and his heirs, administrators, representatives, executors,
successors, and assigns.

17.

Controlling Law.  This Agreement is made and entered into within the State of
Nevada and shall in all respects be interpreted, enforced, and governed under
the laws of the State of Nevada.

18.

Choice of Form; Waiver of Jury.  EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEVADA, SITTING IN WASHOE
COUNTY, NEVADA AND HAVING PROPER SUBJECT MATTER JURISDICTION, OR THE FEDERAL
DISTRICT COURT FOR THE DISTRICT OF NEVADA, FOR ALL PURPOSES IN CONNECTION WITH
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED BY THIS AGREEMENT (COLLECTIVELY, “PROCEEDINGS”).  EACH PARTY HEREBY
AGREES THAT SERVICE OF SUMMONS, COMPLAINT OR OTHER PROCESS IN CONNECTION WITH
ANY PROCEEDINGS MAY BE MADE AS SET FORTH IN THIS AGREEMENT WITH RESPECT TO
SERVICE OF NOTICES, AND THAT SERVICE SO MADE WILL BE AS EFFECTIVE AS IF
PERSONALLY MADE IN THE STATE OF NEVADA.  IT IS THE INTENT OF EACH OF THE PARTIES
THAT ALL PROCEEDINGS BE HEARD AND LITIGATED EXCLUSIVELY IN A COURT LOCATED IN
WASHOE COUNTY, NEVADA.  EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT IT HAS
FREELY AGREED THAT (A) ALL PROCEEDINGS WILL BE HEARD IN ACCORDANCE WITH THIS
SECTION: (B) THE AGREEMENT TO CHOOSE COURTS LOCATED IN WASHOE COUNTY, NEVADA TO
HEAR ALL PROCEEDINGS IN ACCORDANCE WITH THIS SECTION IS REASONABLE AND WILL NOT
PLACE SUCH PARTY AT A DISADVANTAGE OR OTHERWISE DENY IT ITS DAY IN COURT; (C) IT
IS A KNOWLEDGEABLE, INFORMED, SOPHISTICATED PERSON CAPABLE OF UNDERSTANDING AND
EVALUATING THE PROVISIONS SET FORTH IN THIS AGREEMENT, INCLUDING THIS SECTION;
AND (D) IT HAS BEEN REPRESENTED BY SUCH COUNSEL AND OTHER ADVISORS OF ITS
CHOOSING AS SUCH PARTY HAS DEEMED APPROPRIATE IN CONNECTION WITH THE DECISION TO
ENTER INTO THIS AGREEMENT, INCLUDING THIS SECTION.  THE PARTIES HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER DOCUMENTS ENTERED INTO
IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING OR
STATEMENTS (WHETHER VERBAL OR WRITTEN), OF THE PARTIES.

19.

Severability.  Should any provision of this Agreement be declared or determined
to be illegal or invalid by any  government  agency or court of competent
jurisdiction, the validity of the remaining parts, terms or provisions of this
Agreement shall not be affected and such provisions shall remain in full force
and effect.

20.

Entire Agreement.  This Agreement sets forth the entire agreement between the
parties, and fully supersedes any and all prior agreements, understandings, or
representations between the parties pertaining to the subject matter of this
Agreement, except for any agreements relating to confidential or proprietary
information, trade secrets, nonsolicitation, or noncompetition, all of which

4

--------------------------------------------------------------------------------

shall remain in full force and effect. Executive represents and acknowledges
that in executing this Agreement, he does not rely, and has not relied, upon any
representation(s) by the Company or its agents except as expressly contained in
this Agreement.

21.

Revocation Rights.  Executive understands that he may revoke this Agreement
within seven days after execution.  By signing below, Executive confirms that
he: (a) has read this Agreement carefully and completely; (b) has been given a
period of at least 21 days to consider and review this Agreement; (c) is aware
of his right to consult with legal counsel and acknowledges that he has had
ample opportunity to do so; (d) after executing this Agreement has seven (7)
days to revoke the Agreement; (e) understands all the provisions contained in
this Agreement; and (f) he is entering into this Agreement voluntarily and of
his own free will.

MY SIGNATURE BELOW MEANS THAT I HAVE READ THIS RELEASE AND SETTLEMENT AGREEMENT
AND AGREE AND CONSENT TO ALL THE TERMS AND CONDITIONS CONTAINED IN THE
AGREEMENT.

 

 

 

EXECUTIVE

 

 

 

 

Date:

 

 

 

 

 

 

Name:

Stephen W. Morro

 

 

 

 

 

 

 

 

COMPANY

 

 

 

 

 

 

 

INTERNATIONAL GAME TECHNOLOGY

 

 

 

 

 

 

 

 

By:

/s/ THOMAS J. MATTHEWS

 

 

 

Name:

Thomas J. Mathews

 

 

 

Title:

Chief Executive Officer

5