Exhibit 10.14
 
INTERNATIONAL GAME TECHNOLOGY
 
DIRECTORS’ COMPENSATION POLICY
AND SHARE OWNERSHIP GUIDELINES
 
Effective Date:  October 2, 2011
 
Directors of International Game Technology, a Nevada corporation (the
“Company”), who are not employed by the Company or one of its subsidiaries
(“non-employee directors”) are entitled to the compensation set forth below for
their service as a member of the Board of Directors (the “Board”) of the
Company. This policy is effective as of the first day of the Company’s fiscal
year 2012 and supersedes all prior policies concerning compensation of the
Company’s non-employee directors as to their service from and after that
time.  The Board has the right to amend this policy from time to time.
 
Cash Compensation
     
Annual Retainer
    $150,000  
Additional Chair Retainer
    $50,000  
Additional Committee Chair Retainers
       
Audit Committee Chair
    $40,000  
Compensation Committee Chair
    $30,000  
Chairs of Other Standing Board Committees
    $20,000            
Equity Compensation
       
Annual Equity Award
    $150,000  
Additional Annual Equity for Chair
    $50,000  

 
Cash Compensation
 
Each non-employee director will be entitled to a cash retainer while serving on
the Board in the amount set forth above (the “Annual Retainer”).  A non-employee
director who serves as the Chair of the Board will be entitled to an additional
cash retainer while serving in that position in the amount set forth above (the
“Additional Chair Retainer”).  A non-employee director who serves as the Chair
of the Audit Committee, the Compensation Committee or the Chair of another
standing committee of the Board will be entitled to an additional cash retainer
while serving in that position in the applicable amount set forth above (an
“Additional Committee Chair Retainer”); provided, however, that if a
non-employee director is serving as both the Chair of the Board and the Chair of
a Board committee, the director will be entitled to the Additional Chair
Retainer only and will not receive the Additional Committee Chair Retainer for
that committee.
 
The amounts of the Annual Retainer, Additional Chair Retainer, and Additional
Committee Chair Retainers reflected above are expressed as annualized
amounts.  These retainers will be paid on a quarterly basis, at the beginning of
each quarter.
 
Expense Reimbursement
 
All non-employee directors will be entitled to reimbursement from the Company
for the following expenses incurred by them while on the Board:
 
 
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·
reasonable travel (including airfare and ground transportation), lodging and
meal expenses  in connection with (1) attendance at meetings of the Board and
its committees, (2) regulatory licensing interviews, (3) director education
programs, and (4) other Company business functions;

 
 
·
registration fees or tuition and reasonable related expenses to attend director
education programs consistent with the Company’s continuing education policy set
forth in the Corporate Governance Guidelines; and

 
 
·
expenses related to gaming license applications, including fees for the
preparation of financial statements, postage, bank charges to produce copies of
statements and cancelled checks, and other administrative fees.

 
Directors are encouraged to fly coach-class on commercial airlines if the travel
time does not exceed three hours.  Reimbursement for non-commercial travel
requires prior approval of the Chair of the Board (or, if the Chair is not a
non-employee director at the relevant time, the Company’s lead non-employee
director or the Nominating and Corporate Governance Committee of the
Board).  The Company will make reimbursement to a non-employee director within a
reasonable amount of time following submission by the non-employee director of
reasonable written substantiation for the expenses, and (as required by
applicable tax rules in the case of any taxable reimbursements) in no event
later than the end of the year following the year in which the related expense
was incurred.
 
Equity Awards
 
Annual Equity Awards for Continuing Board Members
 
On the date of each annual meeting of the Company’s shareholders that occurs
after the Effective Date set forth above (or, if more than one such meeting
occurs during a particular fiscal year of the Company, the grants will be made
only in connection with the first such meeting to occur in that fiscal year),
each non-employee director continuing in office after that date will
automatically be granted an award of restricted stock units (“RSUs”).  The
number of RSUs covered by each such award will be determined by dividing (1) the
Annual Equity Award grant value set forth above by (2) the Closing Price as of
the date of grant (rounded down to the nearest whole unit).  For purposes of
this policy, “Closing Price” as of a particular date means the last/closing
market prices (in regular trading on the principal exchange or market on which
the Company’s common stock is then listed or admitted to trade) for a share of
the Company’s common stock on the date in question (or on the immediately
preceding trading day if that day is not a trading day).
 
In addition to the annual equity award grants described above, on the date of
each annual meeting of the Company’s shareholders that occurs after the
Effective Date, a non-employee director who is continuing in office as the Chair
of the Board after that date will also automatically be granted an award of RSUs
determined by dividing the Additional Annual Equity for Chair value set forth
above by the Closing Price as of that date (rounded down to the nearest whole
unit); provided that if more than one such meeting occurs during a particular
fiscal year, this grant will be made only in connection with the first such
meeting to occur in that fiscal year.
 
Initial Equity Awards for New Board Members
 
For each new non-employee director appointed or elected after the Effective Date
and other than on the date of an annual meeting of the Company’s shareholders at
which the Company grants annual equity awards to its non-employee directors, on
the date that the new non-employee director first becomes a member of the Board,
the new non-employee director will automatically be granted an award of RSUs
determined by dividing (1) a pro-rata portion of the Annual Equity Award value
by (2) the Closing Price as of that date (rounded down to the nearest whole
unit).  The pro-rata portion of the Annual Equity Award value for purposes of
the applicable initial equity award will equal the Annual Equity Award value
multiplied by a fraction (not greater than one), the numerator of which is 365
minus the number of calendar days that as of the particular grant date had
elapsed since the Company’s last annual meeting of shareholders at which annual
equity awards were granted by the Company to non-employee directors, and the
denominator of which is 365.
 
 
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For a non-employee director who first becomes Chair of the Board after the
Effective Date and other than on the date of an annual meeting of the Company’s
shareholders at which the Company grants annual equity awards to its
non-employee directors, on the date the non-employee director first becomes
Chair of the Board, the non-employee director will automatically be granted an
award of RSUs determined by dividing (1) a pro-rata portion of the Additional
Annual Equity for Chair value set forth above by (2) the Closing Price as of
that date (rounded down to the nearest whole unit).  The pro-rata portion of the
Additional Annual Equity for Chair value for purposes of this initial equity
award will equal the Additional Annual Equity for Chair value multiplied by a
fraction (not greater than one), the numerator of which is 365 minus the number
of calendar days that as of the particular grant date had elapsed since the
Company’s last annual meeting of shareholders at which annual equity awards were
granted by the Company to non-employee directors, and the denominator of which
is 365.
 
An employee or former employee of the Company or one of its subsidiaries who
ceases or has ceased to be so employed and becomes a non-employee director will
not be eligible for an initial equity award grant, but will be eligible for cash
compensation and annual equity awards on the same basis as other non-employee
directors.
 
Award Agreements; Vesting and Payment of Equity Awards
 
Each annual and initial equity award granted to non-employee directors pursuant
to this policy shall be evidenced by a written award agreement in substantially
the form attached hereto as Exhibit A (or such other form as may be approved by
the Board for use in evidencing such grants).  Annual equity awards granted to
non-employee directors under this policy will vest upon the first to occur of
(1) the first anniversary of the date of grant of the award or (b) the day
before the annual meeting of the Company’s shareholders that occurs in the
fiscal year after the fiscal year in which the date of grant occurs.  Initial
equity awards granted to newly appointed or elected non-employee directors will
vest on the vesting date determined under the preceding sentence for the annual
equity awards granted to non-employee directors in connection with the last
annual meeting of the Company’s shareholders at which the Company grants annual
equity awards to its non-employee directors that occurs before the new
non-employee director’s election or appointment.  In each case, vesting is
contingent upon the non-employee director’s continued service on the Board
through the applicable vesting date.  Each of these awards, to the extent then
outstanding and unvested, will become fully vested in the event of the
director’s death, disability or retirement (as such term is defined in the
Company’s 2002 Stock Incentive Plan (the “Plan”)) or upon the occurrence of a
change in control event (as such term is defined in the Plan).  Subject to any
deferral election that may be made by the director, vested RSUs will generally
be paid in shares of the Company’s common stock on a one-for-one basis promptly
following the vesting date.
 
Election to Receive Equity Awards in Lieu of Cash Retainers
 
A non-employee director may elect, on a form and in a manner prescribed by the
Company, to exchange the right to receive payment in cash of all or any portion
of the director’s Annual Retainer, Additional Chair Retainer, and Additional
Committee Chair Retainer (the “Deferred Retainer Fees”) for an award of RSUs
under the Plan.  Such award will be granted on the first trading day of the
calendar quarter for which the applicable Deferred Retainer Fees would have
otherwise been paid, and the number of RSUs covered by such award will be
determined by dividing (1) the dollar amount of the Deferred Retainer Fees for
that quarter by (2) the Closing Price as of that date (rounded down to the
nearest whole unit).  Such RSUs will be fully vested as of the date of grant and
will generally be paid in shares of the Company’s common stock on a one-for-one
basis upon the termination of the director’s service on the Board (or, if
earlier and as permitted under applicable tax law, upon the occurrence of a
change in control event).  Any such election to receive an equity award in lieu
of cash retainers must be made prior to the December 31 that precedes the
calendar year during which the Deferred Retainer Fees are earned by the
non-employee director (or such earlier date as may be prescribed by the
Company.  A newly appointed or elected non-employee director who has not
previously been employed by the Company or one of its subsidiaries may make such
an election to receive an equity award in lieu of cash retainers at any time
within 30 days after the director’s initial election or appointment to the
Board, and such election will be effective for the first quarter following the
quarter in which the election is received by the Company.
 
 
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Provisions Applicable to All Non-Employee Director Equity Awards
 
Each award of RSUs granted pursuant to this policy will be made under and
subject to the terms and conditions of the Plan (including, without limitation,
the adjustment provisions set forth in Section 6.2 of the Plan), or any
successor equity compensation plan approved by the Company’s shareholders and in
effect at the time of grant.  Notwithstanding any other provision herein or in
the Plan, any such awards that would otherwise exceed any applicable share limit
of the Plan shall be prorated within such limitation.  Any shares of the
Company’s common stock issued pursuant to any such award will be charged against
the applicable share limits of the Plan.  The Board may from time to time amend
this policy without shareholder approval, subject to the limitations set forth
in Section 6.6 of the Plan.  This policy does not limit the Board’s authority to
make other, discretionary award grants to non-employee directors pursuant to the
Plan.  The Board’s power and authority to construe and interpret the Plan and
awards thereunder pursuant to Section 1.2(b) of the Plan shall extend to equity
awards granted hereunder.  As provided in Section 1.2(c) of the Plan, any action
taken by, or inaction of, the Board relating or pursuant to awards granted
pursuant to this policy and within its authority or under applicable law shall
be within the absolute discretion of the Board and shall be conclusive and
binding upon all persons.
 
Share Ownership Guidelines
 
In order to further align the interests of the non-employee directors with the
interests of the Company’s shareholders, non-employee directors are expected to
hold, for as long as they remain on the Board following the applicable time set
forth below, shares of the Company’s common stock that have a fair market value
equal to at least three times the base Annual Retainer amount then in effect for
non-employee directors.  For purposes of these guidelines, shares beneficially
owned by a non-employee director will be taken into account, including shares
owned by the director outright, shares held in trust for the benefit of the
director or his or her family members, and vested RSUs the payment of which has
been deferred; provided that shares subject to unvested RSUs and shares subject
to outstanding stock options (whether or not vested) do not count toward meeting
these guidelines.  A non-employee director is expected to satisfy these
guidelines not later than four years after the later of (1) the date he or she
first becomes a Board member, or (2) the date these guidelines were adopted.  If
the guidelines change as a result of a change in the Annual Retainer, a
non-employee director need not satisfy any increased level of ownership
resulting from the change until one year after the change in Annual Retainer is
effective.  If a director satisfies these guidelines and then a change in stock
price causes the director’s level of stock ownership to fall below the guideline
level of ownership, the director will be expected to again meet the guidelines
within a year.  The Nominating and Corporate Governance Committee of the Board
in its discretion may extend the period of time for attainment of such ownership
levels.
 
 
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EXHIBIT A

INTERNATIONAL GAME TECHNOLOGY
2002 STOCK INCENTIVE PLAN
DIRECTOR RESTRICTED STOCK UNIT AWARD AGREEMENT

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