Exhibit 10.1

 

EXECUTIVE TRANSITION AGREEMENT

 

THIS EXECUTIVE TRANSITION AGREEMENT (this “Agreement”) is dated as of
[                        ], 20[    ] (the “Effective Date”) and is by and
between International Game Technology, a Nevada corporation (the “Corporation”),
and [                        ] (the “Executive”).

 

[WHEREAS, the Executive is currently a party to an Executive Transition
Agreement, dated [                        , 20    ], with the Corporation (the
“Prior Agreement”), and the Executive and the Corporation desire to amend and
restate the Prior Agreement in its entirety as set forth herein effective as of
the Effective Date;]

 

NOW, THEREFORE, in consideration of the premises and the respective undertakings
of the Corporation and the Executive set forth below, the Corporation and the
Executive agree as follows:

 

1.                                      Employment.  The Executive and the
Corporation each acknowledge and agree that the Executive’s employment with the
Corporation is on an “at-will” basis and terminable by either party at any time,
for any reason (or no reason), and without any payment under this Agreement,
subject to Section 5 hereof.  Nothing contained in this Agreement constitutes a
continued employment or service commitment by the Corporation or any of its
affiliates, confers upon the Executive any right to remain employed by the
Corporation or any of its affiliates or interferes in any way with the right of
the Corporation or any of its affiliates at any time to terminate such
employment.

 

2.                                      Confidential Information.  Except as
provided below, the Executive shall not, during the period of time that the
Executive is employed by the Corporation (the “Period of Employment”) or at any
time thereafter, divulge, furnish or make accessible to anyone or use in any way
(other than in the ordinary course of the business of the Corporation or any of
its respective affiliates) any confidential or secret knowledge or information
of the Corporation which the Executive has acquired or becomes acquainted with
or will acquire or become acquainted with prior to the termination of the period
of his or her employment by the Corporation (including employment by the
Corporation or any affiliated or predecessor companies prior to the date of this
Agreement), whether developed by himself or herself or by others, concerning any
trade secrets, confidential or secret designs, processes, formulae, plans,
devices or material (whether or not patented or patentable) directly or
indirectly useful in any aspect of the business of the Corporation, any customer
or supplier lists of the Corporation, any confidential or secret development or
research work of the Corporation, or any other confidential information or
secret aspects of the business of the Corporation.  The Executive acknowledges
that the above-described knowledge or information constitutes a unique and
valuable asset of the Corporation and represents a substantial investment of
time and expense by the Corporation, and that any disclosure or other use of
such knowledge or information other than for the sole benefit of the Corporation
and its affiliates would be wrongful and would cause irreparable harm to the
Corporation.  The foregoing obligations of confidentiality, however, shall not
apply to any knowledge or information which is now published or which
subsequently becomes generally publicly known, other than as a direct or
indirect result of the breach of this Agreement by the Executive.  The foregoing
obligations of confidentiality shall not, however, limit the Executive’s
disclosure of information (1) to the extent necessary to comply with government
disclosure requirements or other applicable laws and regulations, (2) pursuant
to subpoena or order of any judicial, legislative, executive, regulatory or
administrative body, or for the Executive to enforce the Executive’s rights
under this Agreement, and (3) to employees, advisors, counsel, financial
advisors and other third parties as may be necessary and appropriate in
connection with the proper performance and enforcement of this Agreement.

 

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3.                                      Ventures; Invention Assignment
Agreement.  If, during the Period of Employment, the Executive is engaged in or
associated with the planning or implementing of any project, program or venture
involving the Corporation and a third party or parties, all rights with respect
to such project, program or venture shall belong to the Corporation.  Except as
approved by the Corporation’s Board of Directors (the “Board”), the Executive
shall not be entitled to any interest in such project, program or venture or to
any commission, finder’s fee or other compensation in connection therewith other
than the salary otherwise payable to the Executive in accordance with the
Corporation’s usual payroll practices.  The Executive has previously executed
and delivered to the Corporation an Invention and Secrecy Agreement (the
“Invention Agreement”), which the Executive hereby affirms and which shall
continue in effect.

 

4.                                      Noncompetition Covenant;
Non-Solicitation.

 

4.1                               Noncompetition.  The parties hereto
acknowledge and agree that the Corporation’s entry into this Agreement with the
Executive shall be considered additional consideration for the noncompetition
provisions included in any equity award agreement evidencing an equity award
granted by the Corporation to the Executive, and the Executive agrees that such
provisions are fair and reasonable.

 

4.2                               Non-Solicitation.  The Executive agrees that
during the Period of Employment and for a period of twelve (12) months
(twenty-four (24) months in the event the Executive’s employment terminates
during a Protected Period (as such term is defined below) and in circumstances
that entitle the Executive to the benefits set forth in Section 5.2(a)(iii))
thereafter, he or she will not, without the prior written approval of the Board,
solicit or otherwise induce (a) any employee of the Corporation or one of its
subsidiaries who earned annually $75,000 or more as an employee of the
Corporation or one of its subsidiaries during the last twelve months of the
Executive’s own employment by the Corporation, or (b) any person or entity who
was, within the then most recent prior 12-month period, a customer, supplier or
contractor of the Corporation or any of its affiliates, to cease or curtail his,
her or its relationship with the Corporation.

 

5.                                      Termination.

 

5.1                               Termination of Employment.  The Executive’s
employment by the Corporation, and the Period of Employment, may be terminated
at any time by the Corporation either: (1) with Cause (as such term is defined
below), (2) without Cause, (3) in the event of the Executive’s death, or (4) in
the event of the Executive’s Disability (as such term is defined below).  In the
case of Disability, if Executive has a Disability, as defined below, the
termination of Executive’s employment shall be effective ten (10) days after
Executive has received written notice from the Corporation of the Corporation’s
view that Disability has existed.  The Executive’s employment by the
Corporation, and the Period of Employment, may be terminated at any time by the
Executive on no less than sixty (60) days prior written notice to the
Corporation.  The Corporation may place the Executive on a paid leave of absence
during any such notice period.

 

5.2                               Benefits Upon Termination.

 

(a)                                 If the Executive’s employment by the
Corporation is terminated for any reason by the Corporation or by the Executive,
the Corporation shall have no further obligation to make or provide to the
Executive, and the Executive shall have no further right to receive or obtain
from the Corporation, any payments or benefits except:

 

(i)                                     The Corporation shall pay the Executive
(or, in the event of his or her death, the Executive’s estate) any Accrued
Obligations (as such term is defined below).

 

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(ii)                                  If the Executive’s employment by the
Corporation is terminated either due to the Executive’s death or by the
Corporation due to the Executive’s Disability, then the Corporation shall,
subject to the conditions set forth in Section 5.2(b), also pay the Executive
(or, in the event of the Executive’s death, the Executive’s estate) a severance
benefit equal to a Pro-Rata Bonus (as such term is defined below).  In addition,
subject to the conditions set forth in Section 5.2(b), any unvested equity
awards granted by the Corporation to the Executive that were originally subject
to only time-based vesting requirements (with no performance-based vesting
condition, a “time-based award”) shall, to the extent such awards are
outstanding immediately prior to such termination of employment and were
scheduled to vest during the one-year period following the Executive’s last day
of employment by the Corporation (such period continuing through and ending with
the first anniversary of such last day of employment), be deemed to be vested
upon such last day of the Executive’s employment by the Corporation (subject to
any greater vesting that may be provided for in the circumstances pursuant to
the applicable award agreement).  Any equity awards granted by the Corporation
to the Executive that included a performance-based vesting element shall be
treated as follows (to the extent such awards are outstanding immediately prior
to such termination of employment subject to any greater vesting that may be
provided for in the circumstances pursuant to the applicable award agreement):
(x) subject to the next clause, the payout of the award shall be determined as
though the Executive’s employment had not terminated and the performance
conditions applicable to the award were satisfied at the “target” level of
performance (and any performance-based modifier that could result in actual
payment being or more less than the “target” level shall not apply); and (y) the
payout shall be pro-rated based on the number of days in the applicable
performance period that occurred while the Executive was employed by the
Corporation to the total number of calendar days in the applicable performance
period (except that in no event shall the total number of days in the applicable
performance period that occurred while the Executive was employed by the
Corporation be deemed to be more than the total number of calendar days in that
performance period).  Any equity award granted by the Corporation to the
Executive that included a performance-based vesting element, but as to which the
applicable performance condition has been satisfied or otherwise no longer
applies (for example, because, pursuant to the terms of the award, the
performance condition ceased to apply upon a change in control), shall, to the
extent the award is outstanding immediately prior to such termination of
employment, be treated as a time-based award.  Payment of a vested award shall
be made at the time specified in the applicable award so as to avoid any tax,
penalty or interest under Section 409A (as such term is defined below).  Subject
to the conditions set forth in Section 5.2(b), any stock options granted by the
Corporation to the Executive that are vested and exercisable on the last day of
the Executive’s employment by the Corporation (including any that become vested
by operation of the foregoing provisions of this paragraph), shall remain
exercisable following such termination of employment for the greater of one year
or the period of time otherwise provided for in the applicable award agreement
(in each case, not longer than the original maximum term of such option and
subject to earlier termination in connection with a change in control or similar
event pursuant to the provisions of the Corporation’s equity incentive plan
under which the award was granted)[; provided, however, that any stock option
granted by the Corporation to the Executive that is intended to qualify as an
“incentive stock option” within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended, shall not be subject to this exercise period
provision].  In the event the termination of the Executive’s employment is by
the Corporation due to the Executive’s Disability (and not the result of the
Executive’s death), and subject to the conditions set forth in Section 5.2(b),
the Executive shall also be entitled to the COBRA (as such term is defined
below) benefit provided for in Section 5.2(a)(iv).

 

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(iii)                               If, during the Period of Employment, the
Executive’s employment is terminated either (1) by the Corporation other than
for Cause (as such term is defined below) or (2) by the Executive for Good
Reason (as such term is defined below), and in either case
Section 5.2(a)(ii) does not apply, then the Corporation shall, subject to the
conditions set forth in Section 5.2(b), also pay the Executive a severance
benefit equal to: (x) one times the sum of the Executive’s highest annualized
rate of base salary from the Corporation in effect during the Period of
Employment plus the Executive’s target bonus amount from the Corporation for the
fiscal year in which such termination of employment occurs (disregarding any
reductions that gave rise to a Good Reason condition); and (y) a Pro-Rata
Bonus.  Subject to the conditions set forth in Section 5.2(b), the aggregate
amount of the severance benefit set forth in clause (x) above shall be paid in a
single lump sum payment in the month that includes the 60th day following the
Executive’s Separation From Service (as defined below), and not later than two
and one-half months following the month in which the Separation From Service
occurs.  In addition, subject to the conditions set forth in Section 5.2(b), any
unvested equity awards granted by the Corporation to the Executive that were
originally subject to only time-based vesting requirements (with no
performance-based vesting condition) shall (to the extent such awards are
outstanding immediately prior to such termination of employment) be treated as
follows: (x) if such termination of employment does not occur during the
Protected Period, to the extent such awards were scheduled to vest during the
one-year period following the Executive’s last day of employment by the
Corporation (such period continuing through and ending with the first
anniversary of such last day of employment), such portion of the awards shall be
deemed to be vested upon such last day of the Executive’s employment by the
Corporation (subject to any greater vesting that may be provided for in the
circumstances pursuant to the applicable award agreement); and (y) if such
termination occurs during the Protected Period, the entire unvested portion of
the awards shall be deemed to be vested upon such last day of the Executive’s
employment by the Corporation.  Any equity awards granted by the Corporation to
the Executive that included a performance-based vesting element shall be treated
as follows (to the extent such awards are outstanding and subject to one or more
performance-based vesting conditions immediately prior to such termination of
employment and subject to any greater vesting that may be provided for in the
circumstances pursuant to the applicable award agreement): (w) subject to the
next three clauses, the payout of the award shall be determined as though the
Executive’s employment had not terminated; (x) if such termination of employment
occurs before a Change in Control Event, the payout shall remain subject to
attainment of the applicable performance conditions in accordance with the terms
of the award; (y) if such termination of employment occurs on or after a Change
in Control Event, the payout of the award shall be determined as though the
performance conditions applicable to the award were satisfied at the “target”
level of performance (and any performance-based modifier that could result in
actual payment being or more less than the “target” level shall not apply); and
(z) the payout shall be pro-rated based on the number of days in the applicable
performance period that occurred while the Executive was employed by the
Corporation to the total number of calendar days in the applicable performance
period (except that in no event shall the total number of days in the applicable
performance period that occurred while the Executive was employed by the
Corporation be deemed to be more than the total number of calendar days in that
performance period), provided that there shall be no pro-ration if such
termination of employment occurs during the Protected Period (i.e., if such
termination of employment occurs during the Protected Period, the payout of the
entire award shall be determined as though the Executive’s employment had not
terminated, with the performance conditions subject to clause (y) above).  Any
equity award granted by the Corporation to the Executive that included a
performance-based vesting element, but as to which the applicable performance
condition has been satisfied or otherwise no longer applies (for example,
because, pursuant to the terms of the award, the performance condition ceased to
apply upon a change in control) immediately prior to such a termination of
employment, shall, to the extent the award is outstanding immediately prior to
such termination of employment, be treated as a time-based award.  Payment of a
vested award shall be made at the time specified in the

 

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applicable award so as to avoid any tax, penalty or interest under
Section 409A.  Subject to the conditions set forth in Section 5.2(b), any stock
options granted by the Corporation to the Executive that are vested and
exercisable on the last day of the Executive’s employment by the Corporation
(including any that become vested by operation of the foregoing provisions of
this paragraph), shall remain exercisable following such termination of
employment for the greater of one year (two years if such termination of
employment occurs during the Protected Period) or the period of time otherwise
provided for in the applicable award agreement (in each case, not longer than
the original maximum term of such option and subject to earlier termination in
connection with a change in control or similar event pursuant to the provisions
of the Corporation’s equity incentive plan under which the award was granted)[;
provided, however, that any stock option granted by the Corporation to the
Executive that is intended to qualify as an “incentive stock option” within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended, shall
not be subject to this exercise period provision].  In addition, subject to the
conditions set forth in Section 5.2(b), the Executive shall also be entitled to
the COBRA benefit provided for in Section 5.2(a)(iv).

 

(iv)                              If the Executive is entitled to the benefits
provided in Section 5.2(a)(ii) (other than due to a termination of Executive’s
employment as a result of his or her death) or Section 5.2(a)(iii) and, in each
case, satisfies the conditions set forth in Section 5.2(b), the Corporation
shall also pay or reimburse the Executive for his or her premiums charged to
continue medical coverage pursuant to COBRA, at the same or reasonably
equivalent medical coverage for the Executive (and, if applicable, the
Executive’s eligible dependents) as in effect immediately prior to the date his
or her employment by the Corporation terminated, to the extent that the
Executive elects such continued coverage; provided that the Corporation’s
obligation to make any payment or reimbursement pursuant to this paragraph
shall, subject to Section 5.6, commence with continuation coverage for the month
following the month in which the Executive’s Separation From Service occurs and
shall cease with continuation coverage for the twelfth month following the month
in which the Executive’s Separation From Service occurs (or, if earlier, shall
cease upon the first to occur of the Executive’s death, the date the Executive
becomes eligible for coverage under the health plan of a future employer, or the
date the Corporation ceases to offer group medical coverage to its active
executive employees or the Corporation is otherwise under no obligation to offer
COBRA continuation coverage to the Executive).  To the extent the Executive
elects COBRA coverage, he or she shall notify the Corporation in writing of such
election prior to such coverage taking effect and complete any other
continuation coverage enrollment procedures the Corporation may then have in
place.

 

(b)                                 As a condition precedent to any obligation
of the Corporation to the Executive pursuant to Section 5.2(a) above (other than
payment of Accrued Obligations and other than benefits that result from a
termination of Executive’s employment with the Corporation as a result of his or
her death), the Executive shall, upon or within twenty-one (21) days following
(within 45 days following, to the extent that a 45-day period is required under
applicable law in order to make the release maximally enforceable) his or her
last day of employment with the Corporation, provide the Corporation with a
valid, executed, written Release (as such term is defined below) and such
Release shall have not been revoked by the Executive pursuant to any revocation
rights afforded by applicable law.  The Corporation shall have no obligation to
make any payment to the Executive that is conditioned upon this
Section 5.2(b) unless and until the Release contemplated by this paragraph
becomes irrevocable by the Executive in accordance with all applicable laws,
rules and regulations.  In addition, and notwithstanding the foregoing
provisions of this Section 5.2, if the Executive breaches his or her obligations
to the Corporation under the Invention Agreement, under Section 2, under
Section 4, or under Section 5.4 at any time, then (subject to the Corporation
providing written notice to the Executive of such breach and, if a cure is
reasonably possible in the circumstances, affording him or her a reasonable
period (not to exceed 30 days) to cure such

 

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breach) from and after the date of such breach and not in any way in limitation
of any right or remedy otherwise available to the Corporation, the Executive
will no longer be entitled to, and the Corporation will no longer be obligated
to pay, any remaining unpaid portion of any severance or other benefits provided
by this Section 5.2 (other than payment of the Accrued Obligations); provided
that, if the Executive provides (and does not revoke) the Release contemplated
by the foregoing provisions of this Section 5.2(b), in no event shall the
Executive be entitled to severance benefits (in addition to any Accrued
Obligations) pursuant to the applicable provisions of this Section 5.2 of less
than $5,000 (or the amount of such benefits, if less than $5,000), which amount
the parties agree is good and adequate consideration, in and of itself, for the
Executive’s Release.

 

(c)                                  The Corporation and Executive acknowledge
and agree that there is no duty of the Executive to mitigate damages under this
Agreement.  All amounts paid to the Executive pursuant to Section 5.2 shall be
paid without regard to whether the Executive has taken or takes actions to
mitigate damages.

 

(d)                                 The foregoing provisions of this Section 5.2
shall not affect: (1) the Executive’s receipt of benefits otherwise due
terminated employees under group insurance coverage consistent with the terms of
the applicable Corporation welfare benefit plan; (2) the Executive’s rights
under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) to continue
participation in medical, dental, hospitalization and life insurance coverage;
(3) the Executive’s receipt of benefits otherwise due in accordance with the
terms of the Corporation’s Profit Sharing Plan (401(k) plan) (if any); (4) the
Executive’s receipt of benefits otherwise due in accordance with the terms of
the Corporation’s nonqualified deferred compensation plan, if any; or (5) any
rights that the Executive may have under and with respect to a stock option or
restricted stock award, to the extent that such award was granted before the
date that the Executive’s employment by the Corporation terminates and to the
extent expressly provided in the written agreement evidencing such award (after
giving effect to any vesting provided for in the circumstances pursuant to this
Agreement or the award agreement).  For purposes of clarity, if the terms of an
equity award granted by the Corporation to the Executive (as such terms are set
forth in the applicable award agreement and/or plan under which the award was
granted) provide for more favorable accelerated vesting terms for the Executive
in the particular circumstances than those otherwise provided in this Agreement,
the Executive will be entitled, as to that award, to the more favorable
provisions of the award agreement and/or plan, as the case may be.

 

5.3                                            Certain Defined Terms.

 

As used herein, “Accrued Obligations” means any:

 

·                  Base salary from the Corporation that had accrued in
accordance with the Corporation’s usual payroll practices but had not been paid
prior to the date of termination (which shall be paid upon or promptly following
the date of termination); and

·                  any annual bonus that had become payable to the Executive by
the Corporation with respect to a fiscal year ended prior to the termination of
the Executive’s employment but had not actually been paid; and

·                  reimbursement of reasonable business expenses incurred by the
Executive prior to the termination of the Executive’s employment and in
accordance with the Corporation’s expense reimbursement policies and which had
not previously been paid (which shall be paid in accordance with such policies).

 

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As used herein, “Cause” means the Executive’s:

 

·                  willful and material failure to perform his or her duties for
the Corporation and its affiliates (other than any such failure due to the
Executive’s physical or mental illness), or the Executive’s willful and material
breach of his or her obligations to the Corporation or any of its affiliates, in
each case following the Executive’s receipt of written notice thereof from the
Corporation;

·                  engaging in willful and serious misconduct that has caused or
is reasonably expected to result in material injury to the Corporation;

·                  being convicted of, or entering a plea of guilty or nolo
contendre to, a crime that constitutes a felony;

·                  failure or inability to obtain or retain any Government
Approval required to be obtained or retained by him or her in any jurisdiction
in which the Corporation or any of its affiliates does or proposes to do
business, which failure has or would reasonably be expected to have a material
detrimental effect on the Executive’s ability to perform the duties of his or
her employment by the Corporation; or

·                  embezzlement, fraud or misappropriation of the property or
assets of the Corporation or any of its affiliates.

 

As used herein, “Change in Control Event” has the same meaning as the term
“Change in Control Event” under the Plan.

 

As used herein, “Disability” means a physical or mental impairment which
substantially limits a major life activity of the Executive and which renders
the Executive unable to perform the essential functions of his or her position,
even with reasonable accommodation which does not impose an undue hardship on
the Corporation, for ninety (90) days in any consecutive one-hundred eighty
(180) day period.  The Board reserves the right, in good faith, to make the
determination of whether or not a Disability exists for purposes of this
Agreement based upon information supplied by the Executive and/or his or her
medical personnel, as well as information from medical personnel (or others)
selected by the Corporation or its insurers.

 

As used herein, “Good Reason” means the occurrence of any of the following
without the Executive’s express written consent: (i) a material reduction of the
Executive’s duties, position or responsibilities relative to the Executive’s
duties, position or responsibilities in effect immediately prior to such
reduction; or (ii) a reduction by the Corporation of the Executive’s rate of
annual base salary or target annual bonus opportunity as in effect immediately
prior to such reduction; provided that Good Reason shall not exist unless the
Executive shall have first provided written notice to the Corporation of the
circumstances that would otherwise constitute Good Reason and the Corporation
shall have failed to reasonably cure such circumstances promptly (and in no
event more than 30 days after) its receipt of such notice; further provided that
any termination for Good Reason must be made not later than 90 days after the
circumstances giving rise to such claim of Good Reason are first known to exist
(or first reasonably should have been known to exist) by the Executive.

 

As used herein, “Government Approval” shall mean any required filing,
recordation, declaration, registration, permit, approval, license, order,
statement or finding of suitability of any governmental or quasi-governmental
entity, including any federal, state or local court, tribunal, administrative
agency, commission, agency, body or self-regulatory organization.

 

As used herein, “Pro-Rata Bonus” shall equal (i) the annual bonus from the
Corporation the Executive would have received (had his or her employment not
terminated) for the fiscal year of the Corporation in which his or her
employment by the Corporation terminated, as reasonably determined by the

 

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Compensation Committee of the Board based on actual performance, multiplied by
(ii) a fraction, the numerator of which is the number of calendar days in such
fiscal year the Executive was actually employed by the Corporation and the
denominator of which is the total number of calendar days in such fiscal year. 
Subject to the conditions set forth in Section 5.2(b), any Pro-Rata Bonus shall
be paid at the same time the annual bonus for such fiscal year would have
otherwise been paid by the Corporation had the Executive’s employment by the
Corporation continued.

 

As used herein, “Protected Period” shall mean the period of time commencing with
a Change in Control Event and continuing for eighteen (18) months following the
Change in Control Event.

 

As used herein, “Release” shall mean a written release substantially in the form
attached hereto as Exhibit A, as the same may be modified solely to ensure the
enforceability of such release in accordance with applicable federal, state
and/or local law.

 

5.4                               Resignation From Board; Cooperation.

 

(a)                                 Upon or promptly following any termination
of Executive’s employment with the Corporation, unless otherwise requested by
the Board, the Executive agrees to resign from (1) each and every board of
directors (or similar body, as the case may be) of the Corporation and each of
its affiliates on which the Executive may then serve (if any), and (2) each and
every office of the Corporation and each of its affiliates that the Executive
may then hold, and all positions that he or she may have previously held with
the Corporation and any of its affiliates.

 

(b)                                 Following the Executive’s last day of
employment by the Corporation, the Executive shall reasonably cooperate with the
Corporation in connection with: (a) any internal or governmental investigation
or administrative, regulatory, arbitral or judicial proceeding involving the
Corporation or any of its affiliates; and (b) any audit of the financial
statements of the Corporation or any of its affiliates that covers any portion
of the period of time when the Executive was employed by the Corporation.

 

5.5                               Means and Effect of Termination.  Any
termination of the Executive’s employment under this Agreement shall be
communicated by written notice of termination from the terminating party to the
other party.  The notice of termination shall indicate the specific
provision(s) of this Agreement relied upon in effecting the termination.

 

5.6                               Section 409A Compliance.  Notwithstanding
anything in this Section 5 to the contrary, no amount payable as severance which
constitutes a “deferral of compensation” within the meaning of Section 409A of
the Internal Revenue Code of 1986, as amended, and the Treasury Regulations
promulgated thereunder (“Section 409A”) shall be paid unless and until Executive
incurs a “separation from service” within the meaning of the Section 409A (a
“Separation From Service”).  Furthermore, to the extent that the Executive is a
“specified employee” within the meaning of Section 409A as of the date of his or
her separation from service, no amount that constitutes a deferral of
compensation which is payable on account of his or her separation from service
shall be paid to him or her before the date (the “Delayed Payment Date”) which
is the first day of the seventh month after the date of his or her separation
from service or, if earlier, the date of his or her death following such
separation from service.  All such amounts that would, but for this Section,
become payable prior to the Delayed Payment Date will be accumulated and paid on
the Delayed Payment Date.  For purposes of Section 409A, the right to a series
of installment payments under this Agreement shall be treated as a right to a
series of separate payments.  This Agreement shall be construed and interpreted
to comply with, and avoid any tax, penalty or interest under, Section 409A.

 

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6.                                      Miscellaneous.

 

6.1                               Governing Law.  This Agreement and all rights
and obligations hereunder, including, without limitation, matters of
construction, validity and performance, is made under and shall be governed by
and construed in accordance with the internal laws of the State of Nevada,
without regard to principles of conflict of laws.

 

6.2                               Amendments.  No amendment or modification of
this Agreement shall be deemed effective unless made in writing and signed by
all of the parties hereto.

 

6.3                               No Waiver.  No term or condition of this
Agreement shall be deemed to have been waived, nor shall there be any estoppel
to enforce any provisions of this Agreement, except by a statement in writing
signed by the party against whom enforcement of the waiver or estoppel is
sought.  Any written waiver shall not be deemed a continuing waiver unless
specifically stated, shall operate only as to the specific term or condition
waived and shall not constitute a waiver of such term or condition for the
future or as to any act other than that specifically waived.

 

6.4                               Severability.  To the extent any provision of
this Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remainder of such provision and of this Agreement shall be
unaffected and shall continue in full force and effect.  In furtherance and not
in limitation of the foregoing, should the duration or geographical extent of,
or business activities covered by, any provision of this Agreement be in excess
of that which is valid and enforceable under applicable law, then such provision
shall be construed to cover only that duration, extent or activities which may
validly and enforceably be covered.  The Executive acknowledges the uncertainty
of the law in this respect and expressly stipulates that this Agreement be given
the construction which renders its provisions valid and enforceable to the
maximum extent (not exceeding its express terms) possible under applicable law.

 

6.5                               Assignment.  This Agreement shall not be
assignable, in whole or in part, by either party without the written consent of
the other party.

 

6.6                               Injunctive Relief.  Each party agrees that it
would be difficult to compensate the non-breaching party fully for damages for
any violation of any provision set forth in Section 2 or Section 4 hereof.
 Accordingly, each party specifically agrees that the other party shall be
entitled to temporary and permanent injunctive relief to enforce the provisions
of Sections 2 and 4 of this Agreement and that such relief may be granted
without the necessity of proving actual damages.  This provision with respect to
injunctive relief shall not, however, diminish the right of the non-breaching
party to claim and recover damages in addition to injunctive relief.

 

6.7                               Arbitration.  Any controversy or claim arising
out of or relating to this Agreement or the Executive’s employment by the
Corporation shall, except for claims for injunctive relief set out in paragraph
6.6 above, be settled by binding arbitration, with a single neutral arbitrator,
in accordance with the rules of the American Arbitration Association relating to
employment.  The proper venue for any such action is Washoe County, Nevada.  In
any action to enforce this Agreement, the Executive and the Corporation each
agree to accept service of process by mail at its address, as applicable, as set
forth in Section 6.9 below (or at any different address of which the Executive
has notified the Corporation, or the Corporation has notified the Executive, as
applicable, in writing).  In any action in which service is made pursuant to
this paragraph, the Executive and the Corporation each waive any challenge to
the personal jurisdiction of the American Arbitration Association.  Any judgment
on the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.  In reaching his or her decision, the arbitrator shall
have no authority to change or modify any provision of this Agreement.

 

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6.8                               Withholding Taxes.  The Corporation may
withhold from any benefits payable under this Agreement all federal, state, city
or other taxes as shall be required to be withheld pursuant to any law or
governmental regulation or ruling.

 

6.9                               Notices.  All notices, requests, demands and
other communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given and made if (1) delivered by
hand, (2) otherwise delivered against receipt therefor, or (3) sent by
registered or certified mail, postage prepaid, return receipt requested.  Any
notice shall be duly addressed to the parties as follows:

 

If to the Corporation:

 

International Game Technology
6355 South Buffalo Drive
Las Vegas, Nevada 89113
Attn: General Counsel

 

If to the Executive:

 

[                        ]
6355 South Buffalo Drive
Las Vegas, NV 89113

 

Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the foregoing
provisions.  Any communication shall be effective when delivered by hand, when
otherwise delivered against receipt therefor, or five (5) business days after
being mailed in accordance with the foregoing.

 

6.10                        Section Headings.  The section headings of, and
titles of paragraphs and subparagraphs contained in, this Agreement are for the
purpose of convenience only, and they neither form a part of this Agreement nor
are they to be used in the construction or interpretation thereof.

 

6.11                        Provisions that Survive Termination.  The provisions
of Sections 2, 3, 4, 5 and 6 shall survive any termination of the Executive’s
employment.

 

6.12                        Counterparts.  This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original as against any
party whose signature appears thereon, and all of which together shall
constitute one and the same instrument.  This Agreement shall become binding
when one or more counterparts hereof, individually or taken together, shall bear
the signatures of all of the parties reflected hereon as the signatories.
 Photographic copies of such signed counterparts may be used in lieu of the
originals for any purpose.

 

6.13                        Entire Agreement.  This Agreement embodies the
entire agreement of the parties hereto respecting the matters within its scope.
 This Agreement supersedes all prior and contemporaneous agreements of the
parties hereto that directly or indirectly bears upon the subject matter hereof,
including any letters or correspondence regarding offers of employment, whether
executed or not.  Any prior negotiations, correspondence, agreements, proposals
or understandings relating to the subject matter hereof shall be deemed to have
been merged into this Agreement, and to the extent inconsistent herewith, such
negotiations, correspondence, agreements, proposals, or understandings shall be
deemed to be of no force or effect.  There are no representations, warranties,
or agreements, whether express or implied, or oral or written, with respect to
the subject matter hereof, except as expressly set forth herein.  [Without

 

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limiting the generality of the foregoing, this Agreement supersedes the Prior
Agreement as of the Effective Date.  The Prior Agreement is of no further force
or effect.] The Invention Agreement, as well as any Indemnification Agreement
entered into by and between the Corporation and the Executive, are outside of
the scope of the foregoing integration clause.

 

6.14                        Legal Counsel; Mutual Drafting.  Each party
recognizes that this is a legally binding contract and acknowledges and agrees
that they have had the opportunity to consult with legal counsel of their
choice.  Each party has cooperated in the drafting, negotiation and preparation
of this Agreement.  Hence, in any construction to be made of this Agreement, the
same shall not be construed against either party on the basis of that party
being the drafter of such language.

 

[The signature page follows on the next page.]

 

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IN WITNESS WHEREOF, the Executive and the Corporation have executed this
Agreement as of the date set forth in the first paragraph.

 

INTERNATIONAL GAME TECHNOLOGY

 

EXECUTIVE

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

[                        ]

Name:

 

 

 

 

 

 

 

Its:

 

 

 

 

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EXHIBIT A

 

Form of Written Release

 

SEVERANCE AGREEMENT AND RELEASE

 

This Severance Agreement and Release (the “Agreement”) is entered into by and
between International Game Technology (the “Corporation”) and
[                        ] (the “Executive”) and is presented to Executive on
this          day of                       , 20      .

 

WHEREAS, Corporation and the Executive are parties to that certain Executive
Transition Agreement dated as of [                        , 20    ] (as amended
from time to time, the “Transition Agreement”); and

 

WHEREAS, Corporation and Executive desire to resolve any and all potential
disputes or claims or causes of action arising out of Executive’s employment
with and separation from Corporation.

 

Therefore, in consideration of the mutual promises and covenants contained
herein, and effective eight (8) days after Executive’s execution of this
Agreement (the “effective date”), the parties voluntarily agree as follows:

 

1.                                      Executive’s separation from Corporation
occurred on                   , 20    .

 

2.                                      Corporation agrees to pay Executive, at
the time provided for in and subject to the terms and conditions of Section 5.2
of the Transition Agreement and subject to applicable withholding, the benefits
provided for in Section [5.2(a)(ii) / 5.2(a)(iii)] of the Transition Agreement.

 

3.                                      In exchange for the consideration
described in paragraph 2, Executive knowingly and voluntarily covenants and
agrees never to assert, and hereby irrevocably and unconditionally waives and
releases the Corporation, its predecessors, successors, parents, subsidiaries,
divisions, affiliates, assigns, agents, directors, officers, employees,
stockholders, members, representatives, attorneys, insurers, past and present,
and all persons acting by, through, under or in concert with any of them
(collectively, the “Releasees”), from, any and all claims, wages, demands,
rights, liens, agreements, contracts, covenants, actions, suits, causes of
action, obligations, debts, costs, expenses, attorneys’ fees, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity or
otherwise, whether now known or unknown, suspected or unsuspected, and whether
or not concealed or hidden, which he or she may then own or hold or he or she at
any time held or may in the future hold as against any or all of Releasees,
arising out of or in any way connected with the Executive’s employment
relationship with the Corporation (except that the Executive does not release
his or her right to payments under Section 5 of the Transition Agreement, his or
her right to exercise options in accordance with the terms of any option
agreement between the Corporation and the Executive, or his or her right to
receive equity awards that vest in accordance with the terms of any restricted
stock or similar award made by the Corporation to the Executive) and each of its
subsidiaries with which the Executive has had such a relationship, or the
termination of his or her employment or any other transactions, occurrences,
acts or omissions or any loss, damage or injury whatever, known or unknown,
suspected or unsuspected, resulting from any act or omission by or on the part
of the Releasees, or any of them, committed or omitted prior to the date of such
release including, without limiting the generality of the foregoing, any claim
under Section 1981 of the Civil Rights Act of 1866, Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Family and Medical Leave Act of 1993, any other claim
under any other federal, state or local law or regulation, and any other claim
for severance pay, bonus or incentive pay, sick leave, holiday pay, vacation
pay, life insurance, health or medical insurance or any other fringe benefit,
medical expenses, or disability.

 

4.                                      Executive further agrees and warrants
that he or she has not heretofore assigned or transferred to any person or
entity, other than the Corporation, any released matter or any part or portion
thereof and

 

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that he or she will defend, indemnify and hold harmless the Corporation and the
Releasees from and against any claim (including the payment of attorneys’ fees
and costs actually incurred whether or not litigation is commenced) that is
directly or indirectly based on or in connection with or arising out of any such
assignment or transfer made, purported or claimed.

 

5.                                      This Agreement shall not in any way be
construed as an admission by Corporation or the other Releasees of any acts of
wrongdoing, harassment, retaliation, negligence, discrimination or violation of
any statute, law or legal right whatsoever against Executive or any person, and
Corporation specifically disclaims any such illegal discrimination or violation
against Executive or any other person.

 

6.                                      Executive will not make or publish any
disparaging or derogatory statements or otherwise disparage Corporation, any of
its affiliates, or any of their respective directors, officers, employees,
agents or other representatives (collectively, “Representatives”).  Corporation
will not, and will cause its subsidiaries and use commercially reasonable
efforts to cause its other Representatives not to, make or publish any
disparaging or derogatory statements or otherwise disparage Executive.  The
foregoing shall not prohibit any person from (i) making truthful statements when
required by law, court order, subpoena or the like, to a governmental agency or
body or in connection with any legal proceeding, or otherwise making any
statements required by law, and (ii) making or publishing any statements to
Corporation, or Representatives of Corporation or its subsidiaries.

 

7.                                      As a further material inducement to
enter into this Agreement, any party who breaches this Agreement must reimburse
the non-breaching party for any and all loss, cost, damage or expense, including
without limitation, attorneys’ fees arising out of any breach of this
Agreement.  In addition, any breach of this Agreement will entitle the
non-breaching party to seek injunctive relief and to recover any actual damages
incurred as a result of said breach.

 

8.                                      Executive represents and acknowledges
that in executing this Agreement he or she does not rely and has not relied upon
any prior representation made by Corporation or its agents, representatives or
attorneys with regard to the subject matter of said Agreement.

 

9.                                      This Agreement shall be binding upon
Executive and upon his or her heirs, administrators, representatives, executors,
dependents, descendants, successors and assigns, and shall inure to the benefit
of their heirs, administrators, representatives, executors, successors and
assigns.

 

10.                               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.  The language of this Agreement
shall, in all cases, be construed as a whole, according to its fair meaning, and
not strictly for, or against, any of the parties.

 

11.                               This Agreement shall be subject to and hereby
adopts Sections 6.6 (Injunctive Relief) and 6.7 (Arbitration) in the Executive’s
Transition Agreement.

 

12.                               Should any provision of this Agreement be
declared or be determined by any court to be illegal or invalid, the validity of
the remaining parts, terms or provisions of this Agreement shall not be affected
and any illegal or invalid part, term, or provision, should not be deemed to be
part of this Agreement.

 

13.                               This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall be deemed one and the same instrument.

 

14.                               Unless otherwise stated herein or in
Section 6.11 of Executive’s Transition Agreement, this Agreement sets forth the
entire agreement between the parties, and fully supersedes any and all prior
agreements or understandings between the parties pertaining to the subject
matter in this Agreement.  Prior agreements between the parties concerning
confidentiality, non-disclosure, non-competition, non-solicitation and invention
assignment shall, however, remain in full force and effect.

 

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15.                               The parties agree that Executive may revoke
this Agreement within seven (7) days from execution of this Agreement.

 

16.                               By Executive’s signature below, he or she
represents and confirms that he or she: (a) has read this Agreement carefully
and completely, (b) has been given a period of at least twenty-one (21) days to
consider and review this Agreement, (c) has been informed of his or her right to
consult with legal counsel and has had ample opportunity to do so, and
(d) understands all provisions contained in this Agreement.

 

[The signature page follows on the next page.]

 

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PLEASE READ CAREFULLY.  THIS AGREEMENT INCLUDES THE RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.

 

INTERNATIONAL GAME TECHNOLOGY

 

EXECUTIVE

 

 

 

 

By:

 

 

 

 

 

 

[                        ]

Name:

 

 

 

 

 

 

 

 

Title:

 

 

Date:

 

 

 

 

 

Date:

 

 

 

 

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