Document:

exv10w16

 

Exhibit 10.16

INTERNATIONAL GAME TECHNOLOGY

EMPLOYEE STOCK PURCHASE PLAN

(Amended and Restated Effective as of December 8, 2005)

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	1. PURPOSE
	 	 	1	 
	2. DEFINITIONS
	 	 	1	 
	3. ELIGIBILITY
	 	 	4	 
	4. STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS
	 	 	4	 
	5. OFFERING PERIODS
	 	 	5	 
	6. PARTICIPATION
	 	 	5	 
	7. METHOD OF PAYMENT OF CONTRIBUTIONS
	 	 	5	 
	8. GRANT OF OPTION
	 	 	6	 
	9. EXERCISE OF OPTION
	 	 	7	 
	10. DELIVERY
	 	 	8	 
	11. TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS
	 	 	8	 
	12. ADMINISTRATION
	 	 	9	 
	13. DESIGNATION OF BENEFICIARY
	 	 	10	 
	14. TRANSFERABILITY
	 	 	11	 
	15. USE OF FUNDS; INTEREST
	 	 	11	 
	16. REPORTS
	 	 	12	 
	17. ADJUSTMENTS OF AND CHANGES IN THE STOCK
	 	 	12	 
	18. POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS
	 	 	13	 
	19. TERM OF PLAN; AMENDMENT OR TERMINATION
	 	 	13	 
	20. NOTICES
	 	 	14	 
	21. CONDITIONS UPON ISSUANCE OF SHARES
	 	 	14	 
	22. PLAN CONSTRUCTION
	 	 	14	 
	23. EMPLOYEES’ RIGHTS
	 	 	15	 
	24. MISCELLANEOUS
	 	 	15	 
	25. TAX WITHHOLDING
	 	 	16	 
	26. NOTICE OF SALE
	 	 	16	 

-i-

 

 

INTERNATIONAL GAME TECHNOLOGY

EMPLOYEE STOCK PURCHASE PLAN

(Amended and Restated Effective as of December 8, 2005, as subsequently amended)

     The following constitute the provisions of the International Game Technology Employee Stock
Purchase Plan (the “Plan”). The Plan was first adopted by the Board of Directors (the “Board”) of
International Game Technology, a Nevada corporation (the “Corporation”) on February 26, 1987. The
Plan was approved by the Corporation’s stockholders on February 16, 1988. This amendment to and
restatement of the Plan is effective as of December 8, 2005.

	1.	 	PURPOSE
	 
	 	 	The purpose of this Plan is to assist Qualified Employees in acquiring a stock ownership
interest in the Corporation pursuant to a plan which is intended to qualify as an “employee
stock purchase plan” under Section 423 of the Code. This Plan is also intended to encourage
Qualified Employees to remain in the employ of the Corporation (and those Subsidiaries which
may be designated by the Committee as “Participating Subsidiaries”).
	 
	2.	 	DEFINITIONS
	 
	 	 	Capitalized terms used herein which are not otherwise defined shall have the following
meanings.

	 	 	 	“Account” means the bookkeeping account maintained by the Corporation, or by a
recordkeeper on behalf of the Corporation, for a Participant pursuant to
Section 7(a).
	 
	 	 	 	“Board” means the Board of Directors of the Corporation.
	 
	 	 	 	“Code” means the Internal Revenue Code of 1986, as amended from time to time.
	 
	 	 	 	“Committee” means the committee appointed by the Board to administer this Plan
pursuant to Section 12.
	 
	 	 	 	“Common Stock” means the Common Stock, without par value, of the Corporation.
	 
	 	 	 	“Company” means, collectively, the Corporation and its Subsidiaries.
	 
	 	 	 	“Compensation” means (1) if the Qualified Employee is a salaried employee, the
Qualified Employee’s regular salary from the Corporation (or the Participating
Subsidiary that employs the Qualified Employee, as applicable) for the relevant
period of time, or (2) if the Qualified Employee is not a salaried employee, the
Qualified Employee’s regular gross pay from the Corporation (or the Participating
Subsidiary that employs the Qualified Employee, as applicable) for the Qualified
Employee’s regularly scheduled work week(s) during the relevant period of time.

 

 

	 	 	 	Compensation includes any amounts contributed as salary reduction contributions to a
plan qualifying under Section 401(k), 125 or 129 of the Code. Any other form of
remuneration is excluded from Compensation, including (but not limited to) the
following: overtime payments, sales commissions, prizes, awards, relocation or
housing allowances, stock option exercises, stock appreciation rights, restricted
stock exercises, performance awards, auto allowances, tuition reimbursement and
other forms of imputed income, bonuses, incentive compensation, special payments,
fees and allowances. Notwithstanding the foregoing, Compensation shall not include
any amounts deferred under or paid from any nonqualified deferred compensation plan
maintained by the Company.
	 
	 	 	 	“Contributions” means the bookkeeping amounts credited to the Account of a
Participant pursuant to this Plan, equal in amount to the amount of Compensation
that the Participant has elected to contribute for the purchase of Common Stock
under and in accordance with this Plan.
	 
	 	 	 	“Corporation” means International Game Technology, a Nevada corporation, and its
successors.
	 
	 	 	 	“Effective Date” means February 26, 1987, the original effective date of this Plan.
This amendment to and restatement of the Plan is effective as of December 8, 2005.
	 
	 	 	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time.
	 
	 	 	 	“Exercise Date” means, with respect to an Offering Period, the last day of that
Offering Period.
	 
	 	 	 	“Fair Market Value” on any date means: (i) if the Common Stock is listed or admitted
to trade on a national securities exchange, the closing price of a share of Common
Stock on the Composite Tape, as published in the Western Edition of The Wall Street
Journal, of the principal national securities exchange on which such stock is so
listed or admitted to trade, on such date, or, if there is no trading of the Common
Stock on such date, then the closing price of a share of Common Stock as quoted on
such Composite Tape on the next preceding date on which there was trading in such
shares; (ii) if the Common Stock is not listed or admitted to trade on a national
securities exchange, the last/closing price for a share of Common Stock on such
date, as furnished by the National Association of Securities Dealers, Inc. (“NASD”)
through the NASDAQ National Market Reporting System or a similar organization if the
NASD is no longer reporting such information; (iii) if the Common Stock is not
listed or admitted to trade on a national securities exchange and is not reported on
the National Market Reporting System, the mean between the bid and asked price for a
share of Common Stock on such date, as furnished by the NASD or a similar
organization; or (iv) if the Common Stock is not listed or admitted to trade on a
national securities exchange, is not reported on the National Market Reporting
System and if bid and asked

 

 

	 	 	 	prices for the Common Stock are not furnished by the NASD or a similar organization,
the value as established by the Committee at such time for purposes of this Plan.
	 
	 	 	 	“Grant Date” means the first day of each Offering Period, as determined by the
Committee and announced to potential Qualified Employees; provided, however, that no
Grant Date may occur on or before the Exercise Date for the immediately preceding
Offering Period.
	 
	 	 	 	“Offering Period” means the twelve-consecutive month period commencing on each Grant
Date; provided, however, that the Committee may declare, as it deems appropriate and
in advance of the applicable Offering Period, (i) a shorter (not to be less than
three months) Offering Period or a longer (not to exceed 27 months) Offering Period.
	 
	 	 	 	“Option” means the stock option to acquire Shares granted to a Participant pursuant
to Section 8.
	 
	 	 	 	“Option Price” means the per share exercise price of an Option as determined in
accordance with Section 8(b).
	 
	 	 	 	“Parent” means any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation in which each corporation (other than the
Corporation) owns stock possessing 50% or more of the total combined voting power of
all classes of stock in one or more of the other corporations in the chain.
	 
	 	 	 	“Participant” means a Qualified Employee who has elected to participate in this Plan
and who has filed a valid and effective Subscription Agreement to make Contributions
pursuant to Section 6.
	 
	 	 	 	“Participating Subsidiary” has the meaning given to such term in Section 19(c).
	 
	 	 	 	“Plan” means this International Game Technology Employee Stock Purchase Plan, as
amended from time to time.
	 
	 	 	 	“Qualified Employee” means any employee of the Corporation, or of any Subsidiary
which has been designated in writing by the Committee as a “Participating
Subsidiary” (including any Subsidiaries which have become such after the date that
this Plan is approved by the stockholders of the Corporation). Notwithstanding the
foregoing, “Qualified Employee” shall not include any employee: (i)  whose customary
employment is for 20 hours per week or less; or (ii) whose customary employment is
for not more than five months in a calendar year.
	 
	 	 	 	“Rule 16b-3” means Rule 16b-3 as promulgated by the Commission under Section 16, as
amended from time to time.

 

 

	 	 	 	“Section 16” means Section 16 of the Exchange Act.
	 
	 	 	 	“Share” means a share of Common Stock.
	 
	 	 	 	“Subscription Agreement” means the written agreement filed by a Qualified Employee
with the Corporation pursuant to Section 6 to participate in this Plan.
	 
	 	 	 	“Subsidiary” means any corporation in an unbroken chain of corporations (beginning
with the Corporation) in which each corporation (other than the last corporation)
owns stock possessing 50% or more of the total combined voting power of all classes
of stock in one or more of the other corporations in the chain.

	3.	 	ELIGIBILITY
	 
	 	 	Any person employed as a Qualified Employee as of a Grant Date shall be eligible to
participate in this Plan during the Offering Period in which such Grant Date occurs, subject
to the Qualified Employee satisfying the requirements of Section 6.
	 
	4.	 	STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS

	 	(a)	 	The maximum number of Shares that may be delivered pursuant to Options granted
under this Plan is 12,600,000* Shares (after giving effect to the
Corporation’s stock splits affecting the Common Stock through the July 2003
four-for-one stock split), subject to adjustments pursuant to Section 17. In the event
that all of the shares of Common Stock made available under this Plan are subscribed
prior to the expiration of this Plan, this Plan shall terminate at the end of that
Offering Period and the shares available shall be allocated for purchase by
Participants in that Offering Period on a pro-rata basis determined with respect to
Participants’ Account balances.
	 
	 	(b)	 	The maximum number of Shares that any one individual may acquire upon exercise
of his or her Option with respect to any one Offering Period is 12,000, subject to
adjustments pursuant to Section 17 (the “Individual Limit”); provided, however, that
the Committee may amend such Individual Limit, effective no earlier than the first
Offering Period commencing after the adoption of such amendment, without stockholder
approval. The Individual Limit shall be proportionately adjusted for any Offering
Period of less than 12 months, and may, at the discretion of the Committee, be
proportionately increased for any Offering Period of greater than 12 months.
	 
	 	(c)	 	Shares that are subject to or underlie Options, which for any reason are
cancelled or terminated, are forfeited, fail to vest, or for any other reason are not
paid or delivered under this Plan shall again, except to the extent prohibited by law,
be available for subsequent Options under this Plan.

 

			
	*	 	Reflects the December 2003 amendment approved by the
Board to increase the Share limit by 3,000,000 Shares, which amendment is
subject to approval by stockholders at the 2004 annual meeting of stockholders.

 

 

	5.	 	OFFERING PERIODS
	 
	 	 	During the term of this Plan, the Corporation will grant Options to purchase Shares in each
Offering Period to all Participants in that Offering Period. Each Option shall become
effective on the Grant Date of the Offering Period with respect to which the Option was
granted. The term of each Option shall be the duration of the related Offering Period and
shall end on the Exercise Date of that Offering Period. Offering Periods shall continue
until this Plan is terminated in accordance with Section 18 or 19, or, if earlier, until no
Shares remain available for Options pursuant to Section 4.
	 
	6.	 	PARTICIPATION

	 	(a)	 	A Qualified Employee may become a participant in this Plan by completing a
Subscription Agreement on a form approved by and in a manner prescribed by the
Committee (or its delegate). To become effective, a Subscription Agreement must be
signed by the Qualified Employee and be filed with the Corporation at the time
specified by the Committee, but in all cases prior to the start of the Offering Period
with respect to which it is to become effective, and must set forth a stated amount
(or, if the Committee so provides, a whole percentage) of the Qualified Employee’s
Compensation to be credited to the Participant’s Account as Contributions each pay
period.
	 
	 	(b)	 	Notwithstanding the foregoing, a Participant may not elect to contribute more
than ten percent (10%) of his or her Compensation during any one pay period and, in the
case of a Contribution that is expressed as a stated amount, may not elect to
contribute less than $10.00 for any one pay period as Plan Contributions; provided,
however, that the Committee may establish different maximum and/or minimum limits on
Contributions for any Offering Period prior to the start of such Offering Period. The
Committee also may prescribe other limits, rules or procedures for Contributions.
	 
	 	(c)	 	Subscription Agreements shall contain the Qualified Employee’s authorization
and consent to the Company’s withholding from his or her Compensation the amount of his
or her Contributions. A Qualified Employee’s Subscription Agreement, and his or her
participation election and withholding consent therein, shall be effective only with
respect to the related Offering Period, and such Qualified Employee must timely file a
new Subscription Agreement for each Offering Period in which he or she wishes to
participate; provided, however, that the Committee may provide in advance of an
Offering Period that Subscription Agreements, and participation elections and
withholding consents therein, shall remain valid for subsequent Offering Periods,
subject to such rules and procedures as the Committee may prescribe.

	7.	 	METHOD OF PAYMENT OF CONTRIBUTIONS

	 	(a)	 	The Corporation shall maintain on its books, or cause to be maintained by a
recordkeeper, an Account in the name of each Participant. The percentage of

 

 

	 	 	 	Compensation elected to be applied as Contributions by a Participant shall be
deducted from such Participant’s Compensation on each payday during the period for
payroll deductions set forth below and such payroll deductions shall be credited to
that Participant’s Account as soon as administratively practicable after such date.
A Participant may not make any additional payments to his or her Account. A
Participant’s Account shall be reduced by any amounts used to pay the Option Price
of Shares acquired, or by any other amounts distributed pursuant to the terms
hereof.
	 
	 	(b)	 	Subject to such other rules as the Committee may adopt, payroll deductions with
respect to an Offering Period shall commence as of the first payday which coincides
with or immediately follows the applicable Grant Date and shall end on the last payday
which coincides with or immediately precedes the applicable Exercise Date, unless
sooner terminated by the Participant as provided in this Section 7 or until his or her
participation terminates pursuant to Section 11.
	 
	 	(c)	 	Unless otherwise provided by the Committee in advance of an Offering Period, a
Participant may not increase or decrease the level of his or her Contributions during
an Offering Period (other than a termination of Contributions as contemplated by
Section 7(d)).
	 
	 	(d)	 	A Participant may terminate his or her Contributions during an Offering Period
(and receive a distribution of the balance of his or her Account in accordance with
Section 11) by completing and filing with the Corporation, in such form and on such
terms as the Committee (or its delegate) may prescribe, a written withdrawal form which
shall be signed by the Participant. Such termination shall be effective as soon as
administratively practicable after its receipt by the Corporation. A withdrawal
election pursuant to this Section 7(d) with respect to an Offering Period shall only be
effective, however, if it is received by the Corporation prior to the Exercise Date of
that Offering Period (or such earlier deadline that the Committee may reasonably
require to process the withdrawal prior to the applicable Exercise Date). Partial
withdrawals of Accounts, and other modifications or suspensions of Subscription
Agreements are not permitted.
	 
	 	(e)	 	During leaves of absence approved by the Corporation or a Participating
Subsidiary and meeting the requirements of Regulation Section 1.421-7(h)(2) under the
Code, a Participant may continue participation in this Plan by cash payments to the
Corporation on his normal paydays equal to the reduction in his Plan Contributions
caused by his leave.

	8.	 	GRANT OF OPTION

	 	(a)	 	On each Grant Date, each Qualified Employee who is a Participant during that
Offering Period shall be granted an Option to purchase a number of Shares. The Option
shall be exercised on the Exercise Date. The number of Shares subject to the Option
shall be determined by dividing the Participant’s Account balance as

 

 

	 		 	of the applicable Exercise Date by the Option Price, subject to the limits of
Section 8(c).
	 
	 	(b)	 	The Committee shall establish the method for determining the Option Price per
Share of the Shares subject to an Option for an Offering Period prior to the start of
that Offering Period in accordance with this Section 8(b). The Committee may provide
prior to the start of an Offering Period that the Option Price for that Offering Period
shall be determined by applying a discount amount (not to exceed 15%) to either (1) the
Fair Market Value of a Share on the Grant Date of that Offering Period, or (2) the Fair
Market Value of a Share on the Exercise Date of that Offering Period, or (3) the lesser
of the Fair Market Value of a Share on the Grant Date of that Offering Period or the
Fair Market Value of a Share on the Exercise Date of that Offering Period.
Notwithstanding anything to the contrary in the preceding provisions of this Section
8(b), in no event shall the Option Price per Share be less than the par value of a
Share.
	 
	 	(c)	 	Notwithstanding anything else contained herein, the maximum number of Shares
subject to an Option for an Offering Period shall be subject to the Individual Limit in
effect on the Grant Date of that Offering Period (subject to adjustment pursuant to
Section 17) and any person who is otherwise a Qualified Employee shall not be granted
any Option (or any Option granted shall be subject to compliance with the following
limitations) or other right to purchase Shares under this Plan to the extent:

	 	(1)	 	it would, if exercised, cause the person to own
stock (within the meaning of Section 423(b)(3) of the Code) possessing
5% or more of the total combined voting power or value of all classes
of stock of the Corporation, or of any Parent, or of any Subsidiary; or
	 
	 	(2)	 	such Option causes such individual to have
rights to purchase stock under this Plan and any other plan of the
Corporation, any Parent, or any Subsidiary which is qualified under
Section 423 of the Code which accrue at a rate which exceeds $25,000 of
the fair market value of the stock of the Corporation, of any Parent,
or of any Subsidiary (determined at the time the right to purchase such
Stock is granted, before giving effect to any discounted purchase price
under any such plan) for each calendar year in which such right is
outstanding at any time.

	 	 	For purposes of the foregoing, a right to purchase stock accrues when it first
become exercisable during the calendar year. In determining whether the stock
ownership of a Qualified Employee equals or exceeds the 5% limit set forth above,
the rules of Section 424(d) of the Code (relating to attribution of stock ownership)
shall apply, and stock which the Qualified Employee may purchase under outstanding
options shall be treated as stock owned by the Qualified Employee.

 

 

	9.	 	EXERCISE OF OPTION

	 	(a)	 	Unless a Participant withdraws pursuant to Section 7(d) or the Participant’s
Plan participation is terminated as provided in Section 11, his or her Option for the
purchase of shares shall be exercised automatically on the Exercise Date for that
Offering Period, without any further action on the Participant’s part, and the maximum
number of whole Shares subject to such Option (subject to the Individual Limit set
forth in Section 4(b) and the limitations contained in Section 8(c)) shall be purchased
at the Option Price with the balance of such Participant’s Account.
	 
	 	(b)	 	If any amount which is not sufficient to purchase a whole Share remains in a
Participant’s Account after the exercise of his or her Option on the Exercise Date:
(1) such amount shall be credited to such Participant’s Account for the next Offering
Period, if he or she is then a Participant; or (2) if such Participant is not a
Participant in the next Offering Period, or if the Committee so elects, such amount
shall be refunded to such Participant as soon as administratively practicable after
such date. If the share limit of Section 4(a) is reached, any amount that remains in a
Participant’s Account after the exercise of his or her Option on the Exercise Date to
purchase the number of shares that he or she is allocated shall be refunded to the
Participant as soon as administratively practicable after such date. If any amount
which exceeds the limits of Section 8(c) remains in a Participant’s Account after the
exercise of his or her Option on the Exercise Date, such amount shall be refunded to
the Participant as soon as administratively practicable after such date.

	10.	 	DELIVERY
	 
	 	 	As soon as administratively practicable after the Exercise Date, the Corporation shall
deliver to each Participant a certificate representing the Shares purchased upon exercise of
his or her Option. The Corporation may make available an alternative arrangement for
delivery of Shares to a recordkeeping service. The Committee (or its delegate), in its
discretion, may either require or permit the Participant to elect that such certificates be
delivered to such recordkeeping service. In the event the Corporation is required to obtain
from any commission or agency authority to issue any such certificate, the Corporation will
seek to obtain such authority. If the Corporation is unable to obtain from any such
commission or agency authority which counsel for the Corporation deems necessary for the
lawful issuance of any such certificate or other delivery of such Shares, or if for any
other reason the Corporation cannot issue or deliver Shares and satisfy Section 21, the
Corporation shall be relieved from liability to any Participant except that the Corporation
shall return to each Participant to whom such shares cannot be issued or delivered the
amount of the balance credited to his or her Account that would have otherwise been used for
the purchase of such shares.

 

 

	11.	 	TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS

	 	(a)	 	Except as provided in Section 11(b) below, if a Participant ceases to be an
Eligible Employee for any reason (including, without limitation, due to the
Participant’s death, disability, quit, resignation or retirement, or due to a layoff or
other termination of employment with or without cause), or if the Participant elects to
withdraw from the Plan pursuant to Section 7(d), at any time prior to the last day of
an Offering Period in which he or she participates, such Participant’s Account shall be
paid to him or her (or, in the event of the Participant’s death, to the person or
persons entitled thereto under Section 13) in cash, and such Participant’s Option and
participation in the Plan shall automatically terminate as of the time that the
Participant ceased to be a Qualified Employee.
	 
	 	(b)	 	If a Participant (1) ceases to be a Qualified Employee during an Offering
Period but remains an employee of the Company through the Exercise Date (for example,
and without limitation, due to a change in the Participant’s employer from the
Corporation or a Participating Subsidiary to a non-Participating Subsidiary, if the
Participant’s employer ceases to maintain the Plan as a Participating Subsidiary but
otherwise continues as a Subsidiary, or if the Participant’s customary level of
employment no longer satisfies the requirements set forth in the definition of
Qualified Employee), or (2) during an Offering Period commences a sick leave, military
leave, or other leave of absence approved by the Company, and the leave meets the
requirements of Treasury Regulation Section 1.421-7(h)(2) and the Participant is an
employee of the Company or on such leave as of the applicable Exercise Date, such
Participant’s Contributions shall cease (subject to Section 7(e)), and the
Contributions previously credited to the Participant’s Account for that Offering Period
shall be used to exercise the Participant’s Option as of the applicable Exercise Date
in accordance with Section 9 (unless the Participant makes a timely withdrawal election
in accordance with Section 7(d), in which case such Participant’s Account shall be paid
to him or her in cash in accordance with Section 11(a)).
	 
	 	(c)	 	A Participant’s termination from Plan participation precludes the Participant
from again participating in this Plan during that Offering Period. However, such
termination shall not have any effect upon his or her ability to participate in any
succeeding Offering Period, provided that the applicable eligibility and participation
requirements are again then met. A Participant’s termination from Plan participation
shall be deemed to be a revocation of that Participant’s Subscription Agreement and
such Participant must file a new Subscription Agreement to resume Plan participation in
any succeeding Offering Period.

	12.	 	ADMINISTRATION

	 	(a)	 	The Board shall appoint the Committee, which shall be composed of not less than
two members of the Board. The Board may, at any time, increase or decrease the number
of members of the Committee, may remove from membership on the
Committee all or any portion of its members, and may appoint such person or

 

 

	 	 	 	persons as it desires to fill any vacancy existing on the Committee, whether caused by
removal, resignation, or otherwise. The Board may also, at any time, assume the
administration of all or a part of this Plan, in which case references (or relevant
references in the event the Board assumes the administration of only certain aspects
of this Plan) to the “Committee” shall be deemed to be references to the Board.
Action of the Committee with respect to this Plan shall be taken pursuant to a
majority vote or by the unanimous written consent of its members. No member of the
Committee shall be entitled to act on or decide any matter relating solely to
himself or herself or solely to any of his or her rights or benefits under this
Plan.
	 
	 	(b)	 	Subject to the express provisions of this Plan, the Committee shall supervise
and administer this Plan and shall have the full authority and discretion: (1) to
construe and interpret this Plan and any agreements defining the rights and obligations
of the Corporation, any Subsidiary, and Participants under this Plan; (2) to further
define the terms used in this Plan; (3) to prescribe, amend and rescind rules and
regulations relating to the administration of this Plan; and (4) to make all other
determinations and take such other action as contemplated by this Plan or as may be
necessary or advisable for the administration of this Plan or the effectuation of its
purposes. The Committee may delegate ministerial, non-discretionary functions to
individuals who are officers or employees of the Corporation or a Subsidiary.
	 
	 	(c)	 	Any action taken by, or inaction of, the Corporation, any Subsidiary, the Board
or the Committee relating or pursuant to this Plan and within its authority hereunder
or under applicable law shall be within the absolute discretion of that entity or body
and shall be conclusive and binding upon all persons.
	 
	 	(d)	 	Neither the Board nor any Committee, nor any member thereof or person acting at
the direction thereof, shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with this Plan, and all
such persons shall be entitled to indemnification and reimbursement by the Corporation
in respect of any claim, loss, damage or expense (including, without limitation,
attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law
and/or under any directors and officers liability insurance coverage that may be in
effect from time to time.
	 
	 	(e)	 	In making any determination or in taking or not taking any action under this
Plan, the Committee or the Board, as the case may be, may obtain and may rely upon the
advice of experts, including professional advisors to the Corporation. No director,
officer or agent of the Corporation or any Participating Subsidiary shall be liable for
any such action or determination taken or made or omitted in good faith.

 

 

	13.	 	DESIGNATION OF BENEFICIARY
	 
	 	 	If the Committee permits beneficiary designations with respect to this Plan, then each
Participant may file, on a form and in a manner prescribed by the Committee (or its
delegate), a written designation of a beneficiary who is to receive any Shares or cash from
or with respect to such Participant’s Account under this Plan in the event of such
Participant’s death. If a Participant is married and the designated beneficiary is not
solely his or her spouse, spousal consent shall be required for such designation to be
effective unless it is established (to the satisfaction of the Committee or its delegate)
that there is no spouse or that the spouse cannot be located. The Committee may rely on the
last designation of a beneficiary filed by a Participant in accordance with this Plan.
Beneficiary designations may be changed by the Participant (and his or her spouse, if
required) at any time on forms provided and in the manner prescribed by the Committee (or
its delegate).
	 
	 	 	If a Participant dies with no validly designated beneficiary under this Plan who is living
at the time of such Participant’s death (or in the event the Committee does not permit
beneficiary designations under this Plan), the Corporation shall deliver all Shares and/or
cash payable pursuant to the terms hereof to the executor or administrator of the estate of
the Participant, or if no such executor or administrator has been appointed, the
Corporation, in its discretion, may deliver such Shares and/or cash to the spouse or to any
one or more dependents or relatives of the Participant, or if no spouse, dependent or
relative is known to the Corporation, then to such other person as the Corporation may
designate.
	 
	 	 	If a Participant’s death occurs before the end of an Offering Period or subsequent to the
end of an Offering Period but prior to the delivery to him or her or for his or her benefit
of any Shares deliverable under the terms of this Plan, and the Corporation has notice of
the Participant’s death, then any Shares purchased for that Offering Period and any
remaining balance of such Participant’s Account shall be paid to such beneficiary (or such
other person entitled to such payment pursuant to this Section 13). If the Committee
permits beneficiary designations with respect to this Plan, any such designation shall have
no effect with respect to Shares purchased and actually delivered (or credited, as the case
may be) to or for the benefit of the Participant.

	14.	 	TRANSFERABILITY
	 
	 	 	Neither Contributions credited to a Participant’s Account nor any Options or rights with
respect to the exercise of Options or right to receive Shares under this Plan may be
anticipated, alienated, encumbered, assigned, transferred, pledged or otherwise disposed of
in any way (other than by will, the laws of descent and distribution, or as provided in
Section 13) by the Participant. Any such attempt at anticipation, alienation, encumbrance,
assignment, transfer, pledge or other disposition shall be without effect and all amounts
shall be paid and all shares shall be delivered in accordance with the provisions of this
Plan. Amounts payable or Shares deliverable pursuant to this Plan shall be paid or
delivered only to the Participant or, in the event of the Participant’s death, to the
Participant’s beneficiary pursuant to Section 13.

 

 

	15.	 	USE OF FUNDS; INTEREST
	 
	 	 	All Contributions received or held by the Corporation under this Plan will be included in
the general assets of the Corporation and may be used for any corporate purpose.
Notwithstanding anything else contained herein to the contrary, no interest will be paid to
any Participant or credited to his or her Account under this Plan (in respect of Account
balances, refunds of Account balances, or otherwise). Amounts payable under this Plan shall
be payable in Shares or from the general assets of the Corporation and, except for any
Shares that may be reserved on the books of the Corporation for issuance with respect to
this Plan, no special or separate reserve, fund or deposit shall be made to assure payment
of amounts that may be due with respect to this Plan.

	16.	 	REPORTS
	 
	 	 	Statements shall be provided to Participants as soon as administratively practicable
following each Exercise Date. Each Participant’s statement shall set forth, as of such
Exercise Date, that Participant’s Account balance immediately prior to the exercise of his
or her Option, the Option Price, the number of whole Shares purchased and his or her
remaining Account balance, if any.

	17.	 	ADJUSTMENTS OF AND CHANGES IN THE STOCK
	 
	 	 	Upon or in contemplation of any reclassification, recapitalization, stock split (including a
stock split in the form of a stock dividend), or reverse stock split; any merger,
combination, consolidation, or other reorganization; split-up, spin-off, or any similar
extraordinary dividend distribution in respect of the Common Stock (whether in the form of
securities or property); any exchange of Common Stock or other securities of the
Corporation, or any similar, unusual or extraordinary corporate transaction in respect of
the Common Stock; or a sale of substantially all the assets of the Corporation as an
entirety occurs; then the Committee shall, in such manner, to such extent (if any) and at
such time as it deems appropriate and equitable in the circumstances:

	 	(a)	 	proportionately adjust any or all of (i) the number and type of Shares (or
other securities) that thereafter may be made the subject of Options (including the
specific maxima and numbers of shares set forth elsewhere in this Plan), (ii) the
number, amount and type of Shares (or other securities or property) subject to any or
all outstanding Options, (iii) the Option Price of any or all outstanding Options, or
(iv) the securities, cash or other property deliverable upon exercise of any
outstanding Options, or
	 
	 	(b)	 	make provision for a cash payment or for the substitution or exchange of any or
all outstanding Options for cash, securities or property to be delivered to the holder
of any or all outstanding Options based upon the distribution or consideration payable
to holders of the Common Stock upon or in respect of such event.

	 	 	The Committee may adopt such valuation methodologies for outstanding Options as it deems
reasonable in the event of a cash or property settlement and, without limitation on

 

 

	 	 	other methodologies, may base such settlement solely upon the excess (if any) of the amount
payable upon or in respect of such event over the Option Price of the Option.
	 
	 	 	In any of such events, the Committee may take such action sufficiently prior to such event
to the extent that the Committee deems the action necessary to permit the Participant to
realize the benefits intended to be conveyed with respect to the underlying shares in the
same manner as is or will be available to stockholders generally.

	18.	 	POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS
	 
	 	 	Upon a dissolution of the Corporation, or any other event described in Section 17 that the
Corporation does not survive or does not survive as a publicly-traded company in respect of
its Common Stock, as the case may be, the Plan and, if prior to the last day of an Offering
Period, any outstanding Option granted with respect to that Offering Period shall terminate,
subject to any provision that has been expressly made by the Board for the survival,
substitution, assumption, exchange or other settlement of the Plan and Options. In the
event a Participant’s Option is terminated pursuant to this Section 18 without a provision
having been made by the Board for a substitution, exchange or other settlement of the
Option, such Participant’s Account shall be paid to him or her in cash without interest.

	19.	 	TERM OF PLAN; AMENDMENT OR TERMINATION

	 	(a)	 	This Plan shall become effective as of the Effective Date. No new Offering
Periods shall commence on or after February 28, 2015 (after giving effect to the
amendment approved by the Corporation’s stockholders at the 2005 annual meeting of
stockholders which extended the term of this Plan) and this Plan shall terminate as of
the Exercise Date immediately following such date unless sooner terminated pursuant to
Section 4, Section 18, or this Section 19.
	 
	 	(b)	 	The Board may amend, modify or terminate this Plan at any time, in whole or in
part and without notice. Stockholder approval for any amendment or modification shall
not be required, except to the extent required by law or applicable stock exchange
rules, or required under Section 423 of the Code in order to preserve the intended tax
consequences of the Plan. No Options may be granted during any suspension of this Plan
or after the termination of this Plan, but the Committee will retain jurisdiction as to
Options then outstanding in accordance with the terms of this Plan. No amendment,
modification, or termination pursuant to this Section 19(b) shall, without written
consent of the Participant, affect in any manner materially adverse to the Participant
any rights or benefits of such Participant or obligations of the Corporation under any
Option granted under this Plan prior to the effective date of such change. Changes
contemplated by Section 17 or Section 18 shall not be deemed to constitute changes or
amendments requiring Participant consent.
	 
	 	(c)	 	Notwithstanding the amendment provisions of Section 19(b) and without limiting
the Board’s authority thereunder and without limiting the Committee’s authority

 

 

	 	 	 	pursuant to any other provision of this Plan, the Committee shall have the right (1)
to designate from time to time the Subsidiaries whose employees may be eligible to
participate in this Plan (including, without limitation, any Subsidiary that may
first become such after the date stockholders first approve this Plan) (each a
“Participating Subsidiary”), and (2) to change the service and other qualification
requirements set forth under the definition of Qualified Employee in Section 2
(subject to the requirements of Section 423(b) of the Code and applicable rules and
regulations thereunder). Any such change shall not take effect earlier than the
first Offering Period that starts on or after the effective date of such change.
Any such change shall not require stockholder approval.

	20.	 	NOTICES
	 
	 	 	All notices or other communications by a Participant to the Corporation contemplated by this
Plan shall be deemed to have been duly given when received in the form and manner specified
by the Committee (or its delegate) at the location, or by the person, designated by the
Committee (or its delegate) for that purpose.

	21.	 	CONDITIONS UPON ISSUANCE OF SHARES
	 
	 	 	This Plan, the granting of Options under this Plan and the offer, issuance and delivery of
Shares are subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities laws) and to such
approvals by any listing, regulatory or governmental authority as may, in the opinion of
counsel for the Corporation, be necessary or advisable in connection therewith. The person
acquiring any securities under this Plan will, if requested by the Corporation and as a
condition precedent to the exercise of his or her Option, provide such assurances and
representations to the Corporation as the Committee may deem necessary or desirable to
assure compliance with all applicable legal requirements.

	22.	 	PLAN CONSTRUCTION

	 	(a)	 	It is the intent of the Corporation that transactions involving Options under
this Plan (other than “Discretionary Transactions” as that term is defined in Rule
16b-3(b)(1) promulgated by the Commission under Section 16 of the Exchange Act, to the
extent there are any Discretionary Transactions under this Plan), in the case of
Participants who are or may be subject to the prohibitions of Section 16 of the
Exchange Act, satisfy the requirements for exemption under Rule 16b-3(c) promulgated by
the Commission under Section 16 of the Exchange Act to the maximum extent possible.
Notwithstanding the foregoing, the Corporation shall have no liability to any
Participant for Section 16 consequences of Options or other events with respect to this
Plan.
	 
	 	(b)	 	This Plan and Options are intended to qualify under Section 423 of the Code.
Accordingly, all Participants are to have the same rights and privileges (within the
meaning of Section 423(b)(5) of the Code) under this Plan, subject to differences

 

 

	 	 	 	in Compensation among Participants and subject to the Contribution and share limits
of this Plan.
	 
	 	(c)	 	If any provision of this Plan or of any Option would otherwise frustrate or
conflict with the intents expressed above, that provision to the extent possible shall
be interpreted so as to avoid such conflict. If the conflict remains irreconcilable,
the Committee may disregard the provision if it concludes that to do so furthers the
interest of the Corporation and is consistent with the purposes of this Plan as to such
persons in the circumstances.

	23.	 	EMPLOYEES’ RIGHTS

	 	(a)	 	Nothing in this Plan (or in any Subscription Agreement or other document
related to this Plan) will confer upon any Qualified Employee or Participant any right
to continue in the employ or other service of the Company, constitute any contract or
agreement of employment or other service or affect an employee’s status as an employee
at will, nor shall interfere in any way with the right of the Company to change such
person’s compensation or other benefits or to terminate his or her employment or other
service, with or without cause. Nothing contained in this Section 23(a), however, is
intended to adversely affect any express independent right of any such person under a
separate employment or service contract other than a Subscription Agreement.
	 
	 	(b)	 	No Participant or other person will have any right, title or interest in any
fund or in any specific asset (including Shares) of the Corporation or any Subsidiary
by reason of any Option hereunder. Neither the provisions of this Plan (or of any
Subscription Agreement or other document related to this Plan), nor the creation or
adoption of this Plan, nor any action taken pursuant to the provisions of this Plan
will create, or be construed to create, a trust of any kind or a fiduciary relationship
between the Corporation or any Subsidiary and any Participant, beneficiary or other
person. To the extent that a Participant, beneficiary or other person acquires a right
to receive payment pursuant to this Plan, such right will be no greater than the right
of any unsecured general creditor of the Corporation.
	 
	 	(c)	 	A Participant will not be entitled to any privilege of stock ownership as to
any Shares not actually delivered to and held of record by the Participant. No
adjustment will be made for dividends or other rights as a shareholder for which a
record date is prior to such date of delivery.

	24.	 	MISCELLANEOUS

	 	(a)	 	This Plan, the Options, Subscription Agreements and other documents related to
this Plan shall be governed by, and construed in accordance with, the laws of the State
of Nevada. If any provision shall be held by a court of competent jurisdiction to be
invalid and unenforceable, the remaining provisions of this Plan shall continue in
effect.

 

 

	 	(b)	 	Captions and headings are given to the sections of this Plan solely as a
convenience to facilitate reference. Such captions and headings shall not be deemed in
any way material or relevant to the construction of interpretation of this Plan or any
provision hereof.
	 
	 	(c)	 	The adoption of this Plan shall not affect any other Company compensation or
incentive plans in effect. Nothing in this Plan will limit or be deemed to limit the
authority of the Board or Committee (i) to establish any other forms of incentives or
compensation for employees of the Company (with or without reference to the Common
Stock), or (ii) to grant or assume options (outside the scope of and in addition to
those contemplated by this Plan) in connection with any proper corporate purpose; to
the extent consistent with any other plan or authority. Benefits received by a
Participant under an Option granted pursuant to this Plan shall not be deemed a part of
the Participant’s compensation for purposes of the determination of benefits under any
other employee welfare or benefit plans or arrangements, if any, provided by the
Corporation or any Subsidiary, except where the Committee or the Board (or the Board of
Directors of the Subsidiary that sponsors such plan or arrangement, as applicable)
expressly otherwise provides or authorizes in writing.

	25.	 	TAX WITHHOLDING
	 
	 	 	Notwithstanding anything else contained in this Plan herein to the contrary, the Corporation
may deduct from a Participant’s Account balance as of an Exercise Date, before the exercise
of the Participant’s Option is given effect on such date, the amount of taxes (if any) which
the Corporation reasonably determines it or any Subsidiary may be required to withhold with
respect to such exercise. In such event, the maximum number of whole shares subject to such
Option (subject to the other limits set forth in this Plan) shall be purchased at the
Exercise Price with the balance of the Participant’s Account (after reduction for the tax
withholding amount).
	 
	 	 	Should the Corporation for any reason be unable, or elect not to, satisfy its or any
Subsidiary’s tax withholding obligations in the manner described in the preceding paragraph
with respect to a Participant’s exercise of an Option, or should the Corporation or any
Subsidiary reasonably determine that it or an affiliated entity has a tax withholding
obligation with respect to a disposition of shares acquired pursuant to the exercise of an
Option prior to satisfaction of the holding period requirements of Section 423 of the Code,
the Corporation or Subsidiary, as the case may be, shall have the right at its option to (1)
require the Participant to pay or provide for payment of the amount of any taxes which the
Corporation or Subsidiary reasonably determines that it or any affiliate is required to
withhold with respect to such event or (2) deduct from any amount otherwise payable to or
for the account of the Participant the amount of any taxes which the Corporation or
Subsidiary reasonably determines that it or any affiliate is required to withhold with
respect to such event.

 

 

	26.	 	NOTICE OF SALE
	 
	 	 	Any person who has acquired shares under this Plan shall give prompt written notice to the
Corporation of any sale or other transfer of the shares if such sale or transfer occurs (1)
within the two-year period after the Grant Date of the Offering Period with respect to which
such shares were acquired, or (2) within the twelve-month period after the Exercise Date of
the Offering Period with respect to which such shares were acquired.exv10w18

 

INTERNATIONAL GAME TECHNOLOGY

Exhibit 10.18 to Form 10K for period ended September 30, 2007

Summary of Named Executive Officer and Director Compensation Arrangements

Executive Officers

In addition to the base salaries noted in the table below, compensation arrangements for our
executive officers include benefits paid under any applicable employment contracts, other IGT Plans
for Management Bonus (including Cash Sharing), Stock Incentives, Profit Sharing, and Deferred
Compensation as more fully described in exhibits to our annual report on Form 10-K or interim
quarterly Form 10-Q. These individuals also receive certain perquisites as explained in our annual
proxy statement. Except where noted that employment contracts have been filed as exhibits, these
are at-will employment arrangements.

	 	 	 	 	 	 	 
	 	 	 	 	Base
	Name	 	Title	 	Salary (1)
	Thomas J. Matthews (2)
	 	President, Chief Executive Officer	 	$	840,000	 
	 
	Stephen W. Morro
	 	Chief Operating Officer	 	$	600,000	 
	 
	David D. Johnson
	 	Executive Vice President, General Counsel	 	$	525,000	 
	 
	Robert A. Bittman
	 	Executive Vice President, Product Strategy	 	$	420,000	 
	 
	Daniel R. Siciliano
	 	Chief Accounting Officer, Treasurer and Principal Financial Officer	 	$	250,000	 

			
	(1)	 	Amounts reported in our proxy statement may vary depending on the timing of pay period during
the fiscal year
	 
	(2)	 	Employment contract has been filed in a separate exhibit to our most recent annual report on
Form 10-K

Directors (effective June 26, 2007)

Annual Retainer

	 	a	 	$65,000 paid in quarterly installments
	 
	 	a	 	Prior to the beginning of each fiscal year, members may elect to receive all or a
part of the total retainer in the form of a restricted stock award

Board and Committee Meeting Fees

	 	a	 	Board — $1,500 per meeting attended after 8 meetings have been held and attended
	 
	 	a	 	Audit — $1,500 per meeting attended after 10 meetings have been held and attended
	 
	 	a	 	Compensation, Nominating & Corporate Governance, and Compliance — $1,500 per meeting
attended after 4 meetings have been held

Committee Annual Retainer (payable in quarterly installments)

	 	a	 	Chair: Audit — $35,000; Compensation, Nominating & Corporate Governance, and
Compliance — $20,000
	 
	 	a	 	Member: Audit — $17,500; Compensation, Nominating & Corporate Governance, and
Compliance — $10,000

Equity Grants (effective after next IGT Annual Shareholders’ Meeting in March 2008)

	 	a	 	Upon election to the board: 20,000 stock options and 5,000 restricted shares vesting ratably over 3 years
	 
	 	a	 	Annual grant: 11,000 stock options and 2,750 shares restricted shares with 1-year vesting

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]