INTERNATIONAL GAME TECHNOLOGY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 22, 1994
The Annual Meeting of the Stockholders of International Game
Technology will be held at 1085 Palms Airport Drive, Las Vegas, Nevada, on
Tuesday, February 22, 1994, at 1:30 p.m., local time, for the purpose of
considering and voting on:
(1) Election of seven directors for the ensuing year (the Board
of Director's nominees are named in the accompanying Proxy Statement); and
(2) Such other business as may properly come before the meeting
and any and all adjournments thereof.
The Board of Directors has fixed December 31, 1993 as the record date
for determining the stockholders of the Corporation entitled to notice of
and to vote at the meeting and any adjournment thereof, and only holders of
Common Stock of the Corporation of record at the close of business on such
date will be entitled to notice of and to vote at said meeting or
adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
Brian McKay
Secretary
Reno, Nevada
January 7, 1994
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE SIGN, DATE AND
RETURN YOUR PROXY AS PROMPTLY AS POSSIBLE. AN ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED FOR THIS PURPOSE. YOUR
SIGNED PROXY IS THE ONLY WAY YOUR SHARES CAN BE COUNTED IN THE VOTE UNLESS
YOU PERSONALLY CAST A BALLOT AT THE MEETING.
INTERNATIONAL GAME TECHNOLOGY
PROXY STATEMENT
INFORMATION REGARDING PROXIES
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of International Game Technology
(together with its subsidiaries, as the context may require, hereinafter
called the "Corporation") to be voted at the Annual Meeting of Stockholders
on Tuesday, February 22, 1994, and at any and all adjournments thereof.
Solicitation of proxies by mail is expected to commence on or about
January 24, 1994 and the cost thereof will be borne by the Corporation. In
addition to such solicitation by mail, some of the officers and regular
employees of the Corporation may solicit, without extra compensation,
proxies by telephone, telegraph and personal interview. Arrangements will
be made with brokerage houses, custodians, nominees and other fiduciaries
to send proxy material to their principals, and they will be reimbursed by
the Corporation for postage and clerical expense in doing so.
Proxies may be revoked at any time prior to the exercise thereof by
giving written notice to the Corporation or by a later dated proxy executed
by the person executing the prior proxy and filed with the Corporation or
otherwise presented at the meeting. Stockholders attending the Annual
Meeting may vote their shares in person whether or not a proxy has been
previously executed and returned. If the accompanying proxy card is signed
and returned to the Corporation, and not revoked, it will be voted in
accordance with instructions contained therein. Unless contrary
instructions are given, the persons designated as proxy holders on the
proxy card will vote FOR election of the nominees named herein as
directors.
Votes cast by proxy or in person at the Annual Meeting will be counted
by persons appointed by the Corporation to act as election inspectors for
the meeting. The election inspectors will treat shares represented by
proxies that reflect abstentions or represent "broker non-votes" as shares
that are present and entitled to vote, for purposes of determining the
presence of a quorum and for purposes of determining the outcome of any
matter submitted to the shareholders for a vote. Abstentions and broker
non-votes, however, do not constitute a vote "for" or "against" any matter
and thus will be disregarded in the calculation of a plurality or of "votes
cast."
If a broker or nominee has indicated on the proxy that it does not
have discretionary authority to vote certain shares, those shares will be
treated as not present and not entitled to vote with respect to that matter
(even though those shares may be considered entitled to vote for quorum
purposes and entitled to vote on other matters). Shares referred to as
"broker non-votes" are shares held by brokers or nominees as to which
instructions have not been received from the beneficial owners or persons
entitled to vote that the broker or nominee does not have discretionary
power to vote on a particular matter.
Any unmarked proxies, including those submitted by brokers or
nominees, will be voted in favor of the nominees of the Board. If a broker
or nominee who does not have discretion to vote has delivered a proxy but
has failed to physically indicate on the proxy card such person's lack of
authority to vote, the shares will be treated as present and will be voted
in accordance with the instructions on the proxy card (i.e. as a vote FOR
the director nominees named therein).
The executive offices of the Corporation are located at 5270 Neil
Road, Reno, Nevada 89510.
VOTING SECURITIES
The securities of the Corporation entitled to be voted at the meeting
consist of shares of its Common Stock, $0.000625 par value, of which
127,926,561 shares were issued and outstanding at the close of business on
December 31, 1993. Only stockholders of record at the close of business on
that date will be entitled to vote at the meeting.
The shares of Common Stock are entitled to one vote per share but do
not have cumulative voting rights and, therefore, a majority of the
outstanding shares entitled to vote has the power to elect all directors.
Directors of the Corporation who have been nominated for re-election and
the executive officers of the Corporation collectively have the power to
vote 6,531,190 shares as of the record date (5.1% of the outstanding shares
as of the record date) and have indicated that they currently intend to
vote such shares in favor of each of management's nominees to serve as
directors.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the next Annual
Meeting must be received by the Corporation by September 26, 1994 to be
considered for inclusion in the Corporation's proxy statement relating to
that meeting.
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth the information as of December 31, 1993
with respect to the beneficial ownership of the Corporation's Common Stock
by the principal stockholders, all directors, and all officers and
directors of the Corporation as a group.
Shares Beneficially
Names and Addresses of Owned
Beneficial Owners Number(1) Percent(2)
- ----------------------------------------- ---------- ------------
Wilbur K. Keating
8 Comstock Circle
Carson City, Nevada 89701 . . . . . . . . 7,601 -
Claudine B. Williams
3475 Las Vegas Boulevard South
Las Vegas, Nevada 89109 . . . . . . . . . 134,940 0.11
Albert J. Crosson
1645 West Valencia Drive
Fullerton, California 92633 . . . . . . . 259,333 0.20
Charles N. Mathewson
520 South Rock Boulevard
Reno, Nevada 89502. . . . . . . . . . . . 3,233,324 2.53
John J. Russell
520 South Rock Boulevard
Reno, Nevada 89502. . . . . . . . . . . . 327,547 0.26
Warren L. Nelson
Post Office Box 3196
Reno, Nevada 89505. . . . . . . . . . . . 432,381 0.34
Frederick B. Rentschler
5945 East Sage Drive
Scottsdale, Arizona 85253 . . . . . . . . 3,333 -
All officers and directors
as group (13 persons). . . . . . . . . . . . 7,091,466 5.52
_____________________
1 Includes shares which may be purchased upon exercise of options which are
exercisable within 60 days of December 31, 1993.
2 Any securities not outstanding which are subject to options or conversion
privileges which are exercisable within 60 days of December 31, 1993 are
deemed outstanding for the purpose of computing the percentage of
outstanding securities of the class owned by any person holding such
securities but are not deemed outstanding for the purpose of computing the
percentage of the class owned by any other person.
ELECTION OF DIRECTORS
Seven directors are to be elected at the Annual Meeting, each to hold office
until the next annual meeting of stockholders and until a successor is
elected. It is the intention of the persons named in the enclosed form of
proxy to vote, if authorized, the proxies for the election as directors of
the seven persons named below as nominees. All of the nominees are at
present directors of the Corporation. If any nominee declines or is unable
to serve as a director (which is not anticipated), the persons named as
proxies reserve full discretion to vote for any other person who may be
nominated.
The following table sets forth for each nominee for election as a director
his or her name, all positions with the Corporation held by him or her and
his or her principal occupation:
Director
Name Age Principal Occupation Since
- -------------------- ---- -------------------------------- -----------
Charles N. Mathewson 65 Mr. Mathewson was appointed to 1985
fill a vacancy on the
Corporation's Board of Directors
in 1985 and was named Chairman in
February 1986. In December 1986,
Mr. Mathewson was appointed
President and Chief Executive
Officer and resigned as Chairman
of the Board. Mr. Mathewson
resumed the position as Chairman
of the Board and resigned as
President in February 1988. He
received his Bachelor of Finance
degree from the University of
Southern California in 1953 and
graduated from the University of
California Management Program in
1960. He served as Senior
Executive Vice President and a
Director of Jefferies and Co. from
1968 to 1971, Chairman of the
Board of Arden Mayfair Inc. from
1971 to 1974, and Chairman of the
Board of Wagenseller & Durst from
1978 to 1979. From 1980 until
February 1986, Mr. Mathewson was a
general partner of Management
Advisors Associates, a partnership
engaged in investment and business
consulting. Mr. Mathewson is a
member of the Board of Directors
of Baron Asset Fund.
Warren L. Nelson 81 Mr. Nelson joined the Corporation 1983
as a Director in February 1983.
Since coming to Nevada in 1936,
Mr. Nelson has been actively
involved in the gaming industry,
holding various management
positions in several gaming
establishments in the State.
Since its inception in November
1961, Mr. Nelson has been an owner
and actively involved in the
management of the Club Cal Neva, a
casino located in Reno, Nevada.
He has previously served under
three Nevada governors on the
Nevada Gaming Policy Committee.
Wilbur K. Keating 62 Mr. Keating was elected a Director 1987
in May 1987. He received his
degree in Business Management from
the University of Colorado in
1956. He is the Chief Executive
Officer of the Nevada Public
Employees Retirement System, a
position he has held since 1974.
Claudine B. Williams 72 Ms. Williams was elected a 1988
Director in May 1988. In 1965,
she began operating the Silver
Slipper Casino in Las Vegas, and
opened the Holiday Casino in 1973.
Ms. Williams served as Past-
President and General Manager of
the Holiday Casino and presently
serves as its Chairman of the
Board. Ms. Williams currently
serves as Chairman of the Board of
the American Bank of Commerce, and
the Chairman of the Board of
Harrah's Las Vegas (formerly the
Holiday Inn). On the Nevada state
level, she was appointed a Member
of the Nevada State Board of
Equalization, a position in which
she served for six years.
Ms. Williams was appointed a
Member of the Nevada Commission on
Tourism in 1984 and was re-
appointed in 1987 and 1990. In
January 1988, she was appointed a
Member of the California-Nevada
Super Speed Ground Transportation
Commission. In 1985, Ms. Williams
was elected to serve on the Board
of Directors of the Las Vegas
Convention and Visitors Authority,
and served as its Secretary/
Treasurer. She also served on the
Board of Directors of the Las
Vegas Chamber of Commerce for
eight years and was Chairman for
one term.
Albert J. Crosson 63 Mr. Crosson was elected to the 1988
Corporation's Board of Directors
in May 1988. Since January 1993,
Mr. Crosson has been President and
Chief Operating Officer of ConAgra
Grocery Products Companies. From
1986 to January 1993, he was
President of Hunt-Wesson Foods,
Inc., a ConAgra Company. Prior to
1986, he was Executive Vice
President for Hunt-Wesson, Inc.,
and President of Arden Mayfair.
Mr. Crosson is also a Director of
Pioneer Bank, which is based in
Fullerton, California.
John J. Russell 64 Mr. Russell was appointed to the 1990
Board in January 1990 to fill a
new position on the Board.
Mr. Russell joined the Corporation
as Senior Vice President in
February 1986, was named Executive
Vice President in June 1987 and
President in February 1988. He
was named Chief Executive Officer
of the Corporation in June 1993.
Mr. Russell served as President of
Gabler, Russell & Company, Inc., a
firm of business consultants, from
1959 to 1986. Mr. Russell began
his business career in 1948 in the
wholesale distribution and
brokerage business.
Frederick B.
Rentschler 54 Mr. Rentschler was appointed to 1992
the Board of Directors in May 1992
to fill a vacancy on the Board.
Prior to his retirement in 1991,
Mr. Rentschler served as President
and Chief Executive Officer of
Northwest Airlines from 1990 to
1991. Prior to those positions,
Mr. Rentschler served as President
and Chief Executive Officer of
Beatrice Company from 1988 to
1990, as President and Chief
Executive Officer of Beatrice U.S.
Foods from 1985 to 1988, as
President and Chief Executive
Officer of Hunt-Wesson, Inc. from
1980 to 1984 and President of
Armour-Dial from 1977 to 1980.
Mr. Rentschler is a member of the
Board of Directors of Esca
Genetics Corp.
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held four meetings during fiscal
1993. Each outside director receives a $10,000 annual fee, a fee
of $600 for attendance at meetings of the Board and a fee of $600
for attendance at committee meetings. Directors who are
employees of the Corporation are not paid any fees or additional
remuneration for service as members of the Board or its
Committees. Each current non-employee director received non-
qualified stock options to purchase 10,000 shares of Common Stock
in fiscal 1993 (adjusted to reflect a two-for-one stock split
effective March 17, 1993) at an exercise price of $21.81 per
share. Each new non-employee director will receive non-qualified
stock options to purchase 10,000 shares of Common Stock upon his
or her initial election to the Board of Directors and every year
thereafter, including 1994, each non-employee director, including
each of the current non-employee directors, will receive non-
qualified stock options to purchase 4,000 shares of Common Stock
upon his or her re-election to the Board.
The Board of Directors has an Executive Committee (comprised
of Ms. Williams and Messrs. Nelson and Mathewson) which held no
meetings during fiscal 1993. Except for certain powers which
under Nevada law may only be exercised by the full Board of
Directors, the Executive Committee has and exercises the powers
of the Board in monitoring the management of the business of the
Corporation between meetings of the Board of Directors.
The Corporation has an Audit Committee consisting of Messrs.
Crosson and Keating. The Audit Committee held one meeting during
fiscal 1993. The Audit Committee has responsibility for
consulting with the Corporation's officers regarding the
appointment of independent public accountants as auditors,
discussing the scope of the auditors' examination and reviewing
annual financial statements, related party transactions,
potential conflict situations and corporate accounting policies.
During fiscal 1993, each director attended at least 75% of
the aggregate of the number of meetings of the Board and
respective Committees on which he or she served while a member
thereof. The Board of Directors does not have a nominating
committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has a Compensation Committee. During
fiscal 1993, Ms. Williams and Messrs. Nelson and Crosson served
as members of the Compensation Committee. No member of the
Committee is a former or current officer or employee of the
Corporation or any of its subsidiaries. The functions performed
by the Compensation Committee include administration of the
Corporation's Stock Option and Employee Stock Purchase Plans and
a review of the compensation policies applicable to executive
officers. The Compensation Committee acted by unanimous written
consent fifteen times in fiscal 1993. See "Certain Relationships
and Related Transactions" for a discussion of certain
relationships between the Corporation and certain businesses
affiliated with Mr. Nelson and Ms. Williams.
EXECUTIVE COMPENSATION
Summary Compensation Table
Long-Term
Compensation
Awards
Securities
Underlying
Name and Annual Compensation Options (C)
Principal (A) (A) Granted All Other
Position Year Salary Bonus (#)(B) Compensation
- -------- ----- ------ ----- -------- ------------
Charles N. Mathewson
Chairman of the Board(D)
1993 $260,000 $367,500 12,700 $79,749
1992 260,000 325,000 --- 81,125
1991 259,327 260,000 400,000 49,801
John J. Russell
President/Chief Executive Officer(D)
1993 230,000 323,750 210,278 74,294
1992 210,000 265,500 --- 68,945
1991 209,231 210,000 200,000 46,323
Peter D. Dickinson
Executive Vice President,
Corporate Operations
1993 179,615 252,000 8,346 54,238
1992 169,611 212,500 --- 56,488
1991 151,892 134,975 120,000 32,490
Robert M. McMonigle
Executive Vice President,
Corporate Relations
1993 164,692 222,000 7,830 55,369
1992 156,212 200,000 10,000 60,316
1991 136,375 145,249 40,000 36,473
Raymond D. Pike
Executive Vice President,
Corporate Development
1993 147,966 206,500 17,120 46,072
1992 137,700 182,000 --- 49,208
1991 130,000 115,872 40,000 34,583
_____________________________
(A) Amounts shown include cash compensation earned and received by
executive officers. No non-cash compensation was paid as salary or as
a bonus during fiscal 1993.
(B) The Corporation has not issued stock appreciation rights or
restricted stock awards.
(C) Amounts shown represent contributions by the Corporation to the
accounts of the identified executive officers under the Corporation's
qualified profit sharing plan and payments under the Corporation's
Cash Sharing Plan. See "Qualified Profit Sharing Plan" and "Cash
Sharing Plan" for a description of these plans.
(D) Mr. Mathewson served as Chairman of the Board and Chief Executive
Officer until June 1, 1993. On June 1, 1993 Mr. Russell became
the Chief Executive Officer of the Corporation. Mr Mathewson
continues to serve as Chairman of the Board.
Options
The table below sets forth certain information
regarding options granted to the five most highly compensated
executive officers of the Corporation during fiscal 1993.
Option Grants In Last Fiscal Year
Individual Grants Potential Realizable
------------------------------------------------- Value at
Number of Assumed Annual
Securities Percent of Rates of
Underlying Total Options Exercise Stock Price
Options Granted to or Base Appreciation for
Granted Employees in Price Expiration Option Term
(#) (A) Fiscal Year ($/SH) Date 5%(A) 10%(A)
----------- ------------ ------- ---------- --------- ---------
Charles N. Mathewson
12,700 1.51% $25.44 12/31/02 $ 203,525 $ 513,659
John J. Russell
10,278 1.22% 25.44 12/31/02 164,711 415,700
200,000 23.78% 25.69 02/03/03 3,236,625 8,168,625
Peter D. Dickinson
8,346 0.99% 25.44 12/31/02 133,750 337,559
Robert M. McMonigle
7,830 0.93% 25.44 12/31/02 125,481 316,689
Raymond D. Pike
7,120 0.85% 25.44 12/31/02 114,102 287,973
10,000 1.19% 34.87 07/20/03 219,712 554,512
___________________________
(A)Such options have a ten year term and are exercisable
commencing 12 months after the grant date, with 20% of the shares
covered thereby becoming exercisable at that time and with an
additional 20% of the option shares becoming exercisable on each
successive anniversary date, with full vesting occurring on the
fifth anniversary date. The 200,000 share option granted to Mr.
Russell has a ten year term and is exercisable commencing 12 months
after the grant date, with 50% of the shares covered thereby becoming
exercisable at that time and with the remaining 50% becoming exercisable
12 months therafter.
Option Exercises And Year End Value Table
Aggregated Option Exercises In Last Fiscal Year
And Fiscal Year End Option Values
Options Exercised Number of Securities
in Fiscal 1993 Underlying Unexercised Value of Unexercised
Shares Value Options at In-The-Money Options
Acquired on Realized September 30, 1993(#) at September30,1993($)(A)
Exercise(#) ($) (A) Exercisable Unexercisable Exercisable Unexercisable
- ----------- -------- ----------- ------------- ----------- -------------
Charles N. Mathewson
1,104,438 $21,603,108 400,000 72,057 $13,558,799 $2,475,314
John J. Russell
375,510 8,247,355 122,000 252,496 4,135,437 4,616,041
Peter D. Dickinson
250,332 5,709,793 48,001 186,333 1,622,381 6,299,897
Robert M. McMonigle
64,812 1,871,993 18,595 146,339 688,813 5,101,874
Raymond D. Pike
69,208 1,655,065 --- 95,063 --- 2,936,038
________________________
(A) Market value of the underlying securities at exercise date
or year-end, as the case may be, minus the exercise price of
"in-the-money" options.
Qualified Profit Sharing Plan
In 1980, the Corporation established a qualified profit
sharing plan (the "Profit Sharing Plan") designed as a defined
contribution profit sharing plan covering all non-union employees
of the Corporation, including officers, who are 18 years of age
or older and have completed 1,000 hours of employment with the
Corporation. The Profit Sharing Plan is funded by Corporation
contributions, and amounts so contributed vest with respect to
each employee over a seven-year period after such employee begins
participation in the Profit Sharing Plan. The Profit Sharing
Plan provides for payment of vested benefits on a lump sum basis.
The amount of the Corporation's contributions to the Profit
Sharing Plan is determined, in its sole discretion, by the Board
of Directors of the Corporation. Under the Profit Sharing Plan,
5% of the annual pre-tax profits of the Corporation (as adjusted
to exclude the effect of certain consolidated subsidiaries) are
contributed to the Profit Sharing Plan. Beginning with fiscal
year 1988, the contribution has been 5% of adjusted pre-tax
profit of the Corporation in excess of a set minimum ($44,000,000
in fiscal 1993). The maximum annual contribution permitted under
the Profit Sharing Plan is an amount equal to the lesser of 25%
of the total compensation of participating employees in any
calendar year or the current ERISA limitation of $30,000 per
employee for 1993. The Corporation's contribution in each year
is allocated to employees' accounts based on the ratio of each
participating employee's annual compensation to the annual
compensation of all participating employees. Each participant
directs the investment of their individual account from six
investment alternatives, and the vested portion of a
participant's account is distributed upon normal retirement,
disability or death. In case of termination of employment for
reasons other than retirement, disability or death, the unvested
portion of a participant's account is forfeited, and the amount
so forfeited is allocated to the accounts of the remaining
participants.
Cash Sharing Plan
A Cash Sharing Plan was adopted by the Corporation in 1986, in
which 5% of annual pre-tax operating profits of the Corporation
in excess of a pre-determined threshold are distributed to all
employees, in proportion to their salary or wage compensation, on
a semi-annual basis.
Employment Contracts
Pursuant to an employment agreement dated July 19, 1991
between the Corporation and Mr. Mathewson, the Corporation has
agreed to pay Mr. Mathewson a base salary of $260,000 per year
and an annual bonus measured by earnings increases of the Corporation
and its subsidiaries. The agreement also provides that the
Corporation will pay Mr. Mathewson severance pay, if he is discharged
without cause, in an amount equal to three months of salary for each
full year of employment since February 1986, with a minimum payment of
one year of salary and a maximum payment of two years of salary.
Pursuant to an employment agreement dated July 19, 1991
between the Corporation and Mr. Russell, the Corporation has
agreed to pay Mr. Russell a base salary of $210,000 per year and
an annual bonus and severance pay based on the same formulas
applicable for Mr. Mathewson. Mr. Russell's agreement also
provided for the grant of stock options to Mr. Russell in fiscal
1991 covering 50,000 shares at an exercise price equal to the
fair market value of such shares on the date of grant. Mr. Russell
was promoted to the position of Chief Executive Officer on June 1,
1993 and at that time his base salary was increased to $275,000.
Mr. Russell also received a grant of 200,000 stock options at the
time of his promotion.
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE
PERFORMANCE GRAPH THAT APPEARS IMMEDIATELY AFTER SUCH REPORT
SHALL NOT BE DEEMED TO BE SOLICITING MATERIAL OR TO BE FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT
OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR INCORPORATED BY
REFERENCE IN ANY DOCUMENT SO FILED.
REPORT OF THE COMPENSATION COMMITTEE
To: The Board of Directors
The Compensation Committee (Committee), a committee composed
entirely of directors who have never served as officers of the
Corporation, administers the compensation of the Corporation's
executive officers. The Committee also administers incentive
plans of the Corporation, including the Corporation's Management
Bonus Program and the key employee provisions of the International Game
Technology 1993 Stock Option Plan and the Stock Option Plan for
Key Employees of International Game Technology (the "Stock Option
Plans").
Compensation Philosophy: At the direction of the Board of
Directors and pursuant to the charter of the Committee, the
Committee endeavors to insure that the compensation programs for
executive officers of the Corporation and its subsidiaries are
effective in attracting and retaining key executives responsible
for the success of the Corporation, and are administered in an
appropriate fashion in the long-term interests of the Corporation
and its stockholders. The Committee believes that an important
factor in determining the total compensation of the Corporation's
executive officers should be the Corporation's overall financial
performance, and has instituted a policy that a significant
portion of total compensation should consist of variable,
performance-based components, such as management bonuses and
stock option awards, which can increase or decrease to reflect
changes in corporate and individual performance. For example,
under the 1993 Management Bonus Program of the Corporation, the
annual bonus compensation received by executive officers is
determined in significant part by the increase in the
Corporation's income from operations compared to the previous
year. Income from operations for fiscal 1993 was 149% of the
prior year. For the executive officers named in the Summary
Compensation Table, cash bonuses comprised on average
approximately 58.3% of total 1993 salary and bonus compensation.
The Committee also takes into account various qualitative
indicators of corporate and individual performance in determining
the level and composition of the base salary and incentive
compensation awards for the chief executive officer and other
executive officers. For example, the Committee recognizes
qualitative factors such as the successful supervision of
significant corporate projects and demonstrated leadership
ability in determining compensation levels.
The incentive compensation awards received by the chief
executive officer and other executive officers during fiscal 1993
under the Management Bonus Program included cash bonuses and
stock option awards under the Corporation's Stock Option Plans.
Stock options awarded under the Management Bonus Program typically
vest over five years, and are priced at the fair market value of
the common stock on the day of grant. The bonuses for fiscal 1993
for executive officers named in the Summary Compensation Table
(other than Messrs. Mathewson and Russell) were established by
Mr. Russell based on his review of each officer's individual
performance and the overall financial performance of the
Corporation, and such bonuses were approved by the Committee.
Committee actions related to the compensation of the chief
executive officer of the Corporation are submitted to the full
Board of Directors for ratification. The Committee may also
approve additional stock option awards for the chief executive
officer and other executive officers in instances where the
Committee determines that such an award is merited.
In approving incentive compensation awards, the Committee
considers and evaluates the quantitative and qualitative factors
outlined above relating to the Corporation's performance and each
executive officer's relative contribution to that performance, as
well as the total compensation of the Corporation's chief
executive officer and other executive officers in light of
information regarding the compensation practices and corporate
financial performances of peer group companies.
To the extent readily determinable, and as one of the
factors in its consideration of compensation matters, the
Compensation Committee also considers the anticipated tax
treatment to the Corporation and to the executives of various
payments and benefits. However, since some types of compensation
payments and their deductibility depend upon the timing of an
executive's exercise of stock option rights (e.g., the spread on
exercise of non-qualified options), and because interpretations
and changes in the tax laws and other factors beyond the
Committee's control may also effect the deductibility of
compensation, the Committee will not necessarily limit executive
compensation to that which is deductible under applicable
provisions of the Internal Revenue Code. The Committee will
consider various alternatives to preserving the deductibility of
compensation payments and benefits to the extent reasonably
practicable and to the extent consistent with its other
compensation objectives.
Chief Executive Officer Compensation: During fiscal year
1993, Mr. Mathewson, who served as the Chariman of the Board and
Chief Executive Officer of the Corporation until June 1, 1993,
received a base salary of $260,000.00 per annum as established
pursuant to an employment contract dated July 19, 1991. Mr.
Mathewson's base salary has not been modified since July, 1991
despite the Corporation's earnings improvements during fiscal years
1991, 1992 and 1993, under his leadership. Effective June 1, 1993,
Mr. John J. Russell was appointed to serve as the Corporation's Chief
Executive Officer. Prior to June 1, 1993, Mr. Russell served as
President and Chief Operating Officer of the Corporation, and in
that capacity received a base salary of $210,000.00 per annum
pursuant to an employment contract dated July 19, 1991.
In recognition of the increased responsibilties assumed by Mr.
Russell as Chief Executive Officer, Mr. Russell's base salary was
increased to $275,000.00 per annum, and Mr. Russell received a
grant of options to acquire 200,000 shares (approximately 0.16% of
the current outstanding stock) of the Corporation's Common Stock,
vesting over a two-year period. During fiscal 1993, Mr. Mathewson
and Mr. Russell each received, in accordance with their employment
agreements, a management bonus under the Corporation's 1993 Management
Bonus Program measured at 3% of base salary for each 1% of increase in
the Corporation's income from operations compared to the previous
fiscal year, up to 140% of their base salary. The Committee
believes that Mr. Mathewson's and Mr. Russell's compensation
during fiscal 1993 is appropriate considering the principals and
procedures outlined in this report.
COMPENSATION COMMITTEE
Albert J. Crosson, Chair
Warren L. Nelson
Claudine B. Williams
January 7, 1994
(The comparison of five year cumulative total return in graph
form which is shown here on the proxy statement has been filed
under form SE as of January 19, 1994.)
EXECUTIVE OFFICERS
The following table sets forth the names and ages of the
executive officers of the Corporation (each of whom serves at the
pleasure of the Board of Directors), all positions held with the
Corporation by each individual, and a description of the business
experience of each individual for at least the past five years.
Name Age Title
- ---------------------- ----- -----------------
Charles N. Mathewson 65 Chairman of the Board of Directors
John J. Russell 64 Director, President and Chief
Executive Officer
Peter D. Dickinson 46 Executive Vice President,
Corporate Operations
Raymond D. Pike 46 Executive Vice President,
Corporate Development
G. Thomas Baker 51 Executive Vice President Finance,
Chief Financial Officer and
Treasurer
Robert M. McMonigle 49 Executive Vice President,
Corporate Relations
Brian McKay 48 General Counsel, Corporate
Secretary
For a description of Messrs. Mathewson's and Russell's
business experience, see "Election of Directors."
Mr. Dickinson joined the Corporation as its Vice President-
Engineering in November 1981 and in February 1988 was named
Senior Vice President. He was named President and Chief
Operating Officer of IGT - North America, a wholly-owned
subsidiary of International Game Technology, in October 1991, and
was named Executive Vice President, Corporate Operations in
September 1993. Mr. Dickinson received his Bachelor of Science
and Masters of Engineering Degrees in Electrical Engineering from
Cornell University in 1969 and 1970, respectively. Prior to
joining the Corporation, he had 13 years of electronics
experience with various divisions of the Hewlett-Packard Company.
Mr. Dickinson holds numerous patents in the computer and gaming
fields.
Mr. Pike joined the Corporation as its General Counsel in
December 1980, has served as its Chief Counsel and Secretary from
June 1981 until January 1994, was named Vice President in 1983,
Senior Vice President in February 1988, and Executive Vice
President, Corporate Development in September 1993. He received
his law degree from Boalt Hall, the University of California,
Berkeley, in 1973. From September 1974 to December 1977, Mr.
Pike was an Assistant United States Attorney for the District of
Nevada. He then spent one year in the private practice of law as
an associate with Lionel Sawyer & Collins before becoming the
Deputy Attorney General for the State of Nevada/Chief of the
Gaming Division. He held the latter position from December 1978
until joining the Corporation in December 1980.
Mr. Baker joined the Corporation in September 1988 as its
Vice President of Finance and Administration and Chief Financial
Officer. In October 1991, Mr. Baker was named Vice President of
Finance, Chief Financial Officer and Treasurer of the
Corporation. He was named Executive Vice President, Corporate
Finance, Chief Financial Officer and Treasurer in September 1993.
Prior to his current position, from August 1985 to September
1988, he was Chief Financial Officer for Evans Rents, an upscale
furniture rental company in Los Angeles, California. From April
1979 until August 1985, Mr. Baker was the Chief Financial Officer
at Aurora Productions, an independent motion picture production
company in Los Angeles, California.
Mr. McMonigle joined the Corporation as a Sales Manager for
IGT - North America in March of 1986. From April 1987 until
October 1989, Mr. McMonigle was the Director of Sales for IGT and
from October 1989 until September 1991 he was Vice President-
Sales of the Corporation. From September 1991 to September 1993
he has served as Executive Vice President of Sales for the
Corporation. In September 1993, Mr. McMonigle was promoted to
Executive Vice President, Corporate Relations. Prior to joining
the Corporation, from September 1984 through March 1986, Mr.
McMonigle served as Regional Sales Manager at American Protective
Services located in Oakland, California. From March 1979 through
July 1984, Mr. McMonigle was employed by ARA Services, Inc. as
Regional Vice President in Los Angeles, and prior to that was
employed from 1975 to 1979 as Director of Circulation for
Straight Arrow Publishing in New York, publishers of "Rolling
Stone" and "Outside" magazines. Prior to that, Mr. McMonigle was
with Readers Digest in Pleasantville, New York. Mr. McMonigle is
a graduate of Southeast Missouri State University with a
Bachelor's Degree in Business Administration.
Mr. McKay joined the Corporation in January 1994 as General
Counsel and Corporate Secretary. From 1982 to 1990, Mr. McKay
served two terms as Nevada's Attorney General, during which time
he also served as Chairman of the Conference of Western Attorneys
General. From 1990 to 1993, Mr. McKay was a partner in the
administrative law and litigation departments of the law firm of
Lionel Sawyer & Collins in Reno, Nevada. Mr. McKay serves as
Chairman of the Nevada Republican Party, and is a member of the
Board of Trustees of the International Association of Gaming
Attorneys. He also serves on the Board of Directors of the State
and Local Legal Centers and serves as a Board Member Emeritus of
Westrends. Mr. McKay was a Deputy Attorney General for the State
of Nevada from 1975 to 1979. Mr. McKay received his law degree
in 1974 from Albany Law School of Union University.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934
The following reports filed under Section 16(a) of the
Securities Exchange Act of 1934, during or with respect to the
fiscal year ended September 30, 1993, were not filed on a timely
basis: a Form 3 reporting the receipt on November 5, 1992, of
618 shares (adjusted for March 17, 1993 two-for-one split) into
the Sarah J. Shackelton Testamentary Trust, of which Scott
Shackelton is a co-trustee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Nelson, a member of the Corporation's Board of
Directors, is an officer of and has an equity interest in a
Nevada gaming business from which the Corporation recognized
revenues of $889,000 for the fiscal year ended September 30,
1993. The Corporation had contracts and accounts receivable
balances from this customer of $836,000 at September 30, 1993.
During the fiscal year ended September 30, 1993, the largest
amount of the Corporation's contract receivable balance from such
customer was $826,000. Mr. Nelson is also a director and officer
of the parent corporation to four additional gaming businesses in
Nevada. The Corporation recognized revenues from these
businesses of $3,727,000 for the fiscal year ended September 30,
1993. The Corporation had contracts and accounts receivable
balances from these businesses of $804,000 as of September 30,
1993.
Additionally, Ms. Williams, a member of the Corporation's
Board of Directors, is the Chairman of the Board of a Nevada
gaming business from which the Corporation recognized revenues of
$2,064,000 for the fiscal year ended September 30, 1993. The
Corporation had contracts and accounts receivable balances from
this business of $15,000 at September 30, 1993.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Corporation has selected Deloitte and Touche as its
independent accountants for the year ended September 30, 1994.
A representative of Deloitte and Touche will be present at
the Annual Meeting of Stockholders and will have the opportunity
to make an appropriate statement and will respond to appropriate
questions.
GENERAL
The Corporation's Annual Report to Stockholders, containing
audited financial statements, accompanies this Proxy Statement.
As of the date of this Proxy Statement, the Board of Directors
knows of no business which will be presented for consideration at
the meeting other than the matters stated in the notice and
described in the Proxy Statement. If, however, any matter
incident to the conduct of the meeting or other business shall
properly come before the meeting, it is intended that the proxies
will be voted in respect of any such matters or other business in
accordance with the best judgment of the persons acting under the
proxies, and discretionary authority to do so is included in the
proxy.
BY ORDER OF THE BOARD OF DIRECTORS
Brian McKay
Secretary
Reno, Nevada
January 7, 1994
PROXY
INTERNATIONAL GAME TECHNOLOGY
PROXY
ANNUAL MEETING OF STOCKHOLDERS, FEBRUARY 22, 1994
The undersigned hereby appoints Charles N. Mathewson and
Brian McKay, and each of them, the proxies and attorneys-in-fact
of the undersigned, with full power of substitution in each, for
in the name of the undersigned to attend the Annual Meeting of Stockholders
of International Game Technology to be held February 22, 1994 at 1:30 p.m.,
Pacific Standard Time, at 1085 Palms Airport Drive, Las Vegas, Nevada, and any
and all adjournments thereof, and to vote thereat the shares of Common Stock
which the undersigned would be entitled to vote if then follows:
Proposals of Management - the Board of Directors recommends a vote
FOR Item (1).
(1) ELECTION OF DIRECTORS
FOR all nomiees listed below
(except as marked to the contrary below)
WITHHOLD AUTHORITY to vote for all nomiees listed below
(INSTRUCTION: To withhold authority to vote for any individual
nominee strike a line through the nominee name in the list below.)
Albert J. Crosson Wilbur K. Keating Charles N. Mathewson
Warren L. Nelson John J. Russell Claudine B. Williams
Frederick B. Rentschler
(2) In their discretion, upon such other matters as may properly come
before the meeting.
PLEASE SIGN AND RETURN PROMPTLY IN THE SELF-ADDRESSED ENVELOPE
Dated ________________________, 1994
Signature of stockholder should
correspond exactly with the name shown
below. Corporate officers, attorneys,
trustees, executors, administrators,
guardians, and others should designate
their full titles. Joint owners should
each sign.
________________________________________
Signature
________________________________________
Signature
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE VOTED AS
SPECIFIED. IF NO SPECIFICATION IS MADE, IT WILL BE VOTED FOR THE ELECTION OF
THE PROPOSED DIRECTORS.
