SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the Appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
INTERNATIONAL GAME TECHNOLOGY
(Name of Resistrant as Specified In Its Charter)
Scott Shackelton, Corporate Controller
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exhange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:1
(4) Proposed maximum aggregate value of transaction:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the form or schedule and the
date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
INTERNATIONAL GAME TECHNOLOGY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 21, 1995
The Annual Meeting of the Stockholders of International Game
Technology will be held at the Mirage Hotel and Casino, Ballroom
G on 3400 South Las Vegas Boulevard, Las Vegas, Nevada, on
Tuesday, February 21, 1995, at 1:30 p.m., local time, for the
purpose of considering and voting on:
(1) Election of eight 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 30, 1994 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 9, 1995
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.
<PAGE>
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 21, 1995, and at any and all adjournments thereof.
Solicitation of proxies by mail is expected to commence on
or about January 20, 1995 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 89502.
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 132,426,723 shares were issued and outstanding at
the close of business on December 30, 1994. 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 3,910,735 shares
as of the record date (2.95% 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, 1995 to be considered for inclusion in the
Corporation's proxy statement relating to that meeting.
<PAGE>
PRINCIPAL HOLDERS OF COMMON STOCK
The following table sets forth the information as of December
30, 1994 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.
<TABLE>
<CAPTION>
Names and Addresses of Shares Beneficially Owned
Beneficial Owners Number1 Percent2
<S> <C> <C>
Wilbur K. Keating
8 Comstock Circle
Carson City, Nevada 89701 . . . . . . . 9,384 -
Claudine B. Williams
3475 Las Vegas Boulevard South
Las Vegas, Nevada 89109 . . . . . . . . 139,606 0.11
Albert J. Crosson
1645 West Valencia Drive
Fullerton, California 92633 . . . . . . 257,999 0.19
Charles N. Mathewson
5270 Neil Road
Reno, Nevada 89502. . . . . . . . . . . 2,653,194 2.00
John J. Russell
5270 Neil Road
Reno, Nevada 89502. . . . . . . . . . . 427,469 0.32
Warren L. Nelson
Post Office Box 3196
Reno, Nevada 89505. . . . . . . . . . . 438,047 0.33
Frederick B. Rentschler
5945 East Sage Drive
Scottsdale, Arizona 85253 . . . . . . . 7,999 -
Rockwell A. Schnabel
355 So. Grand Ave., Suite 4295
Los Angeles, CA 90071. . . . . . . . . . 5,500 -
All officers and directors
as group (19 persons). . . . . . . . . . 4,700,600 3.53
_____________________
<F1>
1 Includes shares which may be purchased upon exercise of options which are
exercisable within 60 days of December 30, 1994.
<F2>
2 Any securities not outstanding which are subject to options or conversion
privileges which are exercisable within 60 days of December 30,
1994 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.
</TABLE>
<PAGE>
ELECTION OF DIRECTORS
Eight 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 eight 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 Since
Charles N. Mathewson 66 1985
Mr. Mathewson was appointed to 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, and Chief Executive Officer in June 1993.
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, and a member of the Board of Directors of Fel Cor
Suite Hotels. He is also Chairman of the American Gaming Association.
Warren L. Nelson 82 1983
Mr. Nelson joined the Corporation 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 63 1987
Mr. Keating was elected a Director 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 73 1988
Ms. Williams was elected a 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, General Manager and as 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 Casino). 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 64 1988
Mr. Crosson was elected to the 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.
John J. Russell 65 1990
Mr. Russell was appointed to the 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 55 1992
Mr. Rentschler was appointed to 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 the Salk
Institute, La Jolla, California and the Woods Hole Oceanographic
Institute of Cape Cod.
Rockwell A. Schnabel 57 1994
Mr. Schnabel was elected a Director in September 1994. Mr.
Schnabel is founder and co-chairman of Trident Capital, Inc.,
a private equity investment firm. He also serves as president of the
Board of Commissioners for the Los Angeles Fire and Police Pension
Board, which oversees investments of over $5 billion in pension
funds. He is the former Deputy Secretary of the U.S. Department
of Commerce in Washington, D.C., and also served as the
department's Acting Secretary. Mr. Schnabel previously served as
the U.S. Ambassador to Finland and as President of Bateman Eichler
Hill Richards (member N.Y.S.E.) (Kemper Securities). He is
presently serving on the boards of directors of Cypress Amax Minerals
Company and Amax Gold, Inc.
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held four meetings during fiscal 1994.
Each outside director receives a $10,000 annual fee and a fee of $600
per meeting for attendance at meetings of the Board. 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 non-employee director receives non-qualified stock options to
purchase 10,000 shares of Common Stock upon his or her initial
election to the Board of Directors. Additionally, every year
thereafter, including 1995, 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. Each non-employee director,
other than Mr. Schnabel, received non-qualified stock options to
purchase 4,000 shares of Common Stock in fiscal 1994 at an exercise
price of $28.50 per share. Mr. Schnabel was granted options to
purchase 10,000 shares of Common Stock upon his election to the Board
of Directors in September 1994 at an exercise price of $21.38 per
share.
The Board of Directors has an Executive Committee (comprised of
Ms. Williams and Messrs. Nelson and Mathewson) which did not hold any
meetings during fiscal 1994. 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 two meetings during
fiscal 1994. 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 1994, 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 with the
exception of Mr. Keating who did not attend two of the four meetings
of the Board of Directors. The Board of Directors does not have a
nominating committee.
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has a Compensation Committee. During
fiscal 1994, Ms. Williams and Messrs. Crosson and Nelson 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 oversight of executive compensation, review of the
Corporation's overall compensation programs, and administration of
certain of the Corporation's incentive compensation programs. The
Compensation Committee held two meetings in fiscal 1994 and acted by
unanimous written consent nineteen times in fiscal 1994. 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.
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION
Summary Compensation Table
Long-Term
Compensation
Awards
Securities
Name and Annual Compensation Underlying
Principal Salary Bonus Options All Other
Position Year (A) (A) Granted#(B) Compensation(C)
<S> <C> <C> <C> <C> <C>
John J. Russell 1994 $287,706 $283,884 6,084 $71,706
President/Chief 1993 230,000 323,750 210,278 72,294
Executive 1992 210,000 265,500 - 68,945
Officer
Robert M. 1994 175,030 175,000 4,187 56,365
McMonigle 1993 164,692 222,000 7,830 55,369
Executive Vice 1992 156,212 200,000 10,000 60,316
President,
Corporate Relations
Robert Bittman 1994 160,144 175,000 28,449 50,397
Vice President 1993 132,519 180,500 30,878 45,871
Corporate 1992 124,269 150,000 - 41,054
Marketing
& President IGT-
North America
Raymond D. Pike 1994 158,279 160,000 13,798 44,488
Executive Vice 1993 147,966 206,500 17,120 46,072
President, 1992 137,700 182,000 - 49,208
Corporate Development
G. Thomas Baker 1994 151,906 156,000 13,680 43,114
Executive Vice 1993 142,577 202,500 16,454 42,437
President, 1992 135,274 165,000 - 35,478
Finance, Chief
Financial Officer
& Treasurer
_____________________________
<F1>
(A) Amounts shown include cash compensation earned and received by
executive officers. No non-cash compensation was paid as salary or as
a bonus during fiscal 1993.
<F2>
(B) The Corporation has not issued stock appreciation rights or restricted
stock awards.
<F3>
(C) Amounts shown represent contributions by the Corporation to the
accounts of the identified executive officers under the Corporation's
qualified profit sharing plan and payments under the Corporation's
Cash Sharing Plan. See "Qualified Profit Sharing Plan" and "Cash
Sharing Plan" for a description of these plans.
</TABLE>
<PAGE>
Options
The table below sets forth certain information
regarding options granted to the five most highly compensated
executive officers of the Corporation during fiscal 1994.
<TABLE>
<CAPTION>
Option Grants In Last Fiscal Year
Individual Grants
Number of Percent of Potential Realizable Value
Securities Total at Assumed Annual Rates
Underlying Options Exercise of Stock Price
Options Granted to or Base Appreciation for
Granted Employees in Price Expiration Option Term
Name (#) (A) Fiscal Year ($/SH) Date 5%(A) 10%(A)
<S> <C> <C> <C> <C> <C> <C>
John J. Russell 6,084 0.68% $28.38 01/03/04 $105,568 $275,133
Robert N.
McMonigle 4,187 0.47% 28.38 01/03/04 74,717 189,346
Robert A. Bittman 3,449 0.39% 28.38 01/03/04 61,547 155,972
25,000 2.80% 22.25 05/31/04 349,823 886,519
Raymond D. Pike 3,798 0.43% 28.38 01/03/04 67,775 171,755
10,000 1.12% 22.25 05/31/04 139,929 354,608
G. Thomas Baker 3,680 0.41% 28.38 01/03/04 65,669 166,419
10,000 1.12% 22.25 05/31/04 139,929 354,608
<F1>
(A) Such options have a ten year term and are generally
exercisable commencing 12 months after the grant date, with
20% of the shares covered thereby becoming exercisable at
that time and with an additional 20% of the option shares
becoming exercisable on each successive anniversary date,
with full vesting occurring on the fifth anniversary date.
</TABLE>
<PAGE>
Option Exercises and Year End Value Table
<TABLE>
<CAPTION>
Aggregated Option Exercises In Last Fiscal Year
and Fiscal Year-End Option Values
Number of Value of
Options Exercised Securities Unexercised
in Fiscal 1994 Underlying In-The-Money
Shares Unexercised Options
Acquired Value Options at
on Realized at 09/30/94 09/30/94(A)
Name Exercise ($)(A) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
John J.
Russell - - 266,274 114,306 $2,604,393 $ -
Robert N.
McMonigle 12,664 $411,957 70,006 86,451 1,183,113 1,227,701
Robert A.
Bittman - - 51,818 107,551 798,778 892,901
Raymond D.
Pike 47,370 1,136,335 2,000 59,494 - 468,701
G. Thomas
Baker 9,000 216,197 106,787 58,843 1,808,833 468,701
_____________________
<F1>
(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.
</TABLE>
<PAGE>
Employee Profit Sharing Plan
In 1980, the Company adopted a qualified profit sharing retirement
plan for its employees working in the United States. Company contributions
to the plan are at the sole discretion of the Company's Board of Directors.
Benefits vest over a seven-year period of employment. Under a
discretionary program effective January 1, 1986, and reviewable by the
Board annually, contributions are based on 5% of annual consolidated pre-
tax operating profits (excluding IGT-Australia) above a set minimum.
Effective for fiscal 1994, the minimum pre-tax operating profit was
$78,700,000 before any allocation to the Plan.
Effective January 1, 1993, the Company offered a 401(k) retirement
plan contribution matching program. Under the plan agreement, the Company
matches 100% of employee contributions up to $500 and an additional 50% of
the next $500 contributed by the employee. This allows for maximum annual
Company contributions of $750 to each employee's 401(k) account. The
employees will be 100% vested in Company contributions at the date the
contribution is made.
A cash sharing plan was adopted effective January 1, 1986, in which 5%
of annual consolidated pre-tax operating profits (excluding IGT-Australia)
in excess of $78,700,000 for 1994 was distributed to United States and
European employees on a semiannual basis. Contributions to the plan are
reviewed annually by the Board.
Employment Contracts
Pursuant to an employment agreement dated March 23, 1994 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. 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. In 1994, Mr. Mathewson elected to discontinue
receiving his base salary.
Pursuant to an employment agreement dated May 24, 1994 between the
Corporation and Mr. Russell, the Corporation has agreed to pay Mr. Russell
a base salary of $300,000 per year, an annual bonus and severance pay based
on the same formula applicable for Mr. Mathewson.
<PAGE>
David P. Hanlon was appointed President and Chief Operating Officer of
the Corporation effective January 1, 1995. The Corporation expects to
enter into an employment agreement with Mr. Hanlon which will provide for a
base salary of $450,000 per year and a management bonus arrangement which
the Corporation anticipates will result in a cash bonus award of
approximately $550,000 during his first year of employment. Mr. Hanlon has
also received an award of stock options to purchase 500,000 shares of
Common Stock of the Corporation at an exercise price equal to the fair
market value on date of grant. The options, subject to certain provisions
regarding early acceleration will vest at the rate of 20% per year over
five years.
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.
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, consisting
entirely of non-employee directors, is responsible for oversight of
executive compensation, review of the Corporation's overall compensation
programs, and administration of certain of the Corporation's incentive
compensation programs.
Compensation Philosophy: Generally, the Corporation's compensation
programs are designed to attract, retain, motivate and appropriately reward
individuals who are responsible for the Company's short and long-term
profitability, growth and return to shareholders. The overall compensation
philosophy followed by the Committee is to pay competitively while
emphasizing performance based components of the Corporation's compensation
programs. In furtherance of this philosophy, the Corporation has
instituted a policy that, when appropriate, a significant portion of total
annual compensation of its officers be based upon quantifiable financial
performance criteria. For example, the cash bonuses received by the
executive officers named in the Summary Compensation Table under the
Corporation's Management Bonus Program comprised on average approximately
50.5% of their total salary and bonus compensation for fiscal 1994. 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 compensation awards for the executive
officers of the Corporation.
Executive Compensation: The Corporation's Management Bonus Program is
a cash-based incentive program, and for fiscal year 1994 was based on the
level of the Corporation's income from operations in excess of a specified
amount. Income from operations for fiscal 1994 increased 31.7% over the
prior year. Individual cash bonus awards for executive officers other than
the Chief Executive Officer were determined by the Chief Executive Officer
based on each officers' individual performance and on the specified
financial performance criteria described above.
Executive officers also participate in benefit plans available to
employees generally, including a qualified Profit Sharing/401(k) Plan, and
an employee cash-based incentive bonus plan (Cash-Sharing Plan) which
provides for bi-annual cash bonuses based on corporate profitability.
Long-term incentive for key personnel of the Corporation, including
the executive officers, is realized through stock option awards under the
Stock Option Plan for Key Employees of International Game Technology and
the International Game Technology 1993 Stock Option Plan (the "Stock Option
Plans"), both previously approved by shareholders of the Corporation.
Stock options are priced at the fair market value of the common stock of
the Corporation on the date of grant, and typically vest at the rate of
twenty percent (20%) per year over five (5) years with exercisability
dependent on continued employment. During fiscal year 1994, all executive
officers received a stock option award under the Stock Option Plans as part
of their total annual compensation. The Committee also periodically
approves additional stock option awards for eligible individuals, including
executive officers, based on individual current performance, assumption of
significant responsibilities, anticipated future contribution, and/or
ability to impact overall corporate and/or business unit financial results.
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, specifically in light of
Section 162(m) of the Internal Revenue Code. For the near term, executive
compensation paid to the Corporation's executive officers is expected to
remain tax deductible under Section 162(m). However, because
interpretations and changes in the tax laws and other factors beyond the
Committee's control may effect the deductibility of compensation, the
Committee will not necessarily limit executive compensation to that which
is deductible. The Committee will continuously 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 Compensation: During fiscal year 1994, Mr. Russell,
President and Chief Executive Officer of the Corporation, received a base
salary of $265,000 per annum through June 30, 1994 pursuant to an
employment contract dated June 1, 1993. Effective July 1, 1994, Mr.
Russell's base salary was increased to $300,000 per annum by amendment of
his employment agreement. On January 3, 1994, Mr. Russell received an
award of a stock option to acquire 6,084 shares of the Corporation' common
stock vesting over a five year period. For fiscal 1994, the Committee
approved a cash bonus award of $283,884 to Mr. Russell under the
Corporation's 1994 Management Bonus Program pursuant to the same policies
and procedures used to determine cash bonuses for all executive officers
during fiscal year 1994.
<PAGE>
The Committee believes that the level and composition of Mr. Russell's
compensation during fiscal 1994 are appropriate, and consistent with the
compensation philosophy of the Committee as set forth in this report.
COMPENSATION COMMITTEE
Albert J. Crosson, Chair
Warren L. Nelson
Claudine B. Williams
<PAGE>
<TABLE>
<CAPTION>
Comparison of Five Year Cumulative Total Return Among International Game
Technology, Peer Group and S&P 500*
9/89 9/90 9/91 9/92 9/93 9/94
<S> <C> <C> <C> <C> <C> <C>
IGT 100 91 325 1043 2045 1063
Peer Group** 100 33 151 169 228 155
S&P 500 100 86 119 132 149 149
<F1>
* $100 invested on 9/30/89 in the Corporation's stock and in S&P 500 and
Gaming Peer Group. Total return includes reinvestment of dividends (if
applicable). Returns for the Corporation are not necessarily indicative of
future performance. Dates are for fiscal years ending on September 30 in
each of the years indicated.
<F2>
**Gaming Peer Group includes: WMS Industries, Inc. from 1989 through 1994,
Bally Gaming International Inc. from 1991 (in 1991 Bally Gaming
International Inc., became a publicly traded company) through 1994, Video
Lottery Technologies, Inc. from 1990 (in 1990, Video Lottery Technologies,
Inc. became publicly traded) through 1994. Each Peer Group company is
engaged in the manufacture and sale of gaming products.
</TABLE>
<PAGE>
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 . . . . 66 Chairman of the Board of Directors
John J. Russell. . . . . . . 65 Director and Chief Executive
Officer
David P. Hanlon. . . . . . . 50 President and Chief Operating
Officer
Robert A. Bittman. . . . . . 40 President IGT-North America and
Vice President Corporate Marketing
James J. Krejci . . . .. . . 52 President, IGT International
G. Thomas Baker. . . . . . . 52 Executive Vice President Finance,
Chief Financial Officer and
Treasurer
Robert M. McMonigle. . . . . 50 Executive Vice President, Corporate
Relations
Raymond D. Pike. . . . . . . 47 Executive Vice President,
Corporate Development
Robert Z. Watts . . . . . . 53 Senior Vice President, Corporate
Research and Development
Anthony Ciorciari. . . . . . 47 Vice President, Corporate
Operations
Brian McKay. . . . . . . . . 49 Vice President, General Counsel and
Corporate Secretary
Donald C. Miller, Sr . . . . 55 Vice President, Information
Technology and Chief Information
Officer
For a description of Messrs. Mathewson's and Russell's business
experience, see "Election of Directors."
<PAGE>
Mr. Hanlon joined the Company effective January 1, 1995 as President
and Chief Operating Officer. Mr. Hanlon has more than 16 years of
experience in the gaming and hospitality industry including executive
positions with Caesars from 1978 to 1984; Harrah's from 1984 to 1988; and
Resorts International, Inc. where he served as President and Chief
Executive Officer from 1988 to 1993. He spent the past year as a gaming
consultant and casino project developer operating both nationally and
internationally. Mr. Hanlon holds degrees from Cornell University, and the
University of Pennsylvania (Wharton) and also completed the Harvard
Advanced Management Program.
Mr. Bittman joined the Corporation in October 1985 as a Marketing
Research Analyst. In November 1985, Mr. Bittman was named Director of
Marketing. He was named Vice President of Marketing in 1988. In August of
1993, Mr. Bittman was promoted to President of IGT-North America, a
division of IGT. In addition to his role as President of IGT-North
America, Mr. Bittman was named Vice President, Corporate Marketing in 1994.
Prior to joining the Corporation, Mr. Bittman worked five years in all
phases of slot management at Caesars Tahoe, including two years as Director
of Slot Operations.
Mr. Krejci joined the Corporation in May 1994 as President, IGT-
International, a division of IGT. Prior to joining IGT, Mr. Krejci was
employed by Jones International, Ltd. concurrently holding the following
positions: Group Vice President, Jones International, Ltd.; Vice President
and Director, Jones Intercable, Inc.; President, Jones Futurex, Inc.;
President, Jones Lightwave, Ltd.; Chief Executive Officer, Jones
Information Management, Inc.; and President, Jones Satellite Programming,
Inc. and held these positions from 1985 to 1994. At Jones International,
Ltd., Mr. Krejci also held the positions of President Sky Merchant from
1986 to 1988 and President of Mind Extension University, Ltd., and Galactic
Radio, Ltd., from 1988 to 1991, at Jones International, Ltd. Jones
International Ltd's. primary businesses include telecommunications, cable
television and cable television programming. Prior to Jones International,
Mr. Krejci held the position of President, B-D Labware, a Division of
Becton-Dickinson, Inc. from 1979 to 1985. Mr. Krejci also has held
positions at General Electric and the 3M Company. Mr. Krejci graduated
from the University of Wisconsin with a Bachelor of Science degree in
Chemical Engineering and an Masters of Business Administration.
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 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 served as Executive Vice President of Sales for the Corporation.
In September 1993, Mr. McMonigle was promoted to Executive Vice President,
Corporate Relations for the Corporation. 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. Pike joined the Corporation as its General Counsel in December
1980 and 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 for the
Corporation in September 1993. He is currently a Trustee of the
International Association of Gaming Attorneys and the National Council on
Problem Gaming. 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. In December 1994, Mr. Pike was appointed a Director of
Radica Games Limited, a publicly held company.
Mr. Watts joined IGT as the Senior Vice President of Corporate
Research and Development in January, 1994. Prior to joining IGT, Mr. Watts
was the Director of Worldwide Software Manufacturing Development at IBM
Corporation. In his 24-year career at IBM, he was a technical and business
executive responsible for the worldwide introduction of hardware and
software products and services utilizing a broad range of technologies and
disciplines. Mr. Watts holds patents in the data processing field. He has
a Bachelor of Science in Electronic Engineering and Computer Science as
well as a Bachelor of Science in Business Administration from the
University of Colorado.
Mr. Ciorciari joined the Corporation as Vice President of Corporate
Operations in January 1994, with responsibility for worldwide
manufacturing, procurement, corporate facilities and services. He has more
than 26 years experience in U.S. and international manufacturing at Digital
Equipment Corporation. From June 1987 through December 1993, Mr. Ciorciari
was General Manager of the Digital manufacturing operations in Albuquerque
New Mexico and Chihuahua, Mexico. In this position, he was responsible for
approximately 1,600 people and the manufacturing and supply of the
Digital's workstation and systems product lines.
Mr. McKay joined the Corporation in January 1994 as General Counsel
and Corporate Secretary. In June 1994, he was promoted to Vice President
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. 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.
Mr. Miller joined the Corporation in December, 1993, as Manager of
Quality Assurance in Corporate Research and Development. In March, 1994,
Mr. Miller was named Vice President of Information Technology and Chief
Information Officer for the Corporation. During 1992 and 1993, Mr. Miller
was Director of Technical Operations and Consultant to the President of
Cadam, Inc. and Altium, Inc., both involved in the development of complex
industrial software products. Mr. Miller spent 29 years with IBM at
various locations in the U.S. and in France before taking early retirement
in 1992. Mr. Miller directed Research and Development for products that
included complex large systems software, private branch exchange systems,
and data base storage. His last assignment at IBM was as the General
Manager of Qronos, Inc., an acquired industrial software company in Santa
Clara, California. Mr. Miller received a Bachelor of Science from Columbia
University in 1961 and has completed Graduate and Executive programs at
Harvard, University of California, Los Angeles, and the University of
Virginia.
<PAGE>
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, 1994, were not filed on a timely basis: a Form 4 reporting
the transfer between September 1990 through March 1993 of a total of 20,000
shares (adjusted for stock splits) from Warren L. Nelson into the Warren L.
Nelson and Norma K. Nelson 1979 Living Trust of which Mr. Nelson is a
trustee; and a Form 4 reporting a charitable gift by Warren L. Nelson of
1,000 shares during August of 1994.
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 $1,486,000 for the fiscal year
ended September 30, 1994. The Corporation had contracts and accounts
receivable balances from this customer of $110,000 at September 30, 1994.
During the fiscal year ended September 30, 1994, 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 nine
additional gaming businesses in the United States. The Corporation
recognized revenues from these businesses of $30,227,000 for the fiscal
year ended September 30, 1994. The Corporation had contracts and accounts
receivable balances from these businesses of $9,550,000 as of September 30,
1994. During the fiscal year ended September 30, 1994, the largest amount
of the Corporation's contract receivable balances from these customers was
$5,186,000.
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 $5,132,000 for the fiscal year ended
September 30, 1994. The Corporation had contracts and accounts receivable
balances from this business of $1,150,000 at September 30, 1994.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Corporation has selected Deloitte & Touche LLP as its independent
accountants for the year ended September 30, 1995.
A representative of Deloitte & Touche LLP 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.
<PAGE>
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 9, 1995
<PAGE>
PROXY INTERNATIONAL GAME TECHNOLOGY PROXY
ANNUAL MEETING OF STOCKHOLDERS, FEBRUARY 21 1995
The undersigned hereby appoints Charles N. Mathewson, Raymond D. Pike
and Brian McKay, and each of them, the proxies and attorneys-in-fact
of the undersigned, with full power of substitution in each, for and in
the name of the undersigned to attend the Annual Meeting of Stockholders of
International Game Technology to be held February 21, 1995 at 1:30,
Pacific Standard Time, at the Mirage Hotel and Casino, Ballroom G on
3400 South Las Vegas Boulevard, Las Vegas, Nevada, and any
and all adjournments thereof, and to vote thereat the number of shares
of Common Stock which the undersigned would be entitled to vote if
then personally present as follows:
Proposals of Management - the Board of Directors recommends a vote
FOR Item (1).
(1) ELECTION OF DIRECTORS
FOR all nominees listed below (ex- WITHHOLD AUTHORITY to
cept as marked to the contrary below) vote for all nominees listed below
(INSTRUCTION: To withhold authority to vote for any individual nominee
strike a line through the nominee's name in the list below.)
Albert J. Crosson Warren L. Nelson Rockwell A. Schnabel
Wilbur K. Keating Frederick B. Rentschler Claudine B. Williams
Charles N. Mathewson John J. Russell
(2) In their discretion, upon such other matters as may properly
come before the meeting.
<PAGE>
PLEASE SIGN AND RETURN PROMPTLY IN THE SELF-ADDRESSED ENVELOPE
Dated ________________________, 1995
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.
