INTERNATIONAL GAME TECHNOLOGY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
February 20, 1996
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 20,
1996, at 1:30 p.m., local time, for the purpose of considering and voting
on:
(1) Election of nine 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 29, 1995 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 18, 1996
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 20, 1996, and at any and all adjournments thereof.
Solicitation of proxies by mail is expected to commence on or about
January 18, 1996 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.
<PAGE>
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
126,543,692 shares were issued and outstanding at the close of business on
December 29, 1995. 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 4,028,400 shares as of the record date (3.17% 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 the 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 18, 1996 to be
considered for inclusion in the Corporation's proxy statement relating to
that meeting.
<PAGE>
PRINCIPAL HOLDERS OF COMMON STOCK
<TABLE>
The following table sets forth the information as of December 29, 1995
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.
<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 15,345 .01
Claudine B. Williams
3475 Las Vegas Boulevard South
Las Vegas, Nevada 89109 145,567 .12
Albert J. Crosson
1645 West Valencia Drive
Fullerton, California 92633 263,960 .21
Charles N. Mathewson
5270 Neil Road
Reno, Nevada 89502 2,657,065 2.10
John J. Russell
5270 Neil Road
Reno, Nevada 89502 428,341 .34
Warren L. Nelson
Post Office Box 3196
Reno, Nevada 89505 218,368 .17
Frederick B. Rentschler
5945 East Sage Drive
Scottsdale, Arizona 85253 13,960 .01
Rockwell A. Schnabel
355 So. Grand Ave., Suite 4295
Los Angeles, California 90071 12,120 .01
All executive officers and
directors as group (15 persons) 4,028,400 3.17
J.P. Morgan & Co., Incorporated
60 Wall Street
New York, New York 102603 13,464,877 10.6
____________
<FN>
1 Includes shares which may be purchased upon exercise of options which are
exercisable within 60 days of December 29, 1995.
2 Any securities not outstanding which are subject to options or conversion
privileges which are exercisable within 60 days of December 29, 1995 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.
3 This information is based on the Schedule 13G filed by J.P. Morgan &
Co., Incorporated as of September 30, 1995. The number of shares
beneficially owned include: 8,623,219 shares with sole voting authority;
132,175 shares with shared voting authority; 13,464,877 shares with sole
dispositive authority and 215,275 shares with shared dispositive authority.
</FN>
</TABLE>
<PAGE>
ELECTION OF DIRECTORS
Nine 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 nine persons named below as nominees. All of the nominees, with the
exception of Mr. Hanlon, 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:
Charles N. Mathewson, 67, 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, 83, 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, 64, was elected a Director in May 1987. He received his
degree in Business Management from the University of Colorado in 1956.
He is currently the Administrative Officer for the National
Association of State Retirement Administrators and was previously the
Chief Executive Officer of the Nevada Public Employees Retirement
System, a position he held from 1974 through 1994.
Claudine B. Williams, 74, 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.
Ms. Williams is Past President of the University of Nevada, Las Vegas
Foundation where she currently serves on the Board of Trustees. She
received an Honorary Doctorate of Humane Letters from UNLV in May,
1994. Ms. Williams is a board member of the Nevada Gaming Foundation
for Educational Excellence and the National Judicial College. She
served as Chairman of the Board of Trustees for St. Jude's Ranch for
Children and she supports numerous local and national charitable
organizations. On September 24, 1992, Ms. Williams was the first
woman inducted into the Gaming Hall of Fame.
Albert J. Crosson, 65, 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, 66, 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 served as President from February 1988
until December 1994. He served as Chief Executive Officer of the
Corporation from June 1993 until December 31, 1995. On December 31,
1995, Mr. Russell resigned as Chief Executive Officer and became a
part time employee of the Corporation. 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, 56, 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, 58, was elected a Director in September 1994. Mr.
Schnabel is founder and 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 $6 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
NYSE) (Everen Securities). He is presently serving on the Boards of
Directors of Cypress Amax Minerals Company, Amax Gold, Inc. and CSG
Systems, Inc.
David P. Hanlon, 51, joined the Corporation effective January 1, 1995 as
President and Chief Operating Officer. In August 1995, Mr. Hanlon was
named Chief Financial Officer and in December, 1995 became Chief
Executive Officer of the Corporation. Mr. Hanlon has more than 17
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. Mr. Hanlon holds
degrees from Cornell University and the University of Pennsylvania
(Wharton) and also completed the Harvard Advanced Management Program.
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors held five meetings during fiscal 1995. 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 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, each non-employee director, including
each of the current non-employee directors, receives 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 received non-qualified
stock options to purchase 4,000 shares of Common Stock in fiscal 1995 at an
exercise price of $14.25 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 1995. 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 three meetings during fiscal 1995. 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 1995, each director attended at least 75% of the aggregate
number of meetings of the Board and respective Committees on which he or
she served while a member thereof with the following exceptions: Mr. Russell
did not attend two of the five meetings of the Board of Directors.
Ms. Williams did not attend two of the five meetings of the Board of
Directors and did not attend two of the four meetings of the Compensation
Committee. Mr. Keating did not attend one of the three meetings of the
Audit Committee. 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
1995, 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 four meetings in
fiscal 1995 and acted by unanimous written consent ten times in fiscal
1995. 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>
EXECUTIVE COMPENSATION
<TABLE>
Summary Compensation Table
<CAPTION>
Long-Term
Compensation
Awards
Name and Annual Securities Underlying
Principal Compensation Options All Other
Position Year Salary1 Bonus1 Granted2 Compensation3
<S> <C> <C> <C> <C> <C>
David P. Hanlon4 1995 $377,308 $476,154 500,000 $148,571
President, Chief
Executive Officer
and Chief
Financial Officer
John J. Russell4 1995 300,000 215,000 6,153 54,894
Chief Executive 1994 287,706 283,884 6,084 71,706
Officer 1993 230,000 323,750 210,278 72,294
Robert M. McMonigle 1995 182,000 125,000 15,746 45,150
Executive Vice 1994 175,030 175,000 4,187 56,365
President, 1993 164,692 222,000 7,830 55,369
Corporate
Relations and
South America
Robert A. Bittman5 1995 177,644 150,000 62,915 50,152
Vice President 1994 160,144 175,000 28,449 50,397
Marketing and 1993 132,519 180,500 30,878 45,871
North America
Sales
Raymond D. Pike 1995 162,750 123,500 32,888 37,103
Executive Vice 1994 158,279 160,000 13,798 44,488
President, 1993 147,966 206,500 17,120 46,072
International
Development
____________
<FN>
1 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 1995.
2 Amounts represent options granted to purchase the number of shares of
Common Stock shown. The options reflected in this table include options
repriced in fiscal 1995. See "Option Exchange Program." The Corporation
has not issued stock appreciation rights or restricted stock awards.
3 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. In addition, the amount for Mr. Hanlon
includes reimbursement of $112,700 in relocation costs incurred by Mr.
Hanlon.
4 Mr. Hanlon's appointment as President and Chief Operating Officer became
effective on January 1, 1995. In December 1995, Mr. Russell resigned as
Chief Executive Officer and Mr. Hanlon became President and Chief Executive
Officer.
5 Mr. Bittman resigned in December 1995 from all positions held with the
Corporation.
</FN>
</TABLE>
<PAGE>
Options
<TABLE>
The table below sets forth certain information regarding options
granted to the five most highly compensated executive officers of the
Corporation during fiscal 1995.
<CAPTION>
Option Grants In Last Fiscal Year
Potential
Individual Grants Realizable
Percent Value at Assumed
of Total Annual
Number of Options Exercise Rates of
Securities Granted to Base Stock Price
Underlying Employees Price Appreciation
Options in Fiscal Per Expiration for Option Term1
Name Granted1,2 Year Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
David P. Hanlon 500,000 21.83% $16.75 12/1/04 $5,266,992 $13,347,593
John J. Russell 6,153 0.27% 12.75 05/5/05 49,337 125,030
Robert N. Mcmonigle 15,746 0.69% 12.75 05/5/05 126,258 319,962
Robert A. Bittman 62,915 2.75% 12.75 05/5/05 504,478 1,278,446
Raymond D. Pike 32,888 1.44% 12.75 05/5/05 263,709 668,291
____________
<FN>
1 The 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.
2 The options presented in the table include options to purchase 12,017,
59,327 and 29,494 shares that were exchanged by Messrs. McMonigle, Bittman
and Pike, respectively for previously granted options. See "Option
Exchange Program."
</FN>
</TABLE>
<TABLE>
Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-End
Option Values
<CAPTION>
Number of Options
Exercised
Shares Number of Securities Value of Unexercised
Acquired Underlying Unexercised In-The-Money Options
on Value Options at 09/30/95 at 09/30/951
Name Exercise Realized1 Exercisable Unexercisable Exercisable Enexercisable
<S> <C> <C> <C> <C> <C> <C>
David P.
Hanlon - - - 500,000 - -
John J.
Russell - - 369,547 17,186 $1,434,339 $ 4,614
Robert N.
Mcmonigle - - 128,040 32,146 1,273,494 119,993
Robert A.
Bittman 84,042 $948,446 - 78,915 - 167,536
Raymond D.
Pike 16,000 128,350 - 48,888 - 145,016
____________
<FN>
1 Market value of the underlying securities at the exercise date or year-
end, as the case may be, less the exercise price of "in-the-money" options.
Option Exchange Program
</FN>
</TABLE>
Option Exchange Program
The Compensation Committee of the Board of Directors determined in May
1995 that the exercise price of a significant portion of the then
outstanding stock options was at such a high level that the incentives
associated with such options had been substantially diminished. Based on
this judgment, the Committee authorized the Corporation to offer to all
employees who then held outstanding stock options with an exercise price of
$12.75 or greater (other than Messrs. Mathewson, Russell and Hanlon), the
opportunity to exchange such options on a one-for-one basis for new
options. The new options granted pursuant to such exchange aggregated
1,298,803 and each has an exercise price of $12.75 per share, the fair
market price of the Corporation's Common Stock as of the date the options
were granted. Optionees who participated in the exchange received a new
ten-year option with the lower exercise price. All of the newly granted
options have a new five-year vesting schedule that began May 5, 1995. A
total of 1,298,803 options held by approximately 190 employees were
exchanged for new options in the Option Exchange Program. No other options
of the Corporation have been repriced during the ten-year period ending on
September 30, 1995.
<PAGE>
<TABLE>
The following table sets forth information concerning the exchange and
repricing of options held by executive officers during the ten-year period
ended September 30, 1995.
<CAPTION>
Ten Year Option/SAR Repricing
Length of
Market Original
Number Price of Exercies Term
Date of of Stock at Price New Remaining at
Original Options Time of Prior to Exercise Date of
Name Grant Repriced Repricing Repricing Price Repricing1
<S> <C> <C> <C> <C> <C> <C>
Robert M. 12/31/92 7,830 $12.75 $25.4375 $12.75 7 yr., 7 mo.
McMonigle 01/03/94 4,187 12.75 28.3750 12.75 8 yr., 8 mo.
Robert A. 12/31/92 5,878 12.75 25.4375 12.75 7 yr., 7 mo.
Bittman 07/20/93 25,000 12.75 34.8750 12.75 8 yr., 2 mo.
01/03/94 3,449 12.75 28.3750 12.75 8 yr., 8 mo.
05/31/94 25,000 12.75 22.2500 12.75 9 yr., 0 mo.
Raymond D. 12/31/92 5,696 12.75 25.4375 12.75 7 yr., 7 mo.
Pike 07/20/93 10,000 12.75 34.8750 12.75 8 yr., 2 mo.
01/03/94 3,798 12.75 28.3750 12.75 8 yr., 8 mo.
05/31/94 10,000 12.75 22.2500 12.75 9 yr., 0 mo.
G. Thomas 12/31/92 6,454 12.75 25.4375 12.75 7 yr., 7 mo.
Baker2 07/20/93 10,000 12.75 34.8750 12.75 8 yr., 2 mo.
01/03/94 3,680 12.75 28.3750 12.75 8 yr., 8 mo.
05/31/94 10,000 12.75 22.2500 12.75 9 yr., 0 mo.
Robert Z. 01/03/94 10,000 12.75 29.7500 12.75 8 yr., 8 mo.
Watts 05/31/94 10,000 12.75 22.2500 12.75 9 yr., 0 mo.
Tony 01/03/94 10,000 12.75 29.5000 12.75 8 yr., 8 mo.
Ciorciari 05/31/94 10,000 12.75 22.2500 12.75 9 yr., 0 mo.
04/19/95 40,000 12.75 12.8750 12.75 9 yr.,11 mo.
Brian 01/03/94 20,000 12.75 28.3750 12.75 8 yr., 8 mo.
McKay 05/31/94 20,000 12.75 22.2500 12.75 9 yr., 0 mo.
04/19/95 20,000 12.75 12.8750 12.75 9 yr.,11 mo.
____________
<FN>
1 All original options had ten-year terms and a five-year vesting
schedule. All repriced options have a new ten-year term and a new five-
year vesting schedule beginning on the grant date.
2 Mr. Baker resigned in August 1995 from all positions held with the
Corporation.
</FN>
</TABLE>
<PAGE>
Employee Profit Sharing Plan
In 1980, the Corporation adopted a qualified profit sharing retirement
plan for its employees working in the United States. Contributions
to the plan are at the sole discretion of the Corporation'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, IGT-Europe, IGT-Japan
and operations in China) above a specified amount. The Corporation's
contribution for the profit sharing plan for fiscal 1995 was $4,765,000.
Effective January 1, 1993, the Corporation adopted a 401(k) retirement
plan contribution matching program. Under the plan agreement, the
Corporation 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 contributions of $750 to each employee's 401(k) account.
The employees are 100% vested in the Corporation's 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 a specified amount is contributed. The Corporation's
contribution to the cash sharing plan for fiscal 1995 was $5,828,000. This
amount was distributed to all non IGT-Australia employees. Contributions
to the plan are reviewed annually by the Board.
Employment Contracts
David P. Hanlon was appointed President and Chief Operating Officer of
the Corporation effective January 1, 1995. He assumed the additional
position of Chief Financial Officer in September 1995 and, he also in
December 1995, became Chief Executive Officer of the Corporation. The
Corporation entered into a three year employment agreement with Mr. Hanlon
in December 1994 providing for an annual base salary of $450,000 and an
annual bonus in an amount equal to 3% of the base salary for each 1% of
increase in the total aggregate amount of gross profits realized by the
Corporation over the prior year, before deductions for taxes, cash sharing
distributions and management bonus distributions. Under the agreement, the
annual bonus may not be less than $550,000, payable in bi-weekly
installments in advance. Mr. Hanlon does not participate in the
Corporation's Management Bonus Program. He does participate in the
Corporation's Cash Sharing and Profit Sharing Plans.
In December 1994, Mr. Hanlon received a grant 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 the date of grant. The options,
subject to certain provisions regarding early acceleration, vest at the
rate of 20% per year, provided that all of such options vest in the event
the Corporation elects not to continue Mr. Hanlon's employment upon the
expiration of his agreement. In addition, Mr. Hanlon will also be granted
additional stock options on December 31 of each year at the rate of one
share for each $100 of his base salary. The price of such options will be
the price of the Common Stock of the Corporation as of the close of
business on the date of grant of the options. The options will vest at the
rate of 20% per year. In the event that Mr. Hanlon's employment with the
Corporation terminates for any reason prior to full vesting of the stock
options granted each December 31, Mr. Hanlon shall be entitled to exercise
those stock options which shall have vested as of the termination date, in
accordance with the IGT Stock Option Plan. In accordance with these
provisions of his employment agreement, at December 31, 1995, Mr. Hanlon is
entitled to options to purchase 4,500 shares.
<PAGE>
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 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 Corporation'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 and qualitative indicators of corporate and individual
performance. 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 47.6% of their total salary and
bonus compensation for fiscal 1995.
Executive Compensation: The Corporation's Management Bonus Program is
a cash-based incentive program, and for fiscal year 1995, was based on the
level of the Corporation's income from operations in excess of a specified
amount. While income from operations for fiscal 1995 decreased
approximately 29.6% from the prior year, individual cash bonus awards were
made to the executive officers because the Committee believes the awards
provide appropriate long-term incentives. Individual cash bonus awards for
executive officers other than the Chief Executive Officer and the President
and Chief Operating Officer were determined for fiscal 1995 jointly by the
then Chief Executive Officer and President and Chief Operating Officer
based on each officer's individual performance and on the specified
financial performance criteria described above. The cash bonus payable to
the President and Chief Operating Officer was determined in accordance with
his employment agreement.
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 which provides for bi-annual
cash bonuses based on corporate profitability.
The Committee also uses stock option awards made 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") to provide incentives for key personnel, including executive
officers. Stock options are priced at the fair market value of the Common
Stock of the Corporation on the date of the grant, and typically vest at
the rate of 20% per year over five years with exercisability dependent on
continued employment.
<PAGE>
The Committee determined in May, 1995 that the exercise prices of a
significant portion of the then outstanding stock options was at such a
high level that the incentives associated with such options had been
substantially diminished. Based on this judgment, the Committee authorized
the Corporation to offer, to all employees who then held outstanding stock
options (other than Messrs. Mathewson, Russell and Hanlon) with an exercise
price of $12.75 or greater, the opportunity to exchange such options on a
one-for-one basis for new options. Pursuant to such authorization, options
to purchase 1,298,803 shares each with an exercise price of $12.75 per
share, the fair market of the Corporation's Common Stock as of the date
action was taken by the Committee, were granted to approximately 190
employees. Optionees who participated in the exchange received a new ten-
year option with the lower exercise price. All of the newly granted
options have a new five-year vesting schedule that began May 5, 1995. No
other options of the Corporation have been repriced during the ten-year
period ended September 30, 1995.
In addition to exchanging new options for outstanding options during
fiscal year 1995, all executive officers received a stock option award
under the Stock Option Plans. The Committee determined that the annual
grant of additional stock awards should not be curtailed because of the
option repricing as the Committee believes the annual award of options
plays a significant role in providing long-term incentives. 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
contributions, 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 consideration
of Section 162(m) of the Internal Revenue Code. The Committee will not,
however, necessarily limit executive compensation to that which is
deductible. For the near term, executive compensation paid to the
Corporation's executive officers, is expected to remain tax deductible
under Section 162(m). Mr. Hanlon's compensation, as described in this
Proxy Statement, includes a minimum annual bonus of $550,000. The actual
bonus may exceed this amount based on the percentage increase, if any, in
the gross profits of the Corporation. As a result of these features, Mr.
Hanlon's compensation could, if gross profits increased by more than 40% in
fiscal 1996 as compared to fiscal 1995, exceed $1,000,000. Under section
162(m), the amount in excess of $1,000,000 would not be deductible by the
Corporation for Federal income tax purposes.
Chief Executive Compensation: Mr. Russell, the Chief Executive
Officer of the Corporation during fiscal 1995, received a base salary of
$300,000 pursuant to the terms of his existing employment agreement. On
May 5, 1995, Mr. Russell was awarded a stock option to acquire 6,153 shares
of the Corporation's Common Stock vesting over a five year period. For
fiscal 1995, the Committee, based on its subjective evaluation of Mr.
Russell's performance, approved a cash bonus award of $215,000 to Mr.
Russell under the Corporation's 1995 Management Bonus Program.
The Committee believes that the level and composition of Mr. Russell's
compensation during fiscal 1995 was appropriate.
COMPENSATION COMMITTEE
Albert J. Crosson, Chair
Warren L. Nelson
Claudine B. Williams
<PAGE>
* $100 invested on 9/30/90 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.
**Gaming Peer Group includes: WMS Industries, Inc. from 1990 through 1995,
Bally Gaming International Inc. from 1991 (Bally Gaming International Inc.
became a publicly traded company in 1991) through 1995 and Video Lottery
Technologies, Inc. from 1990 through 1995. Each Peer Group company is
engaged in the manufacture and sale of gaming products.
<PAGE>
EXECUTIVE OFFICERS
<TABLE>
The following table sets forth the names and ages of the executive
officers of the Corporation, 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.
<CAPTION>
<S> <C> <C>
Name Age Title
David P. Hanlon 51 President, Chief Executive
Officer
and Chief Financial Officer
Robert M. McMonigle 51 Executive Vice President, Corporate
Relations and South America
Raymond D. Pike 48 Executive Vice President,
International Development
Robert Z. Watts 54 Senior Vice President,
Corporate
Research and Development,
and Engineering
Anthony Ciorciari 48 Vice President, Operations
Brian McKay 51 Vice President, General
Counsel and
Corporate Secretary
Jeffrey A. Lowenhar 50 Vice President, Strategy,
Research and Development
</TABLE>
Mr. Hanlon joined the Corporation effective January 1, 1995 as
President and Chief Operating Officer. In August 1995, Mr. Hanlon was named
Chief Financial Officer and in December, 1995 became Chief Executive
Officer of the Corporation. Mr. Hanlon has more than 17 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. Mr. Hanlon holds degrees from Cornell
University and the University of Pennsylvania (Wharton) and also completed
the Harvard Advanced Management Program.
Mr. McMonigle joined the Corporation as a Sales Manager in March of
1986. From April 1987 until October 1989, Mr. McMonigle was the Director of
Sales for the Corporation and from October 1989 until September 1991 he was
Vice President-Sales for 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 and in April 1995 his title was
changed to Executive Vice President Corporate Relations and South America.
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, Executive Vice President, Corporate Development for the
Corporation in September 1993 and Executive Vice President International
Development in April 1995. 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.
Mr. Watts joined the Corporation as the Senior Vice President of
Research and Development in January, 1994. Prior to joining the
Corporation, 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 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 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 Commission on Nuclear Projects
for the State of Nevada, and is a member of the Board of Trustees of the
International Association of Gaming Attorneys. From 1992 to 1995 he served
as Chairman of the Nevada Republican Party. 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.
Dr. Lowenhar joined the Corporation in September 1995 as its Vice
President of Strategy, Research and Development. Prior to joining the
Corporation, Dr. Lowenhar was Senior Management Consultant to Resorts
International Casino Hotels, Inc. and provided, for more than 15 years,
consulting services to such familiar brand names as Hilton's Gaming
Division, Harrah's Aztar, Caesars, Circus Circus and others. He was
Professor of Marketing at Temple University's Graduate School of Business
from 1974 to 1988 and from 1993 to 1994 was Visiting Professor, School of
Hotel Administration at Cornell University. He has been a faculty member
at the Executive Development Program of the Institute for the Study of
Gambling and Commercial Gaming at the University of Nevada, Reno. Dr.
Lowenhar received his Ph.D. degree in Marketing with concentration in
Quantitative Methods, Social Psychology and Economics from Syracuse
University, School of Management in 1973.
<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, 1995 were not filed on a timely basis: a Form 3 reporting
that Jeffrey Lowenhar was appointed Vice President Strategy, Research and
Development effective September 1, 1995, and a Form 4 reporting the
purchase of 2,000 shares by Rockwell Schnabel on September 21, 1995.
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 $1,805,000 for the fiscal year
ended September 30, 1995. The Corporation had contracts and accounts
receivable balances from this customer of $1,133,000 at September 30, 1995.
During the fiscal year ended September 30, 1995, the largest amount of the
Corporation's contract receivable balance from such customer was
$1,165,000. 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 $19,886,000 for
the fiscal year ended September 30, 1995. The Corporation had contracts
and accounts receivable balances from these businesses of $8,546,000 as of
September 30, 1995. During the fiscal year ended September 30, 1995, the
largest amount of the Corporation's contract receivable balances from these
customers was $6,805,000.
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 $5,216,000 for the fiscal year ended
September 30, 1995. The Corporation had accounts receivable balances from
this business of $174,000 at September 30, 1995.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Corporation has selected Deloitte & Touche LLP as its independent
accountants for the year ended September 30, 1996.
A representative of Deloitte & Touche LLP will be present at the
Annual Meeting of Stockholders and will have the opportunity to make a
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 18, 1996
<PAGE>
PROXY INTERNATIONAL GAME TECHNOLOGY PROXY
ANNUAL MEETING OF STOCKHOLDERS, FEBRUARY 20, 1996
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 20, 1996 at 1:30 p.m., 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 " WITHHOLD AUTHORITY to
(except as marked to the contrary vote for all nominees
below) 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 David P. Hanlon
(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:
_______________________, 1996
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.
