As filed with the Securities and Exchange Commission on
April 4, 1997.
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
INTERNATIONAL GAME TECHNOLOGY
(Exact name of registrant as specified in its charter)
___________________
Nevada 88-0173041
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5270 Neil Road, Reno, Nevada 89502
(Address of principal executive offices)
INTERNATIONAL GAME TECHNOLOGY 1993 STOCK OPTION PLAN
(Full title of the plan)
Brian McKay
Vice President, General Counsel, Secretary and Treasurer
INTERNATIONAL GAME TECHNOLOGY
5270 Neil Road, Reno, Nevada 89502
(Name and address of agent for service)
___________________
Telephone number, including area code, of agent for service:
(702) 448-7777
___________________
Copy to:
Joseph J. Herron, Esq.
O'MELVENY & MYERS
610 Newport Center Drive, Suite 1700
Newport Beach, California 92660
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered Per unit price fee
Common Stock, $0.000625 2,000,000<1> $15.9375<2> $31,875,000<2> $9,660<2>
par value per share shares
______________
<FN>
<1> This Registration Statement covers, in addition to the
number of shares of Common Stock stated above, options to
purchase or acquire the shares of Common Stock covered by
the Prospectus and, pursuant to Rule 416, an additional
indeterminate number of shares and options which by
reason of certain events specified in the Plan may become
subject to the Plan.
<2> Pursuant to Rule 457(h), the maximum offering price, per
share and in the aggregate, and the registration fee were
calculated based upon the average of the high and low
prices of the Common Stock on April 1, 1997, as reported
on the New York Stock Exchange and published in the
Western Edition of the Wall Street Journal.
The Exhibit Index included in this Registration Statement
is at page S-3.
</FN>
</TABLE>
The Prospectus which contains the information required
pursuant to Section 10(a) of the Securities Act of 1933, as
amended (the "Act"), relates to a registration statement on
Form S-8 (File No. 33-69400) under the Act, with respect to
3,250,000 shares of Common Stock.
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(A) PROSPECTUS
The documents containing the information specified in
Part I of Form S-8 (plan information and registrant
information) will be sent or given to employees as specified
by Rule 428(b)(1) of the Act. Such documents need not be
filed with the Securities and Exchange Commission either as
part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424. These documents,
which include the statement of availability required by Item
2 of Form S-8, and the documents incorporated by reference in
this Registration Statement pursuant to Item 3 of Form S-8
(Part II hereof), taken together, constitute a prospectus that
meets the requirements of Section 10(a) of the Act.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of International Game
Technology (the "Company") filed with the Securities and
Exchange Commission are incorporated herein by reference:
(a) Annual Report on Form 10-K for the Company's fiscal
year ended September 30, 1996;
(b) Quarterly Report on Form 10-Q for the Company's
quarterly period ended December 31, 1996; and
(c) The description of the Company's Common Stock
contained in its Registration Statement on Form S-3
dated April 23, 1991, and any amendment or report
filed for the purpose of updating such description.
All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities and Exchange Act of 1934, as amended, prior to the
filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters
all securities then remaining unsold shall be deemed to be
incorporated by reference into the prospectus and to be a part
hereof from the date of filing of such documents. Any
statement contained herein or in a document, all or a portion
of which is incorporated or deemed to be incorporated by
reference herein, shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that
a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be
deemed, except as so modified or amended, to constitute a part
of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the original issuance of the Common Stock
registered hereby is passed on for the Company by Brian McKay.
Mr. McKay is Vice President, General Counsel, Secretary and
Treasurer of the Company and is compensated as an employee of
the Company. Mr. McKay is the holder of options to acquire
65,957 shares of the Company's Common Stock and the Company's
Board of Directors has approved the grant to Mr. McKay of
50,000 restricted shares of the Company's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
ITEM 8. EXHIBITS - SEE THE ATTACHED EXHIBIT INDEX AT PAGE
S-3.
ITEM 9. UNDERTAKINGS
The information and contents of Registration Statement No.
33-69400 on Form S-8, which was previously filed with the
Securities and Exchange Commission by the Company, is
incorporated herein by reference. Except for required
opinions, consents, signature pages and any information
required in this Registration Statement that is not in the
above mentioned Registration Statement, information required
by Part II to be contained in this Registration Statement is
omitted in accordance with General Instruction E to Form S-8.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Act, as amended,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, State of Nevada, on
March 31, 1997.
INTERNATIONAL GAME TECHNOLOGY
By: /s/ Brian McKay
Brian McKay
Its: Vice President, General
Counsel, Secretary and
Treasurer
POWER OF ATTORNEY
Each person whose signature appears below constitutes
and appoints Charles N. Mathewson, G. Thomas Baker, and Brian
McKay, or each of them individually, his or her true and
lawful attorney-in-fact and agent with full powers of
substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign
any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them individually, or
his or her substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Act, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
SIGNATURE TITLE DATE
/s/ Charles N. Mathewson Chairman of the Board and Chief March 31, 1997
Charles N. Mathewson Executive Officer (Principal
Executive Officer)
/s/ G. Thomas Baker President, Chief Operating Officer, March 31, 1997
G. Thomas Baker (Principal Financial Officer and
Chief Financial Officer and
Principal Accounting Officer)
Albert J. Crosson Director
/s/ Wilbur K. Keating Director March 26, 1997
Wilbur K. Keating
/s/ Warren L. Nelson Director<1> March 31, 1997
Warren L. Nelson
/s/ Frederick B. Rentschler Director<1> March 31, 1997
Frederick B. Rentschler
/s/ John J. Russell Director March 31, 1997
John J. Russell
Rockwell A. Schnabel Director
/s/ Claudine B. Williams Director<1> March 31, 1997
Claudine B. Williams
_________________________________________
<1> Member of Compensation Committee
</TABLE>
<PAGE>
EXHIBIT INDEX<1>
Exhibit Sequentially
Number Description Numbered Page
4. International Game Technology 1993 Stock Option Plan
(Amended and Restated Effective as of August 27, 1996).
5. Opinion of Counsel (opinion re legality).
23.1 Consent of Independent Accountants.
23.2 Consent of Counsel (included in Exhibit 5).
24. Power of Attorney (included in this Registration
Statement under "Signatures").
__________________
<1> Each exhibit index and exhibit of Registration Statement
No. 33-69400, which was previously filed with the Securities
and Exchange Commission by the registrant, is incorporated
herein by reference.
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of International Game Technology on Form S-8 of our report dated November
7, 1996, appearing in the Annual Report on Form 10-K of International Game
Technology for the year ended September 30, 1996.
DELOITTE & TOUCHE LLP
/s/
Reno, Nevada
April 4, 1997
<PAGE>
Exhibit 4
INTERNATIONAL GAME TECHNOLOGY
1993 STOCK OPTION PLAN
(AMENDED AND RESTATED EFFECTIVE AS OF AUGUST 27, 1996)
<PAGE>
TABLE OF CONTENTS
Page
I. THE PLAN . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose. . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Administration and Authorization; Power and
Procedure. . . . . . . . . . . . . . . . . . . . . . 1
1.3 Participation. . . . . . . . . . . . . . . . . . . . 2
1.4 Shares Available for Awards; Share Limits. . . . . . 3
1.5 Grant of Awards. . . . . . . . . . . . . . . . . . . 3
1.6 Award Period . . . . . . . . . . . . . . . . . . . . 4
1.7 Limitations on Exercise and Vesting of Awards. . . . 4
1.8 Acceptance of Notes to Finance Exercise. . . . . . . 4
1.9 No Transferability . . . . . . . . . . . . . . . . . 5
II. EMPLOYEE OPTIONS . . . . . . . . . . . . . . . . . . 6
2.1 Grants . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Option Price . . . . . . . . . . . . . . . . . . . . 6
2.3 Limitations on Grant and Terms of Incentive
Stock Options. . . . . . . . . . . . . . . . . . . . 7
2.4 Limits on 10% Holders. . . . . . . . . . . . . . . . 7
2.5 Option Repricing/Cancellation and Regrant/Waiver of
Restrictions . . . . . . . . . . . . . . . . . . . . 7
III. STOCK APPRECIATION RIGHTS. . . . . . . . . . . . . . 8
3.1 Grants . . . . . . . . . . . . . . . . . . . . . . . 8
3.2 Exercise of Stock Appreciation Rights. . . . . . . . 8
3.3 Payment. . . . . . . . . . . . . . . . . . . . . . . 8
IV. RESTRICTED STOCK AWARDS. . . . . . . . . . . . . . . 9
4.1 Grants . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Restrictions . . . . . . . . . . . . . . . . . . . . 9
4.3 Return to the Corporation. . . . . . . . . . . . . . 10
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES . . . . . 10
5.1 Grants of Performance Share Awards . . . . . . . . . 10
5.2 Special Performance-Based Share Awards . . . . . . . 10
5.3 Grants of Stock Bonuses. . . . . . . . . . . . . . . 12
5.4 Deferred Payments. . . . . . . . . . . . . . . . . . 12
VI. OTHER PROVISIONS . . . . . . . . . . . . . . . . . . 13
6.1 Rights of Eligible Employees, Participants and
Beneficiaries. . . . . . . . . . . . . . . . . . . . 13
6.2 Adjustments; Acceleration. . . . . . . . . . . . . . 13
6.3 Effect of Termination of Employment. . . . . . . . . 14
6.4 Compliance with Laws . . . . . . . . . . . . . . . . 15
6.5 Tax Withholding. . . . . . . . . . . . . . . . . . . 15
6.6 Plan Amendment, Termination and Suspension . . . . . 16
6.7 Privileges of Stock Ownership. . . . . . . . . . . . 16
6.8 Effective Date of the Plan . . . . . . . . . . . . . 17
6.9 Term of the Plan . . . . . . . . . . . . . . . . . . 17
6.10 Governing Law; Construction; Severability. . . . . . 17
6.11 Captions . . . . . . . . . . . . . . . . . . . . . . 18
6.12 Effect of Change of Subsidiary Status. . . . . . . . 18
6.13 Non-Exclusivity of Plan. . . . . . . . . . . . . . . 18
VII. NON-EMPLOYEE DIRECTOR OPTIONS. . . . . . . . . . . . 18
7.1 Participation. . . . . . . . . . . . . . . . . . . . 18
7.2 Annual Option Grants . . . . . . . . . . . . . . . . 18
7.3 Option Price . . . . . . . . . . . . . . . . . . . . 19
7.4 Option Period and Exercisability . . . . . . . . . . 19
7.5 Termination of Directorship. . . . . . . . . . . . . 19
7.6 Adjustments. . . . . . . . . . . . . . . . . . . . . 20
7.7 Acceleration Upon a Change in Control Event. . . . . 20
VIII. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . 20
8.1 Definitions. . . . . . . . . . . . . . . . . . . . . 20
<PAGE>
INTERNATIONAL GAME TECHNOLOGY
1993 STOCK OPTION PLAN
(AMENDED AND RESTATED EFFECTIVE AS OF AUGUST 27, 1996)
I. THE PLAN
1.1 PURPOSE
The purpose of this Plan is to promote the success of the
Company by providing an additional means through the grant of
Awards to attract, motivate, retain and reward key employees,
including officers, whether or not directors, of the Company with
Awards and incentives for high levels of individual performance and
improved financial performance of the Company and to attract,
motivate and retain experienced and knowledgeable independent
directors through the benefits provided under Article VII.
"Corporation" means International Game Technology, a Nevada
corporation, and "Company" means the Corporation and its
Subsidiaries, collectively. These terms and other capitalized
terms are defined in Article VIII.
1.2 ADMINISTRATION AND AUTHORIZATION; POWER AND PROCEDURE
(a) Committee. This Plan shall be administered by and all
Awards to Eligible Employees shall be authorized by the Committee.
Action of the Committee with respect to the administration of this
Plan shall be taken pursuant to a majority vote or by written
consent of its members.
(b) Plan Awards; Interpretation; Powers of Committee.
Subject to the express provisions of this Plan, the Committee shall
have the authority:
(i) to determine from among those persons eligible the
particular Eligible Employees who will receive any Awards;
(ii) to grant Awards to Eligible Employees, determine
the price at which securities will be offered or awarded and
the amount of securities to be offered or awarded to any of
such individuals, and determine the other specific terms and
conditions of such Awards consistent with the express limits
of this Plan, and establish the installments (if any) in which
such Awards shall become exercisable or shall vest, or
determine that no delayed exercisability or vesting is
required, and establish the events of termination or reversion
of such Awards;
(iii) to approve the forms of Award Agreements (which
need not be identical either as to type of Award or as among
Participants);
(iv) to construe and interpret this Plan and any
agreements defining the rights and obligations of the Company
and Participants under this Plan, further define the terms
used in this Plan, and prescribe, amend and rescind rules and
regulations relating to the administration of this Plan;
(v) to cancel, modify, or waive the Corporation's
rights with respect to, or modify, discontinue, suspend, or
terminate any or all outstanding Awards held by Eligible
Employees, subject to any required consent under Section 6.6;
(vi) to accelerate or extend the exercisability or
extend the term of any or all such outstanding Awards within
the maximum ten-year term of Awards under Section 1.6; and
(vii) to make all other determinations and take such
other action as contemplated by this Plan or as may be
necessary or advisable for the administration of this Plan and
the effectuation of its purposes.
Notwithstanding the foregoing, the provisions of Article VII
relating to Non-Employee Director Options shall be automatic and,
to the maximum extent possible, self-effectuating.
(c) Binding Determinations. Any action taken by, or inaction
of, the Corporation, any Subsidiary, the Board or the Committee
relating or pursuant to this Plan shall be within the absolute
discretion of that entity or body and shall be conclusive and
binding upon all persons. No member of the Board or Committee, or
officer of the Corporation or any Subsidiary, shall be liable for
any such action or inaction of the entity or body, of another
person or, except in circumstances involving bad faith of himself
or herself. Subject only to compliance with the express provisions
hereof, the Board and Committee may act in their absolute
discretion in matters within their authority related to this Plan.
(d) Reliance on Experts. In making any determination or in
taking or not taking any action under this Plan, the Committee or
the Board, as the case may be, may obtain and may rely upon the
advice of experts, including professional advisors to the
Corporation. No director, officer or agent of the Company shall be
liable for any such action or determination taken or made or
omitted in good faith.
(e) Delegation. The Committee may delegate ministerial, non-
discretionary functions to a third-party administrator or to
individuals who are officers or employees of the Company.
1.3 PARTICIPATION
Awards may be granted by the Committee only to those persons
that the Committee determines to be Eligible Employees. An
Eligible Employee who has been granted an Award may, if otherwise
eligible, be granted additional Awards if the Committee shall so
determine. Non-Employee Directors shall not be eligible to receive
any Options except for Nonqualified Stock Options granted
automatically without action of the Committee under the provisions
of Article VII.
1.4 SHARES AVAILABLE FOR AWARDS; SHARE LIMITS
Subject to the provisions of Section 6.2, the capital stock
that may be delivered under this Plan shall be shares of the
Corporation's authorized but unissued Common Stock and any shares
of its Common Stock held as treasury shares. The shares may be
delivered for any lawful consideration.
(a) Share Limits. The maximum number of shares of Common
Stock that may be delivered pursuant to all Awards granted under
this Plan shall not exceed [4,500,000] shares (the "Share Limit").
The maximum number of shares of Common Stock that may be delivered
pursuant to Options qualified as Incentive Stock Options granted
under this Plan is [3,000,000]. The maximum number of shares of
Common Stock that may be delivered to Non-Employee Directors issued
under the provisions of Article VII shall not exceed [125,000]
shares [(or, effective __________, after giving effect to a 2 for
1 stock split, 250,000 shares).] The maximum number of shares
subject to Options and Stock Appreciation Rights that are granted
during any calendar year to any individual shall be limited to
_________. Each of the four foregoing numerical limits shall be
subject to adjustment as contemplated by Section 6.2.
(b) Share Reservation; Replenishment and Reissue of Unvested
Awards. No Award may be granted under this Plan unless, on the
date of grant, the sum of (i) the maximum number of shares issuable
at any time pursuant to such Award, plus (ii) the number of shares
that have previously been issued pursuant to Awards granted under
this Plan, other than reacquired shares available for reissue
consistent with any applicable legal limitations, plus (iii) the
maximum number of shares that may be issued at any time after such
date of grant pursuant to Awards that are outstanding on such date,
does not exceed the Share Limit. Shares that are subject to or
underlie Awards which expire or for any reason are cancelled or
terminated, are forfeited, fail to vest, or for any other reason
are not paid or delivered under this Plan, as well as reacquired
shares, shall again, except to the extent prohibited by law, be
available for subsequent Awards under the Plan. Except as limited
by law, if an Award is or may be settled only in cash, such Award
need not be counted against any of the limits under this Section
1.4.
1.5 GRANT OF AWARDS
Subject to the express provisions of this Plan, the Committee
shall determine the number of shares of Common Stock subject to
each Award, the price (if any) to be paid for the shares or the
Award and, in the case of Performance Share Awards, in addition to
matters addressed in Section 1.2(b), the specific objectives, goals
and performance criteria (such as an increase in sales, market
value, earnings or book value over a base period, the years of
service before vesting, the relevant job classification or level of
responsibility or other factors) that further define the terms of
the Performance Share Award. Each Award shall be evidenced by an
Award Agreement signed by the Corporation and, if required by the
Committee, by the Participant. The Award Agreement shall set forth
the material terms and conditions of the Award established by the
Committee consistent with the specific provisions of this Plan.
1.6 AWARD PERIOD
Each Award and all executory rights or obligations under the
related Award Agreement shall expire on such date (if any) as shall
be determined by the Committee, but in the case of Options or other
rights to acquire Common Stock not later than ten (10) years after
the Award Date.
1.7 LIMITATIONS ON EXERCISE AND VESTING OF AWARDS
(a) Provisions for Exercise. Unless the Committee expressly
provides otherwise, no Award shall be exercisable or shall vest
until at least six months after the initial Award Date, and once
exercisable an Award shall remain exercisable until the expiration
or earlier termination of the Award.
(b) Procedure. Any exercisable Award shall be deemed to be
exercised when the Secretary of the Corporation receives written
notice of such exercise from the Participant, together with the
required any payment made in accordance with Section 2.2(b) or 7.3,
as the case may be.
(c) Fractional Shares/Minimum Issue. Fractional share
interests shall be disregarded, but may be accumulated. The
Committee, however, may determine in the case of Eligible Employees
that cash, other securities or other property will be paid or
transferred in lieu of any fractional share interests. No fewer
than 100 shares may be purchased on exercise of any Award at one
time unless the number purchased is the total number at the time
available for purchase under the Award.
1.8 ACCEPTANCE OF NOTES TO FINANCE EXERCISE
The Corporation may, with the Committee's approval, accept one
or more notes from any Eligible Employee in connection with the
exercise or receipt of any outstanding Award; provided that any
such note shall be subject to the following terms and conditions:
(a) The principal of the note shall not exceed the amount
required to be paid to the Corporation upon the exercise or receipt
of one or more Awards under the Plan and the note shall be
delivered directly to the Corporation in consideration of such
exercise or receipt.
(b) The initial term of the note shall be determined by the
Committee; provided that the term of the note, including
extensions, shall not exceed a period of 10 years.
(c) The note shall provide for full recourse to the
Participant and shall bear interest at a rate determined by the
Committee but not less than the applicable imputed interest rate
specified by the Code.
(d) If the employment of the Participant terminates, the
unpaid principal balance of the note shall become due and payable
on the 10th business day after such termination; provided, however,
that if a sale of such shares would cause such Employee Participant
to incur liability under Section 16(b) of the Exchange Act, the
unpaid balance shall become due and payable on the 10th business
day after the first day on which a sale of such shares could have
been made without incurring such liability assuming for these
purposes that there are no other transactions by the Employee
Participant subsequent to such termination.
(e) If required by the Committee or by applicable law, the
note shall be secured by a pledge of any shares or rights financed
thereby in compliance with applicable law.
(f) The terms, repayment provisions, and collateral release
provisions of the note and the pledge securing the note shall
conform with applicable rules and regulations of the Federal
Reserve Board as then in effect.
1.9 NO TRANSFERABILITY
(a) Limit On Exercise and Transfer. Unless otherwise
expressly provided in (or pursuant to) this Section 1.9, by
applicable law and by the Award Agreement, as the same may be
amended, (i) all Awards are non-transferable and shall not be
subject in any manner to sale, transfer, anticipation, alienation,
assignment, pledge, encumbrance or charge; Awards shall be
exercised only by the Participant; and (ii) shares issuable
pursuant to an Award shall be delivered only to (or for the account
of) the Participant.
(b) Exceptions. The Committee may permit Awards to be
exercised by certain persons or entities related to the
Participant, including but not limited to members of the
Participant's family, charitable institutions, or trusts or other
entities whose beneficiaries or beneficial owners are members of
the Participant's family and/or charitable institutions, or to such
other persons or entities as may be approved by the Committee,
pursuant to such conditions and procedures as the Committee may
establish. Any permitted transfer shall be subject to the
condition that the Committee receive evidence satisfactory to it
that the transfer is being made for estate and/or tax planning
purposes on a gratuitous or donative basis and without
consideration (other than nominal consideration).
(c) Further Exceptions to Limits On Transfer. The exercise
and transfer restrictions in Section 1.9(a) shall not apply to:
(i) transfers to the Corporation,
(ii) the designation of a beneficiary to receive
benefits in the event of the Participant's death
or, if the Participant has died, transfers to or
exercise by the Participant's beneficiary, or, in
the absence of a validly designated beneficiary,
transfers by will or the laws of descent and
distribution,
(iii) transfers pursuant to a QDRO if approved or
ratified by the Committee,
(iv) if the Participant has suffered a Total
Disability, permitted transfers or exercises on
behalf of the Participant by his or her legal
representative, or
(v) the authorization by the Committee of "cashless
exercise" procedures with third parties who
provide financing for the purpose of (or who
otherwise facilitate) the exercise of Awards
consistent with applicable laws and the express
authorization of the Committee.
(d) Limitations on Incentive Stock Options and Restricted
Stock Awards. Notwithstanding the foregoing, Incentive Stock
Options and Restricted Stock Awards shall be subject to any and all
applicable transfer restrictions under the Code.
II. EMPLOYEE OPTIONS
2.1 GRANTS
One or more Options may be granted under this Article to any
Eligible Employee. Each Option granted may be either an Option
intended to be an Incentive Stock Option, or an Option not so
intended, and such intent shall be indicated in the applicable
Option Agreement.
2.2 OPTION PRICE
(a) Pricing Limits. The purchase price per share of the
Common Stock covered by each Option shall be determined by the
Committee at the time of the Option is granted, but in the case of
Incentive Stock Options shall not be less than 100% (110% in the
case of a Participant who owns or is deemed to own under Section
424(d) of the Code more than 10% of the total combined voting power
of all classes of stock of the Corporation) of the Fair Market
Value of the Common Stock on the Award Date.
(b) Payment Provisions. The purchase price of any shares
purchased on exercise of an Option granted under this Article shall
be paid in full at the time of each purchase in one or a
combination of the following methods: (i) in cash or by electronic
funds transfer; (ii) by check payable to the order of the
Corporation; (iii) if authorized by the Committee or specified in
the applicable Option Agreement, by a promissory note of the
Participant consistent with the requirements of Section 1.8;
(iv) by notice and third party payment in such manner as may be
authorized by the Committee; or (v) by the delivery of shares of
Common Stock of the Corporation already owned by the Participant,
provided, however, that the Committee may in its absolute
discretion limit the Participant's ability to exercise an Option by
delivering such shares. Shares of Common Stock used to satisfy the
exercise price of an Option shall be valued at their Fair Market
Value on the date of exercise.
2.3 LIMITATIONS ON GRANT AND TERMS OF INCENTIVE STOCK OPTIONS
(a) $100,000 Limit. To the extent that the aggregate "Fair
Market Value" of stock with respect to which Incentive Stock
Options first become exercisable by a Participant in any calendar
year exceeds $100,000, taking into account both Common Stock
subject to Incentive Stock Options under this Plan and stock
subject to Incentive Stock Options under all other plans of the
Company or any parent corporation, such options shall be treated as
nonqualified stock options. For this purpose, the "Fair Market
Value" of the stock subject to options shall be determined as of
the date the options were optioned. In reducing the number of
options treated as Incentive Stock Options to meet the $100,000
limit, the most recently granted options shall be reduced first.
To the extent a reduction of simultaneously granted options is
necessary to meet the $100,000 limit, the Committee may, in the
manner and to the extent permitted by law, designate which shares
of Common Stock are to be treated as shares acquired pursuant to
the exercise of an Incentive Stock Option.
(b) Option Period. Each Incentive Stock Option and all
rights thereunder shall expire no later than ten years after the
Award Date.
(c) Other Code Limits. There shall be imposed in any Award
Agreement relating to Incentive Stock Options such terms and
conditions as from time to time are required in order that the
Option be an "incentive stock option" as that term is defined in
Section 422 of the Code.
2.4 LIMITS ON 10% HOLDERS
No Incentive Stock Option may be granted to any person who, at
the time the Option is granted, owns (or is deemed to own under
Section 424(d) of the Code) shares of outstanding Common Stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation, unless the exercise price of
such Option is at least 110% of the Fair Market Value of the stock
subject to the Option and such Option by its terms is not
exercisable after the expiration of five years from the date such
Option is granted.
2.5 OPTION REPRICING/CANCELLATION AND REGRANT/WAIVER OF
RESTRICTIONS
Subject to Section 1.4 and Section 6.6 and the specific
limitations on Options contained in this Plan, the Committee from
time to time may authorize, generally or in specific cases only,
for the benefit of any Eligible Employee, any adjustment in the
exercise price, the number of shares subject to or the term of, an
Option granted under this Article by cancellation of an outstanding
Option and a subsequent regranting of an Option, by amendment, by
substitution of an outstanding Option, by waiver or by other
legally valid means. Such amendment or other action may result
among other changes in an exercise price which is higher or lower
than the exercise or purchase price of the original or prior
Option, provide for a greater or lesser number of shares subject to
the Option, or provide for a longer or shorter vesting or exercise
period.
III. STOCK APPRECIATION RIGHTS
3.1 GRANTS.
In its discretion, the Committee may grant a Stock
Appreciation Right to any Eligible Employee either concurrently
with the grant of another Award or in respect of an outstanding
Award, in whole or in part, or independently of any other Award.
Any Stock Appreciation Right granted in connection with an
Incentive Stock Option shall contain such terms as may be required
to comply with the provisions of Section 422 of the Code and the
regulations promulgated thereunder, unless the holder otherwise
agrees.
3.2 EXERCISE OF STOCK APPRECIATION RIGHTS.
(a) Exercisability. Unless the Award Agreement or the
Committee otherwise provides, a Stock Appreciation Right related to
another Award shall be exercisable at such time or times, and to
the extent, that the related Award shall be exercisable.
(b) Effect on Available Shares. To the extent that a Stock
Appreciation Right is exercised, the number of underlying shares of
Common Stock theretofore subject to a related Award shall be
charged against the maximum amount of Common Stock that may be
delivered pursuant to Awards under this Plan. The number of shares
subject to the Stock Appreciation Right and the related Option of
the Participant shall be reduced by the number of underlying shares
as to which the exercise related, unless the Award
Agreement otherwise provides.
(c) Stand-Alone SARs. A Stock Appreciation Right granted
independently of any other Award shall be exercisable pursuant to
the terms of the Award Agreement but in no event earlier than six
months after the Award Date, except in the case of death or Total
Disability.
3.3 PAYMENT.
(a) Amount. Unless the Committee otherwise provides, upon
exercise of a Stock Appreciation Right and the attendant surrender
of an exercisable portion of any related Award, the Participant
shall be entitled to receive payment of an amount determined by
multiplying
(i) the difference obtained by subtracting the exercise
price per share of Common Stock under the related Award (if
applicable) or the initial share value specified in the Award
from the Fair Market Value of a share of Common Stock on the
date of exercise of the Stock Appreciation Right, by
(ii) the number of shares with respect to which the
Stock Appreciation Right shall have been exercised.
(b) Form of Payment. The Committee, in its sole discretion,
shall determine the form in which payment shall be made of the
amount determined under paragraph (a) above, either solely in cash,
solely in shares of Common Stock (valued at Fair Market Value on
the date of exercise of the Stock Appreciation Right), or partly in
such shares and partly in cash, provided that the Committee shall
have determined that such exercise and payment are consistent with
applicable law. If the Committee permits the Participant to elect
to receive cash or shares (or a combination thereof) on such
exercise, any such election shall be subject to such conditions as
the Committee may impose.
IV. RESTRICTED STOCK AWARDS
4.1 GRANTS.
The Committee may, in its discretion, grant one or more
Restricted Stock Awards to any Eligible Employee. Each Restricted
Stock Award Agreement shall specify the number of shares of Common
Stock to be issued to the Participant, the date of such issuance,
the consideration for such shares (but not less than the minimum
lawful consideration under applicable state law) by the
Participant, the extent to which the Participant shall be entitled
to dividends, voting and other rights in respect of the shares
prior to vesting and the restrictions imposed on such shares and
the conditions of release or lapse of such restrictions. Such
restrictions shall not lapse earlier than 12 months after the Award
Date, except to the extent the Committee may otherwise provide.
Stock certificates evidencing shares of Restricted Stock pending
the lapse of the restrictions ("restricted shares") shall bear a
legend making appropriate reference to the restrictions imposed
hereunder and shall be held by the Corporation or by a third party
designated by the Committee until the restrictions on such shares
shall have lapsed and the shares shall have vested in accordance
with the provisions of the Award and Section 1.7. Upon issuance of
the Restricted Stock Award, the Participant may be required to
provide such further assurance and documents as the Committee may
require to enforce the restrictions.
4.2 RESTRICTIONS.
(a) Pre-Vesting Restraints. Except as provided in Section
4.1 and 1.9, restricted shares comprising any Restricted Stock
Award may not be sold, assigned, transferred, pledged or otherwise
disposed of or encumbered, either voluntarily or involuntarily,
until the restrictions on such shares have lapsed and the shares
have become vested.
(b) Dividend and Voting Rights. Unless otherwise provided in
the applicable Award Agreement, a Participant receiving a
Restricted Stock Award shall be entitled to cash dividend and
voting rights for all shares issued even though they are not
vested, provided that such rights shall terminate immediately as to
any restricted shares which cease to be eligible for vesting.
(c) Cash Payments. If the Participant shall have paid or
received cash (including any dividends) in connection with the
Restricted Stock Award, the Award Agreement shall specify whether
and to what extent such cash shall be returned (with or without an
earnings factor) as to any restricted shares which cease to be
eligible for vesting.
4.3 RETURN TO THE CORPORATION.
Unless the Committee otherwise expressly provides, restricted
shares that remain subject to restrictions at the time of
termination of employment or are subject to other conditions to
vesting that have not been satisfied by the time specified in the
applicable Award Agreement shall not vest and shall be returned to
the Corporation in such manner and on such terms as the Committee
shall therein provide.
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES
5.1 GRANTS OF PERFORMANCE SHARE AWARDS.
The Committee may, in its discretion, grant Performance Share
Awards to Eligible Employees based upon such factors as the
Committee shall deem relevant in light of the specific type and
terms of the award. An Award Agreement shall specify the maximum
number of shares of Common Stock (if any) subject to the
Performance Share Award, the consideration (but not less than the
minimum lawful consideration) to be paid for any such shares as may
be issuable to the Participant, the duration of the Award and the
conditions upon which delivery of any shares or cash to the
Participant shall be based. The amount of cash or shares or other
property that may be deliverable pursuant to such Award shall be
based upon the degree of attainment over a specified period (a
"performance cycle") as may be established by the Committee of such
measure(s) of the performance of the Company (or any part thereof)
or the Participant as may be established by the Committee. The
Committee may provide for full or partial credit, prior to
completion of such performance cycle or the attainment of the
performance achievement specified in the Award, in the event of the
Participant's death, or Total Disability, a Change in Control Event
or in such other circumstances as the Committee consistent with
Section 6.10(c)(2), if applicable, may determine.
5.2 SPECIAL PERFORMANCE-BASED SHARE AWARDS.
Without limiting the generality of the foregoing, and in
addition to Options and Stock Appreciation Rights granted under
other provisions of this Plan which are intended to satisfy the
exception for "performance-based compensation" under Section 162(m)
of the Code (with such Awards hereinafter referred to as a
"Qualifying Option" or a "Qualifying Stock Appreciation Right,"
respectively), other performance-based awards within the meaning of
Section 162(m) of the Code ("Performance-Based Awards"), whether in
the form of restricted stock, performance stock, phantom stock,
Cash-Based Awards, or other rights, the grant, vesting,
exercisability or payment of which depends on the degree of
achievement of the Performance Goals relative to preestablished
targeted levels for the Corporation or the Corporation and one or
more of its Subsidiaries, may be granted under this Plan. Any
Qualifying Option or Qualifying Stock Appreciation Right shall be
subject only to the requirements of subsections (a) and (c) below
in order for such Awards to satisfy the requirements for
Performance-Based Awards under this Section 5.2. With the
exception of any Qualifying Option or Qualifying Stock Appreciation
Right, an Award that is intended to satisfy the requirements of
this Section 5.2 shall be designated as a Performance-Based Award
at the time of grant.
(a) Eligible Class. The eligible class of persons for
Performance-Based Awards under this Section shall be the executive
officers of the Corporation.
(b) Performance Goal Alternatives. The specific performance
goals for Performance-Based Awards granted under this Section
(other than Qualifying Options and Qualifying Stock Appreciation
Rights) shall be, on an absolute or relative basis, one or more of
the Performance Goals, as selected by the Committee in its sole
discretion. The Committee shall establish in the applicable Award
Agreement the specific performance target(s) relative to the
Performance Goal(s) which must be attained before the compensation
under the Performance-Based Award becomes payable. The specific
targets shall be determined within the time period permitted under
Section 162(m) of the Code (and any regulations issued thereunder)
so that such targets are considered to be preestablished and so
that the attainment of such targets is substantially uncertain at
the time of their establishment. The applicable performance
measurement period may not be less than one nor more than 10 years.
(c) Maximum Performance-Based Award. Notwithstanding any
other provision of the Plan to the contrary, the maximum number of
shares of Common Stock which may be delivered pursuant to options,
stock appreciation rights, restricted stock or other share-based
awards that are granted as Performance-Based Awards to any
Participant in any calendar year shall not exceed _______ shares,
either individually or in the aggregate, subject to adjustment as
provided in Section 6.2. Awards that are cancelled during the year
shall be counted against this limit to the extent required by
Section 162(m) of the Code. In addition, the aggregate amount of
compensation to be paid to any Participant in respect of any Cash-
Based Awards that are granted during any calendar year as
Performance-Based Awards shall not exceed $_________.
(d) Committee Certification. Before any Performance-Based
Award under this Section 5.2 (other than Qualifying Options or
Qualifying Stock Appreciation Rights) is paid, the Committee must
certify in writing that the Performance Goal(s) and any other
material terms of the Performance-Based Award were satisfied;
provided, however, that a Performance-Based Award may be paid
without regard to the satisfaction of the applicable Performance
Goal in the event of a Change in Control Event in accordance with
Section 6.2(d).
(e) Terms and Conditions of Awards. The Committee will have
the discretion to determine the restrictions or other limitations
of the individual Awards granted under this Section 5.2 including
the authority to reduce Awards, payouts or vesting or to pay no
Awards, in its sole discretion, if the Committee preserves such
authority at the time of grant by language to this effect in its
authorizing resolutions or otherwise.
(f) Adjustments for Changes in Capitalization and other
Material Changes. In the event of a change in corporate
capitalization, such as a stock split or stock dividend, or a
corporate transaction, such as a merger, consolidation, spinoff,
reorganization or similar event, or any partial or complete
liquidation of the Corporation, or any similar event consistent
with regulations issued under Section 162(m) of the Code including,
without limitation, any material change in accounting policies or
practices affecting the Corporation and/or the Performance Goals or
targets, then the Committee may make adjustments to the Performance
Goals and targets relating to outstanding Performance-Based Awards
to the extent such adjustments are made to reflect the occurrence
of such an event; provided, however, that adjustments described in
this subsection may be made only to the extent that the occurrence
of an event described herein was unforeseen at the time the targets
for a Performance-Based Award were established by the Committee.
5.3 GRANTS OF STOCK BONUSES.
The Committee may grant a Stock Bonus to any Eligible Employee
to reward exceptional or special services, contributions or
achievements in the manner and on such terms and conditions
(including any restrictions on such shares) as determined from time
to time by the Committee. The number of shares so awarded shall be
determined by the Committee. The Award may be granted
independently or in lieu of a cash bonus.
5.4 DEFERRED PAYMENTS.
The Committee may authorize for the benefit of any Eligible
Person the deferral of any payment of cash or shares that may
become due or of cash otherwise payable under this Plan, and
provide for accredited benefits thereon based upon such deferment,
at the election or at the request of such Participant, subject to
the other terms of this Plan. Such deferral shall be subject to
such further conditions, restrictions or requirements as the
Committee may impose, subject to any then vested rights of
Participants.
VI. OTHER PROVISIONS
6.1 RIGHTS OF ELIGIBLE EMPLOYEES, PARTICIPANTS AND BENEFICIARIES
(a) Employment Status. Status as an Eligible Employee shall
not be construed as a commitment that any Award will be granted
under this Plan to an Eligible Employee or to Eligible Employees
generally.
(b) No Employment Contract. Nothing contained in this Plan
(or in any other documents related to this Plan or to any Award)
shall confer upon any Eligible Employee or other Participant any
right to continue in the employ or other service of the Company or
constitute any contract or agreement of employment or other
service, nor shall interfere in any way with the right of the
Company to change such person's compensation or other benefits or
to terminate the employment of such person, with or without cause,
but nothing contained in this Plan or any document related hereto
shall adversely affect any independent contractual right of such
person without his or her consent thereto.
(c) Plan Not Funded. Awards payable under this Plan shall be
payable in shares or from the general assets of the Corporation,
and no special or separate reserve, fund or deposit shall be made
to assure payment of such Awards. No Participant, Beneficiary or
other person shall have any right, title or interest in any fund or
in any specific asset (including shares of Common Stock, except as
expressly otherwise provided) of the Company by reason of any Award
hereunder. Neither the provisions of this Plan (or of any related
documents), nor the creation or adoption of this Plan, nor any
action taken pursuant to the provisions of this Plan shall create,
or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary
or other person. To the extent that a Participant, Beneficiary or
other person acquires a right to receive payment pursuant to any
Award hereunder, such right shall be no greater than the right of
any unsecured general creditor of the Company.
6.2 ADJUSTMENTS; ACCELERATION
(a) Adjustments. If there shall occur any extraordinary
dividend or other extraordinary distribution in respect of the
Common Stock (whether in the form of cash, Common Stock, other
securities, or other property), or any reclassification,
recapitalization, stock split (including a stock split in the form
of a stock dividend), reverse stock split, reorganization, merger,
combination, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the
Corporation, or there shall occur any other like corporate
transaction or event in respect of the Common Stock on a sale of
substantially all the assets of the Corporation as an entirety,
then the Committee shall, in such manner and to such extent (if
any) as it deems appropriate and equitable (1) proportionately
adjust any or all of (i) the number and type of shares of Common
Stock (or other securities) which thereafter may be made the
subject of Awards (including the specific maxima and numbers of
shares set forth elsewhere in this Plan), (ii) the number, amount
and type of shares of Common Stock (or other securities or
property) subject to any or all outstanding Awards, (iii) the
grant, purchase, or exercise price of any or all outstanding
Awards, (iv) the securities, cash or other property deliverable
upon exercise of any outstanding Awards, or (v) the performance
standards appropriate to any outstanding Awards, or (2) in the case
of an extraordinary dividend or other distribution,
recapitalization, reclassification, merger, reorganization,
consolidation, combination, sale of assets, split up, exchange, or
spin off, make provision for a cash payment or for the substitution
or exchange of any or all outstanding Awards or the cash,
securities or property deliverable to the holder of any or all
outstanding Options based upon the distribution or consideration
payable to holders of the Common Stock of the Corporation upon or
in respect of such event; provided, however, in each case, that
with respect to Incentive Stock Options, no such adjustment shall
be made which would cause the Plan to violate Section 424(a) of the
Code or any successor provisions thereto.
(b) Acceleration of Awards Upon Change in Control. As to any
Eligible Employee Participant, unless prior to a Change in Control
Event the Committee determines that, upon its occurrence, there
shall be no acceleration of benefits under Awards or determines
that only certain or limited benefits under Options shall be
accelerated and the extent to which they shall be accelerated,
and/or establishes a different time in respect of such Change in
Control Event for such acceleration, then upon the occurrence of a
Change in Control Event (i) each Option and Stock Appreciation
Right shall become immediately exercisable, (ii) Restricted Stock
shall immediately vest free of restrictions, and (iii) each
Performance Share Award shall become payable to the Participant;
provided, however, that in no event shall any Award be accelerated
as to any Section 16 Person to a date less than six months after
the Award Date of such Award. The Committee may override the
limitations on acceleration in this Section 3.2(b) by express
provision in the Award Agreement and may accord any Eligible
Employee a right to refuse any acceleration, whether pursuant to
the Award Agreement or otherwise, in such circumstances as the
Committee may approve. Any acceleration of Awards shall comply
with applicable regulatory requirements, including, without
limitation, Section 422 of the Code.
(c) Possible Early Termination of Accelerated Awards. If any
Option or other right to acquire Common Stock under this Plan
(other than under Article VII) has been fully accelerated as
permitted by Section 6.2(b) but is not exercised prior to (i) a
dissolution of the Corporation, or (ii) a reorganization event
described in Section 6.2(a) that the Corporation does not survive,
or (iii) the consummation of an event described in Section 6.2(a)
that results in a Change in Control Event approved by the Board,
such Option or right shall thereupon terminate, subject to any
provision that has been expressly made by the Committee for the
survival, substitution, exchange or other settlement of such Option
or right.
6.3 EFFECT OF TERMINATION OF EMPLOYMENT
The Committee shall establish in respect of each Award granted
to an Eligible Employee the effect of a termination of employment
on the rights and benefits thereunder and in so doing may make
distinctions based upon the cause of termination. In addition, in
the event of, or in anticipation of, a termination of employment
with the Company for any reason, other than discharge for cause,
the Committee may, in its discretion, increase the portion of the
Participant's Award available to the Participant, or Participant's
Beneficiary or Personal Representative, as the case may be, or,
subject to the provisions of Section 1.6, extend the exercisability
period upon such terms as the Committee shall determine and
expressly set forth in or by amendment to the Award Agreement.
6.4 COMPLIANCE WITH LAWS
This Plan, the granting and vesting of Awards under this Plan
and the offer, issuance and delivery of shares of Common Stock
and/or the payment of money under this Plan or under Awards granted
hereunder are subject to compliance with all applicable federal and
state laws, rules and regulations (including, but not limited to,
state and federal securities laws and federal margin requirements)
and to such approvals by any listing, regulatory or governmental
authority as may, in the opinion of counsel for the Corporation, be
necessary or advisable in connection therewith. Any securities
delivered under this Plan shall be subject to such restrictions,
and the person acquiring such securities shall, if requested by the
Corporation, provide such assurances and representations to the
Corporation as the Corporation may deem necessary or desirable to
assure compliance with all applicable legal requirements.
6.5 TAX WITHHOLDING
(a) Cash or Shares. Upon any exercise, vesting or payment of
any Award or upon the disposition of shares of Common Stock
acquired pursuant to the exercise of an Incentive Stock Option
prior to satisfaction of the holding period requirements of Section
422 of the Code, the Company shall have the right at its option to
(i) require the Participant (or Personal Representative or
Beneficiary, as the case may be) to pay or provide for payment of
the amount of any taxes which the Company may be required to
withhold with respect to such Award event or payment or (ii) deduct
from any amount payable in cash the amount of any taxes which the
Company may be required to withhold with respect to such cash
payment. In any case where a tax is required to be withheld in
connection with the delivery of shares of Common Stock under this
Plan, the Committee may in its sole discretion grant (either at the
time of the Award is granted or thereafter) to the Participant the
right to elect, pursuant to such rules and subject to such
conditions as the Committee may establish, to have the Corporation
reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of shares valued at their then
Fair Market Value, to satisfy such withholding obligation.
(b) Tax Loans. The Committee may, in its discretion,
authorize a loan to an Eligible Employee in the amount of any taxes
which the Company may be required to withhold with respect to
shares of Common Stock received (or disposed of, as the case may
be) pursuant to a transaction described in subsection (a) above.
Such a loan shall be for a term, at a rate of interest and pursuant
to such other terms and conditions as the Committee, under
applicable law, may establish and such loan need not comply with
the provisions of Section 1.8.
6.6 PLAN AMENDMENT, TERMINATION AND SUSPENSION
(a) Board Authorization. The Board may, at any time,
terminate or, from time to time, amend, modify or suspend this
Plan, in whole or in part. No Awards may be granted during any
suspension of this Plan or after termination of this Plan, but the
Committee shall retain jurisdiction as to Awards then outstanding
in accordance with the terms of this Plan.
(b) Stockholder Approval. Any amendment that would (i)
materially increase the benefits accruing to Participants under
this Plan, (ii) materially increase the aggregate number of
securities that may be issued under this Plan, or (iii) materially
modify the requirements as to eligibility for participation in this
Plan, shall be subject to stockholder approval only to the extent
then required by Section 422 of the Code or any other applicable
law, or deemed necessary or advisable by the Board.
(c) Amendment to Awards. Without limiting any other express
authority of the Committee under but subject to the express limits
of this Plan, the Committee by agreement or resolution may waive
conditions of or limitations on Awards to Eligible Employees that
the Committee in the prior exercise of its discretion has imposed,
without the consent of a Participant, and may make other changes to
the terms and conditions of Awards that do not affect in any manner
materially adverse to the Employee Participant, his or her rights
and benefits under an Award.
(d) Limitations on Amendments to Plan and Awards. No
amendment, suspension or termination of the Plan or change of or
affecting any outstanding Award shall, without written consent of
the Participant, affect in any manner materially adverse to the
Participant any rights or benefits of the Participant or
obligations of the Corporation under any Award granted under this
Plan prior to the effective date of such change. Changes
contemplated by Section 6.2 shall not be deemed to constitute
changes or amendments for purposes of this Section 6.6.
6.7 PRIVILEGES OF STOCK OWNERSHIP
Except as otherwise expressly authorized by the Committee or
this Plan, a Participant shall not be entitled to any privilege of
stock ownership as to any shares of Common Stock not actually
delivered to and held of record by him or her. No adjustment will
be made for dividends or other rights as a stockholders for which
a record date is prior to such date of delivery.
6.8 EFFECTIVE DATE OF THE PLAN
This Plan was originally effective as of September 22, 1992
("Effective Date"), the date of Board approval, and was subject to
stockholder approval within 12 months thereafter. The Plan is
hereby amended and restated in its entirety, effective as of August
27, 1996.
6.9 TERM OF THE PLAN
No Award shall be granted more than ten years after the
Effective Date of this Plan (the "termination date"). Unless
otherwise expressly provided in this Plan or in an applicable Award
Agreement, any Award granted prior to the termination date may
extend beyond such date, and all authority of the Committee with
respect to Awards hereunder, including the authority to amend an
Award, shall continue during any suspension of this Plan and in
respect of outstanding Awards on such termination date.
6.10 GOVERNING LAW; CONSTRUCTION; SEVERABILITY
(a) Choice of Law. This Plan, the Awards, all documents
evidencing Awards and all other related documents shall be governed
by, and construed in accordance with the laws of the State of
Nevada.
(b) Severability. If any provision shall be held by a court
of competent jurisdiction to be invalid and unenforceable, the
remaining provisions of this Plan shall continue in effect.
(c) Plan Construction.
(1) Rule 16b-3. It is the intent of the Corporation
that transactions in and affecting Awards in the case of
Participants who are or may be subject to Section 16 of the
Exchange Act satisfy any then applicable requirements of Rule
16b-3 so that such persons will be entitled to the benefits of
Rule 16b-3 or other exemptive rules under Section 16 of the
Exchange Act in respect of these transactions and will not be
subjected to avoidable liability thereunder. If any provision
of this Plan or of any Award would otherwise frustrate or
conflict with the intent expressed above, that provision to
the extent possible shall be interpreted and deemed amended so
as to avoid such conflict, but to the extent of any remaining
irreconcilable conflict with such intent as to such persons in
the circumstances, such provision shall be deemed void.
(2) Section 162(m). It is the further intent of the
Company that Options and Stock Appreciation Rights with an
exercise or base price not less than Fair Market Value on the
date of grant and Performance Share Awards under Section 5.2
of the Plan that are granted to or held by a Section 16 Person
shall qualify as performance-based compensation under Section
162(m) of the Code, and this Plan shall be interpreted
consistent with such intent.
6.11 CAPTIONS
Captions and headings are given to the sections and
subsections of this Plan solely as a convenience to facilitate
reference. Such headings shall not be deemed in any way material
or relevant to the construction or interpretation of the Plan or
any provision thereof.
6.12 EFFECT OF CHANGE OF SUBSIDIARY STATUS
For purposes of this Plan and any Award hereunder, if an
entity ceases to be a Subsidiary a termination of employment shall
be deemed to have occurred with respect to each employee of such
Subsidiary who does not continue as an employee of another entity
within the Company.
6.13 NON-EXCLUSIVITY OF PLAN
Nothing in this Plan shall limit or be deemed to limit the
authority of the Board or the Committee to grant awards or
authorize any other compensation, with or without reference to the
Common Stock, under any other plan or authority.
VII. NON-EMPLOYEE DIRECTOR OPTIONS
7.1 PARTICIPATION
Options under this Article VII shall be made only to Non-
Employee Directors.
7.2 ANNUAL OPTION GRANTS
(a) Time of Initial Grant. After approval of this Plan by
the stockholders of the Corporation, if any person who is not then
an officer or employee of the Company shall become a director of
the Corporation, there shall be granted automatically to such
person (without any action by the Board of Committee) a
Nonqualified Stock Option (the Award Date of which shall be the
date such person takes office) to purchase 5,000 shares (or,
effective ________, 10,000 shares of Common Stock, after giving
effect to a 2 for 1 stock split). Each person who is a Non-
Employee Director in office at the time this Plan is first approved
by the stockholders of the Corporation shall be granted without
further action an Option to purchase 5,000 shares of Common Stock
(the Award Date of which shall be September 22, 1992, the date of
Board approval of this Plan).
(b) Subsequent Annual Options. In each calendar year during
the term of the Plan, commencing in 1994, there shall be granted
automatically (without any action by the Committee or the Board) a
Nonqualified Stock Option to purchase 2,000 shares (or, effective
__________, 4,000 shares after giving effect to a 2 for 1 stock
split) of Common Stock to each Non-Employee Director who is re-
elected as a director of the Corporation (the Award Date of which
shall be the date of such re-election). In addition, subject to
stockholder approval at the 1997 Annual Stockholders Meeting, each
person who is a Non-Employee Director on August 27, 1996 shall be
granted on a one-time basis without further action on Option to
purchase 2,000 shares of Common Stock (the Award Date of which
shall be August 27, 1996, the date of Board approval of this
amendment). Furthermore, notwithstanding the first sentence of
this subsection (b), but subject to stockholder approval at the
1997 Annual Stockholders Meeting, in each calendar year during the
remaining term of the Plan, (commencing in 1997), the grant
described in the first sentence of this subsection shall not be
made and instead there shall be granted automatically (without any
action by the Committee or the Board) a Nonqualified Stock Option
to purchase 6,000 shares of Common Stock to each Non-Employee
Director who is re-elected as a director of the Corporation (the
Award Date of which shall be the date of such re-election).
(c) Maximum Number of Shares. Annual grants that would
otherwise exceed the maximum number of shares under Section 1.4(a)
shall be prorated within such limitation. A Non-Employee Director
shall not receive more than [25,000] shares on exercise of all
Options optioned under this Section 7.2.
7.3 OPTION PRICE
The purchase price per share of the Common Stock covered by
each Option granted pursuant to Section 7.2 hereof shall be 100% of
the Fair Market Value of the Common Stock on the Award Date. The
exercise price of any Option granted under this Article shall be
paid in full at the time of each purchase in cash or by check or in
shares of Common Stock valued at their Fair Market Value on the
date of exercise of the Option, or partly in such shares and partly
in cash, provided that any such shares used in payment shall have
been owned by the Participant at least six months prior to the date
of exercise.
7.4 OPTION PERIOD AND EXERCISABILITY
Each Option granted under this Article VII and all rights or
obligations thereunder shall commence on the Award Date and expire
ten years thereafter and shall be subject to earlier termination as
provided below. Each Option granted under Section 7.2 shall become
exercisable at the rate of 33-1/3% per year, on the first, second
and third anniversaries of the Award Date.
7.5 TERMINATION OF DIRECTORSHIP
If a Non-Employee Director's services as a member of the Board
of Directors terminate by reason of death, Disability or
Retirement, an Option granted pursuant to this Article held by such
Participant shall immediately become and shall remain exercisable
for two years after the date of such termination or until the
expiration of the stated term of such Option, whichever first
occurs. If a Non-Employee Director's services as a member of the
Board of Directors terminate for any other reason, any portion of
an Option granted pursuant to this Article which is not then
exercisable shall terminate and any portion of such Option which is
then exercisable may be exercised within a period of thirty (30)
days after the date of such termination or until the expiration of
the stated term, whichever first occurs.
7.6 ADJUSTMENTS
Options granted under this Article VII shall be subject to
adjustment as provided in Section 6.2, but only to the extent that
(a) such adjustment and the Committee's action in respect thereof
satisfy applicable law, (b) such adjustment in the case of a Change
in Control Event is effected pursuant to the terms of a
reorganization agreement approved by stockholders of the
Corporation, and (c) such adjustment is consistent with adjustments
to Options held by persons other than executive officers or
directors of the Corporation.
7.7 ACCELERATION UPON A CHANGE IN CONTROL EVENT
Upon the occurrence of a Change in Control Event, each Option
granted under Section 7.2 hereof shall become immediately
exercisable in full. To the extent that any Option granted under
this Article VII is not exercised prior to (i) a dissolution of the
Corporation or (ii) a merger or other corporate event that the
Corporation does not survive, and no provision is (or consistent
with the provisions of Section 7.6 can be) made for the assumption,
conversion, substitution or exchange of the Option, the Option
shall terminate upon the occurrence of such event.
VIII. DEFINITIONS
8.1 DEFINITIONS
(a) "Award" shall mean an award of any Option, Stock
Appreciation Right, Restricted Stock, Stock Bonus, Performance
Share Award, Performance-Based Award, Cash-Based Award, dividend
equivalent or deferred payment right or other right or security
that would constitute a "derivative security" under Rule 16a-1(c)
of the Exchange Act, or any combination thereof, whether
alternative or cumulative, authorized by and granted under this
Plan.
(b) "Award Agreement" shall mean any writing setting forth
the terms of an Award that has been authorized by the Committee.
(c) "Award Date" shall mean the date upon which the Committee
took the action granting an Award or such later date as the
Committee designates as the Award Date at the time of the Award or,
in the case of Awards under Article VII, the applicable dates set
forth therein.
(d) "Award Period" shall mean the period beginning on an
Award Date and ending on the expiration date of such Award.
(e) "Beneficiary" shall mean the person, persons, trust or
trusts designated by a Participant or, in the absence of a
designation, entitled by will or the laws of the descent and
distribution to receive the benefits specified in the Award
Agreement and under this Plan in the event of a Participant's
death, and shall mean the Participant's executor or administrator
if no other Beneficiary is designated and able to act under the
circumstances.
(f) "Board" shall mean the Board of Directors of the
Corporation.
(g) "Cash-Based Awards" shall mean Awards that, if paid, must
be paid in cash and that are neither denominated in nor have a
value derived from the value of, nor an exercise or conversion
privilege at a price related to, shares of Common Stock.
(h) "Cash Flow" shall mean cash and cash equivalents derived
from either (i) net cash flow from operations or (ii) net cash flow
from operations, financings and investing activities, as determined
by the Committee at the time an Award is granted.
(i) "Change in Control Event" shall mean any of the
following:
(1) Approval by the stockholders of the Corporation of
the dissolution or liquidation of the Corporation;
(2) Approval by the stockholders of the Corporation of
an agreement to merge or consolidate, or otherwise reorganize,
with or into one or more entities that are not Subsidiaries,
as a result of which less than 50% of the outstanding voting
securities of the surviving or resulting entity immediately
after the reorganization are, or will be, owned by
stockholders of the Corporation immediately before such
reorganization (assuming for purposes of such determination
that there is no change in the record ownership of the
Corporation's securities from the record date for such
approval until such reorganization and that such record owners
hold no securities of the other parties to such
reorganization):
(3) Approval by the stockholders of the Corporation of
the sale of substantially all of the Corporation's business
and/or assets to a person or entity which is not a Subsidiary;
(4) Any "person (as such term is used in Section 13(d)
and 14(d) of the Exchange Act) (other than a person having
such ownership at the time of adoption of this Plan) becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Corporation representing more than 50% of the combined voting
power of the Corporation's then outstanding securities
entitled to then vote generally in the election of directors
of the Corporation; or
(5) During any period not longer than two consecutive
years, individuals who at the beginning of such period
constituted the Board cease to constitute at least a majority
thereof, unless the election, or the nomination for election
by the Corporation's stockholders, of each new Board member
was approved by a vote of at least three-fourths of the Board
members then still in office who were Board members at the
beginning of such period (including for these purposes, new
members whose election or nomination was so approved).
(j) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(k) "Commission" shall mean the Securities and Exchange
Commission.
(l) "Committee" shall mean the Board or a committee appointed
by the Board to administer this Plan, which committee shall be
comprised only of two or more directors or such greater number of
directors as may be required under applicable law, each of whom (i)
in respect of any decision at a time when the Participant affected
by the decision may be subject to Section 162(m) of the Code be an
"outside director" within the meaning of Code Section 162(m) and
(ii) in respect of any decision at a time when the Participant
affected by the decision may be subject to Section 16 under the
Exchange Act, shall be a "Non-Employee Director" within the meaning
of Rule 16b-3(b)(3).
(m) "Common Stock" shall mean the Common Stock of the
Corporation and such other securities or property as may become
subject to Awards, or become subject to Awards, pursuant to an
adjustment made under Section 6.2 of this Plan.
(n) "Company" shall mean, collectively, the Corporation and
its domestic or foreign Subsidiaries or divisions.
(o) "Corporation" shall mean International Game Technology,
a Nevada corporation, and its successors.
(p) "Eligible Employee" shall mean an officer (whether or not
a director) or key executive, administrative, managerial,
production, marketing or sales employee of the Company.
(q) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
(r) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(s) "Fair Market Value" or any date shall mean (i) if the
stock is listed or admitted to trade on a national securities
exchange, the closing price of the stock on the Composite Tape, as
published in the Western Edition of The Wall Street Journal, of the
principal national securities exchange on which the stock is so
listed or admitted to trade, on such date, or, if there is no
trading of the stock on such date, then the closing price of the
stock as quoted on such Composite Tape on the next preceding date
on which there was trading in such shares; (ii) if the stock is not
listed or admitted to trade on a national securities exchange, the
last price for the stock on such date, as furnished by the National
Association of Securities Dealers, Inc. ("NASD") through the NASDAQ
National Market Reporting System or a similar organization if the
NASD is no longer reporting such information, (iii) if the stock is
not listed or admitted to trade on a national securities exchange
and is not reported on the National Market Reporting System, the
mean between the bid and asked price for the stock on such date, as
furnished by the NASD or a similar organization, or (iv) if the
stock is not listed or admitted to trade on a national securities
exchange, is not reported on the National Market Reporting System
and if bid and asked prices for the stock are not furnished by the
NASD or a similar organization, the value as established by the
Committee at such time for purposes of this Plan.
(t) "Incentive Stock Option" shall mean an Option which is
designated as an incentive stock option within the meaning of
Section 422 of the Code, the award of which contains such
provisions as are necessary to comply with that section.
(u) "Nonqualified Stock Option" shall mean an Option that is
designated as a Nonqualified Stock Option and shall include any
Option intended as an Incentive Stock Option that fails to meet the
applicable legal requirements thereof. Any Option granted
hereunder that is not designated as an Incentive Stock Option shall
be deemed to be designated a Nonqualified Stock Option under this
Plan and not an incentive stock option under the Code.
(v) "Non-Employee Director" shall mean a member of the Board
of Directors of the Corporation who is not an officer or employee
of the Company.
(w) "Non-Employee Director Participant" shall mean a Non-
Employee Director who has been granted an Option under the
provisions of Article VII.
(x) "Option" shall mean an option to purchase Common Stock
granted under this Plan. The Committee shall designate any Option
granted to an Eligible Employee as a Nonqualified Stock Option or
an Incentive Stock Option. Options granted under Article VII shall
be Nonqualified Stock Options.
(y) "Participant" shall mean an Eligible Employee who has
been granted an Award under this Plan and a Non-Employee Director
who has been received an Option under Article VII of this Plan.
(z) "Performance-Based Award" shall mean an Award of a right
to receive shares of Common Stock or other compensation (including
cash) under Section 5.2, the issuance or payment of which is
contingent upon, among other conditions, the attainment of
performance objectives specified by the Committee.
[(aa) "Performance Goals" shall mean EPS or ROE or Cash
Flow or Total Stockholder Return, and "Performance Goals" means any
combination thereof.]
(ab) "Performance Share Award" shall mean an Award of a right
to receive shares of Common Stock made in accordance with Section
5.1, the issuance or payment of which is contingent upon, among
other conditions, the attainment of performance objectives
specified by the Committee.
"Personal Representative" shall mean the person or
persons who, upon the disability or incompetence of a Participant,
shall have acquired on behalf of the Participant, by legal
proceeding or otherwise, the power to exercise the rights or
receive benefits under this Plan and who shall have become the
legal representative of the Participant.
(ad) "Plan" shall mean this 1993 Stock Option Plan, as amended
and restated.
(ae) "QDRO" shall mean a qualified domestic relations order as
defined in Section 414(p) of the Code or Title I, Section 206(d)(3)
of ERISA (to the same extent as if this Plan were subject thereto),
or the applicable rules thereunder.
(af) "Restricted Stock Award" shall mean an award of a fixed
number of shares of Common Stock to the Participant subject,
however, to payment of such consideration, if any, and such
forfeiture provisions, as are set forth in the Award Agreement.
(ag) "Restricted Stock" shall mean shares of Common Stock
awarded to a Participant under this Plan, subject to payment of
such consideration, if any, and such conditions on vesting and such
transfer and other restrictions as are established in or pursuant
to this Plan, for so long as such shares remain unvested under the
terms of the applicable Award Agreement.
(ah) "Retirement" shall mean retirement with the consent of
the Company, or in the case of a Non-Employee Director, a
retirement or resignation as a director after at least eight years
service as a director.
(ai) "ROE" shall mean consolidated net income of the
Corporation (less preferred dividends), divided by the average
consolidated common shareholders equity.
(aj) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the
Commission pursuant to the Exchange Act.
(ak) "Section 16 Person" shall mean a person subject to
Section 16(a) of the Exchange Act.
(al) "Securities Act" shall mean the Securities Act of 1933,
as amended from time to time.
(am) "Stock Appreciation Right" shall mean a right to receive
a number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of
which is determined by reference to a change in the Fair Market
Value of the Common Stock that is authorized under this Plan.
(an) "Stock Bonus" shall mean an Award of shares of Common
Stock granted under this Plan for no consideration other than past
services and without restriction other than such transfer or other
restrictions as the Committee may deem advisable to assure
compliance with law.
(ao) "Subsidiary" shall mean any corporation or other entity
a majority of whose outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Corporation.
(ap) "Total Disability" shall mean a "permanent and total
disability within the meaning of Section 22(e)(3) of the Code and
(except in the case of a Non-Employee Director) such other
disabilities, infirmities, afflictions or conditions as the
Committee by rule may include.
(aq) "Total Stockholder Return" shall mean with respect to the
Corporation or other entities (if measures on a relative basis),
the (i) change in the market price of its common stock (as quoted
in the principal market on which it is traded as of the beginning
and ending of the period) plus dividends and other distributions
paid, divided by (ii) the beginning quoted market price, all of
which is adjusted for any changes in equity structure, including
but not limited to stock splits and stock dividends.
<PAGE>
International Game Technology
March 31, 1997
International Game Technology
5270 Neil Road
Reno, Nevada 89502
Re: Registration on Form S-8 of International Game
Technology (the "Company")
Ladies and Gentlemen:
At your request, we have examined the Registration Statement on Form
S-8 to be filed with the Securities and Exchange Commission in connection
with the registration under the Securities Act of 1933, as amended, of
2,000,000 shares of Common Stock, $0.000625 par value per share, of the
Company (the "Common Stock"), to be issued pursuant to the International
Game Technology Stock Option Plan, as amended (the "Plan"). We have
examined the proceedings heretofore taken and to be taken in connection
with the authorization of the Plan and the Common Stock to be issued
pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of fact and law as
we have deemed relevant, we are of the opinion that the Common Stock has
been duly authorized by all necessary corporate action on the part of the
Company and, when issued in accordance with such authorization, the
provisions of the Plan and relevant agreements duly authorized by and in
accordance with the terms of the Plan, will be validly issued, fully paid
and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement.
Respectfully submitted,
/s/ Brian McKay
Brian McKay
Vice President, General Counsel,
Secretary and Treasurer
