As filed with the Securities and Exchange Commission on August 25, 1999
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.)
9295 Prototype Drive, Reno, Nevada 89511
(702) 448-7777
(Address and telephone number of principal executive offices)
___________________
International Game Technology Deferred Compensation Plan
(Full title of the plan)
___________________
Brian McKay
Vice President, General Counsel, Secretary and Treasurer
International Game Technology
9295 Prototype Drive, Reno, Nevada 89511
(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 LLP
610 Newport Center Drive, Suite 1700
Newport Beach, California 92660
___________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<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
Deferred $8,000,000 100% $8,000,000(2) $2,224(2)
Compensation
Obligations(1)
(1) The Deferred Compensation Obligations being
registered are general unsecured obligations of
International Game Technology (the "Company") to pay
deferred compensation in the future to participating members
of a select group of management or highly compensated
employees in accordance with the terms of the International
Game Technology Deferred Compensation Plan (the "Plan").
(2) Estimated solely for purposes of determining the registration fee.
The Exhibit Index for this Registration Statement is at page 10.
</TABLE>
<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 Securities Act. Such documents need not be filed with the
Securities and Exchange Commission (the "Commission") either as
part of this Registration Statement or as prospectuses or
prospectus supplements pursuant to Rule 424 of the Securities
Act. 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 Securities Act.
<PAGE>
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 Commission are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for its
fiscal year ended September 30, 1998;
(b) The Company's Quarterly Reports on Forms 10-Q for its
quarterly periods ended January 2, 1999, April 3,
1999, and July 3, 1999; and
(c) The Company's Current Reports on Forms 8-K filed with
the Commission on December 23, 1998, March 12, 1999,
April 29, 1999, April 30, 1999, and July 23, 1999.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), 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
The Plan provides a select group of management or highly
compensated employees (the "Eligible Employees") of the Company
and certain of its affiliates with the opportunity to defer the
receipt of certain pre-tax cash compensation. The obligations
of the Company under the Plan (the "Deferred Compensation
Obligations") will be general unsecured obligations of the
Company to pay deferred compensation in the future to
participating Eligible Employees (the "Participants") in
accordance with the terms of the Plan from the general assets of
the Company, and will rank pari passu with other unsecured and
unsubordinated indebtedness of the Company from time to time
outstanding. The Deferred Compensation Obligations will be
denominated and payable in United States dollars.
Each Participant may elect to defer under the Plan a
portion of his or her cash compensation that may otherwise be
payable in a calendar year. A Participant's compensation
deferrals are credited to the Participant's bookkeeping account
("Account") maintained under the Plan. At the time of making an
election to defer, each Participant may elect to have the
amounts in the Account indexed against an investment fund or
portfolio, solely for purposes of
<PAGE>
determining amounts payable under the Plan. Deferred amounts are
not actually invested in those funds or portfolios by the Company.
Each Participant's Account is credited on a periodic basis with a
deemed rate of earnings or loss, depending upon the investment
performance of the deemed investment fund or portfolio. Each choice
offers its own risks and potential for return, no representation is
made regarding the future performance of such fund or portfolio and
none of the investment funds or portfolios are insured or
guaranteed by the U.S. government or any other entity.
With certain exceptions, Deferred Compensation Obligations
will be paid after the earlier of: (1) a fixed payment date, as
elected by the Participant (if any); or (2) the Participant's
termination of employment with the Company. The Company may,
however, pay Deferred Compensation Obligations in connection
with the termination of the Plan. Participants may generally
elect that payments be made in a lump sum or installments upon
their retirement, although payments will be made in the form of
a lump sum for all other distribution events and the Company may
mandate payment in the form of a lump sum in certain
circumstances.
No amount payable under the Plan shall be subject to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, voluntary or involuntary. Any attempt
to dispose of any rights to benefits payable under the Plan
shall be void.
The Deferred Compensation Obligations are not subject to
redemption, in whole or in part, prior to the individual payment
dates selected by the Participants, except that Participants may
withdraw all or a portion of the value of their Plan accounts
under certain specified circumstances. However, the Company
reserves the right to amend or terminate the Plan at any time.
The total amount of the Deferred Compensation Obligations
is not determinable because the amount will vary depending upon
the level of participation by Eligible Employees and the amounts
of their compensation. The duration of the Plan is indefinite
(subject to the Company's ability to terminate the Plan). The
Deferred Compensation Obligations are not convertible into
another security of the Company. The Deferred Compensation
Obligations will not have the benefit of a negative pledge or
any other affirmative or negative covenant on the part of the
Company. Each Participant will be responsible for acting
independently with respect to, among other things, the giving of
notices, responding to any requests for consents, waivers or
amendments pertaining to the Deferred Compensation Obligations,
enforcing covenants and taking action upon a default by the
Company.
Item 5. Interests of Named Experts and Counsel
The validity of the original issuance of the Deferred
Compensation Obligations registered hereby is passed on for the
Company by Brian McKay. Mr. McKay is Vice President, General
Counsel, Secretary and Treasurer of the Company, is compensated
as an employee of the Company, is the holder of restricted
shares of the Company's Common Stock and options to acquire
shares of the Company's Common Stock, and is expected to be
eligible to participate in the Plan.
Item 6. Indemnification of Directors and Officers
Nevada Revised Statutes ("NRS") Section 78.037(1) allows a
Nevada corporation to provide in its articles of incorporation
for the elimination or limitation of the personal liability of a
director or an officer to the corporation or its stockholders
for damages for breach of fiduciary duty as a director or an
officer. Any such provision cannot eliminate or limit a
director or an officer's liability (1) for acts or omissions
which involve intentional misconduct, fraud or a knowing
violation of law, and (2) payment of distributions in violation
of Section 78.300 of the NRS.
Section 78.751 of the NRS allows a Nevada corporation to
indemnify any person who was, or is threatened to be made, a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such
corporation) by reason of the fact that such person is or was an
officer or director of such corporation, or is or was serving at
the request of such corporation as a director, officer, employee
or agent of another corporation or enterprise. The indemnity
may be against expenses (including attorneys' fees), judgments,
fees and amounts paid in settlement actually and reasonably
incurred by such person in connection with the action, suit or
proceeding, provided that he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to
the best interests of the corporation, and with respect to any
criminal action or proceeding had no reasonable cause to believe
his or her conduct was unlawful. A Nevada corporation may
indemnify officers and directors in an action by or in the right
of the corporation to procure a judgment in its favor under the
same conditions, except that no indemnification is permitted
without judicial approval if the officer or director is adjudged
to be liable to the corporation after exhaustion of all appeals
therefrom. When an officer or director is successful on the
merits or otherwise in the defense of any action referred to
above, the corporation must indemnify him or her against the
expenses which he or she actually and reasonably incurred in
connection with the defense. The indemnification provided is
not deemed to be exclusive of any other rights to which an
officer or director may be entitled under a corporation's
bylaws, by agreement, vote or otherwise, provided that
indemnification will not be allowed if a final adjudication
establishes that the acts and omissions of the director or
officer involved intentional misconduct, fraud or a knowing
violation of the law and was material to the cause of action
(unless indemnification is ordered by a court of competent
jurisdiction).
In accordance with the NRS, Article V of the Company's
Articles of Incorporation provides that no officer of director
of the Company shall have personal liability to the Company or
any of its stockholders for monetary damages for breach of
fiduciary duty as an officer or director. This provision does
not eliminate or limit the liability of an officer or director
for (1) any breach of the officer's or director's duty of
loyalty to the Company, (2) acts or omissions not in good faith
which involve intentional misconduct, fraud or a knowing
violation of law, (3) distributions in violation of the NRS or
(4) any transaction from which the officer or director derived
an improper personal benefit. The provisions of Article V do
not limit or preclude indemnification of an officer or director
by the Company for any liability of the officer or director
which has not been eliminated by the provisions of the Article.
In the event that the law of the State of Nevada is amended
subsequently so as to authorize corporate action further
eliminating or limiting the liability of officers or directors,
the liability of officers or directors shall thereupon be
eliminated or limited to the fullest extent permitted by the
General Corporation Law of the State of Nevada, as amended from
time to time.
Section 4.10 of the Company's By-Laws provides that the
Company is obligated to provide indemnity to directors and
officers of the Company to the fullest extent permitted by the
laws of the State of Nevada against all costs, charges,
expenses, liabilities and losses reasonably incurred or suffered
by such persons in their capacities as such. The By-Laws also
provide that the Company may provide indemnification to
employees and agents of the Company, with the same scope and
effect of the foregoing indemnification of directors and
officers. Under the By-Laws, the right to indemnification and
the payment of expenses incurred in defending a
<PAGE>
proceeding in advance of its final disposition shall not be
exclusive of any other right which any person may have or thereafter
acquire under any statute, provisions of the Articles of
Incorporation, By-Laws, agreement, vote of stockholders or
disinterested directors or otherwise. The By-Laws also provide
that any director, officer, employee or agent of the Company shall be
indemnified against all costs and expenses actually and
reasonably incurred by him as a witness in any action, suit or
proceeding. The By-Laws further provide that the Board of
Directors may enter into indemnification agreements with any
directors, officers, employees and agents of the Company as it
may designate from time to time, such agreements to provide in
substance the indemnification set forth in the By-Laws.
The Company has a policy of directors and officers
liability insurance which insures directors and officers against
the cost of defense, settlement or payment of a judgment under
certain circumstances. In addition, the Company has entered
into indemnification agreements with its directors and officers
which provides that the Company is required to indemnify such
directors and officers, to the maximum extent permitted by laws
of the State of Nevada.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
See the attached Exhibit Index on page 10.
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of this
Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
and
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in this Registration Statement or
any material change to such information in this
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant
with or furnished to the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated
by reference in this Registration Statement;
<PAGE>
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(h) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
provisions described in Item 6 above, or otherwise, the
registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Reno, State of Nevada, on the 14th day of August, 1999.
By: /s/ Brian McKay
----------------------------
Brian McKay
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 Commission,
granting unto said attorneys-in-fact and agents, 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 substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Signature Title Date
/s/ Charles N. Mathewson Chairman of the Board August 14, 1999
Charles N. Mathewson and Chief Executive
Officer (Principal
Executive Officer)
/s/ Maureen T. Mullarkey Vice President, August 14, 1999
Maureen T. Mullarkey Finance, Treasurer
and Chief Financial
Officer (Principal
Financial and
Accounting Officer)
<PAGE>
/s/ Albert J. Crosson Director August 17, 1999
Albert J. Crosson
/s/ Wilbur K. Keating Director August 14, 1999
Wilbur K. Keating
- ----------------------- Director
Warren L. Nelson
/s/ Frederick B. Rentschler Director August 14, 1999
Frederick B. Rentschler
/s/ John J. Russell Director August 14, 1999
John J. Russell
/s/ Rockwell A. Schnabel Director August 14, 1999
Rockwell A. Schnabel
/s/ Claudine B. Williams Director August 14, 1999
Claudine B. Williams
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
4. International Game Technology Deferred Compensation
Plan.
5. Opinion of Company Counsel (opinion re legality).
23.1 Consent of Deloitte & Touche LLP (consent of
independent auditors).
23.2 Consent of Company Counsel (included in Exhibit 5).
24. Power of Attorney (included in this Registration
Statement under "Signatures").
<PAGE>
International Game Technology
Deferred Compensation Plan
Master Plan Document
Effective September 1, 1999
Copyright 1999
By Compensation Resource Group, Inc.
All Rights Reserved
<PAGE>
TABLE OF CONTENTS
Page
PURPOSE 1
ARTICLE 1 DEFINITIONS 1
ARTICLE 2 SELECTION, ENROLLMENT, ELIGIBILITY 6
2.1 Selection by Committee 6
2.2 Enrollment Requirements 6
2.3 Eligibility; Commencement of Participation 6
2.4 Termination of Participation and/or Deferrals 6
ARTICLE 3 DEFERRAL COMMITMENTS/PROFIT SHARING RESTORATION
CONTRIBUTION/CREDITING/TAXES 6
3.1 Minimum Deferrals 6
3.2 Maximum Deferral 7
3.3 Election to Defer; Effect of Election Form 7
3.4 Withholding of Annual Deferral Amounts 8
3.5 Annual Company Contribution Amount 8
3.6 Annual Profit Sharing Restoration Contribution Amount 8
3.7 Vesting 9
3.8 Crediting/Debiting of Account Balances 9
3.9 FICA and Other Taxes 11
ARTICLE 4 SHORT-TERM PAYOUT; WITHDRAWAL ELECTION 12
4.1 Short-Term Payout 12
4.2 Other Benefits Take Precedence Over Short-Term 12
4.3 Withdrawal Election 12
ARTICLE 5 RETIREMENT BENEFIT 13
5.1 Retirement Benefit 13
5.2 Payment of Retirement Benefit 13
5.3 Death Prior to Completion of Retirement Benefit 13
ARTICLE 6 PRE-RETIREMENT SURVIVOR BENEFIT 13
6.1 Pre-Retirement Survivor Benefit 13
6.2 Payment of Pre-Retirement Survivor Benefit 13
ARTICLE 7 TERMINATION BENEFIT 13
<PAGE>
7.1 Termination Benefit 13
7.2 Payment of Termination Benefit 13
ARTICLE 8 DISABILITY WAIVER AND BENEFIT 14
8.1 Disability Waiver 14
8.2 Continued Eligibility; Disability Benefit 14
ARTICLE 9 BENEFICIARY DESIGNATION 14
9.1 Beneficiary 14
9.2 Beneficiary Designation; Change; Spousal Consent 15
9.3 Acknowledgment 15
9.4 No Beneficiary Designation 15
9.5 Doubt as to Beneficiary 15
9.6 Discharge of Obligations 15
ARTICLE 10 LEAVE OF ABSENCE 15
10.1 Paid Leave of Absence 15
10.2 Unpaid Leave of Absence 15
ARTICLE 11 TERMINATION, AMENDMENT OR MODIFICATION 16
11.1 Termination 16
11.2 Amendment 16
11.3 Plan Agreement 17
11.4 Effect of Payment 17
ARTICLE 12 ADMINISTRATION 17
12.1 Committee Duties 17
12.2 Administration Upon Change In Control 17
12.3 Agents 18
12.4 Binding Effect of Decisions 18
12.5 Indemnity of Committee 18
12.6 Employer Information 18
ARTICLE 13 OTHER BENEFITS AND AGREEMENTS 18
13.1 Coordination with Other Benefits 18
ARTICLE 14 CLAIMS PROCEDURES 18
<PAGE>
14.1 Presentation of Claim 18
14.2 Notification of Decision 18
14.3 Review of a Denied Claim 19
14.4 Decision on Review 19
14.5 Legal Action 19
ARTICLE 15 TRUST 20
15.1 Establishment of the Trust 20
15.2 Interrelationship of the Plan and the Trust 20
15.3 Distributions From the Trust 20
ARTICLE 16 MISCELLANEOUS 20
16.1 Status of Plan 20
16.2 Unsecured General Creditor 20
16.3 Employer's Liability 20
16.4 Nonassignability 20
16.5 Not a Contract of Employment 21
16.6 Furnishing Information 21
16.7 Terms 21
16.8 Captions 21
16.9 Governing Law 21
16.10 Notice 21
16.11 Successors 22
16.12 Spouse's Interest 22
16.13 Validity 22
16.14 Incompetent 22
16.15 Court Order 22
16.16 Distribution in the Event of Taxation 22
16.17 Insurance 23
16.18 Legal Fees To Enforce Rights After Change in Control 23
<PAGE>
INTERNATIONAL GAME TECHNOLOGY
DEFERRED COMPENSATION PLAN
Effective September 1, 1999
Purpose
The purpose of this Plan is to provide specified benefits to
a select group of management and highly compensated Employees who
contribute materially to the continued growth, development and future
business success of International Game Technology, a Nevada
corporation, and its subsidiaries, if any, that sponsor this Plan.
This Plan shall be unfunded for tax purposes and for purposes of Title
I of ERISA.
ARTICLE 1
Definitions
For purposes of this Plan, unless otherwise clearly apparent
from the context, the following phrases or terms shall have the
following indicated meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, a
credit on the records of the Employer equal to the sum of (i) the
Deferral Account balance, (ii) the vested Company Contribution Account
balance, and (iii) the vested Profit Sharing Restoration Contribution
Account balance. The Account Balance, and each other specified
account balance, shall be a bookkeeping entry only and shall be
utilized solely as a device for the measurement and determination of
the amounts to be paid to a Participant, or his or her designated
Beneficiary, pursuant to this Plan.
1.2 "Annual Cash Sharing" shall mean any compensation based upon
Company profitability and payable to a Participant as an Employee in
May and November under the Company's cash sharing plan.
1.3 "Annual Commissions" shall mean any compensation payable to a
Participant as an Employee based upon his or her sales, excluding Base
Annual Salary, Annual Discretionary Cash Bonus and Annual Cash
Sharing.
1.4 "Annual Company Contribution Amount" shall mean, for any one Plan
Year, the amount determined in accordance with Section 3.5.
1.5 "Annual Deferral Amount" shall mean that portion of a
Participant's Base Annual Salary, Annual Discretionary Cash Bonus,
Annual Cash Sharing and/or Annual Commissions that a Participant
elects to have, and is deferred, in accordance with Article 3, for any
one Plan Year. In the event of a Participant's Retirement, Disability
(if deferrals cease in accordance with Section 8.1), death or a
Termination of Employment prior to the end of a Plan Year, such year's
Annual Deferral Amount shall be the actual amount withheld prior to
such event.
1.6 "Annual Discretionary Cash Bonus" shall mean any compensation, in
addition to Base Annual Salary relating to services performed during
any calendar year, whether or not paid in such calendar year, payable
to a Participant as an Employee under any Employer's annual cash bonus
and cash incentive plans, excluding stock options.
<PAGE>
1.7 "Annual Installment Method" shall be an annual installment
payment over the number of years selected by the Participant in
accordance with this Plan, calculated as follows: The Account Balance
of the Participant shall be calculated as of the close of business on
the last business day of the year. The annual installment shall be
calculated by multiplying this balance by a fraction, the numerator of
which is one, and the denominator of which is the remaining number of
annual payments due the Participant. By way of example, if the
Participant elects a 10-year Annual Installment Method, the first
payment shall be 1/10 of the Account Balance, calculated as described
in this definition. The following year, the payment shall be 1/9 of
the Account Balance, calculated as described in this definition. Each
annual installment shall be paid on or as soon as practicable after
the last business day of the applicable year.
1.8 "Annual Profit Sharing Restoration Contribution Amount" for any
one Plan Year shall be the amount determined in accordance with
Section 3.6.
1.9 "Base Annual Salary" shall mean the annual cash compensation
relating to services performed during any calendar year, whether or
not paid in such calendar year, excluding bonuses, cash sharing,
commissions, overtime, fringe benefits, stock options, relocation
expenses, incentive payments, non-monetary awards, and other fees,
automobile and other allowances paid to a Participant for employment
services rendered (whether or not such allowances are included in the
Employee's gross income). Base Annual Salary shall be calculated
before reduction for compensation voluntarily deferred or contributed
by the Participant pursuant to all qualified or non-qualified plans of
any Employer and shall be calculated to include amounts not otherwise
included in the Participant's gross income under Code Sections 125,
402(e)(3), 402(h), or 403(b) pursuant to plans established by any
Employer; provided, however, that all such amounts will be included in
compensation only to the extent that, had there been no such plan, the
amount would have been payable in cash to the Employee.
1.10 "Beneficiary" shall mean one or more persons, trusts, estates or
other entities, designated in accordance with Article 9, that are
entitled to receive benefits under this Plan upon the death of a
Participant.
1.11 "Beneficiary Designation Form" shall mean the form established
from time to time by the Committee that a Participant completes, signs
and returns to the Committee to designate one or more Beneficiaries.
1.12 "Board" shall mean the board of directors of the Company.
1.13 "Change in Control" shall mean the first to occur of any of the
following events:
(a) Any "person" (as that term is used in Section 13 and 14(d)(2) of
the Securities Exchange Act of 1934 ("Exchange Act")) becomes the
beneficial owner (as that term is used in Section 13(d) of the
Exchange Act), directly or indirectly, of fifty percent (50%) or more
of the Company's capital stock entitled to vote in the election of
directors;
(b) During any period of not more than two consecutive years, not
including any period prior to the adoption of this Plan, individuals
who, at the beginning of such period constitute the board of directors
of the Company, and any new director (other than a director designated
by a person who has entered into an agreement with the Company to
effect a transaction described in clause (a), (c), (d) or (e) of this
Section 1.10) whose election by the board of directors or nomination
for election by the Company's stockholders was
<PAGE>
approved by a vote of at least three-fourths (3/4ths) of the
directors then still in office, who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at
least a majority thereof;
(c) The shareholders of the Company approve any consolidation or
merger of the Company, other than a consolidation or merger of the
Company in which the holders of the common stock of the Company
immediately prior to the consolidation or merger hold more than fifty
percent (50%) of the common stock of the surviving corporation
immediately after the consolidation or merger;
(d) The shareholders of the Company approve any plan or proposal for
the liquidation or dissolution of the Company; or
(e) The shareholders of the Company approve the sale or transfer of
all or substantially all of the assets of the Company to parties that
are not within a "controlled group of corporations" (as defined in
Code Section 1563) in which the Company is a member.
1.14 "Claimant" shall have the meaning set forth in Section 14.1.
1.15 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.16 "Committee" shall mean the Profit Sharing Plan committee.
1.17 "Company" shall mean International Game Technology, a Nevada
corporation, and any successor.
1.18 "Company Contribution Account" shall mean (i) the sum of the
Participant's Annual Company Contribution Amounts, plus (ii) amounts
credited in accordance with all the applicable crediting provisions of
this Plan that relate to the Participant's Company Contribution
Account, less (iii) all distributions made to the Participant or his
or her Beneficiary pursuant to this Plan that relate to the
Participant's Company Contribution Account.
1.19 "Deduction Limitation" shall mean the following described
limitation on a benefit that may otherwise be distributable pursuant
to the provisions of this Plan. Except as otherwise provided, this
limitation shall be applied to all distributions that are "subject to
the Deduction Limitation" under this Plan. If an Employer determines
in good faith prior to a Change in Control that there is a reasonable
likelihood that any compensation otherwise payable to a Participant
for a taxable year of the Employer would not be deductible by the
Employer solely by reason of the limitation under Code Section 162(m),
then, to the extent deemed necessary by the Employer in its discretion
to ensure that the entire amount of any distribution to the
Participant pursuant to this Plan prior to the Change in Control is
deductible, the Employer may defer all or any portion of a
distribution otherwise payable under this Plan. Any amounts deferred
pursuant to this limitation shall continue to be credited/debited with
additional amounts in accordance with Section 3.9 below, even if such
amount is being paid out in installments. The amounts so deferred and
amounts credited thereon shall be distributed to the Participant or
his or her Beneficiary (in the event of the Participant's death) at
the earliest possible date, as determined by the Employer in good
faith, on which the deductibility of compensation paid or payable to
the Participant for the taxable year of the Employer during which the
distribution is made will not be limited by Section
<PAGE>
162(m), or if earlier, the effective date of a Change in Control.
Notwithstanding anything to the contrary in this Plan, the Deduction
Limitation shall not apply after a Change in Control.
1.20 "Deferral Account" shall mean (i) the sum of all of a
Participant's Annual Deferral Amounts, plus (ii) amounts credited in
accordance with all the applicable crediting provisions of this Plan
that relate to the Participant's Deferral Account, less (iii) all
distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to his or her Deferral Account.
1.21 "Disability" shall mean a period of disability during which a
Participant qualifies for permanent disability benefits under the
Participant's Employer's long-term disability plan, or, if a
Participant does not participate in such a plan, a period of
disability during which the Participant would have qualified for
permanent disability benefits under such a plan had the Participant
been a participant in such a plan, as determined in the sole
discretion of the Committee. If the Participant's Employer does not
sponsor such a plan, or discontinues to sponsor such a plan,
Disability shall be determined by the Committee in its sole
discretion.
1.22 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.23 "Election Form" shall mean a written form established from time
to time by the Committee that a Participant must complete, sign and
return to the Committee to make an election under the Plan.
1.24 "Employee" shall mean a person who is an employee of any
Employer.
1.25 "Employer(s)" shall mean the Company and/or any of its
subsidiaries (now in existence or hereafter formed or acquired) that
have been selected by the Board to participate in the Plan and have
adopted the Plan as a sponsor.
1.26 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.27 "First Plan Year" shall mean the period beginning September 1,
1999 and ending December 31, 1999.
1.28 "Participant" shall mean any Employee (i) who is selected to
participate in the Plan, (ii) who elects to participate in the Plan,
(iii) who signs a Plan Agreement, an Election Form and a Beneficiary
Designation Form, (iv) whose signed Plan Agreement, Election Form and
Beneficiary Designation Form are accepted by the Committee, (v) who
commences participation in the Plan, and (vi) whose Plan Agreement has
not terminated. A spouse or former spouse of a Participant shall not
be treated as a Participant in the Plan or have an account balance
under the Plan, even if he or she has an interest in the Participant's
benefits under the Plan as a result of applicable law or property
settlements resulting from legal separation or divorce.
1.29 "Plan" shall mean the Company's Deferred Compensation Plan, which
shall be evidenced by this instrument and by each Plan Agreement, as
they may be amended from time to time.
1.30 "Plan Agreement" shall mean a written agreement, in a form
approved by the Committee and as it may be amended from time to time,
which is entered into by and between an Employer and a Participant.
Each Plan Agreement executed by a Participant and the Participant's
Employer shall provide for the entire benefit to which such
Participant is entitled under the Plan; should there be more than one
Plan Agreement, the Plan Agreement bearing the latest date of
acceptance by the
<PAGE>
Employer shall supersede all previous Plan Agreements in their
entirety and shall govern such entitlement. The terms of any Plan
Agreement may be different for any Participant, and any Plan
Agreement may provide additional benefits not set forth in
the Plan or limit the benefits otherwise provided under the Plan;
provided, however, that any such additional benefits or benefit
limitations must be agreed to by both the Employer and the
Participant.
1.31 "Plan Year" shall, except for the First Plan Year, mean a period
beginning on January 1 of each calendar year and continuing through
December 31 of such calendar year.
1.32 "Pre-Retirement Survivor Benefit" shall mean the benefit set
forth in Article 6.
1.33 "Profit Sharing Plan" shall be that certain IGT Profit Sharing
Plan, as amended from time to time.
1.34 "Profit Sharing Restoration Contribution Account" shall mean (i)
the sum of all of a Participant's Annual Profit Sharing Restoration
Contribution Amounts, plus (ii) amounts credited in accordance with
all the applicable crediting provisions of this Plan that relate to
the Participant's Profit Sharing Restoration Contribution Account,
less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to the Participant's
Profit Sharing Restoration Contribution Account.
1.35 "Retirement", "Retire(s)" or "Retired" shall mean, with respect
to an Employee, severance from employment from all Employers for any
reason other than a leave of absence, death or Disability on or after
the attainment of age fifty-five (55).
1.36 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.37 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
1.38 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.39 "Termination of Employment" shall mean the severing of employment
with all Employers, voluntarily or involuntarily, for any reason other
than Retirement, Disability, death or an authorized leave of absence.
1.40 "Trust" shall mean one or more trusts established pursuant to
that certain Master Trust Agreement between the Company and the
trustee named therein, as amended from time to time.
1.41 "Years of Vesting Service" shall mean, with respect to a
Participant, his or her total years of vesting service as defined in
and for purposes of the Profit Sharing Plan.
ARTICLE 2
Selection, Enrollment, Eligibility
2.1 Selection by Committee. Participation in the Plan shall be
limited to a select group of management and highly compensated
Employees of the Employers, as determined by the Committee in its sole
discretion. From that group, the Committee shall select, in its sole
discretion, those Employees who may actually elect to participate in
the Plan.
<PAGE>
2.2 Enrollment Requirements. As a condition to participation, each
selected Employee who wishes to participate in the Plan shall
complete, execute and return to the Committee a Plan Agreement, an
Election Form and a Beneficiary Designation Form, all within 30 days
after he or she is selected to participate in the Plan. In addition,
the Committee shall establish from time to time such other enrollment
requirements as it determines in its sole discretion are necessary. A
selected Employee whose Plan Agreement, Election Form and Beneficiary
Designation are not received by the Committee within such 30 day
period shall not be eligible to participate in the Plan unless we or
she is again selected by the Committee and timely files such
documents.
2.3 Eligibility; Commencement of Participation. Provided an Employee
selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within the
specified time period, that Employee shall commence participation in
the Plan on the first day of the Plan Year following the date on which
the Employee completes all enrollment requirements. The Committee may
allow an Employee who is first employed by an Employer to commence
participation in the Plan during a Plan Year; provided that the
Employee is selected in accordance with Section 2.1 and satisfies the
requirements of Section 2.3 no later than 30 days after the date he or
she is first employed and provided that no amount of compensation
earned prior to the date of the Committee's receipt of his or her Plan
Agreement and Election Form may be deferred.
2.4 Termination of Participation and/or Deferrals. If the Committee
determines in good faith that a Participant no longer qualifies as a
member of a select group of management or highly compensated
employees, as membership in such group is determined in accordance
with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee
shall have the right, in its sole discretion, to (i) terminate any
deferral election the Participant has made for the remainder of the
Plan Year in which the Participant's membership status changes, (ii)
prevent the Participant from making future deferral elections and/or
(iii) immediately distribute the Participant's then Account Balance as
a Termination Benefit and terminate the Participant's participation in
the Plan.
ARTICLE 3
Deferral Commitments/Profit Sharing Restoration
Contribution/Crediting/Taxes
3.1 Minimum Deferrals.
(a) Base Annual Salary, Annual Discretionary Cash Bonus, Annual Cash
Sharing, and Annual Commissions. For each Plan Year, a Participant
may elect to defer, as his or her Annual Deferral Amount, Base Annual
Salary, Annual Discretionary Cash Bonus, Annual Cash Sharing, and/or
Annual Commissions in an aggregate minimum of $2,000.
If an election is made for less than $2,000, if no election
is made or if no election can be made because the maximum
amount that the Participant may defer under Section 3.2 is
less than $2,000, the amount deferred shall be zero.
(b) Short Plan Year. Notwithstanding the foregoing, if a Participant
first becomes a Participant after the first day of a Plan Year, or in
the case of the first Plan Year of the Plan itself, the minimum Base
Annual Salary, Annual Discretionary Cash Bonus, Annual Cash Sharing
and Annual Commissions deferral shall be an amount equal to the
<PAGE>
minimums set forth above, respectively, multiplied by a fraction, the
numerator of which is the number of complete months remaining in the
Plan Year and the denominator of which is 12.
3.2 Maximum Deferral.
(a) Base Annual Salary, Annual Discretionary Cash Bonus, Annual Cash
Sharing and Annual Commissions. For each Plan Year, a Participant may
elect to defer, as his or her Annual Deferral Amount, Base Annual
Salary, Annual Discretionary Cash Bonus, Annual Cash Sharing and/or
Annual Commissions up to the following maximum percentages for each
deferral elected:
Deferral Maximum Amount
Base Annual Salary 50%
Annual Discretionary 50%
Cash Bonus
Annual Cash Sharing 50%
Annual Commissions 50%
Notwithstanding the foregoing, if a Participant first
becomes a Participant after the first day of a Plan Year, or
in the case of the first Plan Year of the Plan itself, the
maximum Annual Deferral Amount, with respect to Base Annual
Salary, Annual Discretionary Cash Bonus, Annual Cash Sharing
and/or Annual Commissions shall be limited to 50% of the
amount of such form of compensation not yet earned by the
Participant as of the date the Participant submits a Plan
Agreement and Election Form to the Committee for acceptance.
The Committee, in its discretion, may adopt other deferral
limits that are more restrictive on Participants than the
foregoing limits, and the Committee may provide that such
limits, and the Committee may provide that such other limits
shall apply to Participants generally or only to certain
specified Participants.
3.3 Election to Defer; Effect of Election Form.
(a) First Plan Year. In connection with a Participant's commencement
of participation in the Plan, the Participant shall make an
irrevocable deferral election for the Plan Year in which the
Participant commences participation in the Plan, along with such other
elections as the Committee deems necessary or desirable under the
Plan. For these elections to be valid, the Election Form must be
completed and signed by the Participant, timely delivered to the
Committee (in accordance with Section 2.2 above) and accepted by the
Committee.
(b) Subsequent Plan Years. For each succeeding Plan Year, an
irrevocable deferral election for that Plan Year, and such other
elections as the Committee deems necessary or desirable under the
Plan, shall be made by timely delivering to the Committee, in
accordance with its rules and procedures, before the end of the Plan
Year preceding the Plan Year for which the election is made, a new
Election Form. If no such Election Form is timely delivered for a Plan
Year, the Annual Deferral Amount shall be zero for that Plan Year.
<PAGE>
3.4 Withholding of Annual Deferral Amounts. For each Plan Year, the
Base Annual Salary portion of the Annual Deferral Amount shall be
withheld from each regularly scheduled Base Annual Salary payroll in
equal amounts, as adjusted from time to time for increases and
decreases in Base Annual Salary. The Annual Discretionary Cash Bonus,
Annual Cash Sharing and Annual Commissions portion of the Annual
Deferral Amount shall be withheld at the time the Annual Discretionary
Cash Bonus, Annual Cash Sharing or Annual Commissions, as the case may
be, are or otherwise would be paid to the Participant, whether or not
this occurs during the Plan Year itself.
3.5 Annual Company Contribution Amount. For each Plan Year, an
Employer, in its sole discretion, may, but is not required to, credit
any amount it desires to any Participant's Company Contribution
Account under this Plan, which amount shall be for that Participant
the Annual Company Contribution Amount for that Plan Year. The amount
so credited to a Participant may be smaller or larger than the amount
credited to any other Participant, and the amount credited to any
Participant for a Plan Year may be zero, even though one or more other
Participants receive an Annual Company Contribution Amount for that
Plan Year. The Annual Company Contribution Amount, if any, shall be
credited as of the last day of the Plan Year. If a Participant is not
employed by an Employer as of the last day of a Plan Year other than
by reason of his or her Retirement or death while employed, the Annual
Company Contribution Amount for that Plan Year shall be zero.
3.6 Annual Profit Sharing Restoration Contribution Amount. A
Participant's Annual Profit Sharing Restoration Contribution Amount
for any Plan Year shall be equal to the difference between (i) the
amount of employer matching contributions the Participant would have
received under section 3.3 of the Profit Sharing Plan for the period
under the Profit Sharing Plan that corresponds to the Plan Year, but
for the Participant's deferral election under this Plan, and (ii) the
amount of employer matching contributions the Participant actually
received under section 3.3 of the Profit Sharing Plan for the period
under the Profit Sharing Plan that corresponds to the Plan Year. If a
Participant is not employed by an Employer as of the last day of a
Plan Year other than by reason of his or her Retirement or death, the
Annual Profit Sharing Restoration Contribution Amount for such Plan
Year shall be zero. In the event of Retirement or death, a
Participant shall be credited with the Annual Profit Sharing
Restoration Contribution Amount for the Plan Year in which he or she
Retires or dies. Any Annual Company Profit Sharing Restoration
Amount, and amounts debited or credited thereon in accordance with
Section 3.9, which has been forfeited under Section 3.8 during a Plan
Year shall be allocated as of the last day of the Plan Year to the
Company Profit Sharing Restoration Accounts of the other eligible
Participants in the Plan during that Plan Year in accordance with the
methodology set forth in Section 3.10 of the Profit Sharing Plan as
interpreted by the Committee in its sole and absolute discretion.
3.7 Vesting.
(a) A Participant shall at all times be 100% vested in his or her
Deferral Account.
(b) A Participant shall be vested in his or her Company Contribution
Account and Profit Sharing Restoration Contribution Account in
accordance with the following schedule:
Years of Vesting Service Vested Percentage of
on Date of Termination of Company Contribution Account
<PAGE>
Employment
Less than 1 year 0%
More than 1 but less than 2 years 10%
More than 2 but less than 3 years 20%
More than 3 but less than 4 years 30%
More than 4 but less than 5 years 45%
More than 5 but less than 6 years 60%
More than 6 but less than 7 years 80%
7 years or more 100%
(c) Notwithstanding anything to the contrary contained in this
Section 3.8, in the event of the Participant's death, or a Change in
Control, a Participant's Company Contribution Account and Profit
Sharing Restoration Contribution Account shall immediately become 100%
vested (if it is not already vested in accordance with the above
vesting schedules).
(d) Notwithstanding subsection (c), the vesting schedule for a
Participant's Company Contribution Account and Profit Sharing
Restoration Contribution Account shall not be accelerated to the
extent that the Committee determines that such acceleration would
cause the deduction limitations of Section 280G of the Code to become
effective. In the event that all of a Participant's Company
Contribution Account or Profit Sharing Restoration Contribution
Account is not vested pursuant to such a determination, the
Participant may request, no later than 60 days after the date the
Committee notifies the Participant in writing that his or her vesting
will not be fully accelerated in accordance with the foregoing
sentence, independent verification of the Committee's calculations
with respect to the application of Section 280G. Such request must be
made in writing to the Committee. In such case, the Committee must
provide to the Participant within 30 business days of its receipt of
such a request an opinion from a nationally recognized accounting firm
selected by the Participant (the "Accounting Firm"). The opinion
shall state the Accounting Firm's opinion that any limitation in the
vested percentage hereunder is necessary to avoid the limits of
Section 280G and contain supporting calculations, and the
Participant's vesting (to the extent not previously accelerated) shall
be accelerated to the maximum extent possible (within the
determination made by the Accounting Firm) such that the limitations
of Section 280G of the Code will not be triggered. The cost of such
opinion shall be paid for by the Company.
3.8 Crediting/Debiting of Account Balances. In accordance with, and
subject to, the rules and procedures that are established from time to
time by the Committee, in its sole discretion, amounts shall be
credited or debited to a Participant's Account Balance in accordance
with the following rules:
(a) Election of Measurement Funds. A Participant, in connection with
his or her initial deferral election in accordance with Section 3.3(a)
above, shall elect, on the Election Form, one or more Measurement
Fund(s) (as described in Section 3.9(c) below) to be used to determine
the additional amounts to be credited (or, in the event of losses,
debited) to his or her Account Balance for the first calendar month or
portion thereof in which the Participant commences participation in
the Plan and continuing thereafter for each subsequent calendar month
in which the Participant participates in the Plan, unless changed in
accordance with the next sentence. Commencing with the first business
day
<PAGE>
that follows the Participant's commencement of participation in
the Plan and continuing thereafter for each subsequent business day in
which the Participant participates in the Plan, the Participant may
(but is not required to) elect, by submitting an Election Form to the
Committee that is accepted by the Committee, to add or delete one or
more Measurement Fund(s) to be used to determine the additional
amounts to be credited (or, in the event of losses, debited) to his or
her Account Balance, or to change the portion of his or her Account
Balance allocated to each previously or newly elected Measurement
Fund. If an election is made in accordance with the previous sentence,
it shall apply to the next business day and continue thereafter for
each subsequent day in which the Participant participates in the Plan,
unless changed in accordance with the previous sentence.
(b) Proportionate Allocation. In making any election described in
Section 3.9(a) above, the Participant shall specify on the Election
Form, in increments of five percentage points (5%), the percentage of
his or her Account Balance to be deemed to be invested in a particular
Measurement Fund for purposes of crediting deemed earnings (or losses)
with respect to his or her Account Balance. A Participant's elections
shall total 100%.
(c) Measurement Funds. The Participant may elect one (1) or more of
the measurement funds, based on certain mutual funds approved from
time to time by the Committee (the "Measurement Funds"), for the
purpose of crediting additional amounts to his or her Account Balance.
As necessary, the Committee may, in its sole discretion, discontinue,
substitute or add a Measurement Fund. Each such action will take
effect as of the first business day that follows by thirty (30) days
the day on which the Committee gives Participants advance written
notice of such change.
(d) Crediting or Debiting Method. The performance of each elected
Measurement Fund (either positive or negative) will be determined by
the Committee, in its reasonable discretion, based on the actual
performance of the selected mutual funds corresponding to the
Measurement Funds. A Participant's Account Balance shall be credited
or debited on a daily basis based on the performance of each
Measurement Fund selected by the Participant, as determined by the
Committee in its sole discretion, as though (i) a Participant's
Account Balance were invested in the Measurement Fund(s) selected by
the Participant, in the percentages applicable to such calendar month,
as of the close of business on the first business day of such calendar
month, at the closing price on such date; (ii) the portion of the
Annual Deferral Amount that was actually deferred during any calendar
month were invested in the Measurement Fund(s) selected by the
Participant, in the percentages applicable to such calendar month, no
later than the close of business on the first business day after the
day on which such amounts are actually deferred from the Participant's
Base Annual Salary through reductions in his or her payroll, at the
closing price on such date; and (iii) any distribution made to a
Participant that decreases such Participant's Account Balance ceased
being invested in the Measurement Fund(s), in the percentages
applicable to such calendar month, no earlier than one business day
prior to the distribution, at the closing price on such date. The
Participant's Annual Company Contribution Amount and Annual Profit
Sharing Restoration Contribution Amount shall be credited to his or
her Company Contribution Account or Profit Sharing Restoration
Contribution Account, as the case may be, for purposes of this Section
3.9(d) as of the close of business on the last business day of the
Plan Year to which it relates.
<PAGE>
(e) No Actual Investment. Notwithstanding any other provision of
this Plan that may be interpreted to the contrary, the Measurement
Funds are to be used for measurement purposes only, and a
Participant's election of any such Measurement Fund, the deemed
allocation to his or her Account Balance thereto, the calculation of
additional amounts and the crediting or debiting of such amounts to a
Participant's Account Balance shall not be considered or construed in
any manner as an actual investment of his or her Account Balance in
any such Measurement Fund. In the event that the Company or the
Trustee (as that term is defined in the Trust), in its own discretion,
decides to invest funds in any or all of the Measurement Funds, no
Participant shall have any rights in or to such investments. Without
limiting the foregoing, a Participant's Account Balance shall at all
times be a bookkeeping entry only and shall not represent any
investment made on his or her behalf by the Company or the Trust; the
Participant shall at all times remain an unsecured general creditor of
the Company.
3.9 FICA and Other Taxes.
(a) Annual Deferral Amounts. For each Plan Year in which an Annual
Deferral Amount is being withheld from a Participant, the
Participant's Employer(s) shall withhold from that portion of the
Participant's Base Annual Salary, Annual Discretionary Cash Bonus,
Annual Cash Sharing and Annual Commissions that is not being deferred,
in a manner determined by the Employer(s), the Participant's share of
FICA and other employment taxes on such Annual Deferral Amount. If
necessary, the Committee may reduce the Annual Deferral Amount
otherwise elected by a Participant in order to comply with this
Section 3.10.
(b) Annual Company Contribution Amounts and Annual Profit Sharing
Restoration Contribution Amounts. For each Plan Year in which an
Annual Company Contribution Amount or Profit Sharing Restoration
Contribution Amount vests, the Participant's Employer(s) shall
withhold from that portion of the Participant's Base Annual Salary,
Annual Discretionary Cash Bonus, Annual Cash Sharing and Annual
Commissions that is not being deferred, in a manner determined by the
Employer(s), the Participant's share of FICA and other employment
taxes on such Annual Company Contribution Amount and Annual Profit
Sharing Restoration Contribution Amount and all earnings thereon. If
necessary, the Committee may reduce a Participant's Annual Company
Contribution Amount or Annual Profit Sharing Restoration Contribution
Amount or both in order to comply with this Section 3.10.
(c) Distributions. The Participant's Employer(s), or the trustee of
the Trust, shall withhold from any amount otherwise payable to a
Participant under this Plan all federal, state and local income,
employment and other taxes required to be withheld by the Employer(s),
or the trustee of the Trust, in connection with such payments, in
amounts and in a manner to be determined in the sole discretion of the
Employer(s) and the trustee of the Trust.
ARTICLE 4
Short-Term Payout; Withdrawal Election
4.1 Short-Term Payout. In connection with each election to defer an
Annual Deferral Amount, a Participant may irrevocably elect to receive
a future "Short-Term Payout" from the Plan with respect to such Annual
Deferral Amount. Subject to the Deduction Limitation, the Short-Term
<PAGE>
Payout shall be a lump sum payment in an amount that is equal to the
Annual Deferral Amount plus amounts credited or debited in the manner
provided in Section 3.9 above on that amount, determined at the time
that the Short-Term Payout becomes payable (rather than the date of a
Termination of Employment). Subject to the Deduction Limitation and
the other terms and conditions of this Plan, each Short-Term Payout
elected shall be paid out during a 45 day period commencing
immediately after the last day of any Plan Year designated by the
Participant that is at least three Plan Years after the Plan Year in
which the Annual Deferral Amount is actually deferred. By way of
example, if a three year Short-Term Payout is elected for Annual
Deferral Amounts that are deferred in the Plan Year commencing January
1, 2000, the three year Short-Term Payout would become payable during
the 45 day period commencing January 1, 2004.
4.2 Other Benefits Take Precedence Over Short-Term. Should an event
occur that triggers a benefit under Article 5, 6, 7 or 8, any Annual
Deferral Amount, plus amounts credited or debited thereon, that is
subject to a Short-Term Payout election under Section 4.1 shall not be
paid in accordance with Section 4.1 but shall be paid in accordance
with the other applicable Article.
4.3 Withdrawal Election. A Participant (or, after a Participant's
death, his or her Beneficiary) may elect, at any time, to withdraw all
of his or her Account Balance, calculated as if there had occurred a
Termination of Employment as of the day of the election, less a
withdrawal penalty equal to 10% of such amount (the net amount shall
be referred to as the "Withdrawal Amount"). This election can be made
at any time, before or after Retirement, Disability, death or
Termination of Employment, and whether or not the Participant (or
Beneficiary) is in the process of being paid pursuant to an
installment payment schedule. If made before Retirement, Disability
or death, a Participant's Withdrawal Amount shall be his or her
Account Balance calculated as if there had occurred a Termination of
Employment as of the day of the election. No partial withdrawals of a
Participant's Account Balance shall be allowed. The Participant (or
his or her Beneficiary) shall make this election by giving the
Committee advance written notice of the election in a form determined
from time to time by the Committee. The Participant (or his or her
Beneficiary) shall be paid the Withdrawal Amount within 45 days of his
or her election. Once the Withdrawal Amount is paid, the
Participant's participation in the Plan shall terminate and the
Participant shall not be eligible to participate in the Plan for the
remainder of the Plan Year in which the withdrawal election is made
and the next full Plan Year. The payment of this Withdrawal Amount
shall not be subject to the Deduction Limitation. The amount of the
withdrawal penalty shall be permanently and irrevocably forfeited by
the Participant.
ARTICLE 5
Retirement Benefit
5.1 Retirement Benefit. Subject to the Deduction Limitation, a
Participant who Retires shall receive, as a Retirement Benefit, his or
her Account Balance.
5.2 Payment of Retirement Benefit. A Participant, in connection with
his or her commencement of participation in the Plan, shall elect on
an Election Form to receive the Retirement Benefit in a lump sum or
pursuant to an Annual Installment Method of 5, 10 or 15 years. The
Participant may annually change his or her election to an allowable
alternative payout period by submitting a new Election Form to the
Committee, provided that an Election Form must be received and
accepted by the Committee at least 1 year prior to the Participant's
Retirement in order to be effective with respect to a change of the
Participant's alternative payout period. The Election Form most
recently accepted by the Committee shall govern the payout of the
Retirement
<PAGE>
Benefit. If a Participant does not make any election with
respect to the payment of the Retirement Benefit, then such benefit
shall be payable in a lump sum. The lump sum payment shall be made,
or installment payments shall commence, no later than 45 days after
the last day of the Plan Year in which the Participant Retires. Any
payment made shall be subject to the Deduction Limitation.
5.3 Death Prior to Completion of Retirement Benefit. If a
Participant dies after Retirement but before the Retirement Benefit is
paid in full, the Participant's unpaid Retirement Benefit payments
shall continue and shall be paid to the Participant's Beneficiary in a
lump sum that is equal to the Participant's unpaid remaining Account
Balance.
ARTICLE 6
Pre-Retirement Survivor Benefit
6.1 Pre-Retirement Survivor Benefit. Subject to the Deduction
Limitation, the Participant's Beneficiary shall receive a Pre-
Retirement Survivor Benefit equal to the Participant's Account Balance
if the Participant dies before he or she Retires, experiences a
Termination of Employment or suffers a Disability.
6.2 Payment of Pre-Retirement Survivor Benefit. The Pre-Retirement
Survivor Benefit shall be paid in a lump sum. The lump sum payment
shall be made no later than 45 days after the last day of the Plan
Year in which the Committee is provided with proof that is
satisfactory to the Committee of the Participant's death. Any payment
made shall be subject to the Deduction Limitation.
ARTICLE 7
Termination Benefit
7.1 Termination Benefit. Subject to the Deduction Limitation, the
Participant shall receive a Termination Benefit, which shall be equal
to the Participant's Account Balance if a Participant experiences a
Termination of Employment prior to his or her Retirement, death or
Disability.
7.2 Payment of Termination Benefit. The Termination Benefit shall be
paid in a lump sum. The lump sum payment shall be made no later than
45 days after the date on which the Participant experiences the
Termination of Employment. Any payment made shall be subject to the
Deduction Limitation.
ARTICLE 8
Disability Waiver and Benefit
8.1 Disability Waiver.
(a) Waiver of Deferral. A Participant who is determined by the
Committee to be suffering from a Disability shall be excused from
fulfilling that portion of the Annual Deferral Amount commitment that
would otherwise have been withheld from a Participant's Base Annual
Salary, Annual Discretionary Cash Bonus, Annual Cash Sharing and/or
Annual Commissions for the Plan Year during which the Participant
first suffers a Disability. During the period of Disability, the
Participant shall not be allowed to make any additional deferral
elections, but will continue to be considered a Participant for all
other purposes of this Plan.
(b) Return to Work. If a Participant returns to employment with an
Employer, after a Disability ceases, the Participant may elect to
defer an Annual Deferral Amount for the Plan Year following his or her
return to employment or service and for every Plan Year thereafter
while a Participant in the Plan; provided such deferral elections are
otherwise allowed and an Election Form is timely delivered to and
accepted by the Committee for each such election in accordance with
Section 3.3 above.
8.2 Continued Eligibility; Disability Benefit. A Participant
suffering a Disability shall, solely for benefit purposes under this
Plan, continue to be considered to be employed, and shall be eligible
for the benefits provided for in Articles 4, 5, 6 or 7 in accordance
with the provisions of those Articles. Notwithstanding the above, the
Committee shall have the right to, in its sole and absolute discretion
and for purposes of this Plan only, and must in the case of a
Participant who is otherwise eligible to Retire, deem the Participant
to have experienced a Termination of Employment, or in the case of a
Participant who is eligible to Retire, to have Retired, at any time
(or in the case of a Participant who is eligible to Retire, as soon as
practicable) after such Participant is determined to be suffering a
Disability, in which case the Participant shall receive a Disability
Benefit equal to his or her Account Balance at the time of the
Committee's determination; provided, however, that should the
Participant otherwise have been eligible to Retire, he or she shall be
paid in accordance with Article 5. The Disability Benefit shall be
paid in a lump sum within 45 days of the Committee's exercise of such
right. Any payment made shall be subject to the Deduction Limitation.
ARTICLE 9
Beneficiary Designation
9.1 Beneficiary. Each Participant shall have the right, at any time,
to designate his or her Beneficiary(ies) (both primary as well as
contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of a Participant. The Beneficiary
designated under this Plan may be the same as or different from the
Beneficiary designation under any other plan of an Employer in which
the Participant participates.
9.2 Beneficiary Designation; Change; Spousal Consent. A Participant
shall designate his or her Beneficiary by completing and signing the
Beneficiary Designation Form, and returning it to the Committee or its
designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Committee's rules
and procedures, as in effect from time to time. If the Participant
names someone other than his or her spouse as his or her sole primary
Beneficiary, a spousal consent, in the form designated by the
Committee, must be signed by that Participant's spouse and returned to
the Committee. Upon the acceptance by the Committee of a new
Beneficiary Designation Form, all Beneficiary designations previously
filed shall be canceled. The Committee shall be entitled to rely on
the last Beneficiary Designation Form filed by the Participant and
accepted by the Committee prior to his or her death.
9.3 Acknowledgment. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in
writing by the Committee or its designated agent.
<PAGE>
9.4 No Beneficiary Designation. If a Participant fails to designate
a Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if
all designated Beneficiaries predecease the Participant or die prior
to complete distribution of the Participant's benefits, then the
Participant's designated Beneficiary shall be deemed to be his or her
surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall be
payable to the executor or personal representative of the
Participant's estate.
9.5 Doubt as to Beneficiary. If the Committee has any doubt as to
the proper Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its discretion, to
cause the Participant's Employer to withhold such payments until this
matter is resolved to the Committee's satisfaction.
9.6 Discharge of Obligations. The payment of benefits under the Plan
to a Beneficiary shall fully and completely discharge all Employers
and the Committee from all further obligations under this Plan with
respect to the Participant, and that Participant's Plan Agreement
shall terminate upon such full payment of benefits.
ARTICLE 10
Leave of Absence
10.1 Paid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence
from the employment of the Employer, the Participant shall continue to
be considered employed by the Employer and the Annual Deferral Amount
shall continue to be withheld during such paid leave of absence in
accordance with Section 3.3.
10.2 Unpaid Leave of Absence. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of
absence from the employment of the Employer, the Participant will
continue to be considered employed by the Employer and the Participant
shall be excused from making deferrals until the earlier of the date
the leave of absence expires or the Participant returns to a paid
employment status. Upon such expiration or return, deferrals shall
resume for the remaining portion of the Plan Year in which the
expiration or return occurs, based on the deferral election, if any,
made for that Plan Year. If no election was made for that Plan Year,
no deferral shall be withheld. A Participant shall be deemed to have
terminated employment if he or she fails to timely return to the
employ of the Employer.
ARTICLE 11
Termination, Amendment or Modification
11.1 Termination. Although each Employer anticipates that it will
continue the Plan for an indefinite period of time, there is no
guarantee that any Employer will continue the Plan or will not
terminate the Plan at any time in the future. Accordingly, each
Employer reserves the right to discontinue its sponsorship of the Plan
and/or to terminate the Plan at any time with respect to any or all of
its participating Employees by action of its board of directors. Upon
the termination of the Plan with respect to any Employer, the Plan
Agreements of the affected Participants who are employed by that
Employer shall terminate and their Account Balances, determined as if
they had experienced a Termination of Employment on the date of Plan
termination or, if Plan termination occurs after the date upon which a
Participant was eligible to Retire, then with respect to that
Participant as if he or she had Retired on the date of Plan
termination, shall be
<PAGE>
paid to the Participants as follows: Prior to a Change in Control,
if the Plan is terminated with respect to all of its Participants,
an Employer shall have the right, in its sole discretion, and
notwithstanding any elections made by the Participant,
to pay such benefits in a lump sum or pursuant to an Annual
Installment Method of up to 15 years, with amounts credited and
debited during the installment period as provided herein. If the Plan
is terminated with respect to less than all of its Participants, an
Employer shall be required to pay such benefits in a lump sum. After
a Change in Control, the Employer shall be required to pay such
benefits in a lump sum. The termination of the Plan shall not
adversely affect any Participant or Beneficiary who has become
entitled to the payment of any benefits under the Plan as of the date
of termination; provided however, that the Employer shall have the
right to accelerate installment payments without a premium or
prepayment penalty by paying the Account Balance in a lump sum or
pursuant to an Annual Installment Method using fewer years (provided
that the present value of all payments that will have been received by
a Participant at any given point of time under the different payment
schedule shall equal or exceed the present value of all payments that
would have been received at that point in time under the original
payment schedule).
11.2 Amendment. Any Employer may, at any time, amend or modify the
Plan in whole or in part with respect to that Employer by the action
of its board of directors; provided, however, that: (i) no amendment
or modification shall be effective to decrease or restrict the value
of a Participant's Account Balance in existence at the time the
amendment or modification is made, calculated as if the Participant
had experienced a Termination of Employment as of the effective date
of the amendment or modification or, if the amendment or modification
occurs after the date upon which the Participant was eligible to
Retire, the Participant had Retired as of the effective date of the
amendment or modification, and (ii) no amendment or modification of
this Section 11.2 or Section 12.2 of the Plan shall be effective. The
amendment or modification of the Plan shall not affect any Participant
or Beneficiary who has become entitled to the payment of benefits
under the Plan as of the date of the amendment or modification;
provided, however, that the Employer shall have the right to
accelerate installment payments by paying the Account Balance in a
lump sum or pursuant to an Annual Installment Method using fewer years
(provided that the present value of all payments that will have been
received by a Participant at any given point of time under the
different payment schedule shall equal or exceed the present value of
all payments that would have been received at that point in time under
the original payment schedule).
11.3 Plan Agreement. Despite the provisions of Sections 11.1 and 11.2
above, if a Participant's Plan Agreement contains benefits or
limitations that are not in this Plan document, the Employer may only
amend or terminate such provisions as to the Participant with his or
her consent.
11.4 Effect of Payment. The full payment of the applicable benefit
under Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge
all obligations to a Participant and his or her designated
Beneficiaries under this Plan and the Participant's Plan Agreement
shall terminate.
ARTICLE 12
Administration
12.1 Committee Duties. Except as otherwise provided in this Article
12, this Plan shall be administered by a Committee, which shall
consist of the Board, or such committee as the Board shall appoint.
Members of the Committee may be Participants under this Plan. In
addition to any powers otherwise conferred under this Plan, the
Committee shall have the discretion and
<PAGE>
authority to (i) make, amend, interpret, and enforce all appropriate
rules and regulations for the administration of this Plan and (ii)
decide or resolve any and all questions including interpretations of
this Plan, as may arise in connection with the Plan. Any individual
serving on the Committee who Is a Participant shall not vote or act on
any matter relating solely to himself or herself. When making a
determination or calculation, the Committee shall be entitled to rely
on information furnished by a Participant or the Company.
12.2 Administration Upon Change In Control. For purposes of this
Plan, the Company shall be the "Administrator" at all times prior to
the occurrence of a Change in Control. Upon and after the occurrence
of a Change in Control, the "Administrator" shall be an independent
third party selected by the Trustee and approved by the individual
who, immediately prior to such event, was the Company's Chief
Executive Officer or, if not so identified, the Company's highest
ranking officer (the "Ex-CEO"). The Administrator shall have the
discretionary power to determine all questions arising in connection
with the administration of the Plan and the interpretation of the Plan
and Trust including, but not limited to benefit entitlement
determinations; provided, however, upon and after the occurrence of a
Change in Control, the Administrator shall have no power to direct the
investment of Plan or Trust assets or select any investment manager or
custodial firm for the Plan or Trust. Upon and after the occurrence
of a Change in Control, the Company must: (1) pay all reasonable
administrative expenses and fees of the Administrator; (2) indemnify
the Administrator against any costs, expenses and liabilities
including, without limitation, attorney's fees and expenses arising in
connection with the performance of the Administrator hereunder, except
with respect to matters resulting from the gross negligence or willful
misconduct of the Administrator or its employees or agents; and (3)
supply full and timely information to the Administrator or all matters
relating to the Plan, the Trust, the Participants and their
Beneficiaries, the Account Balances of the Participants, the date of
circumstances of the Retirement, Disability, death or Termination of
Employment of the Participants, and such other pertinent information
as the Administrator may reasonably require. Upon and after a Change
in Control, the Administrator may be terminated (and a replacement
appointed) by the Trustee only with the approval of the Ex-CEO. Upon
and after a Change in Control, the Administrator may not be terminated
by the Company.
12.3 Agents. In the administration of this Plan, the Committee may,
from time to time, employ agents and delegate to them such
administrative duties as it sees fit (including acting through a duly
appointed representative) and may from time to time consult with
counsel who may be counsel to any Employer.
12.4 Binding Effect of Decisions. The decision or action of the
Administrator with respect to any question arising out of or in
connection with the administration, interpretation and application of
the Plan and the rules and regulations promulgated hereunder shall be
final and conclusive and binding upon all persons having any interest
in the Plan.
12.5 Indemnity of Committee. All Employers shall indemnify and hold
harmless the members of the Committee, any Employee to whom the duties
of the Committee may be delegated, and the Administrator against any
and all claims, losses, damages, expenses or liabilities arising from
any action or failure to act with respect to this Plan, except in the
case of willful misconduct by the Committee, any of its members, any
such Employee or the Administrator.
12.6 Employer Information. To enable the Committee and/or
Administrator to perform its functions, the Company and each Employer
shall supply full and timely information to the
<PAGE>
Committee and/or Administrator, as the case may be, on all matters
relating to the compensation of its Participants, the date and
circumstances of the Retirement, Disability, death or circumstances
of the Retirement, Disability, death or Termination of Employment of its
Participants, and such other pertinent information as the Committee or
Administrator may reasonably require.
ARTICLE 13
Other Benefits and Agreements
13.1 Coordination with Other Benefits. The benefits provided for a
Participant and Participant's Beneficiary under the Plan are in
addition to any other benefits available to such Participant under any
other plan or program for employees of the Participant's Employer.
The Plan shall supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly
provided.
ARTICLE 14
Claims Procedures
14.1 Presentation of Claim. Any Participant or Beneficiary of a
deceased Participant (such Participant or Beneficiary being referred
to below as a "Claimant") may deliver to the Committee a written claim
for a determination with respect to the amounts distributable to such
Claimant from the Plan. If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within 60 days
after such notice was received by the Claimant. All other claims must
be made within 180 days of the date on which the event that caused the
claim to arise occurred. The claim must state with particularity the
determination desired by the Claimant.
14.2 Notification of Decision. The Committee shall consider a
Claimant's claim within a reasonable time, and shall notify the
Claimant in writing:
(a) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or
in part, to the Claimant's requested determination, and such notice
must set forth in a manner calculated to be understood by the
Claimant:
(i) the specific reason(s) for the denial of the claim, or any part
of it;
(ii) specific reference(s) to pertinent provisions of the Plan upon
which such denial was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is necessary; and
(iv) an explanation of the claim review procedure set forth in Section
14.3 below.
<PAGE>
14.3 Review of a Denied Claim. Within 60 days after receiving a
notice from the Committee that a claim has been denied, in whole or in
part, a Claimant (or the Claimant's duly authorized representative)
may file with the Committee a written request for a review of the
denial of the claim. Thereafter, but not later than 30 days after the
review procedure began, the Claimant (or the Claimant's duly
authorized representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
14.4 Decision on Review. The Committee shall render its decision on
review promptly, and not later than 60 days after the filing of a
written request for review of the denial, unless a hearing is held or
other special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must be written in a manner calculated to be understood
by the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which
the decision was based; and
(c) such other matters as the Committee deems relevant.
14.5 Legal Action. A Claimant's compliance with the foregoing
provisions of this Article 14 is a mandatory prerequisite to a
Claimant's right to commence any legal action with respect to any
claim for benefits under this Plan.
ARTICLE 15
Trust
15.1 Establishment of the Trust. The Company shall establish the
Trust, and each Employer shall at least annually transfer over to the
Trust such assets as the Employer determines, in its sole discretion,
are necessary to provide, on a present value basis, for its respective
future liabilities created with respect to the Annual Deferral
Amounts, Annual Company Contribution Amounts, and for such Employer's
Participants for all periods prior to the transfer, as well as any
debits and credits to the Participants' Account Balances for all
periods prior to the transfer, taking into consideration the value of
the assets in the trust at the time of the transfer.
15.2 Interrelationship of the Plan and the Trust. The provisions of
the Plan and the Plan Agreement shall govern the rights of a
Participant to receive distributions pursuant to the Plan. The
provisions of the Trust shall govern the rights of the Employers,
Participants and the creditors of the Employers to the assets
transferred to the Trust. Each Employer shall at all times remain
liable to carry out its obligations under the Plan.
15.3 Distributions From the Trust. Each Employer's obligations under
the Plan may be satisfied with Trust assets distributed pursuant to
the terms of the Trust, and any such distribution shall reduce the
Employer's obligations under this Plan.
<PAGE>
ARTICLE 16
Miscellaneous
16.1 Status of Plan. The Plan is intended to be a plan that is not
qualified within the meaning of Code Section 401(a) and that "is
unfunded and is maintained by an employer primarily for the purpose of
providing deferred compensation for a select group of management or
highly compensated employee" within the meaning of ERISA Sections
201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and
interpreted to the extent possible in a manner consistent with that
intent.
16.2 Unsecured General Creditor. Participants and their
Beneficiaries, heirs, successors and assigns shall have no legal or
equitable rights, interests or claims in any property or assets of an
Employer. For purposes of the payment of benefits under this Plan,
any and all of an Employer's assets shall be, and remain, the general,
unpledged unrestricted assets of the Employer. An Employer's
obligation under the Plan shall be merely that of an unfunded and
unsecured promise to pay money in the future.
16.3 Employer's Liability. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as
entered into between the Employer and a Participant. An Employer
shall have no obligation to a Participant under the Plan except as
expressly provided in the Plan and his or her Plan Agreement.
16.4 Nonassignability. Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate,
alienate or convey in advance of actual receipt, the amounts, if any,
payable hereunder, or any part thereof, which are, and all rights to
which are expressly declared to be, unassignable and non-transferable.
No part of the amounts payable shall, prior to actual payment, be
subject to seizure, attachment, garnishment or sequestration for the
payment of any debts, judgments, alimony or separate maintenance owed
by a Participant or any other person, be transferable by operation of
law in the event of a Participant's or any other person's bankruptcy
or insolvency or be transferable to a spouse as a result of a property
settlement or otherwise.
16.5 Not a Contract of Employment. The terms and conditions of this
Plan shall not be deemed to constitute a contract of employment
between any Employer and the Participant. Such employment is hereby
acknowledged to be an "at will" employment relationship that can be
terminated at any time for any reason, or no reason, with or without
cause, and with or without notice, unless expressly provided in a
written employment agreement. Nothing in this Plan shall be deemed to
give a Participant the right to be retained in the service of any
Employer as an Employee, or to interfere with the right of any
Employer to discipline or discharge the Participant at any time.
16.6 Furnishing Information. A Participant or his or her Beneficiary
will cooperate with the Committee by furnishing any and all
information requested by the Committee and take such other actions as
may be requested in order to facilitate the administration of the Plan
and the payments of benefits hereunder, including but not limited to
taking such physical examinations as the Committee may deem necessary.
16.7 Terms. Whenever any words are used herein in the masculine, they
shall be construed as though they were in the feminine in all cases
where they would so apply; and whenever any words are
<PAGE>
used herein in the singular or in the plural, they shall be construed
as though they were used in the plural or the singular, as the case may
be, in all cases where they would so apply.
16.8 Captions. The captions of the articles, sections and paragraphs
of this Plan are for convenience only and shall not control or affect
the meaning or construction of any of its provisions.
16.9 Governing Law. Subject to ERISA, the provisions of this Plan
shall be construed and interpreted according to the internal laws of
the State of Nevada without regard to its conflicts of laws
principles.
16.10 Notice. Any notice or filing required or permitted to be
given to the Committee under this Plan shall be sufficient if in
writing and hand-delivered, or sent by registered or certified mail,
to the address below:
Deferred Compensation Plan Administrative Committee
International Game Technology
9295 Prototype Drive
Reno, Nevada 89511-8986
Such notice shall be deemed given as of the date of delivery or,
if delivery is made by mail, as of the date shown on the postmark
on the receipt for registration or certification.
Any notice or filing required or permitted to be given to a
Participant under this Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the
Participant.
16.11 Successors. The provisions of this Plan shall bind and
inure to the benefit of the Participant's Employer and its successors
and assigns and the Participant and the Participant's designated
Beneficiaries.
16.12 Spouse's Interest. The interest in the benefits hereunder
of a spouse of a Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be transferable by
such spouse in any manner, including but not limited to such spouse's
will, nor shall such interest pass under the laws of intestate
succession.
16.13 Validity. In case any provision of this Plan shall be
illegal or invalid for any reason, said illegality or invalidity shall
not affect the remaining parts hereof, but this Plan shall be
construed and enforced as if such illegal or invalid provision had
never been inserted herein.
16.14 Incompetent. If the Committee determines in its discretion
that a benefit under this Plan is to be paid to a minor, a person
declared incompetent or to a person incapable of handling the
disposition of that person's property, the Committee may direct
payment of such benefit to the guardian, legal representative or
person having the care and custody of such minor, incompetent or
incapable person. The Committee may require proof of minority,
incompetence, incapacity or guardianship, as it may deem appropriate
prior to distribution of the benefit. Any payment of a benefit shall
be a payment for the account of the Participant and the Participant's
Beneficiary, as the case may be, and shall be a complete discharge of
any liability under the Plan for such payment amount.
<PAGE>
16.15 Court Order. The Committee is authorized to make any
payments directed by court order in any action in which the Plan or
the Committee has been named as a party. In addition, if a court
determines that a spouse or former spouse of a Participant has an
interest in the Participant's benefits under the Plan in connection
with a property settlement or otherwise, the Committee, in its sole
discretion, shall have the right, notwithstanding any election made by
a Participant, to immediately distribute the spouse's or former
spouse's interest in the Participant's benefits under the Plan to that
spouse or former spouse.
16.16 Distribution in the Event of Taxation.
(a) In General. If, for any reason, all or any portion of a
Participant's benefits under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the Committee
before a Change in Control, or the trustee of the Trust after a Change
in Control, for a distribution of that portion of his or her benefit
that has become taxable. Upon the grant of such a petition, by the
Committee in its sole discretion, a Participant's Employer shall
distribute to the Participant immediately available funds in an amount
equal to the taxable portion of his or her benefit (which amount shall
not exceed a Participant's unpaid Account Balance under the Plan). If
the petition is granted, the tax liability distribution shall be made
within 90 days of the date when the Participant's petition is granted.
Such a distribution shall affect and reduce the benefits to be paid
under this Plan.
(b) Trust. If the Trust terminates in accordance with Section 3.6(e)
of the Trust and benefits are distributed from the Trust to a
Participant in accordance with that Section, the Participant's
benefits under this Plan shall be reduced to the extent of such
distributions.
16.17 Insurance. The Employers, on their own behalf or on behalf
of the trustee of the Trust, and, in their sole discretion, may apply
for and procure insurance on the life of the Participant, in such
amounts and in such forms as the Trust may choose. The Employers or
the trustee of the Trust, as the case may be, shall be the sole owner
and beneficiary of any such insurance. The Participant shall have no
interest whatsoever in any such policy or policies, and at the request
of the Employers shall submit to medical examinations and supply such
information and execute such documents as may be required by the
insurance company or companies to whom the Employers have applied for
insurance.
16.18 Legal Fees To Enforce Rights After Change in Control. The
Company and each Employer is aware that upon the occurrence of a
Change in Control, the Board or the board of directors of a
Participant's Employer (which might then be composed of new members)
or a shareholder of the Company or the Participant's Employer, or of
any successor corporation might then cause or attempt to cause the
Company, the Participant's Employer or such successor to refuse to
comply with its obligations under the Plan and might cause or attempt
to cause the Company or the Participant's Employer to institute, or
may institute, litigation seeking to deny Participants the benefits
intended under the Plan. In these circumstances, the purpose of the
Plan could be frustrated. Accordingly, if, following a Change in
Control, it should appear to any Participant that the Company, the
Participant's Employer or any successor corporation has failed to
comply with any of its obligations under the Plan or any agreement
thereunder or, if the Company, such Employer or any other person takes
any action to declare the Plan void or unenforceable or institutes any
litigation or other legal action designed to deny, diminish or to
recover from any Participant the benefits intended to be provided,
then the Company and the Participant's
<PAGE>
Employer irrevocably authorize such Participant to retain counsel of
his or her choice at the expense of the Company and the Participant's
Employer (who shall be jointly and severally liable) to represent such
Participant in connection with the initiation or defense of any
litigation or other legal action, whether by or against the Company,
the Participant's Employer or any director, officer, shareholder or
other person affiliated with the Company, the Participant's Employer
or any successor thereto in any jurisdiction.
<PAGE>
[International Game Technology letterhead]
August 20, 1999
International Game Technology
9295 Prototype Drive
Reno, Nevada 89511
Re: Registration on Form S-8 of International
Game Technology (the "Company")
Ladies and Gentlemen:
At your request, and as General Counsel of the Company, I
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
$8,000,000 of Deferred Compensation Obligations of the Company
(the "Obligations"), to be issued pursuant to the International
Game Technology Deferred Compensation Plan (the "Plan"). I have
examined the Plan and am familiar with the proceedings taken by
the Company in connection with the authorization of the Plan, and
the authorization, registration, and offering of the Obligations.
Based upon such examination and upon such matters of fact
and law as I have deemed relevant, I am of the opinion that:
(1) the Obligations have been duly authorized by all necessary
corporate action on the part of the Company;
(2) when incurred in accordance with such authorization, the
provisions of the Plan and relevant elections and agreements duly
authorized by and in accordance with the terms of the Plan, the
Obligations will be legally valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally (including, without
limitation, fraudulent conveyance laws), and by general
principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in
equity or at law; and
(3) the participants will not, solely by virtue of their status
as participants, be held liable for assessments by the Company
against amounts previously deferred, except for required
withholding and other payroll or similar deductions, and other
charges or adjustments, referenced in or contemplated by the
Registration Statement and the terms of the Plan.
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I consent to the use of this opinion as an exhibit to the
Registration Statement.
Respectfully submitted,
/s/ Brian McKay
Brian McKay
Sr. Vice President, General Counsel, Secretary
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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 2, 1998, appearing in the Annual Report on
Form 10-K of International Game Technology for the year ended
September 30, 1998.
/s/ Deloitte & Touche LLP
Reno, Nevada
August 24, 1999
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