As filed with the Securities and Exchange Commission on
June 29, 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 1993 Stock Option 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
Securities to be price offering registration
to be registered registered per unit price fee
Common Stock, 3,250,000(1) $17.71875(2) $57,585,937(2) $16,009(2)
$0.000625 par shares
value per share
_________
(1) This Registration Statement covers, in addition to the number
of shares of Common Stock stated above, options and other
rights to purchase or acquire the shares of Common Stock
covered by the Prospectus and, pursuant to Rule 416(c) under
the Securities Act of 1933, as amended (the "Securities Act"),
an additional indeterminate number of shares, options and
rights which by reason of certain events specified in the
International Game Technology 1993 Stock Option Plan, as
amended (the "Plan"), may become subject to the Plan.
(2) Pursuant to Rule 457(h), the maximum offering price, per
share and in the aggregate, and the registration fee were
calculated based upon the average of the high and low prices
of the Common Stock on June 22, 1999, as reported on the New
York Stock Exchange and published in The Western Edition
of The Wall Street Journal.
The Exhibit Index for this Registration Statement is at
page 6.
</TABLE>
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.
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 Registration Statement on Form S-8 of the Company
relating to the Plan filed with the Commission on April 4, 1997,
as amended (registration number 333-24605); and
(b) The Registration Statement on Form S-8 of the Company
relating to the Plan filed with the Commission on June 1, 1993
(registration number 33-69400).
Item 5. Interests of Named Experts and Counsel
The validity of the original issuance of the Common Stock
registered hereby is passed on for the Company by Brian McKay.
Mr. McKay is Vice President, General Counsel, Secretary and
Treasurer of the Company, 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 eligible to participate in the Plan.
Item 8. Exhibits
See the attached Exhibit Index at page 6.
<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 16 day of June, 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 and Chief June 16, 1999
Charles N. Mathewson Executive Officer (Principal
Executive Officer)
/s/ Maureen T. Mullarkey Vice President, Finance, June 16, 1999
Maureen T. Mullarkey Treasurer and Chief Financial
Officer (Principal Financial
and Accounting Officer)
/s/ Albert J. Crosson Director June 16, 1999
Albert J. Crosson
/s/ Wilbur K. Keating Director June 16, 1999
Wilbur K. Keating
/s/ Warren L. Nelson Director June 16, 1999
Warren L. Nelson
/s/ Frederick B. Rentschler Director June 16, 1999
Frederick B. Rentschler
/s/ John J. Russell Director June 16, 1999
John J. Russell
/s/ Rockwell A. Schnabel Director June 16, 1999
Rockwell A. Schnabel
/s/ Claudine B. Williams Director June 16, 1999
Claudine B. Williams
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
4. International Game Technology 1993 Stock Option Plan
(Amended and Restated Effective as of August 27, 1996)
(Composite Plan Document Incorporating Amendments 1998-I
and 1998-II).
5. Opinion of Company Counsel (opinion re legality).
23.1 Consent of Deloitte & Touche LLP (Consent of Independent
Auditor).
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
1993 STOCK OPTION PLAN
(Amended and Restated Effective as of August 27, 1996)
(Composite Plan Document Incorporating
Amendments 1998-I and 1998-II)
<PAGE>
TABLE OF CONTENTS
Page
I. THE PLAN 1
1.1 Purpose 1
1.2 Administration and Authorization; Power
and Procedure 1
1.3 Participation 2
1.4 Shares Available for Awards; Share Limits 3
1.5 Grant of Awards 3
1.6 Award Period 4
1.7 Limitations on Exercise and Vesting
of Awards 4
1.8 Acceptance of Notes to Finance Exercise 4
1.9 No Transferability 5
II. EMPLOYEE OPTIONS 6
2.1 Grants 6
2.2 Option Price 6
2.3 Limitations on Grant and Terms of
Incentive Stock Options 6
2.4 Limits on 10% Holders 7
2.5 Cancellation and Regrant/Waiver of
Restrictions 7
III. STOCK APPRECIATION RIGHTS 7
3.1 Grants 7
3.2 Exercise of Stock Appreciation Rights 8
3.3 Payment 8
IV. RESTRICTED STOCK AWARDS 8
4.1 Grants 8
4.2 Restrictions 9
4.3 Return to the Corporation 9
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES 9
5.1 Grants of Performance Share Awards 9
5.2 Special Performance-Based Share Awards. 10
5.3 Grants of Stock Bonuses. 11
5.4 Deferred Payments. 11
VI. OTHER PROVISIONS 12
6.1 Rights of Eligible Employees, Participants
and Beneficiaries 12
6.2 Adjustments; Acceleration 12
6.3 Effect of Termination of Employment 13
6.4 Compliance with Laws 14
6.5 Tax Withholding 14
6.6 Plan Amendment, Termination and Suspension 14
6.7 Privileges of Stock Ownership 15
6.8 Effective Date of the Plan 15
6.9 Term of the Plan 15
6.10 Governing Law; Construction; Severability 16
6.11 Captions 16
6.12 Effect of Change of Subsidiary Status 16
6.13 Non-Exclusivity of Plan 16
VII. NON-EMPLOYEE DIRECTOR OPTIONS 17
7.1 Participation 17
7.2 Annual Option Grants 17
7.3 Option Price 17
7.4 Option Period and Exercisability 18
7.5 Termination of Directorship 18
7.6 Adjustments 18
7.7 Acceleration Upon a Change in Control
Event 18
VIII. DEFINITIONS 18
8.1 Definitions 18
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INTERNATIONAL GAME TECHNOLOGY
1993 STOCK OPTION PLAN
(Amended and Restated Effective as of August 27, 1996)
(Composite Plan Document Incorporating Amendments 1998-I and
1998-II)
I. THE PLAN
1.1 Purpose
The purpose of this Plan is to promote the success of the
Company by providing an additional means through the grant of
Awards to attract, motivate, retain and reward key employees,
including officers, whether or not directors, of the Company
with Awards and incentives for high levels of individual
performance and improved financial performance of the Company
and to attract, motivate and retain experienced and knowledgeable
independent directors through the benefits provided under
Article VII. "Corporation" means International Game Technology, a
Nevada corporation, and "Company" means the Corporation and its
Subsidiaries, collectively. These terms and other capitalized
terms are defined in Article VIII.
1.2 Administration and Authorization; Power and Procedure
(a) Committee. This Plan shall be administered by and all
Awards to Eligible Employees shall be authorized by the Committee.
Action of the Committee with respect to the administration of this
Plan shall be taken pursuant to a majority vote or by written
consent of its members.
(b) Plan Awards; Interpretation; Powers of Committee.
Subject to the express provisions of this Plan, the Committee
shall have the authority:
(i) to determine from among those persons eligible the
particular Eligible Employees who will receive any Awards;
(ii) to grant Awards to Eligible Employees, determine
the price at which securities will be offered or awarded
and the amount of securities to be offered or awarded to
any of such individuals, and determine the other specific
terms and conditions of such Awards consistent with the
express limits of this Plan, and establish the installments
if any) in which such Awards shall become exercisable
or shall vest, or determine that no delayed exercisability
or vesting is required, and establish the events of
termination or reversion of such Awards;
(iii) to approve the forms of Award Agreements (which
need not be identical either as to type of Award or as among
Participants);
(iv) to construe and interpret this Plan and any agreements
defining the rights and obligations of the Company and
Participants under this Plan, further define the terms used
in this Plan, and prescribe, amend and rescind rules and
regulations relating to the administration of this Plan;
(v) to cancel, modify, or waive the Corporation's rights
with respect to, or modify, discontinue, suspend, or terminate
any or all outstanding Awards held by Eligible Employees,
subject to any required consent under Section 6.6;
(vi) to accelerate or extend the exercisability or extend
the term of any or all such outstanding Awards within the
maximum ten-year term of Awards under Section 1.6; and
(vii) to make all other determinations and take such
other action as contemplated by this Plan or as may be
necessary or advisable for the administration of this Plan
and the effectuation of its purposes.
Notwithstanding the foregoing, the provisions of Article VII
Relating to Non-Employee Director Options shall be automatic and,
to the maximum extent possible, self-effectuating.
(c) Binding Determinations. Any action taken by, or inaction
of, the Corporation, any Subsidiary, the Board or the Committee
relating or pursuant to this Plan shall be within the absolute
discretion of that entity or body and shall be conclusive and
binding upon all persons. No member of the Board or Committee, or
officer of the Corporation or any Subsidiary, shall be liable for
any such action or inaction of the entity or body, of another
person or, except in circumstances involving bad faith of himself
or herself. Subject only to compliance with the express provisions
hereof, the Board and Committee may act in their absolute discretion
in matters within their authority related to this Plan.
(d) Reliance on Experts. In making any determination or in
taking or not taking any action under this Plan, the Committee or
the Board, as the case may be, may obtain and may rely upon the
advice of experts, including professional advisors to the Corporation.
No director, officer or agent of the Company shall be liable for any
Such action or determination taken or made or omitted in good faith.
(e) Delegation. The Committee may delegate ministerial,
non-discretionary functions to a third-party administrator or to
individuals who are officers or employees of the Company.
1.3 Participation
Awards may be granted by the Committee only to those persons
that the Committee determines to be Eligible Employees. An
Eligible Employee who has been granted an Award may, if otherwise
eligible, be granted additional Awards if the Committee shall so
determine. Non-Employee Directors shall not be eligible to receive
any Options except for Nonqualified Stock Options granted automatically
without action of the Committee under the provisions of Article VII.
1.4 Shares Available for Awards; Share Limits
Subject to the provisions of Section 6.2, the capital stock
that may be delivered under this Plan shall be shares of the
Corporation's authorized but unissued Common Stock and any shares
Of its Common Stock held as treasury shares. The shares may be
Delivered for any lawful consideration.
(a) Share Limits. The maximum number of shares of Common
Stock that may be delivered pursuant to all Awards, including
Incentive Stock Options, granted to Eligible Employees under this
Plan shall not exceed 8,000,000 shares. The maximum number of
shares of Common Stock that may be delivered to Non-Employee
Directors in respect of Options granted under the provisions of
Article VII shall not exceed 500,000 shares. The maximum number
of shares of Common Stock subject to Options and Stock Appreciation
Rights that are granted during any calendar year to any individual
shall not exceed 1,000,000 shares. The maximum number of shares of
Common Stock that may be delivered to Participants in respect of
time-based Restricted Stock Awards and Stock Bonuses granted, for
nominal or no consideration other than the amount of the par value
thereof, under the provisions of Article IV and Section 5.3,
respectively, shall not exceed 500,000 shares in the aggregate.
The limit in the foregoing sentence shall not apply to shares
Delivered in respect of compensation earned but deferred. Each of
the foregoing numerical limits shall be subject to adjustment as
contemplated by Section 6.2.
(b) Share Reservation; Replenishment and Reissue of Unvested
Awards. No Award may be granted under this Plan unless, on the
date of grant, the sum of (i) the maximum number of shares issuable
at any time pursuant to such Award, plus (ii) the number of shares
that have previously been issued pursuant to Awards granted under
this Plan, other than reacquired shares available for reissue
consistent with any applicable legal limitations, plus (iii) the
maximum number of shares that may be issued at any time after such
date of grant pursuant to Awards that are outstanding on such date,
does not exceed the applicable share limit(s) under Section 1.4(a).
Shares that are subject to or underlie Awards which expire or for
any reason are cancelled or terminated, are forfeited, fail to vest,
or for any other reason are not paid or delivered under this Plan,
as well as reacquired shares, shall again, except to the extent
prohibited by law, be available for subsequent Awards under the Plan.
Except as limited by law, if an Award is or may be settled only in
cash, such Award need not be counted against any of the limits under
this Section 1.4.
1.5 Grant of Awards
Subject to the express provisions of this Plan, the Committee
shall determine the number of shares of Common Stock subject to each
Award, the price (if any) to be paid for the shares or the Award and,
in the case of Performance Share Awards, in addition to matters
addressed in Section 1.2(b), the specific objectives, goals and
performance criteria (such as an increase in sales, market value,
earnings or book value over a base period, the years of service
before vesting, the relevant job classification or level of
responsibility or other factors) that further define the terms of the
Performance Share Award. Each Award shall be evidenced by an Award
Agreement signed by the Corporation and, if required by the Committee,
by the Participant. The Award Agreement shall set forth the material
terms and conditions of the Award established by the Committee
consistent with the specific provisions of this Plan.
1.6 Award Period
Each Award and all executory rights or obligations under
the related Award Agreement shall expire on such date (if any) as
shall be determined by the Committee, but in the case of Options or
other rights to acquire Common Stock not later than ten (10) years
after the Award Date.
1.7 Limitations on Exercise and Vesting of Awards
(a) Exercise. Unless the Committee expressly provides otherwise,
no Award shall be exercisable or shall vest until at least six months
after the initial Award Date, and once exercisable an Award shall
remain exercisable until the expiration or earlier termination of the
Award.
(b) Procedure. Any exercisable Award shall be deemed to be
exercised when the Secretary of the Corporation receives written
notice of such exercise from the Participant, together with the
required any payment made in accordance with Section 2.2(b) or
7.3, as the case may be.
(c) Fractional Shares/Minimum Issue. Fractional share
interests shall be disregarded, but may be accumulated. The Committee,
however, may determine in the case of Eligible Employees that cash,
other securities or other property will be paid or transferred in lieu
of any fractional share interests. No fewer than 100 shares may be
purchased on exercise of any Award at one time unless the number
purchased is the total number at the time available for purchase
under the Award.
1.8 Acceptance of Notes to Finance Exercise
The Corporation may, with the Committee's approval, accept one
or more notes from any Eligible Employee in connection with the
exercise or receipt of any outstanding Award; provided that any such
note shall be subject to the following terms and conditions:
(a) The principal of the note shall not exceed the amount
required to be paid to the Corporation upon the exercise or receipt
of one or more Awards under the Plan and the note shall be delivered
directly to the Corporation in consideration of such exercise or
receipt.
(b) The initial term of the note shall be determined by the
Committee; provided that the term of the note, including extensions,
shall not exceed a period of 10 years.
(c) The note shall provide for full recourse to the Participant
and shall bear interest at a rate determined by the Committee but not
less than the applicable imputed interest rate specified by the
Code.
(d) If the employment of the Participant terminates, the unpaid
principal balance of the note shall become due and payable on the
10th business day after such termination; provided, however, that if
a sale of such shares would cause such Employee Participant to incur
liability under Section 16(b) of the Exchange Act, the unpaid balance
shall become due and payable on the 10th business day after the first
day on which a sale of such shares could have been made without
incurring such liability assuming for these purposes that there are
no other transactions by the Employee Participant subsequent to such
termination.
(e) If required by the Committee or by applicable law, the note
shall be secured by a pledge of any shares or rights financed thereby
in compliance with applicable law.
(f) The terms, repayment provisions, and collateral release
provisions of the note and the pledge securing the note shall conform
with applicable rules and regulations of the Federal Reserve Board as
then in effect.
1.9 No Transferability
(a) Limit On Exercise and Transfer. Unless otherwise expressly
provided in (or pursuant to) this Section 1.9, by applicable law
and by the Award Agreement, as the same may be amended, (i) all Awards
are non-transferable and shall not be subject in any manner to sale,
transfer, anticipation, alienation, assignment, pledge, encumbrance
or charge; Awards shall be exercised only by the Participant; and
(ii) shares issuable pursuant to an Award shall be delivered only
to (or for the account of) the Participant.
(b) Exceptions. The Committee may permit Awards to be exercised
by certain persons or entities related to the Participant, including
but not limited to members of the Participant's family, charitable
institutions, or trusts or other entities whose beneficiaries or
beneficial owners are members of the Participant's family and/or
charitable institutions, or to such other persons or entities as may
be approved by the Committee, pursuant to such conditions and
procedures as the Committee may establish. Any permitted transfer
shall be subject to the condition that the Committee receive evidence
satisfactory to it that the transfer is being made for estate and/or
tax planning purposes on a gratuitous or donative basis and without
consideration (other than nominal consideration).
(c) Further Exceptions to Limits On Transfer. The exercise
and transfer restrictions in Section 1.9(a) shall not apply to:
(i) transfers to the Corporation,
(ii) the designation of a beneficiary to receive benefits
in the event of the Participant's death or, if the Participant
has died, transfers to or exercise by the Participant's
beneficiary, or, in the absence of a validly designated
beneficiary, transfers by will or the laws of descent and
distribution,
(iii) transfers pursuant to a QDRO if approved or ratified
by the Committee,
(iv) if the Participant has suffered a Total Disability,
permitted transfers or exercises on behalf of the Participant
by his or her legal representative, or
(v) the authorization by the Committee of "cashless
exercise" procedures with third parties who provide financing
for the purpose of (or who otherwise facilitate) the exercise
of Awards consistent with applicable laws and the express
authorization of the Committee.
(d) Limitations on Incentive Stock Options and Restricted Stock
Awards. Notwithstanding the foregoing, Incentive Stock Options
and Restricted Stock Awards shall be subject to any and all
applicable transfer restrictions under the Code.
II. EMPLOYEE OPTIONS
2.1 Grants
One or more Options may be granted under this Article to any
Eligible Employee. Each Option granted may be either an Option
intended to be an Incentive Stock Option, or an Option not so
intended, and such intent shall be indicated in the applicable
Option Agreement.
2.2 Option Price
(a) Pricing Limits. The purchase price per share of the Common
Stock covered by each Option shall be determined by the Committee at
the time of the Option is granted, but in the case of Incentive
Stock Options shall not be less than 100% (110% in the case of a
Participant who owns or is deemed to own under Section 424(d) of the
Code more than 10% of the total combined voting power of all classes
of stock of the Corporation) of the Fair Market Value of the Common
Stock on the Award Date.
(b) Payment Provisions. The purchase price of any shares
purchased on exercise of an Option granted under this Article shall
be paid in full at the time of each purchase in one or a combination
of the following methods: (i) in cash or by electronic funds
transfer; (ii) by check payable to the order of the Corporation;
(iii) if authorized by the Committee or specified in the applicable
Option Agreement, by a promissory note of the Participant consistent
with the requirements of Section 1.8; (iv) by notice and third party
payment in such manner as may be authorized by the Committee; or
(v) by the delivery of shares of Common Stock of the Corporation
already owned by the Participant, provided, however, that the
Committee may in its absolute discretion limit the Participant's
ability to exercise an Option by delivering such shares. Shares
of Common Stock used to satisfy the exercise price of an Option
shall be valued at their Fair Market Value on the date of
exercise.
2.3 Limitations on Grant and Terms of Incentive Stock Options
(a) $100,000 Limit. To the extent that the aggregate "Fair
Market Value" of stock with respect to which Incentive Stock
Options first become exercisable by a Participant in any calendar
year exceeds $100,000, taking into account both Common Stock
subject to Incentive Stock Options under this Plan and stock subject
to Incentive Stock Options under all other plans of the Company or
any parent corporation, such options shall be treated as nonqualified
stock options. For this purpose, the "Fair Market Value" of the stock
subject to options shall be determined as of the date the options were
optioned. In reducing the number of options treated as Incentive Stock
Options to meet the $100,000 limit, the most recently granted options
shall be reduced first. To the extent a reduction of simultaneously
granted options is necessary to meet the $100,000 limit, the Committee
may, in the manner and to the extent permitted by law, designate which
shares of Common Stock are to be treated as shares acquired pursuant
to the exercise of an Incentive Stock Option.
(b) Option Period. Each Incentive Stock Option and all
rights thereunder shall expire no later than ten years after the
Award Date.
(c) Other Code Limits. There shall be imposed in any Award
Agreement relating to Incentive Stock Options such terms and conditions
as from time to time are required in order that the Option be an
"incentive stock option" as that term is defined in Section 422 of
the Code.
2.4 Limits on 10% Holders
No Incentive Stock Option may be granted to any person who, at
the time the Option is granted, owns (or is deemed to own under
Section 424(d) of the Code) shares of outstanding Common Stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Corporation, unless the exercise price of
such Option is at least 110% of the Fair Market Value of the stock
subject to the Option and such Option by its terms is not exercisable
after the expiration of five years from the date such Option is
granted.
2.5 Cancellation and Regrant/Waiver of Restrictions
Subject to Section 1.4 and Section 6.6 and the specific
limitations on Options contained in this Plan, the Committee from
time to time may authorize, generally or in specific cases only, for
the benefit of any Eligible Employee, any adjustment in the exercise
price, the number of shares subject to or the term of, an Option
granted under this Article by cancellation of an outstanding Option
and a subsequent regranting of an Option, by amendment, by substitution
of an outstanding Option, by waiver or by other legally valid means.
Such amendment or other action may result among other changes in
an exercise price which is higher or lower than the exercise or
purchase price of the original or prior Option, provide for a greater
or lesser number of shares subject to the Option, or provide for a
longer or shorter vesting or exercise period.
III. STOCK APPRECIATION RIGHTS
3.1 Grants
In its discretion, the Committee may grant a Stock Appreciation
Right to any Eligible Employee either concurrently with the grant
of another Award or in respect of an outstanding Award, in whole or
in part, or independently of any other Award. Any Stock Appreciation
Right granted in connection with an Incentive Stock Option shall
contain such terms as may be required to comply with the provisions
of Section 422 of the Code and the regulations promulgated thereunder,
unless the holder otherwise agrees.
3.2 Exercise of Stock Appreciation Rights
(a) Exercisability. Unless the Award Agreement or the
Committee otherwise provides, a Stock Appreciation Right related
to another Award shall be exercisable at such time or times, and
to the extent, that the related Award shall be exercisable.
(b) Effect on Available Shares. To the extent that a Stock
Appreciation Right is exercised, the number of underlying shares of
Common Stock therefore subject to a related Award shall be charged
against the maximum amount of Common Stock that may be delivered
pursuant to Awards under this Plan. The number of shares subject
to the Stock Appreciation Right and the related Option of the
Participant shall be reduced by the number of underlying shares
as to which the exercise related, unless the Award Agreement
otherwise provides.
(c) Stand-Alone SARs. A Stock Appreciation Right granted
independently of any other Award shall be exercisable pursuant to
the terms of the Award Agreement but in no event earlier than six
months after the Award Date, except in the case of death or Total
Disability.
3.3 Payment
(a) Amount. Unless the Committee otherwise provides, upon
exercise of a Stock Appreciation Right and the attendant surrender
of an exercisable portion of any related Award, the Participant
shall be entitled to receive payment of an amount determined by
multiplying
(i) the difference obtained by subtracting the exercise
price per share of Common Stock under the related Award (if
applicable) or the initial share value specified in the Award
from the Fair Market Value of a share of Common Stock on the
date of exercise of the Stock Appreciation Right, by
(ii) the number of shares with respect to which the
Stock Appreciation Right shall have been exercised.
(b) Form of Payment. The Committee, in its sole discretion,
shall determine the form in which payment shall be made of the
amount determined under paragraph (a) above, either solely in cash,
solely in shares of Common Stock (valued at Fair Market Value on
the date of exercise of the Stock Appreciation Right), or partly
in such shares and partly in cash, provided that the Committee
shall have determined that such exercise and payment are consistent
with applicable law. If the Committee permits the Participant to
elect to receive cash or shares (or a combination thereof) on such
exercise, any such election shall be subject to such conditions
as the Committee may impose.
IV. RESTRICTED STOCK AWARDS
4.1 Grants
The Committee may, in its discretion, grant one or more
Restricted Stock Awards to any Eligible Employee. Each Restricted
Stock Award Agreement shall specify the number of shares of Common
Stock to be issued to the Participant, the date of such issuance,
the consideration for such shares (but not less than the minimum
lawful consideration under applicable state law) by the Participant,
the extent to which the Participant shall be entitled to dividends,
voting and other rights in respect of the shares prior to vesting
and the restrictions imposed on such shares and the conditions of
release or lapse of such restrictions. Such restrictions shall
not lapse earlier than 12 months after the Award Date, except to
the extent the Committee may otherwise provide. Stock certificates
evidencing shares of Restricted Stock pending the lapse of the
restrictions ("restricted shares") shall bear a legend making
appropriate reference to the restrictions imposed hereunder and
shall be held by the Corporation or by a third party designated by
the Committee until the restrictions on such shares shall have
lapsed and the shares shall have vested in accordance with the
provisions of the Award and Section 1.7. Upon issuance of the
Restricted Stock Award, the Participant may be required to provide
such further assurance and documents as the Committee may require
to enforce the restrictions.
4.2 Restrictions
(a) Pre-Vesting Restraints. Except as provided in Section 4.1
and 1.9, restricted shares comprising any Restricted Stock Award may
not be sold, assigned, transferred, pledged or otherwise disposed of
or encumbered, either voluntarily or involuntarily, until the
restrictions on such shares have lapsed and the shares have become
vested.
(b) Dividend and Voting Rights. Unless otherwise provided in
the applicable Award Agreement, a Participant receiving a Restricted
Stock Award shall be entitled to cash dividend and voting rights for
all shares issued even though they are not vested, provided that such
rights shall terminate immediately as to any restricted shares which
cease to be eligible for vesting.
(c) Cash Payments. If the Participant shall have paid or
received cash (including any dividends) in connection with the
Restricted Stock Award, the Award Agreement shall specify whether
and to what extent such cash shall be returned (with or without an
earnings factor) as to any restricted shares which cease to be
eligible for vesting.
4.3 Return to the Corporation
Unless the Committee otherwise expressly provides, restricted
shares that remain subject to restrictions at the time of termination
of employment or are subject to other conditions to vesting that have
not been satisfied by the time specified in the applicable Award
Agreement shall not vest and shall be returned to the Corporation in
such manner and on such terms as the Committee shall therein provide.
V. PERFORMANCE SHARE AWARDS AND STOCK BONUSES
5.1 Grants of Performance Share Awards.
The Committee may, in its discretion, grant Performance Share
Awards to Eligible Employees based upon such factors as the Committee
shall deem relevant in light of the specific type and terms of the
award. An Award Agreement shall specify the maximum number of shares
of Common Stock (if any) subject to the Performance Share Award, the
consideration (but not less than the minimum lawful consideration)
to be paid for any such shares as may be issuable to the Participant,
the duration of the Award and the conditions upon which delivery of
any shares or cash to the Participant shall be based. The amount of
cash or shares or other property that may be deliverable pursuant to
such Award shall be based upon the degree of attainment over a
specified period (a "performance cycle") as may be established
by the Committee of such measure(s) of the performance of the
Company (or any part thereof) or the Participant as may be
established by the Committee. The Committee may provide for full
or partial credit, prior to completion of such performance cycle
or the attainment of the performance achievement specified in the
Award, in the event of the Participant's death, or Total Disability,
a Change in Control Event or in such other circumstances as
the Committee consistent with Section 6.10(c)(2), if applicable,
may determine.
5.2 Special Performance-Based Share Awards.
Without limiting the generality of the foregoing, and in
Addition to Options and Stock Appreciation Rights granted under
Other provisions of this Plan which are intended to satisfy the
exception for "performance-based compensation" under Section 162(m)
of the Code (with such Awards hereinafter referred to as a
"Qualifying Option" or a "Qualifying Stock Appreciation Right,"
respectively), other performance-based awards within the meaning
of Section 162(m) of the Code ("Performance-Based Awards"),
whether in the form of restricted stock, performance stock,
phantom stock, Cash-Based Awards, or other rights, the grant,
vesting, exercisability or payment of which depends on the
degree of achievement of the Performance Goals relative to
preestablished targeted levels for the Corporation or the
Corporation and one or more of its Subsidiaries, may be granted
under this Plan. Any Qualifying Option or Qualifying Stock
Appreciation Right shall be subject only to the requirements of
subsections (a) and (c) below in order for such Awards to
satisfy the requirements for Performance-Based Awards under this
Section 5.2. With the exception of any Qualifying Option or
Qualifying Stock Appreciation Right, an Award that is intended
to satisfy the requirements of this Section 5.2 shall be
designated as a Performance-Based Award at the time of grant.
(a) Eligible Class. The eligible class of persons for
Performance-Based Awards under this Section shall be the executive
officers of the Corporation.
(b) Performance Goal Alternatives. The specific performance
goals for Performance-Based Awards granted under this Section (other
than Qualifying Options and Qualifying Stock Appreciation Rights)
shall be, on an absolute or relative basis, one or more of the
Performance Goals, as selected by the Committee in its sole
discretion. The Committee shall establish in the applicable
Award Agreement the specific performance target(s) relative to
the Performance Goal(s) which must be attained before the
compensation under the Performance-Based Award becomes payable.
The specific targets shall be determined within the time period
permitted under Section 162(m) of the Code (and any regulations
issued thereunder) so that such targets are considered to be
preestablished and so that the attainment of such targets is
substantially uncertain at the time of their establishment.
The applicable performance measurement period may not be less
than one nor more than 10 years.
(c) Maximum Performance-Based Award. Notwithstanding any
other provision of the Plan to the contrary, the maximum number
of shares of Common Stock which may be delivered pursuant to
options, stock appreciation rights, restricted stock or other
share-based awards that are granted as Performance-Based Awards
to any Participant in any calendar year shall not exceed 1,000,000
shares, either individually or in the aggregate, subject to
adjustment as provided in Section 6.2. Awards that are cancelled
during the year shall be counted against this limit to the extent
required by Section 162(m) of the Code. In addition, the aggregate
amount of compensation to be paid to any Participant in respect
of any Cash-Based Awards that are granted during any calendar
year as Performance-Based Awards shall not exceed $1,000,000.
(d) Committee Certification. Before any Performance-Based
Award under this Section 5.2 (other than Qualifying Options or
Qualifying Stock Appreciation Rights) is paid, the Committee must
certify in writing that the Performance Goal(s) and any other
material terms of the Performance-Based Award were satisfied;
provided, however, that a Performance-Based Award may be paid
without regard to the satisfaction of the applicable Performance
Goal in the event of a Change in Control Event in accordance with
Section 6.2(d).
(e) Terms and Conditions of Awards. The Committee will have
the discretion to determine the restrictions or other limitations
of the individual Awards granted under this Section 5.2 including
the authority to reduce Awards, payouts or vesting or to pay no
Awards, in its sole discretion, if the Committee preserves such
Authority at the time of grant by language to this effect in its
Authorizing resolutions or otherwise.
(f) Adjustments for Changes in Capitalization and other
Material Changes. In the event of a change in corporate
capitalization, such as a stock split or stock dividend, or a
corporate transaction, such as a merger, consolidation, spinoff,
reorganization or similar event, or any partial or complete
liquidation of the Corporation, or any similar event consistent with
regulations issued under Section 162(m) of the Code including,
without limitation, any material change in accounting policies
or practices affecting the Corporation and/or the Performance
Goals or targets, then the Committee may make adjustments to
the Performance Goals and targets relating to outstanding
Performance-Based Awards to the extent such adjustments are
made to reflect the occurrence of such an event; provided, however,
that adjustments described in this subsection may be made only to
the extent that the occurrence of an event described herein was
unforeseen at the time the targets for a Performance-Based Award
were established by the Committee.
5.3 Grants of Stock Bonuses.
The Committee may grant a Stock Bonus to any Eligible Employee
to reward exceptional or special services, contributions or
achievements in the manner and on such terms and conditions
(including any restrictions on such shares) as determined from
time to time by the Committee. The number of shares so awarded
shall be determined by the Committee. The Award may be granted
independently or in lieu of a cash bonus.
5.4 Deferred Payments.
The Committee may authorize for the benefit of any Eligible
Person the deferral of any payment of cash or shares that may become
Due or of cash otherwise payable under this Plan, and provide for
Accredited benefits thereon based upon such deferment, at the
election or at the request of such Participant, subject to the
other terms of this Plan. Such deferral shall be subject to
such further conditions, restrictions or requirements as the
Committee may impose, subject to any then vested rights of
Participants.
VI. OTHER PROVISIONS
6.1 Rights of Eligible Employees, Participants and Beneficiaries
(a) Employment Status. Status as an Eligible Employee shall
not be construed as a commitment that any Award will be granted
under this Plan to an Eligible Employee or to Eligible Employees
generally.
(b) No Employment Contract. Nothing contained in this Plan
(or in any other documents related to this Plan or to any Award) shall
confer upon any Eligible Employee or other Participant any right to
continue in the employ or other service of the Company or constitute
any contract or agreement of employment or other service, nor shall
interfere in any way with the right of the Company to change such
person's compensation or other benefits or to terminate the employment
of such person, with or without cause, but nothing contained in this
Plan or any document related hereto shall adversely affect any
independent contractual right of such person without his or her
consent thereto.
(c) Plan Not Funded. Awards payable under this Plan shall be
payable in shares or from the general assets of the Corporation, and
no special or separate reserve, fund or deposit shall be made to
assure payment of such Awards. No Participant, Beneficiary or
other person shall have any right, title or interest in any fund
or in any specific asset (including shares of Common Stock, except
as expressly otherwise provided) of the Company by reason of any
Award hereunder. Neither the provisions of this Plan (or of any
related documents), nor the creation or adoption of this Plan, nor
any action taken pursuant to the provisions of this Plan shall
create, or be construed to create, a trust of any kind or a fiduciary
relationship between the Company and any Participant, Beneficiary
or other person. To the extent that a Participant, Beneficiary or
other person acquires a right to receive payment pursuant to any
Award hereunder, such right shall be no greater than the right of
any unsecured general creditor of the Company.
6.2 Adjustments; Acceleration
(a) Adjustments. If there shall occur any extraordinary
dividend or other extraordinary distribution in respect of the
Common Stock (whether in the form of cash, Common Stock, other
securities, or other property), or any reclassification,
recapitalization, stock split (including a stock split in the
form of a stock dividend), reverse stock split, reorganization,
merger, combination, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the
Corporation, or there shall occur any other like corporate
transaction or event in respect of the Common Stock on a sale of
substantially all the assets of the Corporation as an entirety,
then the Committee shall, in such manner and to such extent (if any)
as it deems appropriate and equitable (1) proportionately adjust
any or all of (i) the number and type of shares of Common Stock (or
other securities) which thereafter may be made the subject of Awards
(including the specific maxima and numbers of shares set forth
elsewhere in this Plan), (ii) the number, amount and type of
shares of Common Stock (or other securities or property) subject
to any or all outstanding Awards, (iii) the grant, purchase, or
exercise price of any or all outstanding Awards, (iv) the
securities, cash or other property deliverable upon exercise of
any outstanding Awards, or (v) the performance standards appropriate
to any outstanding Awards, or (2) in the case of an extraordinary
dividend or other distribution, recapitalization, reclassification,
merger, reorganization, consolidation, combination, sale of assets,
split up, exchange, or spin off, make provision for a cash payment
or for the substitution or exchange of any or all outstanding
Awards or the cash, securities or property deliverable to the
holder of any or all outstanding Options based upon the distribution
or consideration payable to holders of the Common Stock of the
Corporation upon or in respect of such event; provided, however,
in each case, that with respect to Incentive Stock Options, no
such adjustment shall be made which would cause the Plan to violate
Section 424(a) of the Code or any successor provisions thereto.
(b) Acceleration of Awards Upon Change in Control. As to any
Eligible Employee Participant, unless prior to a Change in Control
Event the Committee determines that, upon its occurrence, there shall
be no acceleration of benefits under Awards or determines that only
certain or limited benefits under Options shall be accelerated and
the extent to which they shall be accelerated, and/or establishes a
different time in respect of such Change in Control Event for such
acceleration, then upon the occurrence of a Change in Control Event
(i) each Option and Stock Appreciation Right shall become immediately
exercisable, (ii) Restricted Stock shall immediately vest free of
restrictions, and (iii) each Performance Share Award shall become
payable to the Participant; provided, however, that in no event shall
any Award be accelerated as to any Section 16 Person to a date less
than six months after the Award Date of such Award. The Committee
may override the limitations on acceleration in this Section 3.2(b)
by express provision in the Award Agreement and may accord any
Eligible Employee a right to refuse any acceleration, whether
pursuant to the Award Agreement or otherwise, in such circumstances
as the Committee may approve. Any acceleration of Awards shall
comply with applicable regulatory requirements, including, without
limitation, Section 422 of the Code.
(c) Possible Early Termination of Accelerated Awards. If any
Option or other right to acquire Common Stock under this Plan (other
than under Article VII) has been fully accelerated as permitted by
Section 6.2(b) but is not exercised prior to (i) a dissolution of
the Corporation, or (ii) a reorganization event described in Section
6.2(a) that the Corporation does not survive, or (iii) the consummation
of an event described in Section 6.2(a) that results in a Change in
Control Event approved by the Board, such Option or right shall
thereupon terminate, subject to any provision that has been
expressly made by the Committee for the survival, substitution,
exchange or other settlement of such Option or right.
6.3 Effect of Termination of Employment
The Committee shall establish in respect of each Award
granted to an Eligible Employee the effect of a termination of
employment on the rights and benefits thereunder and in so doing may
make distinctions based upon the cause of termination. In addition,
in the event of, or in anticipation of, a termination of employment
with the Company for any reason, other than discharge for cause,
the Committee may, in its discretion, increase the portion of the
Participant's Award available to the Participant, or Participant's
Beneficiary or Personal Representative, as the case may be, or,
subject to the provisions of Section 1.6, extend the exercisability
period upon such terms as the Committee shall determine and expressly
set forth in or by amendment to the Award Agreement.
6.4 Compliance with Laws
This Plan, the granting and vesting of Awards under this Plan
and the offer, issuance and delivery of shares of Common Stock and/or
the payment of money under this Plan or under Awards granted hereunder
are subject to compliance with all applicable federal and state laws,
rules and regulations (including, but not limited to, state and federal
securities laws and federal margin requirements) and to such approvals
by any listing, regulatory or governmental authority as may, in the
opinion of counsel for the Corporation, be necessary or advisable in
connection therewith. Any securities delivered under this Plan shall
be subject to such restrictions, and the person acquiring such
securities shall, if requested by the Corporation, provide such
assurances and representations to the Corporation as the Corporation
may deem necessary or desirable to assure compliance with all applicable
legal requirements.
6.5 Tax Withholding
(a) Cash or Shares. Upon any exercise, vesting or payment of
any Award or upon the disposition of shares of Common Stock acquired
pursuant to the exercise of an Incentive Stock Option prior to
satisfaction of the holding period requirements of Section 422 of
the Code, the Company shall have the right at its option to (i) require
the Participant (or Personal Representative or Beneficiary, as the
case may be) to pay or provide for payment of the amount of any taxes
which the Company may be required to withhold with respect to such
Award event or payment or (ii) deduct from any amount payable in
cash the amount of any taxes which the Company may be required to
withhold with respect to such cash payment. In any case where a
tax is required to be withheld in connection with the delivery
of shares of Common Stock under this Plan, the Committee may in
its sole discretion grant (either at the time of the Award is
granted or thereafter) to the Participant the right to elect, pursuant
to such rules and subject to such conditions as the Committee may
establish, to have the Corporation reduce the number of shares to
be delivered by (or otherwise reacquire) the appropriate number of
shares valued at their then Fair Market Value, to satisfy such
withholding obligation.
(b) Tax Loans. The Committee may, in its discretion,
authorize a loan to an Eligible Employee in the amount of any
taxes which the Company may be required to withhold with respect
to shares of Common Stock received (or disposed of, as the case may
be) pursuant to a transaction described in subsection (a) above.
Such a loan shall be for a term, at a rate of interest and pursuant
to such other terms and conditions as the Committee, under
applicable law, may establish and such loan need not comply with
the provisions of Section 1.8.
6.6 Plan Amendment, Termination and Suspension
(a) Board Authorization. The Board may, at any time,
terminate or, from time to time, amend, modify or suspend this Plan,
in whole or in part. No Awards may be granted during any suspension
of this Plan or after termination of this Plan, but the Committee
shall retain jurisdiction as to Awards then outstanding in accordance
with the terms of this Plan.
(b) Stockholder Approval. Any amendment that would (i)
materially increase the benefits accruing to Participants under
this Plan, (ii) materially increase the aggregate number of securities
that may be issued under this Plan, or (iii) materially modify the
requirements as to eligibility for participation in this Plan,
shall be subject to stockholder approval only to the extent then
required by Section 422 of the Code or any other applicable law,
or deemed necessary or advisable by the Board.
(c) Amendment to Awards. Without limiting any other express
authority of the Committee under but subject to the express limits
of this Plan, the Committee by agreement or resolution may waive
conditions of or limitations on Awards to Eligible Employees that
the Committee in the prior exercise of its discretion has imposed,
without the consent of a Participant, and may make other changes
to the terms and conditions of Awards that do not affect in any
manner materially adverse to the Employee Participant, his or her
rights and benefits under an Award.
(d) Limitations on Amendments to Plan and Awards. No
amendment, suspension or termination of the Plan or change of
or affecting any outstanding Award shall, without written consent
of the Participant, affect in any manner materially adverse to
the Participant any rights or benefits of the Participant or
obligations of the Corporation under any Award granted under this
Plan prior to the effective date of such change. Changes
contemplated by Section 6.2 shall not be deemed to constitute
changes or amendments for purposes of this Section 6.6.
6.7 Privileges of Stock Ownership
Except as otherwise expressly authorized by the Committee or
this Plan, a Participant shall not be entitled to any privilege of
stock ownership as to any shares of Common Stock not actually
delivered to and held of record by him or her. No adjustment
will be made for dividends or other rights as a stockholders for
which a record date is prior to such date of delivery.
6.8 Effective Date of the Plan
This Plan was originally effective as of September 22, 1992
("Effective Date"), the date of Board approval, and was subject to
stockholder approval within 12 months thereafter. The Plan is
hereby amended and restated in its entirety, effective as of
August 27, 1996.
6.9 Term of the Plan
No Award shall be granted more than ten years after the
Effective Date of this Plan (the "termination date"). Unless
otherwise expressly provided in this Plan or in an applicable
Award Agreement, any Award granted prior to the termination date
may extend beyond such date, and all authority of the Committee
with respect to Awards hereunder, including the authority to
amend an Award, shall continue during any suspension of this
Plan and in respect of outstanding Awards on such termination
date.
6.10 Governing Law; Construction; Severability
(a) Choice of Law. This Plan, the Awards, all documents
evidencing Awards and all other related documents shall be
governed by, and construed in accordance with the laws of the
State of Nevada.
(b) Severability. If any provision shall be held by a court
of competent jurisdiction to be invalid and unenforceable, the
remaining provisions of this Plan shall continue in effect.
(c) Plan Construction.
(1) Rule 16b-3. It is the intent of the Corporation that
transactions in and affecting Awards in the case of Participants
who are or may be subject to Section 16 of the Exchange Act
satisfy any then applicable requirements of Rule 16b-3 so that
such persons will be entitled to the benefits of Rule 16b-3 or
other exemptive rules under Section 16 of the Exchange Act in
respect of these transactions and will not be subjected to
avoidable liability thereunder. If any provision of this Plan
or of any Award would otherwise frustrate or conflict with the
intent expressed above, that provision to the extent possible
shall be interpreted and deemed amended so as to avoid such
conflict, but to the extent of any remaining irreconcilable
conflict with such intent as to such persons in the circumstances,
such provision shall be deemed void.
(2) Section 162(m). It is the further intent of the Company
that Options and Stock Appreciation Rights with an exercise or
base price not less than Fair Market Value on the date of grant
and Performance Share Awards under Section 5.2 of the Plan that
are granted to or held by a Section 16 Person shall qualify as
performance-based compensation under Section 162(m) of the Code,
and this Plan shall be interpreted consistent with such intent.
6.11 Captions
Captions and headings are given to the sections and subsections
of this Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the
construction or interpretation of the Plan or any provision thereof.
6.12 Effect of Change of Subsidiary Status
For purposes of this Plan and any Award hereunder, if an
entity ceases to be a Subsidiary a termination of employment shall
be deemed to have occurred with respect to each employee of such
Subsidiary who does not continue as an employee of another entity
within the Company.
6.13 Non-Exclusivity of Plan
Nothing in this Plan shall limit or be deemed to limit the
authority of the Board or the Committee to grant awards or authorize
any other compensation, with or without reference to the Common Stock,
under any other plan or authority.
VII. NON-EMPLOYEE DIRECTOR OPTIONS
7.1 Participation
Options under this Article VII shall be made only to Non-
Employee Directors.
7.2 Annual Option Grants
(a) Time of Initial Grant. After approval of this Plan by
the stockholders of the Corporation, if any person who is not then
an officer or employee of the Company shall become a director of the
Corporation, there shall be granted automatically to such person
(without any action by the Board of Committee) a Nonqualified
Stock Option (the Award Date of which shall be the date such
person takes office) to purchase 10,000 shares.
(b) Subsequent Annual Options. In each calendar year during
the term of the Plan, commencing in 1994, there shall be granted
automatically (without any action by the Committee or the Board) a
Nonqualified Stock Option to purchase 4,000 shares of Common Stock
to each Non-Employee Director who is re-elected as a director of
the Corporation (the Award Date of which shall be the date of such
re-election). In addition, subject to stockholder approval at the
1997 Annual Stockholders Meeting, each person who is a Non-
Employee Director on August 27, 1996 shall be granted on a one-time
basis without further action on Option to purchase 2,000 shares of
Common Stock (the Award Date of which shall be August 27, 1996, the
date of Board approval of this amendment). Furthermore,
notwithstanding the first sentence of this subsection (b), but
subject to stockholder approval at the 1997 Annual Stockholders
Meeting, in each calendar year during the remaining term of the Plan,
(commencing in 1997), the grant described in the first sentence of
this subsection shall not be made and instead there shall be granted
automatically (without any action by the Committee or the Board) a
Nonqualified Stock Option to purchase 6,000 shares of Common Stock
to each Non-Employee Director who is re-elected as a director of
the Corporation (the Award Date of which shall be the date of such
re-election).
(c) Maximum Number of Shares. Annual grants that would
otherwise exceed the maximum number of shares under Section 1.4(a)
shall be prorated within such limitation. A Non-Employee Director
shall not receive more than 50,000 shares on exercise of all Options
optioned under this Section 7.2.
7.3 Option Price
The purchase price per share of the Common Stock covered by
each Option granted pursuant to Section 7.2 hereof shall be 100%
of the Fair Market Value of the Common Stock on the Award Date. The
exercise price of any Option granted under this Article shall be
paid in full at the time of each purchase in cash or by check or
in shares of Common Stock valued at their Fair Market Value on the
date of exercise of the Option, or partly in such shares and partly
in cash, provided that any such shares used in payment shall have
been owned by the Participant at least six months prior to the date
of exercise.
7.4 Option Period and Exercisability
Each Option granted under this Article VII and all rights or
obligations thereunder shall commence on the Award Date and expire
ten years thereafter and shall be subject to earlier termination as
provided below. Each Option granted under Section 7.2 shall become
exercisable at the rate of 33-1/3% per year, on the first, second
and third anniversaries of the Award Date.
7.5 Termination of Directorship
If a Non-Employee Director's services as a member of the
Board of Directors terminate by reason of death, Disability or
Retirement, an Option granted pursuant to this Article held by
such Participant shall immediately become and shall remain
exercisable for two years after the date of such termination or
until the expiration of the stated term of such Option, whichever
first occurs. If a Non-Employee Director's services as a member
of the Board of Directors terminate for any other reason, any
portion of an Option granted pursuant to this Article which is not
then exercisable shall terminate and any portion of such Option
which is then exercisable may be exercised within a period of
thirty (30) days after the date of such termination or until the
expiration of the stated term, whichever first occurs.
7.6 Adjustments
Options granted under this Article VII shall be subject to
adjustment as provided in Section 6.2, but only to the extent that
(a) such adjustment and the Committee's action in respect thereof
satisfy applicable law, (b) such adjustment in the case of a
Change in Control Event is effected pursuant to the terms of a
reorganization agreement approved by stockholders of the
Corporation, and (c) such adjustment is consistent with
adjustments to Options held by persons other than executive
officers or directors of the Corporation.
7.7 Acceleration Upon a Change in Control Event
Upon the occurrence of a Change in Control Event, each Option
granted under Section 7.2 hereof shall become immediately
exercisable in full. To the extent that any Option granted under
this Article VII is not exercised prior to (i) a dissolution of
the Corporation or (ii) a merger or other corporate event that the
Corporation does not survive, and no provision is (or consistent
with the provisions of Section 7.6 can be) made for the
assumption, conversion, substitution or exchange of the Option,
the Option shall terminate upon the occurrence of such event.
VIII. DEFINITIONS
8.1 Definitions
(a) "Award" shall mean an award of any Option, Stock Appreciation
Right, Restricted Stock, Stock Bonus, Performance Share Award,
Performance-Based Award, Cash-Based Award, dividend equivalent or
deferred payment right or other right or security that would
constitute a "derivative security" under Rule 16a-1(c) of the
Exchange Act, or any combination thereof, whether alternative or
cumulative, authorized by and granted under this Plan.
(b) "Award Agreement" shall mean any writing setting forth the
terms of an Award that has been authorized by the Committee.
(c) "Award Date" shall mean the date upon which the Committee took
the action granting an Award or such later date as the Committee
designates as the Award Date at the time of the Award or, in the
case of Awards under Article VII, the applicable dates set forth
therein.
(d) "Award Period" shall mean the period beginning on an Award
Date and ending on the expiration date of such Award.
(e) "Beneficiary" shall mean the person, persons, trust or
trusts designated by a Participant or, in the absence of a
designation, entitled by will or the laws of the descent and
distribution to receive the benefits specified in the Award
Agreement and under this Plan in the event of a Participant's
death, and shall mean the Participant's executor or administrator
if no other Beneficiary is designated and able to act under the
circumstances.
(f) "Board" shall mean the Board of Directors of the
Corporation.
(g) "Cash-Based Awards" shall mean Awards that, if paid, must
be paid in cash and that are neither denominated in nor have a value
derived from the value of, nor an exercise or conversion privilege
at a price related to, shares of Common Stock.
(h) "Cash Flow" shall mean cash and cash equivalents derived
from either (i) net cash flow from operations or (ii) net cash flow
from operations, financings and investing activities, as determined
by the Committee at the time an Award is granted.
(i) "Change in Control Event" shall mean any of the following:
(1) Approval by the stockholders of the Corporation of
the dissolution or liquidation of the Corporation;
(2) Approval by the stockholders of the Corporation of
an agreement to merge or consolidate, or otherwise reorganize,
with or into one or more entities that are not Subsidiaries,
as a result of which less than 50% of the outstanding voting
securities of the surviving or resulting entity immediately
after the reorganization are, or will be, owned by stockholders
of the Corporation immediately before such reorganization
(assuming for purposes of such determination that there is
no change in the record ownership of the Corporation's
securities from the record date for such approval until
such reorganization and that such record owners hold no
securities of the other parties to such reorganization):
(3) Approval by the stockholders of the Corporation of
the sale of substantially all of the Corporation's business
and/or assets to a person or entity which is not a Subsidiary;
(4) Any "person (as such term is used in Section 13(d)
and 14(d) of the Exchange Act) (other than a person having
such ownership at the time of adoption of this Plan) becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Corporation representing more than 50% of the combined voting
power of the Corporation's then outstanding securities
entitled to then vote generally in the election of directors
of the Corporation; or
(5) During any period not longer than two consecutive
years, individuals who at the beginning of such period
constituted the Board cease to constitute at least a majority
thereof, unless the election, or the nomination for election
by the Corporation's stockholders, of each new Board member
was approved by a vote of at least three-fourths of the Board
members then still in office who were Board members at the
beginning of such period (including for these purposes, new
members whose election or nomination was so approved).
(j) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(k) "Commission" shall mean the Securities and Exchange
Commission.
(l) "Committee" shall mean the Board or a committee appointed
by the Board to administer this Plan, which committee shall be
comprised only of two or more directors or such greater number of
directors as may be required under applicable law, each of whom
(i) in respect of any decision at a time when the Participant
affected by the decision may be subject to Section 162(m) of the
Code be an "outside director" within the meaning of Code Section
162(m) and (ii) in respect of any decision at a time when the
Participant affected by the decision may be subject to Section 16
under the Exchange Act, shall be a "Non-Employee Director" within
the meaning of Rule 16b-3(b)(3).
(m) "Common Stock" shall mean the Common Stock of the
Corporation and such other securities or property as may become
subject to Awards, or become subject to Awards, pursuant to an
adjustment made under Section 6.2 of this Plan.
(n) "Company" shall mean, collectively, the Corporation and
its domestic or foreign Subsidiaries or divisions.
(o) "Corporation" shall mean International Game Technology, a
Nevada corporation, and its successors.
(p) "Eligible Employee" shall mean an officer (whether or
not a director) or key executive, administrative, managerial,
production, marketing or sales employee of the Company.
(q) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended.
(r) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(s) "Fair Market Value" or any date shall mean (i) if the stock
is listed or admitted to trade on a national securities exchange,
the closing price of the stock on the Composite Tape, as published in
the Western Edition of The Wall Street Journal, of the principal
national securities exchange on which the stock is so listed or
admitted to trade, on such date, or, if there is no trading of the
stock on such date, then the closing price of the stock as quoted
on such Composite Tape on the next preceding date on which there
was trading in such shares; (ii) if the stock is not listed or
admitted to trade on a national securities exchange, the last
price for the stock on such date, as furnished by the National
Association of Securities Dealers, Inc. ("NASD") through the
NASDAQ National Market Reporting System or a similar organization
if the NASD is no longer reporting such information, (iii) if the
stock is not listed or admitted to trade on a national securities
exchange and is not reported on the National Market Reporting
System, the mean between the bid and asked price for the stock on
such date, as furnished by the NASD or a similar organization, or
(iv) if the stock is not listed or admitted to trade on a national
securities exchange, is not reported on the National Market
Reporting System and if bid and asked prices for the stock are not
furnished by the NASD or a similar organization, the value as
established by the Committee at such time for purposes of this
Plan.
(t) "Incentive Stock Option" shall mean an Option which is
designated as an incentive stock option within the meaning of
Section 422 of the Code, the award of which contains such
provisions as are necessary to comply with that section.
(u) "Nonqualified Stock Option" shall mean an Option that is
designated as a Nonqualified Stock Option and shall include any
Option intended as an Incentive Stock Option that fails to meet
the applicable legal requirements thereof. Any Option granted
hereunder that is not designated as an Incentive Stock Option
shall be deemed to be designated a Nonqualified Stock Option under
this Plan and not an incentive stock option under the Code.
(v) "Non-Employee Director" shall mean a member of the Board
of Directors of the Corporation who is not an officer or employee
of the Company.
(w) "Non-Employee Director Participant" shall mean a Non-Employee
Director who has been granted an Option under the provisions of
Article VII.
(x) "Option" shall mean an option to purchase Common Stock
granted under this Plan. The Committee shall designate any Option
granted to an Eligible Employee as a Nonqualified Stock Option or
an Incentive Stock Option. Options granted under Article VII shall
be Nonqualified Stock Options.
(y) "Participant" shall mean an Eligible Employee who has been
granted an Award under this Plan and a Non-Employee Director who
has been received an Option under Article VII of this Plan.
(z) "Performance-Based Award" shall mean an Award of a right
to receive shares of Common Stock or other compensation (including
cash) under Section 5.2, the issuance or payment of which is
contingent upon, among other conditions, the attainment of
performance objectives specified by the Committee.
(aa) "Performance Goals" shall mean EPS or ROE or Cash Flow
or Total Stockholder Return, and "Performance Goals" means any
combination thereof.
(bb) "Performance Share Award" shall mean an Award of a right
to receive shares of Common Stock made in accordance with Section
5.1, the issuance or payment of which is contingent upon, among
other conditions, the attainment of performance objectives
specified by the Committee.
(cc) "Personal Representative" shall mean the person or persons
who, upon the disability or incompetence of a Participant, shall
have acquired on behalf of the Participant, by legal proceeding or
otherwise, the power to exercise the rights or receive benefits
under this Plan and who shall have become the legal representative
of the Participant.
(dd) "Plan" shall mean this 1993 Stock Option Plan, as amended
and restated.
(ee) "QDRO" shall mean a qualified domestic relations order as
defined in Section 414(p) of the Code or Title I, Section
206(d)(3) of ERISA (to the same extent as if this Plan were
subject thereto), or the applicable rules thereunder.
(ff) "Restricted Stock Award" shall mean an award of a fixed
number of shares of Common Stock to the Participant subject,
however, to payment of such consideration, if any, and such
forfeiture provisions, as are set forth in the Award Agreement.
(gg) "Restricted Stock" shall mean shares of Common Stock
awarded to a Participant under this Plan, subject to payment of
such consideration, if any, and such conditions on vesting and
such transfer and other restrictions as are established in or
pursuant to this Plan, for so long as such shares remain unvested
under the terms of the applicable Award Agreement.
(hh) "Retirement" shall mean retirement with the consent of the
Company, or in the case of a Non-Employee Director, a retirement
or resignation as a director after at least eight years service as
a director.
(ii) "ROE" shall mean consolidated net income of the
Corporation (less preferred dividends), divided by the average
Consolidated common shareholders equity.
(jj) "Rule 16b-3" shall mean Rule 16b-3 as promulgated by the
Commission pursuant to the Exchange Act.
(kk) "Section 16 Person" shall mean a person subject to Section
16(a) of the Exchange Act.
(ll) "Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
(mm) "Stock Appreciation Right" shall mean a right to receive a
number of shares of Common Stock or an amount of cash, or a
combination of shares and cash, the aggregate amount or value of
which is determined by reference to a change in the Fair Market
Value of the Common Stock that is authorized under this Plan.
(nn) "Stock Bonus" shall mean an Award of shares of Common
Stock granted under this Plan for no consideration other than past
services and without restriction other than such transfer or
other restrictions as the Committee may deem advisable to assure
compliance with law.
(oo) "Subsidiary" shall mean any corporation or other entity a
majority of whose outstanding voting stock or voting power is
beneficially owned directly or indirectly by the Corporation.
(pp) "Total Disability" shall mean a "permanent and total
disability within the meaning of Section 22(e)(3) of the Code and
(except in the case of a Non-Employee Director) such other
disabilities, infirmities, afflictions or conditions as the
Committee by rule may include.
(qq) "Total Stockholder Return" shall mean with respect to the
Corporation or other entities (if measures on a relative basis),
the (i) change in the market price of its common stock (as quoted
in the principal market on which it is traded as of the beginning
and ending of the period) plus dividends and other distributions
paid, divided by (ii) the beginning quoted market price, all of
which is adjusted for any changes in equity structure, including
but not limited to stock splits and stock dividends.
<PAGE>
[International Game Technology letterhead]
June 16, 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, 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 3,250,000 shares of Common Stock, $0.000625
par value per share, of the Company (the "Common Stock"), to be
issued pursuant to the International Game Technology 1993 Stock
Option Plan, as amended (the "Plan"). I have examined the
proceedings heretofore taken and to be taken in connection with
the authorization of the Plan and the Common Stock to be issued
pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of fact and
law as I have deemed relevant, I am of the opinion that the Common
Stock has been duly authorized by all necessary corporate action
on the part of the Company and, when issued in accordance with
such authorization, the provisions of the Plan and relevant
agreements duly authorized by and in accordance with the terms of
the Plan, will be validly issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to the
Registration Statement.
Respectfully submitted,
/s/ Brian McKay
Brian McKay
Vice President, General Counsel,
Secretary and Treasurer
<PAGE>
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 which is incorporated by reference in
Registration Statement Nos. 33-69400 and 333-24605.
/s/ Deloitte & Touche LLP
______________________
Reno, Nevada
June 28, 1999
<PAGE>
