Schedule 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities & Exchange Act of 1934
(Amendment No. ______)
Filed by the Registrant X Filed by a party other than the Registrant Check the
appropriate box:
___ Preliminary Proxy Statement
___ Confidential for use of the Commission only (as permitted by Rule
14a-6(e)(2))
_X_ Definitive Proxy Statement
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
International Game Technology
(Name of Registrant as specified in its Charter)
Payment or Filing Fee (check the appropriate box):
_X_ No fee required
___ Fee computed on table below per Exchange Act Rules 14a-6(i) (4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11: (1)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
___ Fee paid previously with preliminary materials.
___ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
INTERNATIONAL GAME TECHNOLOGY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On March 6, 2000
The Annual Meeting of the Stockholders of International Game Technology
will be held at our corporate headquarters, 9295 Prototype Drive, Reno, Nevada
89511, on Monday, March 6, 2000, at 1:30 p.m., local time, for the purpose of
considering and voting on:
1. Election of seven directors for the ensuing year; and
2. Such other business as may properly come before the meeting and any and
all adjournments thereof.
The Board of Directors has fixed January 14, 2000 as the record date for
determining the stockholders of the Company entitled to notice of and to vote at
the meeting and any adjournment thereof, and only holders of Common Stock of the
Company of record at the close of business on such date will be entitled to
notice of and to vote at said meeting or adjournment.
By Order of the Board of Directors
Sara Beth Brown
Secretary
Reno, Nevada
January 18, 2000
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING,
PLEASE VOTE AS SOON AS POSSIBLE. THIS YEAR YOU MAY VOTE OVER THE INTERNET, AS
WELL AS BY TELEPHONE OR BY MAILING A TRADITIONAL PROXY CARD. VOTING OVER THE
INTERNET, BY PHONE OR BY WRITTEN PROXY WILL ENSURE YOUR REPRESENTATION AT THE
ANNUAL MEETING IF YOU DO NOT ATTEND IN PERSON. PLEASE REVIEW THE INSTRUCTIONS ON
THE PROXY CARD REGARDING EACH OF THESE VOTING OPTIONS.
<PAGE>
TABLE OF CONTENTS
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS.......................... 1
INFORMATION CONCERNING SOLICITATION AND VOTING.................... 3
ELECTION OF DIRECTORS............................................. 4
NOMINEES FOR ELECTION OF DIRECTORS.............................. 4
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................. 6
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD.................. 6
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION..... 7
COMPENSATION OF DIRECTORS....................................... 7
OTHER INFORMATION................................................. 8
EXECUTIVE OFFICERS AND KEY EMPLOYEES............................ 8
EQUITY SECURITY OWNERSHIP OF MANAGEMENT AND OTHER BENEFICIAL OWNERS 11
EXECUTIVE COMPENSATION.......................................... 12
EMPLOYMENT CONTRACTS............................................ 13
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934 14
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS................ 14
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION..... 14
PERFORMANCE GRAPH................................................. 16
GENERAL .......................................................... 17
<PAGE>
INTERNATIONAL GAME TECHNOLOGY
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of International Game Technology (together
with its subsidiaries, as the context may require, hereinafter called the
"Company") to be voted at the Annual Meeting of Stockholders to be held on
Monday, March 6, 2000, and at any and all adjournments thereof.
Solicitation of proxies by mail and distribution of proxy statements are
expected to commence on or about January 27, 2000 and the cost thereof will be
borne by the Company. In addition to solicitation by mail, some of the officers
and regular employees of the Company may solicit, without extra compensation,
proxies by telephone and personal interview. Arrangements will be made with
brokerage houses, custodians, nominees and other fiduciaries to send proxy
material to their principals, and they will be reimbursed by the Company for
postage and clerical expense in doing so.
The executive offices of the Company are located at 9295 Prototype Drive,
Reno, Nevada 89511.
Voting Securities
The securities of the Company entitled to be voted at the meeting consist
of shares of its Common Stock, $0.000625 par value, of which 75,473,501 shares
were issued and outstanding at the close of business on January 14, 2000. Only
stockholders of record at the close of business on January 14, 2000, the record
date, will be entitled to vote at the meeting.
The shares of Common Stock are entitled to one vote per share but do not
have cumulative voting rights; therefore, a majority of the outstanding shares
entitled to vote has the power to elect all directors. Directors of the Company
who have been nominated for re-election and the executive officers of the
Company collectively have the power to vote 3,254,371 shares as of the record
date (4% of the outstanding shares) and have indicated that they currently
intend to vote such shares in favor of each of the director nominees named
herein.
Quorum, Abstentions and Broker Non-Votes
Votes cast by proxy or in person at the Annual Meeting will be counted by
persons appointed by the Company to act as election inspectors for the meeting.
The election inspectors will treat shares represented by proxies that reflect
abstentions or represent "broker non-votes" as shares that are present and
entitled to vote, for purposes of determining the presence of a quorum.
Abstentions and broker non-votes, however, do not constitute a vote "for" or
"against" any matter and thus will be disregarded in the calculation of a
plurality or of "votes cast."
Shares referred to as "broker non-votes" are shares held by brokers or
nominees as to which instructions have not been received from the beneficial
owners or persons entitled to vote that the broker or nominee does not have
discretionary power to vote on a particular matter. If a broker or nominee has
indicated on the proxy that it does not have discretionary authority to vote
certain shares, those shares will be treated as not present and not entitled to
vote with respect to that matter (even though those shares may be considered
entitled to vote for quorum purposes and entitled to vote on other matters).
<PAGE>
Any unmarked proxies, including those submitted by brokers or nominees,
will be voted in favor of the proposals described herein. If a broker or nominee
who does not have discretion to vote has delivered a proxy but has failed to
physically indicate on the proxy card such person's lack of authority to vote,
the shares will be treated as present and will be voted in accordance with the
instructions on the proxy card (i.e., as a vote FOR the proposals discussed
herein).
Revocability
Proxies may be revoked at any time prior to the exercise thereof by giving
written notice to the Company or by a later dated proxy executed by the person
executing the prior proxy and filed with the Company or otherwise presented at
the meeting. Stockholders attending the Annual Meeting may vote their shares in
person whether or not a proxy has been previously executed and returned. If a
proxy is granted and not revoked, it will be voted in accordance with
instructions contained therein. Unless contrary instructions are given, the
persons designated as proxy holders on the proxy card will vote FOR the
proposals described herein.
Stockholder Proposals for the 2001 Annual Meeting
Proposals of stockholders intended to be presented at the next Annual
Meeting must be received by the Company by September 29, 2000 to be considered
for inclusion in the Company's proxy statement relating to that meeting.
Stockholders desiring to present a proposal at the next Annual Meeting but who
do not desire to have the proposal included in the proxy materials distributed
by the Company must deliver written notice of such proposal to the Company prior
to December 13, 2000 or the persons appointed as proxies in connection with the
next Annual Meeting will have discretionary authority to vote on any such
proposal.
ELECTION OF DIRECTORS
Seven directors are to be elected at the Annual Meeting, each to hold
office until the next annual meeting of stockholders and until a successor is
elected. It is the intention of the persons named in the enclosed form of proxy
to vote, if authorized, the proxies for the election as directors of the seven
persons named below as nominees. All of the nominees are at present directors of
the Company. If any nominee declines or is unable to serve as a director, which
is not anticipated, the persons named as proxies reserve full discretion to vote
for any other person who may be nominated. The favorable vote of a plurality of
votes cast for each nominee is required for election to the Board of Directors.
Nominees for Election of Directors
The following sets forth for each nominee for election as a director his
name, all positions with the Company held by him and his principal occupation:
Charles N. Mathewson, 71, was appointed to the Company's Board of Directors in
1985 and was named Chairman in February 1986. In December 1986, Mr.
Mathewson was appointed President and Chief Executive Officer and resigned
as Chairman of the Board. Mr. Mathewson resumed the position as Chairman
of the Board and resigned as President in February 1988, and resigned as
Chief Executive Officer in June 1993. In February 1996, he resumed the
position of Chief Executive Officer. He received his Bachelor of Finance
degree from the University of Southern California in 1953 and graduated
from the University of California Management Program in 1960. He served as
Senior Executive Vice President and a Director of Jefferies and Co. from
<PAGE>
1968 to 1971, Chairman of the Board of Arden Mayfair, Inc. from 1971 to
1974, and Chairman of the Board of Wagenseller & Durst from 1978 to 1979.
From 1980 until February 1986, Mr. Mathewson was a general partner of
Management Advisors Associates, a partnership engaged in investment and
business consulting. Mr. Mathewson is a member of the Board of Directors
of Baron Asset Fund, and a member of the Board of Directors of Fel Cor
Lodging Trust. He is also Chairman of the American Gaming Association.
AlbertJ. Crosson, 69, was elected to the Company's Board of Directors in May
1988. In July 1996, he became Vice Chairman of the Board and an employee
of the Company. Mr. Crosson was employed for 34 years by ConAgra, Inc. and
its predecessor companies. He was President of ConAgra Grocery Products
Companies from 1993 until July 1996, when he retired. From 1986 until
January 1993, he was President of Hunt-Wesson Foods, Inc., a ConAgra
company. Prior to 1986, he was Executive Vice President for Hunt-Wesson,
Inc., and President of Arden Mayfair.
WilburK. Keating, 68, was elected a Director in May 1987. He received his
degree in Business Management from the University of Colorado in 1956. He
is currently the Administrative Officer for the National Association of
State Retirement Administrators and was previously the Assistant Executive
Officer of the Nevada Public Employees Retirement System from 1974 through
1980, and the Chief Executive
Officer from 1981 through 1994.
Bob Miller, 54, was appointed to the Board in January 2000. Governor Miller
has been a senior partner at the law firm of Jones Vargas since January
1999. From January 1989 until January 1999, he served as Governor of the
State of Nevada, and as Lieutenant Governor of the State of Nevada from
1987 to 1989. Governor Miller was the Clark County District Attorney from
1979 to 1986, and was Las Vegas Township Justice of the Peace from 1975 to
1979. He was first legal advisor for the Las Vegas Metropolitan Police
Department from 1973 to 1975, and was a Clark County Deputy District
Attorney from 1971 to 1973. Prior to 1973, Governor Miller was a uniformed
commissioned officer for the Clark County Sheriff's Department and the Los
Angeles County Sheriff's Department. During Governor Miller's political
and professional careers, he has served on many local and national boards
and chaired or co-chaired numerous committees within the National
Governor's Association including the Chairmanship of the Association
during 1996-1997. He was appointed by President Reagan to the nine-member
President's Task Force on Victims of Crime in 1982, and was appointed to
the Advisory Commission on Intergovernmental Relations by President Bill
Clinton in 1993. Current board memberships include Newmont Mining
Corporation, PageNet (Paging Network, Inc.), American Cancer Society
Foundation-National, U.S. Secretary of Energy Advisory Board, Zenith
National Insurance Corp., National Center for Missing and Exploited
Children, Advisory Board of Americans for Technology Leadership. Governor
Miller received his law degree in 1971 from Loyola Law School, Los
Angeles.
Frederick B. Rentschler, 60, was appointed to the Board of Directors in May
1992. Prior to his retirement in 1991, Mr. Rentschler served as President
and Chief Executive Officer of Northwest Airlines from 1990 to 1991. Mr.
Rentschler served as President and Chief Executive Officer of Beatrice
Company from 1988 to 1990, as President and Chief Executive Officer of
Beatrice U.S. Foods from 1985 to 1988, as President and Chief Executive
Officer of Hunt-Wesson, Inc. from 1980 to 1984 and President of
Armour-Dial from 1977 to 1980. Mr. Rentschler is the Chairman of the Board
of Trustees of the Salk Institute, La Jolla, California. Additionally, Mr.
Rentschler serves on the Boards of Bionutrics, and the Scottsdale Health
Care Systems.
<PAGE>
John J. Russell, 70, was appointed to the Board in January 1990. Mr. Russell
joined the Company as Senior Vice President in February 1986, was named
Executive Vice President in June 1987 and served as President from
February 1988 until December 1994. He served as Chief Executive Officer of
the Company from June 1993 until December 1995. In December 1995, Mr.
Russell resigned as Chief Executive Officer and became a consultant to the
Company. Mr. Russell served as President of Gabler, Russell & Company,
Inc., a firm of business consultants, from 1959 to 1986. Mr. Russell began
his business career in 1948 in the wholesale distribution and brokerage
business.
Rockwell A. Schnabel, 62, was elected a Director in September 1994. Mr. Schnabel
is founder and Managing Director of Trident Capital, Inc., a private
equity investment firm. He also served as President of the Board of
Commissioners for the Los Angeles Fire and Police Pension Board, which
oversees investments of more than $10 billion in pension funds. He is the
former Deputy Secretary of the U.S. Department of Commerce in Washington,
D.C., and also served as the department's Acting Secretary. Mr. Schnabel
previously served as the U.S. Ambassador to Finland and as President of
Bateman Eichler Hill Richards (member NYSE) (Everen Securities). He is
presently serving on the Boards of Directors of CSG Systems, Inc., Cyprus
Amax Minerals Company, and Rezsolutions, Inc.
Certain Relationships and Related Transactions
Mr. Warren L. Nelson, who is retiring from the Company's Board of
Directors in March 2000, has an equity interest in a Nevada gaming business from
which the Company recognized revenues of $1.5 million for fiscal 1999. The
Company had contracts and accounts receivable balances from this customer of
$1.5 million at October 2, 1999. During fiscal 1999, the largest aggregate
amount of the Company's receivable balances from such customer was $1.7 million.
Mr. Nelson is also a Director of the parent company of additional gaming
businesses. The Company recognized revenues from these businesses of $18.7
million for fiscal 1999. The Company had contracts and accounts receivable
balances from these businesses of $1.5 million as of October 2, 1999. During
fiscal 1999, the largest aggregate amount of the Company's receivable balances
from these customers was $1.8 million.
Board of Directors and Committees of the Board
The Board of Directors held four regular meetings during fiscal 1999.
During fiscal 1999, each director attended at least 75% of the aggregate number
of meetings of the Board and respective Committees on which he or she served
while a member thereof. The Board of Directors has three standing committees:
the Audit Committee, the Compensation Committee and the Executive Committee.
The Executive Committee, comprised of Messrs. Crosson and Mathewson, did
not hold any meetings during fiscal 1999. Except for certain powers which under
Nevada law may only be exercised by the full Board of Directors, the Executive
Committee has and exercises the powers of the Board in monitoring the management
of the business of the Company between meetings of the Board of Directors.
The Audit Committee consists of Messrs. Keating, Rentschler and Schnabel.
The Audit Committee held three meetings during fiscal 1999. The Audit Committee
has responsibility for consulting with the Company's officers regarding the
<PAGE>
appointment of independent public accountants as auditors, discussing the scope
of the auditors' examination and reviewing annual financial statements, related
party transactions, potential conflict situations and corporate accounting
policies.
Compensation Committee Interlocks and Insider Participation
During fiscal 1999, Ms. Claudine B. Williams, who retired from the Board
of Directors in January 2000, and Messrs. Nelson and Rentschler served as
members of the Compensation Committee. No member of the Committee is a former or
current officer or employee of the Company or any of its subsidiaries. The
functions performed by the Compensation Committee include oversight of executive
compensation, review of the Company's overall compensation programs, and
administration of certain incentive compensation programs. The Compensation
Committee held four meetings in fiscal 1999. See "Certain Relationships and
Related Transactions" for a discussion of certain relationships between the
Company and certain businesses affiliated with Mr. Nelson.
Compensation of Directors
Each outside director receives a $12,500 annual fee and a fee of $750 for
each committee meeting attended. Directors who are employees of the Company are
not paid fees or additional remuneration for service as members of the Board or
its Committees.
Each non-employee director receives non-qualified stock options to
purchase 10,000 shares of Common Stock upon his or her initial election to the
Board of Directors. Additionally, every year thereafter, each non-employee
director receives non-qualified stock options to purchase 6,000 shares of Common
Stock upon his or her re-election to the Board. Each non-employee director,
except Governor Bob Miller, received non-qualified stock options to purchase
6,000 shares of Common Stock in fiscal 1999 at an exercise price of $14.375 per
share. Governor Miller received non-qualified options to purchase 10,000 shares
of Common Stock at an exercise price of $21.6875 per share upon his appointment
to the Board in January 2000.
<PAGE>
OTHER INFORMATION
Executive Officers and Key Employees
The following table sets forth the name, age, and current office of the
executive officers and key employees of the Company, all positions held with the
Company by each individual, and a description of the business experience of each
individual for at least the past five years.
Name Age Title
Charles N. Mathewson 71 Chief Executive Officer
Albert J. Crosson 69 Vice Chairman
G. Thomas Baker 57 President, Chief Operating Officer
Robert A. Bittman 45 Executive Vice President,
Product Development
Robert M. McMonigle 55 Executive Vice President, Corporate
Relations and North America Sales
Raymond D. Pike 52 Executive Vice President,
Corporate Development
Anthony Ciorciari 52 Senior Vice President, Operations
Sara Beth Brown 44 Vice President, General Counsel,
Secretary
Maureen T. Mullarkey 40 Vice President, Finance, Chief
Financial Officer, Treasurer
Randy Kirner 53 Vice President, Human Resources
Richard Pennington 37 Vice President, Product Management
For a description of Mr. Mathewson's and Mr. Crosson's backgrounds, see
"Election of Directors."
<PAGE>
Mr. Baker first joined the Company in September 1988 as its Vice President
of Finance and Administration and Chief Financial Officer. In October 1991, Mr.
Baker was named Vice President of Finance, Chief Financial Officer and Treasurer
of the Company. He was named Executive Vice President, Corporate Finance; Chief
Financial Officer and Treasurer in September 1993 and held these positions until
August 1995. Mr. Baker was Senior Vice President and Chief Financial Officer of
Boomtown Hotels & Casinos from August 1995 to February 1996. Mr. Baker rejoined
the Company in February 1996 as its President, Chief Operating Officer and Chief
Financial Officer. In May 1998, he resigned as Chief Financial Officer of the
Company. From August 1985 to September 1988, he was Chief Financial Officer for
Evans Rents, an upscale furniture rental company in Los Angeles, California.
From April 1979 until August 1985, Mr. Baker was the Chief Financial Officer at
Aurora Productions, an independent motion picture production company in Los
Angeles, California. Mr. Baker has a Bachelor of Science degree in Business
Administration and Liberal Arts from Upper Iowa University.
Mr. Bittman first joined the Company in 1985 as Marketing Research Analyst
and was subsequently named Director of Marketing. He was promoted to Vice
President of Marketing in 1988 and held this position until December 1995. Mr.
Bittman rejoined the Company in March 1996 as Executive Vice President, Product
Development. From 1980 to 1985, Mr. Bittman worked for Caesar's Tahoe in all
phases of slot management, including two years as Director of Slot Operations.
Mr. Bittman majored in systems analysis at New York University, and psychology
at Queens College and the University of Nevada, Reno.
Mr. McMonigle joined the Company as a Sales Manager in March of 1986. From
April 1987 until October 1989, Mr. McMonigle was the Director of Sales for the
Company and from October 1989 until September 1991 he was Vice President, Sales
for the Company. From September 1991 to September 1993 he served as Executive
Vice President of Sales for the Company. In September 1993, Mr. McMonigle was
promoted to Executive Vice President, Corporate Relations and North America
Sales for the Company. Prior to joining the Company, from September 1984 through
March 1986, Mr. McMonigle served as Regional Sales Manager at American
Protective Services located in Oakland, California. From March 1979 through July
1984, Mr. McMonigle was employed by ARA Services, Inc. as Regional Vice
President in Los Angeles, and prior to that was employed from 1975 to 1979 as
Director of Circulation for Straight Arrow Publishing in New York, publishers of
"Rolling Stone" and "Outside" magazines. Prior to that, Mr. McMonigle was with
Readers Digest in Pleasantville, New York. Mr. McMonigle is a graduate of
Southeast Missouri State University with a Bachelor's Degree in Business
Administration.
Mr. Pike joined the Company as its General Counsel in December 1980 and
served as its Chief Counsel and Secretary from June 1981 until January 1994, was
named Vice President in 1983, Senior Vice President in February 1988, Senior
Vice President, Corporate Development for the Company in September 1993 and
Executive Vice President, Corporate Development in April 1995. He is currently a
Trustee and Secretary for the International Association of Gaming Attorneys and
serves as Vice Chairman of the Gaming Law Committee of the American Bar
Association. He received his law degree from Boalt Hall, the University of
California, Berkeley, in 1973. From September 1974 to December 1977, Mr. Pike
was an Assistant United States Attorney for the District of Nevada. He then
spent one year in the private practice of law as an associate with Lionel Sawyer
& Collins before becoming the Deputy Attorney General for the State of
Nevada/Chief of the Gaming Division. He held the latter position from December
1978 until joining the Company in December 1980.
<PAGE>
Mr. Ciorciari joined the Company as Vice President of Operations in January
1994, with responsibility for worldwide manufacturing, procurement, corporate
facilities and services. In August 1998, he was appointed Senior Vice President
of Operations. Mr. Ciorciari has more than 26 years experience in U.S. and
international manufacturing at Digital Equipment Company. From June 1987 through
December 1993, Mr. Ciorciari was General Manager of the Digital manufacturing
operations in Albuquerque, New Mexico and Chihuahua, Mexico. In this position,
he was responsible for the manufacturing and supply of Digital's workstation and
systems product lines. Mr. Ciorciari is currently a member of the Board of
Directors for the National Association of Manufacturers in Washington, D.C. He
is also a Foundation Board Member for Truckee Meadows Community College.
Ms. Brown joined the Company in November 1999 as Vice President, General
Counsel and Corporate Secretary. From 1994 to 1999, Ms. Brown was Senior Vice
President and Regional Manager of Wells Fargo Private Client Services. From 1984
to 1994, Ms. Brown was Vice President and Managing Counsel for First Interstate
Bank's Legal Division for the state of Nevada. From 1981 to 1984, she practiced
law in the areas of civil rights, criminal defense and plaintiff's employment
law. Ms. Brown graduated from the University of Nevada, Reno in 1978 with high
honors and received a degree in Journalism. She received her Juris Doctorate
from McGeorge School of Law in 1981 with distinction, and is a member of the
Order of the Coif. Ms. Brown serves as a Commissioner to the Governor's
Commission on Economic Development, and was appointed by U.S. Senator Richard
Bryan to the committee which selects Nevada's military academy appointees.
Ms. Mullarkey was named Chief Financial Officer at IGT in May 1998. Ms.
Mullarkey began her career at IGT in 1989 and has held several financial
positions, including her most recent position as Vice President of Finance and
Treasurer of the Company. Ms. Mullarkey directs investor relations, finance,
accounting, treasury management, tax, and information system functions. Ms.
Mullarkey received a Bachelor of Science degree from the University of Texas at
Austin in 1981, and a Masters of Business Administration degree from the
University of Nevada, Reno in 1988.
Mr. Kirner joined the Company in October 1997 as Vice President, Human
Resources. From September 1993 through September 1997, Mr. Kirner served as the
Vice President, Human Resources for Wyle Electronics, an international
distributor of semiconductors, computer systems and related value-added
services. From 1986 to 1992, he was employed by Allergan, Inc. of Irvine,
California in various capacities including Regional Sales Manager and earlier as
Vice President, Human Resources for Medical Optics, a subsidiary. Prior to that,
Mr. Kirner was with American Hospital Supply Corporation from 1972 to 1986. He
is a Vietnam veteran having served as an officer in the U.S. Army from 1967 to
1972. Mr. Kirner received a Masters of Science from West Coast University in
1975, a Masters of Business Administration degree from Georgia State University
in 1968 and his Bachelors degree in Business Administration from North Georgia
College and State University in 1967.
Mr. Pennington joined the Company in July 1991 and has held several
management positions in the finance and accounting areas of the Company. In 1997
he was promoted to Finance Director with responsibility for Credit, Cost
Accounting, and Corporate Finance. In 1999, Mr. Pennington was promoted to Vice
President of Product Management where he manages and coordinates the
cross-functional activities and processes from product development through
manufacturing, sales and service. Prior to joining the Company, Mr. Pennington
was Manager of Cost Accounting at Western Digital in Irvine California, and
prior to that, Manager of Accounting at Emerson Technologies LLP., an affiliate
of Emerson Radio. Mr. Pennington attended California State University at Pomona
where he graduated with a Bachelor's of Science degree in Business
Administration in 1987.
<PAGE>
Equity Security Ownership of Management and Other Beneficial Owners
The following table sets forth information as of January 14, 2000 with
respect to the beneficial ownership of the Company's Common Stock by principal
shareholders owning more than 5% known to the Company, all directors, the
officers named in the Summary Compensation Table, and all executive officers and
directors of the Company as a group. The Company has no other class of equity
securities outstanding.
<TABLE>
<CAPTION>
Shares of the Company's Common Stock
------------------------------------------
Options
Exercisable Beneficially Percent of
Name of Beneficial Owner Owned within 60 days Owned 1 Class 2
- ------------------------ --------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
G. Thomas Baker 105,636 420,439 526,075 .70
Robert A. Bittman 162,500 5,091 167,591 .22
Anthony Ciorciari 44,113 53,902 98,015 .13
Albert J. Crosson 208,864 622,000 830,864 1.10
Wilbur K. Keating 4,718 32,667 37,385 .05
Charles N. Mathewson 2,557,520 1,013,021 3,570,541 4.73
Robert M. McMonigle 64,400 39,232 103,632 .14
Bob Miller 0 0 0 0
Frederick B. Rentschler 0 36,000 36,000 .05
John J. Russell 8,469 18,000 26,469 .04
Rockwell A. Schnabel 50,000 32,000 82,000 .11
All executive officers and
directors as a group
(16 persons) 3,254,371 2,361,189 5,615,560 7.44
Ariel Capital Management Inc 7,395,000 -- 7,395,000 9.80
307 North Michigan Avenue
Chicago, IL 60601
Pacific Financial Research, Inc. 7,247,000 -- 7,247,000 9.60
9601 Wilshire Boulevard, Suite 800
Beverly Hills, CA 90210
J.P. Morgan Investment Management, Inc. 6,690,000 -- 6,690,000 8.86
522 Fifth Avenue, 7th Floor
New York, NY 10036
Private Capital Management, Inc. 6,165,000 -- 6,165,000 8.17
3003 Tamiami Trail North
Naples, FL 34103
ESL Partners, L.P. 4,491,400 -- 4,491,400 5.95
ESL Limited
ESL Institutional Partners, L.P.
One Lafayette Place
Greenwich, CT 06830
<FN>
- -----------
1 Represents sum of shares owned and shares which may be purchased upon exercise
of options exercisable within 60 days of January 14, 2000.
2 Any securities not outstanding which are subject to options or conversion
privileges which are exercisable within 60 days of January 14, 2000 are deemed
outstanding for the purpose of computing the percentage of outstanding securi-
ties of the class owned by any person holding such securities but are not
deemed outstanding for the purpose of computing the percentage of the class
owned by any other person.
</FN>
</TABLE>
<PAGE>
Executive Compensation
Summary Compensation Table
The following table summarizes all compensation paid for fiscal 1999,
1998, and 1997, to the persons who held the position of Chief Executive Officer
and the other four most highly compensated executive officers (collectively, the
"Named Officers") during fiscal 1999.
<TABLE>
<CAPTION>
Long-Term Compensation
Securities
Restricted Underlying All
Annual Compensation Stock Options Other
Name and Principal Position Year Salary($)1 Bonus($)1 Awards($) Granted2 Compensation($)3
<S> <C> <C> <C> <C> <C> <C>
Charles N. Mathewson4 1999 1 -- -- -- 117,507 5
Chairman of the Board of 1998 1 -- -- -- 3076
Directors and Chief Executive 1997 1 -- -- -- 3,229
Officer
G. Thomas Baker 1999 450,000 350,000 -- -- 69,257
President, Chief Operating 1998 450,000 640,877 -- 10,017 65,566
Officer 1997 418,269 522,000 -- 7,233 57,335
Robert A. Bittman 1999 300,000 200,000 -- -- 51,584
Executive Vice President, 1998 286,539 350,000 -- 5,970 46,476
Product Development 1997 263,461 300,000 -- 4,506 41,697
Robert M. McMonigle 1999 225,000 175,000 -- -- 43,258
Executive Vice President, 1998 214,114 200,000 -- 4,162 39,541
Corporate Relations 1997 207,478 185,000 912,000 6 3,964 41,002
North American Sales
Anthony Ciorciari 1999 196,500 170,000 -- -- 40,231
Senior Vice President, 1998 187,638 180,000 -- 3,646 36,578
Operations 1997 178,685 165,000 912,000 6 3,522 35,504
<FN>
- ------------
1 Amounts shown includes base compensation earned and received by executive
officers. No non-cash compensation was paid as salary or as a bonus during
fiscal 1999.
2 Amounts represent options to purchase the number of shares of Common Stock
shown.
3 Amounts shown include contributions by the Company to the accounts of the
identified executive officers under the Company's qualified profit sharing
plan and payment under the Company's cash sharing plan. See "Employee
Incentive Plans" for a description of these plans.
4 During the period from October 1995 to February 1996, Mr. Mathewson had an
annual base salary of $260,000. Commencing with his appointment to Chief
Executive Officer, he has received nominal annual compensation of $1.00.
5 Amount shown also include estate planning, and health and life insurance
premiums.
6 Restricted stock awards of 50,000 shares were made to both Mr. McMonigle and
Mr. Ciorciari on February 18, 1997.The shares were awarded for a price of $.01
per share.40% of these awards vested in August 1999 and the remainder will vest
in August 2001. The unvested shares issued are subject to repurchase by the
Company at $.01 per share if employment terminates for certain reasons prior to
the vesting of such shares.The dollar value of the shares issued,as presented,
is based on the fair market value of the stock at the date of grant and does
not take into account any diminution in value attributable to restrictions
applicable to these shares.The dollar value of each of the awards was $906,250
at October 2, 1999.
</FN>
</TABLE>
Options
The table below sets forth certain information regarding options granted
to the Named Officers during fiscal 1999. No options were granted to any Named
Officer during fiscal 1999.
Aggregated Option Exercises In Last Fiscal Year and Fiscal Year-End Option
Values
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Options Exercised Underlying Unexercised In-The-Money Options
Shares Value Options at 10/02/99 at 10/02/99 1
Name Acquired Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Charles N. Mathewson -- -- 1,012,440 1,683 $4,857,107 $ 11,372
G. Thomas Baker -- -- 316,989 219,037 1,534,825 1,010,916
Robert A. Bittman -- -- 2,996 7,480 -- --
Robert M. McMonigle -- -- 36,959 10,153 287,051 26,478
Anthony Ciorciari -- -- 51,886 18,197 270,899 73,099
- ------------
<FN>
1 Market value of the underlying securities at year-end, less the exercise price
of "in-the-money" options.
</FN>
</TABLE>
Employee Incentive Plans
The Company provides the following three employee incentive plans: profit
sharing and 401(k) plan, cash sharing and management bonus. Total annual
contributions from operating profits for all three plans for fiscal 1999, 1998
and 1997 were $27.1 million, $26.5 million and $23.6 million.
The profit sharing plan was originally adopted in 1980 for the Company's
employees working in the United States. Benefits vest over a seven year period
of employment. Effective January 1, 1993, the Company began distributing a
portion of the profit sharing plan contribution under a 401(k) retirement plan
matching program. Per the plan agreement, the Company matches 100% of employee
contributions up to $500 and an additional 50% of the next $500 contributed by
the employee. This allows for maximum annual Company contributions of $750 to
each employee's 401(k) account. These contributions vest immediately. The
Company's foreign subsidiaries have similar retirement plans.
The cash sharing plan calls for semi-annual distributions to all non
IGT-Australia, IGT-Japan, and Barcrest-Japan employees. The management bonuses
under the management bonus plan are paid out annually to key employees
throughout the Company.
Employment Contracts
Robert A. Bittman was appointed Executive Vice President, Product
Development of the Company effective March 18, 1996. The Company entered into a
five year employment agreement with Mr. Bittman in March 1996 providing for an
annual base salary of $250,000 and a one-time cash payment of $150,000, paid
upon the commencement of his employment. Mr. Bittman is also eligible to
participate in the Company's profit sharing, cash sharing and management bonus
plans (see "Employee Incentive Plans"). Additionally, Mr. Bittman was granted a
restricted stock award for 225,000 shares at a price of $.01 per share. The
award vests in three equal installments upon the second, third and fifth
anniversaries of the award. The unvested shares issued to Mr. Bittman are
subject to repurchase by the Company at $.01 per share if Mr. Bittman's
employment terminates for certain reasons prior to the vesting of such shares.
<PAGE>
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, and regulations of
the Securities and Exchange Commission ("SEC") thereunder, require the Company's
executive officers, directors, and persons who beneficially own more than 10% of
the Company's Common Stock, as well as certain affiliates of such persons, to
file initial reports of ownership and monthly transaction reports covering any
changes in ownership with the SEC and the New York Stock Exchange. Executive
officers, directors and persons owning more than 10% of the Company's Common
Stock are required by SEC regulations to furnish the Company with all such
reports they file. Based solely on a review of the copies of such reports
received by it, the Company believes that, during fiscal 1999, all filing
requirements applicable to executive officers and directors were complied with.
Relationship with Independent Public Accountants
The Company has selected Deloitte & Touche LLP as its independent
accountants for the year ending September 30, 2000. A representative of Deloitte
& Touche LLP will be present at the Annual Meeting of Stockholders and will have
an opportunity to make a statement as well as respond to appropriate questions.
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH
THAT APPEARS IMMEDIATELY AFTER SUCH REPORT SHALL NOT BE DEEMED TO BE SOLICITING
MATERIAL OR TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934 OR INCORPORATED BY
REFERENCE IN ANY DOCUMENT SO FILED.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors, consisting entirely
of non-employee directors, is responsible for oversight of executive
compensation, review of the Company's overall compensation programs, and
administration of certain incentive compensation programs.
Compensation Philosophy
Generally, the Company's compensation programs are designed to attract,
retain, motivate and appropriately reward individuals who are responsible for
the Company's short and long-term profitability, growth and return to
stockholders. The overall compensation philosophy followed by the Committee is
to pay competitively while emphasizing qualitative indicators of corporate and
individual performance. The incentive cash bonuses received by the Named
Officers in the Summary Compensation Table under the Company's management bonus
plan comprised on average approximately 43% of their total salary and bonus
compensation for fiscal 1999.
Executive Compensation
The Company's management bonus plan is a cash-based incentive program, and
for fiscal 1999, was based on the Company's income from operations. Individual
cash bonus awards were made to the executive officers because the Committee
<PAGE>
believes such awards provide appropriate performance incentives. Individual cash
bonus awards for executive officers other than the Chief Executive Officer and
the President and Chief Operating Officer were determined for fiscal 1999,
jointly by the Company's Chief Executive Officer, Mr. Mathewson, and the
Company's President and Chief Operating Officer, Mr. Baker, based on their
subjective evaluation of each officer's individual performance.
Executive officers also participate in benefit plans available to
employees as described under "Employee Incentive Plans."
The Committee also uses stock option awards made under the International
Game Technology 1993 Stock Option Plan (the "Stock Option Plan") to provide
various incentives for key personnel, including executive officers. Stock
options are priced at the fair market value of the Common Stock of the Company
on the date of the grant, and typically vest at the rate of 20% per year over
five years with exercisability dependent on continued employment.
Sara Beth Brown, Maureen Mullarkey and Richard Pennington each received a
stock option award under the Stock Option Plan in fiscal 1999. The Committee
also periodically approves additional stock option awards for eligible
individuals, including executive officers, based on a subjective evaluation of
individual current performance, assumption of significant responsibilities,
anticipated future contributions, and/or ability to impact overall corporate
and/or business unit financial results.
To the extent readily determinable, and as one of the factors in its
consideration of compensation matters, the Compensation Committee also considers
the anticipated tax treatment to the Company and to the executives of various
payments and benefits, specifically in consideration of Section 162(m) of the
Internal Revenue Code. The Committee will not, however, necessarily limit
executive compensation to that which is deductible.
Chief Executive Compensation
Mr. Mathewson became Chief Executive Officer of the Company on February
12, 1996. The Committee granted Mr. Mathewson stock options in February 1996 to
acquire 1.0 million shares of the Company's Common Stock. All of such options
were fully vested in December 1996. No options were granted to Mr. Mathewson in
fiscal 1997, 1998 or 1999. On December 8, 1998, the Compensation Committee and
Board of Directors approved the purchase of a $10 million split dollar life
insurance benefit plan. Mr. Mathewson received nominal compensation of $1.00 for
salary in fiscal 1999.
COMPENSATION COMMITTEE
Frederick B. Rentschler, Chairman
Warren L. Nelson
Claudine B. Williams
<PAGE>
PERFORMANCE GRAPH
The following graph reflects the cumulative total return (change in stock
price plus reinvested dividends) of a $100 investment in the Company's Common
Stock for the five-year period from October 1, 1994 through October 2, 1999 in
comparison to the Standard and Poor's 500 Composite Index and a Peer Group. The
comparisons are not intended to forecast or be indicative of possible future
performance of the Company's Stock.
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
<S> <C> <C> <C> <C> <C> <C>
International Game Technology o 100 66 101 115 93 87
Peer Group (DELTA) 100 137 181 208 125 123
S & P 500 X 100 130 156 219 239 306
</TABLE>
The peer group includes Alliance Gaming Corp., Anchor Gaming, Casino
Data Systems, GTECH Holdings Corp., Silicon Gaming, Inc. and WMS Industries, Inc
<PAGE>
GENERAL
The Company's Annual Report to Stockholders, containing audited financial
statements, accompanies this Proxy Statement. A copy of the Company's most
recent annual report on Form 10-K as filed with the Securities and Exchange
Commission is available to shareholders upon written request, without charge.
All requests should be directed to International Game Technology, Attn: Investor
Relations, 9295 Prototype Drive, P.O. Box 10580, Reno, Nevada
89510-0580, telephone (775) 448-0880, fax (775) 448-1137.
As of the date of this Proxy Statement, the Board of Directors knows of no
business which will be presented for consideration at the meeting other than the
matters stated in the notice and described in this Proxy Statement. If, however,
any matter incident to the conduct of the meeting or other business shall
properly come before the meeting, it is intended that the proxies will be voted
in respect of any such matters or other business in accordance with the best
judgment of the persons acting under the proxies, and discretionary authority to
do so is included in the proxy.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Sara Beth Brown
Sara Beth Brown
Secretary
Reno, Nevada
January 18, 2000
<PAGE>
Map to IGT
[GRAPHIC OMITTED][GRAPHIC OMITTED]
