EXHIBIT 10.17
INTERNATIONAL GAME TECHNOLOGY
2002 STOCK INCENTIVE PLAN
DIRECTOR STOCK OPTION AGREEMENT
THIS DIRECTOR STOCK OPTION AGREEMENT (this "OPTION AGREEMENT") by and
between INTERNATIONAL GAME TECHNOLOGY, a Nevada corporation (the "CORPORATION"),
and ________________________ (the "PARTICIPANT") evidences the nonqualified
stock option (the "OPTION") granted by the Corporation to the Participant as to
the number of shares of the Corporation's Common Stock first set forth below.
NUMBER OF SHARES OF COMMON STOCK:(1) _________ AWARD DATE: ____________
EXERCISE PRICE PER SHARE:(1) $__________ EXPIRATION DATE:(1,2) __________
VESTING(1,2) The Option shall become vested in 33-1/3% installments of the total
number of shares of Common Stock subject to the Option over three years as
provided in Section 7.4 of the Plan.
The Option is granted under the International Game Technology 2002 Stock
Incentive Plan (the "PLAN") and subject to the Terms and Conditions of Director
Stock Option (the "TERMS") attached to this Option Agreement (incorporated
herein by this reference) and to the Plan. The Option has been granted to the
Participant in addition to, and not in lieu of, any other form of compensation
otherwise payable or to be paid to the Participant. The Option is not and shall
not be deemed to be an incentive stock option within the meaning of Section 422
of the Code. Capitalized terms are defined in the Plan if not defined herein.
The parties agree to the terms of the Option set forth herein. The Participant
acknowledges receipt of a copy of the Terms, the Plan, and the Prospectus for
the Plan.
"PARTICIPANT" INTERNATIONAL GAME TECHNOLOGY,
a Nevada corporation
_________________________________
Signature
By:_________________________________
_________________________________
Print Name Print Name: Xxxxx X. Xxxxxxx
_________________________________ Title: Sr. V.P., General Counsel
Address
_________________________________
City, State, Zip Code
----------
(1) Subject to adjustment under Section 7.6 of the Plan.
(2) Subject to early termination pursuant to Section 4 of this Option
Agreement.
TERMS AND CONDITIONS OF DIRECTOR STOCK OPTION
1. VESTING; LIMITS ON EXERCISE.
As set forth on the cover page of this Option Agreement, the Option shall
vest and become exercisable in percentage installments of the aggregate number
of shares of Common Stock subject to the Option. The Option may be exercised
only to the extent the Option is vested and exercisable.
- Cumulative Exercisability. To the extent that the Option is vested
and exercisable, the Participant has the right to exercise the
Option (to the extent not previously exercised), and such right
shall continue, until the expiration or earlier termination of the
Option.
- No Fractional Shares. Fractional share interests shall be
disregarded, but may be cumulated.
- Minimum Exercise. No fewer than 100(1) shares of Common Stock may be
purchased at any one time, unless the number purchased is the total
number at the time exercisable under the Option.
2. CONTINUANCE OF SERVICE REQUIRED; NO SERVICE COMMITMENT.
The vesting schedule requires continued service through each applicable
vesting date as a condition to the vesting of the applicable installment of the
Option and the rights and benefits under this Option Agreement. Service for only
a portion of the vesting period with respect to a vesting installment, even if
services are provided for a substantial portion of that period, will not entitle
the Participant to any proportionate vesting or avoid or mitigate a termination
of rights and benefits upon or following a termination of services as provided
in Section 4 below.
Nothing contained in this Option Agreement or the Plan constitutes an
employment or service commitment by the Corporation or any Subsidiary, confers
upon the Participant any right to remain in the service of the Corporation or
any Subsidiary, interferes in any way with the right of the Corporation or any
Subsidiary at any time to terminate such service, or affects the right of the
Corporation or any Subsidiary to increase or decrease the Participant's other
compensation.
3. METHOD OF EXERCISE OF OPTION.
The Option shall be exercisable by the delivery to the Secretary of the
Corporation of a written notice stating the number of shares of Common Stock to
be purchased pursuant to the Option (or by completion of such other
administrative exercise procedures as the Committee may require from time to
time) and accompanied by:
- payment in full for the Exercise Price of the shares to be purchased
(A) in cash or by electronic funds transfer to the Corporation, (B)
by check payable to the order of the Corporation, or (C) by delivery
to the Corporation of shares of Common Stock already owned by the
Participant, valued at their Fair Market Value on the exercise date,
provided, however, that any shares acquired directly from the
Corporation (upon exercise of a stock option or otherwise) must have
been owned by the Participant for at least six (6) months before the
date of such exercise, and in each case subject to such specific
procedures or directions as the Committee may establish; and
- any written statements or agreements required pursuant to Section
6.4 of the Plan.
4. EARLY TERMINATION OF OPTION.
The Option, to the extent not previously exercised, and all other rights
in respect thereof, whether vested and exercisable or not, shall terminate and
become null and void prior to the Expiration Date in the event that either: (1)
the Participant ceases to be a member of the Board of Directors and the Option
terminates pursuant to Section 7.5 of the Plan; or (2) the Option terminates
pursuant to Section 7.7 of the Plan.
5. NON-TRANSFERABILITY AND OTHER RESTRICTIONS.
The Option and any other rights of the Participant under this Option
Agreement or the Plan are nontransferable and exercisable only by the
Participant, except as set forth in Section 1.9 of the Plan.
1
6. NOTICES.
Any notice to be given under the terms of this Option Agreement shall be
in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Participant at the address reflected or
last reflected on the Corporation's records. Any notice shall be delivered in
person or shall be enclosed in a properly sealed envelope, addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government. Any such notice shall be given only
when received, but if the Participant is no longer a member of the Board of
Directors, notice to the Participant by the Corporation shall be deemed to have
been duly given as of the date mailed in accordance with the foregoing
provisions of this Section 6.
7. PLAN.
The Option and all rights of the Participant under this Option Agreement
are subject to, and the Participant agrees to be bound by, all of the terms and
conditions of the Plan, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Option
Agreement and of the Plan, the terms and conditions of the Plan shall govern.
The Participant agrees to be bound by the terms of the Plan and of this Option
Agreement. The Participant acknowledges reading and understanding the Plan, the
Plan Prospectus, and this Option Agreement. Unless otherwise expressly provided
in other sections of this Option Agreement, provisions of the Plan that confer
discretionary authority on the Board or the Committee do not and shall not be
deemed to create any rights in the Participant unless such rights are expressly
set forth herein or are otherwise in the sole discretion of the Board or the
Committee so conferred by appropriate action of the Board or the Committee under
the Plan after the date hereof.
8. ENTIRE AGREEMENT.
This Option Agreement (including these Terms) and the Plan together
constitute the entire agreement and supersede all prior understandings and
agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Option Agreement may be amended pursuant to
Section 6.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Participant hereunder, but no such waiver shall operate as or
be construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
9. GOVERNING LAW.
This Option Agreement and the rights of the parties hereunder and with
respect to the Option shall be shall be governed by and construed and enforced
in accordance with the laws of the State of Nevada without regard to conflict of
law principles thereunder. The parties, as well as any of their successors,
employees, or representatives, irrevocably agree to the exclusive jurisdiction
of the Courts of the State of Nevada (or such judicial district of a court of
the United States as shall include same) for the determination of all matters
arising hereunder or with respect to the Option. In the event of litigation with
respect to any such matter, the prevailing party shall be entitled to recover
such party's costs of the action, including reasonable attorneys fees.
(Remainder of Page Intentionally Left Blank)
2
INTERNATIONAL GAME TECHNOLOGY
2002 STOCK INCENTIVE PLAN
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (this "OPTION AGREEMENT") by and
between INTERNATIONAL GAME TECHNOLOGY, a Nevada corporation (the "CORPORATION"),
and _____________ (the "PARTICIPANT") evidences the incentive stock option (the
"OPTION") granted by the Corporation to the Participant as to the number of
shares of the Corporation's Common Stock first set forth below.
NUMBER OF SHARES OF COMMON STOCK:(1) ______ AWARD DATE: _________________
EXERCISE PRICE PER SHARE:(1) $_____ EXPIRATION DATE:(1,2) ______________
VESTING(1,2) The Option shall become vested as to ____% of the total number of
shares of Common Stock subject to the Option on each of the ____ through _____
anniversaries of the Award Date.
The Option is granted under the International Game Technology 2002 Stock
Incentive Plan (the "PLAN") and subject to the Terms and Conditions of Incentive
Stock Option (the "TERMS") attached to this Option Agreement (incorporated
herein by this reference) and to the Plan. The Option has been granted to the
Participant in addition to, and not in lieu of, any other form of compensation
otherwise payable or to be paid to the Participant. The Option is intended as an
incentive stock option within the meaning of Section 422 of the Code (an "ISO").
Capitalized terms are defined in the Plan if not defined herein. The parties
agree to the terms of the Option set forth herein. The Participant acknowledges
receipt of a copy of the Terms, the Plan, and the Prospectus for the Plan.
"PARTICIPANT" INTERNATIONAL GAME TECHNOLOGY,
a Nevada corporation
________________________________
Signature
By:__________________________________
________________________________
Print Name Print Name: Xxxxx X. Xxxxxxx
________________________________ Title: Senior Vice President, General Counsel
Address
________________________________
City, State, Zip Code
----------
(1) Subject to adjustment under Section 6.2 of the Plan.
(2) Subject to early termination pursuant to Section 4 of this Option
Agreement.
1
TERMS AND CONDITIONS OF INCENTIVE STOCK OPTION
1. VESTING; LIMITS ON EXERCISE.
As set forth on the cover page of this Option Agreement, the Option shall
vest and become exercisable in percentage installments of the aggregate number
of shares of Common Stock subject to the Option. The Option may be exercised
only to the extent the Option is vested and exercisable.
- Cumulative Exercisability. To the extent that the Option is vested
and exercisable, the Participant has the right to exercise the
Option (to the extent not previously exercised), and such right
shall continue, until the expiration or earlier termination of the
Option.
- No Fractional Shares. Fractional share interests shall be
disregarded, but may be cumulated.
- Minimum Exercise. No fewer than 100(1) shares of Common Stock may be
purchased at any one time, unless the number purchased is the total
number at the time exercisable under the Option.
- ISO Value Limit. If the aggregate fair market value of the shares
with respect to which ISOs (whether granted under the Option or
otherwise) first become exercisable by the Participant in any
calendar year exceeds $100,000, as measured on the applicable Award
Dates, the limitations of Section 2.3.1 of the Plan shall apply and
to such extent the Option will be rendered a Nonqualified Stock
Option.
2. CONTINUANCE OF EMPLOYMENT REQUIRED; NO EMPLOYMENT COMMITMENT.
The vesting schedule requires continued employment through each applicable
vesting date as a condition to the vesting of the applicable installment of the
Option and the rights and benefits under this Option Agreement. Employment for
only a portion of the vesting period with respect to a vesting installment, even
if employed for a substantial portion of that period, will not entitle the
Participant to any proportionate vesting or avoid or mitigate a termination of
rights and benefits upon or following a termination of employment as provided in
Section 4 below.
Nothing contained in this Option Agreement or the Plan constitutes an
employment or service commitment by the Corporation or any Subsidiary, affects
the Participant's status as an employee at will who is subject to termination
without cause, confers upon the Participant any right to remain employed by the
Corporation or any Subsidiary, interferes in any way with the right of the
Corporation or any Subsidiary at any time to terminate such employment, or
affects the right of the Corporation or any Subsidiary to increase or decrease
the Participant's other compensation.
3. METHOD OF EXERCISE OF OPTION.
The Option shall be exercisable by the delivery to the Secretary of the
Corporation of a written notice stating the number of shares of Common Stock to
be purchased pursuant to the Option (or by completion of such other
administrative exercise procedures as the Committee may require from time to
time) and accompanied by:
- payment in full for the Exercise Price of the shares to be
purchased, in cash or by electronic funds transfer to the
Corporation, or by check payable to the order of the Corporation,
subject to such specific procedures or directions as the Committee
may establish;
- satisfaction of the tax withholding provisions of Section 6.5 of the
Plan; and
- any written statements or agreements required pursuant to Section
6.4 of the Plan.
The Committee also may, but is not required to, authorize a non-cash payment
alternative specified below at or prior to the time of exercise. In which case,
the Exercise Price and/or applicable withholding taxes, to the extent so
authorized, may be paid in full or in part by delivery to the Corporation of:
- shares of Common Stock already owned by the Participant, valued at
their Fair Market Value on the exercise date, provided, however,
that any shares acquired directly from the Corporation (upon
exercise of a stock option or otherwise) must have been owned by the
Participant for at least six (6) months before the date of such
exercise; and/or
2
- irrevocable instructions to a broker to, upon exercise of the
Option, promptly sell a sufficient number of shares of Common Stock
acquired upon exercise of the Option and deliver to the Corporation
the amount necessary to pay the Exercise Price (and, if applicable,
the amount of any related tax withholding obligations); and/or
- a note meeting the requirements of Section 1.8 of the Plan (or, in
the case of tax loans, Section 6.5(b) of the Plan).
The Option will qualify as an ISO only if it meets all of the applicable
requirements of the Code. The Option may be rendered a Nonqualified Stock Option
if the Committee permits the use of one or more of the non-cash payment
alternatives referenced above.
4. EARLY TERMINATION OF OPTION.
The Option, to the extent not previously exercised, and all other rights
in respect thereof, whether vested and exercisable or not, shall terminate and
become null and void prior to the Expiration Date in the event that either: (1)
the Participant ceases to be employed by the Corporation or a Subsidiary, except
as expressly provided below; or (2) the Option terminates pursuant to Section
6.2 of the Plan.
- If the Participant ceases to be employed by the Corporation or a
Subsidiary other than due to the Participant's death, Total
Disability or a termination of employment by the Corporation or a
Subsidiary for Cause (as defined below), then the unvested portion
of the Option shall terminate upon such termination of employment
and the then-vested portion of the Option shall (subject to earlier
termination pursuant to Section 6.2 of the Plan and subject to the
maximum ten-year term of the Option) continue to be exercisable only
for three months after such termination of employment, at which time
such remaining portion of the Option shall terminate.
- If the Participant ceases to be employed by the Corporation or a
Subsidiary due to the Participant's death or Total Disability, then
the unvested portion of the Option shall terminate upon such
termination of employment and the then-vested portion of the Option
shall (subject to earlier termination pursuant to Section 6.2 of the
Plan and subject to the maximum ten-year term of the Option)
continue to be exercisable only for one year after such termination
of employment, at which time such remaining portion of the Option
shall terminate.
- The Option (whether or not vested) shall terminate immediately if
the Participant's employment is terminated by the Corporation or a
Subsidiary for Cause (as defined below).
- The foregoing termination of employment rules are subject to Section
6.12 of the Plan.
Notwithstanding any post-termination exercise period provided for herein
or in the Plan, the Option will qualify as an ISO only if it is exercised within
the applicable exercise periods for ISOs under, and meets all of the other
requirements of, the Code. If the Option is not exercised within the applicable
exercise periods for ISOs or does not meet such other requirements, the Option
will be rendered a Nonqualified Stock Option.
For purposes of this Section 4, the term "Cause" means a termination of
employment based upon a finding by the Corporation, acting in good faith and
based on its reasonable belief at the time, that the Participant:
(1) has been negligent in the discharge of his or her duties to the
Corporation or one of its affiliates (the term "affiliate" for
purposes of this definition shall include, without limitation, each
Subsidiary), has refused to perform stated or assigned duties or is
incompetent in or (other than be reason of a disability or analogous
condition) incapable of performing those duties; or
(2) has been dishonest or committed or engaged in an act of
embezzlement, fraud, or theft, a breach of confidentiality, an
unauthorized disclosure or use of inside information, customer
lists, trade secrets or other confidential information; or
(3) has breached a fiduciary duty, or violated any other duty, law,
rule, regulation or policy of the Corporation or an affiliate; or
has been convicted of, or plead guilty or nolo contendere to, a
felony or misdemeanor (other than minor traffic violations or
similar offences); or
3
(4) has breached any of the provisions of any agreement with the
Corporation or an affiliate; or
(5) has improperly induced a vendor or customer to break or terminate
any contract with the Corporation or an affiliate or induced a
principal for whom the Corporation or an affiliate acts as agents to
terminate such agency relationship.
A termination for Cause shall be deemed to occur (subject to reinstatement upon
a contrary final determination by the Committee) on the date on which the
Corporation first delivers written notice to the Participant of a finding of
termination for Cause.
5. NON-TRANSFERABILITY AND OTHER RESTRICTIONS.
The Option and any other rights of the Participant under this Option
Agreement or the Plan are nontransferable and exercisable only by the
Participant, except as set forth in Section 1.9 of the Plan.
6. NOTICES.
Any notice to be given under the terms of this Option Agreement shall be
in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Participant at the address reflected or
last reflected on the Corporation's payroll records. Any notice shall be
delivered in person or shall be enclosed in a properly sealed envelope,
addressed as aforesaid, registered or certified, and deposited (postage and
registry or certification fee prepaid) in a post office or branch post office
regularly maintained by the United States Government. Any such notice shall be
given only when received, but if the Participant is no longer an Eligible
Person, notice to the Participant by the Corporation shall be deemed to have
been duly given as of the date mailed in accordance with the foregoing
provisions of this Section 6.
7. PLAN.
The Option and all rights of the Participant under this Option Agreement
are subject to, and the Participant agrees to be bound by, all of the terms and
conditions of the Plan, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Option
Agreement and of the Plan, the terms and conditions of the Plan shall govern.
The Participant agrees to be bound by the terms of the Plan and of this Option
Agreement. The Participant acknowledges reading and understanding the Plan, the
Plan Prospectus, and this Option Agreement. Unless otherwise expressly provided
in other sections of this Option Agreement, provisions of the Plan that confer
discretionary authority on the Board or the Committee do not and shall not be
deemed to create any rights in the Participant unless such rights are expressly
set forth herein or are otherwise in the sole discretion of the Board or the
Committee so conferred by appropriate action of the Board or the Committee under
the Plan after the date hereof.
8. ENTIRE AGREEMENT.
This Option Agreement (including these Terms) and the Plan together
constitute the entire agreement and supersede all prior understandings and
agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Option Agreement may be amended pursuant to
Section 6.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Participant hereunder, but no such waiver shall operate as or
be construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
9. GOVERNING LAW.
This Option Agreement and the rights of the parties hereunder and with
respect to the Option shall be shall be governed by and construed and enforced
in accordance with the laws of the State of Nevada without regard to conflict of
law principles thereunder. The parties, as well as any of their successors,
employees, or representatives, irrevocably agree to the exclusive jurisdiction
of the Courts of the State of Nevada (or such judicial district of a court of
the United States as shall include same) for the determination of all matters
arising hereunder or with respect to the Option. In the event of litigation with
respect to any such matter, the prevailing party shall be entitled to recover
such party's costs of the action, including reasonable attorneys fees.
4
10. NOTICE OF EARLY DISPOSITION.
The Participant agrees to give prompt written notice to the Corporation of
any sale or other transfer of any shares of Common Stock acquired upon exercise
of the Option that occurs before the later of (A) one year after the date that
the Participant acquires the shares upon exercise of the Option, or (B) two
years after the Award Date set forth on the cover page of this Option Agreement.
11. OTHER RESTRICTIONS.
In consideration of the granting of this Option, the Participant agrees
that for a period of one (1) year after he or she ceases to be employed by the
Corporation or a Subsidiary, the Participant will not own, manage, control or
associate with as an agent, officer, employee, investor, lender, or otherwise
with any business entity which competes worldwide with the business of the
Corporation or any of its Subsidiaries in the design, manufacture and/or
distribution of coin-operated gaming or amusement devices and/or lottery
devices, systems or tickets; nor shall the Participant at any time after his or
her employment by the Corporation or a Subsidiary terminates disclose, discuss,
copy or otherwise use or suffer to be used, in any manner, in competition with
or contrary to the interests of the Corporation or any of its Subsidiaries, the
customer lists, product research, engineering data or other trade secrets of the
Corporation or any of its Subsidiaries. The Corporation and the Participant
specifically agree that the scope of the foregoing provisions in this Section 11
are reasonable and fair. Should, however, a court of competent jurisdiction deem
the foregoing provisions of this Section 11 to be impermissibly overbroad, it is
the desire and intention of the parties that such provisions be enforced as to
the greatest extent permitted under applicable law.
(Remainder of Page Intentionally Left Blank)
5
INTERNATIONAL GAME TECHNOLOGY
2002 STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "OPTION AGREEMENT") by and
between INTERNATIONAL GAME TECHNOLOGY, a Nevada corporation (the "CORPORATION"),
and ______________ (the "PARTICIPANT") evidences the nonqualified stock option
(the "OPTION") granted by the Corporation to the Participant as to the number of
shares of the Corporation's Common Stock first set forth below.
NUMBER OF SHARES OF COMMON STOCK:(1) _______ AWARD DATE: _________________
EXERCISE PRICE PER SHARE:(1) $_____ EXPIRATION DATE:(1,2) _______________
VESTING(1,2) The Option shall become vested as to ____% of the total number of
shares of Common Stock subject to the Option on each of the ____ through ____
anniversaries of the Award Date.
The Option is granted under the International Game Technology 2002 Stock
Incentive Plan (the "PLAN") and subject to the Terms and Conditions of
Nonqualified Stock Option (the "TERMS") attached to this Option Agreement
(incorporated herein by this reference) and to the Plan. The Option has been
granted to the Participant in addition to, and not in lieu of, any other form of
compensation otherwise payable or to be paid to the Participant. The Option is
not and shall not be deemed to be an incentive stock option within the meaning
of Section 422 of the Code. Capitalized terms are defined in the Plan if not
defined herein. The parties agree to the terms of the Option set forth herein.
The Participant acknowledges receipt of a copy of the Terms, the Plan, and the
Prospectus for the Plan.
"PARTICIPANT" INTERNATIONAL GAME TECHNOLOGY,
a Nevada corporation
_______________________________
Signature
By:__________________________________
_______________________________
Print Name Print Name: Xxxxx X. Xxxxxxx
_______________________________ Title: Senior Vice President., General Counsel
Address
_______________________________
City, State, Zip Code
----------
(1) Subject to adjustment under Section 6.2 of the Plan.
(2) Subject to early termination pursuant to Section 4 of this Option
Agreement.
1
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION
1. VESTING; LIMITS ON EXERCISE.
As set forth on the cover page of this Option Agreement, the Option shall
vest and become exercisable in percentage installments of the aggregate number
of shares of Common Stock subject to the Option. The Option may be exercised
only to the extent the Option is vested and exercisable.
- Cumulative Exercisability. To the extent that the Option is vested
and exercisable, the Participant has the right to exercise the
Option (to the extent not previously exercised), and such right
shall continue, until the expiration or earlier termination of the
Option.
- No Fractional Shares. Fractional share interests shall be
disregarded, but may be cumulated.
- Minimum Exercise. No fewer than 100(1) shares of Common Stock may be
purchased at any one time, unless the number purchased is the total
number at the time exercisable under the Option.
2. CONTINUANCE OF EMPLOYMENT REQUIRED; NO EMPLOYMENT COMMITMENT.
The vesting schedule requires continued employment through each applicable
vesting date as a condition to the vesting of the applicable installment of the
Option and the rights and benefits under this Option Agreement. Employment for
only a portion of the vesting period with respect to a vesting installment, even
if employed for a substantial portion of that period, will not entitle the
Participant to any proportionate vesting or avoid or mitigate a termination of
rights and benefits upon or following a termination of employment as provided in
Section 4 below.
Nothing contained in this Option Agreement or the Plan constitutes an
employment or service commitment by the Corporation or any Subsidiary, affects
the Participant's status as an employee at will who is subject to termination
without cause, confers upon the Participant any right to remain employed by the
Corporation or any Subsidiary, interferes in any way with the right of the
Corporation or any Subsidiary at any time to terminate such employment, or
affects the right of the Corporation or any Subsidiary to increase or decrease
the Participant's other compensation.
3. METHOD OF EXERCISE OF OPTION.
The Option shall be exercisable by the delivery to the Secretary of the
Corporation of a written notice stating the number of shares of Common Stock to
be purchased pursuant to the Option (or by completion of such other
administrative exercise procedures as the Committee may require from time to
time) and accompanied by:
- payment in full for the Exercise Price of the shares to be
purchased, in cash or by electronic funds transfer to the
Corporation, or by check payable to the order of the Corporation,
subject to such specific procedures or directions as the Committee
may establish;
- satisfaction of the tax withholding provisions of Section 6.5 of the
Plan; and
- any written statements or agreements required pursuant to Section
6.4 of the Plan.
The Committee also may, but is not required to, authorize a non-cash payment
alternative specified below at or prior to the time of exercise. In which case,
the Exercise Price and/or applicable withholding taxes, to the extent so
authorized, may be paid in full or in part by delivery to the Corporation of:
- shares of Common Stock already owned by the Participant, valued at
their Fair Market Value on the exercise date, provided, however,
that any shares acquired directly from the Corporation (upon
exercise of a stock option or otherwise) must have been owned by the
Participant for at least six (6) months before the date of such
exercise; and/or
- irrevocable instructions to a broker to, upon exercise of the
Option, promptly sell a sufficient number of shares of Common Stock
acquired upon exercise of the Option and deliver to the Corporation
the amount necessary to pay the Exercise Price (and, if applicable,
the amount of any related tax withholding obligations); and/or
2
- a note meeting the requirements of Section 1.8 of the Plan (or, in
the case of tax loans, Section 6.5(b) of the Plan).
4. EARLY TERMINATION OF OPTION.
The Option, to the extent not previously exercised, and all other rights
in respect thereof, whether vested and exercisable or not, shall terminate and
become null and void prior to the Expiration Date in the event that either: (1)
the Participant ceases to be employed by the Corporation or a Subsidiary, except
as expressly provided below; or (2) the Option terminates pursuant to Section
6.2 of the Plan.
- If the Participant ceases to be employed by the Corporation or a
Subsidiary other than due to the Participant's death, Total
Disability or a termination of employment by the Corporation or a
Subsidiary for Cause (as defined below), then the unvested portion
of the Option shall terminate upon such termination of employment
and the then-vested portion of the Option shall (subject to earlier
termination pursuant to Section 6.2 of the Plan and subject to the
maximum ten-year term of the Option) continue to be exercisable only
for three months after such termination of employment, at which time
such remaining portion of the Option shall terminate.
- If the Participant ceases to be employed by the Corporation or a
Subsidiary due to the Participant's death or Total Disability, then
the unvested portion of the Option shall terminate upon such
termination of employment and the then-vested portion of the Option
shall (subject to earlier termination pursuant to Section 6.2 of the
Plan and subject to the maximum ten-year term of the Option)
continue to be exercisable only for one year after such termination
of employment, at which time such remaining portion of the Option
shall terminate.
- The Option (whether or not vested) shall terminate immediately if
the Participant's employment is terminated by the Corporation or a
Subsidiary for Cause (as defined below).
- The foregoing termination of employment rules are subject to Section
6.12 of the Plan.
For purposes of this Section 4, the term "Cause" means a termination of
employment based upon a finding by the Corporation, acting in good faith and
based on its reasonable belief at the time, that the Participant:
(1) has been negligent in the discharge of his or her duties to the
Corporation or one of its affiliates (the term "affiliate" for
purposes of this definition shall include, without limitation, each
Subsidiary), has refused to perform stated or assigned duties or is
incompetent in or (other than be reason of a disability or analogous
condition) incapable of performing those duties; or
(2) has been dishonest or committed or engaged in an act of
embezzlement, fraud, or theft, a breach of confidentiality, an
unauthorized disclosure or use of inside information, customer
lists, trade secrets or other confidential information; or
(3) has breached a fiduciary duty, or violated any other duty, law,
rule, regulation or policy of the Corporation or an affiliate; or
has been convicted of, or plead guilty or nolo contendere to, a
felony or misdemeanor (other than minor traffic violations or
similar offences); or
(4) has breached any of the provisions of any agreement with the
Corporation or an affiliate; or
(5) has improperly induced a vendor or customer to break or terminate
any contract with the Corporation or an affiliate or induced a
principal for whom the Corporation or an affiliate acts as agents to
terminate such agency relationship.
A termination for Cause shall be deemed to occur (subject to reinstatement upon
a contrary final determination by the Committee) on the date on which the
Corporation or a Subsidiary first delivers written notice to the Participant of
a finding of termination for Cause.
5. NON-TRANSFERABILITY AND OTHER RESTRICTIONS.
The Option and any other rights of the Participant under this Option
Agreement or the Plan are nontransferable and exercisable only by the
Participant, except as set forth in Section 1.9 of the Plan.
3
6. NOTICES.
Any notice to be given under the terms of this Option Agreement shall be
in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Participant at the address reflected or
last reflected on the Corporation's payroll records. Any notice shall be
delivered in person or shall be enclosed in a properly sealed envelope,
addressed as aforesaid, registered or certified, and deposited (postage and
registry or certification fee prepaid) in a post office or branch post office
regularly maintained by the United States Government. Any such notice shall be
given only when received, but if the Participant is no longer an Eligible
Person, notice to the Participant by the Corporation shall be deemed to have
been duly given as of the date mailed in accordance with the foregoing
provisions of this Section 6.
7. PLAN.
The Option and all rights of the Participant under this Option Agreement
are subject to, and the Participant agrees to be bound by, all of the terms and
conditions of the Plan, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Option
Agreement and of the Plan, the terms and conditions of the Plan shall govern.
The Participant and agrees to be bound by the terms of the Plan and of this
Option Agreement. The Participant acknowledges reading and understanding the
Plan, the Plan Prospectus, and this Option Agreement. Unless otherwise expressly
provided in other sections of this Option Agreement, provisions of the Plan that
confer discretionary authority on the Board or the Committee do not and shall
not be deemed to create any rights in the Participant unless such rights are
expressly set forth herein or are otherwise in the sole discretion of the Board
or the Committee so conferred by appropriate action of the Board or the
Committee under the Plan after the date hereof.
8. ENTIRE AGREEMENT.
This Option Agreement (including these Terms) and the Plan together
constitute the entire agreement and supersede all prior understandings and
agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Option Agreement may be amended pursuant to
Section 6.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Participant hereunder, but no such waiver shall operate as or
be construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
9. GOVERNING LAW.
This Option Agreement and the rights of the parties hereunder and with
respect to the Option shall be shall be governed by and construed and enforced
in accordance with the laws of the State of Nevada without regard to conflict of
law principles thereunder. The parties, as well as any of their successors,
employees, or representatives, irrevocably agree to the exclusive jurisdiction
of the Courts of the State of Nevada (or such judicial district of a court of
the United States as shall include same) for the determination of all matters
arising hereunder or with respect to the Option. In the event of litigation with
respect to any such matter, the prevailing party shall be entitled to recover
such party's costs of the action, including reasonable attorneys fees.
10. OTHER RESTRICTIONS.
In consideration of the granting of this Option, the Participant agrees
that for a period of one (1) year after he or she ceases to be employed by the
Corporation or a Subsidiary, the Participant will not own, manage, control or
associate with as an agent, officer, employee, investor, lender, or otherwise
with any business entity which competes worldwide with the business of the
Corporation or any of its Subsidiaries in the design, manufacture and/or
distribution of coin-operated gaming or amusement devices and/or lottery
devices, systems or tickets; nor shall the Participant at any time after his or
her employment by the Corporation or a Subsidiary terminates disclose, discuss,
copy or otherwise use or suffer to be used, in any manner, in competition with
or contrary to the interests of the Corporation or any of its Subsidiaries, the
customer lists, product research, engineering data or other trade secrets of the
Corporation or any of its Subsidiaries. The Corporation and the Participant
specifically agree that the scope of the foregoing provisions in this Section 10
are reasonable and fair. Should, however, a court of competent jurisdiction deem
the foregoing provisions of this Section 10 to be impermissibly overbroad, it is
the desire and intention of the parties that such provisions be enforced as to
the greatest extent permitted under applicable law.
4
INTERNATIONAL GAME TECHNOLOGY
2002 STOCK INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT
THIS RESTRICTED STOCK AWARD AGREEMENT (this "AWARD AGREEMENT") is dated as
of ___________________, by and between INTERNATIONAL GAME TECHNOLOGY, a Nevada
corporation (the "CORPORATION"), and ___________________ (the "GRANTEE").
W I T N E S S E T H
WHEREAS, the Corporation maintains the International Game Technology 2002
Stock Incentive Plan (the "PLAN"); and
WHEREAS, the Corporation desires to grant to the Grantee, and the Grantee
desires to accept, a restricted stock award (the "AWARD") upon the terms and
conditions set forth herein and in the Plan.
NOW THEREFORE, in consideration of services rendered and to be rendered by
the Grantee, and the mutual promises made herein and the mutual benefits to be
derived therefrom, the parties agree as follows:
1. DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning given to such terms in the Plan.
2. GRANT. Subject to the terms of this Award Agreement, the Corporation
hereby grants to the Grantee a Restricted Stock Award with respect to an
aggregate of _______ shares of Common Stock (the "RESTRICTED STOCK").
3. VESTING. Subject to Section 8 below, the Award shall vest, and
restrictions (other than those set forth in Section 6.4 of the Plan) shall
lapse, with respect to ________ (___th) of the total number of shares of
Restricted Stock (subject to adjustment under Section 6.2(a) of the Plan) on
each of _____________, _____________, ____________, ______________ and
__________________.
4. CONTINUANCE OF EMPLOYMENT. The vesting schedule requires continued
employment or service through each applicable vesting date as a condition to the
vesting of the applicable installment of the Award and the rights and benefits
under this Award Agreement. Employment or service for only a portion of the
vesting period, even if a substantial portion, will not entitle the Grantee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
in Section 8 below or under the Plan.
Nothing contained in this Award Agreement or the Plan constitutes an
employment or service commitment by the Corporation or any Subsidiary, affects
the Grantee's status as an employee at will who is subject to termination
without cause, confers upon the Grantee any right to remain employed by or in
service to the Corporation or any Subsidiary, interferes in any way with the
right of the Corporation or any Subsidiary at any time to terminate such
employment or
services, or affects the right of the Corporation or any Subsidiary to increase
or decrease the Grantee's other compensation or benefits. Nothing in this
paragraph, however, is intended to adversely affect any independent contractual
right of the Grantee under any written employment agreement with the
Corporation.
5. DIVIDEND AND VOTING RIGHTS. After the Award Date, the Grantee shall
be entitled to cash dividends and voting rights with respect to the shares of
Restricted Stock subject to the Award even though such shares are not vested,
provided that such rights shall terminate immediately as to any shares of
Restricted Stock that are forfeited pursuant to Section 8.
6. RESTRICTIONS ON TRANSFER. Prior to the time that they have become
vested pursuant to Section 3, neither the Restricted Stock, nor any interest
therein, amount payable in respect thereof, or Restricted Property (as defined
in Section 9 hereof) may be sold, assigned, transferred, pledged or otherwise
disposed of, alienated or encumbered, either voluntarily or involuntarily. The
transfer restrictions in the preceding sentence shall not apply to (a) transfers
to the Corporation, or (b) transfers by will or the laws of descent and
distribution.
7. STOCK CERTIFICATES.
(a) Book Entry Form. The Corporation shall, in its discretion,
issue the shares of Restricted Stock subject to the Award either: (a) in
certificate form as provided in Section 7(b) below; or (b) in book entry form,
registered in the name of the Grantee with notations regarding the applicable
restrictions on transfer imposed under this Award Agreement.
(b) Certificates to be Held by Corporation; Legend. Any
certificates representing shares of Restricted Stock that may be delivered to
the Grantee by the Corporation prior to vesting shall be immediately redelivered
by the Grantee to the Corporation to be held by the Corporation until the
restrictions on such shares shall have lapsed and the shares shall thereby have
become vested or the shares represented thereby have been forfeited hereunder.
Such certificates shall bear the following legend:
"The ownership of this certificate and the shares of stock evidenced
hereby and any interest therein are subject to substantial restrictions on
transfer under an Agreement entered into between the registered owner and
International Game Technology. A copy of such Agreement is on file in the
office of the Secretary of International Game Technology."
(c) Delivery of Certificates Upon Vesting. Promptly after the
vesting of any shares of Restricted Stock pursuant to Section 3 and the
satisfaction of any and all related tax withholding obligations pursuant to
Section 10, the Corporation shall, as applicable, either remove the notations on
any shares of Restricted Stock issued in book entry form which have vested or
deliver to the Grantee a certificate or certificates evidencing the number of
shares of Restricted Stock which have vested (or, in either case, such lesser
number of shares as may be permitted pursuant to Section 10). The Grantee (or
the Beneficiary or Personal Representative of the Grantee in the event of the
Grantee's death or incapacity, as the case may be) shall deliver to the
Corporation any representations or other documents or assurances as the
Corporation may deem necessary or reasonably desirable to ensure compliance with
all applicable legal and regulatory requirements. The shares so delivered shall
no longer be restricted shares hereunder.
(d) Stock Power; Power of Attorney. Concurrent with the execution
and delivery of this Award Agreement, the Grantee shall deliver to the
Corporation an executed stock power in the form attached hereto as Exhibit A, in
blank, with respect to the Restricted Stock. The Grantee, by acceptance of the
Award, shall be deemed to appoint, and does so appoint by execution of this
Award Agreement, the Corporation and each of its authorized representatives as
the Grantee's attorney(s)-in-fact to effect any transfer of unvested, forfeited
shares (or shares otherwise reacquired by the Corporation hereunder) to the
Corporation as may be required pursuant to the Plan or this Award Agreement and
to execute such documents as the Corporation or such representatives deem
necessary or advisable in connection with any such transfer.
8. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) Forfeiture after Certain Events. The Grantee's shares of
Restricted Stock shall be forfeited to the extent such shares have not become
vested upon the first date the Grantee is no longer employed by the Corporation
or one of its Subsidiaries, regardless of the reason for the termination of the
Grantee's employment, whether with or without cause, voluntarily or
involuntarily. If the Grantee is employed by a Subsidiary and that entity ceases
to be a Subsidiary, such event shall be deemed to be a termination of employment
of the Grantee for purposes of this Award Agreement, unless the Grantee
otherwise continues to be employed by the Corporation or another of its
Subsidiaries following such event.
(b) Return of Shares. Upon the occurrence of any forfeiture of
shares of Restricted Stock hereunder, such unvested, forfeited shares and
related Restricted Property shall, without payment of any consideration by the
Corporation for such transfer, be automatically transferred to the Corporation,
without any other action by the Grantee, or the Grantee's Beneficiary or
Personal Representative, as the case may be. The Corporation may exercise its
powers under Section 7(d) hereof and take any other action necessary or
advisable to evidence such transfer. The Grantee, or the Grantee's Beneficiary
or Personal Representative, as the case may be, shall deliver any additional
documents of transfer that the Corporation may request to confirm the transfer
of such unvested, forfeited shares and related Restricted Property to the
Corporation.
9. ADJUSTMENTS UPON SPECIFIED EVENTS. Upon the occurrence of certain
events relating to the Corporation's stock contemplated by Section 6.2(a) of the
Plan, the Committee will make adjustments if appropriate in the number and kind
of securities that may become vested under an Award. If any adjustment is made
under Section 6.2(a) of the Plan, the restrictions applicable to the shares of
Restricted Stock shall continue in effect with respect to any consideration or
other securities (the "RESTRICTED PROPERTY" and, for the purposes of this Award
Agreement, "Restricted Stock" shall include "Restricted Property," unless the
context otherwise requires) received in respect of such Restricted Stock. Such
Restricted Property shall vest at such times and in such proportion as the
shares of Restricted Stock to which the Restricted Property is attributable
vest, or would have vested pursuant to the terms hereof if such shares of
Restricted Stock had remained outstanding. To the extent that the Restricted
Property includes any cash (other than regular cash dividends provided for in
Section 5 hereof), such cash shall be invested, pursuant to policies established
by the Committee, in interest bearing, FDIC-insured (subject to applicable
insurance limits) deposits of a depository institution selected
by the Committee, the earnings on which shall be added to and become a part of
the Restricted Property.
10. TAX WITHHOLDING. The Corporation shall reasonably determine the
amount of any federal, state, local or other income, employment, or other taxes
which the Corporation or any of its affiliates may reasonably be obligated to
withhold with respect to the grant, vesting, making of an election under Section
83(b) of the Internal Revenue Code of 1986, as amended (the "CODE"), or other
event with respect to the Restricted Stock. The Corporation may, in its sole
discretion, withhold and/or reacquire a sufficient number of shares of
Restricted Stock in connection with the vesting of such shares at their then
Fair Market Value (determined either as of the date of such withholding or as of
the immediately preceding trading day, as determined by the Corporation in its
discretion) to satisfy the amount of any such withholding obligations that arise
with respect to the vesting of such shares. The Corporation may take such
action(s) without notice to the Grantee and shall remit to the Grantee the
balance of any proceeds from withholding and/or reacquiring such shares in
excess of the amount reasonably determined to be necessary to satisfy such
withholding obligations. The Grantee shall have no discretion as to the
satisfaction of tax withholding obligations in such manner. If, however, the
Grantee makes an election under Section 83(b) of the Code with respect to the
Restricted Stock, if any other withholding event occurs with respect to the
Restricted Stock other than the vesting of such stock, or if the Corporation for
any reason does not satisfy the withholding obligations with respect to the
vesting of the Restricted Stock as provided above in this Section 10, the
Corporation shall be entitled to require a cash payment by or on behalf of the
Grantee and/or to deduct from other compensation payable to the Grantee the
amount of any such withholding obligations.
11. NOTICES. Any notice to be given under the terms of this Award
Agreement shall be in writing and addressed to the Corporation at its principal
office to the attention of the Secretary, and to the Grantee at the Grantee's
last address reflected on the Corporation's records, or at such other address as
either party may hereafter designate in writing to the other. Any such notice
shall be given only when received, but if the Grantee is no longer an employee
of the Corporation or one of its Subsidiaries, shall be deemed to have been duly
given by the Corporation when enclosed in a properly sealed envelope addressed
as aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.
12. PLAN. The Award and all rights of the Grantee under this Award
Agreement are subject to, and the Grantee agrees to be bound by, all of the
terms and conditions of the provisions of the Plan, incorporated herein by this
reference. In the event of a conflict or inconsistency between the terms and
conditions of this Award Agreement and of the Plan, the terms and conditions of
the Plan shall govern. The Grantee agrees to be bound by the terms of the Plan
and of this Award Agreement. The Grantee acknowledges reading and understanding
the Plan, the Prospectus for the Plan, and this Award Agreement. Unless
otherwise expressly provided in other sections of this Award Agreement,
provisions of the Plan that confer discretionary authority on the Board or the
Committee do not (and shall not be deemed to) create any rights in the Grantee
unless such rights are expressly set forth herein or are otherwise in the sole
discretion of the Board or the Committee so conferred by appropriate action of
the Board or the Committee under the Plan after the date hereof.
13. ENTIRE AGREEMENT. This Award Agreement and the Plan together
constitute the entire agreement and supersede all prior understandings and
agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Award Agreement may be amended pursuant to
Section 6.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Grantee hereunder, but no such waiver shall operate as or be
construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
14. COUNTERPARTS. This Award Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
15. SECTION HEADINGS. The section headings of this Award Agreement are
for convenience of reference only and shall not be deemed to alter or affect any
provision hereof.
16. GOVERNING LAW. This Award Agreement and the rights of the parties
hereunder with respect to the Restricted Stock Award shall be governed by and
construed and enforced in accordance with the laws of the State of Nevada
without regard to conflict of law principles thereunder.
IN WITNESS WHEREOF, the Corporation has caused this Award Agreement to be
executed on its behalf by a duly authorized officer and the Grantee has hereunto
set his or her hand as of the date and year first above written.
INTERNATIONAL GAME TECHNOLOGY,
A NEVADA CORPORATION
By:_____________________________________________
Print Name: Xxxxx X. Xxxxxxx
Its: Senior Vice President, General Counsel
GRANTEE
________________________________________________
Signature
________________________________________________
Print Name
EXHIBIT A
STOCK POWER
FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Award
Agreement between International Game Technology, a Nevada corporation (the
"Corporation"), and the individual named below (the "Individual") dated as of
_____________, 2003, the Individual hereby sells, assigns and transfers to the
Corporation, an aggregate ______________ shares of Common Stock of the
Corporation, standing in the Individual's name on the books of the Corporation
and represented by stock certificate number(s) ________________________
_____________________ to which this instrument is attached, and hereby
irrevocably constitutes and appoints __________________________________________
as his or her lawful attorney in fact and agent to transfer such shares on the
books of the Corporation, with full power of substitution in the premises.
Dated ______________________
__________________________________
Signature
__________________________________
Print Name
(Instruction: Please do not fill in any blanks other than the signature line.
The purpose of the assignment is to enable the Corporation to exercise its
rights set forth in the Restricted Stock Award Agreement in connection with the
forfeiture of any restricted shares subject thereto without requiring additional
signatures on the part of the Individual.)
INTERNATIONAL GAME TECHNOLOGY
2002 STOCK INCENTIVE PLAN
UK STOCK OPTION SUB-PLAN ("THE UK SUB-PLAN")
OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (this "OPTION AGREEMENT") by and
between INTERNATIONAL GAME TECHNOLOGY, a Nevada corporation (the "CORPORATION"),
and ________________ (the "PARTICIPANT") evidences the incentive stock option
(the "OPTION") granted by the Corporation to the Participant as to the number of
shares of the Corporation's Common Stock first set forth below.
NUMBER OF SHARES OF COMMON STOCK:(1) _______ AWARD DATE: _______________
EXERCISE PRICE PER SHARE:(1) $______ EXPIRATION DATE:(1,2) ______________
VESTING(1,2) The Option shall become vested as to 20% of the total number of
shares of Common Stock subject to the Option on each of the first through fifth
anniversaries of the Award Date.
The Option is granted under the UK Sub-Plan to the International Game Technology
2002 Stock Incentive Plan (the "UK SUB-PLAN") and subject to the Terms and
Conditions of Incentive Stock Option (the "TERMS") attached to this Option
Agreement (incorporated herein by this reference) and to the UK Sub-Plan. The
Option has been granted to the Participant in addition to, and not in lieu of,
any other form of compensation otherwise payable or to be paid to the
Participant. The Option is intended to be an approved option for the purposes of
Schedule 9 to the United Kingdom Income and Corporation Taxes Act. Capitalized
terms are defined in the UK Sub-Plan if not defined herein. The parties agree to
the terms of the Option set forth herein. The Participant acknowledges receipt
of a copy of the Terms, the UK Sub-Plan, and the Prospectus for the UK Sub-Plan.
"PARTICIPANT" INTERNATIONAL GAME TECHNOLOGY,
a Nevada corporation
__________________________________
Signature By:__________________________________
__________________________________ Print Name: Xxxxx X. Xxxxxxx
Print Name
Title: Sr. V.P., General Counsel
__________________________________
Address
__________________________________
City, State, Zip Code
----------
(1) Subject to adjustment under Section 6.2(a) of the Plan.
(2) Subject to early termination pursuant to Section 4 of this Option
Agreement.
1
TERMS AND CONDITIONS OF INCENTIVE STOCK OPTION
1. VESTING; LIMITS ON EXERCISE.
As set forth on the cover page of this Option Agreement, the Option shall
vest and become exercisable in percentage installments of the aggregate number
of shares of Common Stock subject to the Option. The Option may be exercised
only to the extent the Option is vested and exercisable.
- Cumulative Exercisability. To the extent that the Option is vested
and exercisable, the Participant has the right to exercise the
Option (to the extent not previously exercised), and such right
shall continue, until the expiration or earlier termination of the
Option.
- No Fractional Shares. Fractional share interests shall be
disregarded, but may be cumulated.
- Minimum Exercise. No fewer than 100(1) shares of Common Stock may be
purchased at any one time, unless the number purchased is the total
number at the time exercisable under the Option.
2. CONTINUANCE OF EMPLOYMENT REQUIRED; NO EMPLOYMENT COMMITMENT.
The vesting schedule requires continued employment through each applicable
vesting date as a condition to the vesting of the applicable installment of the
Option and the rights and benefits under this Option Agreement. Employment for
only a portion of the vesting period with respect to a vesting installment, even
if employed for a substantial portion of that period, will not entitle the
Participant to any proportionate vesting or avoid or mitigate a termination of
rights and benefits upon or following a termination of employment as provided in
Section 4 below.
Nothing contained in this Option Agreement or the Plan constitutes an
employment or service commitment by the Corporation or any Subsidiary, affects
the Participant's status as an employee at will who is subject to termination
without cause, confers upon the Participant any right to remain employed by the
Corporation or any Subsidiary, interferes in any way with the right of the
Corporation or any Subsidiary at any time to terminate such employment, or
affects the right of the Corporation or any Subsidiary to increase or decrease
the Participant's other compensation.
An Option may not be granted to an individual who is not an Eligible
Employee pursuant to the UK Sub-Plan at the date of the award and it should be
noted that status as an Eligible Employee shall not be construed as a commitment
that any Option under this Sub-Plan to such Eligible Employee or to Eligible
Employee generally.
3. METHOD OF EXERCISE OF OPTION.
The Option shall be exercisable by the delivery to the Secretary of the
Corporation of a written notice stating the number of shares of Common Stock to
be purchased pursuant to the Option (or by completion of such other
administrative exercise procedures as the Committee may require from time to
time) and accompanied by:
- payment in full for the Exercise Price of the shares to be
purchased, in cash or by electronic funds transfer to the
Corporation, or by check payable to the order of the Corporation,
subject to such specific procedures or directions as the Committee
may establish;
- satisfaction of the tax withholding provisions of Section 6.5 of the
Plan as amended by the UK Sub-Plan; and
- any written statements or agreements required pursuant to Section
6.4 of the Plan as amended by the UK Sub-Plan.
2
4. EARLY TERMINATION OF OPTION.
The Option, to the extent not previously exercised, and all other rights
in respect thereof, whether vested and exercisable or not, shall terminate and
become null and void prior to the Expiration Date in the event that either: (1)
the Participant ceases to be employed by the Corporation or a Subsidiary, except
as expressly provided below; or (2) the Option terminates pursuant to Section
6.2 of the Plan as amended by the UK Sub-Plan.
- If the Participant ceases to be employed by the Corporation or a
Subsidiary other than due to the Participant's death, Total
Disability or a termination of employment by the Corporation or a
Subsidiary for Cause (as defined below), then the unvested portion
of the Option shall terminate upon such termination of employment
and the then-vested portion of the Option shall (subject to earlier
termination pursuant to Section 6.2 of the Plan, as amended by the
UK Sub-Plan, and subject to the maximum ten-year term of the Option)
continue to be exercisable only for three months after such
termination of employment, at which time such remaining portion of
the Option shall terminate.
- If the Participant ceases to be employed by the Corporation or a
Subsidiary due to the Participant's death or Total Disability, then
the unvested portion of the Option shall terminate upon such
termination of employment and the then-vested portion of the Option
shall (subject to earlier termination pursuant to Section 6.2 of the
Plan, as amended by the UK Sub-Plan and subject to the maximum
ten-year term of the Option) continue to be exercisable only for one
year after such termination of employment, at which time such
remaining portion of the Option shall terminate.
- The Option (whether or not vested) shall terminate immediately if
the Participant's employment is terminated by the Corporation or a
Subsidiary for Cause (as defined below).
- The foregoing termination of employment rules are subject to Section
6.12 of the Plan, as amended by the UK Sub-Plan.
For purposes of this Section 4, the term "Cause" means a termination of
employment based upon a finding by the Corporation, acting in good faith and
based on its reasonable belief at the time, that the Participant:
(1) has been negligent in the discharge of his or her duties to the
Corporation or one of its affiliates (the term "affiliate" for
purposes of this definition shall include, without limitation, each
Subsidiary), has refused to perform stated or assigned duties or is
incompetent in or (other than be reason of a disability or analogous
condition) incapable of performing those duties; or
(2) has been dishonest or committed or engaged in an act of
embezzlement, fraud, or theft, a breach of confidentiality, an
unauthorized disclosure or use of inside information, customer
lists, trade secrets or other confidential information; or
(3) has breached a fiduciary duty, or violated any other duty, law,
rule, regulation or policy of the Corporation or an affiliate; or
has been convicted of, or plead guilty or nolo contendere to, a
felony or misdemeanor (other than minor traffic violations or
similar offences); or
(4) has breached any of the provisions of any agreement with the
Corporation or an affiliate; or
(5) has improperly induced a vendor or customer to break or terminate
any contract with the Corporation or an affiliate or induced a
principal for whom the Corporation or an affiliate acts as agents to
terminate such agency relationship.
A termination for Cause shall be deemed to occur (subject to reinstatement upon
a contrary final determination by the Committee) on the date on which the
Corporation first delivers written notice to the Participant of a finding of
termination for Cause.
5. NON-TRANSFERABILITY AND OTHER RESTRICTIONS.
The Option and any other rights of the Participant under this Option
Agreement or the Plan are nontransferable and exercisable only by the
Participant, except as set forth in Section 1.9 of the Plan.
3
6. NOTICES.
Any notice to be given under the terms of this Option Agreement shall be
in writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Participant at the address reflected or
last reflected on the Corporation's payroll records. Any notice shall be
delivered in person or shall be enclosed in a properly sealed envelope,
addressed as aforesaid, registered or certified, and deposited (postage and
registry or certification fee prepaid) in a post office or branch post office
regularly maintained by the United States Government. Any such notice shall be
given only when received, but if the Participant is no longer an Eligible
Person, notice to the Participant by the Corporation shall be deemed to have
been duly given as of the date mailed in accordance with the foregoing
provisions of this Section 6.
7. PLAN.
The Option and all rights of the Participant under this Option Agreement
are subject to, and the Participant agrees to be bound by, all of the terms and
conditions of the Plan, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Option
Agreement and of the Plan, the terms and conditions of the Plan shall govern.
The Participant agrees to be bound by the terms of the Plan and of this Option
Agreement. The Participant acknowledges reading and understanding the Plan, the
Plan Prospectus, and this Option Agreement. Unless otherwise expressly provided
in other sections of this Option Agreement, provisions of the Plan that confer
discretionary authority on the Board or the Committee do not and shall not be
deemed to create any rights in the Participant unless such rights are expressly
set forth herein or are otherwise in the sole discretion of the Board or the
Committee so conferred by appropriate action of the Board or the Committee under
the Plan after the date hereof.
8. ENTIRE AGREEMENT.
This Option Agreement (including these Terms) and the Plan together
constitute the entire agreement and supersede all prior understandings and
agreements, written or oral, of the parties hereto with respect to the subject
matter hereof. The Plan and this Option Agreement may be amended pursuant to
Section 6.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Participant hereunder, but no such waiver shall operate as or
be construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.
9. GOVERNING LAW.
This Option Agreement and the rights of the parties hereunder and with
respect to the Option shall be shall be governed by and construed and enforced
in accordance with the laws of the State of Nevada without regard to conflict of
law principles thereunder. The parties, as well as any of their successors,
employees, or representatives, irrevocably agree to the exclusive jurisdiction
of the Courts of the State of Nevada (or such judicial district of a court of
the United States as shall include same) for the determination of all matters
arising hereunder or with respect to the Option. In the event of litigation with
respect to any such matter, the prevailing party shall be entitled to recover
such party's costs of the action, including reasonable attorneys fees.
10. NOTICE OF EARLY DISPOSITION.
The Participant agrees to give prompt written notice to the Corporation of
any sale or other transfer of any shares of Common Stock acquired upon exercise
of the Option that occurs before the later of (A) one year after the date that
the Participant acquires the shares upon exercise of the Option, or (B) two
years after the Award Date set forth on the cover page of this Option Agreement.
11. OTHER RESTRICTIONS.
In consideration of the granting of this Option, the Participant agrees
that for a period of one (1) year after he or she ceases to be employed by the
Corporation or a Subsidiary, the Participant will not own, manage, control or
associate with as an agent, officer, employee, investor, lender, or otherwise
with any business entity which competes worldwide with the business of the
Corporation or any of its Subsidiaries in the design, manufacture and/or
distribution of coin-operated gaming or amusement devices and/or lottery
devices, systems or tickets; nor shall the Participant at any time after his or
her employment by the Corporation or a Subsidiary terminates disclose, discuss,
copy or otherwise use or suffer to be used, in any manner, in competition with
or contrary to the interests of the Corporation or any of its Subsidiaries, the
customer lists, product research, engineering data or other trade secrets of the
Corporation or any of its Subsidiaries. The Corporation and the Participant
specifically agree that the scope of
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the foregoing provisions in this Section 11 are reasonable and fair. Should,
however, a court of competent jurisdiction deem the foregoing provisions of this
Section 11 to be impermissibly overbroad, it is the desire and intention of the
parties that such provisions be enforced as to the greatest extent permitted
under applicable law.
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