Employment Agreement, Dated March 20, 2009, Between International Game Technology And Patti S. Hart.

EXECUTION VERSION


Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this " Agreement" ) is dated as of March 20, 2009 (the " Effective Date" ), and is by and between International Game Technology, a Nevada corporation (the " Corporation" ), and Patti S. Hart (the " Executive" ).

WHEREAS, the Corporation desires to employ the Executive, and the Executive desires to be employed by the Corporation and to render services to it, on the terms and subject to the conditions in this Agreement.

NOW, THEREFORE, in consideration of the premises and the respective undertakings of the Corporation and the Executive set forth below, the Corporation and the Executive agree as follows:

1.

Employment . The Corporation hereby employs the Executive in the position of President and Chief Executive Officer, and the Executive accepts such employment and agrees to perform services for the Corporation, for the period and upon the other terms and conditions set forth in this Agreement. As Chief Executive Officer, the Executive shall be responsible for:

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the day-to-day operations of the Corporation;

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the development of a strategic course of direction for the Corporation;

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developing a strong team of managers for the Corporation reporting to the President and Chief Executive Officer and ensuring that each has a competent replacement;

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developing an annual operating plan for the Corporation to be submitted to the Corporation' s Board of Directors (the " Board" ) against which (as modified and/or approved by the Board or the Compensation Committee of the Board (the " Compensation Committee" )) the Executive and the Executive' s management team will be measured and, if appropriate, granted incentive compensation awards; and

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such other duties, consistent with the Executive' s position, as the Board may delegate to the Executive from time to time.

The Executive shall report to the Board. Additionally, the Executive shall serve as a director of the Corporation, but, in her capacity as a director, shall be subject to appointment, election and removal in accordance with the Corporation' s Bylaws, Articles of Incorporation and any other policies or procedures of the Corporation in effect from time-to-time, and shall also be subject to Section 7.4 of this Agreement. The Executive will not be entitled to any additional compensation for serving as a director.


The Executive will devote her full business time and efforts to the performance of the Executive' s duties and responsibilities under this Agreement and to the business and affairs of Corporation, its subsidiaries and affiliates. The Executive may engage in personal, charitable, professional and investment activities to the extent such activities do not conflict or interfere with the Executive' s duties and obligations under this Agreement or the Executive' s ability to perform her duties and responsibilities under this Agreement. During the Term (as such term is defined below), the Executive shall not serve on the board of directors (or similar governing body) of any other business entity without the prior approval of the Board. The Executive shall resign from any such board of directors (or similar governing body) on which she currently serv es within six (6) months from the date of this Agreement, and shall, promptly following receipt of a written request from the Board, resign from any board of directors on which she subsequently serves (even if such service has been approved by the Board) if the Board determines in its sole discretion that the Executive' s activities on such board (or other body) conflict or interfere with the performance of the Executive' s duties for the Corporation. The executive shall also be subject to and shall comply with the Corporation' s code of conduct, insider trading policy and other governance guidelines as the Corporation may implement from time-to-time.

2.

Term . This Agreement will commence on the Effective Date and will terminate as provided in Section 7 hereof (such period being the " Term" ).

3.

C ompensation. As compensation for the services to be rendered by the Executive under this Agreement during the Term:

3.1

Base Salary. The Corporation shall pay to the Executive a base salary at an annualized rate of Eight Hundred Thousand Dollars ($800,000) per year (the " Base Salary" ), which Base Salary shall be paid in accordance with the Corporation' s normal payroll procedures and policies. The Base Salary amount shall be subject to annual review at the end of each fiscal year by the Compensation Committee; provided that such review shall not occur following the partial fiscal year ending on September 30, 2009.

3.2

One-Time Payment. The Corporation shall, upon execution of this Agreement, pay to the Executive, a one-time payment of $400,000.

3.3

Bonus Opportunity. For each fiscal year of the Corporation during the Term (including the partial fiscal year ending on September 30, 2009), the Executive shall have the opportunity to earn a bonus with a target amount of Two-Hundred Percent (200%) of the Executive' s Base Salary paid to the Executive for such fiscal year or partial fiscal year, as the case may be, up to a maximum of Two-Hundred Forty percent (240%) (the " Annual Bonus" ). A portion of each such bonus opportunity will be based on the Corporation' s annual financial performance, and the remaining portion of each such bonus opportunity will be based on the Executive' s achievement of non-financial performance objectives, each as determined by the Compensation Committee of the Board in its sole discretion prior to the commencement of the fiscal year (including the partial fiscal year ending on September 30, 2009 in which such Annual Bonus may be earned; provided, however, that with respect to the initial partial fiscal year of the Term, such bonus opportunity will be based only on the Executive' s achievement of non-


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financial performance objectives. At the conclusion of the applicable fiscal year, the Compensation Committee will reasonably determine whether and to what extent the Executive has met the objectives previously established. The Annual Bonus will be determined and payable by the Corporation no later than the 15th day of the third month following the end of the fiscal year for which the bonus is earned.

3.4

Stock Option Award. Concurrent with the date of this Agreement, the Corporation shall grant to the Executive an option to purchase 661,704 shares of common stock of the Corporation. Such stock option shall be granted under the Corporation' s 2002 Stock Incentive Plan (the " Plan" ). Such stock option shall be evidenced by a written option agreement in the form attached to this Agreement as Exhibit A (the " Option Grant Agreement" ) and shall be subject to all of the terms and conditions of conditions of such agreement and the Plan (including, without limitation, provisions as to vesting and the term of the option). The per share exercise price for such stock option shall be determined in accordance with the Plan.

3.5

Restricted Stock Award . Concurrent with the date of this Agreement, the Corporation shall grant to the Executive 175,439 shares of common stock of the Corporation. Such shares of stock are granted under the Plan, shall be granted pursuant to a written agreement in the form attached to this Agreement as Exhibit B , and shall be subject to all of the terms and conditions of such agreement and the Plan, including, without limitation, provisions as to vesting and forfeiture.

3.6

Forfeiture of Equity Compensation Received as Director. Executive hereby cancels and surrenders the equity awards made to Executive on March 3, 2009.

3.7

Review of Equity Incentives. The type, amount and terms and conditions of equity incentives provided to Executive in connection with her services to the Corporation shall be subject to annual review at the end of each fiscal year by the Compensation Committee, and any grants, including the terms and conditions of accelerated vesting of such grants, shall be made by the Compensation Committee in its sole discretion.

3.8

Participation in Benefit Plans . During the Term, the Executive shall also be entitled to participate in all employee benefit plans or programs of the Corporation available to senior executives of the Corporation in accordance with the terms of the applicable plans or programs. The Corporation does not guarantee the adoption or continuance of any particular employee benefit plan or program during the Term, and the Executive' s participation in any such plan or program shall be subject to the provisions, rules and regulations applicable thereto and as amended from time-to-time.

3.9

Withholding Taxes . The Corporation may withhold from any compensation or other benefits payable under this Agreement, all federal, state, city or other taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling.


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4.

Confidential Information . Except as provided below, the Executive shall not, during the Term or at any time thereafter, divulge, furnish or make accessible to anyone or use in any way (other than in the ordinary course of the business of the Corporation or any of its respective affiliates) any confidential or secret knowledge or information of the Corporation which the Executive has acquired or becomes acquainted with or will acquire or become acquainted with prior to the termination of the period of her employment by the Corporation (including employment by the Corporation or any affiliated or predecessor companies prior to the date of this Agreement), whether developed by herself or by others, concerning any trade secrets, confidential or secret designs, processes, formulae, plans, devices or material (whether or not patented or patentable) directly or indirectly useful in any aspect of the business of the Corporation, any customer or supplier lists of the Corporation, any confidential or secret development or research work of the Corporation, or any other confidential information or secret aspects of the business of the Corporation. The Executive acknowledges that the above-described knowledge or information constitutes a unique and valuable asset of the Corporation and represents a substantial investment of time and expense by the Corporation, and that any disclosure or other use of such knowledge or information other than for the sole benefit of the Corporation and its affiliates would be wrongful and would cause irreparable harm to the Corporation. The foregoing obligations of confidentiality, however, shall not apply to any knowledge or information which is now published or which subsequently becomes generally publicly known, other than as a direct or indirect result of the breach of this Agreement by the Executive. The foregoing obligations of confidential ity shall not, however, limit the Executive' s disclosure of information (1) to the extent necessary to comply with government disclosure requirements or other applicable laws and regulations, (2) pursuant to subpoena or order of any judicial, legislative, executive, regulatory or administrative body, or for the Executive to enforce the Executive' s rights under this Agreement, and (3) to employees, advisors, counsel, financial advisors and other third parties as may be necessary and appropriate in connection with the proper performance and enforcement of this Agreement.

5.

Ventures; Invention Assignment Agreement . If, during the Term, the Executive is engaged in or associated with the planning or implementing of any project, program or venture involving the Corporation and a third party or parties, all rights with respect to such project, program or venture shall belong to the Corporation. Except as approved by the Board, the Executive shall not be entitled to any interest in such project, program or venture or to any commission, finder' s fee or other compensation in connection therewith other than the salary to be paid to the Executive as provided in this Agreement. Concurrent with the execution of this Agreement; the Executive shall execute and deliver to the Corporation the Invention and Secrecy Agreement attached here to as Exhibit C .

6.

Noncompetition Covenant; Non-Solicitation .

6.1

Noncompetition. The parties hereto acknowledge and agree that the consideration paid hereunder shall be considered additional consideration for the noncompetition provisions of the Option Grant Agreement, and the Executive agrees that such provisions are fair and reasonable.

6.2

Non-Solicitation . The Executive agrees that during the Term and for a period of twelve (12) months thereafter, she will not, without the prior written approval


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of the Board, solicit or otherwise induce (a) any employee of the Corporation or one of its subsidiaries who earned annually $75,000 or more as an employee of the Corporation or one of its subsidiaries during the last twelve months of the Executive' s own employment by the Corporation, or (b) any person or entity who was, within the then most recent prior 12-month period, a customer, supplier or contractor of the Corporation or any of its affiliates, to cease or curtail his, her or its relationship with the Company.

7.

Termination .

7.1

Termination of Employment. The Executive' s employment by the Corporation, and the Term, may be terminated at any time by the Corporation either: (1) with Cause (as such term is defined below), (2) without Cause, (3) in the event of the Executive' s death, or (4) in the event of the Executive' s Disability (as such term is defined below). In the case of Disability, if Executive has a Disability, as defined below, the termination of Executive' s employment shall be effective ten (10) days after Executive has received written notice from the Corporation of the Corporation' s view that Disability has existed. The Executive' s employment by the Corporation, and the Term, may be terminated at any time by the Executive on no less than sixty (60) days prior written notice to the Corporation.

7.2

Benefits Upon Termination.

(a)

If the Executive' s employment by the Corporation is terminated for any reason by the Corporation or by the Executive, the Corporation shall have no further obligation to make or provide to the Executive, and the Executive shall have no further right to receive or obtain from the Corporation, any payments or benefits except:

(i)

the Corporation shall pay the Executive (or, in the event of her death, the Executive' s estate) any Accrued Obligations (as such term is defined below); and

(ii)

if, during the Term, the Executive' s employment is terminated either (1) by the Corporation or the Executive due to the death of Executive or Disability, (2) by the Corporation other than for Cause (as such term is defined below), or (3) by the Executive for Good Reason (as such term is defined below), then the Corporation shall, subject to the conditions set forth in the following paragraph, also pay the Executive (or, in the event of the Executive' s death, the Executive' s estate) a severance benefit equal to the sum of (x) one (1) times the Executive' s highest annualized rate of Base Salary in effect during the Term, and (y) a pro-rata portion of the Annual Bonus Executive would have been entitled to receive under Section 3.3. for the year in which the termination of the Executive' s employment occurred, as reasonably determined by the Board; provided t hat such pro-rata bonus amount shall not be less than the product of (i) the number of days of Executive' s employment with the Corporation during such fiscal year divided by 365 and (ii) Two-Hundred


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Percent (200%) of the Executive' s Base Salary. Subject to the conditions set forth in Section 7.2(b), the aggregate amount of such severance benefit shall be paid in a series of twelve (12) substantially equal monthly installments (without interest, with each installment equal to approximately l/12th of the aggregate amount of the severance benefit) commencing with the month following the month in which the Executive' s employment by the Corporation terminates and continuing for the following eleven months until paid in full (subject to the Executive' s compliance with the following paragraph and the provisions of Section 6). In addition, the Executive shall be entitled to reimbursement of all premiums paid by the Executive during the one-year period following such termination pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA).

(b)

As a condition precedent to any obligation of the Corporation to the Executive pursuant to Section 7.2(a) above, the Executive (or, in the event of her death, the Executive' s estate on behalf of the Executive) shall, upon or promptly following her last day of employment with the Corporation, provide the Corporation with a valid, executed, written Release (as such term is defined below) (in a form provided by the Corporation) and such Release shall have not been revoked by the Executive pursuant to any revocation rights afforded by applicable law. The Corporation shall have no obligation to make any payment to the Executive pursuant to Section or above unless and until the Release contemplated by this paragraph becomes irrevocable by the Executive in accordance with all applicable laws, rules and regulations.

(c)

The Corporation and Executive acknowledge and agree that there is no duty of the Executive to mitigate damages under this Agreement. All amounts paid to the Executive pursuant to Section 7.2 shall be paid without regard to whether the Executive has taken or takes actions to mitigate damages.

(d)

The foregoing provisions of this Section 7.2 shall not affect: (1) the Executive' s receipt of benefits otherwise due terminated employees under group insurance coverage consistent with the terms of the applicable Corporation welfare benefit plan; (2) the Executive' s rights under the Consolidated Omnibus Budget Reconciliation Act to continue participation in medical, dental, hospitalization and life insurance coverage; (3) the Executive' s receipt of benefits otherwise due in accordance with the terms of the Corporation' s Profit Sharing Plan (401(k) plan) (if any); (4) the Executive' s receipt of benefits otherwise due in accordance with the terms of the Corporation' s nonqualified deferred compensation plan, if any; or (5) any rights that the Executive may have under and with respect to a stock option or restricted stock award, to the extent that s uch award was granted before the date that the Executive' s employment by the Corporation terminates and to the extent expressly provided in the written agreement evidencing such award.


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7.3

Certain Defined Terms .

As used herein, " Accrued Obligations" means any:

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Base Salary that had accrued but had not been paid prior to the date of termination; and

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bonus (including the Annual Bonus) that had become payable to the Executive with respect to a fiscal year ended prior to the termination of the Executive' s employment but had not actually been paid; and

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reimbursement of reasonable business expenses incurred by the Executive prior to the termination of the Executive' s employment and in accordance with the Corporation' s expense reimbursement policies and which had not previously been paid.

As used herein, " Cause" means the Executive' s:

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willful and material failure to perform her duties hereunder (other than any such failure due to the Executive' s physical or mental illness), or the Executive' s willful and material breach of her obligations hereunder, in each case following the Executive' s receipt of written notice thereof from the Corporation;

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engaging in willful and serious misconduct that has caused or is reasonably expected to result in material injury to the Corporation;

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being convicted of, or entering a plea of guilty or nolo contendre to, a crime that constitutes a felony;

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failure or inability to obtain or retain any Government Approval required to be obtained or retained by her in any jurisdiction in which the Corporation does or proposes to do business, which failure has or would reasonably be expected to have a material detrimental effect on the Executive' s ability to act as the Chief Executive Officer of the Corporation or to perform her obligations hereunder; or

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embezzlement, fraud or misappropriation of the Corporation' s property or assets.

As used herein, " Change in Control" has the same meaning as the term " Change in Control" under the Plan."


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As used herein, " Disability" means a physical or mental impairment which substantially limits a major life activity of the Executive and which renders the Executive unable to perform the essential functions of her position, even with reasonable accommodation which does not impose an undue hardship on the Corporation, for ninety (90) days in any consecutive one-hundred eighty (180) day period. The Board reserves the right, in good faith, to make the determination of whether or not a Disability exists for purposes of this Agreement based upon information supplied by the Executive and/or her medical personnel, as well as information from medical personnel (or others) selected by the Corporation or its insurers.

As used herein, " Good Reason" means shall mean the occurrence of any of the following: (i) without the Executive' s express written consent, a material reduction of the Executive' s duties, position or responsibilities relative to the Executive' s duties, position or responsibilities in effect immediately prior to such reduction (including duties, position and responsibilities as a member of the Board), or the removal of the Executive from such duties, position and responsibilities (including duties, position and responsibilities as a member of the Board), (ii) Executive ceases to be the chief executive officer of an entity, the common stock of which is publicly traded on a national U.S. securities exchange (other than as a result of the delisting of the Corporation' s common stock for failure to meet applicable listing standards regarding total market capitalization or price per share) ; (iii) a reduction by the Corporation of the Executive' s rate of Base Salary or target Annual Bonus opportunity as in effect immediately prior to such reduction; or (iv) any material breach of this Agreement by the Corporation; provided that Good Reason shall not exist pursuant to clause (i) or (iv) above unless the Executive shall have first provided written notice to the Corporation of the circumstances that would otherwise constitute Good Reason and the Corporation shall have failed to reasonably cure such circumstances promptly (and in no event more than 30 days after) its receipt of such notice; further provided that any termination for Good Reason must be made not later than 90 days after the circumstances giving rise to such claim of Good Reason are first known to exist (or first reasonably should have been known to exist) by the Executive.

As used herein, " Government Approval" shall mean any required filing, recordation, declaration, registration, permit, approval, license, order, statement or finding of suitability of any governmental or quasi-governmental entity, including any federal, state or local court, tribunal, administrative agency, commission, agency, body or self-regulatory organization.

As used herein, " Release" shall mean a written release substantially in the form attached hereto as Exhibit D, as the same may be modified solely to ensure the enforceability of such release in accordance with applicable federal, state and/or local law.

7.4

Resignation From Board . Upon or promptly following any termination of Executive' s employment with the Corporation, unless otherwise requested by the Board, the Executive agrees to resign from (1) each and every board of directors (or similar body, as the case may be) of the Corporation and each of its affiliates on which the Executive may then serve (if any), and (2) each and every office of the Corporation and each of its affiliates that the Executive may then hold, and all positions that she may have previously held with the Corporation and any of its affiliates.


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7.5

Means and Effect of Termination . Any termination of the Executive' s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other party. The notice of termination shall indicate the specific provision(s) of this Agreement relied upon in effecting the termination.

7.6

Section 409A Compliance . Notwithstanding anything in this Section 7 to the contrary, no amount payable as severance which constitutes a " deferral of compensation" within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code (the " Section 409A Regulations" ) shall be paid unless and until Executive incurres a " separation from service" within the meaning of the Section 409A Regulations. Furthermore, to the extent that the Executive is a " specified employee" within the meaning of the Section 409A Regulations as of the date of her separation from service, no amount that constitutes a deferral of compensation which is payable on account of her separation from service shall paid to before the date (the " Delayed Payment Date" ) which is first day of the seventh month after the date of her separation from service or, if earlier, the date of her death following such separation from service. All such amounts that would, but for this Section, become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date. For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments.

8.

Indemnification and Insurance . The Corporation will, at all times during the Term, maintain a directors and officers liability insurance policy covering the Executive. In addition, the Executive shall be entitled to the indemnification provisions of the Corporation' s Bylaws and Articles of Incorporation, and, in the event the Corporation' s officers or directors enter into written indemnification agreements with the Corporation, the Corporation and the Executive shall enter into an indemnification agreement substantially in the form of indemnification agreement used by the Corporation for its most senior executive officers or directors, as applicable.

9.

Miscellaneous .

9.1

Governing Law . This Agreement and all rights and obligations hereunder, including, without limitation, matters of construction, validity and performance, is made under and shall be governed by and construed in accordance with the internal laws of the State of Nevada, without regard to principles of conflict of laws.

9.2

Amendments . No amendment or modification of this Agreement shall be deemed effective unless made in writing and signed by all of the parties hereto.

9.3

No Waiver . No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel to enforce any provisions of this Agreement, except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or


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condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

9.4

Severability . To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect. In furtherance and not in limitation of the foregoing, should the duration or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid and enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities which may validly and enforceably be covered. The Executive acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisio ...