INTERNATIONAL GAME TECHNOLOGY
EXHIBIT 10.16 - EMPLOY AGREE WITH G. THOMAS BAKER
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<FILENAME>tbakeremployagmt102703.htm
<DESCRIPTION>EXHIBIT 10.16 - EMPLOY AGREE WITH G. THOMAS BAKER
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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EMPLOYMENT AGREEMENT</B> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THIS
EMPLOYMENT AGREEMENT</B> (this &#147;<U>Agreement</U>&#148;) is dated as of October 27, 2003 (the
&#147;<U>Effective Date</U>&#148;), and is by and between International Game Technology, a Nevada
corporation (the &#147;<U>Corporation</U>&#148;), and G. Thomas Baker (the
&#147;<U>Executive</U>&#148;). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>,
the Executive is currently employed by the Corporation; and </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, the
Corporation considers it important and in its best interest to foster the employment of
key management personnel and desires to retain the services of the Executive on the terms
and subject to the conditions in this Agreement; and </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>,
the Executive desires to continue employment by the Corporation to render services to the
Corporation on the terms and subject to the conditions in this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW,
THEREFORE</B>, 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: </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Employment</U></B>. The Corporation hereby employs the Executive in the position of
          Chairman, 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 Chairman, the Executive shall be
          responsible for: </FONT></P>


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     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=96% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>along with the members of the Corporation's Board of Directors (the "Board"), the governance of the Corporation;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>providing strategic consultation with the Corporation's Chief Executive Officer regarding balance sheet issues such as stock</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>buy backs, splits, dividend recommendations, debt refinancing and profit and loss issues such as acquisitions and</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>divestitures;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>providing Board members who are not employed by the Company the information that they reasonably will need or may otherwise</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>request to fulfill their duties for the Corporation;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>for as long as the Executive is the Chairman of the Board, presiding over quarterly and other special Board meetings;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>interfacing with significant Corporation shareholders and customers, as deemed appropriate by the Board;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>for as long as the Executive is Chairman of the Board, presiding over the Corporation's annual shareholders meetings;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>being reasonably available to the Corporation's Chief Executive Officer to oversee intra-company objectives as reasonably</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>requested by the Chief Executive Officer;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>directing the international operations of the Corporation, with Paulus Karskens (for as long as he is employed by the</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Corporation, or his successor) reporting directly to the Executive; and</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>such other duties, consistent with his position, as the Board may delegate to the Executive from time to time.</FONT></TD></TR>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Executive acknowledges the employment agreement entered into by Thomas J. Matthews on or
about the date hereof and agrees to the division of responsibilities and authorities
reflected therein and herein. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Executive shall report to the Board. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Executive
will devote his full business time and efforts to the performance of the Executive&#146;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
materially conflict or interfere with the Executive&#146;s duties and obligations under
this Agreement or the Executive&#146;s ability to perform his 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 he may serve (even if such service
has been approved by the Board) if the Executive&#146;s activities on such board (or other
body) conflict or interfere with the performance of the Executive&#146;s duties for the
Corporation. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
for any reason the Executive is not re-elected as a director or as Chairman of the Board,
but remains as an executive officer of the Corporation, such failure to re-elect the
Executive will not constitute a breach of this Agreement. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Term</U></B>. The &#147;<U>Term</U>&#148; shall, unless sooner terminated as provided herein,
          be a period of three (3) years commencing on the Effective Date and ending at
          the close of business on the day before the third anniversary of the Effective
          Date (day before the third anniversary of the Effective Date is referred to as
          the &#147;<U>Initial Extension Date</U>&#148;). Notwithstanding the preceding sentence,
          on Initial Extension Date and on each annual anniversary of the Initial
          Extension Date (the Initial Extension Date and each annual anniversary thereof
          is referred to as an &#147;<U>Extension Date</U>&#148;), the Term shall be
          automatically extended through and shall end with the close of business on the
          first (1st) anniversary of that Extension Date (for example, on the Initial
          Extension Date the Period of Employment shall be automatically extended through
          the close of business on the day before the fourth anniversary of the Effective
          Date), unless at least sixty (60) days prior to such Extension Date the
          Corporation or the Executive has provided the other with written notice that the
          Term shall not be extended or further extended, as the case may be. The term
          &#147;<U>Term</U>&#148; shall include any extension thereof pursuant to the preceding
          sentence. Provision of notice that the Term shall not be extended or further
          extended, as the case may be, shall not constitute a breach of this Agreement,
          and shall not entitle the Executive to severance benefits pursuant to Section 7. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Compensation</U></B>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.1 <I>Base Salary</I></B>. As compensation in
full for the services to be rendered by the Executive under this Agreement during the
Term, the Corporation shall pay to the Executive a base salary (&#147;<U>Base Salary</U>&#148;)
at an annualized rate determined as follows: </FONT></P>


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     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=96% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>from the Effective Date through and including December 6, 2003, the Executive's Base Salary shall be paid at an annualized</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>rate of Seven Hundred and Fifty Thousand Dollars ($750,000) per year;</FONT></TD></TR>
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     <TD COLSPAN=2>&nbsp;</TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>after December 6, 2003 and continuing for the balance of the Term, the Executive's Base Salary shall be paid at an</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>annualized rate of Six Hundred Thousand Dollars ($600,000) per year;</FONT></TD></TR>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Such Base Salary shall be paid in
accordance with the Corporation&#146;s normal payroll procedures and policies. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.2 <I>Bonus Opportunity</I></B>. For each
fiscal year of the Corporation during the Term, commencing with the fiscal year beginning
October 1, 2003, the Corporation shall grant to the Executive the opportunity to earn a
bonus up to a maximum amount of One Hundred and Fifty Percent (150%) of the
Executive&#146;s Base Salary for such year. Fifty Percent (50%) of each such bonus
opportunity will be based on the Corporation&#146;s annual year-over-year increase in net
operating income, Twenty Five Percent (25%) of each such bonus opportunity will be based
on the annual operating performance of the Corporation&#146;s international operations,
and Twenty Five Percent (25%) of each such bonus opportunity will be based on other
objectives established with respect to that year, each as determined by the Compensation
Committee of the Board. The specific bonus opportunity with respect to a particular fiscal
year will be established by the Compensation Committee prior to or within the first three
months of that fiscal year. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.3<I> Stock Option</I></B>. Concurrent with the
date this Agreement, the Corporation shall grant to the Executive an option to purchase
1,500,000 shares of common stock of the Corporation. Such stock option shall be granted
under the Corporation&#146;s 2002 Stock Incentive Plan (the &#147;<U>Plan</U>&#148;). Such stock
option shall be evidenced by a written option agreement in the form attached to this
Agreement as <U>Exhibit A </U>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 the
term of the option). The per share exercise price for such stock option shall be the
closing market price for a share of common stock of the Corporation on the New York Stock
Exchange on the date executed. The number of shares subject to, and the exercise price of,
the stock option shall be subject to adjustment as provided in the Plan (for example, to
reflect stock splits and similar changes in capitalization). The Corporation has, on the
date of this Agreement, delivered to the Executive a schedule of his outstanding stock
options granted by the Corporation, and the Corporation hereby acknowledges and affirms
the validity and effectiveness of each stock option set forth on such schedule (each such
option, however, subject to the terms and conditions of the applicable written stock
option agreement that evidences such grant and the terms and conditions of the applicable
Corporation incentive plan under which such option was granted; nothing in such schedule
modifies any of the terms or conditions of any such option). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.4 <I>Participation in Benefit Plans</I></B>.
During the Term, the Executive shall also be entitled to participate in all employee
benefit plans or programs of the Corporation to the extent that his position, title,
tenure, salary, age, health and other qualifications make him eligible to participate 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&#146;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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3<B>.5 <I>Withholding Taxes</I></B>. 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.6 <I>Continuing Medical Benefits</I></B>.
After the termination of the Executive&#146;s employment with the Corporation (regardless
of the reason for such termination), the Corporation shall continue to provide medical
benefits to the Executive on the following basis: </FONT></P>

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     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=96% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>subject to the next clause, the medical benefits provided shall be the same as or similar to the benefits provided by the</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Corporation to the Executive on the last day that he is employed by the Corporation;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the benefits shall extend only to the Executive; the Corporation shall have no obligation to provide any benefits to any</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>dependent of the Executive even if such a dependent is covered by the Corporation's medical program as an eligible</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>dependent of the Executive on the last day that the Executive is employed by the Corporation;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the benefits shall terminate upon the Executive's death;</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any co-pays or deductibles with respect to the medical benefits shall be paid or reimbursed by the Corporation (subject to</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Section 3.5);</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>such benefits shall be provided at no cost to the Executive (except for any taxes that may result from such benefits, which</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>taxes shall be the sole responsibility of the Executive; provided that the Corporation may require that the Executive</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>remit to the Corporation in cash the amount necessary to satisfy any applicable withholding obligations due with respect</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>to such benefits);</FONT></TD></TR>
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     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>such benefits shall be secondary to Medicare or any other insurance that may cover the Executive from time to time.</FONT></TD></TR>
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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Corporation may, in its sole
discretion and notwithstanding the foregoing, pay the Executive on a periodic basis an
amount equal to the reasonable cost to obtain such benefits for the corresponding period
in lieu of providing such benefits directly (the cost of such benefits to be determined
before giving effect to any taxes that may result from the Corporation making such payment
and such payment shall be subject to the tax withholding provisions of Section 3.5). For
the sake of clarity, the Corporation shall have no obligation to provide long or
short-term disability benefits or insurance, life insurance, or any other type of benefits
(other than the medical benefits expressly contemplated above) to the Executive following
the termination of the Executive&#146;s employment with the Corporation. The Executive
agrees to enroll in Medicare parts A and B as soon as he is eligible to do so. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Confidential Information</U></B>. 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 become acquainted with or will acquire or become acquainted with
          prior to the termination of the period of his 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 himself 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. Both during and after the Term, the
          Executive shall refrain from any acts or omissions that would reduce the value
          of such knowledge or information 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 confidentiality shall not, however,
          limit the Executive&#146;s disclosure of information (1) to the extent necessary
          to comply with government disclosure requirements or other applicable laws, (2)
          pursuant to subpoena or order of any judicial, legislative, executive,
          regulatory or administrative body, or for the Executive to enforce the
          Executive&#146;s rights under this Agreement, (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; and (4) pursuant to the Executive&#146;s normal reporting procedures
          as an executive of a publicly traded company (e.g., pursuant to Sarbanes-Oxley
          requirements or otherwise). </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>5.&nbsp;&nbsp;&nbsp;&nbsp;
         <U> Ventures</U></B>. 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&#146;s fee or other
          compensation in connection therewith other than the salary to be paid to the
          Executive as provided in this Agreement. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Noncompetition Covenant</U></B>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.1 <I>Agreement not to Compete</I></B>. The
Executive agrees that during the Term of this Agreement and, if the Executive has received
or is receiving severance benefits pursuant to Section 7, for the twenty-four (24) months
following the Term, the Executive shall not, without the written consent of the Board,
directly or indirectly, engage in competition with the Corporation in any manner or
capacity (e.g., as an advisor, principal, agent, partner, officer, director, stockholder,
employee, member of any association, or otherwise) in any phase of the business which the
Corporation is conducting during the Term, including the design, development, manufacture,
distribution, marketing, leasing, financing or selling of accessories, devices, or systems
related to the products or services being sold by the Corporation; provided, however, that
nothing herein shall prevent the Executive from investing as less than a one-half percent
(0.5%) stockholder in the securities of any company listed on a national securities
exchange or quoted on an automated quotation system if such ownership is held indirectly
through a mutual fund or similar investment. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.2 <I>Scope of Covenant</I></B>. The
obligations of the Executive under Section 6.1 shall apply to any geographic area in which
the Corporation has engaged in business during the Term. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.3 <I>Non-Solicitation</I></B>. The Executive
agrees that during the Term and for a period of twenty-four (24) months thereafter, he
will not, without the prior written approval of the Board, hire, solicit or endeavor to
entice away from the Corporation or, following termination of the Executive&#146;s
employment, otherwise interfere with the relationship of the Corporation with 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&#146;s own employment by the Corporation, or 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. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.&nbsp;&nbsp;&nbsp;&nbsp;
         <U> Termination</U></B>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.1 <I>Termination of Employment</I></B>. The
Executive&#146;s employment by the Corporation, and the Term, may be terminated at any
time during the Term by the Corporation: (1) with Cause (as such term is defined below),
or (2) without Cause, or (3) in the event of the Executive&#146;s death, or (4) in the
event of the Executive&#146;s Disability (as such term is defined below) (in the case of
Disability, the termination shall be effective ten (10) days after notice thereof is given
to the Executive). The Executive&#146;s employment by the Corporation, and the Term, may
be terminated at any time during the Term by the Executive, on no less than sixty (60)
days prior written notice to the Corporation. After the expiration of the Term, the Board
may continue the employment of the Executive and the Executive may accept the employment
on an at-will basis. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.2 <I>Benefits Upon Termination</I></B>. If the
Executive&#146;s employment by the Corporation is terminated during the Term for any
reason by the Corporation or by the Executive, or upon or following the expiration of the
Term, 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: </FONT></P>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          the Corporation shall pay the Executive (or, in the event of his death, the
          Executive&#146;s estate) any Accrued Obligations (as such term is defined
          below); and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if, during the Term (but not upon or following the expiration of the Term), the
          Executive&#146;s employment is terminated either by the Corporation or the
          Executive due to the death or Disability of the Executive, by the Corporation
          other than for Cause (as such term is defined below), or by the Executive for
          any reason following (but not prior to) a Change in Control (as such term is
          defined below), the Corporation shall, subject to the conditions set forth in
          the following paragraph, also pay the Executive (or, in the event of the
          Executive&#146;s death, the Executive&#146;s estate) a severance benefit equal
          to two (2) times the Executive&#146;s highest annualized rate of Base Salary in
          effect at any time during the Term. Subject to the conditions set forth in the
          following paragraph, the aggregate amount of such severance benefit shall be
          paid in a series of twenty-four (24) substantially equal monthly installments
          (without interest, with each installment equal to approximately 1/24th of the
          aggregate amount of the severance benefit) commencing with the month following
          the month in which the Executive&#146;s employment by the Corporation terminates
          and continuing for the following twenty-three months until paid in full (subject
          to the Executive&#146;s compliance with the following paragraph and the
          provisions of Section 6); and </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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     <TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
          <TR VALIGN=TOP>
          <TD ALIGN=LEFT WIDTH=3%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c) </FONT></TD>
          <TD WIDTH=97%><P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          if, during the Term (but not upon or following the expiration of the Term), the
          Executive&#146;s employment is terminated by the Corporation without Cause or by
          the Executive for any reason following (but not prior to) a Change in Control
          (and, in each case, other than due to either (1) the Executive&#146;s death, or
          (2) a good faith determination by the Board that the Executive has a
          Disability), the Corporation shall, subject to the conditions set forth in the
          following paragraph, also pay the Executive a one-time lump sum amount equal to
          a pro-rata portion of the bonus the Executive would have been entitled to under
          Section 3.2 for the year in which the termination of the Executive&#146;s
          employment occurred (the amount of such pro-rata bonus to be determined by the
          Board in its reasonable discretion). </FONT></P></TD>
          </TR>
          </TABLE>
          <BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
a condition precedent to any Corporation obligation to the Executive pursuant to Section
7.2(b) or (c) above, the Executive (or, in the event of his death, the Executive&#146;s
estate on behalf of the Executive) shall, upon or promptly following his 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 7.2(b) or (c) above unless and until the Release
contemplated by this paragraph becomes irrevocable by the Executive in accordance with all
applicable laws, rules and regulations. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Executive agrees that the payments contemplated by Section 7.2 shall constitute the
exclusive and sole remedy for any termination of his employment and the Executive
covenants not to assert or pursue any other remedies, at law or in equity, with respect to
any termination of employment. 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
foregoing provisions of this Section 7.2 shall not affect: (1) the Executive&#146;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&#146;s rights under the Consolidated Omnibus Budget Reconciliation Act to
continue participation in medical, dental, hospitalization and life insurance coverage;
(3) the Executive&#146;s receipt of benefits otherwise due in accordance with the terms of
the Corporation&#146;s Profit Sharing Plan (401(k) plan) (if any); (4) the
Executive&#146;s receipt of benefits otherwise due in accordance with the terms of the
Corporation&#146;s Executive Deferred Compensation Plan (nonqualified deferred
compensation plan) (if any); (5) any rights that the Executive may have under and with
respect to a stock option or restricted stock award, to the extent that such award was
granted before the date that the Executive&#146;s employment by the Corporation terminates
and to the extent expressly provided in the written agreement evidencing such award; or
(6) the continuing medical benefit obligation to the Executive pursuant to Section 3.7. </FONT></P>

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<A NAME=A002></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.3 <I>Certain Defined Terms</I></B>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used herein, &#147;<U>Accrued Obligations</U>&#148; means: </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=760>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=96% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any Base Salary that had accrued but had not been paid prior to the date of termination; and</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any bonus that had become payable to the Executive with respect to a fiscal year ended prior to the termination of the</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Executive's employment but had not actually been paid; and</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any reimbursement of reasonable business expenses incurred by the Executive prior to the termination of the Executive's</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>employment and in accordance with the Corporation's expense reimbursement policies and which had not previously</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>been paid.</FONT></TD></TR>
</TABLE>




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<A NAME=A003></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used herein, &#147;<U>Cause</U>&#148; means: </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=760>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=96% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Executive's willful and material failure to perform his duties hereunder (other than any such failure due to the</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Executive's physical or mental illness), or the Executive's willful and material breach of his obligations</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>hereunder;</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Executive's engaging in willful and serious misconduct that has caused or is reasonably expected to result in material</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>injury to the Corporation;</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Executive's being convicted of, or entering a plea of guilty or nolo contendre to, a crime that constitutes a felony; or</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Executive's failure or inability to obtain or retain any license required to be obtained or retained by him in any</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>jurisdiction in which the Corporation does or proposes to do business.</FONT></TD></TR>
</TABLE>




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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used herein, &#147;<U>Change in Control</U>&#148; has the same meaning as the term &#147;Change
in Control&#148; under the Corporation&#146;s 2002 Stock Incentive Plan, with the
following modifications: (a) clause (4) of the definition of such term in the 2002 Stock
Incentive Plan shall not apply, (b) the phrase &#147;less than 50%&#148; in clause (2) of
the definition of such term in the 2002 Stock Incentive Plan is replaced with the phrase
&#147;less than 60%,&#148; and (c) the phrase &#147;more than 50%&#148; in clause (3) of
the definition of such term in the 2002 Stock Incentive Plan is replaced with the phrase
&#147;more than 40%.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used herein, &#147;<U>Disability</U>&#148; 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 the Executive&#146;s 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 his medical personnel, as well as information from medical personnel (or
others) selected by the Corporation or its insurers. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
used herein, &#147;<U>Release</U>&#148; shall mean a written release, discharge and covenant not
to sue entered into by the Executive on behalf of himself, his descendants, dependents,
heirs, executors, administrators, assigns, and successors, and each of them, of and in
favor of the Corporation, its parent (if any), the Corporation&#146;s subsidiaries and
affiliates, past and present, and each of them, as well as its and their trustees,
directors, officers, agents, attorneys, insurers, employees, stockholders, members,
representatives, assigns, and successors, past and present, and each of them (the
&#147;releasees&#148;), with respect to and from any and all claims, wages, demands,
rights, liens, agreements, contracts, covenants, actions, suits, causes of action,
obligations, debts, costs, expenses, attorneys&#146; fees, damages, judgments, orders and
liabilities of whatever kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected, and whether or not concealed or hidden, which he may
then own or hold or he at any time theretofore owned or held or may in the future hold as
against any or all of said releasees, arising out of or in any way connected with the
Executive&#146;s employment relationship with the Corporation and each of its subsidiaries
with which the Executive has had such a relationship, or the termination of his employment
or any other transactions, occurrences, acts or omissions or any loss, damage or injury
whatever, known or unknown, suspected or unsuspected, resulting from any act or omission
by or on the part of said releasees, or any of them, committed or omitted prior to the
date of such release including, without limiting the generality of the foregoing, any
claim under Section 1981 of the Civil Rights Act of 1866, Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities
Act, the Family and Medical Leave Act of 1993, the California Fair Employment and Housing
Act, the California Family Rights Act, any other claim under any other federal, state or
local law or regulation, and any other claim for severance pay, bonus or incentive pay,
sick leave, holiday pay, vacation pay, life insurance, health or medical insurance or any
other fringe benefit, medical expenses, or disability (except that such release shall not
constitute a release of any Corporation obligation to the Executive that may be due to the
Executive pursuant to Section 7.2(b) or (c), as applicable, upon the Corporation&#146;s
receipt of such release or any obligations referred to in the last paragraph of Section
7.2). The Release shall also contain the Executive&#146;s warrant that he has not
theretofore assigned or transferred to any person or entity, other than the Corporation,
any released matter or any part or portion thereof and that he will defend, indemnify and
hold harmless the Corporation and the aforementioned releasees from and against any claim
(including the payment of attorneys&#146; fees and costs actually incurred whether or not
litigation is commenced) that is directly or indirectly based on or in connection with or
arising out of any such assignment or transfer made, purported or claimed. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.4 <I>Resignation From Board</I></B>. Upon or
promptly following any termination of Executive&#146;s employment with the Corporation,
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 he may
have previously held with the Corporation and any of its affiliates. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.5 <I>Means and Effect of Termination</I></B>.
Any termination of the Executive&#146;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. </FONT></P>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Miscellaneous</U></B>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.1 <I>Governing Law</I></B>. 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.2 <I>Amendments</I></B>. No amendment or
modification of this Agreement shall be deemed effective unless made in writing and signed
by all of the parties hereto. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.3 <I>No Waiver</I></B>. 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 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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.4 <I>Severability</I></B>. 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 provisions valid and
enforceable to the maximum extent (not exceeding its express terms) possible under
applicable law. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.5 <I>Assignment</I></B>. This Agreement shall
not be assignable, in whole or in part, by either party without the written consent of the
other party. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.6 <I>Injunctive Relief</I></B>. Each party
agrees that it would be difficult to compensate the non-breaching party fully for damages
for any violation of any provision set forth in Section 4 or Section 6 hereof.
Accordingly, each party specifically agrees that the other party shall be entitled to
temporary and permanent injunctive relief to enforce the provisions of Sections 4 and 6 of
this Agreement and that such relief may be granted without the necessity of proving actual
damages. This provision with respect to injunctive relief shall not, however, diminish the
right of the non-breaching party to claim and recover damages in addition to injunctive
relief. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.7 <I>Arbitration</I></B>. Any controversy or
claim arising out of or relating to this Agreement or the Executive&#146;s employment by
the Corporation shall, except for claims for injunctive relief set out in paragraph 8.6
above, be settled by binding arbitration, with a single neutral arbitrator, in accordance
with the rules of the American Arbitration Association relating to employment. The proper
venue for any such action is Washoe County, Nevada. In any action to enforce this
Agreement, the Executive and the Corporation each agree to accept service of process by
mail at its address, as applicable, as set forth in Section 8.8 below (or at any different
address of which the Executive has notified the Corporation, or the Corporation has
notified the Executive, as applicable, in writing). In any action in which service is made
pursuant to this paragraph, the Executive and the Corporation each waive any challenge to
the personal jurisdiction of the American Arbitration Association. Any judgment on the
award rendered by the arbitrator may be entered in any court having jurisdiction thereof.
In reaching his or her decision, the arbitrator shall have no authority to change or
modify any provision of this Agreement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.8<I> Notices</I></B>. All notices, requests,
demands and other communications required or permitted under this Agreement shall be in
writing and shall be deemed to have been duly given and made if (1) delivered by hand, (2)
otherwise delivered against receipt therefor, or (3) sent by registered or certified mail,
postage prepaid, return receipt requested. Any notice shall be duly addressed to the
parties as follows: </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=44% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If to the Corporation:</FONT></TD>
     <TD WIDTH=30% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If to the Executive:</FONT></TD>
     <TD WIDTH=20% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=6% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD COLSPAN=4>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>International Game Technology</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>G. Thomas Baker</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9295 Prototype Drive</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9295 Prototype Drive</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reno, Nevada 89521</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reno, Nevada 89521</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Attn: General Counsel</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
</TABLE>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any party may alter the address to
which communications or copies are to be sent by giving notice of such change of address
in conformity with the foregoing provisions. Any communication shall be effective when
delivered by hand, when otherwise delivered against receipt therefor, or five (5) business
days after being mailed in accordance with the foregoing. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.9 <I>Section Headings</I></B>. The section
headings of, and titles of paragraphs and subparagraphs contained in, this Agreement are
for the purpose of convenience only, and they neither form a part of this Agreement nor
are they to be used in the construction or interpretation thereof. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.10 <I>Provisions that Survive
Termination</I></B>. The provisions of Sections 3.5, 3.6, 4, 5, 6, 7 and 8 shall survive any
termination of the Term. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.11 <I>Counterparts</I></B>. This Agreement may
be executed in any number of counterparts, each of which shall be deemed an original as
against any party whose signature appears thereon, and all of which together shall
constitute one and the same instrument. This Agreement shall become binding when one or
more counterparts hereof, individually or taken together, shall bear the signatures of all
of the parties reflected hereon as the signatories. Photographic copies of such signed
counterparts may be used in lieu of the originals for any purpose. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.12 <I>Entire Agreement</I></B>. This Agreement
embodies the entire agreement of the parties hereto respecting the matters within its
scope. This Agreement supersedes all prior and contemporaneous agreements of the parties
hereto that directly or indirectly bears upon the subject matter hereof. Any prior
negotiations, correspondence, agreements, proposals or understandings relating to the
subject matter hereof shall be deemed to have been merged into this Agreement, and to the
extent inconsistent herewith, such negotiations, correspondence, agreements, proposals, or
understandings shall be deemed to be of no force or effect. There are no representations,
warranties, or agreements, whether express or implied, or oral or written, with respect to
the subject matter hereof, except as expressly set forth herein. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything in the foregoing paragraph to the contrary, the indemnification agreement
previously entered into by and between the Corporation and the Executive is outside of the
scope of the foregoing integration provisions and shall continue in effect in accordance
with its terms. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN
WITNESS WHEREOF</B>, the Executive and the Corporation have executed this Agreement as of the
date set forth in the first paragraph. </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=59% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>INTERNATIONAL GAME TECHNOLOGY</B></FONT></TD>
     <TD WIDTH=41% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>EXECUTIVE</B></FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:<U>/s/ Maureen T. Mullarkey</U></FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:<U>/s/ G. Thomas Baker&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Its:<U>Chief Financial Officer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Its:<U>Chairman&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD></TR>
</TABLE>


<BR>
<BR>
<HR>
<BR>

<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U><B>EXHIBIT A</B></U> </FONT></P>

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<A NAME=A004></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>INTERNATIONAL GAME
TECHNOLOGY <BR>2002 STOCK INCENTIVE PLAN<BR> NONQUALIFIED STOCK OPTION
AGREEMENT </B></FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THIS
NONQUALIFIED STOCK OPTION AGREEMENT</B> (this &#147;<U><B>Option</B> Agreement</U>&#148;) by and between
<B>INTERNATIONAL GAME TECHNOLOGY</B>, a Nevada corporation (the &#147;<U>Corporation</U>&#148;), and
G. Thomas Baker (the &#147;<U>Executive</U>&#148;) evidences the nonqualified stock option
(the &#147;<U>Option</U>&#148;) granted by the Corporation to the Executive as to the number of
shares of the Corporation&#146;s Common Stock first set forth below. </FONT></P>


<HR WIDTH=85% ALIGN=CENTER>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=52% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Number of Shares of Common Stock:</B><SUP>1</SUP>&nbsp;&nbsp; <B>1,500,000</B></FONT></TD>
     <TD WIDTH=10% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=38% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Award Date:&nbsp;&nbsp;&nbsp; October 27, 2003</B></FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Exercise Price per Share:</B><SUP>1</SUP></FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>$31.57</B></FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Expiration Date:</B><SUP>2 </SUP>&nbsp;&nbsp;<B>October 27, 2013</B></FONT></TD></TR>

</TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> <B><U>Vesting</U></B><SUP>1,2</SUP>&nbsp;
The Option shall vest with respect to 300,000 shares of Common Stock subject to
   the Option on the first anniversary of the Award Date, 525,000 shares of Common Stock
   subject to the Option on the second anniversary of the Grant Date, and 675,000 shares of
   Common Stock subject to the Option on the third anniversary of the Grant Date.</FONT></TD></TR>
</TABLE>
<BR>
<HR WIDTH=85% ALIGN=CENTER>



<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Option is granted under the International Game Technology 2002 Stock Incentive Plan (the
&#147;<U>Plan</U>&#148;) and subject to the Terms and Conditions of Nonqualified Stock Option
(the &#147;<U>Terms</U>&#148;) attached to this Option Agreement (incorporated herein by this
reference) and to the Plan. The Option has been granted to the Executive pursuant to, and
in satisfaction of the Corporation&#146;s obligation under, Section 3.3 of the Employment
Agreement by and between the Executive and the Corporation dated as of October 27, 2003
(the &#147;<U>Employment Agreement</U>&#148;). The Option has been granted in addition to, and
not in lieu of, any other form of compensation otherwise payable or to be paid to the
Executive. 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
Executive acknowledges receipt of a copy of the Terms, the Plan, and the Prospectus for
the Plan. </FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>"EXECUTIVE"</B></FONT></TD>
     <TD WIDTH=50% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>INTERNATIONAL GAME</B></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>TECHNOLOGY</B>, a Nevada corporation</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>/s/G. Thomas Baker&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By:<U>/s/ Maureen T. Mullarkey&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Signature</I></FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Print Name:<U>Maureen T. Mullarkey&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>G. Thomas Baker</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>Print Name</I></FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Title:<U>Chief Financial Officer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></FONT></TD></TR>
</TABLE>

<BR>

<!-- MARKER FORMAT-SHEET="Head Minor Center" FSL="Default" -->
<A NAME=A006></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CONSENT OF SPOUSE </B></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
consideration of the Corporation&#146;s execution of this Option Agreement, the
undersigned spouse of the Executive agrees to be bound by all of the terms and provisions
hereof and of the Plan. </FONT></P>


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<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>________________________________</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>________________</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=85% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Signature of Spouse</FONT></TD>
     <TD WIDTH=15% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date</FONT></TD></TR>
</TABLE>

<BR>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#141; </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Check this box and initial here ______ to indicate that you are not married and that the
consent of your spouse is therefore not required. </FONT></TD>
</TR>
</TABLE>
<BR>

<HR WIDTH=25% ALIGN=LEFT>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>1</SUP>&nbsp;&nbsp;&nbsp; Subject to adjustment under Section 6.2 of the Plan
<BR><SUP>2</SUP>&nbsp;&nbsp;&nbsp; Subject to early termination and acceleration pursuant to Section 4 of this Option Agreement.</FONT></P>

<BR>
<BR>
<HR>

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<A NAME=A007></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>TERMS AND CONDITIONS OF
NONQUALIFIED STOCK OPTION</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>1.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Vesting; Limits on Exercise</U></B>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
set forth on the cover page of this Option Agreement, the Option shall vest and become
exercisable in 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. </FONT></P>


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<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=96% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Cumulative Exercisability</U>. To the extent that the Option is vested and exercisable, the</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Executive has the right to exercise the Option (to the extent not previously exercised),</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>and such right shall continue, until the expiration or earlier termination of the Option.</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>No Fractional Shares</U>. Fractional share interests shall be disregarded, but may be cumulated.</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Minimum Exercise</U>. No fewer than 1001 shares of Common Stock may be purchased at any one time, </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>unless the number purchased is the total number at the time exercisable under the Option.</FONT></TD></TR>
</TABLE>



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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>2.&nbsp;&nbsp;&nbsp;&nbsp;
         <U> Continuance of Employment Required; No Employment Commitment</U>.</B> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as expressly provided in Section 4 below, 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 Executive to any proportionate vesting or avoid or mitigate a termination of rights
and benefits upon or following a termination of employment as provided in (and subject to
the limited exceptions expressly set forth in) Section 4 below. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Nothing
contained in this Option Agreement or the Plan constitutes an employment or service
commitment by the Corporation or any Subsidiary, affects the Executive&#146;s status as an
employee at will who is subject to termination without cause, confers upon the Executive
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 Executive&#146;s other compensation. Nothing in the preceding sentence
modifies, however, any contractual rights that the Executive may have pursuant to a
written agreement with the Corporation (including, but not necessarily limited to, the
Employment Agreement) other than this Option Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>3.&nbsp;&nbsp;&nbsp;&nbsp;
         <U> Method of Exercise of Option</U>.</B> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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: </FONT></P>


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<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=96% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>payment in full for the Exercise Price of the shares to be purchased, in cash or by electronic funds</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>transfer to the Corporation, or by check payable to the order of the Corporation, subject to such</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>specific procedures or directions as the Committee may establish;</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>satisfaction of the tax withholding provisions of Section 6.5 of the Plan; and</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>any written statements or agreements required pursuant to Section 6.4 of the Plan.</FONT></TD></TR>
</TABLE>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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: </FONT></P>



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<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=8% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=92% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>shares of Common Stock already owned by the Executive, valued at their Fair Market Value on the </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>exercise date, <U>provided</U>, <U>however</U>, that any shares acquired directly from the Corporation (upon </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> exercise of a stock option or otherwise) must have been owned by the Executive for at least six (6)  </FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>months before the date of such exercise; and/or</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>irrevocable instructions to a broker to, upon exercise of the Option, promptly sell a sufficient number</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>of shares of Common Stock acquired upon exercise of the Option and deliver to the Corporation the</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>amount necessary to pay the Exercise Price (and, if applicable, the amount of any related tax</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>withholding obligations).</FONT></TD></TR>
</TABLE>



<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>4.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Early Termination&nbsp;of&nbsp;Option; Possible Acceleration of Vesting</U>.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as expressly provided herein, 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
Executive ceases to be employed by the Corporation or a Subsidiary, or (2) the Option
terminates pursuant to Section 6.2 of the Plan. </FONT></P>


<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=96% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Change in Control</B>. If a Change in Control (as such term is defined in the Employment Agreement)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>occurs, the then outstanding and previously unvested portion of the Option shall automatically become</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>vested upon such Change in Control. The foregoing sentence does not limit or otherwise affect</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the Corporation's ability to terminate the Option pursuant to Section 6.2 of the Plan to the</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>extent that the Option is then vested.</FONT></TD></TR>
<TR>
     <TD COLSPAN=2>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Death or Disability</B>. If the Executive ceases to be employed by the Corporation or a Subsidiary due to</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the Executive's death or Disability (as such term is defined in the Employment Agreement), then:</FONT></TD></TR>
</TABLE>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o</FONT></TD>
     <TD WIDTH=91% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the outstanding and previously unvested portion of the Option shall</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> &nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>automatically become fully vested as of the date of such termination of employment,</FONT></TD></TR>
<TR>
     <TD COLSPAN=3>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the Option shall continue to be exercisable for only one year after such termination</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>of employment(subject to earlier termination pursuant to Section 6.2 of the Plan and</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>subject to the maximum ten-year term of the Option), and</FONT></TD></TR>
<TR>
     <TD COLSPAN=3>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the Option, to the extent not exercised prior to the expiration of such period,</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>shall automatically terminate the end of such period.</FONT></TD></TR>
</TABLE>

<BR>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=96% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Termination by the Company For Cause</B>. If the Executive ceases to be employed by the Corporation or a</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subsidiary and such termination is the result of a termination by the Corporation or a</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subsidiary for Cause (as such term is defined in the Employment Agreement), then the</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>outstanding portion of the Option (whether or not vested) shall automatically terminate as of</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>such termination of employment.</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD></TR>

<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Termination by the Company Without Cause</B>. If the Executive ceases to be employed by the Corporation or</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a Subsidiary and such termination is the result of a termination by the Corporation or a</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subsidiary other than for Cause (as such term is defined in the Employment Agreement), and</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>other than due to the Executive's death or Disability (as such term is defined in the</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Employment Agreement), then:</FONT></TD></TR>
</TABLE>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o</FONT></TD>
     <TD WIDTH=91% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the outstanding and previously unvested portion of the Option shall</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> &nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>automatically become fully vested as of the date of such termination of employment,</FONT></TD></TR>
<TR>
     <TD COLSPAN=3>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the Option shall continue to be exercisable for 90 days after such termination</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>of employment(subject to earlier termination pursuant to Section 6.2 of the Plan and</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>subject to the maximum ten-year term of the Option), and</FONT></TD></TR>
<TR>
     <TD COLSPAN=3>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the Option, to the extent not exercised prior to the expiration of such period,</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>shall automatically terminate the end of such period.</FONT></TD></TR>
</TABLE>

<BR>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></TD>
     <TD WIDTH=96% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Termination by the Executive</B>. If the Executive ceases to be employed by the Corporation or a Subsidiary</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>and such termination is the result of a resignation, retirement, quit or other termination of</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>employment by the Executive, other than due to the Executive's death or Disability (as such</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>term is defined in the Employment Agreement), then:</FONT></TD></TR>
</TABLE>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=600>
<TR VALIGN=Bottom>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH>
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=5% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=4% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o</FONT></TD>
     <TD WIDTH=91% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the outstanding and previously unvested portion of the Option shall</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> &nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>automatically terminate as of the date of such termination of employment,</FONT></TD></TR>
<TR>
     <TD COLSPAN=3>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>the Option, to the extent vested on the date of such termination of employment, shall</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>continue to be exercisable for only 90 days after such termination of employment (subject</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>to earlier termination pursuant to Section 6.2 of the Plan and subject to the maximum ten-year term of the Option.) and</FONT></TD></TR>
<TR>
     <TD COLSPAN=3>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>such vested portion of the Option, to the extent not exercised prior to the expiration of</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>such period, shall automatically terminate the end of such period.</FONT></TD></TR>
</TABLE>


<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>5.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Non-Transferability and Other Restrictions</U></B>. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Option and any other rights of the Executive under this Option Agreement or the Plan are
nontransferable and exercisable only by the Executive, except as set forth in Section 1.9
of the Plan. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>6.&nbsp;&nbsp;&nbsp;&nbsp;
          <B><U>Notices</U></B></B>. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 Executive at the address reflected or last reflected on the Corporation&#146;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 Executive is no longer employed by the Corporation, notice to
the Executive 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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>7.&nbsp;&nbsp;&nbsp;&nbsp;
         <U> Plan</U></B>. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Option and all rights of the Executive under this Option Agreement are subject to, and the
Executive 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; provided, however, that in the event of a conflict or inconsistency
between the provisions of the Employment Agreement and the terms and conditions of either
the Option Agreement or the Plan, the provisions of the Employment Agreement shall govern.
The Executive agrees to be bound by the terms of the Plan and of this Option Agreement.
The Executive 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 Executive
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 <U>after</U> the date hereof. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>8.&nbsp;&nbsp;&nbsp;&nbsp;
         <U> Entire Agreement</U></B>. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 defined terms set forth in
the Employment Agreement that are specifically referred to herein are outside of the scope
of the preceding sentence; provided that all other provisions and aspects of the
Employment Agreement are within the scope of the preceding sentence as to the Option. The
Plan and this Option Agreement may be amended pursuant to Section&nbsp;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 Executive 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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush" FSL="Default" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>9.&nbsp;&nbsp;&nbsp;&nbsp;
          <U>Governing Law</U></B>. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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. Any
controversy or claim arising out of or relating to this Option Agreement or the Option
shall be settled by binding arbitration, with a single neutral arbitrator, in accordance
with the rules of the American Arbitration Association relating to employment. The proper
venue for any such action is Washoe County, Nevada. In any action to enforce this Option
Agreement, the Executive and the Corporation each agree to accept service of process by
mail at its address, as applicable, as set forth in the Employment Agreement (or at any
different address of which the Executive has notified the Corporation, or the Corporation
has notified the Executive, as applicable, in writing). In any action in which service is
made pursuant to this paragraph, the Executive and the Corporation each waive any
challenge to the personal jurisdiction of the American Arbitration Association. Any
judgment on the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. In reaching his or her decision, the arbitrator shall have no
authority to change or modify any provision of this Agreement. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left" FSL="Default" -->
<A NAME=A008></A>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>10. <U>Other Restrictions</U></B>. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
consideration of the granting of this Option, the Executive 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 Executive 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 Executive 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. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Large Indent" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
well, should Executive receive severance benefits pursuant to an Employment Agreement that
provides for a non-compete period that exceeds one (1) year, that Employment Agreement
shall govern. </FONT></P>

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