IGT urges shareholders to vote for its experienced director nominees

The Board recommends that shareholders vote FOR IGT's eight highly qualified and experienced directors on the WHITE proxy card, and reject the three candidates nominated by Ader Investment Management, on behalf of former IGT Chairman and CEO Charles N. Mathewson.
 
IGT Board's letter highlights the strong performance of the company: “Over the past three years, IGT's Board of Directors and management team have successfully charted a course for the company that is both strategically and financially sound. As a result, IGT's financial performance has improved, and significant capital has been returned directly to shareholders. Today, the company is positioned for sustained growth through continued investment in its core electronic gaming business and disciplined investments in related business opportunities and new markets.”

It then adds that shareholders will face an important decision about the future of their investment in the firm. “Ader Investment Management, on behalf of former IGT Chairman and CEO Charles N. Mathewson and Richard H. Pickup, a longtime associate of Mr. Mathewson, has nominated three directors for election to the company's Board at the 2013 Annual Meeting. The Mathewson Group has indicated that it has beneficial ownership of approximately 3% of total IGT shares and intends to nominate Mathewson and two others”.

The letter then stated: “Your Board comprises eight highly qualified and experienced directors – Paget L. Alves, Janice Chaffin, Greg Creed, Patti S. Hart, Robert J. Miller, David E. Roberson, Vincent L. Sadusky and Philip G. Satre. In the coming weeks, you will receive the company's proxy materials, including a WHITE proxy card. The IGT Board recommends that you vote FOR all of IGT's directors on the WHITE proxy card in advance of the company's 2013 Annual Meeting. The Board and management team remain confident that the continued execution of the IGT growth strategy will create significant shareholder value.”

Then it also stressed that, under this management team, IGT's financial performance is strong and continues to improve, and named several items:

•In 2012, IGT increased total revenues by more than 10% to over us$ 2.1 billion and grew adjusted earnings per share from continuing operations by 12% to us$ 1.04.1
•IGT's fourth quarter 2012 revenues were the highest in four years, and North American machine sales revenues were the highest in eight years.
•The company's North American ship share is currently at 37%, its highest level since 2008.
•IGT maintains its industry leadership, holding a 31% revenue share in an expanding market.
•In 2013, the company expects to build on this momentum and to deliver its fourth consecutive year of double-digit growth in adjusted earnings per share from continuing operations.
•IGT is using its expertise, content and vision to innovate and deliver industry-altering firsts for its core business, developing technologies that elevate its core gaming experience (MLD, SoundSync, Joy Stick play and Center Stage); and enhance operators' management and delivery systems (sbX, Cloud, and Advantage System enhancements).
•IGT also advanced its position as an innovator and leader in online social casino gaming with the acquisition of Double Down Interactive. Double Down provides IGT with an industry-leading position in the rapidly growing online social casino market.

The Board also said that IGT takes a balanced approach to investing in its business and returning capital to shareholders. “Since 2009, the company has prudently allocated capital to drive growth and return capital to shareholders. IGT has invested nearly us$ 800 million on Research and Development, the largest such investment in the industry. It has strategically deployed us$ 750 million in capital to enhance its core electronic gaming machine business.”

It added that IGT has strategically invested us$ 350 million for growth in new businesses and markets and that, over the last three years, IGT has returned more than us$ 860 million of capital to shareholders. “In fiscal 2012 alone, IGT returned us$ 546 million in cash to shareholders, and an additional us$ 600 million remains available under the company's current share repurchase authorization.”

IGT's Board remarks that it is acting in the best interests of all shareholders. “Nominating and Corporate Governance Committee regularly reviews the representation of relevant skills and experience on the Board and considers new, qualified candidates in this regard. As a result, the company has substantially reconstituted its eight-member Board, adding six new independent directors over the last five years.”

“IGT's seven independent directors have considerable public company experience and a wide range of views and backgrounds, encompassing, among other fields, the gaming industry, the financial sector, consumer sales and marketing, technology and compliance.
The company is committed to, and has implemented, leading corporate governance practices. IGT has a strong strategy to take the company forward – do not allow Mr. Mathewson to take us backward,” the board advices in the letter.

“The company believes that its strategy is the right one to propel IGT into the future and that the election of Mathewson and his associates would be a step in the wrong direction.”
It then states the facts about Mathewson's leadership. “Since Mathewson last served as CEO, the industry and technology have changed dramatically.”

“IGT's performance from 2004 through 2009 declined precipitously, as evidenced by a:
15% decrease in total revenues, 56% decrease in operating income, 48% decrease in operating income margins, 44% decline in North American ship share, decrease of over 60,000 units shipped annually, 42% decline in gaming operations yield and 26% decline in revenue per employee,” it wrote.

“Mr. Mathewson's influence and Mr. Matthews' failed strategies wiped out over us$ 6.6 billion or 70% of IGT's market capitalization, leading to the resignation of Mr. Matthews in 2009.  In 2010, with an eye towards enhancing corporate governance, the Board declined to re-nominate Mr. Mathewson's son, Robert, for the slate of directors to stand for election at the 2011 Annual Meeting of Shareholders. The Board also rejected Mr. Mathewson's repeated requests for reimbursement of personal expenses and terminated all perquisites. Lastly, contrary to Mr. Mathewson's recent statements, he does not qualify to serve as an independent Board member under the New York Stock Exchange rules, as he was an employee of IGT through September 16, 2010.”

“The Board believes that the other two candidates the Mathewson Group intends to nominate – Raymond J. Brooks and Daniel B. Silvers – would negatively impact the strength of IGT's Board. IGT believes that the nominees do not offer diversity or experience, nor do they offer any unique or necessary skills that are not already present on the Board.”

The Board then affirms that it believes its Directors are best equipped to protect and grow shareholders’ investment in IGT. “The IGT Board is focused on the future. The company is executing its strategy, meeting its financial objectives and positioning itself for long-term industry leadership and profitability. IGT's highly experienced, engaged and independent Board is acting in the best interests of all shareholders. In conclusion, the IGT Board recommends that you vote FOR all of IGT's directors on the WHITE proxy card in advance of the company's 2013 Annual Meeting,” said Philip G. Satre, Chairman of the Board, and Patti S. Hart CEO, on behalf of IGT Board of Directors.