Case 3:09-cv ECR-RAM Document 36 Filed 03/10/10 Page 1 of 71 DISTRICT OF NEVADA

Transcription

1 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of GEOFFREY WHITE, Esq. Nevada Bar No. 0 WHITE & WETHERALL, LLP Lakeside Drive Reno, Nevada 0 Telephone: () - Attorneys for Plaintiffs [Additional Counsel Listed Below] UNITED STATES DISTRICT COURT DISTRICT OF NEVADA 0 0 CHRISTOPHER CARR, ROXANNE CLAYTON and BRIAN BENNETT, on Behalf of Themselves and All Others Similarly Situated, v. Plaintiffs, INTERNATIONAL GAME TECHNOLOGY, et al., Defendants. RANDOLPH K. JORDAN and KIMBERLY J. JORDAN, on Behalf of Themselves and a Class of Persons Similarly Situated, v. Plaintiffs, INTERNATIONAL GAME TECHNOLOGY, et al., Defendants. Case No.: :0-cv-00-ECR-RAM CONSOLIDATED CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT JURY TRIAL DEMANDED Case No.: :0-cv-00-ECR-RAM

2 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 Plaintiffs Christopher Carr, Roxanne Clayton, Brian Bennett, Randolph K. Jordan and Kimberly J. Jordan ( Plaintiffs ) allege the following based upon personal information as to themselves and the investigation of Plaintiffs counsel, which included a review of publically available information, including, but not limited to, U.S. Securities and Exchange Commission ( SEC ) filings by IGT International Game Technologies ( IGT or the Company ), including the Company s proxy statements (Form DEF A), annual reports (Form 0-K), quarterly reports (Form 0-Q), current reports (Form -K), and the annual reports (Form -K) filed on behalf of the IGT Profit Sharing Plan (the Plan ); a review of the Form 00s filed by the Plan with the U.S. Department of Labor ( DOL ); and a review of available documents governing the operations of the Plan. Plaintiffs believe that substantial additional evidentiary support will exist for the allegations set forth herein after a reasonable opportunity for discovery. I. NATURE OF THE ACTION. This is a class action brought on behalf of the Plan, pursuant to 0(a)() of the Employee Retirement Income Security Act of ( ERISA ), U.S.C. (a)(), against the fiduciaries of the Plan for violations of ERISA.. The Plan is a retirement plan sponsored by IGT. See Prospectus and Summary Plan Description, dated October, 000 ( SPD ) at IGTERISA 000 ( The Plan is sponsored and administered by International Game Technology, which pays all of the costs of administrating the Plan. The Company has delegated responsibility for Plan administration to a committee appointed by the Company (the Committee ). The Committee has the power to control and manage the Plan ). A true and correct copy of the SPD is attached hereto and incorporated herein as Exhibit A. See also id. at IGTERISA 0000 ( The Plan offers you an excellent opportunity to save and invest for your retirement, while reducing your taxes today ).. Plaintiffs claims arise from the failure of Defendants, who were fiduciaries of the Plan, to act solely in the interest of the participants and beneficiaries of the Plan, and to exercise the required The Committee referred to in this quotation is the IGT Profit Sharing Committee identified in paragraph herein.

3 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 skill, care, prudence, and diligence in administering the Plan and the Plan s assets during the period November, 00, through and including April, 00 (the Class Period ).. Defendants allowed the imprudent investment of the Plan s assets in IGT common stock ( IGT Stock or Company Stock ) throughout the Class Period, even though they knew or should have known that such investment was unduly risky and imprudent for retirement savings accounts. The Company s serious mismanagement and improper business practices led to, inter alia, the artificial inflation of IGT Stock and created poor financial circumstances for the Company. As a result, IGT Stock was an unduly risky and inappropriate investment option for Plan participants retirement savings during the Class Period.. Plaintiffs allege in Count I that Defendants, each having specific responsibilities regarding the management and investment of Plan assets, breached their fiduciary duties to the Plan and Plan participants by failing to prudently and loyally manage the Plan s investment in Company Stock by breaching their fiduciary duties to the Plan participants in various ways, including, but not limited to: (i) misrepresenting and failing to disclose material facts to the participants in connection with the administration of the Plan; (ii) failing to exercise their fiduciary duties to the participants solely in the interests of the participants for the exclusive purpose of providing benefits to participants and their beneficiaries; (iii) failing to manage the Plan s assets with the care, skill, prudence or diligence of a prudent person under the circumstances; and (iv) permitting the participants to continue to elect to invest their retirement monies in IGT Stock when the market price of IGT Stock was artificially inflated, when it was imprudent to do so, and when the participants were not provided with timely, accurate and complete information concerning the Company as required by applicable law. These actions/inactions run directly counter to the express purpose of ERISA pension plans, which are designed to help provide funds for participants retirement. See ERISA, U.S.C. 00 ( Congressional Findings and Declaration of Policy ).. In Count II Plaintiffs allege that certain Defendants breached their fiduciary duties by failing to adequately monitor other persons to whom management/administration of Plan assets was delegated, despite the fact that Defendants knew or should have known that such other fiduciaries were

4 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 imprudently allowing the Plan to continue offering IGT Stock as an investment option and investing Plan assets in IGT Stock when it was no longer prudent to do so.. In Count III Plaintiffs allege that certain Defendants failed to avoid or ameliorate inherent conflicts of interests which crippled their ability to function as independent, single-minded fiduciaries with the best interests of the Plan and Plan participants solely in mind.. In Count IV Plaintiffs allege that Defendants breached their duties and responsibilities as co-fiduciaries by knowing of the breaches of fiduciary duties and failing to remedy them, knowingly participating in the breaches of fiduciary duties, and/or enabling the breaches of fiduciary duties.. As is more fully explained below, during the Class Period, Defendants with responsibility for the Plan s investments imprudently permitted the Plan to hold and acquire millions of dollars in IGT Stock despite the Company s serious mismanagement and improper business practices. Defendants breaches have caused substantial monetary losses to the retirement savings Plan during the Class Period. 0. This action is brought on behalf of the Plan and seeks to recover losses to the Plan for which Defendants are personally liable pursuant to ERISA 0 and 0(a)(), U.S.C. 0 and (a)().. ERISA 0(a) and 0(a)() authorize participants such as Plaintiffs to sue in a representative capacity for losses suffered by the Plan as a result of breaches of fiduciary duty. Pursuant to that authority, Plaintiffs bring this action as a class action under Fed. R. Civ. P. on behalf of all participants and beneficiaries of the Plan whose Plan accounts were invested in IGT Stock during the Class Period.. In addition, because the information and documents on which Plaintiffs claims are based are, for the most part, solely in Defendants possession, certain of Plaintiffs allegations are made by necessity upon information and belief. At such time as Plaintiffs have had the opportunity to conduct discovery, Plaintiffs will, to the extent necessary and appropriate, amend this Complaint or, if required, will seek leave to amend to add additional facts that further support Plaintiffs claims.

5 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of II. JURISDICTION AND VENUE 0. Subject Matter Jurisdiction. This Court has subject matter jurisdiction over this action pursuant to U.S.C. and ERISA 0(e)(), U.S.C. (e)().. Personal Jurisdiction. ERISA provides for nationwide service of process. ERISA 0(e)(), U.S.C. (e)(). All Defendants are either residents of the United States or subject to service in the United States. Therefore, this Court has personal jurisdiction over them. This Court also has personal jurisdiction over Defendants pursuant to FED. R. CIV. P. (k)()(a) because they would all be subject to the jurisdiction of a court of general jurisdiction in the State of Nevada.. Venue. Venue is proper in this district pursuant to ERISA 0(e)(), U.S.C. (e)(), because the Plan is administered in this district, some or all of the fiduciary breaches for which relief is sought occurred in this district, and IGT has its principal place of business in this district. III. PARTIES 0 A. Plaintiffs. Plaintiff Christopher Carr is a resident of the State of Mississippi. He is a participant in the Plan within the meaning of ERISA (), U.S.C. 0(), and held IGT Stock in the Plan during the Class Period.. Plaintiff Roxanne Clayton is a resident of the State of Iowa. She is a participant in the Plan within the meaning of ERISA (), U.S.C. 0(), and held IGT Stock in the Plan during the Class Period.. Plaintiff Brian Bennett is a resident of the State of Nevada. He is a participant in the Plan within the meaning of ERISA (), U.S.C. 0(), and held IGT Stock in the Plan during the Class Period.. Plaintiff Randolph K. Jordan is a resident of the State of Florida. He is a participant in the Plan within the meaning of ERISA (), U.S.C. 0(), and held IGT Stock in the Plan during the Class Period.

6 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of Plaintiff Kimberly J. Jordan is a resident of the State of Florida. She is a participant in the Plan within the meaning of ERISA (), U.S.C. 0(), and held IGT Stock in the Plan during the Class Period. B. Defendants. IGT. Defendant IGT is a Nevada corporation whose principal executive officers are located at Prototype Drive, Reno, Nevada. IGT is a global gaming company that specializes in the design, manufacture, and marketing of electronic gaming equipment and network systems, as well as licensing and services, in North America and internationally. IGT reports the results of its operations in two business segments: (i) North America, which consists of operations in the U.S. and Canada, comprising % of consolidated revenues in fiscal 00, % in 00, and % in 00; and (ii) International, which encompasses the remainder of operations worldwide, comprising % of consolidated revenues in fiscal 00, % in 00, and % in 00. In addition, the Company has two revenue streams within each business segment: (i) gaming operations, which generate recurring revenues by providing customers with proprietary gaming equipment and network systems, as well as licensing, services and component parts; and (ii) product sales. IGT s common stock is publicly traded on the New York Stock Exchange (the NYSE ) under the symbol IGT.. At all relevant times during the Class Period, IGT was the Plan Administrator. See IGT Profit Sharing Plan (As Amended and Restated Effective as of April, 00) (the Plan Document ), Article I,. at IGTERISA A true and correct copy of the Plan Document is attached hereto and incorporated herein as Exhibit B.. Defendant IGT is also the Plan Sponsor. See SPD at IGTERISA 000 ( The Plan is sponsored and administered by International Game Technology, which pays all of the costs of administrating the Plan. The Company has delegated responsibility for Plan administration to a committee appointed by the Company (the Committee ). The Committee has the power to control and manage the Plan ).. Throughout the Class Period, IGT s responsibilities included, along with its officers, directors and executives, broad oversight of and ultimate decision-making authority respecting the

7 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 management and administration of the Plan and the Plan s assets, as well as the appointment, removal, and, thus, monitoring of other fiduciaries of the Plan that it appointed, or to whom it assigned fiduciary responsibility. Throughout the Class Period, the Company exercised discretionary authority with respect to management and administration of the Plan or management and disposition of the Plan s assets.. The Board of Directors. Defendant Thomas J. Matthews ( Matthews ) was appointed to IGT s Board of Directors (the Board ) in December 00, and was named Chairman in March 00. Defendant Matthews served as IGT s President and Chief Executive Officer ( CEO ) from 00 to April 00, and was IGT s Chief Operating Officer ( COO ) from 00 to June 00. After resigning as President and CEO of the Company, Defendant Matthews continued to act as Chairman of the Board until December 00. Defendant Matthews is currently a member of the Board. During the Class Period, Defendant Matthews was a fiduciary within the meaning of ERISA because (i) he exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of the Plan; (ii) he possessed discretionary authority or discretionary responsibility in the administration of the Plan; and (iii) he exercised authority or control with respect to the management of the Plan s assets.. Defendant Robert A. Bittman ( Bittman ) became a Director of the Company in May 000, and was, at all relevant times, a Director of the Company. Defendant was also IGT s Executive Vice President, Product Strategy from 00 until his retirement from IGT in December 00. Defendant Bittman served as the Company s Executive Vice President, Product Strategy from 00 until his retirement from IGT in December 00. During the Class Period, Defendant Bittman was a fiduciary within the meaning of ERISA because (i) he exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of the Plan; (ii) he possessed discretionary authority or discretionary responsibility in the administration of the Plan; and (iii) he exercised authority or control with respect to the management of the Plan s assets.. Defendant Richard R. Burt ( Burt ) served as a Director of the Company from December 00 through March, 00, and during times relevant herein was a member of the Board s

8 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 Audit Committee and Nominating and Corporate Governance Committee. He has also, during times relevant herein, acted as Chair of the Nominating and Corporate Governance Committee. During the Class Period, Defendant Burt was a fiduciary within the meaning of ERISA because (i) he exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of the Plan; (ii) he possessed discretionary authority or discretionary responsibility in the administration of the Plan; and (iii) he exercised authority or control with respect to the management of the Plan s assets.. Defendant Patti S. Hart ( Hart ) has served as a Director of the Company since December 00, and during times relevant herein has acted as a member of the Board s Audit Committee and Compensation Committee. She has also, during times relevant herein, acted as Chair of the Audit Committee. The Company has, during times relevant herein, identified her as its Lead Independent Director. In addition, Defendant Hart has served as the Company s President and CEO since April 00. During the Class Period, Defendant Hart was a fiduciary within the meaning of ERISA because (i) she exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of the Plan; (ii) she possessed discretionary authority or discretionary responsibility in the administration of the Plan; and (iii) she exercised authority or control with respect to the management of the Plan s assets.. Defendant Leslie S. Heisz ( Heisz ) served as a Director of the Company from June 00 through October, 00, and during times relevant herein has acted as a member of the Board s Audit Committee and Nominating and Corporate Governance Committee. During the Class Period, Defendant Heisz was a fiduciary within the meaning of ERISA because (i) she exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of the Plan; (ii) she possessed discretionary authority or discretionary responsibility in the administration of the Plan; and (iii) she exercised authority or control with respect to the management of the Plan s assets. 0. Defendant Robert A. Mathewson ( Mathewson ) has served as a Director of the Company since December 00, and during times relevant herein has acted as a member of the Board s Audit Committee, Compliance Committee, and Nominating and Corporate Governance Committee.

9 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 During the Class Period, Defendant Mathewson was a fiduciary within the meaning of ERISA because (i) he exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of the Plan; (ii) he possessed discretionary authority or discretionary responsibility in the administration of the Plan; and (iii) he exercised authority or control with respect to the management of the Plan s assets.. Defendant Robert Miller ( Miller ) has served as a Director of the Company since January 000, and during times relevant herein has acted as a member of the Board s Compensation Committee, Compliance Committee, and Nominating and Corporate Governance Committee. During the Class Period, Defendant Miller was a fiduciary within the meaning of ERISA because (i) he exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of the Plan; (ii) he possessed discretionary authority or discretionary responsibility in the administration of the Plan; and (iii) he exercised authority or control with respect to the management of the Plan s assets.. Defendant Frederick B. Rentschler ( Rentschler ) has served as a Director of the Company since May, and during times relevant herein has acted as a member of the Board s Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. During the Class Period, Defendant Rentschler was a fiduciary within the meaning of ERISA because (i) he exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of the Plan; (ii) he possessed discretionary authority or discretionary responsibility in the administration of the Plan; and (iii) he exercised authority or control with respect to the management of the Plan s assets.. Defendant David E. Roberson ( Roberson ) has served as a Director of the Company since December 00, and during times relevant herein has acted as the Chair of Board s Audit Committee and a member of the Compensation Committee. On its website the Company represents defendant Roberson as a Financial Expert. During the Class Period, Defendant Roberson was a fiduciary within the meaning of ERISA because (i) he exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of

10 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page 0 of 0 0 the Plan; (ii) he possessed discretionary authority or discretionary responsibility in the administration of the Plan; and (iii) he exercised authority or control with respect to the management of the Plan s assets.. Defendant Philp G. Satre ( Satre ) has served as a Director of the Company since January 00, and was named as Chairman of the Board in December 00. Defendant Satre is currently Chair of the Company s Nominating and Corporate Governance Committee. During the Class Period, Defendant Satre was a fiduciary within the meaning of ERISA because (i) he exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of the Plan; (ii) he possessed discretionary authority or discretionary responsibility in the administration of the Plan; and (iii) he exercised authority or control with respect to the management of the Plan s assets.. Defendants Matthews, Bittman, Burt, Hart, Heisz, Mathewson, Miller, Rentschler, Roberson, and Satre are herein referred to as the Director Defendants.. Pursuant to the Plan Document, the Director Defendants had the power to appoint the members of the IGT Profit Sharing Committee (the Committee ): A committee (hereinafter referred to as the Committee ) shall be appointed by, and shall serve at the pleasure of, the Board. The Board shall appoint a member of the Committee as the Committee Chairman. The number of members comprising the Committee shall be determined by the Board which may from time to time vary the number of members. [ ] The Board may remove any member of the Committee (or provide that the Committee Chairman shall no longer act as such) by delivering written notice thereof to such member. Vacancies in the membership of the Committee shall be filled promptly by the Committee Chairman, subject to the approval of the Committee in accordance with Section. and subject to annual review by the Board. If for any reason there is no Committee Chairman, the Board shall promptly appoint a new Committee Chairman. See Plan Document, Article VII,. at IGTERISA Pursuant to the Plan Document, the Board was also kept apprised of the investment results in the Plan: The Committee shall keep the Board of Directors apprised of the investment results of the Plan and shall report any other information necessary to fully inform the Board of Directors of the status and operation of the Plan and Trust. See Plan Document, Article VII,. at IGTERISA

11 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0. The IGT Profit Sharing Committee. Defendant IGT Profit Sharing Committee (the Committee ) acted, at all relevant times, as the fiduciary with respect to control and management of the Plan. See Plan Document, Article VII,. at IGTERISA 0000; see also SPD at IGTERISA 000 ( The Company has delegated responsibility for Plan administration to a committee appointed by the Company (the Committee ). The Committee has the power to control and manage the Plan ).. The Committee was the Named Fiduciary of the Plan (within the meaning of section 0(a) of ERISA). See Trust Agreement between International Game Technology and Fidelity Management Trust Company, IGT Profit Sharing Plan Trust, dated March, ( Trust Agreement ), at IGTERISA 000. A true and correct copy of the Trust Agreement is attached hereto and incorporated herein as Exhibit C. 0. The Committee was also the administrator of the Plan (within the meaning of Section ()(A) of ERISA). See Trust Agreement at IGTERISA Pursuant to the Trust Agreement, as a Named Fiduciary, the Committee had complete discretion as to whether it wanted to offer Company Stock: The Named Fiduciary shall direct the Trustee as to the investment options in which the Trust shall be invested during the period beginning on the date of the initial transfer of assets to the Trust and ending on the date of the completion of the reconciliation of participant records ( Recordkeeping Reconciliation Period ), and the investment options which Plan participants may invest following the Recordkeeping Reconciliation Period, subject to the following limitations. The Named Fiduciary may determine to offer as investment options only: (i) securities issued by the investment companies advised by Fidelity Management & Research Company ( Fidelity Mutual Funds ) and certain securities issued by investment companies not advised by Fidelity Management & Research Company ( Non-Fidelity Mutual Funds ) (collectively, Mutual Funds ), (ii) equity securities issued by the Sponsor or an affiliate which are publicly-traded and which are qualifying employer securities within the meaning of section 0(d)() of ERISA ( Sponsor Stock ), and (iii) notes evidencing loans to Plan participants in accordance with the terms of the Plan. See Trust Agreement at IGTERISA 000 (emphasis added).. Further, as a Named Fiduciary the Committee was both empowered and required to continually monitor the suitability under the fiduciary duty rules of section 0(a)() of ERISA (as

12 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of modified by Section 0(a)() of ERISA) of acquiring and holding Company Stock. See Trust Agreement at IGTERISA The Committee also had the power to terminate any Investment Fund Industry Company Stock. See Plan Document, Article III,. at IGTERISA Upon information and belief, during the Class Period, the Committee was comprised of the following Company employees: 0 0 (a) (b) Defendant Randy Kirner ( Kirner ) was, at all relevant times, Vice President of Human Resources and a member of the Committee. See IGTERISA 000, 000) (designated as an individual who may provide directions, on behalf of the Administrator, upon which Fidelity Management Trust Company shall be fully protected in relying ) (attached hereto as Exhibit D); see also IGTERISA 000 (signatory of the First Amendment to Trust Agreement) (attached hereto as Exhibit E); IGTERISA 0000 (signatory of the Third Amendment to Trust Agreement) (attached hereto as Exhibit F). During the Class Period, Defendant Kriner was a fiduciary within the meaning of ERISA ()(A), U.S.C. 00()(A) because (i) he exercised discretionary authority or discretionary control with respect to the appointment of Plan fiduciaries and with respect to the management of the Plan; (ii) he possessed discretionary authority or discretionary responsibility in the administration of the Plan; and/or (iii) he exercised authority or control with respect to the management of the Plan s assets. Defendant Rhonda Everett ( Everett ) was, at all relevant times, the Compensation & Benefits Manager and a member of the Committee. See IGTERISA 000, 000) (designated as an individual who may provide Investment Fund shall mean one of the funds [which included the Company Stock Fund] established by the Committee for the investment of the assets of the Plan pursuant to Section.. See Plan Document at IGTERISA 0000.

13 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 (c) (d) directions, on behalf of the Administrator, upon which Fidelity Management Trust Company shall be fully protected in relying ); see also IGTERISA (signatory of the Second Amendment to Trust Agreement) (attached hereto as Exhibit G). During the Class Period, Defendant Everett was a fiduciary within the meaning of ERISA ()(A), U.S.C. 00()(A) because (i) she exercised discretionary authority or discretionary control with respect to the appointment of Plan fiduciaries and with respect to the management of the Plan; (ii) she possessed discretionary authority or discretionary responsibility in the administration of the Plan; and/or (iii) she exercised authority or control with respect to the management of the Plan s assets. Defendant Shari Bainter ( Bainter ) was, at all relevant times, the Accounting Manager and a member of the Committee. See IGTERISA 000, 000 (designated as an individual who may provide directions, on behalf of the Administrator, upon which Fidelity Management Trust Company shall be fully protected in relying ). During the Class Period, Defendant Bainter was a member of the Committee and a fiduciary of the Plan within the meaning of ERISA ()(A), U.S.C. 00()(A) because (i) she exercised discretionary authority or discretionary control with respect to the appointment of Plan fiduciaries and with respect to the management of the Plan; (ii) she possessed discretionary authority or discretionary responsibility in the administration of the Plan; and/or she (iii) exercised authority or control with respect to the management of the Plan s assets. Defendant David D. Johnson ( Johnson ) was, at times relevant times, a member and/or the Chairman of the Committee. Defendant Johnson signed the 00 -K in his capacity as Chairman of the Committee. Defendant Johnson has been IGT s Executive Vice President, General Counsel and Secretary since 00. He is responsible for the direction of the legal, intellectual property,

14 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 compliance, government relations, corporate audit, risk management and human resource functions. Defendant Johnson was a fiduciary of the Plan during the Class Period.. Defendants Kirner, Everett, Bainter, and Johnson are herein referred to as the Committee Defendants.. Officer Defendant. Defendant Daniel R. Siciliano ( Siciliano ) served as IGT s Interim Principal Financial Officer, Chief Accounting Officer and Treasurer during the Class Period. During the Class Period, Defendant Siciliano was a fiduciary within the meaning of ERISA, because he exercised discretionary authority or discretionary control with respect to the appointment of the Plan fiduciaries and with respect to the management of the Plan, he possessed discretionary authority or discretionary responsibility in the administration of the Plan, and he exercised authority or control with respect to the management of the Plan s assets.. Additional John Doe Defendants. Without limitation, unknown John Doe Defendants -0 include other individuals, including Company officers, directors and employees who are or were fiduciaries of the Plan within the meaning of ERISA ()(A), U.S.C. 00()(A) during the Class Period. The identities of the John Doe Defendants are currently unknown to Plaintiffs; once their identities are ascertained, Plaintiffs will seek leave to join them to the instant action under their true names. 0 IV. CLASS ACTION ALLEGATIONS. Class Definition. Plaintiffs bring this action as a class action pursuant to Rules (a), (b)() and/or (b)() of the Federal Rules of Civil Procedure on behalf of the Plaintiffs and the following class of persons similarly situated (the Class ): All persons, other than Defendants, who were participants in or beneficiaries of the Plan at any time between November, 00 through and including April, 00 and whose accounts included investments in IGT Stock.

15 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0. Class Period. The fiduciaries of the Plan knew or should have known at least by November, 00 that the Company s material weaknesses were so pervasive that IGT Stock could no longer be offered as a prudent investment for the retirement Plan. 0. Numerosity. The members of the Class are so numerous that joinder of all members is impracticable. While the exact number of Class members is unknown to the Plaintiffs at this time and can only be ascertained through appropriate discovery, Plaintiffs reasonably believe, based on the Plan s Form 00 for Plan year 00, that there are over, participants or beneficiaries in the Plan and the Plan s 00 for plan year 00, that there are over, participants or beneficiaries in the Plan.. Commonality. Common questions of law and fact exist as to all members of the Class and predominate over any questions affecting solely individual members of the Class. Among the questions of law and fact common to the Class are: 0 whether Defendants each owed a fiduciary duty to Plaintiffs and members of the Class; whether Defendants breached their fiduciary duties to Plaintiffs and members of the Class by failing to act prudently and solely in the interests of the Plan s participants and beneficiaries; whether Defendants violated ERISA; and whether the Plan has suffered losses and, if so, the proper measure of damages.. Typicality. Plaintiffs claims are typical of the claims of the members of the Class. Because Plaintiffs assert derivative claims on behalf of the Plan pursuant to ERISA 0(a), Plaintiffs claims are necessarily typical indeed, identical to the derivative claims of any Class member.. Adequacy. Plaintiffs will fairly and adequately protect the interests of the members of the Class and have retained counsel competent and experienced in class action, complex, and ERISA litigation. Plaintiffs have no interests antagonistic to or in conflict with those of the Class.. Rule (b)()(b) Requirements. Class action status in this ERISA action is warranted under Rule (b)()(b) because prosecution of separate actions by the members of the Class would

16 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 create a risk of adjudications with respect to individual members of the Class which would, as a practical matter, be dispositive of the interests of the other members not parties to the actions, or substantially impair or impede their ability to protect their interests.. Other Rule (b) Requirements. Class action status is also warranted under the other subsections of Rule (b) because: (a) prosecution of separate actions by the members of the Class would create a risk of establishing incompatible standards of conduct for Defendants; and (b) questions of law or fact common to members of the Class predominate over any questions affecting only individual members and a class action is superior to the other available methods for the fair and efficient adjudication of this controversy.. Plaintiffs also seek appropriate relief under ERISA Section 0(a)(), U.S.C. (a)(). This section of ERISA states that [a] civil action may be brought by the Secretary [of Labor], or by a participant, beneficiary or fiduciary for appropriate relief under section 0 of this title[.] ERISA Section 0(a), U.S.C. 0(a), sets forth that: Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by then fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary. Since the statute does not distinguish in any way among the status or standing of the Secretary of Labor, a plan fiduciary or a plan participant, the statute provides no basis upon which to claim that a participant stands in procedural shoes that are different from either the Secretary or a fiduciary. V. THE PLAN. The Plan, sponsored by IGT, is a defined contribution plan. See Plan Document, Article I,. at IGTERISA ( It is intended that the Plan constitute a profit sharing plan with a qualified cash or deferred arrangement under Section 0(k) of the Code. Contributions may be made to the plan without regard to the current or accumulated profits of the Company ). The Plan is a legal entity that can sue and be sued. ERISA 0(d)(), U.S.C. (d)(). However, in a breach of fiduciary duty action such as this, the Plan is neither a defendant nor a plaintiff. Rather, pursuant to

17 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 ERISA 0, U.S.C. 0, and the law interpreting it, the relief requested in this action is for the benefit of the Plan and its participants and beneficiaries.. The Plan is a voluntary contribution plan whereby participants make contributions to the Plan ( Voluntary Contributions ) and direct the Plan to purchase investments with those contributions from options pre-selected by Defendants which are then allocated to participants individual accounts.. As of June, 00, Plan participants could direct their accounts to be invested in IGT Stock or twenty-six () mutual funds offered by the Plan as investment options. See Form -K, dated June, 00 ( 00 Form -K ) at. 0. The Plan is a retirement plan. See SPD at IGTERISA 0000 ( The Plan offers you an excellent opportunity to save and invest for your retirement, while reducing your taxes today ); see also id. at IGTERISA 0000 ( When you save for retirement through the Plan, you defer part of your current pay to set aside savings for the future ).. In the Company s 00 Form -K, the Plan is described as the following: The IGT Profit Sharing Plan (Plan) is sponsored by International Game Technology (referred to throughout these notes as IGT, we, our and us) and consists of two programs, the profit sharing program and the 0(k) program. The following description of the Plan is provided for general information purposes only. Participants should refer to the IGT Plan document and summary plan description for a more complete description of the Plan s provisions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of (ERISA), as amended, and other provisions of the Internal Revenue Code (IRC). This defined contribution plan covering all eligible IGT employees was adopted in December 0 and is administered by Fidelity Investments (Fidelity).. Fidelity Management Trust Company serves as the Trustee of the Plan. See SPD at IGTERISA Pursuant to the 00 Form -K: Participants may contribute up to 0% of their pretax annual compensation, as defined in the Plan. Highly compensated employees were allowed to make elective deferral contributions up to 0% for 00, and % for 00, of their annual salary. Employees may make pre-tax contributions to their accounts upon completion of 0 days of full time employment, or one year of,000 hours of part-time employment. A participant may discontinue contributions to the Plan at any time. Participants direct 00% of their contributions, matching contributions and profit sharing contributions to the Plan.

18 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 IGT s 0(k) contribution matching program provides for the matching of 00% of an employee s contributions up to $0 as determined by the Profit Sharing Committee. Employees are immediately 00% vested in all 0(k) contributions. The Plan also allows for rollover contributions from other qualified retirement plans. If the rollover is from an individual retirement arrangement, all assets in the prior retirement plan must have originated as contributions made under a qualified plan.. The Plan Document does not mandate that IGT Stock Fund invest solely in IGT Stock. Pursuant to the Plan Document, the Committee may determine to offer as investment options only: (i) securities issued by the investment companies advised by Fidelity Management & Research Company ( Fidelity Mutual Funds ) and certain securities issued by investment companies not advised by Fidelity Management & Research Company ( Non-Fidelity Mutual Funds ) (collectively, Mutual Funds ), (ii) equity securities issued by the Sponsor or an affiliate which are publicly-traded and which are qualifying employer securities within the meaning of section 0(d)() of ERISA ( Sponsor Stock ), and (iii) notes evidencing loans to Plan participants in accordance with the terms of the Plan. See Trust Agreement at IGTERISA 000 (emphasis added).. Furthermore, the Plan does not limit the ability of the Plan fiduciaries, including the Plan administrator, to remove the IGT Stock Fund, or divest assets invested in the IGT Stock Fund, as prudence dictates. See Plan Document, Article III,. at IGTERISA 0000 (Separate Investment Funds shall be established and maintained under the Plan by the Committee. The Committee may, in its discretion, terminate any Investment Fund ) (emphasis added).. The SPD incorporated by reference the Company s SEC filings. For example, the SPD states in relevant part: The following documents filed by the Company with the SEC are incorporated by reference into this Prospectus/Summary Plan Description: The Company s Annual Report on Form 0-K for its fiscal year ended October,. The Company s Quarterly Reports on Forms 0-Q for its fiscal quarters ended January, 000, April, 000, and July, 000.

19 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 The description of the Common Stock contained in the Company s Registration Statement on Form S- filed with the SEC on April,, and any amendment or report filed for the purpose of updating such description. The plan s Annual Report on Form -K for the Plan Year ended December,. All documents filed by the Company pursuant to Section (a), (c), or (d) of the Exchange Act after the date of this Prospectus (but before the Company files a post-effective amendment indicating that all securities offered by this Prospectus have been sold or that Company has de-registered all securities remaining unsold) will be deemed to be incorporated by reference into this Prospectus (and such documents will be part of this Prospectus) from the date that such documents are filed with the SEC. These documents generally include the Company s annual, quarterly, and current financial and other reports filed with the SEC. See SPD at IGTERISA During the Class Period, a significant amount of the Plan s assets were invested in IGT Stock. As of the end of Plan year 00, the Plan held approximately,0, shares of IGT Stock, valued at its then market price of approximately over $0,,00. See 00 Form -K at. As of the end of Plan year 00, the amount of IGT Stock in the Plan had dwindled to $,,0 even though shares of IGT Stock had increased to,,. See 00 Form -K, dated June, 00 ( 00 Form -K ) at. Following revelations that Defendants made misleading and inaccurate disclosures or failed to disclose that: (a) the Company s research and development funding materially compromised its growth prospects and caused the Company lost market share to rivals; (b) the Company s research and development funding and loss of market share made Company growth statements overly optimistic; (c) increasing costs and economic troubles made the Company s time frame for marketing its server-based technology ( SB ) and its advanced video gaming platform ( AVP ) impossible; (d) the Company minimized the impact of a slowdown in the gaming industry which undermined the Company s shift to SB and AVP; (e) the Company failed to reduce expenses to meet a slowdown in the gaming industry; (f) as a result of the above, the Company s actual and projected results for the Class Period were grossly inflated; (g) the Company lacked the required internal controls, and, as a result, the Company s projections and reported results were based upon defective assumptions and/or manipulated facts; (h) by the time that the Company reacted to the above,

20 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page 0 of 0 there was concern that the Company may not be able to do enough to offset a top line slowdown; (i) the Company faced a material debt refinancing risk; and (j) the Company lacked the necessary personnel to issue accurate financial reports and projections, the price of IGT Stock decreased dramatically. As of April, 00, IGT Stock traded at approximately $.0 per share, representing a decline of over.% since the beginning of the Class Period. As a result, the Plan incurred substantial losses due to its investment in IGT Stock.. Despite the Plan s substantial investment in IGT Stock, Defendants failed to protect the Plan and its participants and beneficiaries from the risks of the Company s reckless and improper conduct. Defendants continued to hold the Plan s shares of IGT Stock and compounded the problem (and the losses) by purchasing additional shares during the Class Period. Plaintiffs believe losses to the Plan are in the tens of millions of dollars. VI. DEFENDANTS FIDUCIARY STATUS 0 A. The Nature of Fiduciary Status. Named Fiduciaries. ERISA requires every plan to have one or more named fiduciaries. ERISA 0(a)(), U.S.C. 0(a)(). The person named as the administrator in the plan document is automatically a named fiduciary, and in the absence of such a designation, the sponsor is the administrator. ERISA ()(A), U.S.C. 00()(A). 0. De Facto Fiduciaries. ERISA treats as fiduciaries not only persons explicitly named as fiduciaries under 0(a)(), but also any other persons who in fact perform fiduciary functions. See ERISA ()(A)(i), U.S.C. 00()(A)(i). Thus, a person is a fiduciary to the extent (i) he exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets, (ii) he renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or (iii) he has any discretionary authority or discretionary responsibility in the administration of such plan. Id.. Each of the Defendants was a fiduciary with respect to the Plan and owed fiduciary duties to the Plan and the participants in the manner and to the extent set forth in the Plan s documents, under ERISA, and through their conduct. 0

21 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0. As fiduciaries, Defendants were required by ERISA 0(a)(), U.S.C. 0(a)(), to manage and administer the Plan and the Plan s investments solely in the interest of the Plan s participants and beneficiaries and with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.. Plaintiffs do not allege that each Defendant was a fiduciary with respect to all aspects of the Plan s management and administration. Rather, as set forth below, Defendants were fiduciaries to the extent of the fiduciary discretion and authority assigned to or exercised by each of them, and the claims against each Defendant are based on such specific discretion and authority.. Instead of delegating all fiduciary responsibility for the Plan to external service providers, IGT chose to delegate its responsibility regarding the administration of the Plan to the Committee. See SPD at IGTERISA 000; see also Plan Document, Article VII,. at IGTERISA IGT chose to assign the appointment and removal of fiduciaries to the Board (see Plan Document, Article VII,. at IGTERISA 00000), who, in turn, selected the members of the Committee. See id.. ERISA permits fiduciary functions to be delegated to insiders without an automatic violation of the rules against prohibited transactions. ERISA 0(c)(), U.S.C. 0(c)(). However, insider fiduciaries, like external fiduciaries, must act solely in the interest of participants and beneficiaries, not in the interest of the Plan sponsor. B. IGT s Fiduciary Status. On information and belief, in order to comply with ERISA, the Company exercised responsibility through the Committee for communicating with participants regarding the Plan in a planwide, uniform, mandatory manner by providing participants with information and materials required by ERISA. See, e.g., ERISA 0(a)(), U.S.C. 0(a)() (requiring the plan administrator to furnish to each participant covered under the plan and to each beneficiary who is receiving benefits under the plan a summary plan description). In this regard, the Company and the Committee disseminated the Plan s documents and related materials, which incorporated by reference, among

22 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 0 other things, IGT s inaccurate SEC filings, thus converting such materials into fiduciary communications.. On information and belief, the Company is also charged with the appointment, monitoring, and removal of the Trustee and execution of the Trust documents with the Trustee to provide for the investment, management, and control of the assets of the Plan. See Trust Agreement, IGTERISA 000 ( The Sponsor may remove the Trustee at any time upon sixty (0) days notice in writing to the Trustee, unless a shorter period of notice is agreed upon by the Trustee ).. Moreover, on information and belief, IGT exercised control over the activities of its employees who performed fiduciary functions with respect to the Plan, including the Committee. In particular, IGT through its Board had the authority and discretion to hire, appoint, monitor, and remove the members of the Committee, as well as other officers and employees appointed by IGT to perform Plan-related fiduciary functions in the course and scope of their employment. IGT had, at all applicable times, effective control over the activities of its officers and employees, including their Planrelated activities. Additionally, by failing to properly discharge their fiduciary duties under ERISA, the officer and employee fiduciaries breached duties they owed to the Plan s participants and their beneficiaries. Accordingly, the actions of the Plan s Officer and other employee fiduciaries are imputed to the Company under the doctrine of respondeat superior, and the Company is liable for these actions.. Finally, under basic tenets of corporate law, IGT is imputed with the knowledge which its officers and employees (including other Defendants) had regarding the misconduct alleged herein, even if such knowledge is not communicated to IGT. 0. Consequently, in light of the foregoing duties, responsibilities, and actions, IGT was both a named fiduciary of the Plan pursuant to ERISA 0(a)(), U.S.C. 0(a)(), and a de facto fiduciary of the Plan within the meaning of ERISA (), U.S.C. 00(), during the Class Period because it exercised discretionary authority or discretionary control over the management of the Plan, exercised authority or control over the management or disposition of the Plan s assets, and/or had discretionary authority over or discretionary responsibility for the administration of the Plan.

23 Case :0-cv-00-ECR-RAM Document Filed 0/0/0 Page of 0 C. The Committee and the Committee Defendants Fiduciary Status. The Committee was the Plan administrator during the Class Period. See Trust Agreement at 000 (... the IGT Profit Sharing Committee (the Administrator ) is the administrator of the Plan ).. The Committee is also a Named Fiduciary. See id. (... the IGT Profit Sharing Committee (the Named Fiduciary ) is the named fiduciary of the Plan... ).. During the Class Period, the Company also relied on the Committee Defendants to carry out their fiduciary responsibilities under the Plan and ERISA. As a result, the Committee Defendants are both named and functional fiduciaries under ERISA.. Consequently, in light of the foregoing duties, responsibilities, and actions, the Committee Defendants were both named fiduciaries of the Plan pursuant to ERISA 0(a)(), U.S.C. 0(a)(), and de facto fiduciaries of the Plan within the meaning of ERISA (), U.S.C. 00(), during the Class Period because they exercised discretionary authority or discretionary control over the management of the Plan, exercised authority or control over the management or disposition of the Plan s assets, and/or had discretionary authority over or discretionary responsibility for the administration of the Plan. VII. BREACHES OF FIDUCIARY DUTY 0. As required by ERISA, Defendants issued one or more SPDs, each of which either referred to or incorporated by reference the documents filed by IGT with the SEC under the federal securities laws. These filings, however, contained numerous inaccurate statements.. In particular, IGT was an imprudent retirement savings investment for the Plan during the Class Period because of, inter alia, the facts that: (a) the Company s research and development funding materially compromised its growth prospects and caused the Company lost market share to rivals; (b) the Company s research and development funding and loss of market share made Company growth statements overly optimistic; (c) increasing costs and economic troubles made the Company s time frame for marketing its SB technology and its AVP impossible;