Exhibit 4.4
NONQUALIFIED STOCK OPTION AGREEMENT
This NONQUALIFIED STOCK OPTION AGREEMENT is made as of the ___ day of
_______, 199_, between HOLLYWOOD PARK, INC., a Delaware corporation (the
"Company" and __________ (the "Optionee").
R E C I T A L S
A. The Board of Directors of the Company (the "Board") has determined
that it is to the advantage and in the best interests of the Company and its
stockholders to grant a nonqualified stock option to Optionee covering 400,000
shares of the Company's Common Stock, in order to more closely align the
Optionee's interests with those of other stockholders of the Company, and has
approved the execution of this Nonqualified Stock Option Agreement between the
Company and Optionee.
B. The option granted hereby is not intended to qualify as an "incentive
stock option" under Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code").
NOW, THEREFORE, the parties hereto agree as follows:
1. Grant of Option. The Company grants to Optionee the right and option
("Option") to purchase on the terms and conditions hereinafter set forth, all or
any part of an aggregate of 400,000 shares of Common Stock at the purchase
prices of $10.1875 per share as to 300,000 shares and $18.00 as to 100,000
shares. The Option shall be exercisable from time to time in accordance with the
provisions of this Agreement during a period expiring on the tenth anniversary
of the date of this Agreement (the "Expiration Date") or earlier in accordance
with Section 4 hereof.
2. Vesting. No portion of this Option shall vest prior to the dates
indicated below. Subject to Section 4 hereof, on or after the date of grant and
the following dates this Option may be exercised up to the indicated percentage
of shares covered by this Option:
Percentage of Each Priced
Option Initially Cumulative Percentage
Date Exercisable Exercisable
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Effective Date 25% 25%
First Anniversary of
Effective Date 25% 50%
Second Anniversary of
Effective Date 25% 75%
Third Anniversary of
Effective Date 25% 100%
Subject to earlier termination under Section 4 hereof, at any time after the
third anniversary of the Effective Date, but no later than the Expiration Date,
Optionee may purchase all or any part of the shares subject to this Option which
Optionee theretofore failed to purchase. The grant of 300,000 of the 400,000
options (including 100,000 options exercisable at $18) which are the subject of
this option are expressly subject to the approval by the stockholders of the
Company of such grant and, accordingly, none of the options vesting after the
Effective Date may be exercised unless and until such approval has been
obtained. In each case the number of shares which may be purchased shall be
calculated to the nearest full share.
Notwithstanding the foregoing, the options granted hereby shall become
fully exercisable prior to the scheduled dates above (subject, however, to the
provisions of the paragraph relating to stockholder approval) if Executive's
employment with the Company pursuant to the terms of his employment agreement
with the Company of even date herewith (the "Employment Agreement") is
terminated prior to the expiration of the term by the Company without cause or
by Executive for good reason (as defined in the Employment Agreement) or due to
a Change of Control (as defined in the Employment Agreement). Further, if
Executive has not been offered appointment as chief executive officer of the
Company by December 31, 1999, and as a result terminates his employment on or
before March 31, 2000, then the options which would have vested on January 1,
2001 shall become vested concurrently with such termination.
The payments that Executive shall be entitled to receive upon the exercise
of the options covered hereby and under his Employment Agreement shall in all
events be limited by the provisions of Section 280G of the Internal Revenue Code
("Code") and the regulations thereunder (or their then equivalents) and no
payment shall be made (and no option vesting accelerated) that would have the
result of limiting the deductibility of such payments by the Company that would
result in the imposition of an excise tax under Section 4999 of the Code.
3. Manner of Exercise. Each exercise of this Option shall be by means of
a written notice of exercise delivered to the Company, specifying the number of
shares to be purchased, the exercise price of the options being exercised and
accompanied by payment to the Company (x) of the full purchase price of the
shares to be purchased (i) in cash or by certified, cashier's or (as funds
clear) personal check payable to the order of the Company, or (ii) by delivery
of shares of Common Stock of the Company which have been owned by the Optionee
for over six months and which are in the possession of the Optionee, or a
combination thereof, and (y) of any required withholding taxes (as contemplated
by Section 6 hereof) in cash or by certified, cashier's or (as funds clear)
personal check payable to the order of the Company. Payment of the exercise
price may also be made by delivering (i) a properly executed exercise notice
instructing the Company to deliver the shares being purchased to a broker,
subject to the broker's delivery of cash to the Company equal to the exercise
price plus any applicable tax withholding amount, (ii) irrevocable instructions
to the broker to promptly deliver to the Company such amounts, and (iii) such
other documentation as the Company and the broker shall request. This Option may
not be exercised for a fraction of a share and no partial exercise of this
Option may be for less than
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(i) one hundred (100) shares or (ii) the total number of shares then eligible
for exercise, if less than one hundred (100) shares.
This Option may be exercised (i) during the lifetime of the Optionee only
by the Optionee; (ii) to the extent permitted by the Committee or by the terms
of this Agreement, Optionee's spouse if such spouse obtained the Option pursuant
to a qualified domestic relations order as defined by the Code or Title I of
ERISA, or the rules thereunder ("Qualified Domestic Relations Order"); and (iii)
after the Optionee's death by his or her transferees by will or the laws of
descent or distribution, and not otherwise, regardless of any community property
interest therein of the spouse of the Optionee, or such spouse's successors in
interest. If the spouse of the Optionee shall have acquired a community property
interest in this Option, the Optionee, or the Optionee's permitted successors in
interest, may exercise the Option on behalf of the spouse of the Optionee or
such spouse's successors in interest.
4. Cessation of Services, Death or Permanent Disability. If the Optionee
ceases to be employed by or provide services to the Company or one of its
subsidiaries for any reason other than the Optionee's death, "permanent
disability" (within the meaning of Section 22(e)(3) of the Code) or termination
for "Cause" (as defined below), the Option shall be exercisable until the
earlier of (i) the Expiration Date or (ii) a date three (3) months after the
Optionee ceases to be employed by or provide services to the Company or one of
its subsidiaries, but only to the extent the Option was or became exercisable
due to such termination or cessation of employment or services and shall
thereafter expire and be void and of no further force or effect. The employment
or other relationship of the Optionee to the Company or any subsidiary shall be
deemed to continue during any leave of absence which has been authorized in
writing by the Committee.
If the Optionee dies or becomes "permanently disabled" while the
Optionee is employed by or providing services to the Company or any of its
subsidiaries, the Option shall be exercisable until the earlier of (i) the
Expiration Date or (ii) a date six (6) months after the date of such death or
"permanent disability", but only to the extent the Option was exercisable on the
date of death or "permanent disability", and shall thereafter expire and be void
and of no further force or effect. During such period after death, any vested,
unexercised portion of the Option may be exercised by the person or persons to
whom the Optionee's rights under the Option shall pass by reason of the death of
the Optionee, whether by will or by the applicable laws of descent and
distribution.
If the Optionee is terminated for Cause, either as an employee of or
as a provider of services to the Company or one of its subsidiaries, then the
Option shall terminate immediately and be void and of no further force or effect
and may not be exercised for any reason. For purposes of this Agreement, the
Optionee shall be deemed to have been terminated for "Cause" if such termination
was as a result of any one or more of the events specified in Sections 6.1.1,
6.1.2 and 6.1.3 of the Employment Agreement, which provisions are incorporated
herein by this reference.
If the Optionee is terminated for Cause, the Company shall have the
option, exercisable within ninety (90) days of termination, to repurchase any
shares of Common
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Stock acquired by the Optionee through the exercise of this Option during the
three-month period immediately preceding such termination and which are still
held by the Optionee. The repurchase price per share payable by the Company
shall be the exercise price paid by the Optionee as specified in Section 1
hereof, plus interest at the rate of ten percent (10%) per annum from the date
of payment of the exercise price by the Optionee. Certificates representing the
shares of Common Stock acquired by the Optionee pursuant to the exercise of this
Option may bear a legend regarding the Company's repurchase option.
Any unvested portion of the Option at the date of cessation of
employment or of provision of services, whether or not for Cause, or of death or
permanent disability, as the case may be and which do not become vested by
reason of such termination, shall immediately be cancelled and shall not be
exercisable.
5. Shares to be Issued in Compliance with Federal Securities and Other
Applicable Laws and Exchange Rules. By accepting the Option, Optionee
represents and agrees, for Optionee and his or her legal successors (by will or
the laws of descent and distribution or through a Qualified Domestic Relations
Order), that none of the shares purchased upon exercise of the option will be
acquired with a view to any sale, transfer or distribution of said shares in
violation of the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations promulgated thereunder, any applicable state "blue
sky" laws or any applicable foreign laws. If required by the Committee at the
time the Option is exercised, Optionee or any other person entitled to exercise
the Option shall furnish evidence satisfactory to the Company (including a
written and signed representation) to such effect in form and substance
satisfactory to the Company, including an indemnification of the Company in the
event of any violation of the Securities Act, state blue sky laws or any
applicable foreign laws by such person.
The Company covenants and agrees to use its reasonable best efforts to file
and keep effective a Registration Statement on Form S-8 and such listing
applications with the New York Stock Exchange as may be appropriate covering the
issuance of the shares of Common Stock which are the subject of this Option.
No shares shall be issued and delivered upon the exercise of any
option unless and until there shall have been full compliance with all
applicable requirements of the Securities Act (whether by registration or
satisfaction of exemption conditions), all applicable listing requirements of
any principal securities exchange on which shares of the same class are then
listed and any other requirements of law (including without limitation state
blue sky laws) or of any regulatory bodies having jurisdiction over such
issuance and delivery.
6. Withholding of Taxes. Upon the exercise of this Option, the Company
shall have the right to require Optionee or Optionee's legal successor to pay
the Company the amount of any taxes which the Company may be required to
withhold with respect to such shares.
7. No Assignment. This Option and all other rights and privileges granted
hereby shall not be transferred, assigned, pledged or hypothecated, either
voluntarily or by
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operation of law otherwise than by will or the laws of descent and distribution
or pursuant to a Qualified Domestic Relations Order. Upon any attempt to so
transfer, assign, pledge, hypothecate or otherwise dispose of this Option or any
other right or privileges granted hereby contrary to the provisions hereof, this
Option and all rights and privileges contained herein shall immediately become
null and void and of no further force or effect.
8. Adjustment for Reorganizations, Stock Splits, etc. If the outstanding
shares of Common Stock of the Company (or any other class of shares or
securities which shall have become issuable upon the exercise of this Option
pursuant to this sentence) are increased or decreased or changed into or
exchanged for a different number or kind of shares or securities of the Company
through reorganization, recapitalization, reclassification, stock dividend,
stock split, reverse stock split or other similar transaction, an appropriate
and proportionate adjustment shall be made in the maximum number and kind of
shares or securities receivable upon the exercise of this Option, without change
in the aggregate purchase price applicable to the unexercised portion of this
Option, but with a corresponding adjustment in the price for each share or other
unit of any security covered by this Option.
If the majority of any class of directors be comprised of individuals
who were not either nominated by the then existing Board of Directors or had not
been appointed by the then existing Board of Directors (any of the foregoing, a
"Corporate Transaction"), subject to the following sentence, the Plan and this
Option shall terminate and be of no further force and effect. Notwithstanding
the foregoing, the Committee shall provide in writing in connection with any
such transaction for either or both of the following alternatives: (i) for this
Option (if granted more than six months before such transaction) to become
immediately exercisable in full notwithstanding the provisions of Sections 2 and
3 hereof; or (ii) for the payment in cash or stock at the option of the
Committee in lieu of and in complete satisfaction of this Option. Option Holder
shall be entitled to the most favorable treatment afforded to any other senior
executive relative to the foregoing. The Option Holder may exercise the Option
subject to the consummation of a Corporate Transaction.
Adjustments under this Section 8 shall be made by the Committee, whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. No fractional shares of stock shall be
issued under this Option on any such adjustment.
9. Participation by Optionee in Other Company Plans. Nothing herein
contained shall affect the right of Optionee to participate in and receive
benefits under and in accordance with the then current provisions of any
pension, insurance, profit sharing or other employee welfare plan or program of
the Company or of any subsidiary of the Company.
10. No Rights as a Stockholder Until Issuance of Stock Certificate.
Neither Optionee nor any other person legally entitled to exercise this Option
shall be entitled to any of the rights or privileges of a stockholder of the
Company in respect of any shares issuable upon any exercise of this Option
unless and until a certificate or certificates representing such shares shall
have been actually issued and delivered to Optionee.
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11. Not an Employment or Service Contract. Nothing herein contained shall
be construed as an agreement by the Company or any of its subsidiaries, express
or implied, to employ Optionee or contract for Optionee's services, to restrict
the Company's or such subsidiary's right to discharge Optionee or cease
contracting for Optionee's services or to modify, extend or otherwise affect in
any manner whatsoever, the terms of any employment agreement or contract for
services which may exist between Optionee and the Company or any of its
subsidiaries.
12. Governing Law. The interpretation, performance and enforcement of this
Agreement shall be governed by the internal substantive laws of the State of
Delaware, without regard to the conflict of laws provisions of that or any other
State.
HOLLYWOOD PARK, INC.
By:_____________________________
Its:____________________________
OPTIONEE
________________________________
Name:
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