PRIMADONNA RESORTS, INC.
COMBINATION EMPLOYEE INCENTIVE AND NONQUALIFIED
STOCK OPTION AGREEMENT
THIS AGREEMENT is between Primadonna Resorts,
Inc., a Nevada corporation (the "Corporation"), and
_______________ (the "Employee").
W I T N E S S E T H
WHEREAS, pursuant to the Amended and Restated 1993
Incentive Plan (the "Plan"), the Corporation has granted to
the Employee effective as of ______ ___, ____(the "Award
Date") an incentive stock option to purchase all or any part
of ________ authorized but unissued or treasury shares of
Common Stock, $.01 par value, of the Corporation upon the
terms and conditions set forth herein and in the Plan.
NOW, THEREFORE, in consideration of the mutual
promises and covenants made herein and the mutual benefits
to be derived herefrom, the parties agree as follows:
1. Defined Terms. Capitalized terms used herein
and not otherwise defined herein shall have the meaning
assigned to such terms in the Plan.
2. Grant of Option. This Agreement evidences
the Corporation's grant to the Employee of the right and
option to purchase, on the terms and conditions set forth
herein and in the Plan, all or any part of an aggregate of
________ shares of the Common Stock at the price of $_____
per share (the "Option"), exercisable from time to time,
subject to the provisions of this Agreement and the Plan,
prior to the close of business on the day before the tenth
anniversary of the Award Date (the "Expiration Date"). Such
price equals the fair market value as of the Award Date. It
is the intent of the Corporation that this Option constitute
(to the extent permitted by law) an incentive stock option
("ISO") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), with respect
to ______ of the shares subject to the Option (the "ISO
Shares") and a nonqualified option with respect to any
remainder of the shares subject to the Option (the "Non-ISO
Shares").
3. Exercisability of Option. Except as earlier
permitted by or pursuant to Section 4(c)(ii) of the Plan and
Section 8 of this Agreement, or by resolution of the
Committee adopted after the date hereof, no shares may be
purchased by exercise of the Option until the expiration of
twelve (12) months after the Award Date. The Option shall
become exercisable in installments (i) as to ______% of the
ISO Shares and ______% of the Non-ISO Shares (each subject
to adjustment) on and after the first anniversary of the
Award Date and (ii) as to an additional ______% of the ISO
Shares and an additional ______% of the Non-ISO Shares (each
subject to adjustment) on each of the ________________
anniversaries of the Award Date.
To the extent the Employee does not in any year
purchase all or any part of the shares to which the Employee
is entitled, the Employee has the right cumulatively
thereafter to purchase any shares not so purchased and such
right shall continue until the Option terminates or expires.
Fractional share interests shall be disregarded, but may be
cumulated. No fewer than 100 shares may be purchased at any
one time, unless the number purchased is the total number at
the time available for purchase under the Option.
4. Limitation on Exercise of Option as an ISO.
In the event the Employee is granted incentive stock options
(whether under this Award Agreement or any other incentive
stock option agreement) and the aggregate fair market value
(determined as of the respective dates of grant of such
options) of the Common Stock with respect to which such
options are first exercisable in any calendar year exceeds
$100,000, the most recently granted options shall be treated
as non-qualified stock options to the extent of the excess.
In addition, in the case of simultaneously granted options,
the Corporation may, in the manner and to the extent
permitted by law, designate which shares are to be treated as
stock acquired pursuant to the exercise of an incentive
stock option.
5. Method of Exercise of Option. The Option
shall be exercisable by the delivery to the Corporation of a
written notice stating the number of shares to be purchased
pursuant to the Option and accompanied by payment made
(a) in cash or by check payable to the order
of the Corporation;
(b) by exchange of Common Stock of the
Corporation, then having been owned by the Employee
for at least six (6) months, having a then fair market
value (as determined by the Committee) equal to such
purchase price;
(c) to the extent (if any) permitted by the
Committee, by promissory note of the Employee, to be
secured by a security interest in the shares issued
upon exercise and such other collateral, if any, as the
Committee may require;
(d) to the extent (if any) permitted by the
Committee, by reduction in the number of shares of
Common Stock deliverable upon exercise by that number
of shares which have a then fair market value (as
determined by the Committee) equal to such purchase
price; or
(e) in any combination of the consideration
permitted by the foregoing subsections;
subject to such further limitations, rules and procedures as
the Committee may from time to time establish as to any
noncash payment.
Any promissory note shall bear a rate of interest
not less than a rate, if any, as required under federal tax
law to prevent any imputation of interest, unless such rate
exceeds the maximum rate permissible under Nevada law, in
which case the rate shall not exceed the maximum permitted
under Nevada law. All other terms of such note shall be
determined, subject to compliance with applicable laws
(including federal margin requirements if applicable),
solely by the Committee. All terms and conditions,
including whether the note shall become due upon Employee's
termination of employment, shall be expressly set forth in
the promissory note executed by the Employee. In addition,
the Employee (or the Employee's beneficiary or personal
representative) shall furnish any written statements
required pursuant to Section 10(a) of the Plan.
6. Continuance of Employment. As a condition
of this Option, the Employee hereby agrees to remain in the
employ of the Corporation or one of its subsidiaries for a
period of one (1) year after the Award Date. Nothing
contained herein or in the Plan shall confer upon the Employee
any right with respect to the continuation of employment by
the Corporation or any subsidiary or interfere in any way
with the right of the Corporation or of any subsidiary at
any time to terminate such employment or to increase or
decrease the compensation of the Employee from the rate in
existence at any time.
7. Effect of Termination of Employment or Death;
Change in Subsidiary Status. The Option and all other
rights hereunder, to the extent not exercised, shall
terminate and become null and void at such time as the Employee
ceases to be employed by either the Corporation or any
subsidiary, except that
(a) if the Employee terminates by reason of
permanent and total disability (within the meaning of
Section 22(e)(3) of the Code or as otherwise determined
by the Committee), Employee may at any time within a
period of one (1) year after such termination exercise
the Option to the extent the Option was exercisable at
the date of such termination;
(b) if the Employee terminates by reason of
voluntary retirement with the consent of the Corporation,
Employee may at any time within a period of three
(3) months after such termination exercise the Option
to the extent the Option was exercisable at the date of
such termination;
(c) if the Employee terminates by reason of
resignation (other than pursuant to a dismissal for
Cause (as defined below) or in anticipation of such a
dismissal (as determined by the Committee)), Employee
may at any time within a period of 45 days after such
termination exercise the Option to the extent the
Option was exercisable at the date of such termination;
(d) if the Employee dies while in the employ
of the Corporation or any subsidiary, or within one (1)
year after a termination described in subsection (a) of
this Section 7, or within three (3) months after a
termination described in subsection (b) of this Section
7, or within 45 days after a termination described in
subsection (c) of this Section 7, then the Option may
be exercised within a period of one (1) year after
Employee's date of death by the Employee's beneficiary
to the extent the Option was exercisable on the date of
Employee's death (or such earlier termination);
provided, however, that in no event may the Option be
exercised by anyone under this Section or otherwise after the
Expiration Date or, to the extent the Option is exercised as
an ISO, beyond any earlier date required under the Code.
For purposes of subsection (c) of this Section 7,
Employee will be considered to have been dismissed for
"Cause" if the Corporation or a subsidiary has terminated
Employee's employment because of:
(1) any act which has resulted in the Employee's
personal gain at the expense of the Corporation or any
of its subsidiaries, or because of incompetence,
insubordination or refusal to perform assigned duties;
(2) gross negligence, willful misconduct or
breach of fiduciary duty;
(3) conviction of a crime (other than minor
traffic violations or similar offenses);
(4) being under the influence of, or use, sale,
distribution, or possession of unauthorized or illegal
drugs or intoxicating beverages while on duty or on the
Corporation's or a subsidiary's premises;
(5) theft, embezzlement, fraud or forgery;
(6) willful destruction or defacement of the
Corporation's or a subsidiary's, a visitor's, or an
employee's property;
(7) unauthorized disclosure of confidential
information;
(8) falsifying or altering the Corporation's or a
subsidiary's records;
(9) continued and unexplained absences from work;
(10) or other conduct that results in a
substantial detriment to the business or reputation of
the Corporation or any of its subsidiaries;
in each case, as determined by the Committee.
If Employee is employed by an entity which ceases
to be a subsidiary, such event shall be deemed for purposes
of this Section 7 to be a termination of Employee's
employment described in subsection (b). Absence from work caused
by military service or authorized sick leave shall not be
considered as a termination of employment for purposes of
this Section.
8. Acceleration of Option. This Option shall
become immediately exercisable upon a Change in Control or
Event, except as otherwise provided in or pursuant to the
Section 7 of the Plan.
9. Termination of Option Under Certain
Circumstances. Upon an occurrence or transaction in which
the Corporation does not survive, the Option to the extent
not previously exercised shall terminate, provided that (1)
the Corporation or a successor shall have given to Employee
at least ten (10) days notice of any such termination, and
Employee shall have had the right prior to or simultaneously
with the consummation of such occurrence or transaction to
exercise his or her option as to all or any part of the
Common Stock subject to this Agreement, or (2) the Committee
shall have provided for the termination of this Option by
making an adjustment pursuant to the provisions of Section 7
of the Plan.
10. Non-Transferability of Option. During the
Employee's lifetime, this Option and any other rights
hereunder may be exercised only by the Employee or the
Employee's duly appointed guardian or legal representative.
This Option and such rights shall not be sold, transferred,
assigned, pledged, hypothecated or otherwise disposed of in
any way (whether by operation of law or otherwise);
provided, however, that nothing in this Section 10 shall
prevent transfers by will or by the applicable laws of
descent and distribution or pursuant to a "domestic
relations order" as defined by the Code; provided further,
that nothing in this Section 10 shall prevent transfers to
or exercises on behalf of the Employee by the Employee's
legal representative in the event that the Employee has
suffered a disability.
11. Notices. Any notice to be given under the
terms of this Agreement shall be in writing and addressed to
the Corporation at its principal office, to the attention of
the Corporate Secretary and to the Employee at the address
given beneath the Employee's signature hereto, or at such
other address as either party may hereafter designate in
writing to the other.
12. Employee not a Shareholder. Neither the
Employee nor any other person entitled to exercise the
Option shall have any of the rights or privileges of a
shareholder of the Corporation as to any shares of Common
Stock not actually issued and delivered to him prior to
delivery of the exercise price and satisfaction of all other
conditions precedent to the due exercise of the Option and
delivery of shares.
13. Effect of Award Agreement. This Agreement
shall be binding upon and inure to the benefit of any
successor or successors of the Corporation except to the
extent the Committee determines otherwise.
14. Laws Applicable to Construction. The Option
has been granted as of the Award Date, and the
interpretation, performance and enforcement of the Option
and this Agreement shall be governed by the laws of the State of
Nevada.
15. Plan. The Option and all rights of Employee
thereunder are subject to, and the Employee agrees to be
bound by, all of the terms and conditions of the provisions
of the Plan, incorporated herein by this reference. The
Employee acknowledges receipt of a copy of the Plan, which
is made a part hereof by this reference, and agrees to be
bound by the terms thereof. Unless otherwise expressly
provided in other Sections of this Agreement, provisions
of the Plan that confer discretionary authority on the
Committee do not (and shall not be deemed to) create any
rights in the Employee unless such rights are expressly set
forth herein or are otherwise in the sole discretion of the
Committee so conferred by appropriate action of the
Committee under the Plan after the date hereof.
16. Notice of Disposition. The Employee agrees
to notify the Corporation of any sale or other disposition
of any shares of Common Stock received upon exercise of the
Option, if such sale or disposition occurs within two (2)
years after the Award Date or within one (1) year after the
date of such exercise.
IN WITNESS WHEREOF, the Corporation has caused
this Agreement to be executed on its behalf by a duly
authorized officer and the Employee has hereunto set his
hand.
PRIMADONNA RESORTS, INC.
(a Nevada corporation)
Dated: _______________ By_________________________
Xxxx X. Xxxxx
Chairman of the Board, President
and Chief Executive Officer
EMPLOYEE
Dated: _______________ __________________________
(Signature)
Name
Address
City, State Zip
CONSENT OF SPOUSE
In consideration of the execution of the foregoing
Combination Employee Incentive and Nonqualified Stock Option
Agreement by Primadonna Resorts, Inc., I, ___________________
_________, the spouse of the Employee herein named, do hereby
join with my spouse in executing the foregoing Combination
Employee Incentive and Nonqualified Stock Option Agreement and
do hereby agree to be bound by all of the terms and
provisions thereof and of the Plan.
DATED: ______________, ____._____________________________
Signature of Spouse
