PRIMADONNA RESORTS, INC.
COMBINATION EMPLOYEE INCENTIVE AND NON-INCENTIVE
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 1993 Stock 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 non-qualified 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 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 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 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 non-cash
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 6, 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.
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 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; gross negligence, willful
misconduct or breach of fiduciary duty; conviction of a crime
(other than minor traffic violations or similar offenses); 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;
theft, embezzlement, fraud or forgery; willful destruction or
defacement of the Corporation's or a subsidiary's, a visitor's,
or an employee's property; unauthorized disclosure of
confidential information; falsifying or altering the
Corporation's or a subsidiary's records; continued and
unexplained absences from work; 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.
(a) Definitions. For the purpose of Section 8,
the following capitalized terms shall have the meanings set
forth below:
(i) "Change in Control" shall mean the date
on which either:
a) the "Xxxx Xxxxx Group" own less than
fifteen percent (15%) of the total voting power of
all classes of the Corporation's voting stock,
except as a result of sales made in order to pay
estate taxes owing as a result of the death of
Xxxx X. Xxxxx;
b) any Person other than the Xxxx Xxxxx
Group or the Xxxxx Family, acting together in a
manner which would constitute a group for the
purposes of Section 13(d) of the Securities
Exchange Act of 1934 as amended (a "13(d) Group"),
shall beneficially own (within the meaning of
Rule 13d-3 promulgated under the Securities
Exchange Act of 1934 as amended voting power of
all classes of the Corporation's voting stock
equal to or greater than that owned by the Xxxx
Xxxxx Group;
c) a 13(d) Group succeeds in having
sufficient of its directors on the Corporation's
Board of Directors such that the 13(d) Group's
directors will constitute a majority of the voting
power of the Corporation's Board of Directors; or
d) Xxxx X. Xxxxx shall cease to be the
Corporation's Chairman of the Board of Directors,
except as a result of his death or disability.
(ii) "Xxxx Xxxxx Group" shall mean Xxxx X.
Xxxxx, his executors, administrators, testamentary
trustees, heirs, legatees or beneficiaries.
(iii) "Person" shall mean any legal entity,
including but not limited to any individual,
corporation, group or assemblage, partnership, limited
partnership, joint venture, association, joint stock
company, or trust.
(iv) "Xxxxx Family" shall mean collective
reference to Xxxxx Xxxxx Xxxx, Xxxxxx Xxxxx Xxxxxxxxx,
Xxxxx Xxxxx Xxxxxxxxxxx, Xxxxx X. Xxxxx and Xxxxxxx X.
Xxxxx, their respective executors, administrators,
testamentary trustees, heirs, legatees and
beneficiaries.
(v) "Event" shall mean approval by the
stockholders of the Corporation of any of the
following:
a) The dissolution or liquidation of
the Corporation;
b) An agreement to merge or
consolidate, or otherwise reorganize, with or into
one or more entities which are not Subsidiaries,
as a result of which less than 50% of the
outstanding voting securities of the surviving or
resulting entity are, or are to be, owned by
former stockholders of the Corporation; or
c) The sale of substantially all of the
Corporation's business and/or assets to a person
or entity which is not a Subsidiary.
(vi) "Subsidiary" shall mean any corporation
or other entity a majority or more of the outstanding
voting stock or voting power of which is beneficially
owned directly or indirectly by the Corporation.
(b) Acceleration of Option. As to the Option,
unless prior to a Change in Control or Event the Committee
determines that, upon its occurrence, there shall be no
acceleration of benefits under this Agreement or determines
that only certain or limited benefits under this Agreement
shall be accelerated and the extent to which they shall be
accelerated and/or establishes a different time in respect
of such event for such acceleration, then upon the
occurrence of a Change in Control or Event the Option
granted under this Agreement shall become immediately
exercisable. The Committee may override the limitations on
acceleration in this Section 8 by express provision in this
Agreement and may accord the Employee a right to refuse any
acceleration, whether pursuant to this Agreement or
otherwise, in such circumstances as the Committee may
approve. Any acceleration of the Option shall comply with
applicable regulatory requirements, including without
limitation Section 422 of the Code.
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, effective
September 1, 1993 (or such later date as may be established by
the Committee) pursuant to a "qualified domestic relations order"
as defined by the Code.
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
Incentive 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
Incentive Stock Option Agreement and do hereby agree to be bound
by all of the terms and provisions thereof and of the Plan.
DATED: ______________, 19__. _____________________________
Signature of Spouse
