DIRECTOR STOCK OPTION GRANT NOTICE AND OPTION AGREEMENT
Exhibit 4.23
As a member of the Board of Directors of Pinnacle Entertainment, Inc. (the “Company”), you
have been granted an option to purchase shares of the Company’s common stock. This award is
subject to the terms and conditions of the 2005 Equity and Performance Incentive Plan and the
following Stock Option Agreement, which are in all events the governing documents for your award.
The details of this award are indicated below.
Optionee: |
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Date of Grant: |
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Number of Shares of Common Stock: |
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Exercise Price Per Share: |
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Term of Option: |
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Vesting Date: |
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Type of Option: |
THIS STOCK OPTION AGREEMENT (together with the above grant notice (the “Grant Notice”), the
“Agreement”) is made and entered into as of the date set forth on the Grant Notice by and between
Pinnacle Entertainment, Inc., a Delaware corporation (the “Company”), and the individual (the
“Optionee”) set forth on the Grant Notice.
A. Pursuant to the Pinnacle Entertainment, Inc. 2005 Equity and Performance Incentive Plan
(the “Plan”), the Compensation Committee (the “Committee”) has determined that it is to the
advantage and best interest of the Company to grant to the Optionee an option (the “Option”) to
purchase the number of shares of the Common Stock of the Company (the “Shares” or the “Option
Shares”) set forth on the Grant Notice, at the exercise price determined as provided herein, and in
all respects subject to the terms, definitions and provisions of the Plan, which is incorporated
herein by reference.
B. Unless otherwise defined herein, capitalized terms used in this Agreement shall have the
meanings set forth in the Plan.
NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Optionee and
the Company hereby agree as follows:
1. Acceptance of Agreement. Optionee has reviewed the Plan and this Agreement, and all
provisions of the Plan and Agreement. By electronically accepting this Option according to the
instructions provided by the Company’s designated broker, Optionee agrees that this electronic
contract contains Optionee’s electronic signature, which Optionee has executed with the intent to
sign this Agreement, and that this Option is granted under and governed by the terms and conditions
of the Plan and this Agreement. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Committee on questions relating to the Plan and this
Agreement.
2. Grant and Terms of Stock Option.
2.1 Grant of Option. Pursuant to the Grant Notice, the Company has granted to the
Optionee the right and option to purchase, subject to the terms and conditions set forth in the
Plan and this Agreement, all or any part of the number of Shares set forth on the Grant Notice at a
purchase price per Share equal to the exercise price per Share set forth on the Grant Notice.
2.2 Vesting. The Option is fully vested as of the date of grant provided, however,
that if the Optionee’s Continuous Status as an Employee, Director or Consultant is terminated for
Cause before exercise of the Option, then this entire Option shall be cancelled and terminated as
of the date of such termination and shall no longer be exercisable as to any Shares, whether or not
previously vested.
2.3 Term of Option. The “Term” of this Option shall begin on the Date of Grant set
forth in the Grant Notice and end on the expiration of the Term specified in the Grant Notice. No
portion of this Option may be exercised after the expiration of the Term.
2.3.1 Except as otherwise provided in a written employment agreement between the Company and
the Optionee, the portion of this Option that is vested and exercisable as of the date of
termination shall terminate and be cancelled on the earlier of (i) the expiration of the Term, or
(ii) one year after termination of Optionee’s Continuous Status as an Employee, Director or
Consultant.
2.3.2 Except as otherwise provided in a written employment agreement between the Company and
the Optionee, the portion of this Option that is vested and exercisable as of the date of
termination shall terminate and be cancelled on the earlier of (i) the expiration of the Term, or
(ii) one year after termination of Optionee’s Continuous Status as an Employee, Director or
Consultant by death or Disability.
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2.3.3 If Optionee’s Continuous Status as an Employee, Director or Consultant is terminated for
Cause, or if, after the termination of Optionee’s Continuous Status as an Employee, Director or
Consultant, the Committee determines that Cause existed before such termination, except as
otherwise provided in a written employment agreement between the Company and the Optionee, this
entire Option shall be cancelled and terminated as of the date of such termination and shall no
longer be exercisable as to any Shares, whether or not previously vested.
3. Method of Exercise.
3.1 Delivery of Notice of Exercise. This Option shall be exercisable by delivery of
instructions, which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised, and such other representations and agreements as
may be required by the Company pursuant to the provisions of the Plan. Exercise of the shares shall
be performed by online execution of exercise through the designated broker’s internet tool, or
delivery of verbal instruction to the designated broker’s customer service agent if so permitted by
the designated broker, together with such information as the broker shall require to complete the
transaction; or a combination thereof. The Option shall be deemed to be exercised no earlier than
receipt by the designated broker of such exercise instructions accompanied by the aggregate
exercise price. This Option may not be exercised for a fraction of a Share.
3.2 Restrictions on Exercise. No Shares will be issued pursuant to the exercise of
this Option unless and until there shall have been full compliance with all applicable requirements
of the Securities Act of 1933, as amended (whether by registration or satisfaction of exemption
conditions), all applicable listing requirements of any national securities exchange or other
market system on which the Common Stock is then listed and all applicable requirements of any
Applicable Laws and of any regulatory bodies having jurisdiction over such issuance. As a
condition to the exercise of this Option, the Company may require the Optionee to make any
representation and warranty to the Company as may be necessary or appropriate, in the judgment of
the Committee, to comply with any Applicable Law.
3.3 Method of Payment. Payment of the exercise price shall be made in full at the
time of exercise (a) in cash or by certified check or bank check or wire transfer of immediately
available funds, (b) by tendering previously acquired Shares (either actually or by attestation,
valued at their then Fair Market Value) that have been owned for a period of at least six months
(or such other period to avoid accounting charges against the Company’s earnings), (c) by delivery
of the exercise instructions together with any other documentation as the designated broker (and
Optionee’s broker, if applicable) require(s) to effect an exercise of the Option and delivery to
the Company of the sale or other proceeds (as permitted by Applicable Law) required to pay the
exercise price, or (d) any combination of any of the foregoing. In addition, the Committee may
impose such other conditions in connection with the delivery of shares of Common Stock in
satisfaction of the exercise price as it deems appropriate in its sole discretion.
3.4 No Rights as a Stockholder. Until the stock certificate evidencing shares of
Common Stock issued upon exercise of this Option is issued (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder will exist with respect to the
Shares, notwithstanding the exercise of the Option.
4. Non-Transferability of Option. This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution or to a beneficiary designated
pursuant to the Plan, and may be exercised during the lifetime of Optionee only by Optionee or the
Optionee’s guardian or legal representative. Subject to all of the other terms and conditions of
this Agreement, following the death of Optionee, this Option may, to the extent it is vested and
exercisable by Optionee in accordance with its terms on the date of death, be exercised by
Optionee’s beneficiary or other person entitled to exercise this Option in the event of Optionee’s
death under the Plan. This Option may be assigned, in connection with the Optionee’s estate plan,
in whole or in part, during the Optionee’s lifetime to one or more Family Members of the Optionee.
Rights under the assigned portion may be exercised by the person or persons who acquire a
proprietary interest in such Option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the Option immediately before such
assignment and shall be set forth in such documents issued to the assignee as the Committee deems
appropriate.
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5. Restrictions; Restrictive Legends. Ownership and transfer of Shares issued pursuant to
the exercise of this Option will be subject to the provisions of, including ownership and transfer
restrictions (including, without limitation, ownership and transfer restrictions imposed by
applicable gaming laws) contained in, the Company’s Certificate of Incorporation, as amended from
time to time, restrictions imposed by Applicable Laws and restrictions set forth or referenced in
legends imprinted on certificates representing such Shares.
6. Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of
the Company, to the extent that this Option had not been previously exercised, it will terminate
immediately prior to the consummation of such proposed dissolution or liquidation. In such
instance, the Committee may, in the exercise of its sole discretion, declare that this Option will
terminate as of a date fixed by the Committee and give the Optionee the right to exercise this
Option prior to such date as to all or any part of the optioned stock, including shares as to which
this Option would not otherwise be exercisable.
7. General.
7.1 Governing Law. This Agreement shall be governed by and construed under the laws
of the State of Delaware applicable to agreements made and to be performed entirely in Delaware,
without regard to the conflicts of law provisions of Delaware or any other jurisdiction.
7.2 Community Property. Without prejudice to the actual rights of the spouses as
between each other, for all purposes of this Agreement, the Optionee shall be treated as agent and
attorney-in-fact for that interest held or claimed by his or her spouse with respect to this Option
and the parties hereto shall act in all matters as if the Optionee was the sole owner of this
Option. This appointment is coupled with an interest and is irrevocable.
7.3 Service as Director. Optionee acknowledges and agrees that the vesting of this
Option is earned only by his or her continuing services as a director of the Company (not through
the act of being appointed as a director, being granted this Option or acquiring shares hereunder).
Optionee further acknowledges and agrees that nothing in this Agreement, nor in the Plan which is
incorporated herein by reference, shall confer upon Optionee any right with respect to continuation
of his or her services as a director or employment by the Company, nor shall it interfere in any
way with the right to terminate his or her services as a director of the Company at any time, with
or without cause.
7.4 Application to Other Stock. In the event any capital stock of the Company or any
other corporation shall be distributed on, with respect to, or in exchange for shares of Common
Stock as a stock dividend, stock split, reclassification or recapitalization in connection with any
merger or reorganization or otherwise, all restrictions, rights and obligations set forth in this
Agreement shall apply with respect to such other capital stock to the same extent as they are, or
would have been applicable, to the Option Shares on or with respect to which such other capital
stock was distributed.
7.5 No Third-Party Benefits. Except as otherwise expressly provided in this
Agreement, none of the provisions of this Agreement shall be for the benefit of, or enforceable by,
any third-party beneficiary.
7.6 Successors and Assigns. Except as provided herein to the contrary, this Agreement
shall be binding upon and inure to the benefit of the parties, their respective successors and
permitted assigns.
7.7 No Assignment. Except as otherwise provided in this Agreement, the Optionee may
not assign any of his, her or its rights under this Agreement without the prior written consent of
the Company, which consent may be withheld in its sole discretion. The Company shall be permitted
to assign its rights or obligations under this Agreement, but no such assignment shall release the
Company of any obligations pursuant to this Agreement.
7.8 Severability. The validity, legality or enforceability of the remainder of this
Agreement shall not be affected even if one or more of the provisions of this Agreement shall be
held to be invalid, illegal or unenforceable in any respect.
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7.9 Equitable Relief. The Optionee acknowledges that, in the event of a threatened or
actual breach of any of the provisions of this Agreement, damages alone will be an inadequate
remedy, and such breach will cause the Company great, immediate and irreparable injury and damage.
Accordingly, the Optionee agrees that the Company shall be entitled to injunctive and other
equitable relief, and that such relief shall be in addition to, and not in lieu of, any remedies it
may have at law or under this Agreement.
7.10 Arbitration.
7.10.1 General. Any controversy, dispute, or claim between the parties to this
Agreement, including any claim arising out of, in connection with, or in relation to the formation,
interpretation, performance or breach of this Agreement shall be settled exclusively by
arbitration, before a single arbitrator, in accordance with this Section 7.10 and the then most
applicable rules of the American Arbitration Association. Judgment upon any award rendered by the
arbitrator may be entered by any state or federal court having jurisdiction thereof. Such
arbitration shall be administered by the American Arbitration Association. Arbitration shall be
the exclusive remedy for determining any such dispute, regardless of its nature. Notwithstanding
the foregoing, either party may in an appropriate matter apply to a court for provisional relief,
including a temporary restraining order or a preliminary injunction, on the ground that the award
to which the applicant may be entitled in arbitration may be rendered ineffectual without
provisional relief. Unless mutually agreed by the parties otherwise, any arbitration shall take
place in the City of Las Vegas, Nevada.
7.10.2 Selection of Arbitrator. In the event the parties are unable to agree upon an
arbitrator, the parties shall select a single arbitrator from a list of nine arbitrators drawn by
the parties at random from the “Independent” (or “Gold Card”) list of retired judges or, at the
option of the Optionee, from a list of nine persons (which shall be retired judges or corporate or
litigation attorneys experienced in stock options and buy-sell agreements) provided by the office
of the American Arbitration Association having jurisdiction over Las Vegas, Nevada. If the parties
are unable to agree upon an arbitrator from the list so drawn, then the parties shall each strike
names alternately from the list, with the first to strike being determined by lot. After each
party has used four strikes, the remaining name on the list shall be the arbitrator. If such
person is unable to serve for any reason, the parties shall repeat this process until an arbitrator
is selected.
7.10.3 Applicability of Arbitration; Remedial Authority. This agreement to resolve
any disputes by binding arbitration shall extend to claims against any parent, subsidiary or
affiliate of each party, and, when acting within such capacity, any officer, director, stockholder,
employee or agent of each party, or of any of the above, and shall apply as well to claims arising
out of state and federal statutes and local ordinances as well as to claims arising under the
common law. In the event of a dispute subject to this paragraph the parties shall be entitled to
reasonable discovery subject to the discretion of the arbitrator. The remedial authority of the
arbitrator (which shall include the right to grant injunctive or other equitable relief) shall be
the same as, but no greater than, would be the remedial power of a court having jurisdiction over
the parties and their dispute. The arbitrator shall, upon an appropriate motion, dismiss any claim
without an evidentiary hearing if the party bringing the motion establishes that he or it would be
entitled to summary judgment if the matter had been pursued in court litigation. In the event of a
conflict between the applicable rules of the American Arbitration Association and these procedures,
the provisions of these procedures shall govern.
7.10.4 Fees and Costs. Any filing or administrative fees shall be borne initially by
the party requesting arbitration. The Company shall be responsible for the costs and fees of the
arbitration, unless the Optionee wishes to contribute (up to 50%) of the costs and fees of the
arbitration. Notwithstanding the foregoing, the prevailing party in such arbitration, as
determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled,
to the extent permitted by law, to reimbursement from the other party for all of the prevailing
party’s costs (including but not limited to the arbitrator’s compensation), expenses, and
attorneys’ fees.
7.10.5 Award Final and Binding. The arbitrator shall render an award and written
opinion, and the award shall be final and binding upon the parties. If any of the provisions of
this paragraph, or of this Agreement, are determined to be unlawful or otherwise unenforceable, in
whole or in part, such determination shall not affect the validity of the remainder of this
Agreement, and this Agreement shall be reformed to the extent necessary to carry out its provisions
to the greatest extent possible and to insure that the resolution of all conflicts between the
parties, including those arising out of statutory claims, shall be resolved by neutral, binding
arbitration.
If a court should find that the arbitration provisions of this Agreement are not absolutely
binding, then the parties intend any arbitration decision and award to be fully admissible in
evidence in any subsequent action, given great weight by any finder of fact, and treated as
determinative to the maximum extent permitted by law.
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7.11 Withholding Taxes. The Company has the right to take whatever steps the Company
deems necessary or appropriate to comply with all applicable federal, state, local, and employment
tax withholding requirements, and the Company’s obligations to deliver shares of Common Stock upon
the exercise of this Option will be conditioned upon compliance with all such withholding tax
requirements. Without limiting the generality of the foregoing, upon the exercise of this Option,
the Company will have the right to withhold taxes from any other compensation or other amounts
which it may owe to the Optionee, or to require the Optionee to pay to the Company the amount of
any taxes which the Company may be required to withhold with respect to the shares issued on such
exercise. Without limiting the generality of the foregoing, the Committee in its discretion may
authorize the Optionee to satisfy all or part of any withholding tax liability by (a) having the
Company withhold from the shares of Common Stock which would otherwise be issued on the exercise of
an Option that number of shares having a Fair Market Value, as of the date the withholding tax
liability arises, equal to or less than the amount of the Company’s withholding tax liability, or
(b) by delivering to the Company previously-owned and unencumbered shares of the Common Stock
having a Fair Market Value, as of the date the withholding tax liability arises, equal to or less
than the amount of the Company’s withholding tax liability.
7.12 Headings. The section headings in this Agreement are inserted only as a matter
of convenience, and in no way define, limit, extend or interpret the scope of this Agreement or of
any particular section.
7.13 Number and Gender. Throughout this Agreement, as the context may require, (a)
the masculine gender includes the feminine and the neuter gender includes the masculine and the
feminine; (b) the singular tense and number includes the plural, and the plural tense and number
includes the singular; (c) the past tense includes the present, and the present tense includes the
past; (d) references to parties, sections, paragraphs and exhibits mean the parties, sections,
paragraphs and exhibits of and to this Agreement; and (e) periods of days, weeks or months mean
calendar days, weeks or months.
7.14 Electronic Delivery and Disclosure. The Company may, in its sole discretion,
decide to deliver or disclose, as applicable, any documents related to this Option granted under
the Plan, future options that may be granted under the Plan, the prospectus related to the Plan,
the Company’s annual reports or proxy statements by electronic means or to request Optionee’s
consent to participate in the Plan by electronic means. Optionee hereby consents to receive such
documents delivered electronically or to retrieve such documents furnished electronically, as
applicable, and agrees to participate in the Plan through any online or electronic system
established and maintained by the Company or another third party designated by the Company.
7.15 Data Privacy. Optionee agrees that all of Optionee’s information that is
described or referenced in this Agreement and the Plan may be used by the Company, its affiliates
and the designated broker and its affiliates to administer and manage Optionee’s participation in
the Plan.
7.16 Acknowledgments of Optionee. Optionee has reviewed the Plan and this Agreement
in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this
Agreement, fully understands all provisions of the Plan and Agreement and, by accepting the Notice
of Grant, acknowledges and agrees to all of the provisions of the Plan and this Agreement.
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7.17 Complete Agreement. The Grant Notice, this Agreement and the Plan constitute the
parties’ entire agreement with respect to the subject matter hereof and supersede all agreements,
representations, warranties, statements, promises and understandings, whether oral or written, with
respect to the subject matter hereof.
7.18 Waiver of Jury Trial. TO THE EXTENT EITHER PARTY INITIATES LITIGATION INVOLVING
THIS AGREEMENT OR ANY ASPECT OF THE RELATIONSHIP BETWEEN US (EVEN IF OTHER PARTIES OR OTHER CLAIMS
ARE INCLUDED IN SUCH LITIGATION), ALL OF THE PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY. THIS
WAIVER WILL APPLY TO ALL CAUSES OF ACTION THAT ARE OR MIGHT BE INCLUDED IN SUCH ACTION, INCLUDING
CLAIMS RELATED TO THE
ENFORCEMENT OR INTERPRETATION OF THIS AGREEMENT, ALLEGATIONS OF STATE OR FEDERAL STATUTORY
VIOLATIONS, FRAUD, MISREPRESENTATION, OR SIMILAR CAUSES OF ACTION, AND IN CONNECTION WITH ANY LEGAL
ACTION INITIATED FOR THE RECOVERY OF DAMAGES BETWEEN OR AMONG US OR BETWEEN OR AMONG ANY OF OUR
OWNERS, AFFILIATES, OFFICERS, EMPLOYEES OR AGENTS.
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