EXHIBIT 10.36
Anchor Gaming
Anchor Gaming 1995 Stock Option Plan
STOCK OPTION AGREEMENT
THIS AGREEMENT, dated as of _____, 1999, is by and between Anchor Gaming
("ANCHOR GAMING"), a Nevada corporation, and the person named on the
signature page to this Agreement (the "PARTICIPANT").
RECITALS
WHEREAS Anchor Gaming has adopted the Anchor Gaming 1995 Stock Option Plan
(the "PLAN") to enable employees of Anchor Gaming and its majority-owned
subsidiaries to acquire shares of Common Stock, $.01 par value, of Anchor
Gaming ("COMMON STOCK") in accordance with the provisions of the Plan.
WHEREAS The Board of Directors (the "BOARD") has selected Participant to
participate in the Plan and has determined to grant Participant the right and
option to purchase shares of Common Stock in accordance with the terms and
conditions of this Agreement, provided that if any change is made in the
shares of Common Stock (including, but not limited to, changes by stock
dividend, stock split, merger or consolidation, but not including the
issuance of additional shares for consideration), the Board of Directors or
the Committee appointed to administer the Plan (the "COMMITTEE"), will make
such adjustments in the number and kind of shares (which may consist of
shares of a surviving corporation to a merger) that may thereafter be
optioned and sold under the Plan and the number and kind of shares (which may
consist of shares of a surviving corporation to a merger) and purchase price
per share of shares subject to outstanding Stock Option Agreements under the
Plan as the Board of Directors or the Committee determines are equitable to
preserve the respective rights of the Participants under the Plan.
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises
and other terms and conditions set forth in this Agreement, Anchor Gaming and
Participant agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms have the
meanings indicated:
(a) "COMPANY" means Anchor Gaming and its majority-owned
subsidiaries.
(b) "CONFIDENTIAL INFORMATION" means all written,
machine-reproducible, oral and visual data, information, and
material, including, but not limited to, business, financial,
and technical information; and computer programs, documents,
and records (including those that Participant develops in the
scope of his or
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her employment) that (i) the Company or any of its
customers or suppliers treats as proprietary or
confidential through markings or otherwise, (ii) relates to
the Company or any of its customers or suppliers or any of
their business activities, products, or services (including
software programs and techniques) and is competitively
sensitive or not generally known in the relevant trade or
industry, or (iii) derives independent economic value from
not being generally known to, and is not readily
ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use.
Confidential Information does not include any information
or material that is approved by Anchor Gaming for
unrestricted public disclosure.
(c) "EXPIRATION DATE" means the date and time as of which the
Option expires, which is the earlier of (i) the close of
business on the date one year after the entire Option has
Vested or (ii) the date and time as of which all rights to
exercise the Option are terminated under SECTION 2(d).
(d) "MARKET VALUE" of a share of Purchased Stock on a given date
means (i) if the Purchased Stock is Publicly Traded, the
closing sale price for Purchased Stock, as determined in good
faith by the Board of Directors, on such date or, if no
closing sale price is available for such date, on the most
recent prior date for which a closing sale price is available
or, if no closing sale price is available, the closing bid
price, as so determined, on such date or, if no closing bid
price is available for such date, the closing bid price on the
most recent prior date for which a closing bid price is
available, or (ii) if the Purchased Stock is not Publicly
Traded, its fair market value, as determined in good faith by
the Board of Directors, as of such date.
(e) "NET INVESTMENT PROCEEDS," with respect to any share of
Purchased Stock sold or otherwise transferred by Participant
or Participant's successor in interest, means the greater of
the value of the gross proceeds received for such share or the
Market Value of such share on the date of sale or transfer
less, in either case, (i) the exercise price of the Option for
such share, (ii) any reasonable and customary commission
actually paid for the sale or transfer, and (iii) the verified
amount of any income taxes paid or payable on the sale or
transfer.
(f) "OPTION" means the right and option to purchase shares of
Common Stock evidenced by this Agreement.
(g) "PUBLICLY TRADED" means Common Stock has been listed on a
registered national securities exchange or approved for
quotation in the Nasdaq(R) National Market ("NASDAQ") or
another national securities exchange of automated quotation
service.
(h) "PURCHASED STOCK" means any security purchased upon the
exercise of this Option, together with any successor security,
property or cash issued or
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distributed by Anchor Gaming or any successor entity,
whether by way of merger, consolidation, share exchange,
reorganization, liquidation, recapitalization, or otherwise.
(i) "TERMINATION FOR SUBSTANTIAL MISCONDUCT" means termination of
employment for commission of a felony by the Participant;
actions involving moral turpitude, theft, or dishonesty by the
Participant in a material matter; breach of any obligation
under this Agreement or any other agreement or obligation of
the Participant to the Company; or failure by Participant to
carry out the directions, instructions, policies, rules,
regulations, or decisions of the Board or the executive
officers of the Company including, without limitation, those
relating to business ethics and the ethical conduct of the
business of the Company.
(j) "TRANSFER" or "TRANSFER" or derivations thereof includes any
sale, assignment, gift, pledge, encumbrance, hypothecation,
mortgage, exchange, or any other disposition or any interest
in this Agreement, the Option, or securities issued on
exercise of this Option.
(k) "VESTING," or "VESTING" or derivations thereof with respect to
any Option issued under this Agreement, means receiving the
right to exercise the Option.
(l) "VESTING PERIOD" means the period of time commencing on the
date of this Agreement and ending on the date on which the
entire Option has Vested.
2. GRANT OF OPTION; PURCHASE OF STOCK.
(a) Subject to the terms, conditions, and restrictions set forth
in the Plan and in this Agreement, Anchor Gaming hereby grants
to Participant, and Participant hereby accepts from Anchor
Gaming, the option to purchase from Anchor Gaming the number
of shares of Common Stock specified on ATTACHMENT A to this
Agreement, at the purchase price so specified, which option
will Vest in Participant in accordance with the Vesting
Schedule set forth on ATTACHMENT A to this Agreement. The
Option shall continue to Vest only for as long as Participant
is an employee of Company, unless the Board or the Committee,
in its sole discretion, agrees in writing otherwise.
Participant will have the right to exercise the Option and
purchase Common Stock after the Option Vests as provided in
SECTION 2(d).
(b) The purchase price of shares as to which the Option is
exercised must be paid to Anchor Gaming at the time of the
exercise either in cash or in such other consideration as the
Board or the Committee may approve or a combination of cash
and such other consideration having a total fair market value,
as determined by the Board or the Committee, equal to the
purchase price.
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(c) The Board or the Committee may elect to assist Participant in
satisfying an obligation to pay or withhold taxes required as
a result of the exercise of this Option by accepting shares of
Purchased Stock at Market Value to satisfy the tax obligation.
The shares of Purchased Stock accepted may be either shares
withheld upon the exercise of this Option or other shares
already owned by Participant. In determining whether to
approve acceptance of Purchased Stock to satisfy such a tax
obligation, the Board or the Committee may consider whether
the shares proposed to be delivered are subject to any holding
period or other restrictions on transfer and may waive or
arrange for the waiver of any such restrictions.
(d) The Option is only exercisable as to Vested Options. Once
Vested, (i) if the Participant ceases to be an employee of the
Company for any reason whatsoever, voluntary or involuntary,
other than death, the Option may be exercised only until 5:00
p.m. Las Vegas time on the business day immediately preceding
the first anniversary of such cessation the date of cessation
of employment and in any case no later than the Expiration
Date, and (ii) if the Participant ceases to be an Employee
because of death of the Participant, the Option may be
exercised by the Participant's estate only for two years after
the Participant's death and in any case no later than the
Expiration Date.
3. RESTRICTIONS ON TRANSFER. The Option may not be sold or otherwise
transferred and is exercisable only by Participant during Participant's
lifetime unless the transfer is by will or the laws of descent and
distribution upon Participant's death. Anchor Gaming is not obligated
to recognize any purported sale or other transfer of the Option or any
Purchased Stock in violation of this SECTION 3 and, unless it elects to
do otherwise, may treat any such purported sale or transfer as null,
void, and of no effect.
4. RIGHTS TO BUY BACK PURCHASED STOCK AND TO REQUIRE PAYBACK OF CERTAIN
PROFITS.
(a) If the Board discovers that Participant has engaged in any
conduct prohibited by SECTION 5 or if Participant ceases to be
employed by the Company and the Board, in its sole discretion,
determines that Participant's cessation of employment resulted
from a Termination for Substantial Misconduct or would have
resulted from a Termination for Substantial Misconduct had the
relevant facts been known at the time of Participant's
cessation of employment, Anchor Gaming will have (i) the right
for 180 days after the Board discovers the relevant facts to
cancel any unexercised Option, whether or not Vested, and to
buy back from Participant any shares of Purchased Stock then
owned by Participant, at a purchase price equal to the price
per share paid by Participant for the shares, and (ii) the
right to require Participant to pay back to Anchor Gaming in
cash the Net Investment
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Proceeds with respect to any shares of Purchased Stock sold or
otherwise transferred by Participant.
(b) Whenever Anchor Gaming has a right to buy back shares of
Purchased Stock or to require Participant to pay back to
Anchor Gaming Participant's Net Investment Proceeds with
respect to any shares of Purchased Stock under this SECTION 4,
Anchor Gaming may exercise its right by notifying Participant
or the subsequent holder of Anchor Gaming's election to
exercise its right within the designated exercise period. In
the case of a buyback under SECTION 4(a), the giving of such
notice will give rise to an obligation on the part of
Participant or the subsequent holder to tender to Anchor
Gaming, within 10 days, any previously issued certificate
representing shares of Purchased Stock to be bought back, duly
endorsed in blank or having a duly executed stock power
attached in proper form for transfer free and clear of any
claim by any other person or entity. If any such certificate
is not tendered within 10 days, Anchor Gaming may cancel any
outstanding certificate representing shares to be bought back.
Anchor Gaming is required to tender the purchase price for
shares to be bought back under this SECTION 4 within 20 days
of giving notice of its election to exercise its right to buy
back shares. If the person from whom the shares are to be
bought back has not complied with an obligation to return a
certificate representing shares to be bought back, however,
Anchor Gaming is not required to tender the purchase price
until 20 days after the certificate is duly returned or 20
days after it cancels the certificate, whichever occurs first.
5. COMPETITION AND NON-DISCLOSURE. Participant acknowledges that: (i)
in the course and as a result of employment with the Company,
Participant will obtain special training and knowledge and will come
in contact with the Company's current and potential customers, which
training, knowledge, and contacts would provide invaluable benefits
to competitors of the Company; (ii) the Company is continuously
developing or receiving Confidential Information, and that during
Participant's employment he or she will receive Confidential
Information from the Company, its customers and suppliers and
special training related to the Company's business methodologies;
and (iii) Participant's employment by Company creates a relationship
of trust that extends to all Confidential Information that becomes
known to Participant. Accordingly, and as a material inducement to
Anchor Gaming to grant this Option to Participant and other good and
valuable consideration, Participant agrees that Anchor Gaming will
be entitled to terminate all rights to exercise the Option and to
exercise the rights specified in SECTION 4 if Participant does any of
the following without the prior written consent of the Company:
(a) while employed by the Company or within one year thereafter:
(i) competes with, or engages in any business that is
competitive with, the Company within 250 miles of any
location at which the Company
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has done business during the employment of the
Participant with the Company;
(ii) solicits or performs services, as an employee,
independent contractor, or otherwise, for any person
or entity (including any affiliates or subsidiaries
of that person or entity) that is or was a customer
or prospect of the Company during the two years
before Participant's employment with the Company
ended if Participant solicited business from or
performed services for that customer or prospect
while employed by Company; or
(iii) recruits, hires, or assist, directly or indirectly,
anyone to recruit or hire anyone who was an employee
of the Company, or of any of its customers for whom
Participant performed services of from whom
Participant solicited business, within the six months
before Participant's employment with the Company
ended; or
(b) discloses or uses any Confidential Information, except in
connection with the good faith performance of Participant's
duties as an employee; or fails to take reasonable precautions
against the unauthorized disclosure or use of Confidential
Information; fails, upon Anchor Gaming' request, to execute
and comply with a third party's agreement to protect its
confidential and proprietary information; solicits or induces
the unauthorized disclosure or use of Confidential
Information; or fails to return on Anchor Gaming's request any
and all Confidential Information in the Participant's care,
custody, or control.
If any court of competent jurisdiction finds any provision of this
SECTION 5 to be unreasonable as to substantive scope, duration or
geographic scope, then the Participant expressly agrees that, at
Anchor's sole discretion, and in addition to any other remedies at law
or equity that may be available to Anchor Gaming: (i) such provision
will be considered to be amended to provide the broadest scope of
protection to the Company that such court would find reasonable and
enforceable or (ii) Anchor Gaming may require that this Agreement be
rescinded.
6. COMPLIANCE WITH SECURITIES LAWS. Participant hereby agrees that,
upon demand by Anchor Gaming, any person exercising this Option, at
the time of such exercise, will deliver to Anchor Gaming a written
representation to the effect that the shares of Purchased Stock
being acquired are being acquired for investment and not with a view
to any resale or distribution thereof. Participant further agrees
that neither Participant nor any successor in interest of
Participant will sell or otherwise transfer the Option or any shares
of Purchased Stock in any way that might result in a violation of
any federal or state securities laws or regulations. Participant
further acknowledges and agrees that Anchor Gaming may require
Participant or any subsequent holder of the Option or of any shares
of Purchased Stock to provide Anchor Gaming, prior to any sale or
other transfer, with such other representations,
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commitments, and opinions regarding compliance with applicable
securities laws and regulations as Anchor Gaming may deem necessary
or advisable.
7. STOCK CERTIFICATES; RIGHTS AS SHAREHOLDER. All certificates
representing shares of Purchased Stock will bear such legends as the
Board determines are necessary or appropriate. Whether or not
certificates representing shares of Purchased Stock have been issued or
delivered, Participant will have all the rights of a shareholder of
Purchased Stock, including voting, dividend and distribution rights,
with respect to shares of Purchased Stock owned by Participant.
Participant will not have any rights as a shareholder with respect to
any shares of Common Stock subject to the Option before the date of
issuance to Participant of shares upon exercise of the Option.
8. INCOME TAX WITHHOLDING. Participant shall, upon request by the Company,
reimburse the Company for, or the Company may withhold from sums or
property otherwise due or payable to Participant, any amounts the
Company is required to remit to applicable taxing authorities as income
tax withholding with respect to the Option or any Purchased Stock. If
shares of Purchased Stock are withheld for such purpose, they will be
withheld at Market Value. If Participant fails to reimburse the Company
for any such amount when requested, the Company has the right to
recover that amount by selling or canceling sufficient shares of any
Purchased Stock held by Participant.
9. COMPLIANCE WITH PLAN. Participant acknowledges receipt of a copy of the
Plan and further acknowledges that this Agreement is entered into, and
the Option is granted, pursuant to the Plan. If the provisions of the
Plan are inconsistent with the provisions of this Agreement, the
provisions of the Plan supersede the provisions of this Agreement.
10. NOTICES. Any notice to Anchor Gaming or the Company that is required
or permitted by this Agreement shall be addressed to the attention
of the Secretary of Anchor Gaming at its principal office. Any
notice to Participant that is required or permitted by this
Agreement shall be addressed to Participant at the most recent
address for Participant reflected in the appropriate records of the
Company. Either party may at any time change its address for
notification purposes by giving the other written notice of the new
address and the date upon which it will become effective. Whenever
this Agreement requires or permits any notice from one party to
another, the notice must be in writing to be effective and, if
mailed, shall be deemed to have been given on the third business day
after the same is enclosed in an envelope, addressed to the party to
be notified at the appropriate address, property stamped, sealed,
and deposited in the United States mail, and, if mailed to the
Company, by certified mail, return receipt requested.
11. REMEDIES. Anchor Gaming is entitled, in addition to any other remedies
it may have at law or in equity, to temporary and permanent injunctive
and other equitable relief to enforce the provisions of this Agreement.
Any action to enforce the
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provisions of, or relating to, this Agreement may be brought in the
state or federal courts having jurisdiction in the State of Nevada. By
signing this Agreement, Participant consents to the personal
jurisdiction of such courts in any such action.
12. ASSIGNMENT. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, personal
representatives, successors, and assigns. However, Participant does not
have the power or right to assign this Agreement without the prior
written consent of Anchor Gaming.
13. ATTORNEYS' FEES. If any legal proceeding is brought to enforce or
interpret the terms of this Agreement, the prevailing party will be
entitled to reasonable attorneys' fees, costs, and necessary
disbursements in addition to any other relief to which that party may
be entitled.
14. SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable for any reason, the validity and enforceability of all
other provisions of this Agreement will not be affected.
15. HEADINGS. The section headings used herein are for reference and
convenience only and do not affect the interpretation of this
Agreement.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEVADA, WITHOUT REGARD TO THE
CHOICE OF LAW RULES IN SUCH LAW OR ANY OTHER PRINCIPLE THAT COULD
REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
17. ENTIRE AGREEMENT. This Agreement, together with the Plan and any
procedure adopted by the Board or the Committee under the Plan,
constitutes the entire agreement between the parties with respect to
its subject matter and may be waived or modified only in writing.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, Participant and a
duly-authorized representative of Anchor Gaming have executed this Agreement as
of the date first above written.
PARTICIPANT ANCHOR GAMING
By:
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Signature Title:
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Printed Name
CONSENT OF SPOUSE
As the spouse of Participant, I consent to be bound by this Stock Option
Agreement and agree that this consent will be binding on my interest under this
Agreement and on my heirs, legatees, and assigns.
---------------------------------
Signature
---------------------------------
Printed Name
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ATTACHMENT A
TO
STOCK OPTION AGREEMENT
FOR
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1. Purchase Price: $______per Share.
2. Expiration Date: _______, ______, unless earlier terminated under terms
of the Agreement.
3. Vesting Schedule:
VESTING DATES Number of
------------- Options Vesting
---------------
Total
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