EXHIBIT 3
AGREEMENT TO TERMINATE STOCK OPTIONS
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This Agreement to Terminate Stock Options (the "AGREEMENT") is made
as of this 29th day of July, 2002, by and among Xxxx X. Xxxxxxxx
("XXXXXXXX") who resides at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, XX 00000,
Xxxxx Xxxxxxxx ("XXXXX") who resides at 000 Xxxxx Xxxx, Xxxxxxxxx, XX 00000
and Xxxxx Xxxxxxxx ("XXXXX") who resides at 0000 Xxxxxxxx Xxxxxx, Xxx. 0,
Xxxxxxx Xxxx, XX 00000.
W I T N E S S E T H:
WHEREAS, XXXXXXXX currently owns, in his name, a total of 1,040,878
shares of restrictive stock in President Casinos, Inc. ("PREZ"), a
publicly-traded Delaware corporation; and
WHEREAS, XXXXX and XXXXXXXX entered into a Stock Option Agreement
dated February 28, 2001, in which XXXXXXXX granted to XXXXX, an option to
purchase 150,210 shares of PREZ stock from XXXXXXXX, at a price of $.39 per
share, for a period of ten (10) years; and
WHEREAS, XXXXX and XXXXXXXX also entered into a Stock Option
Agreement dated February 28, 2001, in which XXXXXXXX granted to XXXXX, an
option to purchase an additional 150,210 shares of PREZ stock from XXXXXXXX
at a price of $.39 per share, for a period of ten (10) years; and
WHEREAS, on June 20, 2002, PREZ filed for Chapter 11 bankruptcy
protection in the United States Bankruptcy Court for the Southern District
of Mississippi, and on that date and thereafter, many of PREZ'S subsidiaries
also filed for Chapter 11 bankruptcy protection in the United States
Bankruptcy Court for the Southern District of Mississippi, which bankruptcy
filings substantially depressed the PREZ share price and will continue to
substantially depress the PREZ share price for an extended period of time;
and
WHEREAS, neither XXXXX nor XXXXX have ever been an officer,
director or employee of PREZ or any of its subsidiaries; and
WHEREAS, XXXXXXXX has been and is currently PREZ'S Chairman of the
Board and due to his position as Chairman and because he is the grandfather
of XXXXX and XXXXX, XXXXXXXX previously granted to XXXXX and XXXXX the
aforementioned stock options in order to permit XXXXX and XXXXX the
opportunity to participate in the anticipated appreciation of PREZ's share
price over time; and
WHEREAS, Stann Financial, LLC, an independent appraisal company,
situated in St. Louis, Missouri, has appraised the value of XXXXXXXX'X
1,040,878 PREZ shares, as of July 29, 2002, at a fair market value of $.10
per share, which appraisal takes into account various factors, including
PREZ'S bankruptcy filings, the size of XXXXXXXX'X block of PREZ shares to be
transferred, as well as the fact that all of his shares are restricted
pursuant to Securities and Exchange Commission Rule 144 and are further
restricted pursuant to that certain Executive Rights Agreement dated
November 20, 1997 entered into by and among XXXXXXXX, PREZ and other
parties; and
WHEREAS, XXXXXXXX has currently offered to sell his entire block of
1,040,878 PREZ shares at $.10 per share to his three grandsons, XXXXXXXX,
XXXXX and XXXXX, but XXXXX and XXXXX have declined to participate in the
purchase; and
WHEREAS, Xxxxxxxx X. Xxxxxxxx ("XXXXX"), the brother of XXXXX and
XXXXX, is an officer, a member of the Board of Directors and an employee of
PREZ, has indicated that he desires to purchase the entire block of
XXXXXXXX'X PREZ shares for $.10 per share in order to
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protect and maintain his positions as a vice-president, member of the Board
of Directors and employee of PREZ, notwithstanding the fact that PREZ and
many of its subsidiaries are in bankruptcy and that XXXXXXXX'X PREZ stock is
restricted; and
WHEREAS, XXXXX has asked his brother, XXXXX, to participate in his
purchase of the stock, however, XXXXX holds no position with PREZ to
protect, nor does he desire to risk any current cash payment necessary to
participate in the purchase; and
WHEREAS, XXXXX has also asked his other brother, XXXXX, to
participate in his purchase of the stock, however, XXXXX holds no position
with PREZ to protect, and is now the new minister and founder of the New
Life Bible Church in Butler, PA, which position would not be compatible with
the purchase of PREZ stock, and he has likewise indicated that he does not
desire to risk any current cash payment necessary to participate in the
purchase; and
WHEREAS, XXXXX and XXXXX have agreed with XXXXXXXX to irrevocably
relinquish, terminate and forever extinguish any and all rights that each of
them have under their respective February 28, 2001 Option Agreements, as if
the same had never been entered into, in order to permit XXXXX to purchase
the entire block of XXXXXXXX'X 1,040,878 PREZ shares.
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth below and for other good and valuable consideration, and
intending to be legally bound hereby, the parties to this AGREEMENT agree as
follows:
1. INCORPORATION OF RECITALS. All of the foregoing recitals
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are incorporated by reference herein as if set forth at length.
2. TERMINATION OF SHAWN'S OPTION AGREEMENT. XXXXXXXX and
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XXXXX hereby agree that the February 28, 2001 Option Agreement which they
entered into, and any and all
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rights thereunder, are hereby immediately and irrevocably relinquished,
terminated and forever extinguished, as if same had never been entered into.
3. TERMINATION OF DAVID'S OPTION AGREEMENT. XXXXXXXX and
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XXXXX hereby agree that the February 28, 2001 Option Agreement which they
entered into, and any and all rights thereunder, are hereby immediately and
irrevocably relinquished, terminated and forever extinguished, as if the
same had never been entered into.
4. SUCCESSORS AND ASSIGNS. This AGREEMENT shall be binding
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upon the parties hereto and their respective heirs, executors, successors
and assigns.
5. GOVERNING LAW. This AGREEMENT shall be enforced and
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construed in accordance with and governed by the internal laws of the
Commonwealth of Pennsylvania, without regard to its rules of conflicts of
laws.
6. MODIFICATION AND AMENDMENT. This AGREEMENT may be amended
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or modified only by the written consent of all parties to this AGREEMENT at
the time of such amendment or modification. This AGREEMENT supersedes or
replaces any and all prior AGREEMENTS, either oral or written, among the
parties with respect to the subject matter of this AGREEMENT. This AGREEMENT
contains the entire understanding between the parties hereto concerning the
subject matter contained herein.
7. SEVERABILITY. If any portion of this AGREEMENT for any
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reason shall be held by judicial decision or otherwise to be invalid or
unenforceable, the remaining provisions of this AGREEMENT shall be valid and
enforceable, and will continue in full force and effect.
8. HEADINGS. Titles of articles and sections in this
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AGREEMENT are provided for convenience only and do not modify or affect the
meaning of any provision and shall not serve as a basis for interpretation
or construction of this AGREEMENT.
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IN WITNESS WHEREOF, intending to be legally bound hereby, the
parties hereto have executed this Agreement on the day and year first above
written.
/s/ Xxxxxxx Xxxxxxx /s/ Xxxx X. Xxxxxxxx
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Witness Xxxx X. Xxxxxxxx
/s/ Xxxxx Xxxxx /s/ Xxxxx Xxxxxxxx
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Witness Xxxxx Xxxxxxxx
/s/ Xxxxx Xxxxx /s/ Xxxxx Xxxxxxxx
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Witness Xxxxx Xxxxxxxx
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