<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 22, 1998
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
PARK PLACE ENTERTAINMENT CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 88-0400631
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3930 HOWARD HUGHES PARKWAY
LAS VEGAS, NEVADA 89109 89109
(Address of principal executive offices) (Zip Code)
------------
PARK PLACE ENTERTAINMENT CORPORATION 1998 INDEPENDENT
DIRECTOR STOCK OPTION PLAN
------------
CLIVE S. CUMMIS
EXECUTIVE VICE PRESIDENT - LAW &
CORPORATE AFFAIRS AND SECRETARY
PARK PLACE ENTERTAINMENT CORPORATION
3930 HOWARD HUGHES PARKWAY
LAS VEGAS, NV 89109
(702) 699-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
CYNTHIA A. ROTELL, ESQ.
LATHAM & WATKINS
633 WEST FIFTH STREET, SUITE 4000
LOS ANGELES, CALIFORNIA 90071
(213) 485-1234
------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PROPOSED
AMOUNT PROPOSED MAXIMUM
OF SHARES MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock,
$0.01 par value ................. 65,000 $12.77 $830,050 $245
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Park Place Entertainment Corporation 1998 Independent Director Stock
Option Plan (the "Plan") authorizes the issuance of a maximum of 65,000
shares of common stock of Park Place Entertainment Corporation, a Delaware
corporation (the "Company"), plus reissuances of shares canceled under the
Plan, and substitutions or adjustments to shares to account for any change
in corporate capitalization, such as a stock split or a corporate
transaction, any merger, consolidation, separation, including a spin-off,
or other distribution of stock or property, any reorganization or any
partial or complete liquidation of the Company.
(2) For purposes of computing the registration fee only, pursuant to Rule
457(h)(1), the proposed Maximum Offering Price Per Share is based on the
pro forma book value of the shares as calculated on September 30, 1998.
<PAGE>
PART I
Item 1. Plan Information
Not required to be filed with this Registration Statement.
Item 2. Registrant Information and Employee Plan Annual Information
Not required to be filed with this Registration Statement.
PART II
Item 3. Incorporation of Documents by Reference
The following documents filed with the Securities and Exchange
Commission (the "Commission") by the Company are incorporated as of their
respective dates in this Registration Statement on Form S-8 (the "Registration
Statement") by reference:
(a) Amendment No. 1 to the Company's Registration Statement on Form
10 filed with the Commission on December 18, 1998;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998; and
(c) The Company's Current Reports on Form 8-K filed with the
Commission on November 25, 1998 and December 16, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Securities Exchange Act of 1934, as amended, after the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, are incorporated by reference
in this Registration Statement and are a part hereof from the date of filing
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities
Not required to be filed with this Registration Statement.
Item 5. Interests of Named Experts and Counsel
The legality of the securities registered hereby has been passed upon
by Clive S. Cummis, Executive Vice President - Law & Corporate Affairs and
Secretary of the Company. Mr. Cummis is expected to hold options for
approximately 500,000 shares of Common Stock pursuant to an employment agreement
Mr. Cummis is expected to enter into with the Registrant.
Item 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of Delaware (the "DGCL")
empowers the Company to indemnify, subject to the standards set forth therein,
any person who is a party to any action in connection with any action, suit or
proceeding brought or threatened by reason of the fact that the person was a
director, officer, employee or agent of the Company, or is or was serving as
such with respect to another entity at the request of the Company. The DGCL
also provides that the Company may purchase insurance on behalf of any such
director, officer, employee or agent. Section 11.2 of the Certificate of
Incorporation of the Company provides that the Company will indemnify any person
to whom, and to the fullest extent, indemnification may be required or permitted
under Section 145 of the DGCL.
Section 102(b)(7) of the DGCL enables a Delaware corporation to
provide in its certificate of incorporation for the elimination or limitation of
the personal liability of a director to the corporation or
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<PAGE>
its stockholders for monetary damages for breach of fiduciary duty as a
director. Any such provision cannot eliminate or limit a director's liability
(1) for any breach of the director's duty of loyalty to the corporation or its
stockholders; (2) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (3) under Section 174 of
the DGCL (which imposes liability on directors for unlawful payment of dividends
or unlawful stock purchase or redemption); or (4) for any transaction from which
the director derived an improper personal benefit. Section 11.1 of the
Certificate of Incorporation of the Company eliminates the liability of a
director of the Company to the Company or its stockholders for monetary damages
for breach of fiduciary duty as a director to the fullest extent permitted by
the DGCL.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The following is a list of exhibits filed as part of this Registration
Statement, which are incorporated herein:
4.1 Amended and Restated Certificate of Incorporation
of the Registrant (incorporated by reference to Exhibit
4.1 to the Company's Form S-8 Registration Statement filed
with the Commission on December 22, 1998 relating to the
Company's 1998 Stock Incentive Plan)
4.2 Amended and Restated Bylaws of the Registrant (incorporated
by reference to Exhibit 4.2 to the Company's Form S-8
Registration Statement filed with the Commission on
December 22, 1998 relating to the Company's 1998 Stock
Incentive Plan)
4.3 Park Place Entertainment Corporation 1998
Independent Director Stock Option Plan
5.1 Opinion of Clive S. Cummis
23.1 Consent of Clive S. Cummis (included as part of
Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
24 Power of Attorney (included on the signature page
of this Registration Statement)
Item 9. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in
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<PAGE>
volume and price represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) shall not apply
if the Registration Statement is on Form S-3, Form S-8 or Form F-3 and the
information to be included in a post effective amendment to those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), that are incorporated by reference
in this Registration Statement.
(2) That, for purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel that
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Newark, State of New Jersey, on this 22nd day of
December, 1998.
PARK PLACE ENTERTAINMENT CORPORATION
By: /s/ Clive S. Cummis
-----------------------------------
Clive S. Cummis
Executive Vice President - Law &
Corporate Affairs and Secretary
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Scott A.
LaPorta and Clive S. Cummis, and each of them, with full power to act without
the other, such person's true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign this Registration Statement, and any
and all amendments thereto (including pre- and post-effective amendments) or any
registration statement for the same offering that is to be effective upon filing
pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to
file the same, with exhibits and schedules thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing necessary or desirable to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form S-8 has been signed below by the following
persons in their capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- -----
/s/ Stephen F. Bollenbach Chairman of the Board December 22, 1998
- ---------------------------
Stephen F. Bollenbach
/s/ Arthur M. Goldberg Director, President and Chief December 22, 1998
- --------------------------- Executive Officer (Principal
Arthur M. Goldberg Executive Officer)
/s/ Scott A. LaPorta Executive Vice President December 22, 1998
- --------------------------- and Chief Financial Officer
Scott A. LaPorta (Principal Financial Officer)
S-1
<PAGE>
INDEX TO EXHIBITS
EXHIBIT PAGE
- ------- ----
4.1 Amended and Restated Certificate of Incorporation of
the Registrant (incorporated by reference to Exhibit
4.1 to the Company's Form S-8 Registration Statement
filed with the Commission on December 22, 1998
relating to the Company's 1998 Stock Incentive Plan)
4.2 Amended and Restated Bylaws of the Registrant (incorporated
by reference to Exhibit 4.2 to the Company's Form S-8
Registration Statement filed with the Commission on
December 22, 1998 relating to the Company's 1998 Stock
Incentive Plan)
4.3 Park Place Entertainment Corporation 1998 Independent
Director Stock Option Plan
5.1 Opinion of Clive S. Cummis
23.1 Consent of Clive S. Cummis (included as part of
Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
24 Power of Attorney (included on the signature page
of this Registration Statement)
<PAGE>
PARK PLACE ENTERTAINMENT CORPORATION
1998 INDEPENDENT DIRECTOR STOCK OPTION PLAN
SECTION 1. PURPOSE; DEFINITIONS
The purpose of the Plan is to give the Corporation a competitive advantage
in attracting, retaining and motivating non-employee directors and to provide
the Corporation and its subsidiaries with a stock plan providing incentives more
directly linked to the profitability of the Corporation's businesses and
increases in shareholder value.
For purposes of the Plan, the following terms are defined as set forth
below:
(a) "AFFILIATE" means a corporation or other entity controlled by the
Corporation and designated by the Board from time to time as such.
(b) "BOARD" means the Board of Directors of the Corporation.
(c) "CHANGE IN CONTROL" means the happening of any of the following
events:
(i) An acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either (1) the then outstanding shares
of common stock of the Corporation (the "Outstanding Corporation Common
Stock") or (2) the combined voting power of the then outstanding voting
securities of the Corporation entitled to vote generally in the election of
directors (the "Outstanding Corporation Voting Securities") (a "Control
Purchase"); excluding, however, the following: (1) Any acquisition directly
from the Corporation, other than an acquisition by virtue of the exercise
of a conversion privilege unless the security being so converted was itself
acquired directly from the Corporation, (2) Any acquisition by the
Corporation, (3) Any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any corporation
controlled by the Corporation, (4) Any acquisition by any corporation
pursuant to a transaction which complies with clauses (1), (2) and (3) of
subparagraph (iii) of this definition, or (5) Any acquisition by Barron
Hilton, the Charitable Remainder Unitrust created by Barron Hilton to
receive shares from the Estate of Conrad N. Hilton, or the Conrad N.
Hilton Fund; or
(ii) A change in the composition of the Board such that the
individuals who, as of the effective date of the Plan, constitute the Board
(such Board shall be hereinafter referred to as the "Incumbent Board")
cease for any reason to constitute at least a majority of the Board;
provided, however, for purposes of this definition, that any individual who
becomes a member of the Board subsequent to the effective date of the Plan,
whose election, or nomination for election by the Corporation's
shareholders, was
<PAGE>
approved by a vote of at least a majority of those individuals who are
members of the Board and who were also members of the Incumbent Board (or
deemed to be such pursuant to this proviso) shall be considered as though
such individual were a member of the Incumbent Board; but, provided
further, that any such individual whose initial assumption of office occurs
as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board shall not be so
considered as a member of the Incumbent Board (a "Board Change"); or
(iii) The approval by the shareholders of the Corporation of a
reorganization, merger or consolidation or sale or other disposition of all
or substantially all of the assets of the Corporation ("Corporate
Transaction"); excluding however, such a Corporate Transaction pursuant to
which (1) all or substantially all of the individuals and entities who are
the beneficial owners, respectively, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities immediately prior to
such Corporate Transaction will beneficially own, directly or indirectly,
more than 60% of, respectively, the outstanding shares of common stock, and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of such
transaction owns the Corporation or all or substantially all of the
Corporation's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately prior
to such Corporate Transaction, of the Outstanding Corporation Common Stock
and Outstanding Corporation Voting Securities, as the case may be, (2) no
Person (other than the Corporation, any employee benefit plan (or related
trust) of the Corporation or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of
the outstanding voting securities of such corporation entitled to vote
generally in the election of directors except to the extent that such
ownership existed prior to the Corporate Transaction, and (3) individuals
who were members of the Incumbent Board will constitute at least a majority
of the members of the board of directors of the corporation resulting from
such Corporate Transaction; or
(iv) The approval by the stockholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
(d) "CHANGE IN CONTROL PRICE" means the higher of (i) the highest reported
sales price, regular way, of a share of Common Stock in any transaction reported
on the New York Stock Exchange Composite Tape or other national exchange on
which such shares are listed or on NASDAQ during the 60-day period prior to and
including the date of a Change in Control or (ii) if the Change in Control is
the result of a tender or exchange offer or a Corporate Transaction, the highest
price per share of Common Stock paid in such tender or exchange offer or
Corporate
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Transaction; provided, however, that in the case of a Stock Option which (A) is
subject to Section 16(b) of the Exchange Act and (B) was granted within 240 days
of the Change in Control, then the Change in Control Price for such Stock Option
shall be the Fair Market Value of the Common Stock on the date such Stock Option
is exercised or deemed exercised. To the extent that the consideration paid in
any such transaction described above consists all or in part of securities or
other noncash consideration, the value of such securities or other noncash
consideration shall be determined in the sole discretion of the Board.
(e) "CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and any successor thereto.
(f) "COMMISSION" means the Securities and Exchange Commission or any
successor agency.
(g) "COMMON STOCK" means common stock, par value $.01 per share, of the
Corporation.
(h) "CORPORATION" means Park Place Entertainment Corporation, a Delaware
corporation.
(i) "DIRECTOR" means a member of the Board.
(j) "DISABILITY" means permanent and total disability as determined under
procedures established by the Board for purposes of the Plan.
(k) "DISTRIBUTION" means the distribution to the holders of the
outstanding shares of Hilton Common Stock, on a one-for-one basis, of all of the
outstanding shares of Common Stock.
(l) "EMPLOYEE" means any officer or other employee (as defined in
accordance with Section 3401(c) of the Code) of the Corporation or of any
corporation which is a subsidiary of the Corporation.
(m) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor thereto.
(n) "FAIR MARKET VALUE" means, as of any given date, the mean between the
highest and lowest reported sales prices of the Common Stock on the New York
Stock Exchange Composite Tape or, if not listed on such exchange, on any other
national securities exchange on which the Common Stock is listed or on NASDAQ.
If there is no regular public trading market for such Common Stock, the Fair
Market Value of the Common Stock shall be determined by the Board in good faith.
(o) "HILTON" means Hilton Hotels Corporation, a Delaware corporation.
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(p) "HILTON COMMON STOCK" means common stock, par value $2.50 per share,
of Hilton.
(q) "INDEPENDENT DIRECTOR" means a member of the Board who is not an
Employee.
(r) "PLAN" means the Park Place Entertainment Corporation 1998 Independent
Director Stock Option Plan, as set forth herein and as hereinafter amended from
time to time.
(s) "RETIREMENT" means retirement from service as a Director at or after
age 65.
(t) "RULE 16b-3" means Rule 16b-3, as promulgated by the Commission under
Section 16(b) of the Exchange Act, as amended from time to time.
(u) "STOCK OPTION" means a non-qualified option to purchase Common Stock
granted under Section 5.
(v) "TERMINATION OF DIRECTORSHIP" means the time when an optionee who is
an Independent Director ceases to be a Director for any reason, including, but
not by way of limitation, a termination by resignation, failure to be elected,
death or Retirement. The Board, in its sole and absolute discretion, shall
determine the effect of all matters and questions relating to Termination of
Directorship with respect to Independent Directors.
In addition, certain other terms used herein have definitions given to them
in the first place in which they are used.
SECTION 2. ADMINISTRATION
The Plan shall be administered by the full Board, acting by a majority of
its members then in office.
The Board shall have plenary authority to grant Stock Options pursuant to
the terms of the Plan to Independent Directors.
Among other things, the Board shall have the authority, subject to the
terms of the Plan to:
(a) Determine the terms and conditions of any Stock Option granted
hereunder (subject to the terms and conditions of the Plan), any vesting
condition, restriction or limitation (which may be related to the performance of
the participant, the Corporation or any subsidiary or Affiliate) and any
forfeiture waiver regarding any Stock Option and the shares of Common Stock
relating thereto, in accordance with the terms of the Plan;
4
<PAGE>
(b) Modify, amend or adjust the terms and conditions of any Stock Option,
at any time or from time to time;
(c) Determine to what extent and under what circumstances Common Stock and
other amounts payable with respect to a Stock Option shall be deferred; and
The Board shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan as it shall
from time to time deem advisable, to interpret the terms and provisions of the
Plan and any Stock Option issued under the Plan (and any agreement relating
thereto) and to otherwise supervise the administration of the Plan.
The Board may act only by a majority of its members then in office, except
that the members thereof may (i) delegate to an officer of the Corporation the
authority to make decisions pursuant to paragraphs (c), (f), (g), (h) and (i) of
Section 5 (provided that no such delegation may be made that would cause Stock
Options or other transactions under the Plan to cease to be exempt from Section
16(b) of the Exchange Act) and (ii) authorize any one or more of their number or
any officer of the Corporation to execute and deliver documents on behalf of the
Board.
Any determination made by the Board or pursuant to delegated authority
pursuant to the provisions of the Plan with respect to any Stock Option shall be
made in the sole discretion of the Board or such delegate at the time of the
grant of the Stock Option or, unless in contravention of any express term of the
Plan, at any time thereafter. All decisions made by the Board or any
appropriately delegated officer pursuant to the provisions of the Plan shall be
final and binding on all persons, including the Corporation and Plan
participants.
SECTION 3. COMMON STOCK SUBJECT TO PLAN
The total number of shares of Common Stock reserved and available for grant
under the Plan shall be 65,000. Shares subject to a Stock Option under the Plan
may be authorized and unissued shares or may be treasury shares.
If any Stock Option terminates without being exercised, shares subject to
such Stock Option shall again be available for distribution in connection with
Stock Options under the Plan.
In the event of any change in corporate capitalization, such as a stock
split or a corporate transaction, such as any merger, consolidation, separation,
including a spin-off, or other distribution of stock or property of the
Corporation, any reorganization (whether or not such reorganization comes within
the definition of such term in Section 368 of the Code) or any partial or
complete liquidation of the Corporation, the Board may make such substitution or
adjustments in the aggregate number and kind of shares reserved for issuance
under the Plan, in the number, kind and option price of shares subject to
outstanding Stock Options, in the number and kind of shares subject to other
outstanding Stock Options granted under the Plan and/or such other equitable
substitution or adjustments as it may determine to be appropriate in its sole
5
<PAGE>
discretion; provided, however, that the number of shares subject to any Stock
Option shall always be a whole number.
SECTION 4. ELIGIBILITY
Except as provided in Section 10, Independent Directors are eligible to be
granted Stock Options under the Plan.
SECTION 5. STOCK OPTIONS
No Stock Option granted under the Plan shall constitute an "incentive stock
option" under Section 422 of the Code. Any Stock Option granted under the Plan
shall be in such form as the Board may from time to time approve.
During the term of the Plan, each person who is an Independent Director as
of the effective date of the Distribution automatically shall be granted (i) a
Stock Option to purchase two thousand (2,000) shares of Common Stock (subject to
adjustment as provided herein) on such effective date, and (ii) a Stock Option
to purchase two thousand (2,000) shares of Common Stock (subject to adjustment
as provided herein) on the date of each annual meeting of stockholders after
such effective date, for so long as such person remains an Independent Director.
During the term of the Plan, each person who is initially elected to the Board
after the effective date of the Distribution and who is an Independent Director
at the time of such initial election automatically shall be granted (i) a Stock
Option to purchase two thousand (2,000) shares of Common Stock (subject to
adjustment as provided herein) on the date of such initial election, and (ii) a
Stock Option to purchase two thousand (2,000) shares of Common Stock (subject to
adjustment as provided herein) on the date of each annual meeting of
stockholders after such initial election for so long as such person remains an
Independent Director. All of the foregoing Stock Option grants authorized by
this Section 5 are subject to approval of the Plan by the Hilton stockholders in
accordance with Section 9.
Stock Options shall be evidenced by option agreements, the terms and
provisions of which may differ. The grant of a Stock Option shall occur on the
dates specified above. The Corporation shall notify a participant of any grant
of a Stock Option, and a written option agreement or agreements shall be duly
executed and delivered by the Corporation to the participant. Such agreement or
agreements shall become effective upon execution by the Corporation and the
participant.
Stock Options granted under the Plan shall be subject to the following
terms and conditions and shall contain such additional terms and conditions as
the Board shall deem desirable:
(a) OPTION PRICE. The option price per share of Common Stock purchasable
under a Stock Option shall equal 100% of the Fair Market Value of the Common
Stock subject to the Stock Option on the date of grant.
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(b) OPTION TERM. The term of each Stock Option shall be 10 years from the
date such Stock Option is granted, without variation or acceleration hereunder,
but subject to paragraphs (f), (g), (h) and (i) of this Section 5, and no Stock
Option shall be exercisable more than ten years after the date the Stock Option
is granted.
(c) EXERCISABILITY. Except as otherwise provided herein, Stock Options
shall be exercisable from and after the date on which such Stock Option is
granted.
(d) METHOD OF EXERCISE. Subject to the provisions of this Section 5,
Stock Options may be exercised, in whole or in part, at any time during the
option term by giving written notice of exercise to the Corporation specifying
the number of shares of Common Stock subject to the Stock Option to be
purchased.
Such notice shall be accompanied by payment in full of the purchase price
by certified or bank check or such other instrument as the Board may accept.
Payment, in full or in part, may also be made in the form of unrestricted Common
Stock already owned by the optionee of the same class as the Common Stock
subject to the Stock Option (based on the Fair Market Value of the Common Stock
on the date the Stock Option is exercised).
Payment for any shares subject to a Stock Option may also be made by
delivering a properly executed exercise notice to the Corporation, together with
a copy of irrevocable instructions to a broker to deliver promptly to the
Corporation the amount of sale or loan proceeds to pay the purchase price, and,
if requested, by the amount of any Federal, state, local or foreign withholding
taxes. To facilitate the foregoing, the Corporation may enter into agreements
for coordinated procedures with one or more brokerage firms.
No shares of Common Stock shall be issued until full payment therefor has
been made. An optionee shall have all of the rights of a shareholder of the
Corporation holding the class or series of Common Stock that is subject to such
Stock Option (including, if applicable, the right to vote the shares and the
right to receive dividends), when the optionee has given written notice of
exercise, has paid in full for such shares and, if requested, has given the
representation described in Section 8(a).
(e) NONTRANSFERABILITY OF STOCK OPTIONS. No Stock Option shall be
transferable by the optionee other than (i) by will or by the laws of descent
and distribution; or (ii) pursuant to a qualified domestic relations order (as
defined in the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended) whether directly or indirectly or by means of a trust or
partnership or otherwise, under the applicable option agreement. All Stock
Options shall be exercisable, subject to the terms of this Plan, during the
optionee's lifetime, only by the optionee or by the guardian or legal
representative of the optionee or its alternative payee pursuant to such
qualified domestic relations order, it being understood that the terms "holder"
and "optionee" include the guardian and legal representative of the optionee
named in the option agreement and
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any person to whom an option is transferred by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order.
(f) TERMINATION BY DEATH. Unless otherwise determined by the Board, if an
optionee's directorship terminates by reason of death, any Stock Option held by
such optionee may thereafter be exercised, to the extent then exercisable, for a
period of one year (or such other period as the Board may specify in the option
agreement) from the date of such death or until the expiration of the stated
term of such Stock Option, whichever period is the shorter.
(g) TERMINATION BY REASON OF DISABILITY. Unless otherwise determined by
the Board, if an optionee's directorship terminates by reason of Disability, any
Stock Option held by such optionee may thereafter be exercised by the optionee,
to the extent it was exercisable at the time of termination, for a period of one
year (or such other period as the Board may specify in the option agreement)
from the date of such termination of directorship or until the expiration of the
stated term of such Stock Option, whichever period is the shorter; provided,
however, that if the optionee dies within such period, any unexercised Stock
Option held by such optionee shall, notwithstanding the expiration of such
period, continue to be exercisable to the extent to which it was exercisable at
the time of death for a period of 12 months from the date of such death or until
the expiration of the stated term of such Stock Option, whichever period is the
shorter.
(h) TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined by
the Board, if an optionee's directorship terminates by reason of Retirement, any
Stock Option held by such optionee may thereafter be exercised by the optionee,
to the extent it was exercisable at the time of such Retirement, for a period of
two years (or such other period as the Board may specify in the option
agreement) from the date of such termination of directorship or until the
expiration of the stated term of such Stock Option, whichever period is the
shorter; provided, however, that if the optionee dies within such period any
unexercised Stock Option held by such optionee shall, notwithstanding the
expiration of such period, continue to be exercisable to the extent to which it
was exercisable at the time of death for a period of 12 months from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.
(i) OTHER TERMINATION. Unless otherwise determined by the Board: (A)
if an optionee incurs a Termination of Directorship, other than by death,
Disability or Retirement, all Stock Options held by such optionee shall
thereupon terminate; and (B) if an optionee incurs a Termination of
Directorship for any reason other than death, Disability or Retirement, any
Stock Option held by such optionee, to the extent then exercisable, may be
exercised, for the lesser of three months from the date of such Termination
of Directorship or the balance of such Stock Option's term; provided,
however, that if the optionee dies within such three-month period, any
unexercised Stock Option held by such optionee shall, notwithstanding the
expiration of such three- month period, continue to be exercisable to the
extent to which it was exercisable at the time of death for a period of 12
months from the date of such death or until the expiration of the stated term
of such Stock Option, whichever period is the shorter. Notwithstanding the
foregoing, if an optionee incurs a Termination of Directorship at or after a
Change in Control, other than by reason of death, Disability or Retirement,
any Stock Option held by such optionee
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shall be exercisable for the lesser of (1) six months and one day from the
date of such Termination of Directorship, and (2) the balance of such Stock
Option's term.
(j) CHANGE IN CONTROL CASH-OUT. Notwithstanding any other provision of
the Plan, during the 60-day period from and after a Change in Control (the
"Exercise Period"), unless the Board shall determine otherwise at the time of
grant, an optionee shall have the right, whether or not the Stock Option is
fully exercisable and in lieu of the payment of the exercise price for the
shares of Common Stock being purchased under the Stock Option and by giving
notice to the Corporation, to elect (within the Exercise Period) to surrender
all or part of the Stock Option to the Corporation and to receive cash, within
30 days of such notice, in an amount equal to the amount by which the Change in
Control Price per share of Common Stock on the date of such election shall
exceed the exercise price per share of Common Stock under the Stock Option (the
"Spread") multiplied by the number of shares of Common Stock granted under the
Stock Option as to which the right granted under this Section 5(j) shall have
been exercised; provided, however, that if the Change in Control is within six
months of the date of grant of a particular Stock Option and is subject to
Section 16(b) of the Exchange Act no such election shall be made by such
optionee with respect to such Stock Option prior to six months from the date of
grant. However, if the end of such 60-day period from and after a Change in
Control is within six months of the date of grant of a Stock Option and is
subject to Section 16(b) of the Exchange Act, such Stock Option shall be
canceled in exchange for a cash payment to the optionee, effected on the day
which is six months and one day after the date of grant of such Option, equal to
the Spread multiplied by the number of shares of Common Stock granted under the
Stock Option. Notwithstanding the foregoing, if any right granted pursuant to
this Section 5(j) would make a Change in Control transaction ineligible for
pooling of interests accounting under APB No. 16 that but for this Section 5(j)
would otherwise be eligible for such accounting treatment, the Board shall have
the ability to substitute the cash payable pursuant to this Section 5(j) with
Stock with a Fair Market Value equal to the cash that would otherwise be payable
hereunder.
SECTION 6. TERM, AMENDMENT AND TERMINATION
The Plan will terminate 10 years after the effective date of the Plan.
Under the Plan, Stock Options outstanding as of such date shall not be affected
or impaired by the termination of the Plan.
The Board may amend, alter, or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would (i) impair the rights of
an optionee under a Stock Option theretofore granted without the optionee's
consent, except such an amendment made to cause the Plan to qualify for the
exemption provided by Rule 16b-3, or (ii) disqualify the Plan from the exemption
provided by Rule 16b-3. In addition, no such amendment shall be made without
the approval of the Corporation's shareholders (i) if such amendment would
increase the limit imposed under Section 3 on the maximum number of shares of
Common Stock reserved and available for grant under the Plan, or (ii) to the
extent such approval is required by law or agreement.
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The Board may amend the terms of any Stock Option theretofore granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any holder without the holder's consent except such an amendment made to cause
the Plan or Stock Option to qualify for the exemption provided by Rule 16b-3.
Subject to the above provisions, the Board shall have authority to amend
the Plan to take into account changes in law and tax and accounting rules as
well as other developments, and to grant Stock Options which qualify for
beneficial treatment under such rules without stockholder approval.
SECTION 7. UNFUNDED STATUS OF PLAN
It is presently intended that the Plan constitute an "unfunded" plan for
incentive and deferred compensation. The Board may authorize the creation of
trusts or other arrangements to meet the obligations created under the Plan to
deliver Common Stock or make payments; provided, however, that unless the Board
otherwise determines, the existence of such trusts or other arrangements is
consistent with the "unfunded" status of the Plan.
SECTION 8. GENERAL PROVISIONS
(a) The Board may require each person purchasing or receiving shares
pursuant to a Stock Option to represent to and agree with the Corporation in
writing that such person is acquiring the shares without a view to the
distribution thereof. The certificates for such shares may include any legend
which the Board deems appropriate to reflect any restrictions on transfer.
Notwithstanding any other provision of the Plan or agreements made pursuant
thereto, the Corporation shall not be required to issue or deliver any
certificate or certificates for shares of Common Stock under the Plan prior to
fulfillment of all of the following conditions:
(i) Listing or approval for listing upon notice of issuance, of
such shares on the New York Stock Exchange, Inc., or such other securities
exchange as may at the time be the principal market for the Common Stock;
(ii) Any registration or other qualification of such shares of the
Corporation under any state or Federal law or regulation, or the
maintaining in effect of any such registration or other qualification which
the Board shall, in its absolute discretion upon the advice of counsel,
deem necessary or advisable; and
(iii) Obtaining any other consent, approval, or permit from any
state or Federal governmental agency which the Board shall, in its absolute
discretion after receiving the advice of counsel, determine to be necessary
or advisable.
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(b) Nothing contained in the Plan shall prevent the Corporation or any
subsidiary or Affiliate from adopting other or additional compensation
arrangements for its employees or Directors.
(c) Adoption of the Plan shall not confer upon any Independent Director
any right to continue to serve as a Director, nor shall it interfere in any way
with the right of the Corporation to terminate the directorship of any
Independent Director at any time.
(d) No later than the date as of which an amount first becomes
includible in the gross income of the participant for Federal income tax
purposes with respect to any Stock Option under the Plan, the participant shall
pay to the Corporation, or make arrangements satisfactory to the Board regarding
the payment of, any Federal, state, local or foreign taxes of any kind required
by law to be withheld with respect to such amount. The obligations of the
Corporation under the Plan shall be conditional on such payment or arrangements,
and the Corporation and its Affiliates shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment otherwise due to the
participant. The Board may establish such procedures as it deems appropriate,
including making irrevocable elections, for the settlement of withholding
obligations with Common Stock.
(e) The Board shall establish such procedures as it deems appropriate
for a participant to designate a beneficiary to whom any amounts payable in the
event of the participant's death are to be paid or by whom any rights of the
participant, after the participant's death, may be exercised.
(f) The Plan and all Stock Options granted and actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
Delaware, without reference to principles of conflict of laws.
SECTION 9. EFFECTIVE DATE OF PLAN
The Plan shall be effective as of the effective date of the
Distribution, provided that it is approved by at least a majority of the shares
voted of Hilton Common Stock at the special meeting of Hilton stockholders with
respect to the Distribution and other related matters.
SECTION 10. PROVISIONS REGARDING THE DISTRIBUTION
(a) Concurrently with the Distribution, the Corporation and Hilton are
entering into that certain Employee Benefits and Other Employment Matters
Allocation Agreement, dated as of the date of the Distribution (the "Benefits
Allocation Agreement"), which provides for the Corporation and Hilton to
allocate the responsibilities with respect to certain matters relating to
employees and employee compensation, benefits, labor and other employment
matters. Concurrently with the Distribution and pursuant to the terms of the
Benefits Allocation Agreement, all outstanding options to purchase Hilton Common
Stock granted under the Hilton 1997 Independent Director Stock Option Plan
(each, a "Hilton Director Option") shall be
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adjusted (the "Option Adjustment") to represent options to purchase an
equivalent number of shares of Hilton Common Stock (each adjusted option to
purchase Hilton Common Stock, an "Adjusted Hilton Option") and shares of the
Corporation's Common Stock (each adjusted option to purchase the Corporation's
Common Stock, an "Adjusted Park Place Option"). Pursuant to the Option
Adjustment, the intrinsic value of the Hilton Director Options immediately prior
to the Distribution shall be preserved immediately after the Distribution, and
the exercise price of the Hilton Director Options shall be allocated between the
Adjusted Hilton Options and the Adjusted Park Place Options based upon the
relative values of Hilton Common Stock and the Corporation's Common Stock on the
date of the Distribution, all as determined by Hilton.
(b) Following the date of the Option Adjustment, all Adjusted Park
Place Options which were issued as a result of Hilton Director Options shall be
subject to the terms of this Plan and the applicable option agreement, and all
Adjusted Hilton Options which were issued as a result of Hilton Director Options
shall be subject to the terms of the Hilton 1997 Independent Director Stock
Option Plan and any applicable option agreement.
(c) For purposes of this Plan, with respect to Adjusted Park Place
Options held by members of the Board of Directors of Hilton (the "Hilton Board")
as a result of the Option Adjustment, references to directorship or termination
of directorship in this Plan and in the applicable option agreement shall be
deemed to refer to directorship or termination of directorship on the Hilton
Board.
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PARK PLACE ENTERTAINMENT CORPORATION
3930 HOWARD HUGHES PARKWAY
LAS VEGAS, NEVADA 89109
(702) 699-5000
December 21, 1998
Park Place Entertainment Corporation
3930 Howard Hughes Parkway
Las Vegas, Nevada 89109
Re: Registration Statement on Form S-8
65,000 Shares of Common Stock, par value $0.01 per share
--------------------------------------------------------
Ladies and Gentlemen:
I am Executive Vice President - Law & Corporate Affairs and Secretary
of Park Place Entertainment Corporation (the "Company"). At your request, I
have examined the Form S-8 Registration Statement (the "Registration Statement")
which you intend to file with the Securities and Exchange Commission in
connection with the registration under the Securities Act of 1933, as amended,
of 65,000 shares of Common Stock, par value $0.01 per share (the "Shares") of
the Company, issuable pursuant to the Company's 1998 Independent Director Stock
Option Plan (the "Plan").
I am familiar with the proceedings undertaken in connection with the
authorization and issuance of the Shares under the Plan. Additionally, I have
examined such questions of law and fact as I have considered necessary or
appropriate for purposes of this opinion.
Based upon the foregoing, I am of the opinion that the Shares have
been duly authorized, and upon the issuance of the Shares under the terms of the
Plan and delivery and payment therefor of legal consideration at least equal to
the aggregate par value of the Shares issued, such Shares will be validly
issued, fully paid and nonassessable.
<PAGE>
Park Place Entertainment Corporation
Page 2
I consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Clive S. Cummis
Clive S. Cummis
Executive Vice President - Law &
Corporate Affairs and Secretary
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-8 Registration Statement of our reports dated August 7,
1998 on the consolidated financial statements of Park Place Entertainment
Corporation as of December 31, 1997 and 1996 and for each of the three years in
the period ended December 31, 1997, included in or incorporated by reference in
the Park Place Entertainment Corporation's Registration Statement filed on Form
10 with the Commission on October 23, 1998, as amended on December 18, 1998, and
to all references to our Firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Los Angeles, California
December 16, 1998
