<PAGE> 1
As filed with the Securities and Exchange Commission on February 13, 1996
Registration No. 33-
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
AMERICAN CASINO ENTERPRISES, INC.
(Exact Name of Registrant as Specified in its Charter)
NEVADA 04-2709807
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6243 INDUSTRIAL ROAD
LAS VEGAS, NEVADA 89118
(702) 896-8888
-----------------------
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
1991 OFFICERS STOCK OPTION PLAN
1992 EMPLOYEE STOCK OPTION PLAN
1996 STOCK OPTION PLAN
AND
DIRECTORS' OPTIONS
(Full Title of the Plan)
RONALD J. TASSINARI
PRESIDENT
AMERICAN CASINO ENTERPRISES, INC.
6243 INDUSTRIAL ROAD
LAS VEGAS, NEVADA 89118
(702)896-8888
-----------------------------
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
A copy of all communications, including communications sent to the
agent for service should be sent to:
JACK BECKER, ESQ.
SNOW BECKER KRAUSS P.C.
605 THIRD AVENUE
NEW YORK, N.Y. 10158-0125
(212) 687-3860
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
Proposed Maximum
Title of Each Class Offering Proposed Maximum Amount of
of Securities to be Amount to be Price Aggregate Registration
Registered Registered Per Share Offering Price Fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stock Options(1) 1,500,000 -- -- (2)
- ----------------------------------------------------------------------------------------------------------
Common Stock, par 500,000(3) $.25(5) $125,000 $43.10
value $.01 per share (4)
- ----------------------------------------------------------------------------------------------------------
Common Stock, par 250,000(3) $.58(5) $145,000 $50.00
value $.01 per share (4)
- ----------------------------------------------------------------------------------------------------------
Common Stock, par 281,266(3) $.76(5) $213,762 $73.71
value $.01 per share (4)
- ----------------------------------------------------------------------------------------------------------
Stock Options(6) 2,500,000 -- -- (2)
- ----------------------------------------------------------------------------------------------------------
Common Stock, $.01 864,734(7) $.76 $657,198 $226.62
par value per share (8)
- ----------------------------------------------------------------------------------------------------------
Common Stock, $.01 50,000(7) $.53 $26,500 $9.14
par value per share (8)
- ----------------------------------------------------------------------------------------------------------
Common Stock, $.01 594,000(7) $.69 $409,860 $141.33
par value per share (8)
- ----------------------------------------------------------------------------------------------------------
Common stock, $.01 800,000(7) $1.75 $1,400,000 $482.76
par value per share (8)
- ----------------------------------------------------------------------------------------------------------
Stock Options (9) 2,500,000 -- -- (2)
- ----------------------------------------------------------------------------------------------------------
Stock Options 87,500(10) $.53 $46,375 $15.99
- ----------------------------------------------------------------------------------------------------------
Stock Options 112,500(10) $.69 $77,625 $26.76
- ----------------------------------------------------------------------------------------------------------
Stock Options 165,000(10) $1.75 $288,750 $99.57
- ----------------------------------------------------------------------------------------------------------
Common Stock, par 3,160,000(11) $2.56 $8,089,000 $2,789.51
value $.01 per share
- ----------------------------------------------------------------------------------------------------------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,958.49
==========================================================================================================
</TABLE>
(1) Represents options granted or to be granted pursuant to the 1991 Officers
Stock Option Plan, as amended (the "1991 Plan") of American Casino
Enterprises, Inc. (the "Registrant"). Each option entitles the holder
thereof to purchase one share of the common stock, $.01 par value (the
"Common Stock"), of the Registrant.
(2) No registration fee is required pursuant to Rule 457(h)(2).
(3) Shares purchaseable upon exercise of options previously granted pursuant
to the 1991 Plan.
(4) Includes an indeterminate number of shares of Common Stock which may
become issuable pursuant to the antidilution provisions of the 1991 Plan.
(5) Calculated solely for the purpose of determining the registration fee
pursuant to Rule 457(h)(1) based upon the average exercise price.
(6) Represents options granted or to be granted pursuant to the 1992 Employee
Stock Option Plan (the "1992 Plan") of the Registrant. Each option
entitles the holder thereof to purchase one share of the Common Stock of
the Registrant.
(7) Shares purchaseable upon exercise of options previously granted pursuant
to the 1992 Plan.
(8) Includes an indeterminate number of shares of Common Stock which may
become issuable pursuant to the antidilution provisions of the 1992 Plan.
(9) Represents options to be granted pursuant to the Registrant's 1996 Stock
Option Plan. Each option entitles the holder thereof to purchase one
share of the Common Stock of the Registrant.
(10) Represents shares purchaseable upon exercise of options granted to
certain of the Registrant's Directors for services rendered to the
Registrant. Such options were granted outside the 1991 Plan, 1992 Plan
and the 1996 Plan.
(11) Calculated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) based upon the average of the last bid and ask
prices for the Common Stock on February 8, 1996.
-ii-
<PAGE> 3
PROSPECTUS
3,518,000 SHARES
AMERICAN CASINO ENTERPRISES, INC.
Common Stock
(par value $.01)
This Prospectus has been prepared by American Casino Enterprises, Inc., a
Nevada corporation (the "Company"), for use upon resale of shares of common
stock, par value $.01 per share, of the Company (the "Common Stock"), by certain
"Affiliates," as defined in Rule 405 under the Securities Act of 1933, as
amended (the "Act"), of the Company (the "Selling Stockholders") who have
acquired or may acquire such shares of Common Stock upon exercise of options
granted or to be granted under the American Casino Enterprises, Inc. 1991
Officers Stock Option Plan (the "1991 Plan"), under the American Casino
Enterprises, Inc. 1992 Employee Stock Option Plan (the "1992 Plan") and under
Option Agreements with certain Directors of the Company ("Directors' Options").
The maximum number of shares which may be offered or sold hereunder is subject
to adjustment in the event of stock splits or dividends, recapitalizations and
other similar changes affecting the Common Stock. It is anticipated that the
Selling Stockholders will offer shares of Common Stock for resale at prevailing
prices on the Nasdaq system on the date of sale. See "Plan of Distribution." The
Company will receive none of the proceeds from the sale of the Common Stock
offered hereby. All selling and other expenses incurred by individual Selling
Stockholders will be borne by such Selling Stockholders.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is February 13, 1996.
<PAGE> 4
No person is authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
any offer to sell or sale of the securities to which this Prospectus relates
and, if given or made, such information or representations must not be relied
upon as having been authorized. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, imply that there has been no
change in the facts herein set forth since the date hereof. This Prospectus does
not constitute an offer to sell to or a solicitation of any offer to buy from
any person in any state in which any such offer or solicitation would be
unlawful.
-------------------------------
American Casino Enterprises, Inc. was incorporated under the laws
of the State of Nevada in 1979. Its principal executive offices are
located at 6243 Industrial Road, Las Vegas, Nevada 89118, and its
telephone number is (702) 896-8888.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Reports, proxy statements and other information filed by the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Regional Offices of the Commission at Seven
World Trade Center, New York, New York 10048 and at 320 South Dearborn Street,
Chicago, Illinois 60604. Copies can be obtained from the Commission at
prescribed rates by writing to the Commission at 450 Fifth Street N.W.,
Washington, D.C. 20549.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company hereby incorporates by reference the documents listed below:
(1) The Company's Annual Report on Form 10-KSB for the fiscal year
ended July 31, 1995;
(2) The Company's Quarterly Report on Form 10-QSB for the quarter
ended October 31, 1995.
(3) The description of the common stock, par value $.01 per share, of
the Company (the "Common Stock") contained in the Company's Registration
Statement on Form 10 (File No. 0-10061), filed pursuant to Section 12(g) of the
Exchange Act, including any amendment or report filed for the purpose of
updating such information.
-2-
<PAGE> 5
All documents subsequently filed by the Company after the date of this
Prospectus pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act
shall be deemed to be incorporated by reference herein and to be a part hereof
from the date of filing of such documents. Any statement contained in a
previously filed document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement herein modifies or supersedes such statement; and any statement
contained herein shall be deemed to be modified or superseded to the extent that
a statement in any document subsequently filed, which is incorporated by
reference herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon written
or oral request of such person, a copy of any or all of the information that has
been incorporated by reference in this Prospectus (not including exhibits to
such information, unless such exhibits are specifically incorporated by
reference into the information which this Prospectus incorporates). Requests for
copies of such information should be directed to the Company at 6243 Industrial
Road, Las Vegas, Nevada 89118; Attention: Corporate Secretary.
RISK FACTORS
1. Government Regulation; Changes in Law; and Legal Proceedings. The
gaming industry in the United States is subject to federal, state and local
gaming regulations. The gaming operation for which the Company serves as a
consultant is authorized by tribal ordinances under the Indian Gaming Regulatory
Act ("IGRA"), and is also subject to the provisions of IGRA governing the scope
and regulation of Class II gaming. In accordance with IGRA, the type of games
which may be offered by casinos on Indian reservations is particularly dependent
upon the types of gaming permitted under state law and regulation. Accordingly,
the variety of gaming activities, including certain types of slot machines and
parti-mutual betting, to sustain and promote increased gaming activity may be
adversely affected by pending litigation regarding the types of games permitted
in California. In addition, no assurance can be given that IGRA will withstand
the constitutional challenge now before the United States Supreme Court or would
not be amended in the future by Congressional action to limit or restrict casino
gambling on Indian reservations.
On July 15, 1994, the Chairman of the National Indian Gaming Commission
(the "NIGC"), which oversees IGRA, issued Notice of Violation No. NOV-94-03 and
a separate Notice to Show Cause to the Company. The Notice of Violation charged
that the Company was in violation of certain provisions of the IGRA and the
NIGC's regulations, in that the Company had allegedly: (1) engaged in management
of the Table Mountain Casino without an approved management contract beginning
on November 1, 1990 and (2) operated illegal electronic video gaming
-3-
<PAGE> 6
devices without a class III gaming compact with the State of California.
According to the Notice of Violation, the alleged violations could have resulted
result in the assessment of civil fines against the Company in an amount not to
exceed $25,000 per violation per day. In April 1995, the NIGC formally proposed
a fine of $6,000 per day beginning as of July 15, 1994.
On February 1, 1996, the Company entered into a settlement agreement (the
"Settlement Agreement") of the administrative proceedings commenced against it
by the NIGC. The Settlement Agreement resolved all issues associated with the
Notice of Violation and the Notice to Show Cause. Under the Settlement
Agreement, the NIGC agreed to fully withdraw and dismiss any and all charges,
allegations and claims against the Company. In turn, the Company agreed to
terminate its 1993 Consulting Agreement with the Table Mountain Tribe and,
without admitting or denying the NIGC's allegations, pay a civil fine of
$500,000.
In addition to the execution of the Settlement Agreement, on February 1,
1996, the Company entered into a termination agreement with the Tribe (the
"Termination Agreement") which terminated the 1993 Agreement and simultaneously
entered into a new consulting agreement (the "1996 Agreement"). As part of the
overall settlement, the NIGC has reviewed the Termination Agreement and the 1996
Agreement between the Company and the Tribe and has advised both parties that
these agreements are not "management contracts" under the Indian Gaming
Regulatory Act or the NIGC's regulations, and, therefore, do not require
approval of the NIGC chairman.
Although no assurance may be given, the Company expects that any future
consulting agreements which it may enter will not be subject to IGRA or to the
regulations of the NIGC.
On May 22, 1992, the Tribe and other California Indian Tribes commenced a
lawsuit in the United States District Court, Eastern District of California
(Civ-S-92-812 GEB JFM) in the matter of Rumsey Indian Rancheria of Wintun
Indians, et al. v. Governor Peter Wilson and the State of California. The suit
resulted from an agreement between the Tribes and the state to turn to the
courts for guidance as to the type of games allowed under the IGRA. On July 16,
1993, the Court granted to the tribes, including the Table Mountain Tribe, a
declaratory judgment that the State of California and the Governor were
obligated under the IGRA to negotiate in good faith to enter into a tribal-state
compact to conduct their gambling activities, including certain forms of Class
III gaming, namely slot machines/electronic gambling devices and to negotiate to
determine whether other types of banked and percentage card games will be
permitted under a Tribe-State compact. While the judge upheld California's
opposition to traditional casino games, such as blackjack, the Court ruled that
other banking and percentage card games could be included in compact
negotiations.
In November 1994, the U.S. Court of Appeals for the Ninth Circuit reversed
in part the July 1993 ruling by the District Court in favor of the tribes, and
remanded the case to the District Court for
-4-
<PAGE> 7
additional fact finding. The remanded issue is whether California law permits
the use of video gaming devices by the California State Lottery. If California
law is found to permit the use of video gaming devices, the tribes are entitled
to seek agreements for the use of such devices. If California law is not found
to permit their use, the tribes would not be so entitled under the Court of
Appeals' analysis.
In December 1994, the tribes filed a petition for rehearing with the Ninth
Circuit and a suggestion for rehearing en banc. The petition and suggestion were
denied on August 11, 1995, with a vigorous dissent by six judges. The decision,
however, has not been finalized. On August 21, 1995, the Ninth Circuit issued an
order requesting further briefing by the parties on the relevance of an
important new decision of the California state Court of Appeal in Western Telcon
v. California State Lottery. In that case, the court held that the California
State Lottery was authorized to use most forms of slot machines and that the
Lottery was exempt from the State's Penal Code prohibitions against banked
games. On September 1, 1995, the parties in Western Telcon filed a petition for
review with the California Supreme Court, which was granted. That case is now
before the California Supreme Court.
On December 5, 1995, the Ninth Circuit ordered that the parties briefs of
August 28, 1995 would be treated as renewed for rehearing and that disposition
of the petition would be deferred until the decision of the California Supreme
Court in Western Telcon. Effectively, this means that the Rumsey decision is
still under consideration by the Ninth Circuit.
While the Company is optimistic the California tribes will ultimately
prevail in this action, should the State of California be successful in its
legal actions, it could have a severe adverse effect on the Company's sole
business activity.
2. Competition. Casino gambling in the United States is subject to
intense competition from casino operations in Nevada, Atlantic City, New Jersey
and riverboat and cruise operations. In addition, there are presently casinos on
Indian reservations in several states, and tribes in other jurisdictions have
disclosed plans to open additional casinos. Certain of these competitors have
significant resources and can offer potential gamblers more attractive vacation
packages than the Company. In addition, depending upon state regulations,
certain competitors may be able to offer potential gamblers an enhanced variety
of gaming options than the Company, including parti-mutual betting.
The Table Mountain Casino does not presently have any competition from
other Indian gaming operations within a fifty mile area from Fresno, California.
The nearest Indian gaming operation is approximately 70 miles from the Table
Mountain Casino in Lemoore, California. The gaming operation in Lemoore is
housed in a building of approximately 25,000-30,000 square feet. At the Lemoore
operation, Bingo is offered five days a week in the evening with seating of
approximately 1,200 persons. Paper pull tab gaming devices and approximately 300
electronic video games are available to its customers. The Lemoore operation
does not offer card games. The Table
-5-
<PAGE> 8
Mountain Casino competes with the Lemoore operation for customers from the same
geographic area.
3. Results of Operations and Dependence on Single Consulting Agreement.
The Company's results of operations are dependent upon revenues generated under
a consulting contract with an Indian tribe casino. The fees are based upon the
net profits of the casino, which is dependent upon factors beyond the control of
the casino and the Company, including general economic conditions and the
availability of consumer disposable income to wager on gaming activities.
Accordingly, no assurance can be given that the Company will be able to sustain
profitable operations in the future. In addition, no assurance can be given that
the Company will be able to procure additional consulting contracts with other
casino properties, or that the Company's existing consulting contract will be
renewed upon the expiration of its term.
4. Shares Eligible for Future Sale. As of January 11, 1996, there were
approximately 3,005,699 shares of the Company's Common Stock outstanding which
may be deemed "restricted securities," as such term is defined in Rule 144
promulgated under the Securities Act of 1933, as amended (the "Act"). In
general, under Rule 144, a person who has satisfied a two-year holding period
may, under certain circumstances, sell within any three month period a number of
shares which does not exceed the greater of one percent (1%) of the then
outstanding shares or the average weekly trading volume during the four calendar
weeks prior to such sale. Rule 144 also permits, under certain circumstances,
the sale of shares by a person who is not an affiliate of the Company and who
has satisfied a three-year holding period without any quantity limitation. Of
such restricted shares, approximately 2,183,811 shares have satisfied the
afore-described holding period for at least two years as of January 17, 1996 and
are eligible for sale. Accordingly, the market price of the Company's Common
Stock may be adversely affected in the event such sales are effectuated. In
addition, no assurance can be given that the current market for the Company's
Common Stock will be sustained.
5. Dependence on Key Personnel. The success of the Company is largely
dependent on the personal efforts of Ronald J. Tassinari, Audrey K. Tassinari
and Roy K. Keefer. Although the Company has entered into employment agreements
with these persons which do not expire until March 2002, the loss of the
services of any of them would have a material adverse effect on the Company's
business and prospects. The Company currently maintains "key man" life insurance
on the life of Ronald J. Tassinari in the amount of $1,000,000 and $500,000 on
the lives of each of Audrey K. Tassinari, the Company's Vice President and Roy
K. Keefer, the Company's Chief Financial Officer. The success of the Company is
also dependent upon its ability to hire and retain additional personnel who are
familiar with gaming operations. There can be no assurance that the Company will
be able to hire or retain such necessary personnel in the future.
6. No Dividends. The Company has not paid any cash dividends on its
Common Stock and does not expect to declare or pay any cash or other dividends
in the foreseeable future.
-6-
<PAGE> 9
7. Stock Options and Warrants. Pursuant to the Company's 1991 Plan,
1992 Plan and 1996 Plan, the Company may grant options to purchase an aggregate
of 6,500,000 shares of Common Stock. To date, 3,340,000 options have been
granted under such Plans, of which all remain outstanding, at exercise prices
ranging from $.25 to $1.75 per share. The Company has also granted options to
purchase an aggregate of 415,000 shares of Common Stock at prices ranging from
$.53 to $1.75 per share. In addition, the Company has issued 972,222 Warrants
exercisable at $.82 per share. During the term that these securities are
exercisable, the holders thereof are given the opportunity to profit from a rise
in the market price of the Company's Common Shares. The holders of these
securities would be most likely to exercise them and purchase the Company's
Common Stock at a time when the Company could obtain capital by a new offering
of securities on terms more favorable than those provided by such options and
warrants. Consequently, the terms on which the Company could obtain additional
capital during such period may be adversely affected.
8. Public Market for the Company's Common Stock; Possible Volatility of
Common Stock Price. Although a market for the Company's Common Stock currently
exists, there is no assurance that such market will continue. Accordingly, the
purchasers of the Common Stock offered hereby may still experience difficulty in
selling their securities should they desire to do so. The market price for the
Company's securities has been and may at times continue to be highly volatile.
Factors such as the Company's financial results, legal proceedings and entry
into additional consulting arrangements and various factors affecting the gaming
industry generally may have a significant impact on the market price of the
Company's Common Stock. Additionally, in the last several years, the stock
market has experienced a high level of price and volume volatility and market
prices for many companies, particularly small and emerging growth companies, the
common stock of which trades in the over-the-counter-market, have experienced
wide price fluctuations which have not necessarily been related to the operating
performance of such companies.
9. Maintenance Requirements for Nasdaq Securities
Based upon current qualification requirements, the Common Stock is
qualified for inclusion in the Nasdaq stock market. Continued inclusion of the
Company's Common Stock in the Nasdaq stock market requires $2,000,000 in total
assets, $1,000,000 in total capital and surplus (or $2,000,000 in total capital
and surplus if an issuer's common stock has a bid price of less than $1.00), a
public float consisting of 100,000 shares, a market value of the public float of
$200,000 (or $1,000,000 if the bid price is less than $1.00), two market makers,
a bid price of $1.00 and 300 shareholders. If the Company's Common Stock were to
be delisted from the Nasdaq stock market for failure to meet the maintenance
criteria, trading, if any, in the Common Stock would then continue to be
conducted in the over-the-counter market through what is commonly referred to as
"electronic bulletin board." As a result, an investor may find it more difficult
to dispose of, or to obtain accurate quotations as to the
-7-
<PAGE> 10
market value of, the Company's Common Stock. In addition, if the Company's
Common Stock is delisted they may be subject to a Securities and Exchange
Commission rule that imposes additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors. For transactions covered by this rule, the
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
sale. Consequently, the rule may affect the ability of broker-dealers to sell
the Company's Common Stock and may affect the ability of purchasers in this
offering to sell their securities in the secondary market.
10. Preferred Stock
The Board of Directors of the Company has the authority to issue up to
10,000,000 shares of Preferred Stock, the terms of which (including, without
limitation, dividend rates, conversion rights, voting rights, terms of
redemption and liquidation preferences) may be fixed by the Board in its sole
discretion. The holders of the Company's Common Stock will not be entitled to
vote upon such matters. Presently, there are no shares of Preferred Stock
outstanding. There can be no assurance that Preferred Stock will not be issued
in the future. Preferred Stock issued in the future could have conversion rights
which may result in the issuance of additional shares of Common Stock which
could dilute the interests of the holders of Common Stock. Such shares could
also have voting rights and liquidation preferences which are senior to the
rights and preferences of the Common Stock. Additionally, such shares could have
dividend, redemption or other provisions which could adversely affect the
Company's ability to pay dividends on the Common Stock or prohibit payment of
such dividends. Such shares could also be issued, under certain circumstances,
in an attempt to prevent a takeover of the Company, and such issuance could
adversely impact holders of Common Stock who might want to vote in favor of a
proposed merger, tender offer or similar transaction.
-8-
<PAGE> 11
SELLING STOCKHOLDERS
The shares of Common Stock to which this Prospectus relates are being
registered for reoffers and resales by Selling Stockholders of the Company who
may acquire such shares pursuant to the exercise of options granted or to be
granted under the Plan. The Selling Stockholders named below may resell all, a
portion, or none of such shares.
This list of Selling Stockholders set forth below and the amounts of
options owned by such persons may be amended from time to time by use of a
prospectus supplement to this Prospectus filed pursuant to Rule 424(b) under the
1933 Act to reflect the addition of new participants under the 1991 Plan, the
1992 Plan and the 1996 Plan who are deemed to be "affiliates" of the Company who
acquire Common Stock under such Plans or to reflect the receipt by existing
affiliates of grants of additional options under such Plans. An "affiliate" is
defined in Rule 405 under the Securities Act as a "person that directly, or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with," the Company.
The following table sets forth certain information concerning the Selling
Stockholders as of the date of this Prospectus.
SELLING STOCKHOLDERS
<TABLE>
<CAPTION>
===========================================================================================================================
Percentage of Shares of
Common Stock Owned (2)(3)
-----------------------------
Number of Number of Number of
Shares of Stock Option
Common Stock Options Shares to Before After
Name Owned (1) Granted be Sold Offering Offering *
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Ronald J. Tassinari (4)
6243 Industrial Road 1,664,000
Las Vegas, Nevada 89118 1,696,582 (5) (6) 1,664,000 10.7% 2.3%
- ---------------------------------------------------------------------------------------------------------------------------
Audrey K. Tassinari (7)
6243 Industrial Road 882,000
Las Vegas, Nevada 89118 1,106,902 (8) (9) 882,000 7.5% 2.8%
- ---------------------------------------------------------------------------------------------------------------------------
Roy K. Keefer (10)
6243 Industrial Road 607,000
Las Vegas, Nevada 89118 431,000 (11) (12) 607,000 2.8% (13)
- ---------------------------------------------------------------------------------------------------------------------------
Jeanne Hood (14)
2316 Timberline Way 150,000
Las Vegas, Nevada 89117 150,000 (15) (16) 150,000 1.0% -0-
- ---------------------------------------------------------------------------------------------------------------------------
Douglas Sanderson (17)
2800 Crystal Cove Drive 65,000
Las Vegas, Nevada 89117 81,000 (18) (19) 65,000 .5% (13)
- ---------------------------------------------------------------------------------------------------------------------------
Estate of Robert J. Michaels (20)
247 West Roxbury Parkway
Chestnut Hill, Massachusetts 02167 150,000
251,621 (21) (22) 150,000 1.7% (13)
===========================================================================================================================
Total 3,753,105 (23) 3,518,000 3,518,000 21.5% 5.0%
===========================================================================================================================
</TABLE>
* Does not constitute a commitment to sell any or all of the stated number
of shares of Common Stock. The number of shares offered shall be
determined from time to time by each Selling Stockholder at his sole
discretion.
(1) Unless otherwise noted, all persons referred to above have sole voting and
sole investment power.
-9-
<PAGE> 12
(2) Based on 14,367,958 shares outstanding as of the date of this Prospectus,
except each beneficial owner's percentage ownership is determined by
assuming that options or warrants that are held by such person and which
are convertible or exchangeable within 60 days of the date hereof
(purchase to Rule 13d-3 under the Securities Exchange Act of 1934) have
been converted or exercised.
(3) Does not give effect to any currently outstanding options, other than with
respect to those set forth for the individual persons listed in the above
table, pursuant to Rule 13d-3 under the Exchange Act.
(4) Mr. Tassinari is the Company's President and a Director.
(5) Includes 11,094 shares owned of record by Mr. Tassinari as custodian for
his son and 1,321,334 shares issuable upon exercise of a like number of
options at exercise prices of $.25, $.58, $.76 and $1.75 per share. Does
not include options to acquire 342,666 shares at an exercise price of
$.76, which are not currently exercisable. Such shares exclude the
following shares as to which Mr. Tassinari disclaims beneficial ownership:
432,236 shares of Common stock owned of record by Audrey K. Tassinari, Mr.
Tassinari's wife; and 710,666 shares issuable upon exercise of a like
number of currently exercisable stock options owned of record by Mr.
Tassinari's wife.
(6) Represents an aggregate of 781,266 options granted under the 1991 Plan and
882,734 options granted under the 1992 Plan.
(7) Mrs. Tassinari is the Company's Vice President and a Director.
(8) Includes an aggregate of 710,666 shares issuable upon exercise of a like
number of stock options at exercise prices of $.25, $.58, $.76 and $1.75
per share. Does not include options to acquire 171,334 shares at an
exercise price of $.76, which are not currently exercisable. In addition,
such shares exclude the following shares as to which Mrs. Tassinari
disclaims beneficial ownership: 364,154 shares of Common Stock owned of
record by Ronald J. Tassinari, Mrs. Tassinari's husband; 11,094 shares
owned of record by Mrs. Tassinari's husband as custodian for a minor
child; and 1,321,334 shares issuable upon exercise of currently
exercisable options owned by Mrs. Tassinari's husband.
(9) Represents an aggregate of 250,000 options granted under the 1991 Plan and
682,000 options granted under the 1992 Plan.
(10) Mr. Keefer is the Company's Chief Financial Officer, Secretary/Treasurer
and a Director.
(11) Includes 419,000 stock options to acquire a like number of shares at
exercise prices of $.53, $.69 and $1.75 per share. Does not include
options to acquire 188,000 shares at a price of $.69 per share which are
not currently exercisable.
(12) Represents options granted under the 1992 Plan.
(13) Less than one percent.
(14) Ms. Hood is a Director of the Company who serves as a part-time
consultant.
(15) Represents options to acquire a like number of shares at exercise prices
of $.76 and $1.75 per share.
(16) Represents options which were granted by the Company to Ms. Hood in
connection with services rendered to the Company as a Director.
(17) Mr. Sanderson is a Director of Company.
(18) Includes 65,000 stock options to acquire a like number of shares at
exercise prices of $.53, $.69 and $1.75.
(19) Represents options which were granted to Mr. Sanderson by the Company in
connection with services rendered to the Company as a Director.
(20) Robert J. Michaels served as Director of the Company until his death in
November 1995.
(21) Includes 150,000 stock options to a acquire a like number of shares at
exercise prices of $.53, $.69 and 1.75 per share.
(22) Represents options which were granted to Mr. Michaels by the Company in
connection with services to the Company as a Director.
(23) Includes presently exercisable options to purchase an aggregate of
2,451,000 shares of Common Stock referred to in Notes 5, 8, 11, 15, 18,
and 21, above.
PLAN OF DISTRIBUTION
The shares are being sold by the Selling Stockholders for their own
accounts. The shares may be sold or transferred for value by the Selling
Stockholders, or by pledgees, donees, transferees or other successors in
interest to the Selling Stockholders, in one or more
-10-
<PAGE> 13
transactions on the Nasdaq System, in negotiated transactions or in a
combination of such methods of sale, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at prices otherwise
negotiated. The Selling Stockholders may effect such transactions by selling the
shares to or through brokers-dealers, and such broker-dealers may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Stockholders and/or the purchasers of the shares for whom such
broker-dealers may act as agent (which compensation may be less than or in
excess of customary commissions). The Selling Stockholders and any
broker-dealers that participate in the distribution of the shares may be deemed
to be "underwriters" within the meaning of Section 2(11) of the Securities Act
and any commissions received by them and any profit on the resale of the Shares
sold by them may be deemed to be underwriting discounts and commissions under
the Securities Act.
There can be no assurance that any of the Selling Stockholders will sell
any or all of the shares of Common Stock offered by them hereunder.
USE OF PROCEEDS
The Company will not realize any proceeds upon the sale of the shares of
Common Stock issuable upon the exercise of the stock options.
LEGAL MATTERS
The validity of the shares of Common Stock registered hereby have been
passed upon for the Company by Snow Becker Krauss P.C., 605 Third Avenue, New
York, New York 10158-0125. Certain principals of Snow Becker Krauss P.C. own
151,194 shares of Common Stock of the Company.
EXPERTS
The financial statements of the Company appearing in the Company's Annual
Report on Form 10-KSB for the year ended July 31, 1995, have been audited by
Bradshaw Smith & Co., independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such financial statements
are incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
-11-
<PAGE> 14
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and Exchange Commission
(the "Commission") by the registrant, American Casino Enterprises, Inc., a
Nevada corporation (the "Company" or the "Registrant") pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference in this registration statement.
(1) The Company's Annual Report on Form 10-KSB for the fiscal year ended
July 31, 1995;
(2) The Company's Quarterly Report on Form 10-QSB for the quarter ended
October 31, 1995.
(3) The description of the common stock, par value $.01 per share, of
the Company (the "Common Stock") contained in the Company's Registration
Statement on Form 10 (File No. 0-10061), filed pursuant to Section 12(g) of the
Exchange Act, including any amendment or report filed for the purpose of
updating such information.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, 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, shall be deemed
to be incorporated by reference herein and to be a part hereof from the date of
filing of 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 incorporated or 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 applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares of Common Stock registered hereby have been
passed upon for the Company by Snow Becker Krauss P.C., 605 Third Avenue, New
York, New York 10158-0125. Certain principals of Snow
II-1
<PAGE> 15
Becker Krauss P.C. own 151,194 shares of Common Stock of the Company in their
individual capacities.
Item 6. Indemnification of Directors and Officers.
The General Corporation Law of Nevada (the "GCL") permits a corporation
organized thereunder to indemnify its directors and officers for certain of
their acts. Article VII of the By-Laws of American Enterprises, Inc. provides
that the Company shall, to the full extent of Section 78.751 of the GCL,
indemnify all persons who may be indemnified pursuant thereto. This Section
provides that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by reason of the fact that he was or is a director, officer,
employee or agent of the corporation or serving another corporation in such
capacity at the request of the corporation, against expenses (which expenses,
including attorney's fees, may be advanced by the corporation when authorized
under certain circumstances), damages, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, or, with respect
to a criminal action, was not unlawful. In addition, should such person be
successful on the merits, Section 78.751 provides that such person shall be
indemnified against expenses incurred by him. In a suit, action or proceeding
against such person brought by or on behalf of the corporation in which such
person was found to be liable to the corporation, any indemnification must be
approved by the court in which such action is brought. Section 78.752 of the GCL
empowers corporations to purchase and maintain insurance on behalf of an officer
or director of the corporation against any liability, regardless of whether the
corporation could indemnify such person against such liabilities.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF
1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE
REGISTRANT PURSUANT TO THE FOREGOING PROVISIONS, THE REGISTRANT HAS BEEN
INFORMED THAT IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION SUCH
INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS
THEREFORE UNENFORCEABLE.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No. Description of Exhibit
4.1 American Casino Enterprises, Inc. 1991 Officers Stock Option Plan,
as amended.
II-2
<PAGE> 16
4.2 American Casino Enterprises, Inc. 1992 Employee Stock Option Plan.
4.3 American Casino Enterprises, Inc. 1996 Stock Option Plan.
4.4 Form of Option Agreement between the Company and its non- employee
Directors.
5.1 Opinion of Snow Becker Krauss P.C., as to the legality of the
securities being offered hereunder.
23.1 Consent of Snow Becker Krauss P.C. (included in Exhibit 5.1 hereto).
23.2 Consent of Bradshaw Smith & Co.
24.1 Powers of Attorney (included on the signature page of this
Registration Statement).
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(a)(l) 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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represents a fundamental change in the information set forth in the 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 (a)(l)(i) and (a)(l)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities
II-3
<PAGE> 17
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.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
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.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or controlling persons of
the Registrant pursuant to any arrangement, provision or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that 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 the 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 of 1933 and will be governed by the final adjudication of such issue.
II-4
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
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 Las Vegas, Nevada, on February 12, 1996.
AMERICAN CASINO ENTERPRISES, INC.
BY: /s/ Ronald J. Tassinari
------------------------------
Ronald J. Tassinari, President
POWER OF ATTORNEY
Each person whose signature appears below, hereby constitutes and appoints
Ronald J. Tassinari his or her true and lawful attorney-in-fact and agent, with
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying all
that said attorney-in-fact and agent or his or her substitute or substitutes, or
any of them, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
/s/ Ronald J. Tassinari February 12, 1996
Ronald J. Tassinari, President and
Director (Principal Executive Officer)
/s/ Audrey K. Tassinari February 12, 1996
- -----------------------------------
Audrey K. Tassinari, Vice
President and Director
/s/ Roy K. Keefer February 12, 1996
- -----------------------------------
Roy K. Keefer, Chief Financial
Officer, Secretary/Treasurer and
Director (Principal Financial and
Accounting Officer)
/s/ Douglas Sanderson February 12, 1996
- -----------------------------------
Douglas Sanderson, Director
/s/ Jeanne Hood February 12, 1996
- -----------------------------------
Jeanne Hood, Director
II-5
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
4.1 American Casino Enterprises, Inc. 1991 Officers Stock Option Plan,
as amended.
4.2 American Casino Enterprises, Inc. 1992 Employee Stock Option Plan.
4.3 American Casino Enterprises, Inc. 1996 Stock Option Plan.
4.4 Form of Option Agreement between the Company and its non-employee
Directors
5.1 Opinion of Snow Becker Krauss P.C.
23.1 Consent of Snow Becker Krauss P.C. (included in Exhibit 5.1 hereto).
23.2 Consent of Bradshaw Smith & Co.
24.1 Powers of Attorney (included on the signature page of this
Registration Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
<PAGE> 2
AMERICAN ENTERPRISES, INC. 1991 OFFICERS STOCK OPTION PLAN,
AS AMENDED
1. Purposes.
The AMERICAN ENTERPRISES, INC. 1991 OFFICERS STOCK OPTION PLAN (the
"Plan") is intended to provide the officers of American Enterprises, Inc. (the
"Company") with compensation for prior services rendered and an added incentive
to continue their services to the Company and to induce them to exert their
maximum efforts toward the Company's success. By thus encouraging officers and
promoting their continued association with the Company, the Plan may be expected
to benefit the Company and its Shareholders. The Plan allows the Company to
grant Incentive Stock Options ("ISOs") (as defined in Section 422(b) of the
Internal Revenue Code of 1986, as amended [the "Code"]), Non-Qualified Stock
Options ("NQSOs") not intended to qualify under Section 422(b) of the Code,
Stock Appreciation Rights ("SARs") and Stock Depreciation Rights ("SDRs")
(collectively the "Options").
2. Shares Subject to the Plan.
The total number of shares of Common Stock of the Company, $.01 par value
per share (the "Common Stock"), that may be subject to Options granted under the
Plan shall be 1,500,000 in the aggregate, subject to adjustment as provided in
Paragraph 8 of the Plan; however, the grant of any NQSO to an employee together
with a tandem SAR or SDR shall only require one share of Common Stock available
subject to the Plan to satisfy such joint Option. The Company shall at all times
while the Plan is in force reserve such number of shares of Common Stock as will
be sufficient to satisfy the requirement of outstanding Options granted under
the Plan. In the event any Option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part, the unpurchased shares
subject thereto shall again be available for granting of Options under the Plan.
3. Eligibility.
Options may be granted to officers of the Company or of a "subsidiary" or
"parent" of the Company, as the quoted terms are defined within Section 424 of
the Code. Options may be granted from time to time under the Plan to one or more
officers of the Company, including officers who have previously been granted
Options under the Plan.
4. Administration of the Plan.
The Plan shall be administered by the Board of Directors of the Company as
such Board of Directors may be composed from time to time or by a Stock Option
Committee (the "Committee") comprised of two disinterested persons (the term
"disinterested" having the meaning ascribed to it by Rule 16b-3 of the
Securities Exchange Act of 1934 [the "1934 Act"]) appointed by such Board of
Directors of the Company. As and to the extent authorized by the Board of
Directors of the Company, the Committee may exercise the power and authority
vested in
<PAGE> 3
the Board of Directors under the Plan. Within the limits of the express
provisions of the Plan, the Board of Directors shall have the authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, Options shall be granted, the character of such Options (whether ISO,
NQSO and/or SAR or SDR in tandem with a NQSO) and the number of shares of Common
Stock to be subject to each Option, and to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to the Plan, to determine the
terms and provisions of Option agreements that may be entered into in connection
with Options (which need not be identical), subject to the limitation that
agreements granting ISOs must be consistent with requirements for the ISOs being
qualified as "incentive stock options" as provided in Section 422 of the Code,
and to make all other determinations and take all other actions necessary or
advisable for the administration of the Plan. In making such determinations, the
Board of Directors may take into account the nature of the services rendered by
such individuals, their present and potential contributions to the Company's
success, and such other factors as the Board of Directors, in its discretion,
shall deem relevant. The Board of Directors' determinations on the matters
referred to in this paragraph shall be conclusive.
5. Terms of Options.
The Board or the Committee may grant either ISOs or NQSOs or SARs and/or
SDRs in tandem with NQSOs. An ISO or an NQSO enables the optionee to purchase
from the Company, at any time during a specified exercise period, a specified
number of shares of Common Stock at a specified price (the "Option Price"). The
optionee, if granted a SAR in tandem with a NQSO, may receive from the Company,
in lieu of exercising his option to purchase shares pursuant to his NQSO, at one
of the certain specified times during the exercise period of the NQSO as set by
the Board or the Committee, the excess of the fair market value upon such
exercise (as determined in accordance with subparagraph (b) of this Paragraph 5)
of one share of Common Stock over the Option Price per share specified upon
grant of the NQSO/SAR multiplied by the number of shares of Common Stock covered
by the SAR so exercised. The optionee, if granted a SDR in tandem with a NQSO,
may receive from the Company at such date after the optionee's exercise of the
NQSO with which the SDR is in tandem and the SDR itself, which date shall be
determined by the Board or the Committee in its sole discretion, the excess of
the fair market value of one share of Common Stock upon the optionee's exercise
of the NQSO with which the SDR is in tandem over the greater of the (i) fair
market value on the date six months and one day after the exercise of such NQSO
and (ii) the option price paid on the exercise thereof, multiplied by the number
of shares of Common Stock covered by the NQSO/SDR so exercised. The character
and terms of each Option granted under the Plan shall be determined by the Board
of Directors consistent with the provisions of the Plan, including the
following:
(a) An Option granted under the Plan must be granted within 10 years
from the date the Plan is adopted, or the date the Plan is approved by the
Shareholders of the Company, whichever is earlier.
-2-
<PAGE> 4
(b) The Option Price of the shares of Common Stock subject to each ISO
shall not be less than the fair market value of such shares of Common Stock at
the time such ISO is granted. Such fair market value shall be determined by the
Board of Directors and, if the shares of Common Stock are listed on a national
securities exchange or traded on the over-the-counter market, the fair market
value shall be the closing price on such exchange, or the mean of the closing
bid and asked prices of the shares of Common Stock on the over-the-counter
market, as reported by the National Association of Securities Dealers Automated
Quotation System (NASDAQ), the National Association of Securities Dealers OTC
Bulletin Board or the National Quotation Bureau, Inc., as the case may be, on
the day on which the Option is granted or, if there is no closing price or bid
or asked price on that day, the closing price or mean of the closing bid and
asked prices on the most recent day preceding the day on which the Option is
granted for which such prices are available. If an ISO is granted to any
individual who, immediately before the ISO is to be granted, owns (directly or
through attribution) more than 10% of the total combined voting power of all
classes of capital stock of the Company or a subsidiary or parent of the
Company, the Option Price of the shares of Common Stock subject to such ISO
shall not be less than 110% of the fair market value per share of the shares of
Common Stock at the time such ISO is granted.
(c) The Option Price of the shares of Common Stock subject to an NQSO or
a SAR or SDR in tandem with a NQSO granted pursuant to the Plan shall be
determined by the Board of Directors or the Committee, in its sole discretion.
(d) In no event shall any Option granted under the Plan have an
expiration date later than 10 years from the date of its grant, and all Options
granted under the Plan shall be subject to earlier termination as expressly
provided in Paragraph 6 hereof. If an ISO is granted to any individual who,
immediately before the ISO is granted, owns (directly or through attribution)
more that 10% of the total combined voting power of all classes of capital stock
of the Company or of a subsidiary or parent of the Company, such ISO shall by
its terms expire and shall not be exercisable after the expiration of five (5)
years from the date of its grant.
(e) An SAR may be exercised at any time after six months of the date of
the grant thereof during the exercise period of the NQSO with which it is
granted in tandem and prior to the exercise of such NQSO, but only within the
specified 10 business day period referred to in subsection (e)(3) of Rule 16b-3
of the 1934 Act (generally, the 10 business days immediately following the
publication of the Company's quarterly financial information). The exercise of
an SAR granted in tandem with an NQSO shall be deemed to cancel such number of
shares subject to the unexercised Option as were subject to the exercised SAR.
An SDR may be exercised at any time prior to the expiration date of the NQSO
granted in tandem with the SDR and after 6 months from the exercise of the NQSO
granted in tandem with the SDR. The Board or the Committee has discretion to
determine and impose conditions on SDRs such as setting the time of payment at
the date six months and one day following the date of exercise, the date of the
sale of the Common
-3-
<PAGE> 5
Stock received upon the exercise of the NQSO which was granted in tandem with
the SDR, or some other date (but not later than the expiration date of the
option), and reducing the amount of the distribution to take into account
appreciation in the fair market value of the aforementioned Common Stock prior
to the payment of the distribution. The Board or the Committee also has the
discretion to alter the terms of the SDRs if necessary to comply with Federal or
state securities law. Amounts to be paid by the Company in connection with an
SAR or SDR may, in the Board's or the Committee's discretion, be made in cash,
Common Stock or a combination thereof. An NQSO granted in tandem with an SAR or
SDR may not be exercised within six months of the grant thereof.
(f) Unless otherwise provided in any Option agreement under the Plan, an
Option granted under the Plan shall become exercisable, in whole at any time or
in part from time to time, but in no case may an Option (i) be exercised as to
less than one hundred (100) shares of Common Stock at any one time, or the
remaining shares of Common Stock covered by the Option if less than one hundred
(100), and (ii) become fully exercisable more than five years from the date of
its grant nor shall less than 20% of the Option become exercisable in any of the
first five years of the Option.
(g) An Option granted under the Plan shall be exercised by the delivery
by the holder thereof to the Company at its principal office (to the attention
of the Secretary) of written notice of the number of full shares of Common Stock
with respect to which the Option is being exercised, accompanied by payment in
full, in cash or by certified check payable to the order of the Company, of the
Option Price of such shares of Common Stock, or, at the discretion of the
Committee or the Board, by the delivery of shares of Common Stock having a fair
market value equal to the Option Price (provided, in order to qualify as an ISO,
more than one year shall have passed since the date of grant and one year from
the date of exercise), or at the option of the Committee or the Board, by a
combination of cash and such shares (subject to the restriction above) held by
the employee that have a fair market value together with such cash that shall
equal the Option Price, and at the discretion of the Committee or Board by
having the Company withhold from the shares of Common Stock to be issued upon
exercise of the Option that number of shares having a fair market value equal to
the tax withholding amount due, or in the event an employee is granted a NQSO in
tandem with an SAR and/or SDR and desires to exercise such SAR or SDR, such
written notice shall so state such intention.
(h) The holder of an Option shall have none of the rights of a
Shareholder with respect to the shares of Common Stock covered by such holder's
Option until such shares of Common Stock shall be issued to such holder upon the
exercise of the Option.
(i) An ISO granted under the Plan shall not be transferable otherwise
than by will or the laws of descent and distribution, and any ISO granted under
the Plan may be exercised during the lifetime of the
-4-
<PAGE> 6
holder thereof only by the holder. No Option granted under the Plan shall be
subject to execution, attachment or other process.
(j) The aggregate fair market value, determined as of the time any ISO
is granted and in the manner provided for by subparagraph (b) of this Paragraph
5, of the shares of Common Stock with respect to which ISOs granted under the
Plan are exercisable for the first time during any calendar year and under
incentive stock options qualifying as such in accordance with Section 422 of the
Code granted under any other Incentive Stock Option plan maintained by the
Company or its parent or subsidiary corporations, shall not exceed $100,000.
6. Death or Termination of Employment.
(a) If the employment of a holder of an ISO under the Plan shall be
terminated voluntarily by the employee or for cause, such holder's ISO shall
expire within thirty (30) days after such termination. If such employment shall
terminate for any reason other than death, voluntary termination by the employee
or for cause, then such ISO may be exercised at any time within three (3) months
after such termination, subject to the provisions of subparagraph (f) of this
Paragraph 6. For the purposes of this subparagraph (a), the retirement of an
individual either pursuant to a pension or retirement plan adopted by the
Company or at the normal retirement date prescribed from time to time by the
Company shall be deemed to be a termination of such individual's employment
other than voluntarily by the employee or for cause.
(b) If the holder of an ISO under the Plan dies (i) while employed by
the Company or a subsidiary or parent corporation or (ii) within three (3)
months after the termination of such holder's employment other than voluntarily
by the employee or for cause, such ISO may, subject to the provisions of
subparagraph (f) of this Paragraph 6, be exercised by a legatee or legatees of
such Option under such individual's last will or by such individual's personal
representatives or distributees at any time within one year after the
individual's death.
(c) If the employment of a holder of an NQSO or SAR or SDR under the
Plan shall be terminated voluntarily by the employee or for cause, then such
holder's NQSO, SAR or SDR shall expire within thirty (30) days after such
termination. If such employment shall terminate for any reason other than death,
voluntary termination by the employee or for cause, then such NQSO, SAR or SDR
may be exercised at any time within three (3) months after the date of such
termination, subject to the provisions of subparagraph (f) of this Paragraph 6.
For the purposes of this subparagraph (c), the retirement of an individual
either pursuant to a pension or retirement plan adopted by the Company or at the
normal retirement date prescribed from time to time by the Company shall be
deemed to be a voluntary termination of such individual's employment by the
employee.
(d) If the holder of an NQSO, SAR or SDR under the Plan dies (i) while
employed by the Company or a subsidiary or parent corporation
-5-
<PAGE> 7
or (ii) within three (3) months after the termination of his employment either
voluntarily or for cause, such NQSO, SAR or SDR may, subject to the provisions
of subparagraph (f) of this Paragraph 6, be exercised by a legatee or legatees
of such NQSO, SAR or SDR under such individual's last will or by such
individual's personal representatives or distributees at any time within one
year after the individual's death.
(e) If the holder of an Option under the Plan becomes disabled within
the definition of section 104(d) of the Code while employed by the Company or a
subsidiary or parent corporation, such Option may, subject to the provisions of
subparagraph (f) of this Paragraph 6, be exercised at any time within one year
after such holder's termination of employment due to the disability.
(f) An Option may not be exercised pursuant to this Paragraph 6 except
to the extent that the holder was entitled to exercise the Option at the time of
termination of employment or death, and in any event may not be exercised after
the original expiration date of the Option.
7. Leave of Absence.
For the purposes of the Plan, an individual who is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) shall be considered as remaining in the employ of the Company or of
a subsidiary or parent corporation for ninety (90) days or such longer period as
such individual's right to reemployment is guaranteed either by statute or by
contract.
8. Adjustment Upon Changes in Capitalization.
(a) In the event that the outstanding shares of Common Stock are
hereafter changed by reason of recapitalization, reclassification, stock
split-up, combination or exchange of shares of Common Stock or the like, or by
the issuance of dividends payable in shares of Common Stock, an appropriate
adjustment shall be made by the Board of Directors in the aggregate number of
shares of Common Stock available under the Plan and in the number of shares of
Common Stock and price per share subject to outstanding Options. In the event of
the proposed dissolution, liquidation, merger or sale of substantially all of
the assets of the Company, all outstanding Options under the Plan will
automatically terminate, unless otherwise provided by the Board of Directors.
The Board of Directors or the Committee may in its discretion make provision for
accelerating the exercisability of Options under the Plan in such circumstances.
(b) Any adjustment in the number of shares of Common Stock shall apply
proportionately to only the unexercised portion of the Options granted
hereunder. If fractions of shares of Common Stock would result from any such
adjustment, the adjustment shall be revised to the next lower whole number of
shares of Common Stock.
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<PAGE> 8
9. Further Conditions of Exercise.
(a) Unless the shares of Common Stock issuable upon the exercise of an
Option under the Plan have been registered with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, prior to the
exercise of the Option, the notice of exercise shall be accompanied by a
representation or agreement of the individual exercising the Option to the
Company to the effect that such shares of Common Stock are being acquired for
investment and not with a view to the resale or distribution thereof or such
other documentation as may be required by the Company, unless in the opinion of
counsel to the Company such representation, agreement or documentation is not
necessary to comply with said Act.
(b) The Company shall not be obligated to deliver any shares of Common
Stock until they have been listed on each securities exchange on which the
shares of Common Stock may then be listed or until there has been qualification
under or compliance with such state or federal laws, rules or regulations as the
Company may deem applicable. The Company shall use reasonable efforts to obtain
such listing, qualification and compliance.
(c) The Board or Committee may make such provisions and take such steps
as it may deem necessary or appropriate for the withholding of any taxes that
the Company is required by any law or regulation of any governmental authority,
whether federal, state or local, domestic or foreign, to withhold in connection
with the exercise of any Option, including, but not limited to, (i) the
withholding of payment of all or any portion of such Option and/or SAR and/or
SDR until the holder reimburses the Company for the amount the Company is
required to withhold with respect to such taxes, or (ii) the cancelling of any
number of shares of Common Stock issuable upon exercise of such Option and/or
SAR and/or SDR in an amount sufficient to reimburse the Company for the amount
it is required to so withhold, or (iii) the selling of any property contingently
credited by the Company for the purpose of exercising such Option, in order to
withhold or reimburse the Company for the amount it is required to so withhold.
10. Termination, Modification and Amendment.
The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the earliest of the date of its adoption by the
Board of Directors, or the date the Plan is approved by the Shareholders of the
Company, or such date of termination, as hereinafter provided, and no Option
shall be granted after termination of the Plan.
The Plan may from time to time be terminated, modified or amended by the
affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Company entitled to vote thereon.
The Board of Directors of the Company may at any time, prior to ten (10)
years from the earlier of the date of the adoption of the
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<PAGE> 9
Plan by such Board of Directors or the date the Plan is approved by the
Shareholders, terminate the Plan or from time to time make such modifications or
amendments of the Plan as it may deem advisable; provided, however, that the
Board of Directors shall not, without approval by the affirmative vote of the
holders of a majority of the outstanding shares of capital stock of the Company
entitled to vote thereon, increase (except as provided by Paragraph 8) the
maximum number of shares of Common Stock as to which Options may be granted
under the Plan, materially change the standards of eligibility under the Plan or
materially increase the benefits which may accrue to participants under the
Plan. Any amendment to the Plan which, in the opinion of counsel to the Company,
will be deemed to result in the adoption of a new Plan, will not be effective
until approved by the affirmative vote of the holders of a majority of the
outstanding shares of capital stock of the Company entitled to vote thereon.
No termination, modification or amendment of the Plan may adversely affect
the rights under any outstanding Option without the consent of the individual to
whom such Option shall have been previously granted.
11. Effective Date of the Plan.
The Plan shall become effective upon adoption by the Board of Directors of
the Company. The Plan shall be subject to approval by the affirmative vote of
the holders of a majority of the outstanding shares of capital stock of the
Company entitled to vote thereon.
12. Not a Contract of Employment.
Nothing contained in the Plan or in any option agreement executed pursuant
hereto shall be deemed to confer upon any individual to whom an Option is or may
be granted hereunder any right to remain in the employ of the Company or of a
subsidiary or parent of the Company or in any way limit the right of the
Company, or of any parent or subsidiary thereof, to terminate the employment of
any employee.
13. Other Compensation Plans.
The adoption of the Plan shall not affect any other stock option plan,
incentive plan or any other compensation plan in effect for the officers of the
Company, nor shall the Plan preclude the Company from establishing any other
form of stock option plan, incentive plan or any other compensation plan for
officers of the Company.
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<PAGE> 1
EXHIBIT 4.2
<PAGE> 2
AMERICAN ENTERPRISES, INC. 1992 EMPLOYEE STOCK OPTION PLAN
1. Purposes.
The AMERICAN ENTERPRISES, INC. 1992 EMPLOYEE STOCK OPTION PLAN (the
"Plan") is intended to provide the employees of American Enterprises, Inc. (the
"Company") with an added incentive to continue their services to the Company and
to induce them to exert their maximum efforts toward the Company's success. By
thus encouraging employees and promoting their continued association with the
Company, the Plan may be expected to benefit the Company and its Shareholders.
The Plan allows the Company to grant Incentive Stock Options ("ISOs") (as
defined in Section 422(b) of the Internal Revenue Code of 1986, as amended [the
"Code"]), Non-Qualified Stock Options ("NQSOs") not intended to qualify under
Section 422(b) of the Code, Stock Appreciation Rights ("SARs") and Stock
Depreciation Rights ("SDRs") (collectively the "Options").
2. Shares Subject to the Plan.
The total number of shares of Common Stock of the Company, $.01 par value
per share (the "Common Stock"), that may be subject to Options granted under the
Plan shall be 2,500,000 in the aggregate, subject to adjustment as provided in
Paragraph 8 of the Plan; however, the grant of any NQSO to an employee together
with a tandem SAR or SDR shall only require one share of Common Stock available
subject to the Plan to satisfy such joint Option. The Company shall at all times
while the Plan is in force reserve such number of shares of Common Stock as will
be sufficient to satisfy the requirement of outstanding Options granted under
the Plan. In the event any Option granted under the Plan shall expire or
terminate for any reason without having been exercised in full or shall cease
for any reason to be exercisable in whole or in part, the unpurchased shares
subject thereto shall again be available for granting of Options under the Plan.
3. Eligibility.
Options may be granted to employees, which term as used in the Plan
includes officers and directors of the Company or of a "subsidiary" or "parent"
of the Company, as the quoted terms are defined within Section 424 of the Code.
Options may be granted from time to time under the Plan to one or more employees
of the Company, including employees who have previously been granted Options
under the Plan.
4. Administration of the Plan.
The Plan shall be administered by the Board of Directors of the Company as
such Board of Directors may be composed from time to time or by a Stock Option
Committee (the "Committee") comprised of two disinterested persons (the term
"disinterested" having the meaning ascribed to it by Rule 16b-3 of the
Securities Exchange Act of 1934 [the "1934 Act"]) appointed by such Board of
Directors of the Company. As and to the extent authorized by the Board of
Directors of the
<PAGE> 3
Company, the Committee may exercise the power and authority vested in the Board
of Directors under the Plan. Within the limits of the express provisions of the
Plan, the Board of Directors shall have the authority, in its discretion, to
determine the individuals to whom, and the time or times at which, Options shall
be granted, the character of such Options (whether ISO, NQSO and/or SAR or SDR
in tandem with a NQSO) and the number of shares of Common Stock to be subject to
each Option, and to interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to the Plan, to determine the terms and provisions of
Option agreements that may be entered into in connection with Options (which
need not be identical), subject to the limitation that agreements granting ISOs
must be consistent with requirements for the ISOs being qualified as "incentive
stock options" as provided in Section 422 of the Code, and to make all other
determinations and take all other actions necessary or advisable for the
administration of the Plan. In making such determinations, the Board of
Directors may take into account the nature of the services rendered by such
individuals, their present and potential contributions to the Company's success,
and such other factors as the Board of Directors, in its discretion, shall deem
relevant. The Board of Directors' determinations on the matters referred to in
this paragraph shall be conclusive.
5. Terms of Options.
The Board or the Committee may grant either ISOs or NQSOs or SARs and/or
SDRs in tandem with NQSOs. An ISO or an NQSO enables the optionee to purchase
from the Company, at any time during a specified exercise period, a specified
number of shares of Common Stock at a specified price (the "Option Price"). The
optionee, if granted a SAR in tandem with a NQSO, may receive from the Company,
in lieu of exercising his option to purchase shares pursuant to his NQSO, at one
of the certain specified times during the exercise period of the NQSO as set by
the Board or the Committee, the excess of the fair market value upon such
exercise (as determined in accordance with subparagraph (b) of this Paragraph 5)
of one share of Common Stock over the Option Price per share specified upon
grant of the NQSO/SAR multiplied by the number of shares of Common Stock covered
by the SAR so exercised. The optionee, if granted a SDR in tandem with a NQSO,
may receive from the Company at such date after the optionee's exercise of the
NQSO with which the SDR is in tandem and the SDR itself, which date shall be
determined by the Board or the Committee in its sole discretion, the excess of
the fair market value of one share of Common Stock upon the optionee's exercise
of the NQSO with which the SDR is in tandem over the greater of the (i) fair
market value on the date six months and one day after the exercise of such NQSO
and (ii) the option price paid on the exercise thereof, multiplied by the number
of shares of Common Stock covered by the NQSO/SDR so exercised. The character
and terms of each Option granted under the Plan shall be determined by the Board
of Directors consistent with the provisions of the Plan, including the
following:
(a) An Option granted under the Plan must be granted within 10 years
from the date the Plan is adopted, or the date the Plan is approved by the
Shareholders of the Company, whichever is earlier.
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<PAGE> 4
(b) The Option Price of the shares of Common Stock subject to each ISO
shall not be less than the fair market value of such shares of Common Stock at
the time such ISO is granted. Such fair market value shall be determined by the
Board of Directors and, if the shares of Common Stock are listed on a national
securities exchange or traded on the over-the-counter market, the fair market
value shall be the closing price on such exchange, or the mean of the closing
bid and asked prices of the shares of Common Stock on the over-the-counter
market, as reported by the National Association of Securities Dealers Automated
Quotation System (NASDAQ), the National Association of Securities Dealers OTC
Bulletin Board or the National Quotation Bureau, Inc., as the case may be, on
the day on which the Option is granted or, if there is no closing price or bid
or asked price on that day, the closing price or mean of the closing bid and
asked prices on the most recent day preceding the day on which the Option is
granted for which such prices are available. If an ISO is granted to any
individual who, immediately before the ISO is to be granted, owns (directly or
through attribution) more than 10% of the total combined voting power of all
classes of capital stock of the Company or a subsidiary or parent of the
Company, the Option Price of the shares of Common Stock subject to such ISO
shall not be less than 110% of the fair market value per share of the shares of
Common Stock at the time such ISO is granted.
(c) The Option Price of the shares of Common Stock subject to an NQSO or
a SAR or SDR in tandem with a NQSO granted pursuant to the Plan shall be
determined by the Board of Directors or the Committee, in its sole discretion.
(d) In no event shall any Option granted under the Plan have an
expiration date later than 10 years from the date of its grant, and all Options
granted under the Plan shall be subject to earlier termination as expressly
provided in Paragraph 6 hereof. If an ISO is granted to any individual who,
immediately before the ISO is granted, owns (directly or through attribution)
more that 10% of the total combined voting power of all classes of capital stock
of the Company or of a subsidiary or parent of the Company, such ISO shall by
its terms expire and shall not be exercisable after the expiration of five (5)
years from the date of its grant.
(e) An SAR may be exercised at any time after six months of the date of
the grant thereof during the exercise period of the NQSO with which it is
granted in tandem and prior to the exercise of such NQSO, but only within the
specified 10 business day period referred to in subsection (e)(3) of Rule 16b-3
of the 1934 Act (generally, the 10 business days immediately following the
publication of the Company's quarterly financial information). The exercise of
an SAR granted in tandem with an NQSO shall be deemed to cancel such number of
shares subject to the unexercised Option as were subject to the exercised SAR.
An SDR may be exercised at any time prior to the expiration date of the NQSO
granted in tandem with the SDR and after 6 months from the exercise of the NQSO
granted in tandem with the SDR. The Board or the Committee has discretion to
determine and impose conditions on SDRs such as setting the time of payment at
the date six months and one day following the date of exercise, the date of the
sale of the Common
-3-
<PAGE> 5
Stock received upon the exercise of the NQSO which was granted in tandem with
the SDR, or some other date (but not later than the expiration date of the
option), and reducing the amount of the distribution to take into account
appreciation in the fair market value of the aforementioned Common Stock prior
to the payment of the distribution. The Board or the Committee also has the
discretion to alter the terms of the SDRs if necessary to comply with Federal or
state securities law. Amounts to be paid by the Company in connection with an
SAR or SDR may, in the Board's or the Committee's discretion, be made in cash,
Common Stock or a combination thereof. An NQSO granted in tandem with an SAR or
SDR may not be exercised within six months of the grant thereof.
(f) Unless otherwise provided in any Option agreement under the Plan, an
Option granted under the Plan shall become exercisable, in whole at any time or
in part from time to time, but in no case may an Option (i) be exercised as to
less than one hundred (100) shares of Common Stock at any one time, or the
remaining shares of Common Stock covered by the Option if less than one hundred
(100), and (ii) become fully exercisable more than five years from the date of
its grant nor shall less than 20% of the Option become exercisable in any of the
first five years of the Option.
(g) An Option granted under the Plan shall be exercised by the delivery
by the holder thereof to the Company at its principal office (to the attention
of the Secretary) of written notice of the number of full shares of Common Stock
with respect to which the Option is being exercised, accompanied by payment in
full, in cash or by certified check payable to the order of the Company, of the
Option Price of such shares of Common Stock, or, at the discretion of the
Committee or the Board, by the delivery of shares of Common Stock having a fair
market value equal to the Option Price (provided, in order to qualify as an ISO,
more than one year shall have passed since the date of grant and one year from
the date of exercise), or at the option of the Committee or the Board, by a
combination of cash and such shares (subject to the restriction above) held by
the employee that have a fair market value together with such cash that shall
equal the Option Price, and at the discretion of the Committee or Board by
having the Company withhold from the shares of Common Stock to be issued upon
exercise of the Option that number of shares having a fair market value equal to
the tax withholding amount due, or in the event an employee is granted a NQSO in
tandem with an SAR and/or SDR and desires to exercise such SAR or SDR, such
written notice shall so state such intention.
(h) The holder of an Option shall have none of the rights of a
Shareholder with respect to the shares of Common Stock covered by such holder's
Option until such shares of Common Stock shall be issued to such holder upon the
exercise of the Option.
(i) An ISO granted under the Plan shall not be transferable otherwise
than by will or the laws of descent and distribution, and any ISO granted under
the Plan may be exercised during the lifetime of the
-4-
<PAGE> 6
holder thereof only by the holder. No Option granted under the Plan shall be
subject to execution, attachment or other process.
(j) The aggregate fair market value, determined as of the time any ISO
is granted and in the manner provided for by subparagraph (b) of this Paragraph
5, of the shares of Common Stock with respect to which ISOs granted under the
Plan are exercisable for the first time during any calendar year and under
incentive stock options qualifying as such in accordance with Section 422 of the
Code granted under any other Incentive Stock Option plan maintained by the
Company or its parent or subsidiary corporations, shall not exceed $100,000.
6. Death or Termination of Employment.
(a) If the employment of a holder of an ISO under the Plan shall be
terminated voluntarily by the employee or for cause, such holder's ISO shall
expire within thirty (30) days after such termination. If such employment shall
terminate for any reason other than death, voluntary termination by the employee
or for cause, then such ISO may be exercised at any time within three (3) months
after such termination, subject to the provisions of subparagraph (f) of this
Paragraph 6. For the purposes of this subparagraph (a), the retirement of an
individual either pursuant to a pension or retirement plan adopted by the
Company or at the normal retirement date prescribed from time to time by the
Company shall be deemed to be a termination of such individual's employment
other than voluntarily by the employee or for cause.
(b) If the holder of an ISO under the Plan dies (i) while employed by
the Company or a subsidiary or parent corporation or (ii) within three (3)
months after the termination of such holder's employment other than voluntarily
by the employee or for cause, such ISO may, subject to the provisions of
subparagraph (f) of this Paragraph 6, be exercised by a legatee or legatees of
such Option under such individual's last will or by such individual's personal
representatives or distributees at any time within one year after the
individual's death.
(c) If the employment of a holder of an NQSO or SAR or SDR under the
Plan shall be terminated voluntarily by the employee or for cause, then such
holder's NQSO, SAR or SDR shall expire within thirty (30) days after such
termination. If such employment shall terminate for any reason other than death,
voluntary termination by the employee or for cause, then such NQSO, SAR or SDR
may be exercised at any time within three (3) months after the date of such
termination, subject to the provisions of subparagraph (f) of this Paragraph 6.
For the purposes of this subparagraph (c), the retirement of an individual
either pursuant to a pension or retirement plan adopted by the Company or at the
normal retirement date prescribed from time to time by the Company shall be
deemed to be a voluntary termination of such individual's employment by the
employee.
(d) If the holder of an NQSO, SAR or SDR under the Plan dies (i) while
employed by the Company or a subsidiary or parent corporation
-5-
<PAGE> 7
or (ii) within three (3) months after the termination of his employment either
voluntarily or for cause, such NQSO, SAR or SDR may, subject to the provisions
of subparagraph (f) of this Paragraph 6, be exercised by a legatee or legatees
of such NQSO, SAR or SDR under such individual's last will or by such
individual's personal representatives or distributees at any time within one
year after the individual's death.
(e) If the holder of an Option under the Plan becomes disabled within
the definition of section 104(d) of the Code while employed by the Company or a
subsidiary or parent corporation, such Option may, subject to the provisions of
subparagraph (f) of this Paragraph 6, be exercised at any time within one year
after such holder's termination of employment due to the disability.
(f) An Option may not be exercised pursuant to this Paragraph 6 except
to the extent that the holder was entitled to exercise the Option at the time of
termination of employment or death, and in any event may not be exercised after
the original expiration date of the Option.
7. Leave of Absence.
For the purposes of the Plan, an individual who is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) shall be considered as remaining in the employ of the Company or of
a subsidiary or parent corporation for ninety (90) days or such longer period as
such individual's right to reemployment is guaranteed either by statute or by
contract.
8. Adjustment Upon Changes in Capitalization.
(a) In the event that the outstanding shares of Common Stock are
hereafter changed by reason of recapitalization, reclassification, stock
split-up, combination or exchange of shares of Common Stock or the like, or by
the issuance of dividends payable in shares of Common Stock, an appropriate
adjustment shall be made by the Board of Directors in the aggregate number of
shares of Common Stock available under the Plan and in the number of shares of
Common Stock and price per share subject to outstanding Options. In the event of
the proposed dissolution, liquidation, merger or sale of substantially all of
the assets of the Company, all outstanding Options under the Plan will
automatically terminate, unless otherwise provided by the Board of Directors.
The Board of Directors or the Committee may in its discretion make provision for
accelerating the exercisability of Options under the Plan in such circumstances.
(b) Any adjustment in the number of shares of Common Stock shall apply
proportionately to only the unexercised portion of the Options granted
hereunder. If fractions of shares of Common Stock would result from any such
adjustment, the adjustment shall be revised to the next lower whole number of
shares of Common Stock.
-6-
<PAGE> 8
9. Further Conditions of Exercise.
(a) Unless the shares of Common Stock issuable upon the exercise of an
Option under the Plan have been registered with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, prior to the
exercise of the Option, the notice of exercise shall be accompanied by a
representation or agreement of the individual exercising the Option to the
Company to the effect that such shares of Common Stock are being acquired for
investment and not with a view to the resale or distribution thereof or such
other documentation as may be required by the Company, unless in the opinion of
counsel to the Company such representation, agreement or documentation is not
necessary to comply with said Act.
(b) The Company shall not be obligated to deliver any shares of Common
Stock until they have been listed on each securities exchange on which the
shares of Common Stock may then be listed or until there has been qualification
under or compliance with such state or federal laws, rules or regulations as the
Company may deem applicable. The Company shall use reasonable efforts to obtain
such listing, qualification and compliance.
(c) The Board or Committee may make such provisions and take such steps as
it may deem necessary or appropriate for the withholding of any taxes that the
Company is required by any law or regulation of any governmental authority,
whether federal, state or local, domestic or foreign, to withhold in connection
with the exercise of any Option, including, but not limited to, (i) the
withholding of payment of all or any portion of such Option and/or SAR and/or
SDR until the holder reimburses the Company for the amount the Company is
required to withhold with respect to such taxes, or (ii) the cancelling of any
number of shares of Common Stock issuable upon exercise of such Option and/or
SAR and/or SDR in an amount sufficient to reimburse the Company for the amount
it is required to so withhold, or (iii) the selling of any property contingently
credited by the Company for the purpose of exercising such Option, in order to
withhold or reimburse the Company for the amount it is required to so withhold.
10. Termination, Modification and Amendment.
The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the earliest of the date of its adoption by the
Board of Directors, or the date the Plan is approved by the Shareholders of the
Company, or such date of termination, as hereinafter provided, and no Option
shall be granted after termination of the Plan.
The Plan may from time to time be terminated, modified or amended by the
affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Company entitled to vote thereon.
The Board of Directors of the Company may at any time, prior to ten (10)
years from the earlier of the date of the adoption of the
-7-
<PAGE> 9
Plan by such Board of Directors or the date the Plan is approved by the
Shareholders, terminate the Plan or from time to time make such modifications or
amendments of the Plan as it may deem advisable; provided, however, that the
Board of Directors shall not, without approval by the affirmative vote of the
holders of a majority of the outstanding shares of capital stock of the Company
entitled to vote thereon, increase (except as provided by Paragraph 8) the
maximum number of shares of Common Stock as to which Options may be granted
under the Plan, materially change the standards of eligibility under the Plan or
materially increase the benefits which may accrue to participants under the
Plan. Any amendment to the Plan which, in the opinion of counsel to the Company,
will be deemed to result in the adoption of a new Plan, will not be effective
until approved by the affirmative vote of the holders of a majority of the
outstanding shares of capital stock of the Company entitled to vote thereon.
No termination, modification or amendment of the Plan may adversely affect
the rights under any outstanding Option without the consent of the individual to
whom such Option shall have been previously granted.
11. Effective Date of the Plan.
The Plan shall become effective upon adoption by the Board of Directors of
the Company. The Plan shall be subject to approval by the affirmative vote of
the holders of a majority of the outstanding shares of capital stock of the
Company entitled to vote thereon within one year before or after adoption of the
Plan by the Board of Directors.
12. Not a Contract of Employment.
Nothing contained in the Plan or in any option agreement executed pursuant
hereto shall be deemed to confer upon any individual to whom an Option is or may
be granted hereunder any right to remain in the employ of the Company or of a
subsidiary or parent of the Company or in any way limit the right of the
Company, or of any parent or subsidiary thereof, to terminate the employment of
any employee.
13. Other Compensation Plans.
The adoption of the Plan shall not affect any other stock option plan,
incentive plan or any other compensation plan in effect for the employees of the
Company, nor shall the Plan preclude the Company from establishing any other
form of stock option plan, incentive plan or any other compensation plan for
employees of the Company.
-8-
<PAGE> 1
EXHIBIT 4.3
<PAGE> 2
AMERICAN CASINO ENTERPRISES, INC.
1996 STOCK OPTION PLAN
1. Purposes.
The AMERICAN CASINO ENTERPRISES, INC. 1996 STOCK OPTION PLAN (the "Plan")
is intended to provide the employees, directors, independent contractors and
consultants of American Casino Enterprises, Inc. (the "Company") with an added
incentive to continue their services to the Company and to induce them to exert
their maximum efforts toward the Company's success. By thus encouraging
employees, directors, independent contractors and consultants and promoting
their continued association with the Company, the Plan may be expected to
benefit the Company and its stockholders. The Plan allows the Company to grant
Incentive Stock Options ("ISOs") (as defined in Section 422(b) of the Internal
Revenue Code of 1986, as amended (the "Code"), Non-Qualified Stock Options
("NQSOs") not intended to qualify under Section 422(b) of the Code and Stock
Appreciation Rights ("SARs") (collectively the "Options").
2. Shares Subject to the Plan.
The total number of shares of Common Stock of the Company, $.01 par value
per share, that may be subject to Options granted under the Plan shall be
2,500,000 in the aggregate, subject to adjustment as provided in Paragraph 8 of
the Plan; however, the grant of an ISO to an employee together with a tandem SAR
or any NQSO to an employee together with a tandem SAR shall only require one
shares of Common Stock available subject to the Plan to satisfy such joint
Option. The Company shall at all times while the Plan is in force reserve such
number of shares of Common Stock as will be sufficient to satisfy the
requirement of outstanding Options granted under the Plan. In the event any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject thereto shall again be
available for granting of Options under the Plan.
3. Eligibility.
ISO's or ISO's in tandem with SAR's (provided the SAR meets the
requirements set forth in Temp. Reg. Section 14a.422A-1, A-39 (a) through (e)
inclusive) may be granted from time to time under the Plan to one or more
employees of the Company or of a "subsidiary" or "parent" of the Company, as the
quoted terms are defined within Section 424 of the Code. An Officer is an
employee for the above purposes. However, a director of the Company who is not
otherwise an employee is not deemed an employee for such purposes. ISOs, NQSOs
and SARs may be granted from time to time under the Plan to one or more
employees of the Company, Officers, members of the Board of Directors,
independent contractors, consultants and other individuals who are not employees
of, but are involved in the continuing development and success of the Company
and/or of a subsidiary of the Company, including persons who have previously
been granted Options under the Plan.
<PAGE> 3
4. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors of the
Company as such Board of Directors may be composed from time to time and/or by a
Stock Option Committee (the "Committee") which shall be comprised of at least
two disinterested persons (the term "disinterested" having the meaning ascribed
to it by Rule 16b-3 of the Securities Exchange Act of 1934 (the "1934 Act))
appointed by such Board of Directors of the Company. As and to the extent
authorized by the Board of Directors of the Company, the Committee may exercise
the power and authority vested in the Board of Directors under the Plan. Within
the limits of the express provisions of the Plan, the Board of Directors or
Committee shall have the authority, in its discretion, to determine the
individuals to whom, and the time or times at which, Options shall be granted,
the character of such Options (whether ISO, NQSOs, SARs in tandem with NQSOs,
and/or SARs in tandem with ISOs) and the number of shares of Common Stock to be
subject to each Option, the manner and form in which the optionee can tender
payment upon the exercise of his Option, and to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of Option agreements that may be entered into
in connection with Options (which need not be identical), subject to the
limitation that agreements granting ISOs must be consistent with the
requirements for the ISOs being qualified as "incentive stock options" as
provided in Section 422 of the Code, and to make all other determinations and
take all other actions necessary or advisable for the administration of the
Plan. In making such determinations, the Board of Directors and/or the Committee
may take into account the nature of the services rendered by such individuals,
their present and potential contributions to the Company's success, and such
other factors as the Board of Directors and/or the Committee, in its discretion,
shall deem relevant. The Board of Directors' and/or the Committee's
determinations on the matters referred to in this Paragraph shall be conclusive.
(b) Notwithstanding anything contained herein to the contrary, at anytime
during the period the Company's Common Stock is registered pursuant to Section
12(g) of the 1934 Act, the Committee, if one has been appointed to administer
the Plan with respect to grants to all persons or solely with respect to persons
subject to Section 16 of the 1934 Act, shall have the exclusive right to grant
Options to persons subject to Section 16 of the 1934 Act and set forth the terms
and conditions thereof. With respect to persons subject to Section 16 of the
1934 Act, transactions under the Plan are intended, to the extent possible,
comply with all applicable conditions of Rule 16b-3, as amended from time to
time, (and its successor provisions, if any) under the 1934 Act. To the extent
any provision of the Plan or action by the Board of Directors or Committee fails
to so comply, it shall be deemed null and void, to the extent permitted by law
and deemed advisable by the Board of Directors and/or such Committee.
-2-
<PAGE> 4
5. Terms of Options.
Within the limits of the express provisions of the Plan, the Board of
Directors or the Committee may grant either ISOs or NQSOs or SARs in tandem with
NQSOs or SARs in tandem with ISOs. An ISO or an NQSO enables the optionee to
purchase from the Company, at any time during a specified exercise period, a
specified number of shares of Common Stock at a specified price (the "Option
Price"). The optionee, if granted a SAR in tandem with a NQSO or ISO, may
receive from the Company, in lieu of exercising his option to purchase shares
pursuant to his NQSO or ISO, at one of the certain specified times during the
exercise period of the NQSO or ISO as set by the Board of Directors or the
Committee, the excess of the fair market value upon such exercise (as determined
in accordance with subparagraph (b) of this Paragraph 5) of one shares of Common
Stock over the Option Price per share specified upon grant of the NQSO or
ISO/SAR multiplied by the number of shares of Common Stock covered by the SAR so
exercised. The character and terms of each Option granted under the Plan shall
be determined by the Board of Directors and/or the Committee consistent with the
provisions of the Plan, including the following:
(a) An Option granted under the Plan must be granted within 10 years from
the date the Plan is adopted, or the date the Plan is approved by the
shareholders of the Company, whichever is earlier.
(b) The Option Price of the shares of Common Stock subject to each ISO and
each SAR issued in tandem with an ISO shall not be less than the fair market
value of such shares of Common Stock at the time such ISO is granted. Such fair
market value shall be determined by the Board of Directors and, if the Common
Stock is listed on a national securities exchange or traded on the
over-the-counter market, the fair market value shall be the closing price on
such exchange, or the mean of the closing bid and asked prices of the Common
Stock on the over-the-counter market, as reported by the Nasdaq Stock Market,
the National Association of Securities Dealers OTC Bulletin Board or the
National Quotation Bureau, Inc., as the case may be, on the day on which the
Option is granted or, if there is no closing price or bid or asked price on that
day, the closing price or mean of the closing bid and asked prices on the most
recent day preceding the day on which the Option is granted for which such
prices are available. If an ISO or SAR in tandem with an ISO is granted to any
individual who, immediately before the ISO is to be granted, owns (directly or
through attribution) more than 10% of the total combined voting power of all
classes of capital stock of the Company or a subsidiary or parent of the
Company, the Option Price of the Common Stock subject to such ISO shall not be
less than 110% of the fair market value per share of the Common Stock at the
time such ISO is granted.
(c) The Option Price of the Common Stock subject to an NQSO or an SAR in
tandem with a NQSO granted pursuant to the Plan shall be determined by the Board
of Directors or the Committee, in its sole discretion.
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<PAGE> 5
(d) In no event shall any Option granted under the Plan have an expiration
date later than 10 years from the date of its grant, and all Options granted
under the Plan shall be subject to earlier termination as expressly provided in
Paragraph 6 hereof. If an ISO or an SAR in tandem with an ISO is granted to any
individual who, immediately before the ISO is granted, owns (directly or through
attribution) more that 10% of the total combined voting power of all classes of
capital stock of the Company or of a subsidiary or parent of the Company, such
ISO shall by its terms expire and shall not be exercisable after the expiration
of five (5) years from the date of its grant.
(e) With respect to the grant of SAR's to Officers and Directors of the
Company, an SAR may be exercised at any time after six months of the date of the
grant thereof during the exercise period of the ISO or NQSO with which it is
granted in tandem and prior to the exercise of such ISO or NQSO, but only within
the specified 10 business day period referred to in subsection (e)(3) of Rule
16b-3 of the 1934 Act (generally, the 10 business days immediately following the
publication of the Company's quarterly financial information) if the Company's
Common Stock is registered pursuant to Section 12(g) of the 1934 Act.
Notwithstanding the foregoing, the Board of Directors and/or the Committee shall
in their discretion determine from time to time the terms and conditions of
SAR's to be granted, which terms may vary from the afore-described conditions,
and which terms shall be set forth in a written stock option agreement
evidencing the SAR granted in tandem with the ISO or NQSO. The exercise of an
SAR granted in tandem with an ISO or NQSO shall be deemed to cancel such number
of shares subject to the unexercised Option as were subject to the exercised
SAR. The Board of Directors or the Committee has the discretion to alter the
terms of the SARS if necessary to comply with Federal or state securities law.
Amounts to be paid by the Company in connection with an SAR may, in the Board of
Director's or the Committee's discretion, be made in cash, Common Stock or a
combination thereof.
(f) Unless otherwise provided in any Option agreement under the Plan, an
Option granted under the Plan shall become exercisable, in whole at any time or
in part from time to time, but in no case may an Option (i) be exercised as to
less than one hundred (100) shares of Common Stock at any one time, or the
remaining Common Stock covered by the Option if less than one hundred (100), and
(ii) become fully exercisable more than five years from the date of its grant
nor shall less than 20% of the Option become exercisable in any of the first
five years of the Option.
(g) An Option granted under the Plan shall be exercised by the delivery by
the holder thereof to the Company at its principal office (to the attention of
the Secretary) of written notice of the number of full shares of Common Stock
with respect to which the Option is being exercised, accompanied by payment in
full, which payment at the option of the optionee shall be in the form of (i)
cash or certified or bank check payable to the order of the Company, of the
Option Price of such Common Stock, or, (ii) if permitted by the Committee or the
Board of
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<PAGE> 6
Directors, as determined by the Committee or the Board of Directors in its sole
discretion at the time of the grant of the Option with respect to an ISO and at
or prior to the time of exercise with respect to a NQSO, by the delivery of
Common Stock having a fair market value equal to the Option Price or the
delivery of an interest-bearing promissory note having an original principal
balance equal to the Option Price and an interest rate not below the rate which
would result in imputed interest under the Code (provided, in order to qualify
as an ISO, more than one year shall have passed since the date of grant and one
year from the date of exercise), or (iii) at the option of the Committee or the
Board of Directors, determined by the Committee or the Board of Directors in its
sole discretion at the time of the grant of the Option with respect to an ISO
and at or prior to the time of exercise with respect to a NQSO, by a combination
of cash, promissory note and/or such shares of Common Stock (subject to the
restriction above) held by the employee that have a fair market value together
with such cash and principal amount of any promissory note that shall equal the
Option Price, and, in the case of a NQSO, at the discretion of the Committee or
Board of Directors by having the Company withhold from the Common Stock to be
issued upon exercise of the Option that number of shares having a fair market
value equal to the exercise price and/or the tax withholding amount due, or
otherwise provide for withholding as set forth in Paragraph 9(c) hereof, or in
the event an employee is granted an ISO or NQSO in tandem with an SAR and
desires to exercise such SAR, such written notice shall so state such intention.
The Option Price may also be paid in full by a broker-dealer to whom the
optionee has submitted an exercise notice consisting of a fully endorsed Option,
or through any other medium of payment as the Board of Directors and/or the
Committee, in its discretion, shall authorize.
(h) The holder of an Option shall have none of the rights of a shareholder
with respect to the Common Stock covered by such holder's Option until such
Common Stock shall be issued to such holder upon the exercise of the Option.
(i) All Options granted under the Plan shall not be transferable otherwise
than by will or the laws of descent and distribution, and any ISO or SAR in
tandem with an ISO granted under the Plan may be exercised during the lifetime
of the holder thereof only by the holder. No Option granted under the Plan shall
be subject to execution, attachment or other process.
(j) The aggregate fair market value, determined as of the time any ISO or SAR
in tandem with an ISO is granted and in the manner provided for by Subparagraph
(b) of this Paragraph 5, of the Common Stock with respect to which ISOs granted
under the Plan are exercisable for the first time during any calendar year and
under incentive stock options qualifying as such in accordance with Section 422
of the Code granted under any other incentive stock option plan maintained by
the Company or its parent or subsidiary corporations, shall not exceed $100,000.
Any grant of Options in excess of such amount shall be deemed a grant of a NQSO.
-5-
<PAGE> 7
(k) Notwithstanding anything contained herein to the contrary, an SAR which
was granted in tandem with an ISO shall (i) expire no later than the expiration
of the underlying ISO; (ii) be for no more than 100% of the spread at the time
the SAR is exercised; (iii) shall only be transferable when the underlying ISO
is transferable; (iv) only be exercised when the underlying ISO is eligible to
be exercised; and (v) only be exercisable when there is a positive spread.
(l) In no event shall an employee be granted Options for more than 350,000
shares of Common Stock during any calendar year period; provided, however, that
the limitation set forth in this Section 5(l) shall be subject to adjustment as
provided in Section 8 herein.
6. Death or Termination of Employment.
(a) Except as provided herein, or otherwise determined by the Board of
Directors or the Committee in its sole discretion, upon termination of
employment with the Company for any reason, a holder of an Option under the Plan
may exercise such Options to the extent such Options were exercisable as of the
date of termination at any time within thirty (30) days after the date of such
termination, subject to the provisions of Subparagraph (d) of this Paragraph 6.
Notwithstanding anything contained herein to the contrary, unless otherwise
determined by the Board of Directors or the Committee in its sole discretion,
any options granted hereunder to an optionee and then outstanding shall
immediately terminate in the event the optionee is convicted of a felony
committed against the Company, and the provisions of this Subparagraph (a) shall
not be applicable thereto.
(b) If the holder of an Option granted under the Plan dies (i) while employed
by the Company or a subsidiary or parent corporation or (ii) within three (3)
months after the termination of such holder's employment, such Options may,
subject to the provisions of subparagraph (d) of this Paragraph 6, be exercised
by a legatee or legatees of such Option under such individual's last will or by
such individual's personal representatives or distributees at any time within
such time as determined by the Board of Directors or the Committee in its sole
discretion, but in no event less than twelve months less one day after the
individual's death, to the extent such Options were exercisable as of the date
of death or date of termination of employment, whichever date is earlier.
(c) If the holder of an Option under the Plan becomes disabled within the
definition of section 22(e)(3) of the Code while employed by the Company or a
subsidiary or parent corporation, such Option may, subject to the provisions of
subparagraph (d) of this Paragraph 6, be exercised at any time within six months
less one day after such holder's termination of employment due to the
disability.
(d) Except as otherwise determined by the Board of Directors or the Committee
in its sole discretion, an Option may not be exercised pursuant to this
Paragraph 6 except to the extent that the holder was entitled to exercise the
Option at the time of termination of
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<PAGE> 8
employment or death, and in any event may not be exercised after the original
expiration date of the Option.
(e) The Board of Directors or the Committee, in its sole discretion, may at
such time or times as it deems appropriate, if ever, accelerate all or part of
the vesting provisions with respect to one or more outstanding options. The
acceleration of one option shall not infer that any option is or to be
accelerated.
7. Leave of Absence.
For the purposes of the Plan, an individual who is on military or sick leave
or other bona fide leave of absence (such as temporary employment by the
Government) shall be considered as remaining in the employ of the Company or of
a subsidiary or parent corporation for ninety (90) days or such longer period as
such individual's right to reemployment is guaranteed either by statute or by
contract.
8. Adjustment Upon Changes in Capitalization.
(a) In the event that the outstanding Common Stock is hereafter changed by
reason of recapitalization, reclassification, stock split-up, combination or
exchange of Common Stock or the like, or by the issuance of dividends payable in
Common Stock, an appropriate adjustment shall be made by the Board of Directors,
as determined by the Board of Directors and/or the Committee, in the aggregate
number of shares of Common Stock available under the Plan, in the number of
shares of Common Stock issuable upon exercise of outstanding Options, and the
Option Price per share. In the event of any consolidation or merger of the
Company with or into another company, or the conveyance of all or substantially
all of the assets of the Company to another company, each then outstanding
Option shall upon exercise thereafter entitle the holder thereof to such number
of shares of Common Stock or other securities or property to which a holder of
Common Stock of the Company would have been entitled to upon such consolidation,
merger or conveyance; and in any such case appropriate adjustment, as determined
by the Board of Directors of the Company (or successor entity) shall be made as
set forth above with respect to any future changes in the capitalization of the
Company or its successor entity. In the event of the proposed dissolution or
liquidation of the Company, all outstanding Options under the Plan will
automatically terminate, unless otherwise provided by the Board of Directors of
the Company or any authorized committee thereof.
(b) Any Option granted under the Plan, unless waived by the Board of
Directors or the Committee, may, at the discretion of the Board of Directors of
the Company and said other corporation, be exchanged for options to purchase
shares of capital stock of another corporation which the Company, and/or a
subsidiary thereof is merged into, consolidated with, or all or a substantial
portion of the property or stock of which is acquired by said other corporation
or separated or reorganized into. The terms, provisions and benefits to the
optionee of such substitute option(s) shall in all respects be
-7-
<PAGE> 9
identical to the terms, provisions and benefits of optionee under his Option(s)
prior to said substitution. To the extent the above may be inconsistent with
Sections 424(a)(1) and (2) of the Code, the above shall be deemed interpreted so
as to comply therewith.
(c) Any adjustment in the number of shares of Common Stock shall apply
proportionately to only the unexercised portion of the Options granted
hereunder. If fractions of shares of Common Stock would result from any such
adjustment, the adjustment shall be revised to the next higher whole number of
shares of Common Stock.
9. Further Conditions of Exercise.
(a) Unless the Common Stock issuable upon the exercise of an Option have been
registered with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, prior to the exercise of the Option, an
optionee must represent in writing to the Company that such shares of Common
Stock are being acquired for investment purposes only and not with a view
towards the further resale or distribution thereof, and must supply to the
Company such other documentation as may be required by the Company, unless in
the opinion of counsel to the Company such representation, agreement or
documentation is not necessary to comply with said Act.
(b) The Company shall not be obligated to deliver any shares of Common Stock
until they have been listed on each securities exchange on which the Common
Stock may then be listed or until there has been qualification under or
compliance with such state or federal laws, rules or regulations as the Company
may deem applicable.
(c) The Board of Directors or Committee may make such provisions and take
such steps as it may deem necessary or appropriate for the withholding of any
taxes that the Company is required by any law or regulation of any governmental
authority, whether federal, state or local, domestic or foreign, to withhold in
connection with the exercise of any Option, including, but not limited to, (i)
the withholding of payment of all or any portion of such Option and/or SAR until
the holder reimburses the Company for the amount the Company is required to
withhold with respect to such taxes, or (ii) the cancelling of any number of
shares of Common Stock issuable upon exercise of such Option and/or SAR in an
amount sufficient to reimburse the Company for the amount it is required to so
withhold, (iii) the selling of any property contingently credited by the Company
for the purpose of exercising such Option, in order to withhold or reimburse the
Company for the amount it is required to so withhold, or (iv) withholding the
amount due from such employee's wages if the employee is employed by the Company
or any subsidiary thereof.
10. Termination, Modification and Amendment.
(a) The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the earliest of the date of its adoption by the
Board of Directors, or the date the Plan is approved
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<PAGE> 10
by the stockholders of the Company, or such date of termination, as hereinafter
provided, and no Option shall be granted after termination of the Plan.
(b) The Plan may from time to time be terminated, modified or amended by the
affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Company entitled to vote thereon.
(c) The Board of Directors of the Company may at any time, prior to ten (10)
years from the earlier of the date of the adoption of the Plan by such Board of
Directors or the date the Plan is approved by the shareholders, terminate the
Plan or from time to time make such modifications or amendments of the Plan as
it may deem advisable; provided, however, that the Board of Directors shall not,
without approval by the affirmative vote of the holders of a majority of the
outstanding shares of capital stock of the Company entitled to vote thereon,
increase (except as provided by Paragraph 8) the maximum number of shares of
Common Stock as to which Options or shares may be granted under the Plan, or
materially change the standards of eligibility under the Plan. Any amendment to
the Plan which, in the opinion of counsel to the Company, will be deemed to
result in the adoption of a new Plan, will not be effective until approved by
the affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Company entitled to vote thereon.
(d) No termination, modification or amendment of the Plan may adversely
affect the rights under any outstanding Option without the consent of the
individual to whom such Option shall have been previously granted.
11. Effective Date of the Plan.
The Plan shall become effective upon adoption by the Board of Directors of
the Company. The Plan shall be subject to approval by the affirmative vote of
the holders of a majority of the outstanding shares of capital stock of the
Company entitled to vote thereon within one year before or after adoption of the
Plan by the Board of Directors.
12. Not a Contract of Employment.
Nothing contained in the Plan or in any option agreement executed pursuant
hereto shall be deemed to confer upon any individual to whom an Option is or may
be granted hereunder any right to remain in the employ of the Company or of a
subsidiary or parent of the Company or in any way limit the right of the
Company, or of any parent or subsidiary thereof, to terminate the employment of
any employee.
13. Other Compensation Plans.
The adoption of the Plan shall not affect any other stock option plan,
incentive plan or any other compensation plan in effect for the Company, nor
shall the Plan preclude the Company from establishing any other form of stock
option plan, incentive plan or any other compensation plan.
-9-
<PAGE> 1
EXHIBIT 4.4
<PAGE> 2
STOCK OPTION AGREEMENT
AGREEMENT made as of this _____ day of November, 199_ by and between American
Casino Enterprises, Inc., a Nevada corporation having its principal place of
business at 6243 Industrial Road, Las Vegas, Nevada 89118 ("Grantor"), and
___________, residing at ___________________ ("Optionee").
W I T N E S S E T H:
WHEREAS, Optionee has served and continues to serve as a Director of
Grantor;
NOW, THEREFORE, in consideration and recognition for such services to the
Grantor and for other good and valuable consideration, the Grantor hereby grants
the Optionee options to purchase Common Stock of the Grantor on the following
terms and conditions:
1. Option.
The Grantor hereby grants to the Optionee a Non-Qualified Stock Option, as
such term is defined in the Internal Revenue Code of 1986, as amended, to
purchase, at any time after the first anniversary date hereof and prior to 5:00
p.m. on ___________, 199_, up to ______ fully paid and non-assessable shares of
the Common Stock of the Grantor, par value $.0l per share.
2. Purchase Price.
The purchase price shall be $.__ per share. The Grantor shall pay all
original issue or transfer taxes on the exercise of this option and all other
fees and expenses necessarily incurred by the Grantor in connection therewith.
3. Exercise of Option.
The Optionee shall notify the Grantor by registered or certified mail, return
receipt requested, addressed to its principal office as to the number of shares
which he desires to purchase under the options herein granted, which notice
shall be accompanied by payment (by cash or certified check) of the option price
therefore as specified in Paragraph 2 above. As soon as practicable thereafter,
the Grantor shall at its principal office tender to Optionee certificates issued
in the Optionee's name evidencing the shares purchased by the Optionee.
4. Divisibility and Non-Assignability of the Options.
(a) The Optionee may exercise the options herein granted from time to time
during the periods of their respective effectiveness with respect to any whole
number of shares included therein, but in no event may an option be exercised as
to less than one hundred (100) shares at
<PAGE> 3
any one time, except for the remaining shares covered by the option if less than
one hundred (100).
(b) The Optionee may not give, grant, sell, exchange, transfer legal title,
pledge, assign or otherwise encumber or dispose of the options herein granted or
any interest therein, otherwise than by will or the laws of descent and
distribution, and these options, or any of them, shall be exercisable during his
lifetime only by the Optionee.
5. Stock as Investment.
By accepting this option, the Optionee agrees for himself, his heirs and
legatees that any and all shares purchased hereunder shall be acquired for
investment and not for distribution, and upon the issuance of any or all of the
shares subject to the option granted hereunder the Optionee, or his heirs or
legatees receiving such shares, shall deliver to the Grantor a representation in
writing, that such shares are being acquired in good faith for investment and
not for distribution. Grantor may place a "stop transfer" order with respect to
such shares with its transfer agent and place an appropriate restrictive legend
on the stock certificate.
6. Restriction on Issuance of Shares.
The Grantor shall not be required to issue or deliver any certificate for
shares of its Common Stock purchased upon the exercise of any option unless (a)
the issuance of such shares has been registered with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, or counsel to the
Grantor shall have given an opinion that such registration is not required; (b)
approval, to the extent required, shall have been obtained from any state
regulatory body having jurisdiction thereof, and (c) permission for the listing
of such shares shall have been given by any national securities exchange on
which the Common Stock of the Grantor is at the time of issuance listed.
7. Notification of Transfer for Tax Purposes.
In the event of changes in the outstanding Common Stock of the Grantor by
reason of stock dividends, stock splits, recapitalizations, mergers,
consolidations, combinations, or exchanges of shares, separations,
reorganizations, or liquidations, the number and class of shares as to which the
options may be exercised shall be correspondingly adjusted by the Grantor. No
adjustment shall be made with respect to stock dividends or splits which do not
exceed 10% in any fiscal year, cash dividends or the issuance to stockholders of
the Grantor of rights to subscribe for additional shares of Common Stock or
other securities.
Any adjustment in the number of shares shall apply proportionately to only
the unexercised portion of an option granted hereunder. If fractions of a share
would result from any such adjustment, the adjustment shall be revised to the
next higher whole number of shares
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<PAGE> 4
so long as such increase does not result in the holder of the option being
deemed to own more than 5% of the total combined voting power or value of all
classes of stock of the Grantor or its subsidiaries.
8. Effect of Mergers, Consolidations or Sales of Assets.
Anything contained herein to the contrary, a merger or consolidation in which
the Grantor is not the surviving corporation, or a sale of substantially all of
the Grantor's assets or capital stock shall cause the Optionee to have the right
immediately prior to such merger or consolidation or sale in which the Grantor
is not the surviving corporation, to exercise this Option in whole or in part.
Furthermore, this option may, at the discretion of the Board of Directors of
the Grantor and said other corporation, be exchanged for options to purchase
shares of capital stock of another corporation which the Grantor, and/or a
subsidiary thereof is merged into, consolidated with, or all or a substantial
portion of the property or stock of which is acquired by said other corporation
or separated or reorganized into. The terms, provisions and benefits to the
Optionee of such substitute option(s) shall in all respects be identical to the
terms, provisions and benefits of Optionee under his Option(s) prior to said
substitution. To the extent the above may be inconsistent with Sections
425(a)(1) and (2) of the Internal Revenue Code of 1986, as amended, the above
shall be deemed interpreted so as to comply therewith.
9. No Rights in Option Stock.
Optionee shall have no rights as a shareholder in respect of shares as to
which the option granted hereunder shall not have been exercised and payment
made as herein provided.
10. Binding Effect.
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors
legal representatives and assigns.
11. Miscellaneous.
This Agreement shall be construed under the laws of the State of Nevada.
Headings have been included herein for convenience of reference only, and shall
not be deemed a part of the Agreement.
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<PAGE> 5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
AMERICAN CASINO ENTERPRISES, INC.
By:______________________________
ACCEPTED AND AGREED TO:
_________________________________
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<PAGE> 1
EXHIBIT 5.1
<PAGE> 2
[Letterhead of Snow Becker Krauss P.C.]
February 12, 1996
Board of Directors
AMERICAN CASINO ENTERPRISES, INC.
6243 Industrial Road
Las Vegas, Nevada 89118
Re: Registration Statement on Form S-8 Relating to an aggregate of 6,865,000
Shares of Common Stock, Par Value $.01 Per Share, of AMERICAN CASINO
ENTERPRISES, INC. Issuable Under the Company's 1991 Officers Stock Option
Plan, 1992 Employee Stock Option Plan, 1996 Stock Option Plan and
Directors' Options
Gentlemen:
We are counsel to AMERICAN CASINO ENTERPRISES, INC., a Nevada corporation
(the "Company"), in connection with the filing by the Company with the
Securities and Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "Securities Act"), of a registration statement on Form S-8 (the
"Registration Statement") relating to: (1) 1,500,000 shares of the Company's
common stock, par value $.01 per share (the "Common Stock"), issuable upon the
exercise of options granted or to be granted pursuant to the Company's 1991
Officers Stock Option Plan (the "1991 Plan"); (2) 2,500,000 shares of Common
Stock issuable upon the exercise of options granted or to be granted pursuant to
the Company's 1992 Employee Stock Option Plan (the "1992 Plan"); (3) 2,500,000
shares of Common Stock issuable upon the exercise of options to be granted
puruant to the Company's 1996 Stock Option Plan (the "1996 Plan"); and (4)
365,000 shares of Common Stock issuable upon exercise of options granted to
certain of the Company's Directors who are not employees of the Company in
connection with services rendered to the Company (the "Directors' Options"). The
1991 Plan, the 1992 Plan and the 1996 Plan are hereinafter referred to as the
"Plans" and the shares issuable upon exercise of options granted under the Plans
or in accordance with Directors' Options are hereinafter referred to as the
"Shares".
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of the Certificate of Incorporation,
as amended, and By-Laws of the Company, as each is currently in effect, the
Registration Statement, the Plans, the
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Board of Directors
February 12, 1996
Page 2
Directors' Options, resolutions of the Board of Directors of the Company
relating to the adoption of the Plans and the proposed registration and issuance
of the Shares and such other corporate documents and records and other
certificates, and we have made such investigations of law as we have deemed
necessary or appropriate in order to render the opinions hereinafter set forth.
In our examination, we have assumed the genuineness of all signatures, the
legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to any facts material
to the opinions expressed herein which were not independently established or
verified, we have relied upon statements and representations of officers and
other representatives of the Company and others.
Based upon and subject to the foregoing, we are of the opinion that the
Shares to be issued upon exercise of any options duly granted pursuant to the
terms of the Plans or the Directors Options have been duly and validly
authorized and, when the Shares have been paid for in accordance with the terms
of the Plans or the Directors' Options and certificates therefore have been duly
executed and delivered, such Shares will be duly and validly issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference in the Registration Statement to
this firm under the heading "Interests of Named Experts and Counsel." In
addition, we hereby consent to the reference to this firm in the Prospectus
(accompanying this Registration Statement) for resales by affiliates of the
Company under the heading "Legal Matters." In giving this consent, we do not
hereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act, or the rules and regulations of
the Securities and Exchange Commission thereunder.
Certain principals of this firm own 151,194 shares of Common Stock of the
Company.
Very truly yours,
SNOW BECKER KRAUSS P.C.
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EXHIBIT 23.2
<PAGE> 2
INDEPENDENT AUDITORS' CONSENT
THE BOARD OF DIRECTORS
AMERICAN CASINO ENTERPRISES, INC.:
We consent to the use of our reports incorporated herein by reference.
BRADSHAW SMITH & CO.
Las Vegas, Nevada
February 12, 1996
