APPENDIX A - Filed pursuant to Schedule 14A, Item 10, in
connection with the Proxy Statement for the annual meeting of
stockholders to be held on May 23, 1996.
RIO HOTEL & CASINO, INC.
(FORMERLY MARCOR RESORTS, INC.)
1991 DIRECTORS' STOCK OPTION PLAN
AS AMENDED FEBRUARY 28, 1992;
AS AMENDED MARCH 28, 1995; AND
AS FURTHER AMENDED JANUARY 25, 1996
(Final Amendment Subject to Stockholder Approval on May 23, 1996)
1. PURPOSE
The Rio Hotel & Casino, Inc. 1991 Director's Stock Option
Plan (the "Plan") is intended to promote the interests of Rio
Hotel & Casino, Inc. (formerly MarCor Resorts, Inc.) (the
"Company") by encouraging members of the Board of Directors of
the Company who are not employed as regular salaried officers or
employees of the Company (hereinafter referred to as "Non-
Employee Directors" or "Optionees") the opportunity to
participate in a stock option plan in order to encourage Non-
Employee Directors to take a long-term view of the affairs of the
Company to attract and retain new top-notch Non-Employee
Directors; and to aid in rewarding Non-Employee Directors for
their services to the Company.
2. ADMINISTRATION
The Plan shall be administrated by a Committee (the
"Committee") of not less than two directors of the Company
selected by, and serving at the pleasure of, its Board of
Directors (the "Board"). The Committee shall not have any
discretion to determine or vary any matters which are fixed under
the terms of the Plan including, without limitation, which
individuals shall receive option awards, how many shares of the
Company's stock shall be subject to each such option award, what
the exercise price of stock covered by an option shall be, and
what means of payment shall be acceptable.
The Committee shall have the authority to otherwise
interpret the Plan and make all determinations necessary or
advisable for its administration.
The Committee's decisions under the Plan shall be subject to
the approval of the Board.
3. ELIGIBILITY
Only Non-Employee Directors of the Company will be eligible
to be granted awards.
4. STOCK SUBJECT TO THE PLAN
The stock from which awards may be granted shall be the
Company's, $.01 par value, common stock ("Common Stock"). When
options are exercised, the Company may either issue
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authorized but unissued shares of Common Stock or transfer issued
Common Stock held in its treasury. The total number of shares of
Common Stock which may be granted as stock options shall not
exceed 200,000. If an option expires, or is otherwise terminated
prior to its exercise, the Common Stock covered by such option
immediately prior to such expiration or other termination shall
continue to be available for grant under the Plan.
5. GRANT AND AMOUNT OF OPTIONS
The date of the initial option grant for a Non-Employee
Director serving his or her term shall be the date upon which the
Plan is adopted by the Board of Directors for submission to the
stockholders for approval. The date of the initial grant for a
Non-Employee Director commencing his or her term shall be the
date that he or she is elected to the Board of Directors by the
stockholders at any special or annual meeting. The initial
option grant shall be to purchase 20,000 shares of Common Stock
(subject to adjustment pursuant to Section 7).
All annual awards of options shall be granted on January, of
each year, with the first annual grant effective January 1, 1993.
Annual grants prior to January 1, 1996 will be to purchase 1,000
shares of Common Stock; and thereafter annual grants will be to
purchase 5,000 shares of Common Stock (subject to adjustment
pursuant to Section 7).
6. TERMS AND CONDITIONS OF OPTIONS
Options shall be designated non-qualified options or not
qualified as Incentive Stock Options under Section 422A of the
Internal Revenue Code of 1954, as amended (the "Code"), and shall
be evidenced by written instruments approved by the Committee.
Such instruments shall conform to the following terms and
conditions.
6.1. OPTION PRICE
The option price shall be 100% of the fair market value
of the Common Stock granted under the option on the date of
grant. For purposes of this section, the fair market value per
share shall be the last reported sale price of the Common Stock
on the NASDAQ National Market System, or on such other stock
exchange that the Common Stock may be listed from time-to-time,
(the "Reported Price") that day or, if no sale of Common Stock is
recorded on that day, then on the next preceding day on which
there was such a sale. The option price shall be paid (i) in
cash, (ii) in shares of the Company's Common Stock having a fair
market value equal to such option price or (iii) in a combination
of cash and Common Stock. The fair market value of shares of
Common Stock delivered to the Company pursuant to the immediately
preceding sentence shall be determined on the basis of the
Reported Price on the day of exercise or, if there was no such
sale on the day of exercise, on the day next preceding the day of
exercise on which there was such a sale.
6.2. EXERCISE AND TERM OF OPTIONS
Each option shall be exercisable in full six months and
one day following the later of either the date of grant or
stockholder approval of the Plan.
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Except in special circumstances, each option shall
expire the later of the tenth anniversary of the date of its
grant or three months after the director ceases to serve as a
member of the Board of Directors.
After becoming exercisable, each installment shall
remain exercisable until expiration or termination of the option.
After becoming exercisable an option may be exercised by the
optionee from time-to-time, in whole or part, up to the total
number of shares with respect to which it is then exercisable.
The Committee may provide that payment of the option exercise
price may be made following delivery of the certificate for the
exercised shares.
Upon the exercise of a stock option, the purchase price
will be payable in full in cash or its equivalent in property
acceptable to the Company. In the discretion of the Committee,
the purchase price may be paid by the assignment and delivery to
the Company of shares of Common Stock or a combination of cash
and such shares equal in value to the purchase price. Any shares
of Common Stock so assigned and delivered to the Company in
payment or partial payment of the purchase price will be valued
at Fair Market Value on the exercise date. Upon the exercise of a
non-qualified stock option, the Optionee may (a) direct the
Company to withhold from the shares of Common Stock to be issued
to the Optionee the number of shares necessary to satisfy the
Company's obligation to withhold Federal taxes, such
determination to be based on the shares' Fair Market Value on the
date of exercise, (b) deliver to the Company sufficient shares of
Common Stock to satisfy the Company's withholding obligations,
based on the shares' Fair Market Value as of the date of
exercise, or (c) deliver sufficient cash to the Company to
satisfy its Federal tax withholding obligations. Optionees who
elect to use the stock withholding feature must make that
election at the time and in the manner prescribed by the
Committee.
6.3. TERMINATION OF DIRECTORSHIP
If an Optionee ceases, other than by reason of death or
retirement after attaining the age of 72 years to be elected to
serve on the Board of Directors, all options granted to such
Optionee and exercisable on the date of termination of
Directorship shall expire on the earlier of (i) the tenth
anniversary after the date of grant or (ii) three months after
the day such Optionee's term ends.
6.4. EXERCISE UPON DEATH OF OPTIONEE
If an Optionee dies, the option may be exercised, to
the extent of the number of shares that the Optionee could have
exercised on the date of such death, if any, by the Optionee's
estate, personal representative or beneficiary who acquires the
option by will or by the laws of descent and distribution. Such
exercise may be made at any time prior to the earlier of (i) the
tenth anniversary after the date of grant or (ii) the third
anniversary of such Optionee's death. On the earlier of such
dates, the option shall terminate. The Committee may approve all
cash payments to the estate of an Optionee if circumstances
warrant such a decision.
6.5. EXERCISE UPON RETIREMENT OF OPTIONEE
If an Optionee retires from the Board of Directors
after attaining the age of 72 years, the option may be exercised,
to the extent of the number of shares that the Optionee could
have
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exercised on the date of such retirement, if any. Such exercise
may be made at any time prior to the earlier of (i) the tenth
anniversary after the date of grant or (ii) the third anniversary
of such Optionee's retirement. On the earlier of such dates, the
option shall terminate.
6.6. ASSIGNABILITY
No option shall be assignable or transferable by the
Optionee except by will or by the laws of decent and
distribution, and during the lifetime of the Optionee the option
shall be exercisable only by such Optionee.
7. CAPITAL ADJUSTMENTS
The number and price of shares of Common Stock covered by
each award of options and the total number of shares that may be
granted under the Plan shall be proportionally adjusted to
reflect, as deemed equitable and appropriate by the Committee and
subject to any required action by stockholders, any stock
dividend or split, recapitalization, merger, consolidation, spin-
off, reorganization, combination or exchange of shares or other
similar corporate change.
8. CHANGE OF CONTROL
Notwithstanding the provisions of Section 7, in the event of
a change of control, all vesting on all unexercised stock options
will accelerate to the change of control date. For purposes of
the Plan, a "Change of Control" of the Company shall be deemed to
have occurred at such time as (a) any "person" (as term is used
in Section 13(d) and 14(d) of the Securities Exchange Act of 1934
("Exchange Act")) becomes the ''beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 25.0% or more of the
combined voting power of the Company's outstanding securities
ordinarily having the right to vote at the election of directors;
or (b) individuals who constitute the Board of Directors on the
date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person
becoming a director subsequent to the date hereof whose election
was approved by at least a majority of the directors comprising
the Incumbent Board, or whose nomination for election was
approved by a majority of the Board of Directors of the Company
serving under an Incumbent Board, shall be, for purposes of this
clause (b), considered as if he or she were a member of the
Incumbent Board; or (c) a merger, consolidation or sale of all or
substantially all the assets of the Company occurs, unless such
merger or consolidation shall have been affirmatively recommended
to the Company's stockholders by a majority of the Incumbent
Board; or (d) a proxy statement is distributed soliciting proxies
from stockholders of the Company by someone other than the
current management of the Company seeking stockholder approval of
a plan or reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the
outstanding shares of the Company's securities are actually
exchanged for or converted into cash or property or securities
not issued by the Company unless the reorganization, merger or
consolidation shall have been affirmatively recommended to the
Company's stockholders by a majority of the Incumbent Board.
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9. APPROVALS
The issuance of shares pursuant to this Plan is expressly
conditioned upon obtaining all necessary approvals from the
Nevada Gaming Commission, if any, and upon obtaining stockholder
approval of the Plan.
10. EFFECTIVE DATE OF PLAN
The effective date of the Plan is September 5, 1991. The
Plan will become effective as of that date provided that the Plan
receives the approval of the holders of a majority of the
outstanding shares of Common Stock at the Company's 1992 Annual
Meeting of Stockholders.
11. TERM: AMENDMENT OF PLAN
This Plan shall expire on September 5, 2001 (except to
options outstanding on that date). The Board may terminate the
Plan at any time. The Board may amend the Plan at any time;
provided, however, the provisions of Section 5 pertaining to the
amount of options to be granted and the timing of such option
grants and the provisions of Section 6.1 pertaining to the option
price of the Common Stock under option shall not be amended more
than once every six months other than to comport with changes in
the Code or the regulations promulgated thereunder. Further
provided, however, that without the approval of the holders of a
majority of shares of outstanding Common Stock; the total number
of shares that may be sold, issued or transferred under the Plan
may not be increased (except by adjustment pursuant to Section
7); the provisions of Section 3 regarding eligibility may not be
modified; the purchase price at which shares may be offered
pursuant to options may not be reduced (except by adjustment
pursuant to Section 7); and the expiration date of the Plan may
not be extended and no change may be made which would cause the
Plan not to comply with Rule 16b-3 under the Exchange Act, as
amended from time to time. No action of the Board or
stockholders, however, may, without the consent of an Optionee,
alter or impair such Optionee's rights under any option
previously granted.
12. WITHHOLDING TAXES
The Company shall have the right to deduct withholding taxes
from any payments made pursuant to the Plan or to make such other
provisions as it deems necessary or appropriate to satisfy its
obligations to withhold Federal, state or local income or other
taxes incurred by reason of payments or the issuance of shares of
Common Stock under the Plan. Whenever under the Plan, shares of
Common Stock are to be delivered upon exercise of an option, the
Committee shall be entitled to require as a condition of delivery
that the Optionee remit an amount sufficient to satisfy all
Federal, state and other government withholding tax requirements
related thereto.
13. PLAN NOT A TRUST
Nothing contained in the Plan and no action taken pursuant
to the Plan shall create or be construed to create a trust of any
kind, or a fiduciary relationship, between the Company and any
Optionee, the executor, administrator or other personal
representative, or designated beneficiary of such Optionee, or
any other persons. Any reserves that may be established by the
Company in connection with the Plan shall continue to be part of
the general funds of the Company and no
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individual or entity other than the Company shall have any
interest in such funds until paid to an Optionee. If and to the
extent that any Optionee or such Optionee's executor,
administrator or other personal representative, as the case may
be, acquires a right to receive any payment from the Company
pursuant to the Plan, such right shall be no greater than the
right of an unsecured general creditor of the Company.
14. NOTICES
Each Optionee shall be responsible for furnishing the
Committee with the current and proper address for the mailing of
notices and delivery of agreements, shares of Common Stock and
cash pursuant to the Plan. Any notices required or permitted to
be given shall be deemed given if directed to the person to whom
addressed at such address and mailed by regular United States
mail, first-class and prepaid. If any item mailed to such address
is returned as undeliverable to the addressee, mailing will be
suspended until the Optionee furnishes the proper address. This
provision shall not be construed as requiring the mailing of any
notice or notification if such notice is not required under the
terms of the Plan or any applicable law.
15. SEPARABILITY OF PROVISIONS
If any provision of this Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and this Plan shall be
construed and enforced as if such provisions had not been
included.
16. PAYMENT TO MINORS, ETC.
Any benefit payable to or for the benefit of a minor, an
incompetent person or other person incapable of receipting
therefor shall be deemed paid when paid to such person's guardian
or to the party providing or reasonably appearing to provide for
the care of such person, and such payment shall fully discharge
the Committee, the Company and other parties with respect
thereto.
17. HEADINGS AND CAPTIONS
The headings and captions herein are provided for reference
and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.
18. CONTROLLING LAW
This Plan shall be construed and enforced according to the
laws of the State of Nevada to the extent not preempted by
Federal law, which shall otherwise control.
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