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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 22, 1998
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RIO HOTEL & CASINO, INC.
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(Exact name of Registrant as specified in charter)
Nevada
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(State or other jurisdiction of incorporation)
1-11569 95-3671082
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(Commission File Number) (IRS Employee Identification No.)
3700 West Flamingo Road, Las Vegas, Nevada 89103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (702) 252-7733
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Not applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On October 22, 1998, Rio Hotel & Casino, Inc., a Nevada
corporation ("Rio"), amended and restated the terms and
conditions of its 1995 Long-Term Incentive Plan (the "LTIP") and
its 1991 Directors' Stock Option Plan (the "DSOP"). The LTIP and
DSOP were each amended to clarify that the Company's common stock
can be converted into or exchanged for other securities of the
Company or any other corporation by reason of merger,
reorganization or other similar corporate change. In addition,
the DSOP was amended to allow the Board of Directors of Rio
discretion to extend the exercise period for options granted
under the DSOP. Each of the amendments was unanimously approved
by the Board of Directors of Rio.
The foregoing summary of the amendments to the LTIP and
DSOP is not complete and is qualified in its entirety by
reference to the text of the LTIP and DSOP, respectively, copies
of which are filed as Exhibit 4.01 and Exhibit 4.02,
respectively, and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
4.01 Rio Hotel & Casino, Inc. 1995 Long-Term
Incentive Plan, as amended October 22, 1998.
4.02 Rio Hotel & Casino, Inc. 1991 Directors' Stock
Option Plan, as amended October 22, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
RIO HOTEL & CASINO, INC.
(Registrant)
Date: December 21, 1998 By: /s/ Ronald J. Radcliffe
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RONALD J. RADCLIFFE
Vice President, Chief
Financial Officer and
Treasurer
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EXHIBIT INDEX
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EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
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4.01 Rio Hotel & Casino, Inc. 1995 Long-Term 5
Incentive Plan, as amended October 22, 1998.
4.02 Rio Hotel & Casino, Inc. 1991 Directors' 16
Stock Option Plan, as amended October 22,
1998.
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EXHIBIT 4.01
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RIO HOTEL & CASINO, INC.
1995 LONG-TERM INCENTIVE PLAN
Adopted by the Board of Directors January 26, 1995
As Amended by the Board of Directors on March 20, 1997
As Amended by the Board of Directors on February 25, 1998
As Further Amended by the Board of Directors on October 22, 1998
As Approved by Stockholders on May 21, 1998
1. PURPOSE
The 1995 Long-Term Incentive Plan (the "Plan") is intended
to promote the interests of Rio Hotel & Casino, Inc. and its
subsidiaries (collectively the "Corporation") by offering certain
executive officers, employees and outside consultants of the
Corporation who are primarily responsible for the management,
growth and success of the business of the Corporation, the
opportunity to participate in a long-term incentive plan designed
to reward them for their services and to encourage them to
continue in the employ of or to provide services to the
Corporation.
2. DEFINITIONS
For all purposes of this Plan, the following terms shall
have the following meanings:
"Common Stock" means Rio Hotel & Casino, Inc. common stock,
$.01 par value.
"ISO" means incentive stock options qualified under
Section 422 of the Internal Revenue Code of 1986, as amended.
"Non-statutory Options" means stock options not qualified
under Section 422 of the Internal Revenue Code of 1986, as
amended.
"Restricted Shares" means shares of Common Stock which have
not been registered under federal securities law.
"Rio" means Rio Hotel & Casino, Inc.
"Subsidiary" means any company of which Rio owns, directly
or indirectly, the majority of the combined voting power of all
classes of stock.
3. ADMINISTRATION
The Plan shall be administered by a Committee (the
"Committee") composed solely of not less than two "non-employee
directors," as defined by Rule 16b-3(b)(3)(i) of the Securities
Exchange Act of 1934 (the "Exchange Act"), selected by, and
serving at the pleasure of, Rio's Board of Directors (the "Rio
Board").
Plan participants may each be granted options to purchase up
to a maximum of 500,000 shares in any one year. Initially, Rio
or a Subsidiary will recommend to the Committee persons to whom
awards may be
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granted. The Committee then shall have the authority, subject to
the terms of the Plan, to determine, based upon recommendations,
the persons to whom awards shall be granted ("Participants") the
number of shares covered by each award, the time or times at
which awards shall be granted, the timing of when awards shall
vest, and the terms and provisions of the instruments by which
awards shall be evidenced, and to interpret the Plan and make all
determinations necessary or advisable for its administration.
The Committee shall notify the Rio Board of all decisions
concerning awards granted to Participants under the Plan, the
interpretation thereof, and determinations concerning its
administration.
4. ELIGIBILITY
Only persons who are employees, outside consultants,
officers or employee-directors of the Corporation shall be
granted awards. An ISO may not be issued to a person who, at the
time of grant is a non-employee of the Corporation or to a person
who owns stock of the Corporation possessing more than 10% of the
total combined voting power of all classes of stock of Rio or a
Subsidiary.
5. STOCK SUBJECT TO THE PLAN
The stock from which awards may be granted shall be shares
of Common Stock. When Restricted Shares are vested or when
options are exercised, Rio may either issue authorized but
unissued Common Stock or Rio may transfer issued Common Stock
held in its treasury. The Rio Board will fund the Plan to the
extent so required to provide Common Stock for the benefit of
Participants. The total number of shares of Common Stock which
may be granted as Restricted Shares or stock options shall not
exceed, in the aggregate, 4,000,000 shares in total. Any
Restricted Shares awarded and later forfeited are again subject
to award under the Plan. If an option expires, or is otherwise
terminated prior to its exercise, the shares of Common Stock
covered by such an option immediately prior to such expiration or
other termination shall continue to be available for grant under
the Plan.
6. GRANTING OF OPTIONS
The date of grant of options to Participants under the Plan
will be the date on which the options are awarded by the
Committee. The grant of any option to any Participant shall
neither entitle nor disqualify such Participant from
participating in any subsequent grant of options.
7. TERMS AND CONDITIONS OF OPTIONS
Options shall be designated Non-statutory Options or ISOs
and shall be evidenced by written instruments approved by the
Committee. Such instruments shall conform to the following terms
and conditions:
7.1 OPTION PRICE
The option price per share for an option shall be
established by the Committee, but shall be no less than the
fair market value of the Common Stock under option on the
day the option is granted, which shall be an amount equal to
the last reported sale price of the Common Stock on such
date on the New York Stock Exchange, or such other stock
exchange on which the Common Stock may be listed from time
to time. The option price shall be paid (i) in cash or
(ii) in Common Stock, including Common Stock underlying the
option being exercised, having a fair market value equal to
such option price or (iii) in a combination of cash and
Common Stock, including Common Stock underlying the option
being exercised. The fair market value of Common Stock
delivered to Rio of a Subsidiary, as applicable, pursuant to
the immediately preceding sentence shall be determined on
the basis of the last reported sale price of the Common
Stock on the New York Stock Exchange on the
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day of exercise or, if there was no such sale price on the
day of exercise, on the day next preceding the day of
exercise on which there was such a sale.
7.2 TERM AND EXERCISE OF OPTIONS
Unless otherwise provided in the instrument of grant
for special circumstances, no option shall be exercisable
sooner than six months and one day from the date of grant.
Except in special circumstances, each option shall
expire on the tenth anniversary of the date of its grant and
shall be exercisable according to a vesting schedule to be
determined by the Committee. However the Committee may
include in any option instrument, initially or by amendment
at any time, a provision making any installment or
installments exercisable at such earlier date, if the
Committee deems such provision to be in the interests of Rio
or a Subsidiary or necessary to realize the reasonable
expectation of the optionee.
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 Common Stock, or a
combination thereof, as provided in Paragraph 7.1. Any
shares of Common Stock so assigned and delivered to Rio or
the Subsidiary, as applicable, in payment or partial payment
of the purchase price will be valued at Fair Market Value on
the exercise date. Upon the exercise of an option, Rio or a
Subsidiary, as applicable, shall withhold from the shares of
Common Stock to be issued to the Participant the number of
shares necessary to satisfy Rio's or the Subsidiary's, as
applicable, obligation to withhold federal taxes, such
determination to be based on the shares' Fair Market Value
on the date of exercise.
7.3 TERMINATION OF EMPLOYMENT OR ASSOCIATION
Subject to Section 7.7, if an optionee ceases to be
employed or associated with the Corporation, other than by
reason of death, retirement as determined under any of the
Corporation's pension plans, if any, or retirement after
attaining the age of seventy-two (72) years, all options
granted to such optionee and exercisable on the date of
termination of employment or association 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
employment or association with the Corporation ends.
Subject to Section 7.7, if an optionee retires either
pursuant to any of the Corporation's pension plans, if any,
or after attaining the age of seventy-two (72) years, all
options granted to such optionee, and exercisable on the
date of such optionee's retirement shall expire on the
earlier of (i) the tenth anniversary after the date of grant
or (ii) three years after the date of optionee's retirement
from the Corporation.
Any installment not exercisable on the date of such
termination or retirement shall expire and be thenceforth
unexercisable. Whether authorized leave of absence or
absence in military or governmental service may constitute
employment for the purposes of the Plan shall be
conclusively determined by the Committee.
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7.3(1) FORFEITURE
Subsequent to February 1, 1996, all stock option grants
issued pursuant to the Plan shall be subject to the
following forfeiture provisions:
(a) Unless otherwise provided for in the instrument of
grant, a Participant who resigns his or her position with
the Corporation without the written consent of the Rio
Board, and accepts employment, consulting, or other
compensation for services from a Competitor Company, as
defined below, within six (6) months after his or her last
day of employment or association with the Corporation shall:
1. forfeit all vested and unexercised options in
such Participant's account; and
2. reimburse the Corporation for all Profits, as
defined below, earned pursuant to any exercise of
options within six (6) months prior to or six (6)
months subsequent to the date of giving notice of such
Participant's resignation; provided however that all
options must be exercised within ninety (90) days of
the date of such Participant's termination, as provided
in Section 7.3. Further, such reimbursement payable
because of this provision shall be received by the
Corporation from such Participant within ninety (90)
days after the effective date of such Participant's
resignation.
(b) "Competitor Company" shall be defined as any
gaming or hotel company, or any affiliate thereof, located
within fifty (50) miles of any location in which the
Corporation conducts business as of the effective date of
such Participant's resignation.
(c) "Profits" shall be defined as the differential
between the exercise price and the last reported sale price
on the day of exercise, multiplied by the number of option
shares exercised.
(d) This Section 7.3(1) shall not apply to any
Participant who resigns:
1. subsequent to the Corporation entering into a
contractual commitment for a Change of Control of the
Corporation (as defined in Section 10), but prior to an
actual Change of Control; or
2. within one year following a Change of
Control.
7.4 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, 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) three years after the date of such
optionee's death. On the earlier of such dates, the option
shall terminate.
7.5 ASSIGNABILITY
(a) A stock option shall not be assigned, alienated,
pledged, attached, sold, transferred or encumbered by a
Participant other than by will or by the laws of descent and
distribution, or in the case of a Non-statutory Option,
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(1) by transfer without consideration by a
Participant, subject to such rules as the Committee may
adopt to preserve the purposes of the Plan (including
limiting such transfers to transfers by Participants
who are directors or executive officers of Rio or a
Subsidiary), to
(A) a member of his or her Immediate Family
(as defined),
(B) a trust solely for the benefit of the
Participant and his or her Immediate Family, or
(C) a partnership, limited liability company
or corporation whose only partners, members or
shareholders are the Participant and/or his or her
Immediate Family Members.
(each transferee described in (1) is hereafter referred
to as a "Permitted Transferee"), provided that the Committee
is notified in advance in writing of the terms and
conditions of any proposed transfer intended to be described
in (1) and it determines that the proposed transfer complies
with the requirements of the Plan and the applicable option
agreement. Any purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance that does not
qualify under (1) shall be void and unenforceable against
the Corporation. For purposes of the Plan, "Immediate
Family" means, with respect to a particular Participant, the
Participant's spouse, children or grandchildren (including
adopted and step children and grandchildren).
(b) The terms of the stock option shall apply to the
beneficiaries, executors and administrators of the
Participant and of the Permitted Transferees of the
Participant (including the beneficiaries, executors and
administrators of the Permitted Transferees), except that
Permitted Transfers shall not transfer any stock option
other than by will or by the laws of descent and
distribution.
(c) A stock option shall be exercised only by the
Participant (or his or her attorney in fact or guardian)
(including, in the case of a transferred option, by a
Permitted Transferee), or, in the case of the Participant's
death, by the Participant's executor or administrator
(including, in the case of a transferred option, by the
executor or administrator of the Permitted Transferee), and
no shares of Common Stock shall be issued by Rio unless the
exercise of a stock option is accompanied by sufficient
payment, as determined by Rio or a Subsidiary, as
applicable, to meet its withholding tax obligations on such
exercise or by other arrangements satisfactory to the
Committee to provide for such payment.
7.6 LIMITATION ON INCENTIVE STOCK OPTIONS
During a calendar year, the aggregate fair market value
of the option stock (determined at the time of the ISO
grant) for which ISOs are exercisable by a person for the
first time under the Plan, cannot exceed $100,000.
7.7 EXPIRATION OF OPTIONS
Notwithstanding the provisions of Sections 7.3 and 7.4
above, the Committee may, within its discretion, designate
an expiration date for options granted hereunder which is
later than the expiration dates contained in Sections 7.3
and 7.4.
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8. RESTRICTED SHARE AWARDS
8.1 GRANT OF RESTRICTED SHARE AWARDS
The Committee will determine for each Participant the
time or times when Restricted Shares shall be awarded and
the number of shares of Common Stock to be covered by each
Restricted Share award.
8.2 RESTRICTIONS
Shares of Common Stock issued to a Participant as a
Restricted Share award will be subject to the following
restrictions ("Share Restrictions"):
(a) Except as set forth in Paragraphs 8.4 and 8.5,
upon the termination of employment or association of a
Participant with the Corporation, all of the Participant's
Restricted Shares which are subject to Share Restrictions
will be forfeited and returned to Rio or, in the event such
Restricted Shares were provided to the Participant from
shares of Common Stock purchased by the Subsidiary, then the
Restricted Shares will be returned to the Subsidiary. In
either case, all rights of the Participant to such
Restricted Shares will terminate without any payment of
consideration by Rio or the Subsidiary with which the
Participant is employed or associated, unless the
Participant maintains his or her employment or association
(including consulting arrangements) with Rio or a Subsidiary
for a period of time determined by the Committee.
(b) During the longer of the restriction period
("Restriction Period") relating to a Restricted Share award
or a period of six months and one day from the date of the
award, none of the Restricted Shares subject to such award
may be sold, assigned, bequeathed, transferred, pledged,
hypothecated or otherwise disposed of in any way by the
Participant.
(c) The Committee may require the Participant to enter
into an escrow agreement providing that the certificates
representing Restricted Shares sold or granted pursuant to
the Plan will remain in the physical custody of Rio or the
employing Subsidiary or an escrow holder during the
Restriction Period.
(d) Each certificate representing a Restricted Share
sold or granted pursuant to the Plan will bear a legend
making appropriate reference to the restrictions imposed on
the Restricted Share.
(c) The Committee may impose other restrictions on any
Restricted Shares sold pursuant to the Plan as it may deem
advisable, including without limitation, restrictions under
the Securities Act of 1933, as amended, under the
requirements of any stock exchange upon which such share or
shares of the same class are then listed and under any state
securities laws or other securities laws applicable to such
shares.
8.3 RIGHTS AS A STOCKHOLDER
Except as set forth in Paragraph 8.2(b), the recipient
of a Restricted Share award will have all of the rights of a
stockholder of Rio with respect to the Restricted Shares,
including the right to vote the Restricted Shares and to
receive all dividends or other distributions made with
respect to the Restricted Shares.
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8.4 LAPSE OF RESTRICTIONS AT TERMINATION OF EMPLOYMENT
In the event of the termination of employment, or
association of a Participant during the Restriction Period
by reason of death, total and permanent disability,
retirement as determined under any of the Corporation's
pension plans, if any, or discharge from employment other
than a discharge for cause, the Committee may, at its
discretion, remove Share Restrictions on Restricted Shares
subject to a Restricted Share award.
Restricted Shares to which the Share Restrictions have
not so lapsed will be forfeited and returned to the
Corporation as provided in Paragraph 8.2(a).
8.5 LAPSE OF RESTRICTIONS AT DISCRETION OF THE COMMITTEE
The Committee may shorten the Restriction Period or
remove any or all Share Restrictions if, in the exercise of
its absolute discretion, it determines that such action is
in the best interests of the Corporation and equitable to
the Participant.
8.6 LISTING AND REGISTRATION OF SHARES
The Corporation may, in its reasonable discretion,
postpone the issuance and/or delivery of Restricted Shares
until completion of stock exchange listing, or registration,
or other qualification of such Restricted Shares under any
law, rule or regulation.
8.7 DESIGNATION OF BENEFICIARY
A Participant may, with the consent of the Committee,
designate a person or persons to receive, in the event of
death, any Restricted Shares to which such Participant would
then be entitled. Such designation will be made upon forms
supplied by and delivered to the Committee and may be
revoked in writing by the Participant. If a Participant
fails effectively to designate a beneficiary, then such
Participant's estate will be deemed to be the beneficiary.
8.8 WITHHOLDING OF TAXES FOR RESTRICTED SHARES
When the Participant, as holder of the Restricted
Shares, recognizes income, either on the Date of Grant or
the date the restrictions lapse, Rio or a Subsidiary, as
applicable, shall withhold from the shares of Common Stock,
the number of shares necessary to satisfy Rio's or the
Subsidiary's, as applicable, obligation to withhold federal
taxes, such determination to be based on the shares' Fair
Market Value as of the date income is recognized.
9. CAPITAL ADJUSTMENTS
If the outstanding shares of Common Stock (or shares or
securities substituted therefore) are converted into or exchanged
for a different number or kind of shares of the Company or other
securities of the Company or any other corporation by reason of
stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares or
other similar corporate change, the Committee, in its absolute
discretion and on such terms and conditions as it deems
appropriate, may make an appropriate and equitable adjustment in
the number, option price and kind of shares or other securities
covered by all outstanding options and/or Restricted Shares or
reserved for issuance under the Plan. If the Company is the
surviving corporation in any merger or consolidation, any option
shall thereafter be exercisable for the securities to which a
holder of the number of shares of Common Stock subject to the
option would have been entitled after the merger or
consolidation.
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10. CHANGE OF CONTROL
Notwithstanding the provisions of Section 7, in the event of
a change of control, all share restrictions on all Restricted
Shares will lapse and vesting on all unexercised stock options
will accelerate to the change of control date. For purposes of
this plan, a "Change of Control" of Rio shall be deemed to have
occurred at such time as (a) any "person" (as that term is used
in Section 13(d) and 14(d) of the Exchange Act), other than
Anthony A. Marnell II, James A. Barrett, or their affiliates, or
an employee benefit plan of the Corporation becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of Rio representing
25.0% or more of the combined voting power of Rio's outstanding
securities ordinarily having the right to vote at the election of
directors; or (b) individuals who constitute the Rio Board on the
date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof; or (c) the approval by
Rio's stockholders of the merger or consolidation of Rio with any
other corporation or business organization, the sale of all or
substantially all the assets of Rio, or the liquidation or
dissolution of Rio; or (d) a proxy statement is distributed
soliciting proxies from the stockholders of Rio seeking
stockholder approval of a plan of reorganization, merger or
consolidation of Rio with one or more corporations as a result of
which the outstanding shares of Rio's securities are actually
exchanged for or converted into cash or property or securities
not issued by Rio; or (e) at least a majority of the Incumbent
Board who are in office immediately prior to any action proposed
to be taken by Rio determine that such proposed action, if taken,
would constitute a change of control of Rio and such action is
taken.
11. APPROVALS
The issuance of shares pursuant to this Plan is expressly
conditioned upon obtaining all necessary approvals from all
regulatory agencies from which approval is required, including
gaming regulatory agencies, and upon obtaining stockholder
ratification of the Plan.
12. EFFECTIVE DATE OF PLAN
The effective date of the Plan is January 26, 1995.
13. TERM AND AMENDMENT OF PLAN
This Plan shall expire on January 30, 2005 (except to
options and Restricted Shares outstanding on that date). The Rio
Board may terminate or amend the Plan in any respect at any time,
except that, without the approval of the holders of a majority of
the 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 9); the
provisions of Section 4 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 9); 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 of the Exchange Act. No
action of the Rio Board or Rio's stockholders, however, may,
without the consent of an optionee or Restricted Shares grantee,
alter or impair such Participant's rights under any option or
Restricted Shares previously granted.
14. NO RIGHT OF EMPLOYMENT
Neither the action of Rio in establishing this Plan, nor any
action taken by the Rio Board, the board of directors of a
Subsidiary, or the Committee, nor any provision of the Plan
itself, shall be construed to limit in any way the right of Rio
to terminate a Participant's employment or association at any
time; nor shall it be evidence of any agreement or understanding,
expressed or implied, that the Corporation will employ an
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employee in any particular position nor ensure participation in
any future compensation or stock purchase program.
15. WITHHOLDING TAXES
Rio or the Subsidiary, as applicable, 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 Common Stock under the Plan.
Whenever under the Plan, Common Stock is to be delivered upon
vesting of Restricted Shares or exercise of an option, the
Committee shall be entitled to require as a condition of delivery
that the Participant remit or provide for the withholding of an
amount sufficient to satisfy all federal, state and other
government withholding tax requirements related thereto.
16. 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 Corporation and
any Participant, the executor, administrator or other personal
representative, or designated beneficiary of such Participant, or
any other persons. If and to the extent that any Participant or
such Participant's executor, administrator or other personal
representative, as the case may be, acquires a right to receive
any payment from the Corporation pursuant to the Plan, such right
shall be no greater than the right of an unsecured general
creditor of the Corporation.
17. NOTICES
Each Participant shall be responsible for furnishing the
Committee with the current and proper address for the mailing of
notices and delivery of agreements, 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 Participant 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.
18. SEVERABILITY 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.
19. 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 Corporation and other parties with respect
thereto.
20. 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.
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21. 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.
22. ENFORCEMENT OF RIGHTS
In the event the Corporation or a Participant is required to
bring any action to enforce the terms of this Plan, the
prevailing party shall be reimbursed by the non-prevailing party
for all costs and fees, including actual attorney fees, for
bringing and pursuing such action.
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EXHIBIT 4.02
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RIO HOTEL & CASINO, INC.
(FORMERLY MARCOR RESORTS, INC.)
1991 DIRECTORS' STOCK OPTION PLAN
AS AMENDED FEBRUARY 28, 1992;
AS AMENDED MARCH 28, 1995;
AS AMENDED JANUARY 25, 1996;
AS AMENDED ON FEBRUARY 25, 1998; AND
AS FURTHER AMENDED ON OCTOBER 22, 1998
1. PURPOSE
The Rio Hotel & Casino, Inc. 1991 Directors' 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 (the "Board") 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. 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 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.
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1991 DIRECTORS' STOCK OPTION PLAN
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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 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 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.
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 Optionee ceases to serve as a
member of the Board.
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
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1991 DIRECTORS' STOCK OPTION PLAN
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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, 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 (ii) three months after the day such Optionee's term
ends or (iii) as otherwise extended by the Board in its sole
discretion.
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 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 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 or other right under the Plan will be
assignable or transferable by any Optionee except by will or the
laws of the descent and distribution, and no option shall be
exercisable except by the Optionee or the Optionee's legal
representative.
(a) A stock option shall not be assigned, alienated,
pledged, attached, sold, transferred or encumbered by an
Optionee other than by will or by the laws of descent and
distribution, or,
(i) by transfer without consideration by an
Optionee, subject to such rules as the Committee may
adopt to preserve the purposes of the Plan (including
limiting such transfers to transfers by Optionees who
are directors or executive officers of the Company), to
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1991 DIRECTORS' STOCK OPTION PLAN
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(1) a member of his or her Immediate Family
(as defined),
(2) a trust solely for the benefit of the
Optionee and his or her Immediate Family, or
(3) a partnership, limited liability company
or corporation whose only partners, members or
shareholders are the Optionee and/or his or her
Immediate Family Members;
(each transferee described in (i) is hereafter referred to
as a "Permitted Transferee"), provided that the Committee is
notified in advance in writing of the terms and conditions
of any proposed transfer intended to be described in (i) and
it determines that the proposed transfer complies with the
requirements of the Plan and the applicable option
agreement. Any purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance that does not
qualify under (i) shall be void and unenforceable against
the Company. For purposes of the Plan, "Immediate Family"
means, with respect to a particular Optionee, the Optionee's
spouse, children or grandchildren (including adopted and
step children and grandchildren).
(b) The terms of the stock option shall apply to the
beneficiaries, executors and administrators of the
Participant and of the Permitted Transferees of the Optionee
(including the beneficiaries, executors and administrators
of the Permitted Transferees), except that Permitted
Transfers shall not transfer any stock option other than by
will or by the laws of descent and distribution.
(c) A stock option shall be exercised only by the
Optionee (or his or her attorney in fact or guardian)
(including, in the case of a transferred option, by a
Permitted Transferee), or, in the case of the Optionee's
death, by the Optionee's executor or administrator
(including, in the case of a transferred option, by the
executor or administrator of the Permitted Transferee), and
no shares of Common Stock shall be issued by the Company
unless the exercise of a stock option is accompanied by
sufficient payment, as determined by the Company, to meet
its withholding tax obligations on such exercise or by other
arrangements satisfactory to the Committee to provide for
such payment.
7. CAPITAL ADJUSTMENTS
If the outstanding shares of Common Stock (or shares or
securities substituted therefore) are converted into or exchanged
for a different number or kind of shares of the Company or other
securities of the Company or any other corporation by reason of
stock dividend or split, recapitalization, merger, consolidation,
spin-off, reorganization, combination or exchange of shares or
other similar corporate change, the Committee, in its absolute
discretion and on such terms and conditions as it deems
appropriate, may make an appropriate and equitable adjustment in
the number, option price and kind of shares or other securities
covered by all outstanding options or reserved for issuance under
the Plan. If the Company is the surviving corporation in any
merger or consolidation, any option shall thereafter be
exercisable for the securities to which a holder of the number of
shares of Common Stock subject to the option would have been
entitled after the merger or consolidation.
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
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1991 DIRECTORS' STOCK OPTION PLAN
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"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 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 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.
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.
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1991 DIRECTORS' STOCK OPTION PLAN
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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 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.
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1991 DIRECTORS' STOCK OPTION PLAN
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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.
