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EXHIBIT 4.1
SANTA FE GAMING CORPORATION
1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
Section 1. Purpose of Plan
The purpose of this 1995 Non-Employee Director Stock Option Plan (the "Plan") of
Santa Fe Gaming Corporation, a Nevada corporation (the "Company"), is to enable
the Company to attract non-employee directors and further align their interests
with those of the stockholders by providing for or increasing their proprietary
interests in the Company.
Section 2. Persons Eligible Under Plan
Any member of the Board of Directors of the Company (the "Board") who is not an
employee of the Company or any of its subsidiaries (a "Non-Employee Director")
shall be eligible for the grant of Options (as hereinafter defined) hereunder.
Section 3. Options
(a) Each person who is a Non-Employee Director immediately following the annual
meeting of the stockholders of the Company held in 1996 (an "Annual Meeting")
shall, on the date of such Annual Meeting, automatically be granted an option to
purchase 12,500 shares of the Common Stock, par value $.01 per share, of the
Company (the "Common Shares"), subject to adjustment as provided in Section 7
hereof (an "Option").
(b) In addition, each person who first becomes a Non-Employee Director after the
Annual Meeting shall, on the date such person becomes a Non-Employee Director,
automatically be granted an Option to purchase 12,500 Common Shares, subject to
adjustment as provided in Section 7 hereof.
(c) Notwithstanding the foregoing, if, on any date upon which Options are to be
granted hereunder, the number of Common Shares remaining available for issuance
under this Plan is insufficient for the grant of Options to purchase the total
number of Common Shares specified in Section 3(a) and (b) hereof, then each Non-
Employee Director entitled to receive an Option on such date shall be granted an
Option to purchase a proportionate amount of the available number of Common
Shares (rounded down to the greatest number of whole shares).
(d) Each Option shall be evidenced by a written option agreement that shall
contain the following terms and provisions:
(i) The exercise price per Common Share shall be equal to the
greater of (A) the Fair Market Value (as hereinafter defined) of
one Common Share on the date of grant of such Option or (B) the
par value of one Common Share. The "Fair Market Value" of a
Common Share shall be equal to the last sale price, regular way,
of a Common Share on the next preceding business day, or in case
no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system
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with respect to securities listed or admitted to trading on the
principal national securities exchange on which the Common
Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price in the over-the-
counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System or such
other system then in use or, if on such day the Common Shares
are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional
market maker who makes a market in the Common Shares and who is
designated by the Board.
(ii) Payment of the exercise price of the Option shall be made in
full in cash or by check concurrently with the exercise of the
Option.
(iii) The Option shall be nontransferable by the optionee other than
by will or the laws of descent and distribution, and shall be
exercisable during the optionee's lifetime only by the optionee
or the optionee's guardian or legal representative.
(iv) The Option will be fully vested on the date of grant and shall
expire upon the first to occur of the following: (A) the third
anniversary of the date upon which the optionee shall cease to
be a Non-Employee Director, or (B) the tenth anniversary of the
date of grant.
Section 4. Stock Subject to Plan
(a) At any time, the aggregate number of Common Shares issued and issuable
pursuant to all Options granted under this Plan shall not exceed 100,000,
subject to adjustment as provided in Section 7 hereof.
(b) For purposes of Section 4(a) hereof, the aggregate number of Common Shares
issued and issuable pursuant to Options granted under this Plan at any time
shall be deemed to be equal to the sum of the following: (i) the number of
Common Shares which were issued prior to such time pursuant to Options granted
under this Plan; plus (ii) the number of common Shares which are issuable at or
after such time pursuant to Options granted under this Plan prior to such time.
Section 5. Duration of Plan
No Options shall be granted under this Plan after January 20, 2006.
Section 6. Administration of Plan
This Plan is intended to meet the requirements of Rule 16b-3(c) (2) (ii) adopted
under the Securities Exchange Act of 1934 (or its successor) and accordingly is
intended to be self-governing. To this end, this Director Plan requires no
discretionary action by any administrative body with regard to any transaction
under this Director Plan. To the extent, if any, that any questions of
interpretation arise, these shall be resolved by the Board.
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Section 7. Adjustments
If the outstanding securities of the class then subject to this Plan are
increased, decreased or exchanged for or converted into a different number or
kind of securities of the Company, or if cash, property or securities are
distributed in respect of such outstanding securities, in either case as a
result of a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, dividend (other than a regular, quarterly cash
dividend) or other distribution, stock split, reverse stock split or the like,
then, unless the terms of such transaction shall provide otherwise, the Board
shall make appropriate and proportionate adjustments in (a) the number and type
of shares or other securities or cash or other property that may be acquired
pursuant to Options theretofore granted under this Plan and (b) the maximum
number and type of shares or other securities that may be issued pursuant to
Options thereafter granted under this Plan.
Section 8. Amendment and Termination of Plan
The Board may amend or terminate this Plan at any time and in any manner,
subject to the following; (a) no such amendment or termination shall deprive the
recipient of any Option theretofore granted under this Plan, without the consent
of such recipient, of any of his or her rights thereunder or with respect
thereto; and (b) Section 3 hereof shall not be amended more than once every six
months other than to comport with changes in the Internal Revenue Code, the
Employees Retirement Income Security Act, or the rules thereunder.
Section 9. Effective Date of Plan
This Plan was approved by the Board on December 14, 1995. This Plan shall become
effective on the first date thereafter upon which it has been approved, directly
or indirectly, by (a) the affirmative votes of the holders of a majority of the
securities of the Company present, or represented, and entitled to vote at a
meeting duly held in accordance with applicable law or (b) the written consent
of the holders of a majority of the securities of the Company entitled to vote.
