As filed with the Securities and Exchange Commission on August 9, 1996
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
Under the Securities Act of 1933
AMERICAN BINGO & GAMING CORP.
(Exact name of registrant as specified in its charter)
Delaware 1-13530 74-2723809
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation Classification
or organization) Code Number)
515 Congress Avenue, Suite 1200
Austin, Texas 78701
(512) 472-2041
(Address and Telephone Number of
Registrant's Principal Executive Office)(Zip Code)
AMERICAN BINGO & GAMING CORP.
1996 EMPLOYEE STOCK OPTION PLAN
(500,000 shares of Common Stock)
AMERICAN BINGO & GAMING CORP.
1995 EMPLOYEE STOCK OPTION PLAN
(500,000 shares of Common Stock)
AMERICAN BINGO & GAMING CORP.
1995 EMPLOYEE STOCK PURCHASE PLAN
(50,000 shares of Common Stock)
AMERICAN BINGO & GAMING CORP.
AMENDED STOCK OPTION PLAN (1994)
(250,000 shares of Common Stock)
(full title of the plans)
Gregory Wilson, President
515 Congress Avenue, Suite 1200
Austin, Texas 78701
(512) 472-2041
(Name, Address & Telephone number, including area code, of agent for service)
---------------
Copies to:
Silverman, Collura & Chernis, P.C.
381 Park Avenue South - Suite 1601
New York, New York 10016
(212) 779-8600
<PAGE>
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Proposed Proposed
Title of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered per share (1) offering price (1) fee
- --------------------------------------------------------------------------------
Common Stock(1) 1,300,000 2.53125 3,290,625 1,134.70
- --------------------------------------------------------------------------------
(1) Calculated in accordance with 457(h)(1) using the average of the high and
low prices for the Common Stock as reported on the NASDAQ SmallCap Market System
on August 6, 1996.
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PART 1 - INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The documents containing information specified in Part 1 (plan information
and registrant information) will be sent or given to employees as specified by
Rule 428(b)(1). Such documents need not be filed with the Securities and
Exchange Commission either as part of this registration statement or as
prospectuses or prospectus supplements pursuant to Rule 424. These documents and
the documents incorporated by reference in this registration statement pursuant
to Item 3 of Part 2 of this form taken together constitute a prospectus that
meets the requirements of Section 10(a) of the Securities Act of 1933, as
amended.
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AMERICAN BINGO & GAMING CORP.
Cross-Reference Sheet Showing Location in Prospectus
of Information Required by Items of Form S-3
Form S-3 Items and Heading Location in Prospectus
- -------------------------- ----------------------
1. Forepart of the Registration Statement
and Outside Front Cover Page of Prospectus..... Front cover Page
2. Inside Front And Outside Back Cover............ Inside Front cover Page
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges................... The Company
4. Use of Proceeds................................ Not Applicable
5. Determination of Offering Price................ Not Applicable
6. Dilution....................................... Not Applicable
7. Selling Security Holders....................... Selling Stockholders
8. Plan of Distribution........................... Plan of Distribution
9. Description of Securities to be Registered ... Description of Securities
10. Interest of Named Experts and Counsel.......... Legal Matters
11. Material Changes............................... Not Applicable
12. Incorporation of Certain Information by
Reference...................................... Incorporation of
Certain Documents by
Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.................................... Indemnification of
Directors and Officers
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RE-OFFER PROSPECTUS
AMERICAN BINGO & GAMING CORP.
515 Congress Avenue, Suite 1200
Austin, Texas 78701
Common Stock
This Prospectus relates to offers and sales by certain officers and
directors of American Bingo & Gaming Corp., a Delaware corporation (the
"Company"), named herein or to be named supplementally, who may be deemed to be
"affiliates" of the Company as defined in Rule 405 under the Securities Act of
1933, as amended, (the "Securities Act") and an employee of the Company (the
certain officers, directors and employee together, the "Selling Stockholders"),
of shares of the Company's Common Stock, $.001 par value (the "Common Stock"),
that may be acquired by such persons upon exercise of stock options granted to
them or purchased by them pursuant to the Company's Amended Stock Option Plan
(1994)(the "1994 Plan"), the 1995 Employee Stock Purchase Plan (the "Purchase
Plan"), the 1995 Employee Stock Option Plan (the "1995 Plan") and the 1996
Employee Stock Option Plan (the "1996 Plan")(the 1994 Plan, the Purchase Plan,
the 1995 Plan and the 1996 Plan together, the "Plans"). The shares that may be
so acquired by such persons pursuant to the Plans are herein referred to as the
"Option and Restricted Shares".
The Option and Restricted Shares may be offered hereby from time to time by
any and all of the Selling Stockholders, named herein or to be named
supplementally, for their own benefit. The Company will receive no portion of
the proceeds of sales made hereunder. All expenses of registration incurred in
connection with this offering are being borne by the Company, but all selling
and other expenses incurred by the Selling Stockholders will be borne by such
Selling Stockholders.
All or a portion of the shares of Common Stock offered hereby may be
offered for sale, from time to time, on the NASDAQ SmallCap Market System
("Nasdaq") and the Boston Stock Exchange (the "BSE"), or otherwise, at prices
and terms then obtainable. All brokers' commissions, concessions or discounts
will be paid by the Selling Stockholders.
The Selling Stockholders and any broker executing selling orders on behalf
of the Selling Stockholders may be deemed to be an "underwriter" within the
meaning of the Securities Act, in which event commissions received by such
broker may be deemed to be underwriting commissions under the Securities Act.
The Common Stock and Warrants of the Company are listed on Nasdaq under the
symbols BNGO and BNGOW, respectively, as well as on the BSE under the symbols
ABG and ABGW, respectively. On August 6, 1996, the last reported sale price of
the Company's Common Stock and Warrants on Nasdaq was $2.4375 and $.4375,
respectively.
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 August 9, 1996.
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TABLE OF CONTENTS
Page
Available Information...................................................... 7
The Company................................................................ 8
Risk Factors............................................................... 9
Selling Stockholders....................................................... 12
Transfer Agent and Registrar............................................... 13
Plan of Distribution....................................................... 13
Incorporation of Certain Documents by Reference............................ 13
Legal Matters.............................................................. 14
Experts.................................................................... 14
Indemnification of Directors and Officers.................................. 14
6
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No person is authorized to give any information or to make any
representation, other than those contained in this Prospectus, in connection
with the offering described herein, and, if given or made, such information or
representations must not be relied upon as having been authorized by the Company
or the Selling Stockholders. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, nor shall there be any sale of these
securities by any person in any jurisdiction in which it is unlawful for such
person to make such offer, solicitation or sale. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances create an
implication that the information contained herein is correct as of any time
subsequent to the date hereof.
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, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at Room 1204, Everett McKinley Dirksen Building,
219 South Dearborn Street, Chicago, Illinois 60604; and 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material can also be
obtained at prescribed rates from the Public Reference Section of the Commission
at its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
This Prospectus does not contain all of the information set forth in the
Registration Statements of which this Prospectus is a part and which the Company
has filed with the Commission. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof, copies of which can
be inspected at, or obtained at prescribed rates from the Public Reference
Section of the Commission at the address set forth above. Additional updating
information with respect to the Company may be provided in the future by means
of appendices or supplements to the Prospectus.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus is delivered, upon written or oral request of
such person, a copy of any and all of the information that has been or may be
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents).
Requests should be directed to American Bingo & Gaming Corp., 515 Congress
Avenue, Suite 1200, Austin, Texas 78701 (512) 472-2041.
7
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THE COMPANY
American Bingo & Gaming Corp. (the "Company") was incorporated under the
laws of the State of Delaware in 1994. The Company was formed to consummate the
acquisition of four entities engaged in the operation of charity bingo
entertainment centers (the "Centers"). The Company subsequently completed its
initial public offering in December 1994, from which approximately $5.2 million
was raised through the sale of 1,000,000 shares of Common Stock and 1,725,000
Warrants.
The Company, through its subsidiaries, provides maintenance and management
support for charities which utilize bingo events as a means of fund raising. The
Company presently operates nine Centers in Texas, Alabama and South Carolina.
The Company's current Centers average nine sessions per Center per week at an
average per-session fee to the Company of $450. In addition, revenues are
derived from the operation and/or lease of vending and concession outlets at the
Centers. The Company also derives rental revenues from its South Carolina gaming
facility where video gaming is legal. The Company is required to operate the
Centers in compliance with applicable state and local laws and regulations.
Presently, approximately 45 states and the District of Columbia allow charities
to operate regulated bingo halls as a method of fund raising.
The Company has designed an aggressive expansion plan centered around the
acquisition of existing Centers as well as the opening of new Centers. The
Company's goal is to establish itself as a major force in the estimated
multi-billion dollar per year charity bingo market. No assurances may be given
that the Company's goals will be achieved.
The Company is knowledgeable with respect to states whose legislation
permits charity bingo and gaming events. The Company identifies and analyzes
desirable bingo markets that offer favorable population and income demographics.
Where viable, the Company currently plans to establish Centers in each of these
markets. This can be accomplished either by building a new bingo center or by
acquiring an existing center.
The Company's principal executive offices are located at 515 Congress
Avenue, Suite 1200, Austin, Texas, 78701 and the telephone number of the
principal executive offices is (512) 472-2041.
8
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RISK FACTORS
The following factors should be considered carefully in evaluating the
Company's business and before making any investment in the Company.
1. Relatively New Venture, Need for Further Acquisitions.
The Company must be regarded as in a formative stage. The Company's future
success depends upon its ability to continue to expand its existing operations
through the acquisition of Centers, and the establishment of new Centers. There
can be no assurance that the Company will be successful in making such
acquisitions or establishing new Centers. The Company is subject to all the
risks inherent in attempting to expand a relatively new business venture. These
risks include the potential inability of the Company to efficiently operate
additional Centers, the existence of undisclosed actual or contingent
liabilities, the inability to fund the working capital requirements of
additional Centers and the inability to locate and/or establish Centers which
have a positive effect on the Company's operations. Recently, the Company
encountered a hostile regulatory environment in Florida and found it necessary
to dispose of its four centers there. There can be no assurance that the Company
will achieve a level of profitability that will provide a return on invested
capital or will result in an increase in the market value of the Company's
securities.
2. Need for Additional Financing.
The Company's business plan includes an aggressive program to identify
acquisition candidates that meet certain demographic and other criteria, and to
seek to acquire them. Growth to date has been funded initially with cash
advanced by shareholders and from operations, and since December, 1994 with the
proceeds of the Company's initial public offering. The Company believes it will
have resources to enable it to make significant acquisitions. However, there can
be no assurance that the remaining cash, coupled with the Company's Common Stock
which has been used as currency to facilitate certain acquisitions, will enable
the Company to finance all of its acquisition plans. Moreover, additional funds
may be needed to fund the working capital requirements of newly acquired
Centers. No assurance can be given that additional needed financing will be
available to the Company, or if available, on terms acceptable to the Company.
If further financing is needed, but not available, the Company will be required
to scale down its acquisition plans.
3. Competition.
The Company competes with other Centers located in the general area where
the Company's subsidiaries presently operate. Competition is based on such
factors as location, comfort, cleanliness, personal relationships and other
amenities. The Company continues to seek to maximize the competitive advantages
of its facilities. The Company does expect to encounter increased competition as
it seeks to acquire additional Centers. Other forms of gaming, principally
non-charity operations also represent additional competitive threats to the
Company. There can be no assurance that additional competing Centers will not be
opened by parties not affiliated with the Company or that existing Centers will
not be refurbished to the extent that they are more amenable to the charity
bingo players who presently frequent the Company's Centers.
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4. Dependence Upon Key Personnel.
The Company is substantially dependent upon the continued services of
Gregory Wilson, its Chairman and Chief Executive Officer who is the Company's
most experienced person in the operation of charity bingo centers. Mr. Wilson
has entered into a three-year employment agreement with the Company which has
about a year and one half to run. The loss of the services of Mr. Wilson through
incapacity or otherwise would have a material adverse effect upon the Company's
business and prospects. To the extent that his services become unavailable, the
Company will be required to retain other qualified personnel, and there can be
no assurance that it will be able to recruit and hire qualified persons upon
acceptable terms. The Company maintains key person life and disability insurance
in the amount of $1,000,000 on the life of Mr. Wilson, with the Company as
beneficiary. However, in the event of loss, there can be no assurance that the
insurance proceeds will adequately compensate the Company.
5. Government Regulation.
The Company believes that forty-five (45) states and the District of
Columbia have enacted laws permitting and controlling the operation of the
Centers. In some states the Company is required to obtain and maintain permits
and/or licenses from state and local regulatory agencies. State regulations
often limit the amount of revenues which the Company can generate by limiting
the number of sessions, revenues per session, number of locations which may be
operated, or other matters. Certain states may also restrict bingo operators to
locally formed entities or may restrict ownership to private investors who are
active in management. The Company believes it currently complies with all
regulations affecting its operations. However, there can be no assurance that
current laws and regulations will not be changed or interpreted in such a way as
to require the Company to alter its present activities, further restrict profit
margins or obtain additional capital equipment in order to obtain or maintain
licenses and permits. The Company has encountered regulatory problems in the
States of Florida and Texas, respectively.
6. No Assurance as to Future Acquisitions.
The Company's business has grown solely through acquisitions and the
opening of new Centers. The Company's business plan calls for the acquisition of
entities engaged in the operation of charity bingo Centers. The Company's
ability to achieve its expansion plans depends in large part on its sound
business judgment relative to quality targets and its negotiating strength.
Acquisitions to date have been based on a multiple of pre-tax income. Since the
Company has become a public company, it has acquired properties for a
combination of cash, seller-financed notes and stock, and hopes to continue to
do so. If potential sellers are receptive to accepting equity in the Company as
part of the purchase price, the Company's ability to expand will be enhanced.
There can be no assurance, however, that the Company's acquisition targets will
continue to be receptive to such proposals. Nor can there be assurance that the
Company will succeed in effecting future acquisitions of additional Centers that
meet management's criteria of profitability, physical attributes and
demographics in the targeted states and locales. Moreover there can be no
assurance that once acquisitions are made they will have a positive effect on
the Company's operations.
10
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7. General Economic Risks.
The Company's current and future business plans are dependent, in large
part, on the state of the general economy. Adverse changes in general and local
economic conditions may adversely impact on investment in the Company. These
conditions and other factors beyond the Company's control include, among other
factors,: (i) competition from other hospitality and entertainment properties;
(ii) changes in regional and local population and disposable income composition;
(iii) the need for renovations, refurbishment and improvements; (iv)
unanticipated increases in operating costs; (v) changes in federal, state, local
laws, rules and regulations including laws regulating the environment, signage
and the like; (vi) the inability to secure property and liability insurance to
fully protect against all losses, or to obtain such insurance at reasonable
cost; (vii) seasonality, and (ix) changes or cancellation in local tourist,
athletic or cultural events.
8. Possible Volatility of Stock Price.
There can be no assurance that a public market price for the Common Stock
or Warrants will continue. The market prices of the Common Stock and the
Warrants may be significantly affected by factors such as announcements by the
Company or its competitors, as well as variations in the Company's results of
operations and market conditions in the gaming industry in general. The market
prices may also be affected by movements in prices of stocks in general. The
relatively limited amount of publicly trading shares and Warrants (the "float")
renders the Company's securities especially susceptible to sharp price
fluctuations.
9. Shares Eligible for Future Sale.
A large number of shares of Common Stock presently outstanding will be
eligible for public sale under the Securities Act of 1933 as amended in
September, 1996. Possible or actual sales of Common Stock in the future by
existing shareholders may have a depressive effect on the price of the Common
Stock in the open market.
10. Possible Effects of Certain Articles of Incorporation and Bylaw
Provisions.
The Company's Articles of Incorporation and Bylaws contain provisions that
may discourage acquisition bids for the Company. The Company has substantial
authorized but unissued capital stock available for issuance. The Company's
Articles of Incorporation contain provisions which authorize the Board of
Directors, without the consent of stockholders, to issue additional shares of
Common Stock and issue shares of Preferred Stock in series, including
establishment of the voting powers, designation, preferences, limitations,
restrictions and relative rights of each series of Preferred Stock.
11. Absence of Cash Dividends.
The Board of Directors does not anticipate paying cash dividends on the
Common Stock for the foreseeable future and intends to retain any future
earnings to finance the growth of the Company's business. Payment of dividends,
if any, will depend, among other factors, on earnings, capital requirements and
the general operating and financial conditions of the Company.
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SELLING STOCKHOLDERS
The Prospectus covers Option and Restricted Shares that have been or may be
acquired upon exercise of options held by the Selling Stockholders, named herein
or to be supplementally named, as of June 21, 1996.
The following table sets forth the name of each Selling Stockholder, the
nature of his or her position, office, or other material relationship with the
Company, the number of shares of Common Stock beneficially owned by each Selling
Stockholder prior to the offering, and the number of shares and (if one percent
or more) the percentage of the class to be beneficially owned by such Selling
Stockholder after the offering. Non-affiliate Selling Stockholders who hold less
than 1,000 shares of Common Stock issued under the Plans and not named below may
use this Prospectus for reoffers and resales of such Common Stock.
<TABLE>
<CAPTION>
Shares owned
After Offering
Shares Owned Number of Shares --------------
Name Prior to Offering(1) Offered Herein Number Percent
- ---- -------------------- -------------- ------ -------
<S> <C> <C> <C> <C>
John Orton 50,000 150,000(2) 0 **
Chief Financial Officer
Richard Henry 50,000 150,000(3) 0 **
Secretary
Robert S. Hersch 260,833(4) 100,000(2) 210,833 4.7
Director
Bobby Pollard 0 5,000(5) 0 **
Employee
</TABLE>
- ----------------------
** less than 1%
(1) For purposes of this table, a person is deemed to have "beneficial
ownership" of any shares of Common Stock when such person has the right to
acquire such shares within 60 days of June 21, 1996. For purposes of
computing the percentage of outstanding shares of Common Stock held by each
person named above, any security which such person has the right to acquire
within such date is deemed to be outstanding but is not deemed to be
outstanding for the purpose of computing the percentage ownership of any
other person. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the Company believes based
on information supplied by such persons, that the persons named in this
table have sole voting and investment power with respect to all shares of
Common Stock which they beneficially own.
(2) Issued pursuant to the 1994 Plan.
(3) 50,000 shares underlying option issued pursuant to the 1995 Plan and 50,000
shares underlying options issued pursuant to the Plan.
(4) Includes 125,833 shares of Common Stock owned by R&R Tortola Company, Ltd.,
an entity controlled by Mr. Hersch.
(5) Issued pursuant to the 1995 Plan.
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TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock of the Company is
American Stock Transfer & Trust Co., 40 Wall Street, New York, New York 10005.
PLAN OF DISTRIBUTION
The Selling Stockholders may sell shares of Common Stock in any of the
following ways (i) through dealers; (ii) through agents; or (iii) directly to
one or more purchasers. The distribution of the shares of Common Stock may be
effected from time to time in one or more transactions (which may involve
crosses or block transactions) (A) on Nasdaq or the BSE (or on such other
national stock exchanges on which the shares of Common Stock may be traded from
time to time) in transactions which may include special offerings, exchange
distributions and/or secondary distributions pursuant to and in accordance with
rules of such exchanges, (B) in the over-the-counter market, or (C) in
transactions other than on such exchanges or in the over-the-counter market, or
a combination of such transactions. Any such transaction may be effected at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or fixed prices. The Selling
Stockholders may effect such transactions by selling shares of Common Stock to
or through broker-dealers, and such broker-dealers may receive compensation in
the form of discounts, concessions, or commissions from Selling Stockholders
and/or commissions from purchasers of shares of Common Stock for whom they may
act as agent. The Selling Stockholders and any broker-dealers or agents that
participate in the distribution of shares of Common Stock by them might be
deemed to be underwriters, and any discounts, commissions or concessions
received by any such broker-dealers or agents might be deemed to be underwriting
discounts and commissions, under the Securities Act.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Commission and are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB for its fiscal year ended
December 31, 1995;
(b) The Company's Quarterly Report on Form 10-QSB for the three month
period ended March 31, 1996;
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form SB-2, Registration No. 33-85300; and
(d) All other reports filed by the Company pursuant to Section 13(a) and
15(d) of the Exchange Act since the end of the Company's fiscal year ended March
31, 1996.
All documents filed by the Company with the Commission pursuant to sections
13, 14 or 15(d) of the Exchange Act subsequent hereto, but prior to the
termination of the offering of
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securities made by this Prospectus shall be deemed to be incorporated by
reference herein and to be part hereof from their respective dates of filing.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus, to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
LEGAL MATTERS
The legality of the shares offered hereby has been passed upon for the
Company by Silverman, Collura & Chernis, P.C., 381 Park Avenue South, Suite
1601, New York, New York 10016.
EXPERTS
The Company's consolidated financial statements incorporated by reference
in this Registration Statement, have been incorporated herein in reliance on the
reports of Weinick, Sanders & Company, LLP, independent accountants, given on
the authority of that firm as experts in accounting and auditing.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware and
Article 7 of the Company's Articles of Incorporation contain provisions for
indemnification of officers, directors, employees and agents of the Company. The
Articles of Incorporation require the Company to indemnify such persons to the
full extent permitted by Delaware law. Each person will be indemnified in any
proceeding if he acted in good faith and in a manner which he reasonably
believed to be in, or not opposed to, the best interest of the Company.
Indemnification would cover expenses, including attorney's fees, judgments,
fines and amounts paid in settlement.
The Company's Articles of Incorporation also provided that the Company's
Board of Directors may cause the Company to purchase and maintain insurance on
behalf of any present or past director or officer insuring against any liability
asserted against such person incurred in the capacity of director or officer or
arising out of such status, whether or not the Company would have the power to
indemnify such person. The Company has acquired directors' and officers'
liability insurance.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the Company,
the Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expense
incurred or paid by a director, officer, or controlling person of the Company in
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the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person of the Company in connection with the
securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by a controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issues.
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PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission
(the "Commission") by American Bingo & Gaming Corp., a Delaware corporation (the
"Company") are incorporated as to their respective dates in this Registration
Statement by reference:
(a) The Company's Annual Report on Form 10-KSB for its fiscal year ended
December 31, 1995;
(b) The Company's Quarterly Report on Form 10-QSB for the three month
period ended March 31, 1996;
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form SB-2, Registration No. 33-85300; and
(d) All other reports filed by the Company pursuant to Section 13(a) and
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") since the end
of the Company's fiscal year ended March 31, 1996.
All documents filed by the Company with the Commission pursuant to sections
13, 14 or 15(d) of the Exchange Act subsequent hereto, but prior to the
termination of the offering of securities made by this Registration Statement
shall be deemed to be incorporated by reference herein and to be part hereof
from their respective dates of filing.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Registration
Statement, to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL
The legality of the shares offered hereby has been passed upon for the
Company by Silverman, Collura & Chernis, P.C., 381 Park Avenue South, New York,
New York 10016 ("SCC"). SCC owns 7,500 shares of Common Stock and 30,000 Common
Stock Purchase Warrants.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware and
Article 7 of the Company's Articles of Incorporation contain provisions for
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indemnification of officers,directors, employees and agents of the Company. The
Articles of Incorporation require the Company to indemnify such persons to the
full extent permitted by Delaware law. Each person will be indemnified in any
proceeding if he acted in good faith and in a manner which he reasonably
believed to be in, or not opposed to, the best interest of the Company.
Indemnification would cover expenses, including attorney's fees, judgments,
fines and amounts paid in settlement.
The Company's Articles of Incorporation also provided that the Company's
Board of Directors may cause the Company to purchase and maintain insurance on
behalf of any present or past director or officer insuring against any liability
asserted against such person incurred in the capacity of director or officer or
arising out of such status, whether or not the Company would have the power to
indemnify such person. The Company has acquired directors' and officers'
liability insurance.
Insofar as indemnification for liabilities arising under the Securities
Act, as amended (the "Securities Act") may be permitted to directors, officers,
and controlling persons of the Company, the Company has been advised that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expense incurred or paid by a director, officer, or
controlling person of the Company in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person of
the Company in connection with the securities being registered, the Company
will, unless in the opinion of its counsel the matter has been settled by a
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issues.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8 EXHIBITS
4.1 Amended Stock Option Plan (1994)
4.2 1995 Employee Stock Purchase Plan
4.3 1995 Employee Stock Option Plan
4.4 1996 Employee Stock Option Plan
5.1 Opinion of Silverman, Collura & Chernis, P.C.
23.1 Consent of Silverman, Collura & Chernis, P.C. to be named in the
Registration Statement. Reference is made to Exhibit 5.1 to this
Registration Statement which includes such consent.
23.2 Consent of Weinick, Sanders & Company, LLP.
17
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ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes;
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change of such information in the Registration Statement;
Provided however that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply
to information contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof
(3) To remove from registration by means of a post effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act that is incorporated by reference in this Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered herein, 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
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification is against public policy
as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
18
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SIGNATURES
Pursuant to the requirement of the Securities Act, 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, therewith duly authorized, in the City
of New York on August 1, 1996.
AMERICAN BINGO & GAMING CORP.
By: s\Gregory Wilson
---------------------------------------
Gregory Wilson, Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below, hereby constitutes and appoints Gregory Wilson, his true and lawful
attorney-in-fact, with full power of substitution and resubstitution, for his
and in his name, place and stead, in any and all capacities, to sign any or all
amendments or supplements to this Registration Statement and to file the same
with all exhibits thereto and other documents in connection therewith, with the
Commission, granting unto said attorney-in-fact full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with respect to this Registration Statement or any amendments or supplements
hereto and about the premises, as fully to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorney-in-fact, or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in their respective
capacities with American Bingo & Gaming Corp. and on the dates indicated.
SIGNATURES
Signature Title Date
- --------- ----- ----
s\Gregory Wilson Chairman of the Board August 1, 1996
- ---------------------------- of Directors and CEO
Gregory Wilson (Principal Executive Officer)
s\John Orton Chief Financial Officer August 2, 1996
- ---------------------------- (Principal Financial
John Orton and Accounting Officer)
s\Courtland Logue President and Director August 1, 1996
- ----------------------------
Courtland Logue
19
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s\Robert S. Hersch Director August 2, 1996
- ----------------------------
Robert S. Hersch
- ---------------------------- Director August __, 1996
Len Bussey
20
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INDEX TO EXHIBITS
4.1 Amended Stock Option Plan (1994)
4.2 1995 Employee Stock Purchase Plan
4.3 1995 Employee Stock Option Plan
4.4 1996 Employee Stock Option Plan
5.1 Opinion of Silverman, Collura & Chernis, P.C.
23.1 Consent of Silverman, Collura & Chernis, P.C. (included in Exhibit 5.1)
23.2 Consent of Weinick, Sanders & Company, LLP
21
AMENDED EMPLOYEE STOCK OPTION PLAN
AMERICAN BINGO & GAMING CORP.
AMENDED STOCK OPTION PLAN (1994)
1. Purpose
The purpose of the Stock Option Plan (1994) (the "Plan") is to provide a
method whereby selected key employees of American Bingo & Gaming Corp. (the
"Corporation), selected key consultants, professionals and non employee
Directors may have the opportunity to invest in shares of Common Stock (the
"Stock") of the Corporation, thereby giving them a proprietary and vested
interest in the growth and performance of the Corporation, and in general,
generating an increased incentive to contribute to the Corporation's future
success and prosperity, thus enhancing the value of the Corporation for the
benefit of shareholders. Further, the Plan is designed to enhance the
Corporation's ability to attract and retain individuals of exceptional
managerial talent upon whom, in large measure, the sustained progress, growth,
and profitability of the Corporation depends.
2. Administration
The Plan shall be administered by the Corporation's Board of Directors
("the Board") or if so designated by resolution of the Board by a Committee
composed of not less than three individuals ("Committee"). From time to time the
Board, or if so designated the Committee, may grant stock options to such
eligible parties and for such number of shares as it in its sole discretion may
determine. A grant in any year to an eligible Employee, (as defined in Section 3
below) shall neither guarantee nor preclude a grant to such Employee in
subsequent years. Subject to the provisions of the Plan, the Board, or if so
designated the Committee, shall be authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of the option agreements described in Section
5(h) thereof to make all other determinations necessary or advisable for the
administration of the Plan. The Board, or if so designated the Committee, may
correct any defect, supply any omissions or reconcile any inconsistency in the
Plan or in any option in the manner and to the extent it shall deem desirable.
The determinations of the Board, of if so designated the Committee in the
administration of the Plan, as described herein, shall be final and conclusive.
The validity, construction, and effect of Plan and any rules and regulations
relating to the Plan shall be determined in accordance with the laws of the
State of Delaware.
3. Eligibility
The class of employees eligible to participate under the Plan (the
"Employees") shall be key employees of the Corporation, its key consultants or
professionals and Non-employee Directors of the Company. Nothing in the Plan or
in any agreement thereunder shall confer any right on an Employee or key vendor
of goods and services to continue in the employ of the Corporation or shall
interfere in any way with the right of the Corporation or its subsidiaries, as
the case may be, to terminate his employment at any time.
<PAGE>
4. Shares Subject to the Plan
Subject to adjustment as provide in Section 7, an aggregate of 250,000
shares of Stock shall be available for issuance under the Plan. The shares of
Stock deliverable upon the exercise of options may be made available from
authorized but unissued shares or shares reacquired by the Corporation,
including shares purchased in the open market or in private transactions. If any
option granted under the Plan shall terminate for any reason without having been
exercised or settled in Stock or in cash pursuant to related stock appreciation
rights, the shares subject to, but not delivered under, such option shall be
available for other options.
5. Grant Term and Conditions of Options
The Board or if so designated the Committee, may from time to time after
consultation with management select employees to whom stock options shall be
granted. The options granted may be "incentive stock options" within the meaning
of Section 422 of the Internal Revenue Code, as amended (the "Code"), or
nonstatutory stock options whichever the Board, or if so designated the
Committee, shall determine, subject to the following terms and conditions:
(a) Price. The purchase price per share of Stock deliverable upon exercise
of each incentive Stock option shall not be less than 100 percent of the
Fair Market Value of the Stock on the date such the option is granted.
Provided, however, that if an incentive Stock option is issued to an
individual who owns, at the time of grant, more than ten percent (10%) of
the total combined voting power of all classes of the Company's Stock, the
Exercise price of such option shall be at least 110% of the Fair Market
Value of the common Stock on the date of grant. The option price of shares
subject to non-statutory Stock options shall be determined by the Board of
Directors or Committee, in its absolute discretion at the time of grant of
such option. For purposes of this plan, Fair Market Value shall be: (i) the
average of the closing Bid and Ask prices for the Stock on the date in
question.
(b) Payment. Options may be exercised only upon payment of the purchase
price thereof in full. Such payment shall be made in such form of
consideration as the Board or Committee determines and may vary for each
option. Payment may consist of cash, check, notes, delivery of shares of
common stock having a fair market value on the date of surrender equal to
the aggregate exercise price, or any combination of such methods or other
means of payment permitted under the Delaware General Corp. Law.
(c) Term of Options. The term during which each option may be exercised
shall be determined by the Board, or if so designated the Committee,
provided that (i) a nonstatutory option shall not be exercisable in whole
or in part more than 10 years from the date it is granted except as
provided in paragraph (e), below, with respect to the death of the
Employee, and (ii) an incentive stock option shall not be exercisable in
whole or in part more than 10 years from the date it is granted. All rights
2
<PAGE>
to purchase Stock pursuant to an option shall, unless sooner terminated,
expire at the date designated by the Board or, if so designated the
Committee.
The Board, or if so designated the Committee, shall determine the date on
which each option shall become exercisable and may provide that an option shall
become exercisable in installments. The shares comprising each installment may
be purchased in whole or in part at any time after such installment becomes
purchasable, except that the exercise of incentive stock options shall be
further restricted as set forth herein. The Board, or if so designated the
Committee, may in its sole discretion, accelerate the time at which any option
may be exercised in whole or in part, provided that no option shall be
exercisable until one year after grant.
(d) Limitations on Grants. For Options granted on or before December 31,
1986 the aggregate Fair Market Value (determined as of the time the option
is granted) of the Stock for which any employee may be granted incentive
stock options shall not exceed the sum of (i) $100,000 and (ii) any unused
limit carryover calculated under Section 422 of the Code with respect to
such Employee. For incentive stock options granted on or after January 1,
1987, the aggregate Fair Market Value (determined at the time the option is
granted) of the stock with respect to which the investment stock option is
exercisable for the first time by an optionee during any calendar year
(under all plans of the Company and its parent or any subsidiary of the
Corporation) shall not exceed $100,000. The foregoing limitations shall be
modified from time to time to reflect any changes in Section 422 of the
Code and any regulations promulgated thereunder setting forth such
limitations.
(e) Termination of Employment. (i) If the employment of an Employee by the
Company or a subsidiary corporation of the Company shall be terminated
voluntarily by the Employee or for cause by the Company , then his Option
shall expire forthwith. Except as provided in subparagraphs (ii) and (iii)
of this Paragraph e, if such employment shall terminate for any other
reason,then such Option may be exercised at any time within three (3)
months after such termination, subject to the provisions of subparagraph
(iv) of this Paragraph E. For purposes of this subparagraph, an employee
who leaves the employ of the Company to become an employee of a subsidiary
corporation of the Company or a corporation (or subsidiary or parent
corporation of the corporation) which has assumed the Option of the Company
as a result of a corporate reorganization, etc., shall not be considered to
have terminated his employment.
(ii) If the holder of an Option under the Plan dies (a) while employed by,
or while serving as a non-employee Director for, the Company or a
subsidiary corporation of the Company, or (b) within three (3) months after
the termination of his employment or services other than voluntarily by the
employee or non-employee Director, or for cause, then such Option may,
subject to the provisions of subparagraph (iv) of this Paragraph E, by
exercised by the estate of the employee or non-employee Director or by a
person who acquired the right to exercise such Option by bequest or
3
<PAGE>
inheritance or by reason of the death of such employee or non-employee
Director at any time within one (1) year after such death.
(iii) If the holder of Option under the Plan ceases employment because of
permanent or total disability (within the meaning of Section 22 (e) (3) of
the Code) while employed by the Company or a subsidiary corporation of the
Company, then such option may subject to the provisions of subparagraph
(iv) of this paragraph e, be exercised at any time within one year after
his termination of employment due to disability.
(iv) An Option may not be exercised pursuant to this Paragraph E except to
the extent that the holder was entitled to exercise the Option at the time
of termination of employment, termination of Directorship, or death, and in
any event may not be exercised after the expiration of the Option. For
purpose of this Paragraph E, the employment relationship of an employee of
the Company or of a subsidiary corporation of the company will be treated
as continuing intact while he is on military or sick leave or other bona
fide leave of absence (such as temporary employment by the Government) if
such leave does not exceed ninety (90) days, or, if longer, so long as his
right to reemployment is guaranteed either by statute or by contract.
(f) Nontransferability of Options. No option shall be transferable by a
Holder otherwise than by will or the laws of descent and distribution, and
during the lifetime of the Employee to whom an option is granted it may be
exercised only by the employee, his guardian or legal representative if
permitted by Section 422 and related sections of the Code and any
regulations promulgated thereunder.
(g) Listing and Registration. Each option shall be subject to the
requirement that if at any time the Board, or if so designated the
Committee, shall determine, in its discretion, the listing, registration or
qualification of the Stock subject to such option upon any securities
exchange or under any state or federal law, or the consent or approval of
any governmental regulatory body, is necessary or desirable as a condition
of, or in connection with, the granting of such option or the issue or
purchase of shares thereunder, no such option may be exercised in whole or
in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board, or if so designated the Committee.
(h) Option Agreement. Each Employee to whom an option is granted shall
enter into an agreement with the Corporation which shall contain such
provisions, consistent with the provisions of the Plan, as may be
established by the Board, or if so designated the Committee.
(i) Withholding. Prior to the delivery of certificates for shares of Stock,
the Corporation or a subsidiary shall have the right to require a payment
from an Employee to cover any applicable withholding or other employment
taxes due upon the exercise of an option.
4
<PAGE>
6. Stock Appreciation Rights
The Board or Committee may grant stock appreciation rights (SARs) in
connection with all or any part of an option granted under the Plan, either
concurrently with the grant of the option or at any time thereafter, and may
also grant SARs independently of options.
(a) SARs Granted in Connection with an Option. An SAR granted in connection
with an option entitles the optionee to exercise the SAR by surrendering to the
Company, unexercised, the underlying option. The optionee receives in exchange
from the Company an amount equal to the excess of (x) the Fair Market Value on
the date of surrender of the underlying option (y) the exercise price of the
Common Stock covered by the surrendered portion of the option.
When an SAR is exercised, the underlying option, to the extent surrendered,
ceases to be exercisable, and the number of shares available for issuance under
the Plan is reduced correspondingly.
An SAR is exercisable only when and to the extent the underlying option is
exercisable and expires no later than the date on which the underlying option
expires. Notwithstanding the foregoing, neither an SAR nor a related option may
be exercised during the first six (6) months of its respective term: provided,
however, that this limitation will not apply if the optionee dies or is disabled
within such six (6) month period.
(b) Independent SARs. The Board or the Committee may grant SARs without
related options. Such an SAR will entitle the optionee to receive from the
company on exercise of the SAR an amount equal to the excess of (x) the fair
market value of the Common Stock covered by the exercised portion of the SAR, as
of the date of such exercise, over (y) the fair market value of the Common Stock
covered by the exercised portion of the SAR as of the date on which the SAR was
granted.
SARs shall be exercisable in whole or in part at such times as the Board or
the Committee shall specify in the optionee's SAR grant or agreement.
Notwithstanding the foregoing, an SAR may not be exercised during the first six
(6) months of its term: provided, however, that this limitation will not apply
if the optionee dies or is disabled within such six (6) month period.
(c) Payment on Exercise. The Company's obligations arising upon the
exercise of an SAR may be paid in cash or Common Stock, or any combination of
the same, as the Board or the Committee may determine. Shares issued on the
exercise of an SAR are valued at their fair market value as of the date of
exercise.
(d) Limitation on Amount paid on SAR Exercise. The Board or the Committee
may in its discretion impose a limit on the amount to be paid on exercise of an
5
<PAGE>
SAR. In the event such a limit is imposed on an SAR granted in connection with
an option, the limit will not restrict the exercisability of the underlying
option.
(e) Persons Subject to 16(b). An optionee subject to Section 16(b) of the
Securities Exchange Act of 1934, as amended, may only exercise an SAR during the
period beginning on the third and ending on the twelfth business day following
the Company's public release of quarterly or annual summary statements of sales
and earnings and in accordance with all other provisions of Section 16(b).
(f) Non-Transferability of SARs. An SAR is non-transferable by the optionee
other than by will or the laws of descent and distribution, and is exercisable
during the optionee's lifetime only by the optionee, or, in the event of death,
by the optionee's estate or by a person who acquires the right to exercise the
option by bequest or inheritance.
(g) Effect on Shares in Plan. When an SAR is exercised, the aggregate
number of shares of Common Stock available for issuance under the Plan will be
reduced by the number of underlying shares of Common Stock as to which the SAR
is exercised.
7. Adjustment of and Changes in Stock
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of assets,
or any other changes in the corporate structure or shares of the Corporation,
the Board, or if so designated the Committee, shall make such adjustments as it
deems appropriate in the number and kind of shares and SARs authorized by the
Plan, in the number and kind of shares covered by the options granted and in the
exercise price of outstanding options and SARs.
8. Mergers, Sales and Change of Control
In the case of (i) any merger, consolidation or combination of the
Corporation with or into another corporation (other than a merger, consolidation
or combination in which the Corporation is the continuing corporation and which
does not result in its outstanding stock being converted into or exchanged for
different securities, cash or other property, or any combination thereof) or a
sale of all or substantially all of the business or assets of the Corporation or
(ii) a Change in Control (as defined below) of the Corporation, each option or
SAR then outstanding for one year or more shall (unless the Board, or if so
designated the Committee, determines otherwise), receive upon exercise of such
option or SAR an amount equal to the excess of the Fair Market Value on the date
of such exercise of (a) the securities, cash or other property, or combination
thereof, receivable upon such merger, consolidation or combination in respect of
a share of Stock, in the cases covered by clause (i) above, or (b) the final
tender offer price in the case of a tender offer resulting in a Change in
Control or (c) the value of the Stock covered by the option or SAR as determined
by the Board, or if so designated the Committee, in the case of a Change in
Control by reason of any other event, over the exercise price of such option,
multiplied by the number of shares of Stock with respect to which such option or
6
<PAGE>
SAR shall have been exercised provided that in each event the amount payable in
the case of an incentive stock option shall be limited to the maximum
permissible amount necessary to preserve the option incentive stock option
status. Such amount may be payable fully in cash, fully in one or more of the
kind or kinds or property payable in such merger, consolidation or combination,
or partly in cash and partly in one or more such kind or kinds of property, all
in the discretion of the Board or if so designated the Committee.
Any determination by the Board, or if so designated the Committee, made
pursuant to this Section 7 may be made as to all outstanding options and SARs or
only as to certain options and SARs specified by the Board, or if so designated
the Committee and any such determination shall be made (a) in cases covered by
clause (i) above, prior to the occurrence of such event, (b) in the event of a
tender or exchange offer, prior to the purchase of any Stock pursuant thereto by
the offeror and (c) in the case of a Change in Control by reason of any other
event, just prior to or as soon as practicable after such Change in Control.
A "Change in Control" shall be deemed to have occurred if (a) any person,
or any two or more persons acting as a group, and all affiliates of such person
or persons, shall own beneficially 25% or more of the Stock outstanding, or (b)
if following (i) a tender or exchange offer for voting securities of the
Corporation, or (ii) a proxy contest for the election of directors of the
Corporation, the persons who were directors of the Corporation immediately
before the initiation of such event cease to constitute a majority of the Board
of Directors of the Corporation upon the completion of such tender or exchange
offer or proxy contest or within one year after such completion.
9. No Rights of Shareholders
Neither an Employee nor the Employee's legal representative shall be, or
have any of the rights and privileges of, a shareholder of the Corporation in
respect of any shares purchasable upon the exercise of any option, in whole or
in part, unless and until certificates for such shares shall have been issued.
10. Plan Amendments
The plan may be amended by the Board, as it shall deem advisable or to
conform, to any change in any law or regulation applicable thereto; provided,
that the Board may not, without the authorization and approval of shareholders:
(i) increase the aggregate number of shares available for options except as
permitted by Section 7, (ii) change the requirement of Section 5(a) that option
grants be priced at Fair Market value, (iii) extend the maximum period during
which an option may be exercised, or (iv) change the Plan's eligibility
requirements.
7
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11. Term of Plan
The Plan shall become effective upon its approval by the Corporation
shareholders. No options or SARs shall be granted under the Plan after the date
which is ten years after the date on which the Plan was approved by the
Corporation shareholders.
8
AMERICAN BINGO & GAMING CORP.
1995 EMPLOYEE STOCK PURCHASE PLAN
(Pursuant to I.R.C. Section 423)
1. Purpose of this Plan.
This Employee Stock Purchase Plan (the "Plan") is intended to encourage and
assist employees of American Bingo & Gaming Corp. (the"Company"), a Delaware
corporation, and any present or future subsidiaries or affiliates of the Company
to acquire stock ownership in the Company. This Plan is intended to be an
Employee Stock Purchase Plan under Section 423 of the Internal Revenue Code of
1986. This Plan is intended to comply in all material respects and will be
administered in accordance with Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16(b) of the Securities Exchange Act of 1934
(the "Exchange Act").
2. Administration of this Plan.
This Plan shall be administered by the Company's Board of Directors
("Board"), if each member is a "disinterested person" (defined below), or a
committee of two or more directors, each of whom is a "disinterested person"
(the administrative body sometimes hereinafter referred to as the
"Administrators"). For purposes of the prior sentence, a "disinterested person"
is a director who is not, during the one year prior to service as an
administrator of a plan, or during such service, granted or awarded equity
securities or options pursuant to the Plan or any other plan of the Company or
any of its affiliates, except that an election to receive an annual retainer fee
in either cash or an equivalent amount of securities, or partly in cash and
partly in securities, shall not disqualify a director from being a disinterested
person. The Administrators shall have full power and authority to interpret the
provisions and supervise the administration of this Plan.
A majority of the Board or Committee (Administrators) appointed pursuant to
the above paragraph shall constitute a quorum. The Board or Committee shall keep
minutes of its meetings. All decisions and selections made by the Board or
Committee pursuant to the provisions of this Plan shall be made by a majority of
its members. Any decision reduced to writing and signed by all of the members
shall be fully effective as if it had been made by a majority at a meeting duly
held. The Board or Committee shall select one of its members as its chairman and
shall hold its meetings at such times and places as it deems advisable. All
vacancies in the membership of the Committee shall be filled by an appointment
by the Board.
This Plan shall be approved by the shareholders of the Company either by
written consent or by vote at a duly called meeting of shareholders in the
manner provided in the Company's Articles of Incorporation, as amended within
Twelve (12) months of its enactment. In addition to such terms and conditions as
are specified herein with respect to qualification of this Plan under I.R.C.
Section 423, for any eligible employee who is also subject to the provisions of
Section 16(a) and (b) of the Securities Exchange Act of 1934, any grants
hereunder to such employees shall be subject to limitations set forth in Rule
16(b)-3 of the General Rules and Regulations of the Securities and Exchange
Commission, including without limitation, at a minimum, the following: (i) That
<PAGE>
the Option or right to purchase shares shall not be transferable by the
participant other than by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Internal
Revenue Code or Title I of the Employee Retirement Income Security Act, or the
rules thereunder, and (ii) That a period of six (6) months must lapse between
the time of acquisition of the Option or right to purchase by the participant
and the time of disposition of the underlying security.
All Options granted under this Plan shall be clearly identified in the
agreement evidencing such Option as granted under the name of this Plan, and for
purposes of further identification, this Plan shall be designated the "American
Bingo & Gaming Corp. 1996 Employee Stock Purchase Plan".
3. Designation of Participants and Eligibility.
a. Offering Periods. Offerings of Options or purchase rights to eligible
employees shall be made for successive periods of two fiscal quarters each, the
first such Offering Period commencing on the date that this Plan is adopted by
the Board of Directors of the Company and ending on the last day of the fourth
fiscal quarter of fiscal 1996, i.e. December 31, 1996. Each successive Offering
Period shall commence on the first day of the next fiscal quarter and end on the
last day of the following fiscal quarter, i.e. commencing on or about January 1
and July 1 and ending on or about December 31 and June 30 of each fiscal year
(concurrent with the closest payroll period ending on or about the above
reference dates). Offering Periods during the term of this Plan may be changed
from time to time prior to the end of the then current Offering Period, in the
sole discretion of the Administrators.
b. Offerings. During each Offering Period throughout the term of this Plan,
unless the Board of Directors of the Company determines otherwise, the
Administrators shall make an offering under which all Eligible Employees
(defined below) are granted the opportunity to purchase Common Stock of the
Company. Each Eligible Employee may become a participant (defined below) in the
Plan on the first day of each Offering Period.
c. Eligible Employee. All Employees of the Company (as provided in I.R.C.
Section 340(c) and the regulations thereunder) or of any present or future
Affiliated Corporation of the Company, shall be eligible to become participants
in the Plan, except Employees:
I. Who, either at the beginning of an Offering Period is, or who would be
as a result of the exercise of any Option or purchase right granted
under this Plan, directly or indirectly the holder of 5% or more of
the outstanding shares of Common Stock of the Company or any of its
subsidiaries; or
II. Whose customary employment is less than 20 hours per week, and those
employees whose customary employment is for not more than five months
in any calendar year;
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and Except that no Eligible Employee shall be entitled to purchase shares of
stock under the Plan and all other purchase plans of the Company and any
Affiliated Corporation of the Company with an aggregate fair market value
(determined at the date of grant) exceeding $25,000 per year for each calendar
year in which such Option or purchase right is outstanding at any time.
d. Participation in Plan Offerings. Any Eligible Employee shall become a
Participant in the Plan effective as of the first day of the Offering Period
following the day on which the employee completes, signs and returns to the
Company a written election to participate and payroll deduction authorization on
a form to be prescribed by the Administrators. Filing of such Form shall be
deemed to be an election to participate on a continuous basis until terminated
or modified in writing, or until termination of the employee's employment with
the Company or any subsidiary thereof. Failure of an Eligible Employee to
execute and return the required forms within the established time frames set by
the Administrators shall be deemed a waiver of participation. A Participant may
terminate his or her participation in any Offering during the Offering Period
and receive any moneys withheld on his or her behalf for such Offering Period
within 15 days of filing written notification of termination.
Membership of any employee in the Plan is entirely voluntary. Except as
provided in the previous paragraph 3(c), all employees who elect to participate
in the Plan shall have the same rights and privileges. Any employee receiving
shares shall have no rights with respect to continuation of employment, nor with
respect to continuation of any particular Company business, product or policy.
4. Stock Reserved for this Plan.
Subject to adjustment as provided in Section 9 below, a total of Fifty
Thousand (50,000) shares of Common Stock, $.001 par value per share ("Stock"),
of the Company shall be reserved and may be optioned under this Plan. The Stock
subject to this Plan shall consist of unissued shares or previously issued
shares reacquired and held by the Company or any subsidiary, and such amount of
shares shall be and is hereby reserved for sale for such purpose. Any of such
shares which may remain unsold and which are not subject to outstanding Options
at the termination of this shall cease to be reserved for the purpose of this
Plan, but until termination of this Plan, the Company shall at all times reserve
a sufficient number of shares to meet the requirements of this Plan. Should any
Option or purchase right expire or be canceled prior to its exercise in full,
the unexercised shares theretofore subject to such Option or purchase right may
again be subjected to grant under this Plan.
5. Participant's Election and Contributions.
Each Participant shall elect to make contributions by payroll deduction of
between one percent (1%) to ten percent (10%) of his or her gross compensation.
Subject to these limitations, a Participant may elect in writing to increase or
decrease his or her rate of contribution; and such change will become effective
the first day of the Offering Period following receipt by the Administrators of
such written election. The amount of each Participant's contribution (less
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standard deductions, payroll withholding tax, Medicare/Medicaid, worker's
compensation and other Company withholdings) shall be held by the Company and
such contributions, free of any obligation of the Company to pay interest
thereon, shall be credited to such Participant's individual account as of the
last trading day of the month during which the compensation from which the
contribution was deducted was earned. No Participant will be permitted to make
contributions for any period during which he or she is not receiving pay from
the Company or its subsidiaries. The cash proceeds from the sale of Stock on
exercise of any Option or purchase right granted under this Plan are to be added
to the general funds of the Company.
6. Issuance of Shares - Exercise Price.
a. On the last trading day of each Offering Period so long as the Plan shall
remain in effect, and provided the Participant has not before that date advised
the Administrators that he or she does not wish shares purchased for his or her
account on that date, the Company shall apply the funds in the Participant's
account as of that date to the purchase of authorized but unissued shares of its
Common Stock in units of one share or multiples thereof.
b. The Exercise Price or Purchase Price of shares purchased by any Participant
pursuant to grants made in any Offering Period shall be eighty-five percent
(85%) of the lower of the fair market value of the Common Stock on the last
trading day of the Offering Period (the "Date of Exercise"), determined as
follows:
i. The fair market value of the shares on the Date of Grant shall be the
closing bid price of the stock in the over-the-counter-market as
quoted on the National Association of Security Dealers Automatic
Quotation System (NASDAQ), or if its stock is a National Market System
security, the last reported bid price of the stock, or if the stock is
traded on one or more securities exchanges, the average of the closing
bid prices on all such exchanges on the Date of Grant, and
ii. The fair market value of the shares on the Date of Exercise shall be
the closing bid price of the stock in the over-the-counter market as
quoted on the national Association of Security Dealers Automatic
Quotation System (NASDAQ), or if its stock is a National Market System
security, the last reported bid price of the stock, or if the stock is
traded on one or more securities exchanges, the average of the closing
bid prices on all such exchanges on the Date of Exercise.
Any moneys remaining in such Participant's account equaling less than the
sum required to purchase one share, or moneys remaining in such Participant's
account by reason of application of the provisions of this Plan with respect to
Termination, Paragraph 7, below, shall, unless otherwise requested by the
Participant, be held in the Participant's account for use during the next
Offering Period of the Plan. Any moneys remaining in such Participant's account
by reason of his or her prior election not to purchase shares in a given
Offering Period shall be disbursed to the employee within 30 days of the end of
such Offering Period. The Company shall as expeditiously as possible after the
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last day of each Offering Period issue to the member entitled thereto the
certificate evidencing the shares issued to him or her as provided herein.
Notwithstanding anything above to the contrary, (a) if the number of shares
Participants desire to purchase at the end of any Offering Period exceeds the
number of shares then available under the Plan, the shares available shall be
allocated among such members in proportion to their contributions during the
Offering Period (but no fractional shares shall be issued); and (b) no funds in
an employee's account shall be applied to the purchase of shares and no shares
hereunder shall be issued unless such shares are covered by an effective
registration statement under the Securities Act of 1933, as amended, or by an
exemption therefrom.
7. Termination of Participation, Beneficiaries and Transferability.
a. Termination. Any Participant's membership in the Plan will be terminated when
the member (a) voluntarily elects to withdraw his or her entire account, (b)
resigns or is discharged from the Company or its subsidiaries, (c) dies, or (d)
does not receive pay from the Company or any subsidiary for twelve (12)
consecutive months, unless this period is due to illness, injury or for other
reasons approved by the Administrators.
b. Death/Beneficiaries. Each Participant may file a written designation of a
beneficiary who is to receive any shares of Common stock credited to such
Participant's account under the Plan in the event of the death of such
Participant prior to delivery to such Participant of the certificates for such
shares. Such designation may be changed by the Participant at any time by
written notice received by the Company.
Upon the death of a Participant his or her account shall be paid or
distributed to the beneficiary or beneficiaries designated by such member, or in
the absence of such designation, to the executor or administrator of his or her
estate, and in either event the Company shall not be under any further liability
to anyone. If more than one beneficiary is designated, then each beneficiary
shall receive an equal portion of the account unless the member indicates to the
contrary in his or her designation, provided that the Corporation may in its
sole discretion make distributions in such form as will avoid the creation of
fractional shares.
c. Transferability of Rights. No rights of any employee under this Plan shall be
transferable by him or her, by operation of law or otherwise, except to the
extent that a member is permitted to designate a beneficiary or beneficiaries as
above provided, and except to the extent permitted by will or the laws of
descent and distribution if not such beneficiary be designated.
8. Modification and Termination of Plan - Certain Adjustments.
a. Modification and Termination. The Company expects to continue the Plan until
such time as the shares reserved for issuance under the Plan have been sold. The
Board of Directors and/or Administrators may amend, alter or discontinue this
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Plan at any time in such respects as they shall deem advisable, provided,
however that this Plan may not be amended more than once every six months other
than in order to conform to any change in any other applicable law, or in order
to comply with the provisions of any rule or regulation of the Securities and
Exchange Commission required to exempt this Plan or any Options or purchase
rights granted thereunder from the operation of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or in any other respect not inconsistent with
Section 16(b) of such Exchange Act; and further provided, that no amendment or
alteration shall be made which would impair the rights of any participant under
any Option or purchase right theretofore granted, without his consent (unless
made solely to conform such Option to, and necessary because of, changes in the
foregoing laws, rules or regulations), and except that no amendment or
alteration shall be made without the approval of shareholders which would:
i. Increase the total number of shares reserved for the purposes of this
Plan or decrease the Exercise Price provided in Section 6 (except as
provided in Section b), or change the classes of persons eligible to
participate in this Plan as provided in Section 3, or
ii. Materially increase the benefits accruing to participants under this
Plan: or
iii. Materially modify the requirements as to eligibility for participation
in this Plan; or
iv. Extend the expiration date of this Plan as set forth in Section 11.
b. Adjustments on Changes in Capitalization. The existence of this Plan and
Options and rights granted hereunder shall not affect in any way the right or
power of the Company or its shareholders to make or authorize any and all
adjustments, recapitalization, reorganizations or other changes in the Company's
capital structure or its business, or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior preference stocks
ahead of or affecting the Company's Common Stock or the rights thereof, or the
dissolution or liquidation of the Company, or any sale, exchange or transfer of
all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.
i. The shares of Stock with respect to which Options or purchase rights
may be granted hereunder are shares of the Common Stock of the Company
as currently constituted. If, and whenever, prior to delivery by the
Company of all of the shares of the Stock which are subject to Options
or purchase rights granted hereunder, the Company shall effect a
subdivision or consolidation of shares or other capital readjustment,
the payment of a Stock dividend, a stock split, combination of shares
(reverse stock split) or recapitalization or other increase or
reduction of the number of shares of the Common Stock outstanding
without receiving compensation therefore in money, services or
property, then the number of shares of Stock available under this Plan
and the number of shares of Stock with respect to which Options and
purchase rights granted hereunder may thereafter be exercised shall;
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(i) in the event of an increase in the number of outstanding shares,
be proportionately increased, and the cash consideration payable per
share shall be proportionately reduced; and (ii) in the event of a
reduction in the number of outstanding shares, be proportionately
reduced, and the cash consideration payable per share shall be
proportionately increased.
ii. If the Company is reorganized, merged, consolidated or party to a plan
of exchange with another corporation pursuant to which shareholders of
the Company receive any shares of stock or other securities, there
shall be substituted for the shares of Stock subject to the
unexercised portions of outstanding Options or purchase rights an
appropriate number of shares of each class of stock or other
securities which were distributed to the shareholders of the Company
in respect of such shares of Stock in the case of a reorganization,
merger, consolidation or plan of exchange; provided, however, that
this Plan may be terminated and future Options or purchase rights for
subsequent Offering Periods may be canceled by the Company as of the
effective date of a reorganization, merger, consolidation, plan of
exchange, or any dissolution or liquidation of the Company, by giving
notice to each Participant or his personal representative of its
intention to do so and by permitting the purchase of all the shares
subject to such outstanding Options or purchase rights for a period of
not less than thirty (30) days during the sixty (60) days next
preceding such effective date.
iii. Except as expressly provided above, the Company's issuance of shares
of Stock of any class, or securities convertible into shares of Stock
of any class, for cash or property, or for labor or services, either
upon direct sales or upon the exercise of rights or warrants to
subscribe therefor, or upon conversion of shares or obligations of the
Company convertible into shares of Stock or other securities, shall
not affect, and no adjustment by reason thereof shall be made with
respect to, the number of shares of Stock subject to Options or
purchase rights granted hereunder or the purchase price of such
shares.
9. Participation in Other Plans.
Nothing herein contained shall affect an employee's right to participate in
and receive benefits under and in accordance with the then current provisions of
any pension, insurance or other employee welfare plan or program of the Company
or its subsidiaries.
10. Compliance with Securities Laws - Purchase for investment.
Unless the shares of Stock covered by this Plan have been registered under
the Securities Act of 1933, as amended, each Participant exercising an Option or
purchase right under this Plan may be required by the Company to give a
representation in writing that he is acquiring such shares for his own account
for investment and not with a view to, or for sale in connection with, the
distribution or any part thereof. The Company will reserve all rights to confirm
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<PAGE>
through counsel that the stock may be granted and/or transferred without
registration under federal or state securities laws or pursuant to an
appropriate exemption thereto. In the discretion of the Administrators, grant of
an option or issuance of securities on exercise may be deferred beyond the grant
date or exercise date pending confirmation of such compliance with such
securities laws on advise of Company counsel.
The shares of Common Stock to be issued pursuant to the provisions of this
Plan shall have endorsed upon their face the following:
(1) Any legend condition imposed by state securities or Blue-Sky Laws in
which the Company and/or the Employee resides; and
(2) Unless the shares to be issued under this Plan have been registered
under the Securities Act of 1933, the following additional legend
shall be placed on the certificates:
The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The
shares have been acquired for investment and may not be pledged
or hypothecated, and may not be sold or transferred in the
absence of an effective Registration Statement for the shares
under the Securities Act of 1933, as amended or an opinion of
counsel to the Company that registration is not required under
said Act.
11. Effective Date and Expiration of this Plan.
This Plan shall be effective as of July 1, 1995, the date of its adoption
by the Board, subject to approval by the Company's shareholders at their next
Annual or Special Meeting, and no Option or purchase right shall be granted
pursuant to this Plan after its expiration. This Plan shall expire on December
31, 2005 except as to Options then outstanding, which shall remain in effect
until they have expired or been exercised.
12. Government Regulations.
This Plan, and the granting and exercise of Options and/or purchase rights
hereunder, and the obligation of the Company to sell and deliver shares of Stock
under such Options and/or purchase rights, shall be subject to all applicable
laws, rules and regulations, and to such approvals by any governmental agency or
national securities exchanges as may be required.
13. Liability.
No member of the Board of Directors, Committee thereof, the Administrators,
or officers or employees of the Company or any subsidiary shall be personally
liable for any action, omission or determination made in good faith in
connection with this Plan. The Company shall indemnify and hold harmless each
administrator and each other officer, director or employee of the Company to
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<PAGE>
whom any duty or power relating to the administration or interpretation of this
Plan has been delegated against any cost or expense (including counsel fees) or
liability (including any sum paid in settlement of a claim with the approval of
the Administrators) arising out of any action, omission or determination
relating to this Plan, unless, in either case, such action, omission or
determination was taken or made by such member, director or employee in bad
faith and without reasonable belief that it was in the best interests of the
Company.
14. Miscellaneous.
a. The term "Affiliated Corporation" used herein shall mean any Parent or
Subsidiary.
b. The term "Parent" used herein shall mean any corporation owning 50 percent
or more of the total combined voting stock of all classes of the Company or
of another corporation qualifying as a Parent within this definition.
c. The term "Subsidiary" used herein shall mean any corporation more than 50
percent of whose total combined voting stock of all classes is held by the
Company or by another corporation qualifying as a Subsidiary within this
definition.
15. Options in Substitution for Other Options.
The Administrators may, in their sole discretion, at any time during the
term of this Plan, grant new options to any employee under this Plan or any
other stock option of the Company on the condition that such employee shall
surrender for cancellation one or more outstanding options which represent the
right to purchase (after giving effect to any previous partial exercise thereof)
a number of shares, in relation to the number of shares to be covered by the new
conditional grant hereunder, determined by the Administrators. If the
Administrators shall have so determined to grant such new options on such a
conditional basis ("New Conditional Options"), no such New Conditional Option
shall become exercisable in the absence of such employee's consent to the
condition and surrender and cancellation as appropriate. New Conditional Options
shall be treated in all respects under this Plan as newly granted options.
Options may be granted under this Plan from time to time in substitution for
similar rights held by employees of other corporations who are about to become
employees of the Company or an Affiliated Corporation as a result of a merger or
consolidation of the employing corporation with the Company or an Affiliated
Corporation, or the acquisition by the Company or an Affiliated Corporation of
the assets of the employing corporation, or the acquisition by the Company or an
Affiliated Corporation of stock of the employing corporation as the result of
which it becomes an Affiliated Corporation.
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16. Withholding Taxes.
Pursuant to applicable federal and state laws, the Company may be required
to collect withholding taxes upon the exercise of an Option or purchase right.
The Company may require, as a condition to the exercise of a NSO, that the
optionee concurrently pay to the Option or purchase right the entire amount or a
portion of any taxes that the Company is required to withhold by reason of such
exercise, in such amount as the Administrators or the Company in its discretion
may determine. In lieu of part or all of any such payment, the Participant may
elect to have the Company withhold from the shares to be issued upon exercise of
the Option that number of shares having a Fair Market Value equal to the amount
that the Company is required to withhold.
AMERICAN BINGO & GAMING CORP.
By: s\Gregory Wilson
-------------------------------------
Gregory Wilson, President
ATTEST:
By: s\Robert Hersch
-------------------------------------
Robert Hersch, Secretary
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AMERICAN BINGO & GAMING CORP.
1996 EMPLOYEE STOCK PURCHASE PLAN
PARTICIPATION ELECTION FORM
NAME OF EMPLOYEE: ____________________________________
DATE OF FIRST EMPLOYMENT: ___________________________________
ELECTION FOR OFFERING PERIOD COMMENCING _________________________
DECLARATION OF ELECTION: (Check One)
[ ] I DO NOT WISH TO PARTICIPATE IN THE PLAN.
[ ] I WISH TO PARTICIPATE IN THE PLAN. I elect to purchase that number of
shares of common stock of the Company which can be purchased with ________%
(write in 1% to 10%) of my base salary contributed.
[ ] I WISH TO TERMINATE MY CURRENT PARTICIPATION IN THE PLAN, AND STOP MY
PAYROLL DEDUCTIONS.
In order to pay for the shares of common stock of the Company that I have
elected to purchase, I hereby authorize the Company to deduct the percentage of
my base salary that I specified above from my pay each pay period while this
election is in effect.
Date:____________________________ ______________________________
______________________________
(print name)
______________________________
(print address)
______________________________
Return this form to: Received by American Bingo & Gaming Corp.
AMERICAN BINGO & GAMING CORP.
515 Congress Avenue, Suite 1200
Austin, Texas 78701 _______________________, 199__
11
AMERICAN BINGO & GAMING CORP.
1995 EMPLOYEE STOCK OPTION PLAN
1. Purpose
The purpose of the 1995 Employee Stock Option Plan (the "Plan") is to
provide a method whereby selected key employees of American Bingo & Gaming Corp.
(the "Corporation), may have the opportunity to invest in shares of Common Stock
(the "Stock") of the Corporation, thereby giving them a proprietary and vested
interest in the growth and performance of the Corporation, and in general,
generating an increased incentive to contribute to the Corporation's future
success and prosperity, thus enhancing the value of the Corporation for the
benefit of shareholders. Further, the Plan is designed to enhance the
Corporation's ability to attract and retain individuals of exceptional
managerial talent upon whom, in large measure, the sustained progress, growth,
and profitability of the Corporation depends.
2. Administration
The Plan shall be administered by the Corporation's Board of Directors
("the Board") or if so designated by resolution of the Board, by a Committee
composed of not less than three individuals ("Committee"). From time to time the
Board, or if so designated the Committee, may grant stock options ("Options") to
such eligible parties and for such number of shares as it in its sole discretion
may determine. A grant in any year to an eligible Employee, (as defined in
Section 3 below) shall neither guarantee nor preclude a grant to such Employee
in subsequent years. Subject to the provisions of the Plan, the Board, or if so
designated the Committee, shall be authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of the Option Agreements described in Section
5(h) thereof to make all other determinations necessary or advisable for the
administration of the Plan. The Board, or if so designated the Committee, may
correct any defect, supply any omissions or reconcile any inconsistency in the
Plan or in any Option in the manner and to the extent it shall deem desirable.
The determinations of the Board, of if so designated the Committee, in the
administration of the Plan, as described herein, shall be final and conclusive.
The validity, construction, and effect of Plan and any rules and regulations
relating to the Plan shall be determined in accordance with the laws of the
State of Delaware.
3. Eligibility
The employees eligible to participate in the Plan (the "Employees") shall
consist of the Company's current management as well as any additional executive
officers who may be hired by the Company in the future. Nothing in the Plan or
in any agreement thereunder shall confer any right on an Employee to continue in
the employ of the Corporation or shall interfere in any way with the right of
the Corporation or its subsidiaries, as the case may be, to terminate his or her
employment at any time.
<PAGE>
4. Shares Subject to the Plan
Subject to adjustment as provided in Section 7, an aggregate of 500,000
shares of Stock shall be available for issuance under the Plan. The shares of
Stock deliverable upon the exercise of Options may be made available from
authorized but unissued shares or shares reacquired by the Corporation,
including shares purchased in the open market or in private transactions. If any
Option granted under the Plan shall terminate for any reason without having been
exercised or settled in stock or in cash pursuant to related stock appreciation
rights, the shares subject to, but not delivered under, such Option shall be
available for other Options.
5. Grant Term and Conditions of Options
The Board or if so designated the Committee, may from time to time after
consultation with management select employees to whom Options shall be granted.
The Options granted shall be "Incentive Stock Options" within the meaning of
Section 422 of the Internal Revenue Code, as amended (the "Code"), or
nonstatutory stock options whichever the Board, or if so designated the
Committee, shall determine, subject to the following terms and conditions:
(a) Price. The purchase price per share of Stock deliverable upon exercise
of each Incentive Stock Option shall not be less than 100 percent of the
Fair Market Value of the Stock on the date such the Option is granted.
Provided, however, that if an Incentive Stock Option is issued to an
individual who owns, at the time of grant, more than ten percent (10%) of
the total combined voting power of all classes of the Company's Stock, the
Exercise price of such Option shall be at least 110% of the Fair Market
Value of the Stock on the date of grant. The Option price of shares subject
to non-statutory Stock Options shall be determined by the Board of
Directors or Committee, in its absolute discretion at the time of grant of
such Option. For purposes of this plan, Fair Market Value shall be: (i) the
average of the closing Bid and Ask prices for the Stock on the date in
question.
(b) Payment. Options may be exercised only upon payment of the purchase
price thereof in full. Such payment shall be made in such form of
consideration as the Board or Committee determines and may vary for each
Option. Payment may consist of cash, check, notes, delivery of shares of
common stock having a fair market value on the date of surrender equal to
the aggregate exercise price, or any combination of such methods or other
means of payment permitted under the Delaware General Corporation Law.
(c) Term of Options. The term during which each Option may be exercised
shall be determined by the Board, or if so designated the Committee,
provided that (i) a nonstatutory Option shall not be exercisable in whole
or in part more than 10 years from the date it is granted except as
provided in paragraph (e), below, with respect to the death of the
Employee, and (ii) an Incentive Stock Option shall not be exercisable in
whole or in part more than 10 years from the date it is granted. All rights
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to purchase Stock pursuant to an Option shall, unless sooner terminated,
expire at the date designated by the Board or, if so designated the
Committee.
The Board, or if so designated the Committee, shall determine the date
on which each Option shall become exercisable and may provide that an
Option shall become exercisable in installments. The shares comprising each
installment may be purchased in whole or in part at any time after such
installment becomes purchasable, except that the exercise of Incentive
Stock Options shall be further restricted as set forth herein. The Board,
or if so designated the Committee, may in its sole discretion, accelerate
the time at which any Option may be exercised in whole or in part, provided
that no Option shall be exercisable until one year after grant.
(d) Limitations on Grants. For Incentive Stock Options, the aggregate Fair
Market Value (determined at the time the Option is granted) of the stock
with respect to which the Investment Stock Option is exercisable for the
first time by an Optionee during any calendar year (under all plans of the
Company and its parent or any subsidiary of the Corporation) shall not
exceed $100,000. The foregoing limitations shall be modified from time to
time to reflect any changes in Section 422 of the Code and any regulations
promulgated thereunder setting forth such limitations.
(e) Termination of Employment. (i) If the employment of an Employee by the
Company or a subsidiary corporation of the Company shall be terminated
voluntarily by the Employee or for cause by the Company, then his or her
Option shall expire forthwith. Except as provided in subparagraphs (ii) and
(iii) of this Paragraph (e), if such employment shall terminate for any
other reason, then such Option may be exercised at any time within three
(3) months after such termination, subject to the provisions of
subparagraph (iv) of this Paragraph (e). For purposes of this subparagraph,
an employee who leaves the employ of the Company to become an employee of a
subsidiary corporation of the Company or a corporation (or subsidiary or
parent corporation of the corporation) which has assumed the Option of the
Company as a result of a corporate reorganization, etc., shall not be
considered to have terminated his or her employment.
(ii) If the holder of an Option under the Plan dies (a) while employed by,
or while serving as a non-employee Director for, the Company or a
subsidiary corporation of the Company, or (b) within three (3) months after
the termination of his employment or services other than voluntarily by the
Employee, or for cause, then such Option may, subject to the provisions of
subparagraph (iv) of this Paragraph (e), be exercised by the estate of the
Employee or by a person who acquired the right to exercise such Option by
bequest or inheritance or by reason of the death of such Employee at any
time within one (1) year after such death.
(iii) If the holder of the Option under the Plan ceases employment because
of permanent or total disability (within the meaning of Section 22 (e) (3)
of the Code) while employed by the Company or a subsidiary corporation of
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<PAGE>
the Company, then such Option may, subject to the provisions of
subparagraph (iv) of this paragraph (e), be exercised at any time within
one year after his termination of employment due to disability.
(iv) An Option may not be exercised pursuant to this Paragraph (e) 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 expiration of the Option. For purpose of this Paragraph
(e), the employment relationship of an employee of the Company or of a
subsidiary corporation of the company will be treated as continuing intact
while he or she is on military or sick leave or other bona fide leave of
absence (such as temporary employment by the Government) if such leave does
not exceed ninety (90) days, or, if longer, so long as his or her right to
reemployment is guaranteed either by statute or by contract.
(f) Nontransferability of Options. No Option shall be transferable by a
Holder otherwise than by will or the laws of descent and distribution, and
during the lifetime of the Employee to whom an Option is granted, it may be
exercised only by the employee, his guardian or legal representative if
permitted by Section 422 and related sections of the Code and any
regulations promulgated thereunder.
(g) Listing and Registration. Each Option shall be subject to the
requirement that if at any time the Board, or if so designated the
Committee, shall determine, in its discretion, the listing, registration or
qualification of the Stock subject to such Option upon any securities
exchange or under any state or federal law, or the consent or approval of
any governmental regulatory body, is necessary or desirable as a condition
of, or in connection with, the granting of such Option or the issue or
purchase of shares thereunder, no such Option may be exercised in whole or
in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board, or if so designated the Committee.
(h) Option Agreement. Each Employee to whom an Option is granted shall
enter into an agreement with the Corporation which shall contain such
provisions, consistent with the provisions of the Plan, as may be
established by the Board, or if so designated the Committee.
(i) Withholding. Prior to the delivery of certificates for shares of Stock,
the Corporation or a subsidiary shall have the right to require a payment
from an Employee to cover any applicable withholding or other employment
taxes due upon the exercise of an Option.
4
<PAGE>
6. Stock Appreciation Rights
The Board or Committee may grant stock appreciation rights (SARs) in
connection with all or any part of an Option granted under the Plan, either
concurrently with the grant of the Option or at any time thereafter, and may
also grant SARs independently of Options.
(a) SARs Granted in Connection with an Option. An SAR granted in connection
with an Option entitles the Optionee to exercise the SAR by surrendering to the
Company, unexercised, the underlying Option. The Optionee receives in exchange
from the Company an amount equal to the excess of (x) the Fair Market Value on
the date of surrender of the underlying Option over (y) the exercise price of
the Common Stock covered by the surrendered portion of the Option.
When an SAR is exercised, the underlying Option, to the extent surrendered,
ceases to be exercisable, and the number of shares available for issuance under
the Plan is reduced correspondingly.
An SAR is exercisable only when and to the extent the underlying Option is
exercisable and expires no later than the date on which the underlying Option
expires. Notwithstanding the foregoing, neither an SAR nor a related Option may
be exercised during the first six (6) months of its respective term: provided,
however, that this limitation will not apply if the Optionee dies or is disabled
within such six (6) month period.
(b) Independent SARs. The Board or the Committee may grant SARs without
related Options. Such an SAR will entitle the Optionee to receive from the
Company on exercise of the SAR an amount equal to the excess of (x) the fair
market value of the Common Stock covered by the exercised portion of the SAR, as
of the date of such exercise, over (y) the fair market value of the Common Stock
covered by the exercised portion of the SAR as of the date on which the SAR was
granted.
SARs shall be exercisable in whole or in part at such times as the Board or
the Committee shall specify in the Optionee's SAR grant or agreement.
Notwithstanding the foregoing, an SAR may not be exercised during the first six
(6) months of its term: provided, however, that this limitation will not apply
if the Optionee dies or is disabled within such six (6) month period.
(c) Payment on Exercise. The Company's obligations arising upon the
exercise of an SAR may be paid in cash or Common Stock, or any combination of
the same, as the Board or the Committee may determine. Shares issued on the
exercise of an SAR are valued at their fair market value as of the date of
exercise.
(d) Limitation on Amount paid on SAR Exercise. The Board or the Committee
may in its discretion impose a limit on the amount to be paid on exercise of an
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SAR. In the event such a limit is imposed on an SAR granted in connection with
an Option, the limit will not restrict the exercisability of the underlying
Option.
(e) Persons Subject to 16(b). An Optionee subject to Section 16(b) of the
Securities Exchange Act of 1934, as amended, may only exercise an SAR during the
period beginning on the third and ending on the twelfth business day following
the Company's public release of quarterly or annual summary statements of sales
and earnings and in accordance with all other provisions of Section 16(b).
(f) Non-Transferability of SARs. An SAR is non-transferable by the Optionee
other than by will or the laws of descent and distribution, and is exercisable
during the Optionee's lifetime only by the Optionee, or, in the event of death,
by the Optionee's estate or by a person who acquires the right to exercise the
Option by bequest or inheritance.
(g) Effect on Shares in Plan. When an SAR is exercised, the aggregate
number of shares of Common Stock available for issuance under the Plan will be
reduced by the number of underlying shares of Common Stock as to which the SAR
is exercised.
7. Adjustment of and Changes in Stock
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of assets,
or any other changes in the corporate structure or shares of the Corporation,
the Board, or if so designated the Committee, shall make such adjustments as it
deems appropriate in the number and kind of shares and SARs authorized by the
Plan, in the number and kind of shares covered by the Options granted and in the
exercise price of outstanding Options and SARs.
8. Mergers, Sales and Change of Control
In the case of (i) any merger, consolidation or combination of the
Corporation with or into another corporation (other than a merger, consolidation
or combination in which the Corporation is the continuing corporation and which
does not result in its outstanding stock being converted into or exchanged for
different securities, cash or other property, or any combination thereof) or a
sale of all or substantially all of the business or assets of the Corporation or
(ii) a Change in Control (as defined below) of the Corporation, each Option or
SAR then outstanding for one year or more shall (unless the Board, or if so
designated the Committee, determines otherwise), receive upon exercise of such
Option or SAR an amount equal to the excess of the Fair Market Value on the date
of such exercise of (a) the securities, cash or other property, or combination
thereof, receivable upon such merger, consolidation or combination in respect of
a share of Stock, in the cases covered by clause (i) above, or (b) the final
tender offer price in the case of a tender offer resulting in a Change in
Control or (c) the value of the Stock covered by the Option or SAR as determined
by the Board, or if so designated the Committee, in the case of a Change in
Control by reason of any other event, over the exercise price of such Option,
multiplied by the number of shares of Stock with respect to which such Option or
6
<PAGE>
SAR shall have been exercised provided that in each event the amount payable in
the case of an incentive stock Option shall be limited to the maximum
permissible amount necessary to preserve the Option incentive stock Option
status. Such amount may be payable fully in cash, fully in one or more of the
kind or kinds or property payable in such merger, consolidation or combination,
or partly in cash and partly in one or more such kind or kinds of property, all
in the discretion of the Board or if so designated the Committee.
Any determination by the Board, or if so designated the Committee, made
pursuant to this Section 7 may be made as to all outstanding Options and SARs or
only as to certain Options and SARs specified by the Board, or if so designated
the Committee and any such determination shall be made (a) in cases covered by
clause (i) above, prior to the occurrence of such event, (b) in the event of a
tender or exchange offer, prior to the purchase of any Stock pursuant thereto by
the offeror and (c) in the case of a Change in Control by reason of any other
event, just prior to or as soon as practicable after such Change in Control.
A "Change in Control" shall be deemed to have occurred if (a) any person,
or any two or more persons acting as a group, and all affiliates of such person
or persons, shall own beneficially 25% or more of the Stock outstanding, or (b)
if following (i) a tender or exchange offer for voting securities of the
Corporation, or (ii) a proxy contest for the election of directors of the
Corporation, the persons who were directors of the Corporation immediately
before the initiation of such event cease to constitute a majority of the Board
of Directors of the Corporation upon the completion of such tender or exchange
offer or proxy contest or within one year after such completion.
9. No Rights of Shareholders
Neither an Employee nor the Employee's legal representative shall be, or
have any of the rights and privileges of, a shareholder of the Corporation in
respect of any shares purchasable upon the exercise of any Option, in whole or
in part, unless and until certificates for such shares shall have been issued.
10. Plan Amendments
The plan may be amended by the Board, as it shall deem advisable or to
conform, to any change in any law or regulation applicable thereto; provided,
that the Board may not, without the authorization and approval of shareholders:
(i) increase the aggregate number of shares available for Options except as
permitted by Section 7, (ii) change the requirement of Section 5(a) that Option
grants be priced at Fair Market value, (iii) extend the maximum period during
which an Option may be exercised, or (iv) change the Plan's eligibility
requirements.
7
<PAGE>
11. Term of Plan
The Plan shall become effective upon its approval by the Corporation
shareholders. No Options or SARs shall be granted under the Plan after the date
which is ten years after the date on which the Plan was approved by the
Corporation shareholders.
8
AMERICAN BINGO & GAMING CORP.
1996 EMPLOYEE STOCK OPTION PLAN
1. Purpose
The purpose of the 1996 Employee Stock Option Plan (the "Plan") is to
provide a method whereby selected key employees of American Bingo & Gaming Corp.
(the "Corporation), may have the opportunity to invest in shares of Common Stock
(the "Stock") of the Corporation, thereby giving them a proprietary and vested
interest in the growth and performance of the Corporation, and in general,
generating an increased incentive to contribute to the Corporation's future
success and prosperity, thus enhancing the value of the Corporation for the
benefit of shareholders. Further, the Plan is designed to enhance the
Corporation's ability to attract and retain individuals of exceptional
managerial talent upon whom, in large measure, the sustained progress, growth,
and profitability of the Corporation depends.
2. Administration
The Plan shall be administered by the Corporation's Board of Directors
("the Board") or if so designated by resolution of the Board, by a Committee
composed of not less than three individuals ("Committee"). From time to time the
Board, or if so designated the Committee, may grant stock options ("Options") to
such eligible parties and for such number of shares as it in its sole discretion
may determine. A grant in any year to an eligible Employee, (as defined in
Section 3 below) shall neither guarantee nor preclude a grant to such Employee
in subsequent years. Subject to the provisions of the Plan, the Board, or if so
designated the Committee, shall be authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan, to
determine the terms and provisions of the Option Agreements described in Section
5(h) thereof to make all other determinations necessary or advisable for the
administration of the Plan. The Board, or if so designated the Committee, may
correct any defect, supply any omissions or reconcile any inconsistency in the
Plan or in any Option in the manner and to the extent it shall deem desirable.
The determinations of the Board, of if so designated the Committee, in the
administration of the Plan, as described herein, shall be final and conclusive.
The validity, construction, and effect of Plan and any rules and regulations
relating to the Plan shall be determined in accordance with the laws of the
State of Delaware.
3. Eligibility
The employees eligible to participate in the Plan (the "Employees") shall
consist of the Company's current management as well as any additional executive
officers who may be hired by the Company in the future. Nothing in the Plan or
in any agreement thereunder shall confer any right on an Employee to continue in
the employ of the Corporation or shall interfere in any way with the right of
the Corporation or its subsidiaries, as the case may be, to terminate his or her
employment at any time.
<PAGE>
4. Shares Subject to the Plan
Subject to adjustment as provided in Section 7, an aggregate of 500,000
shares of Stock shall be available for issuance under the Plan. The shares of
Stock deliverable upon the exercise of Options may be made available from
authorized but unissued shares or shares reacquired by the Corporation,
including shares purchased in the open market or in private transactions. If any
Option granted under the Plan shall terminate for any reason without having been
exercised or settled in stock or in cash pursuant to related stock appreciation
rights, the shares subject to, but not delivered under, such Option shall be
available for other Options.
5. Grant Term and Conditions of Options
The Board or if so designated the Committee, may from time to time after
consultation with management select employees to whom Options shall be granted.
The Options granted shall be "Incentive Stock Options" within the meaning of
Section 422 of the Internal Revenue Code, as amended (the "Code"), or
nonstatutory stock options whichever the Board, or if so designated the
Committee, shall determine, subject to the following terms and conditions:
(a) Price. The purchase price per share of Stock deliverable upon exercise
of each Incentive Stock Option shall not be less than 100 percent of the
Fair Market Value of the Stock on the date such the Option is granted.
Provided, however, that if an Incentive Stock Option is issued to an
individual who owns, at the time of grant, more than ten percent (10%) of
the total combined voting power of all classes of the Company's Stock, the
Exercise price of such Option shall be at least 110% of the Fair Market
Value of the Stock on the date of grant. The Option price of shares subject
to non-statutory Stock Options shall be determined by the Board of
Directors or Committee, in its absolute discretion at the time of grant of
such Option. For purposes of this plan, Fair Market Value shall be: (i) the
average of the closing Bid and Ask prices for the Stock on the date in
question.
(b) Payment. Options may be exercised only upon payment of the purchase
price thereof in full. Such payment shall be made in such form of
consideration as the Board or Committee determines and may vary for each
Option. Payment may consist of cash, check, notes, delivery of shares of
common stock having a fair market value on the date of surrender equal to
the aggregate exercise price, or any combination of such methods or other
means of payment permitted under the Delaware General Corporation Law.
(c) Term of Options. The term during which each Option may be exercised
shall be determined by the Board, or if so designated the Committee,
provided that (i) a nonstatutory Option shall not be exercisable in whole
or in part more than 10 years from the date it is granted except as
provided in paragraph (e), below, with respect to the death of the
Employee, and (ii) an Incentive Stock Option shall not be exercisable in
whole or in part more than 10 years from the date it is granted. All rights
2
<PAGE>
to purchase Stock pursuant to an Option shall, unless sooner terminated,
expire at the date designated by the Board or, if so designated the
Committee.
The Board, or if so designated the Committee, shall determine the date
on which each Option shall become exercisable and may provide that an
Option shall become exercisable in installments. The shares comprising each
installment may be purchased in whole or in part at any time after such
installment becomes purchasable, except that the exercise of Incentive
Stock Options shall be further restricted as set forth herein. The Board,
or if so designated the Committee, may in its sole discretion, accelerate
the time at which any Option may be exercised in whole or in part, provided
that no Option shall be exercisable until one year after grant.
(d) Limitations on Grants. For Incentive Stock Options, the aggregate Fair
Market Value (determined at the time the Option is granted) of the stock
with respect to which the Investment Stock Option is exercisable for the
first time by an Optionee during any calendar year (under all plans of the
Company and its parent or any subsidiary of the Corporation) shall not
exceed $100,000. The foregoing limitations shall be modified from time to
time to reflect any changes in Section 422 of the Code and any regulations
promulgated thereunder setting forth such limitations.
(e) Termination of Employment. (i) If the employment of an Employee by the
Company or a subsidiary corporation of the Company shall be terminated
voluntarily by the Employee or for cause by the Company, then his or her
Option shall expire forthwith. Except as provided in subparagraphs (ii) and
(iii) of this Paragraph (e), if such employment shall terminate for any
other reason, then such Option may be exercised at any time within three
(3) months after such termination, subject to the provisions of
subparagraph (iv) of this Paragraph (e). For purposes of this subparagraph,
an employee who leaves the employ of the Company to become an employee of a
subsidiary corporation of the Company or a corporation (or subsidiary or
parent corporation of the corporation) which has assumed the Option of the
Company as a result of a corporate reorganization, etc., shall not be
considered to have terminated his or her employment.
(ii) If the holder of an Option under the Plan dies (a) while employed by,
or while serving as a non-employee Director for, the Company or a
subsidiary corporation of the Company, or (b) within three (3) months after
the termination of his employment or services other than voluntarily by the
Employee, or for cause, then such Option may, subject to the provisions of
subparagraph (iv) of this Paragraph (e), be exercised by the estate of the
Employee or by a person who acquired the right to exercise such Option by
bequest or inheritance or by reason of the death of such Employee at any
time within one (1) year after such death.
(iii) If the holder of the Option under the Plan ceases employment because
of permanent or total disability (within the meaning of Section 22 (e) (3)
3
<PAGE>
of the Code) while employedby the Company or a subsidiary corporation of
the Company, then such Option may, subject to the provisions of
subparagraph (iv) of this paragraph (e), be exercised at any time within
one year after his termination of employment due to disability.
(iv) An Option may not be exercised pursuant to this Paragraph (e) 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 expiration of the Option. For purpose of this Paragraph
(e), the employment relationship of an employee of the Company or of a
subsidiary corporation of the company will be treated as continuing intact
while he or she is on military or sick leave or other bona fide leave of
absence (such as temporary employment by the Government) if such leave does
not exceed ninety (90) days, or, if longer, so long as his or her right to
reemployment is guaranteed either by statute or by contract.
(f) Nontransferability of Options. No Option shall be transferable by a
Holder otherwise than by will or the laws of descent and distribution, and
during the lifetime of the Employee to whom an Option is granted, it may be
exercised only by the employee, his guardian or legal representative if
permitted by Section 422 and related sections of the Code and any
regulations promulgated thereunder.
(g) Listing and Registration. Each Option shall be subject to the
requirement that if at any time the Board, or if so designated the
Committee, shall determine, in its discretion, the listing, registration or
qualification of the Stock subject to such Option upon any securities
exchange or under any state or federal law, or the consent or approval of
any governmental regulatory body, is necessary or desirable as a condition
of, or in connection with, the granting of such Option or the issue or
purchase of shares thereunder, no such Option may be exercised in whole or
in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Board, or if so designated the Committee.
(h) Option Agreement. Each Employee to whom an Option is granted shall
enter into an agreement with the Corporation which shall contain such
provisions, consistent with the provisions of the Plan, as may be
established by the Board, or if so designated the Committee.
(i) Withholding. Prior to the delivery of certificates for shares of Stock,
the Corporation or a subsidiary shall have the right to require a payment
from an Employee to cover any applicable withholding or other employment
taxes due upon the exercise of an Option.
4
<PAGE>
6. Stock Appreciation Rights
The Board or Committee may grant stock appreciation rights (SARs) in
connection with all or any part of an Option granted under the Plan, either
concurrently with the grant of the Option or at any time thereafter, and may
also grant SARs independently of Options.
(a) SARs Granted in Connection with an Option. An SAR granted in connection
with an Option entitles the Optionee to exercise the SAR by surrendering to the
Company, unexercised, the underlying Option. The Optionee receives in exchange
from the Company an amount equal to the excess of (x) the Fair Market Value on
the date of surrender of the underlying Option over (y) the exercise price of
the Common Stock covered by the surrendered portion of the Option.
When an SAR is exercised, the underlying Option, to the extent surrendered,
ceases to be exercisable, and the number of shares available for issuance under
the Plan is reduced correspondingly.
An SAR is exercisable only when and to the extent the underlying Option is
exercisable and expires no later than the date on which the underlying Option
expires. Notwithstanding the foregoing, neither an SAR nor a related Option may
be exercised during the first six (6) months of its respective term: provided,
however, that this limitation will not apply if the Optionee dies or is disabled
within such six (6) month period.
(b) Independent SARs. The Board or the Committee may grant SARs without
related Options. Such an SAR will entitle the Optionee to receive from the
Company on exercise of the SAR an amount equal to the excess of (x) the fair
market value of the Common Stock covered by the exercised portion of the SAR, as
of the date of such exercise, over (y) the fair market value of the Common Stock
covered by the exercised portion of the SAR as of the date on which the SAR was
granted.
SARs shall be exercisable in whole or in part at such times as the Board or
the Committee shall specify in the Optionee's SAR grant or agreement.
Notwithstanding the foregoing, an SAR may not be exercised during the first six
(6) months of its term: provided, however, that this limitation will not apply
if the Optionee dies or is disabled within such six (6) month period.
(c) Payment on Exercise. The Company's obligations arising upon the
exercise of an SAR may be paid in cash or Common Stock, or any combination of
the same, as the Board or the Committee may determine. Shares issued on the
exercise of an SAR are valued at their fair market value as of the date of
exercise.
(d) Limitation on Amount paid on SAR Exercise. The Board or the Committee
may in its discretion impose a limit on the amount to be paid on exercise of an
5
<PAGE>
SAR. In the event such a limit is imposed on an SAR granted in connection with
an Option, the limit will not restrict the exercisability of the underlying
Option.
(e) Persons Subject to 16(b). An Optionee subject to Section 16(b) of the
Securities Exchange Act of 1934, as amended, may only exercise an SAR during the
period beginning on the third and ending on the twelfth business day following
the Company's public release of quarterly or annual summary statements of sales
and earnings and in accordance with all other provisions of Section 16(b).
(f) Non-Transferability of SARs. An SAR is non-transferable by the Optionee
other than by will or the laws of descent and distribution, and is exercisable
during the Optionee's lifetime only by the Optionee, or, in the event of death,
by the Optionee's estate or by a person who acquires the right to exercise the
Option by bequest or inheritance.
(g) Effect on Shares in Plan. When an SAR is exercised, the aggregate
number of shares of Common Stock available for issuance under the Plan will be
reduced by the number of underlying shares of Common Stock as to which the SAR
is exercised.
7. Adjustment of and Changes in Stock
In the event of a reorganization, recapitalization, stock split, stock
dividend, combination of shares, merger, consolidation, distribution of assets,
or any other changes in the corporate structure or shares of the Corporation,
the Board, or if so designated the Committee, shall make such adjustments as it
deems appropriate in the number and kind of shares and SARs authorized by the
Plan, in the number and kind of shares covered by the Options granted and in the
exercise price of outstanding Options and SARs.
8. Mergers, Sales and Change of Control
In the case of (i) any merger, consolidation or combination of the
Corporation with or into another corporation (other than a merger, consolidation
or combination in which the Corporation is the continuing corporation and which
does not result in its outstanding stock being converted into or exchanged for
different securities, cash or other property, or any combination thereof) or a
sale of all or substantially all of the business or assets of the Corporation or
(ii) a Change in Control (as defined below) of the Corporation, each Option or
SAR then outstanding for one year or more shall (unless the Board, or if so
designated the Committee, determines otherwise), receive upon exercise of such
Option or SAR an amount equal to the excess of the Fair Market Value on the date
of such exercise of (a) the securities, cash or other property, or combination
thereof, receivable upon such merger, consolidation or combination in respect of
a share of Stock, in the cases covered by clause (i) above, or (b) the final
tender offer price in the case of a tender offer resulting in a Change in
Control or (c) the value of the Stock covered by the Option or SAR as determined
by the Board, or if so designated the Committee, in the case of a Change in
Control by reason of any other event, over the exercise price of such Option,
multiplied by the number of shares of Stock with respect to which such Option or
6
<PAGE>
SAR shall have been exercised provided that in each event the amount payable in
the case of an incentive stock Option shall be limited to the maximum
permissible amount necessary to preserve the Option incentive stock Option
status. Such amount may be payable fully in cash, fully in one or more of the
kind or kinds or property payable in such merger, consolidation or combination,
or partly in cash and partly in one or more such kind or kinds of property, all
in the discretion of the Board or if so designated the Committee.
Any determination by the Board, or if so designated the Committee, made
pursuant to this Section 7 may be made as to all outstanding Options and SARs or
only as to certain Options and SARs specified by the Board, or if so designated
the Committee and any such determination shall be made (a) in cases covered by
clause (i) above, prior to the occurrence of such event, (b) in the event of a
tender or exchange offer, prior to the purchase of any Stock pursuant thereto by
the offeror and (c) in the case of a Change in Control by reason of any other
event, just prior to or as soon as practicable after such Change in Control.
A "Change in Control" shall be deemed to have occurred if (a) any person,
or any two or more persons acting as a group, and all affiliates of such person
or persons, shall own beneficially 25% or more of the Stock outstanding, or (b)
if following (i) a tender or exchange offer for voting securities of the
Corporation, or (ii) a proxy contest for the election of directors of the
Corporation, the persons who were directors of the Corporation immediately
before the initiation of such event cease to constitute a majority of the Board
of Directors of the Corporation upon the completion of such tender or exchange
offer or proxy contest or within one year after such completion.
9. No Rights of Shareholders
Neither an Employee nor the Employee's legal representative shall be, or
have any of the rights and privileges of, a shareholder of the Corporation in
respect of any shares purchasable upon the exercise of any Option, in whole or
in part, unless and until certificates for such shares shall have been issued.
10. Plan Amendments
The plan may be amended by the Board, as it shall deem advisable or to
conform, to any change in any law or regulation applicable thereto; provided,
that the Board may not, without the authorization and approval of shareholders:
(i) increase the aggregate number of shares available for Options except as
permitted by Section 7, (ii) change the requirement of Section 5(a) that Option
grants be priced at Fair Market value, (iii) extend the maximum period during
which an Option may be exercised, or (iv) change the Plan's eligibility
requirements.
7
<PAGE>
11. Term of Plan
The Plan shall become effective upon its approval by the Corporation
shareholders. No Options or SARs shall be granted under the Plan after the date
which is ten years after the date on which the Plan was approved by the
Corporation shareholders.
8
[LETTERHEAD OF SILVERMAN, COLLURA & CHERNIS, P.C.]
August 7, 1996
American Bingo & Gaming Corp.
515 Congress Avenue, Suite 1500
Austin, Texas 78701
Re: Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to American Bingo & Gaming Corp. (the "Company"),
a Delaware corporation, pursuant to a Registration Statement on Form S-8, as
filed with the Securities and Exchange Commission on August 9, 1996 (the
"Registration Statement"), covering an aggregate of 1,300,000 shares of the
Company's Common Stock, $.001 par value (the "Common Stock") representing (i)
500,000 shares of Common Stock issuable pursuant to the Company's 1996 Employee
Stock Option Plan; (ii) 500,000 shares of Common Stock issuable pursuant to the
Company's 1995 Employee Stock Option Plan; (iii) 50,000 shares of Common Stock
issuable pursuant to the Company's 1995 Employee Stock Purchase Plan; and (iv)
250,000 shares of Common Stock issuable pursuant to the Company's Amended Stock
Option Plan (1994).
In acting as counsel for the Company and arriving at the opinions as
expressed below, we have examined and relied upon originals or copies, certified
or otherwise identified to our satisfaction, of such records of the Company,
agreements and other instruments, certificates of officers and representatives
of the Company, certificates of public officials and other documents as we have
deemed necessary or appropriate as a basis for the opinions expressed herein.
In connection with our examination we have assumed the genuineness of all
signatures, the authenticity of all documents tendered to us as originals, the
legal capacity of natural persons and the conformity to original documents of
all documents submitted to us as certified or photostated copies.
Based on the foregoing, and subject to the qualifications and limitations
set forth herein, it is our opinion that:
<PAGE>
American Bingo &
Gaming Corp.
Augu8st 7, 1996
Page 2
1. The Company has authority to issue the Common Stock in the manner and
under the terms set forth in the Registration Statement.
2. The Common Stock has been duly authorized and when issued, delivered and
paid for by recipients in accordance with their respective terms, will be
validly issued, fully paid and non-assessable.
We express no opinion with respect to the laws other than those of the
State of New York and Federal Laws of the United States of America, and we
assume no responsibility as to the applicability or the effect of the laws of
any other jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and its use as part of the Registration Statement.
We are furnishing this opinion to the Company solely for its benefit in
connection with the Registration Statement. It is not to be used, circulated,
quoted or otherwise referred to for any other purpose. Other than the Company no
one is entitled to rely on this opinion.
Very truly yours,
SILVERMAN, COLLURA & CHERNIS, P.C.
s\Silverman, Collura & Chernis, P.C.
------------------------------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
American Bingo & Gaming Corp. on Form S-8 of our report dated February 18, 1996
(except for Notes 11(b) and 14 as to which the dates are March 20, 1996 and
March 29, 1996, respectively) on our audits of the consolidated financial
statements of American Bingo & Gaming Corp. and Subsidiaries as of December 31,
1995 and for the years ended December 31, 1995 and 1994, which report is
included in the Company's Annual Report on Form 10-K filed with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934. We also
consent to the reference to our firm under the caption "Experts".
/s/ Weinick, Sanders & Co. LLP
Weinick, Sanders & Co. LLP
New York, NY
August 7, 1996
