Exhibit 4.5.1
OPTION AGREEMENT
OPTION AGREEMENT made effective as of the July 9, 1992, between Grand
Casinos, Inc., a Minnesota corporation (the "Company"), and ▇▇▇▇ ▇. Sell
("Director").
BACKGROUND
A. Director has been elected to serve as a member of the Board of
Directors of the Company.
B. The Company desires to reward Director for his service to the
Company.
NOW, THEREFORE, the parties hereto agree as follows:
1. GRANT OF OPTION. The Company hereby irrevocably grants to Director
the right and option (the "Option"), to purchase all or any part of an
aggregate of Twenty Thousand (20,000) shares of the common stock, $.0l par
value, of the Company (the "Common Stock") (such number being subject to
adjustment as provided in Section 8 hereof) subject to the terms and
conditions herein set forth.
2. PURCHASE PRICE. The purchase price of the shares of Common Stock
covered by the Option shall be $11.875 per Share.
3. EXERCISE AND VESTING OF OPTION. Subject to the provisions of
Section 9 of this Agreement, the Option shall be exercisable only to the
extent that all, or any portion thereof, has vested in the Director. The
Option shall vest in the Director in Five (5) equal installments of Four
Thousand (4,000) shares each beginning on the first anniversary of this
Agreement and continuing on each of the next four subsequent anniversary
dates (hereinafter referred to singularly as a "Vesting Date" and
collectively as "Vesting Dates") until the Option is fully vested.
In the event that the Director ceases to be a director of the Company,
for any reason or no reason with or without cause, prior to any Vesting Date,
that part of the Option scheduled to vest on such Vesting Date, and all parts
of the Option scheduled to vest in the future, shall not vest and all of
Director's rights to and under such non-vested parts of the Option shall
terminate.
4. TERM OF OPTION. To the extent vested, and except as otherwise
provided in this Agreement, the Option shall be exercisable for ten (10)
years from the date of this Agreement; provided, however, that in the event
that Director ceases to be a director of the Company, for any reason or no
reason, with or without cause, Director or his legal representative shall
have six (6) months from the date of such termination of his position as a
director to exercise any part of the Option vested pursuant to Sections 3 or
4 of this Agreement. Upon the expiration of such six (6) month period, or,
if earlier, upon the expiration date of the option as set forth above, the
Option shall terminate and become null and void.
1
5. MANNER OF EXERCISE. The Option may be exercised, in whole or in
part, by giving written notice to the Company, specifying the number of
shares of Common Stock to be purchased and accompanied by the full purchase
price for such share. The purchase price shall be payable in United States
dollars upon exercise of the Option and may be paid by cash; uncertified or
certified check; bank draft; by delivery of shares of Common Stock in payment
of all or any part of the purchase price, which shares shall be valued for
this purpose at the Fair Market Value on the date such option is exercised;
by instructing the Company to withhold from the shares of Common Stock
issuable upon exercise of the Option, shares of Common Stock, in payment of
all or any part of the purchase price, which shares shall be valued for this
purpose at their then Fair Market Value or in such other manner as may be
authorized from time to time by the Company.
6. RIGHTS OF OPTION HOLDER. Director, as holder of the Option, shall
not have any of the rights of a shareholder with respect to the shares
covered by the Option except to the extent that one or more certificates for
such shares shall be delivered to him upon the due exercise of all or any
part of the Option.
7. NON-TRANSFERABILITY. The Option shall not be transferable
otherwise than by will or the laws of descent and distribution, and the
Option may be exercised, during the lifetime of Director, only by Director.
More particularly (but without limiting the generality of the foregoing), the
Option may not be assigned, transferred except as provided above), pledged,
or hypothecated in any way, shall not be assignable by operation of law, and
shall not be subject to execution, attachment, or similar process. Any
attempted assignment, transfer, pledge, hypothecation, or other disposition
of the Option contrary to the provisions hereof, and the levy of any
execution, attachment, or similar process upon the Option shall be null and
void and without effect.
8. ADJUSTMENT. In the event of any merger, consolidation or
reorganization of the Company with any other corporation or corporations,
there shall be substituted for each of the shares of Common Stock then
subject to the Option, the number and kind of shares of stock or other
securities to which the holders of the shares of Common Stock will be
entitled pursuant to the transaction. In the event of any recapitalization,
stock dividend, stock split, combination of shares or other change in the
Common Stock, the number of shares of Common Stock then subject to the
Option, shall be adjusted in proportion to the change in outstanding shares
of Common Stock. In the event of any such adjustments, the purchase price of
the Option and the shares of Common Stock issuable pursuant thereto shall be
adjusted as and to the extent appropriate, in the discretion of the Board of
Directors of the Company, to provide Director with the same relative rights
before and after such adjustment.
9. IMMEDIATE ACCELERATION OF THE OPTION. Notwithstanding any
provision in this Agreement to the contrary, all of the shares of Common
Stock subject to the Option will become exercisable immediately, if,
subsequent to the date that this Agreement is approved by the Board of
Directors of the Company, any of the following events occur unless otherwise
determined by the Board of Directors and a majority of the Continuing
Directors (as defined below):
2
(a) any person or group of persons becomes the beneficial owner of
25% or more of any equity security of the Company entitled to vote for the
election of directors;
(b) a majority of the members of the Board of Directors of the
Company is replaced within the period of less than two years by directors not
nominated and approved by the Board of Directors; or
(c) the stockholders of the Company approve an agreement to merge
or consolidate with or into another corporation or an agreement to sell or
otherwise dispose of all or substantially all of the Company's assets
(including a plan of liquidation).
For purposes of this Section 9, beneficial ownership by a person or
group of persons shall be determined in accordance with Regulation 13D (or
any similar successor regulation) promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 (the "1934 Act").
Beneficial ownership of more than 25% of an equity security may be
established by any reasonable method, but shall be presumed conclusively as
to any person who files a Schedule 13D report with the Securities and
Exchange Commission reporting such ownership. If the restrictions and
forfeitability periods are eliminated by reason of subsection 9(a), the
limitations of this Agreement shall not become applicable again should the
person cease to own 25% or more of any equity security of the Company.
For purposes of this Section 9, "Continuing Directors" are directors who
were (1) in office prior to the time any of the provisions of subsections
9(a), (b) or (c) occurred or any person publicly announced an intention to
acquire 20% or more of any equity security of the Company, (2) in office for
a period of more than two years, and (3) nominated and approved by the
Continuing Directors.
10. ADDITIONAL CONDITION. Notwithstanding anything in this Agreement
to the contrary: (a) the Company may, if it shall determine it necessary or
desirable for any reason, at the time of the issuance of any shares of Common
Stock pursuant to the Option require the Director, as a condition to the
receipt of shares of Common Stock issued pursuant thereto, to deliver to the
Company a written representation of present intention to acquire the shares
of Common Stock issued pursuant thereto for his own account for investment
and not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration or
qualification (or any updating of any such document) of the shares of Common
Stock issuable pursuant thereto is necessary on any securities exchange or
under any federal or state securities or blue sky law, or that the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with the issuance of shares of Common Stock
pursuant thereto, or the removal of any restrictions imposed on such shares,
such shares of Common Stock shall not be issued or such restrictions shall
not be removed, as the case may be, 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 Company.
3
11. WITHHOLDING.
(a) The Company shall have the right to withhold from any payments
made under this Agreement, or to collect as a condition of payment, any taxes
required by law to be withheld. At any time when Director is required to pay
to the Company an amount required to be withheld under applicable income tax
laws in connection with a distribution of Common Stock or upon exercise of an
option, Director may satisfy this obligation in whole or in part by electing
(the "Election") to have the Company withhold from the distribution shares of
Common Stock having a value up to the amount required to be withheld. The
value of the shares to be withheld shall be based on the Fair Market Value of
the Common Stock on the date that the amount of tax to be withheld shall be
determined ("Tax Date").
(b) Each Election must be made prior to the Tax Date. The Company
may disapprove of any Election or may suspend or terminate the right to make
Elections. An Election is irrevocable.
(c) An Election must comply with all of the requirements of the
1934 Act.
12. DEFINITION OF FAIR MARKET VALUE. Whenever "Fair Market Value" of
Common Stock shall be determined for purposes of this Agreement, it shall be
determined by reference to the last sale price of a share of Common Stock on
the principal United States Securities Exchange registered under the 1934 Act
on which the Common Stock is listed (the "Exchange"), or on the National
Association of Securities Dealers, Inc. Automatic Quotation System (including
the National Market System) ("NASDAQ") on the applicable date. If the
Exchange or NASDAQ is closed for trading on such date, or if the Common Stock
does not trade on such date, then the last sale price used shall be the one
on the date the Common Stock last traded on the Exchange or NASDAQ.
13. GENERAL. The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as
will be sufficient to satisfy the requirements of this Option Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
GRAND CASINOS, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Chief Executive Officer
/s/ ▇▇▇▇ ▇. Sell
-------------------------------
▇▇▇▇ ▇. Sell
4