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Exhibit 10(g), the text of which was not contained in the Form 10-K filed on
March 31, 1998 is set out herein:
EXHIBIT 10(G)
INTERNATIONAL LOTTERY & TOTALIZATOR SYSTEMS, INC.
1997 DIRECTORS' STOCK OPTION PLAN
1. Purpose of the Plan. Under this 1997 Directors' Stock Option Plan (the
"Plan") of International Lottery & Totalizator Systems, Inc. (the "Company"),
options shall be granted to directors who are not employees of the Company to
purchase shares of the Company's capital stock. The Plan is designed to enable
the Company to attract and retain outside directors of the highest caliber and
experience.
2. Stock Subject to Plan. The maximum number of shares of stock for which
options granted hereunder may be exercised shall be 400,000 of the Company's
Common shares, no par value per share, subject to the adjustments provided in
Section 6. Shares of stock subject to the unexercised portions of any options
granted under this Plan which expire or terminate or are cancelled may again be
subject to options under the Plan.
3. Participating Directors. The directors of the Company who shall
participate in this Plan are those directors who are not, as of the applicable
"date of grant" (as defined below), employees of the Company or any of its
subsidiaries.
4. Grant of Options. Each participating director shall be granted the
following options the date of each of which being a "date of grant":
(a) an option to purchase 10,000 Common shares (subject to the
adjustments provided in Section 6) on September 25, 1997;
(b) an option to purchase 10,000 Common shares (subject to the
adjustments provided in Section 6) on September 25, 1998;
(c) an option to purchase 10,000 Common shares (subject to the
adjustments provided in Section 6) on September 25, 1999;
(d) an option to purchase 10,000 Common shares (subject to the
adjustments provided in Section 6) on September 25, 2000;
In addition, the Board of Directors may grant participating directors one or
more additional options from time to time in its discretion.
Notwithstanding any other provision of this Plan, no option hereunder shall
be granted unless sufficient shares (subject to said adjustments) are then
available therefor under Section 2 and 7. In consideration of the granting of
the options, the option holder shall be deemed to have agreed to remain as a
director of the Company for a period of at least one year after each date of
grant. Nothing in this Plan shall, however, confer upon any option holder any
right to continue as a director of the Company or shall interfere with or
restrict in any way the rights of the Company or the Company's shareholders,
which are hereby expressly reserved, to remove any option holder at any time for
any reason whatsoever, with or without cause, to the extent permitted by the
Company's bylaws and applicable law.
5. Option Provisions. Each option granted under the Plan shall contain the
following terms and provisions:
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(a) The exercise price of each option shall be equal to the
aggregate fair market value of the Common shares optioned on the
date of grant of such option. For this purpose, such fair market
value means the closing price of shares of the same class on the
day in question (or, if such day is not a trading day in the U.S.
securities markets or if no sales of shares of that class were
made on such day, on the nearest preceding trading day on which
sales of shares of that class were made), as reported with
respect to the market (or the composite of the markets, if more
than one) in which such shares are then traded; or if no such
closing prices are reported the lowest independent offer
quotation reported for such day in Level 2 of NASDAQ, or if no
such quotations are reported it means the value established by
what the Board of Directors of the Company in its judgment then
deems to be the most nearly comparable valuation method.
(b) Payment for shares purchased upon any exercise of the option
shall be made in full in cash concurrently with such exercise.
(c) The option shall become exercisable in installments as
follows: It may be exercised as to up to but no more than 50% of
the total number of shares optioned on and after the first
anniversary of the date of grant; and up to 100% of the total
number of shares optioned on and after the second anniversary of
the date of grant; in each case to the nearest whole share.
(d) When the option holder ceases to be a director of the
Company, whether because of death, resignation, removal,
expiration of his or her term of office or any other reason, the
option shall terminate ninety (90) days after the date such
option holder ceases to be a director of the Company and may
thereafter no longer be exercised; except that (i) upon the
option holder's death his or her legal representative(s) or the
person(s) entitled to do so under the option holder's last will
and testament or under applicable intestate laws shall have the
right to exercise the option within one year after the date of
death (but not after the expiration date of the option), but only
for the number of shares as to which the option holder was
entitled to exercise the option on the date of his or her death
and (ii) upon the option holder's ceasing to be a director by
reason of disability he or she (or his or her guardian) shall
have the right to exercise the option within one year after the
date of the option holder ceased to be a director (but not after
the expiration date of the option), but only for the number of
shares as to which the option holder was entitled to exercise the
option on the date of his or her ceasing to be a director.
(e) Notwithstanding any other provision herein, such option may
not be exercised prior to approval of this Plan by the Company's
shareholders having a majority of voting power of the outstanding
Common shares represented at a duly held meeting at which a
quorum is present, nor prior to the admission of the shares
issuable on exercise of the option to listing on notice of
issuance on any stock exchange on which shares of the same class
are then listed; nor unless and until, in the opinion of counsel
for the Company, such securities may be issued and delivered
without causing the Company to be in violation of or incur any
liability under any federal, state or other securities law, any
requirement of any securities exchange listing agreement to which
the Company may be a party, or any other requirement of law or of
any regulatory body having jurisdiction over the Company.
6. Adjustments. If the Company's outstanding Common shares are increased or
decreased, or are changed into or exchanged for a different number or kind of
shares or securities of the Company, as a result of one or more reorganizations,
recapitalizations, stock splits, reverse stock splits, stock dividends or the
like, appropriate adjustments shall be made in the number and/or kind of shares
or securities as to which options may thereafter be granted under this Plan and
for which options then outstanding under this Plan may thereafter be exercised.
Any such adjustment in outstanding options shall be made
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without change in the aggregate purchase price applicable to the unexercised
portion of such options, but with a corresponding adjustment in the purchase
price for each share or other unit of any security covered by the option. No
fractional shares of stock shall be issuable under any option granted under this
Plan or as a result of any such adjustment.
7. Corporate Reorganizations. Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the Company as a
result of which the Company's outstanding Common shares are changed or exchanged
for cash or property or securities not of the Company's issue, or upon a sale of
substantially all the property of the Company to another corporation or person,
the Plan shall terminate, and all options thereto granted hereunder shall
terminate, unless provisions shall be made in writing in connection with such
transaction for the continuance of the Plan and/or for the assumption of options
theretofore granted, or the substitution for such options of options covering
the stock of the successor corporation, or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kind of shares and prices, in which
event the Plan and options theretofore granted shall continue in the manner and
under the terms so provided. If the Plan and unexercised options shall terminate
pursuant to the foregoing sentence, all persons entitled to exercise any
unexercised portions of options then outstanding shall have the right, at such
time prior to the consummation of the transaction causing such terminations as
the Company shall designate, to exercise the unexercised portions of their
options, including the portions thereof which would, but for this section
entitled "Corporation Reorganizations," not yet be exercisable.
8. Duration, Termination and Amendment of the Plan. This Plan shall become
effective upon its adoption by the Board of Directors of the Company and shall
expire on September 26, 2000, so that no option may be granted hereunder after
that date although any option outstanding on that date may thereafter be
exercised in accordance with its terms. The Board of Directors of the Company
may alter, amend, suspend or terminate this Plan, provided that no such action
shall deprive an option holder, without his or her consent, of any option
previously granted pursuant to this Plan or of any of the option holder's rights
under such option. Except as herein provided, no such action of the Board,
unless taken with the approval of the stockholders of the Company, may make any
amendment to the Plan as to which approval by stockholders is required by
applicable law, regulation or rule.