WMS HOTEL CORPORATION
1996 STOCK OPTION PLAN
ARTICLE I
PURPOSE OF THE PLAN
The 1996 Stock Option Plan (the "Plan") is intended to provide a method
whereby "Employees," "Directors" and "Consultants and Advisers" of WMS Hotel
Corporation (the "Company") and its "Subsidiaries" (as such quoted terms are
hereinafter defined) may be encouraged to acquire a proprietary interest in the
Company and whereby such individuals may realize benefits from an increase in
the value of the shares of Voting Common Stock, $0.01 par value per share (the
"Common Stock"), of the Company; to encourage and provide such Employees,
Directors and Consultants and Advisers with greater incentive and to encourage
their continued provision of services to the Company; and, generally, to promote
the interests of the Company and all of its stockholders. Under the Plan, from
time to time on or before _________, 2007, options to purchase shares of Common
Stock and related Stock Appreciation Rights may be granted to such persons as
may be selected in the manner hereinafter provided on the terms and subject to
the conditions hereinafter set forth. Capitalized terms are defined in Article
XV hereof.
ARTICLE II
ADMINISTRATION OF THE PLAN
Section 1. Subject to the authority as described herein of the Board of
Directors (the "Board") of the Company, the Plan shall be administered by the
Compensation Committee of the Company's Board of Directors (the "Committee")
which is composed of at least two members of the Board who are Non-Employee
Directors. The Committee is authorized to interpret the Plan and may from time
to time adopt such rules and regulations for carrying out the Plan as it may
deem best. All determinations by the Committee shall be made by the affirmative
vote of a majority of its members but any determination reduced to writing and
signed by a majority of its members shall be fully enforceable and effective as
if it had been made by a majority vote at a meeting duly called and held.
Subject to any applicable provisions of the Plan, all determinations by the
Committee or by the Board pursuant to the provisions of the Plan, and all
related orders or resolutions of the Committee or the Board, shall be final,
conclusive and binding on all Persons, including the Company and its
stockholders, employees, directors and optionees.
SECTION 2. All authority delegated to the Committee pursuant to the
Plan, may also be exercised by the Board except with respect to matters which
under Rule 16b-3 and Section 16 of the 1934 Act or Section 162(m) of the Code
are required to be determined in the absolute discretion of the Committee.
Subject to the foregoing, in the event of any conflict or
inconsistency between determinations, orders, resolutions or other actions of
the Committee and the Board, the actions of the Board shall control.
SECTION 3. With respect to Section 16 of the 1934 Act, transactions
under the Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the 1934 Act. To the extent any provision of the
Plan or action by the Committee fails to so comply, it shall be deemed null and
void to the extent permitted by law and deemed advisable by the Committee.
ARTICLE III
STOCK SUBJECT TO THE PLAN
Section 1. The shares to be issued or delivered upon exercise of options
or rights granted under the Plan shall be made available, at the discretion of
the Board, either from the authorized but unissued shares of Common Stock of the
Company or from shares of Common Stock reacquired by the Company, including
shares purchased by the Company in the open market or otherwise obtained.
SECTION 2. Subject to the provisions of Article X, the aggregate number
of shares of Common Stock which may be purchased pursuant to options granted at
any time under the Plan shall not exceed 900,000. Such number shall be reduced
by the aggregate number of shares covered by options in respect of which Stock
Appreciation Rights are exercised. The maximum number of shares with respect to
which options may be granted in any calendar year to any one employee shall be
500,000 as such number may be adjusted by the Committee in accordance with
Article X hereof. The Committee shall calculate such limit in a manner
consistent with Section 162(m) of the Code. Shares subject to any options which
are canceled, lapse or are otherwise terminated shall be immediately available
for reissuance under the Plan.
ARTICLE IV
PURCHASE PRICE OF OPTIONED SHARES
Unless the Committee shall fix a greater or lesser purchase price, the
purchase price per share of Common Stock under each option granted to Employees,
Directors, Consultants and Advisers shall not be less than one hundred percent
(100%) of the Fair Market Value (as hereinafter defined) of the Common Stock at
the time such option is granted, but in no case shall such price be less than
the par value of the Common Stock or 85% of the Fair Market Value of the Common
Stock as of the time of grant; provided, however, that in the case of an
Incentive Stock Option granted to an Employee who, at the time of the grant,
owns stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company (a "Ten Percent Stockholder"), such
purchase price per share shall be at least one hundred and ten percent (110%) of
the Fair Market Value.
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ARTICLE V
ELIGIBILITY OF RECIPIENTS
Options will be granted only to Persons who are Employees, Directors,
Consultants or Advisers of the Company or a Subsidiary.
ARTICLE VI
DURATION OF THE PLAN
Unless previously terminated by the Committee or the Board, the Plan
will terminate on _________, 2007. Such termination will not terminate any
option or Stock Appreciation Right then outstanding.
ARTICLE VII
GRANT OF OPTIONS TO EMPLOYEES,
DIRECTORS, CONSULTANTS AND ADVISERS
Section 1. Each option granted under the Plan to Employees shall
constitute either an Incentive Stock Option or a Non-Qualified Stock Option, as
determined in each case by the Committee and each option granted under the Plan
to Directors, Consultants and Advisers shall constitute a Non-Qualified Stock
Option. With respect to Incentive Stock Options granted to Employees, to the
extent that the aggregate Fair Market Value (determined at the time an option is
granted) of Common Stock of the Company with respect to which such Incentive
Stock Options are exercisable for the first time by any individual during any
calendar year (under the Plan and any other stock option plan of the Company)
exceeds $100,000, such Incentive Stock Options shall be treated as Non-Qualified
Stock Options to the extent of such excess. The foregoing rule shall be applied
by taking Incentive Stock Options into account in the order in which they were
granted. In the event outstanding Incentive Stock Options become immediately
exercisable under the terms hereof, such Incentive Stock Options will, to the
extent the aggregate Fair Market Value thereof exceeds $100,000, be treated as
Non-Qualified Stock Options.
SECTION 2. The Committee shall from time to time determine the
Employees, Directors, Consultants and Advisers to be granted options, it being
understood that options may be granted at different times to the same person,
provided, however, that no one person may receive an option or options under the
Plan covering more than fifty percent (50%) of the total number of shares
subject to the Plan. In addition, the Committee shall determine subject to the
terms of the Plan (a) the number of shares subject to each option, (b) the time
or times when the options will be granted, (c) whether such options shall be
Incentive Stock Options, Non-Qualified Stock Options or both, (d) whether Stock
Appreciation Rights will be granted in connection with the grant of options, (e)
the purchase price of the shares subject to each option, which price shall be
not less than that specified in Article , (f) the time or times when each option
and any
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related Stock Appreciation Rights may be exercised and (g) any other matters
which the Committee shall deem appropriate.
SECTION 3. All instruments evidencing options granted to Employees,
Directors, Consultants and Advisers under the Plan shall be in such form, which
shall be consistent with the Plan and any applicable determinations, orders,
resolutions or other actions of the Committee or the Board.
SECTION 4. The Committee, in its sole discretion, on the granting of an
option to an Employee, Director, Consultant or Adviser under the Plan may also
grant Stock Appreciation Rights relating to any number of shares but, except as
hereinafter provided, not more than fifty percent (50%) of the number of shares
covered by such option shall include Stock Appreciation Rights. Such options
shall be subject to such terms and conditions, not inconsistent with the Plan,
that the Committee shall impose, including the following:
(i) Stock Appreciation Rights may be granted only in writing and
only attached to an underlying option at the time of the grant of the
option;
(ii) Stock Appreciation Rights may be exercised only at the time
when the option to which it is attached is exercisable;
(iii) Stock Appreciation Rights shall entitle the optionee (or
any person entitled to act under the provisions of the Plan) to
surrender unexercised all or part of the then exercisable portion of the
option to which the Stock Appreciation Rights are attached to the
Company and to receive from the Company in exchange therefor a payment
in cash equal to the excess, if any, of the then value of one share
covered by such portion over the option price per share specified in
such option, multiplied by the number of shares covered by the portion
of the option so surrendered (which excess is herein called the
"Appreciated Value"). For purposes of computation of the Appreciated
Value, the value of one share shall be deemed to be the average Fair
Market Value of such share during the four-week period immediately
preceding the date of notice of exercise of the Stock Appreciation
Rights;
(iv) if Stock Appreciation Rights attached to an option are
exercised, such option shall be deemed to have been canceled to the
extent of the number of shares surrendered on exercise of the Stock
Appreciation Rights and no further options may be granted covering such
shares; and
(v) if an option to which Stock Appreciation Rights are attached
is exercised, such Stock Appreciation Rights shall be canceled to the
extent necessary to cause the number of shares to which such Stock
Appreciation Rights relate not to exceed the number of remaining shares
subject to such option.
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ARTICLE VIII
NON-TRANSFERABILITY OF OPTIONS
No Incentive Stock Option or any related Stock Appreciation Rights
granted under the Plan shall be transferable by the optionee otherwise than by
will or by the laws of descent and distribution, and any such Incentive Stock
Option or any related Stock Appreciation Rights shall be exercised during the
lifetime of the optionee solely by him or her. Any Non-Qualified Stock Option
granted under the Plan may be transferable by the optionee to the extent
specifically permitted by the Committee as specified in the instrument
evidencing the option as the same may be amended from time to time. Except to
the extent permitted by such instrument, no Non- Qualified Stock Option shall be
transferable except by will or by the laws of descent and distribution.
ARTICLE IX
EXERCISE OF OPTIONS
Section 1. Each option (and any related Stock Appreciation Rights)
granted under the Plan shall terminate on the date specified by the Committee
which date shall be not later than the expiration of ten years from the date on
which it was granted; provided, however, that in the case of an Incentive Stock
Option granted to an Employee who, at the time of the grant is a Ten Percent
Stockholder, such period shall not exceed five (5) years from the date of grant.
SECTION 2. Except to the extent otherwise provided in any instruments
evidencing an option and, if so specified in such instrument, in the cases
provided for in Article XII hereof, each option (and any related Stock
Appreciation Rights) granted under the Plan may be exercised only while the
optionee is an Employee or Director of the Company.
SECTION 3. A person electing to exercise an option or Stock Appreciation
Rights then exercisable shall give written notice to the Company of such
election and, if electing to exercise an option, of the number of shares of
Common Stock such person has elected to purchase. A person exercising an option
shall at the time of purchase tender the full purchase price of such shares,
which tender, except as provided in Section 4 of this Article ix, shall be made
in cash or cash equivalent (which may be such person's personal check) or, to
the extent permitted by applicable law, in shares of Common Stock already owned
by such person (which shares shall be valued for such purpose on the basis of
their Fair Market Value on the date of exercise), or in any combination thereof.
In the event of payment in shares of Common Stock already owned, such shares
shall be appropriately endorsed for transfer to the Company. The Company shall
have no obligation to deliver shares of Common Stock pursuant to the exercise
of any option, in whole or in part, until such payment in full of the purchase
price therefor is received by the Company. No optionee, or legal representative,
legatee, distributee or transferee of such optionee, shall be or be deemed to be
a holder of any shares of Common Stock subject to such option or entitled to any
rights of a stockholder of the Company in respect of any shares of
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Common Stock covered by such option until such shares have been paid for in full
and issued or delivered by the Company.
SECTION 4. In order to assist an optionee in the exercise of an option
granted under the Plan, the Committee or Board may, in its discretion,
authorize, either at the time of the grant of the option or thereafter (a) the
extension of a loan to the optionee by the Company, (b) the payment by the
optionee of the purchase price of the Common Stock in installments, (c) the
guarantee by the Company of a loan obtained by the optionee from a third party
or (d) make such other reasonable arrangements to facilitate the exercise of
options in accordance with applicable law. The Committee or Board shall
authorize the terms of any such loan, installment payment arrangement or
guarantee, including the interest rate (which, in the case of incentive stock
options, shall be not less than the higher of (i) the "prime rate" as from time
to time in effect at a commercial bank of recognized standing, and (ii) the rate
of interest from time to time imputed under Section 483 of the Code and terms of
repayment thereof, and shall cause the instrument evidencing any such option to
be amended, if required, to provide for any such extension of credit. Loans,
installment payment arrangements and guarantees may be authorized without
security, and the maximum amount of any such loan or guarantee shall be the
purchase price of the Common Stock being acquired, plus related interest
payments.
SECTION 5. Each option shall be subject to the requirement that if at
any time the Board shall in its discretion determine that the listing,
registration or qualification of the shares of Common 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 issuance or purchase of shares thereunder, such option may not be
exercised in whole or in part unless such listing, registration, qualification,
consent or approval shall have been effected or obtained free from any
conditions not reasonably acceptable to the Board. Unless at the time of
exercise of an option and the issuance of Common Stock so purchased, there shall
be in effect as to such Common Stock a registration statement under the Act, the
holder of such option shall deliver a certification (a) acknowledging that such
shares of Common Stock may be "restricted securities" as defined in Rule 144
promulgated under the Act; and (b) containing such optionee's agreement that
such Common Stock may not be sold or otherwise disposed of except in compliance
with applicable provisions of the Act. In the event that the Common Stock is
then listed on a national securities exchange, the Company shall use its best
efforts to cause the listing of the shares of Common Stock subject to options
upon such exchange.
SECTION 6. All payments made by the Company pursuant to Section 4 of
this Article IX shall be subject to withholding in respect of such income or
other taxes as may be required by law to be paid or withheld. The Company may
establish appropriate procedures to provide for payment or withholding of such
income or other taxes as may be required by law to be paid or withheld in
connection with the exercise of options under the Plan, and to ensure that the
Company receives prompt advice concerning the occurrence of any event which may
create, or affect the timing or amount of, any obligation to pay or withhold any
such taxes or which may make available to the Company any tax deduction
resulting from the occurrence of such event.
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ARTICLE X
ADJUSTMENTS
SECTION 1. New option rights may be substituted for the options granted
under the Plan, or the Company's duties as to options outstanding under the Plan
may be assumed, by a corporation other than the Company, or by a parent or
subsidiary of the Company or such corporation, in connection with any merger,
consolidation, acquisition, separation, reorganization, liquidation or other
similar corporate transaction in which the Company is involved. Notwithstanding
the foregoing or the provisions of this Article X, in the event such
corporation, or parent or subsidiary of the Company or such corporation, does
not substitute new option rights for, and substantially equivalent to, the
options granted hereunder, or assume the options granted hereunder, the options
granted hereunder shall terminate and thereupon become null and void (i) upon
dissolution or liquidation of the Company, or similar occurrence, (ii) upon any
merger, consolidation, acquisition, separation, reorganization, or similar
occurrence, where the Company will not be a surviving entity or (iii) upon a
transfer of substantially all of the assets of the Company or more than 80% of
the outstanding Common Stock in a single transaction; provided, however, that
each optionee shall have the right immediately prior to or concurrently with
such dissolution, liquidation, merger, consolidation, acquisition, separation,
reorganization or other similar corporate transaction, to exercise any unexpired
option granted hereunder whether or not then exercisable.
SECTION 2. In the event that the Committee determines that any dividend
or other distribution (whether in the form of cash, shares, other securities, or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of shares or other securities of the Company, issuance
of warrants or other rights to purchase shares or other securities of the
Company, or other corporate transaction or event affects the shares such that an
adjustment is determined by the Committee to be appropriate in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be
made available under the Plan, then, the Committee shall, in such manner as it
may deem equitable, adjust any or all of (i) the number of shares of Common
Stock or other securities of the Company (or number and kind of other securities
or property) with respect to which options may be granted and any limitations
set forth in the Plan, (ii) the number of shares of Common Stock or other
securities of the Company (or number and kind of other securities or property)
subject to outstanding options and (iii) the grant or exercise or target price
with respect to any option or, if deemed appropriate, make provision for a cash
payment to the holder of an outstanding option including, if necessary, the
termination of such an option; provided, in each case, that with respect to
Incentive Stock Options no such adjustment shall be authorized to the extent
that such authority would cause the Plan to violate Section 422 of the Code.
Without limiting the generality of the foregoing, any such adjustment shall be
deemed to have prevented any dilution and enlargement of an optionee's rights if
such optionee receives in any such adjustment rights which are substantially
similar (after taking into account the fact that the optionee has not paid the
applicable exercise price) to the rights the optionee would have received had he
exercised his outstanding options and become a stockholder of the Company
immediately prior to the event giving rise to such adjustment.
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SECTION 3. Adjustments and elections under this Article X shall be made
by the Committee whose determination as to what adjustments, if any, shall be
made and the extent thereof shall be final, binding and conclusive. Adjustments
required under this Article X shall also be deemed to increase by a like number
the aggregate number of shares authorized for purchase pursuant to options
granted under the Plan as set forth in Section 2 of Article III hereof.
ARTICLE XI
PRIVILEGES OF STOCK OWNERSHIP
No optionee shall be entitled to the privileges of stock ownership as to
any shares of Common Stock not actually issued and delivered to him or her.
ARTICLE XII
TERMINATION OF SERVICE OR EMPLOYMENT
SECTION 1. In the event that an optionee shall cease his or her
relationship with the Company or a Subsidiary by voluntarily terminating such
relationship without the written consent of the Company or a Subsidiary, or if
the Company or a Subsidiary shall terminate for cause such relationship, unless
otherwise provided in the instrument evidencing such option, the option and any
associated Stock Appreciation Rights held by such optionee shall terminate
forthwith.
SECTION 2. If the holder of an option shall voluntarily terminate his or
her relationship with the Company or a Subsidiary with the written consent of
the Company, which written consent expressly sets forth a statement to the
effect that options which are exercisable on the date of such termination shall
remain exercisable, or if the optionee's relationship with the Company or a
Subsidiary shall have terminated by the Company or a Subsidiary for reasons
other than cause, unless otherwise provided in the instrument evidencing such
option, such optionee may exercise his or her option to the extent exercisable
at the time of such termination, at any time prior to the expiration of three
months after such termination or the date of expiration of the option as fixed
at the time of grant, whichever shall first occur. Options granted under the
Plan to Employees shall not be affected by any change in the position of
employment so long as the holder thereof continues to be an Employee or a
Director.
SECTION 3. Should an optionee die during the existence of his or her
relationship with the Company, unless otherwise provided in the instrument
evidencing such option, all of the optionee's options shall be terminated except
that any option (and any related Stock Appreciation Rights) to the extent
exercisable by the optionee at the time of such death, may be exercised within
one year after the date of such death but not later than the expiration date of
the option solely in accordance with all of the terms and conditions of the Plan
by the optionee's personal representatives or by the person or persons to whom
the optionee's rights under the option shall pass by will or by the applicable
laws of descent and distribution.
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SECTION 4. Should an optionee die after cessation of the optionee's
relationship with the Company or a Subsidiary, unless otherwise provided in the
instrument evidencing such option, all of the optionee's options shall be
terminated except that any option (and any related Stock Appreciation Rights) to
the extent exercisable by the optionee at the time of such death may be
exercised within one year after the date of such death but not later than the
expiration of the option solely in accordance with all of the terms and
conditions of the Plan by the optionee's personal representatives or by the
person or persons to whom the optionee's rights under the option shall pass by
will or by the applicable laws of descent and distribution.
ARTICLE XIII
AMENDMENTS TO PLAN
The Board may at any time terminate or from time to time amend, modify
or suspend the Plan; provided, however, that no such amendment or modification
without the approval of the stockholders of the Company shall:
(i) materially increase the benefits accruing to participants
under the Plan;
(ii) materially increase the maximum number (determined as
provided in the Plan) of shares of Common Stock which may be purchased
pursuant to options granted under the Plan; or
(iii) materially modify the requirements as to eligibility for
participation in the Plan.
The amendment or termination of the Plan shall not, without the written consent
of an optionee, adversely affect any rights or obligations under any option
theretofore granted to such optionee under the Plan.
ARTICLE XIV
EFFECTIVE DATE OF PLAN
The Plan shall be effective on _____, 1997.
ARTICLE XV
DEFINITIONS
For the purposes of this Plan, the following terms shall have the
meanings indicated:
Act: Shall mean the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.
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Code: Shall mean the Internal Revenue Code of 1986, as amended and the
regulations promulgated thereunder.
Committee: Such term is defined in Article II, Section 1.
Common Stock: Such term is defined in Article I.
Consultants and Advisers: Such term shall include any third party
retained or engaged by the Company or any Subsidiary to provide services to the
Company or such Subsidiary, including any employee of such third party providing
such services.
Director: Such term shall include any director of the Company.
Employee: Such term shall include (i) any officer as well as any
full-time salaried key executive, managerial, professional, administrative, or
key employee of the Company or a Subsidiary. Such term shall also include an
employee on approved leave of absence provided such employee's right to continue
employment with the Company or a Subsidiary upon expiration of such employee's
leave of absence is guaranteed either by statute or by contract with or by a
policy of the Company or a Subsidiary and any consultant, independent
contractor, professional advisor or other person who is paid by the Company or a
Subsidiary for rendering services or furnishing materials or goods to the
Company or a Subsidiary.
Fair Market Value: The fair market value as of any date shall be
determined by the Committee or Board after giving consideration to the price of
the Common Stock in the public market and shall be determined otherwise in a
manner consistent with the provisions of the Code.
Incentive Stock Option: Such term means an option intended to qualify
under Section 422 of the Code.
1934 Act: Shall mean the Securities Exchange Act of 1934, as amended and
the rules and regulations promulgated thereunder.
Non-Employee Director: Such term shall mean any director of the Company
who is a Non-Employee Director as that term is defined in Rule 16b-3 promulgated
under the 1934 Act.
Non-Qualified Stock Option: Such term means an option which does not
qualify under Section 422 of the Code.
Person: Such term shall have the meaning ascribed to it under the 1934
Act.
Plan: Such term is defined in Article I and shall include all amendments
thereof.
Stock Appreciation Rights: Means the rights granted by the Committee
pursuant to Section 4 of Article hereof.
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Subsidiary: Means and includes a "Subsidiary Corporation" of the Company
as defined in Section 424 of the Code.
Ten Percent Stockholder: Such term is defined in Article IV.
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